Stock-Based Compensation (Tables)

12 Months Ended

Dec. 31, 2013

Stock based compensation

Stock-based compensation

Year Ended December 31,	2013		2012		2011
(Dollars in thousands)
Stock option awards	$	12,973	$	20,884	$	20,443
Restricted stock unit awards		15,535		19,025		14,905
Deferred compensation bonus and matching stock unit awards		550		749		124
Employee stock purchase plans		-		-		485
Awards under Non-Employee Director compensation plan		1,280		1,213		880
Total stock-based compensation, before income taxes		30,338		41,871		36,837
Income tax benefit		(11,459)		(15,848)		(13,862)
Total stock-based compensation expense, net of income taxes	$	18,879	$	26,023	$	22,975

Stock-based compensation, allocation by financial statement line item

December 31,		2013		2012		2011
(Dollars in thousands)
Selling, general and administrative expense	$	27,130	$	38,563	$	33,949
Cost of services and products		3,208		3,308		2,888
Total stock-based compensation	$	30,338	$	41,871	$	36,837

Stock-based compensation, fair value assumptions

TDS estimated the fair value of stock options granted in 2013, 2012 and 2011 using the Black Scholes valuation model and the assumptions shown in the table below:
	2013		2012		2011
Expected life	5.7 Years		5.5 Years		5.5 Years
Expected annual volatility rate	41.0	%	41.1	%	37.6	%
Dividend yield	2.3	%	2.4	%	1.6	%
Risk-free interest rate	1.0	%	0.9	%	2.1	%
Estimated annual forfeiture rate	2.9	%	2.9	%	3.0	%

U.S. Cellular estimated the fair value of stock options granted during 2013, 2012, and 2011 using the Black Scholes valuation model and the assumptions shown in the table below.
	2013	2012	2011
Expected life	4.6-9.0 years	4.5 years	4.3 years
Expected volatility	29.2%-39.6%	40.7%-42.6%	43.4%-44.8%
Dividend yield	0%	0%	0%
Risk-free interest rate	0.7%-2.4%	0.5%-0.9%	0.7%-2.0%
Estimated annual forfeiture rate	0.0%-8.1%	0.0%-9.1%	0.0%-7.8%

Summary of stock options

Tandem Options		Number of Options	Weighted Average Exercise Price		Weighted Average Grant Date Fair Value	Aggregate Intrinsic Value
Outstanding at December 31, 2010		651,000	$	69.60
(651,000 exercisable)				69.60
	Exercised	(2,000)		53.77		$	30,000
	Forfeited	-	-
	Expired	(78,000)		99.23
	Reclassification of Tandem Options due to Share Consolidation	(571,000)		65.64		$	158,000
Outstanding at December 31, 2011		-

Special Common Share Options		Number of Options		Weighted Average Exercise Prices		Weighted Average Grant Date Fair Value		Aggregate Intrinsic Value
Outstanding at December 31, 2010			5,108,000	$	35.41
(2,506,000 exercisable)					43.14
	Granted		1,034,000		29.94	$	9.59
	Exercised		(5,000)		26.95			$	19,000
	Forfeited		(34,000)		28.12
	Expired		(79,000)		35.00
	Reclassification of Special Common Options due to Share Consolidation		(6,024,000)	$	34.38			$	-
Outstanding at December 31, 2011			-

								Weighted
								Average
		Weighted		Weighted				Remaining
		Average		Average		Aggregate		Contractual
	Number of	Exercise		Grant Date		Intrinsic		Life
Common Share Options	Options	Prices		Fair Value		Value		(in years)
Reclassification of Tandem Options due to Share Consolidation	1,192,000		31.45
Reclassification of Special Common Options due to Share Consolidation	6,024,000		34.38
Outstanding at December 31, 2011	7,216,000	$	33.89
(4,865,000 exercisable)			36.67
Granted	1,702,000		20.79	$	6.28
Exercised	(1,000)		20.65			$	4,000
Forfeited	(106,000)		23.81
Expired	(298,000)		30.12
Outstanding at December 31, 2012	8,513,000	$	31.53
(5,782,000 exercisable)			35.12
Granted	1,259,000		22.60	$	7.01
Exercised	(683,000)		25.33			$	2,450,000
Forfeited	(81,000)		23.75
Expired	(228,000)		34.10
Outstanding at December 31, 2013	8,780,000	$	30.74			$	11,483,000	6.0
(6,160,000 exercisable)		$	34.13			$	2,256,000	4.9

								Weighted
								Average
		Weighted		Weighted				Remaining
		Average		Average		Aggregate		Contractual
	Number of	Exercise		Grant Date		Intrinsic		Life
Common Share Options	Options	Price		Fair Value		Value		(in years)
Outstanding at December 31, 2010	2,627,000	$	42.28
(1,333,000 exercisable)			47.18
Granted	694,000		44.34	$	16.66
Exercised	(201,000)		32.32			$	2,099,000
Forfeited	(83,000)		39.42
Expired	(203,000)		49.32
Outstanding at December 31, 2011	2,834,000	$	43.07
(1,533,000 exercisable)			46.23
Granted	677,000		34.91	$	12.61
Exercised	(47,000)		29.82			$	205,000
Forfeited	(117,000)		38.45
Expired	(133,000)		46.17
Outstanding at December 31, 2012	3,214,000	$	41.58
(1,928,000 exercisable)			43.99
Granted	1,213,000		32.45	$	11.53
Exercised	(892,000)		34.78			$	6,787,000
Forfeited	(574,000)		34.17
Expired	(247,000)		48.35
Outstanding at December 31, 2013	2,714,000	$	42.22			$	13,015,000	6.80
(1,359,000 exercisable)		$	46.91			$	2,632,000	4.60

Summary of nonvested restricted stock units

A summary of TDS nonvested restricted stock units and changes during the year ended December 31, 2013 is presented in the table below:
Common Restricted Stock Units	Number	Weighted Average Grant Date Fair Value
Nonvested at December 31, 2012	547,000	$	23.44
Granted	353,000	$	21.09
Vested	(213,000)	$	28.94
Forfeited	(24,000)	$	23.16
Nonvested at December 31, 2013	663,000	$	20.43

A summary of U.S. Cellular nonvested restricted stock units at December 31, 2013 and changes during the year then ended is presented in the table below:
Common Restricted Stock Units	Number	Weighted Average Grant Date Fair Value
Nonvested at December 31, 2012	1,139,000	$	38.40
Granted	601,000		32.06
Vested	(238,000)		42.26
Forfeited	(332,000)		35.63
Nonvested at December 31, 2013	1,170,000	$	36.46