EX-12 2 a06-12108_2ex12.htm EX-12

Exhibit 12

TELEPHONE AND DATA SYSTEMS, INC.

RATIOS OF EARNINGS TO FIXED CHARGES
For the Year Ended December 31,
(Dollars in Thousands)

 

 

2005

 

2004

 

2003

 

2002

 

2001

 

EARNINGS:

 

 

 

 

 

 

 

 

 

 

 

Income (loss) before income taxes and minority Interest

 

$

396,139

 

$

148,613

 

$

121,760

 

$

(1,556,654

)

$

(180,633

)

Add (deduct):

 

 

 

 

 

 

 

 

 

 

 

Earnings on equity method investments 

 

(69,753

)

(64,900

)

(52,179

)

(43,799

)

(51,291

)

Distributions from unconsolidated entities

 

53,036

 

49,234

 

45,427

 

31,328

 

16,644

 

Minority interest in pre-tax income of subsidiariesthat do not have fixed charges

 

(9,063

)

(9,725

)

(11,842

)

(14,865

)

(9,724

)

 

 

370,359

 

123,222

 

103,166

 

(1,583,990

)

(225,004

)

Add fixed charges:

 

 

 

 

 

 

 

 

 

 

 

Consolidated interest expense

 

216,021

 

198,706

 

188,069

 

157,034

 

128,519

 

Interest portion (1/3) of consolidated rent expense

 

40,147

 

33,798

 

29,620

 

28,696

 

19,398

 

 

 

$

626,527

 

$

355,726

 

$

320,855

 

$

(1,398,260

)

$

(77,087

)

FIXED CHARGES:

 

 

 

 

 

 

 

 

 

 

 

Consolidated interest expense

 

$

216,021

 

$

198,706

 

$

188,069

 

$

157,034

 

$

128,519

 

Interest portion (1/3) of consolidated rent expense

 

40,147

 

33,798

 

29,620

 

28,696

 

19,398

 

 

 

$

256,168

 

$

232,504

 

$

217,689

 

$

185,730

 

$

147,917

 

RATIO OF EARNINGS TO FIXED CHARGES

 

2.45

 

1.53

 

1.47

 

—

(a)

—

(b)

Tax-effected preferred dividends

 

$

312

 

$

300

 

$

652

 

$

750

 

$

824

 

Fixed charges

 

256,168

 

232,504

 

217,689

 

185,730

 

147,917

 

Fixed charges and preferred dividends

 

$

256,480

 

$

232,804

 

$

218,341

 

$

186,480

 

$

148,741

 

RATIO OF EARNINGS TO FIXED CHARGES AND PREFERRED DIVIDENDS

 

2.44

 

1.53

 

1.47

 

—

(a)

—

(b)

(a)             Earnings for the year ended December 31, 2002 were insufficient to cover fixed charges by $1,584.0 million and fixed charges and preferred dividends by $1,584.7 million. In the year ended December 31, 2002, TDS recognized a pre-tax loss on marketable securities and other investments of $1,888.4 million as a result of management’s determination that unrealized losses with respect to the investments were other than temporary and the write-off of a note receivable.

(b)            Earnings for the year ended December 31, 2001 were insufficient to cover fixed charges by $225.0 million and fixed charges and preferred dividends by $225.8 million. In 2001, TDS recognized a pre-tax loss of $548.3 million primarily as a result of two merger transactions. The conversion of TDS’s investment in common stock of VoiceStream Wireless Corporation into shares of Deutsche Telekom and cash pursuant to a merger of VoiceStream and Deutsche Telekom resulted in a pre-tax loss of $644.9 million. The conversion of TDS’s investment in common stock of Illuminet Holding, Inc. into shares of VeriSign, Inc. pursuant to a merger resulted in a pre-tax gain of $96.1 million. The loss and gain, respectively, were the result of the change in the market price of VoiceStream and Illuminet stocks between the time TDS acquired such stock and the date of the merger transactions.