Six Months Ended

June 30,

2015

2014

(Dollars in thousands)

EARNINGS:

Income (loss) before income taxes (2)

$

335,754 

$

(7,446)

Add (deduct):

Equity in earnings of unconsolidated entities

(70,053)

(72,117)

Distributions from unconsolidated entities

27,226 

65,569 

Amortization of capitalized interest

3,702 

3,301 

Income attributable to noncontrolling interests in subsidiaries

  that do not have fixed charges

(5,905)

(645)

290,724 

(11,338)

Add fixed charges:

Consolidated interest expense (3)

67,749 

56,605 

Interest portion (1/3) of consolidated rent expense

30,774 

31,313 

$

389,247 

$

76,580 

FIXED CHARGES:

Consolidated interest expense (3)

$

67,749 

$

56,605 

Capitalized interest

3,429 

3,824 

Interest portion (1/3) of consolidated rent expense

30,774 

31,313 

$

101,952 

$

91,742 

RATIO OF EARNINGS TO FIXED CHARGES

3.82 

* 

Tax-effected preferred dividends

$

33 

$

39 

Fixed charges

101,952 

91,742 

Fixed charges and preferred dividends

$

101,984 

$

91,781 

RATIO OF EARNINGS TO FIXED CHARGES AND

  PREFERRED DIVIDENDS

3.82 

* 

(1)

Considering, among other things, recent significant divestitures and an increasing amount of rental income in proportion to gross rent expense, TDS revised its approach in the fourth quarter of 2014 in calculating the above ratios to use gross rent expense, rather than net rent expense, for estimating the interest portion of rent expense.  Prior periods have been revised to conform to this presentation.

(2)

Includes Gain on sale of business and other exit costs, net of $129.4 million and $4.3 million in 2015 and 2014, respectively.  Additionally, includes $122.9 million and $91.4 million in Gain on license sales and exchanges, net in 2015 and 2014, respectively.

(3)

Interest expense on income tax contingencies is not included in fixed charges.

*

Earnings for the six months ended June 30, 2014 were inadequate to cover Fixed charges and Fixed charges and preferred dividends by $15.2 million.