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YoY shift: Bearish
Year-over-year tone shift - average net-tone change across Risk Factors and MD&A vs the prior 10-K. This filing is -0.56pp more bearish than last year's.
Why YoY instead of absolute: the LM lexicon has ~6.6× more negative words than positive (legal/risk-disclosure language is heavy on hedging), so every 10-K reads bearish on raw tone. Year-over-year change strips that bias and surfaces the actual shift in management's framing.
Tone shift by section
The two components the gauge averages: how Risk Factors and MD&A each shifted in net tone versus last year's 10-K. The headline above is their average, so a green needle over a soft section just means the other section carried it.
Risk Factors
-0.65pp
Lean -
Net-tone change vs last year's 10-K.
MD&A
-0.47pp
Lean -
Net-tone change vs last year's 10-K.
Per-snippet highlights
Sentence-level sentiment highlighting with category and subcategory filters is coming once the snippet-scoring pipeline lands. For now, dig into the actual section text on the Sections tab.
Language change vs prior 10-K
Risk Factors (Item 1A) - words with the biggest YoY frequency increase
Negative rising
unforeseen+5
damage+4
negative+2
disasters+2
adversely+1
Positive rising
advancements+2
enhance+1
favorable+1
leadership+1
efficiency+1
Risk Factors (Item 1A)
8,251 words
Item 1A. Risk Factors
PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
SAFE HARBOR CAUTIONARY STATEMENT
This Annual Report on Form 10-K, including exhibits, contains statements that are not based on historical facts and represent forward-looking statements, as this term is defined in the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical facts, that address activities, events or developments that TDS intends, expects, projects, believes, estimates, plans or anticipates will or may occur in the future are forward-looking statements. The words “believes,” “anticipates,” “estimates,” “expects,” “plans,” “intends,” “projects” and similar expressions are intended to identify these forward-looking statements, but are not the exclusive means of identifying them. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results, events or developments to be significantly different from any future results, events or developments expressed or implied by such forward-looking statements. Such risks, uncertainties and other factors include those set forth below under “Risk Factors” in this Form 10-K. Each of the following risks could have a material adverse effect on TDS’ business, financial condition or results of operations. However, such factors are not necessarily all of the important factors that could cause actual results, performance or to differ materially from those expressed in, or implied by, the forward-looking statements contained in this document. Other unknown or factors also could have material effects on future results, performance or . TDS undertakes no obligation to update publicly any forward-looking statements whether as a result of new information, future events or otherwise. The reader should carefully consider the following risk factors and other information contained in, or incorporated by reference into, this Form 10-K to understand the material risks relating to TDS’ business, financial condition or results of operations.
Language change vs prior 10-K
MD&A (Item 7) - words with the biggest YoY frequency increase
Negative rising
discontinued+37
divestitures+10
loss+3
closed+3
inability+2
Positive rising
benefit+12
stable+3
gains+2
exclusive+1
advancements+1
MD&A (Item 7)
14,261 words
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Index to Management's Discussions and Analysis of Financial Condition and Results of Operations (MD&A)
Page No.
Executive Overview
Terms used by TDS
Results of Operations – TDS Consolidated
TDS Telecom Operations
Array Operations
Liquidity and Capital Resources
Consolidated Cash Flow Analysis
Consolidated Balance Sheet Analysis
Application of Critical Accounting Policies and Estimates
Supplemental Information Relating to Non-GAAP Financial Measures
Index to MD&A
Telephone and Data Systems, Inc.
Management’s Discussion and Analysis of Financial Condition
and Results of Operations
Executive Overview
The following Management’s Discussion and Analysis (MD&A) should be read in conjunction with the audited consolidated financial statements and notes of Telephone and Data Systems, Inc. (TDS) for the year ended December 31, 2025, and with the description of TDS’ business included herein. Certain numbers included herein are rounded to thousands or millions for ease of presentation; however, certain calculated amounts and percentages are determined using the unrounded numbers.
Announced Transactions and Strategic Alternatives Review Risk Factors
1) Closing of the T-Mobile transaction occurred on August 1, 2025, and has required substantial changes to the manner in which Array’s remaining business is conducted, which could have a material adverse effect on Array's financial condition and results of operations.
The successfulclosing of the T-Mobile transaction on August 1, 2025 has required significant changes to the manner in which the Array business is operated. The remaining Array business, which includes the tower business, non-controlling interests in certain wireless operating companies and wireless spectrum licenses, certain of which are subject to other sale agreements, is of a significantly smaller scale than its historical operations. This could produce operational, cost and borrowing disadvantages relative to its historical operations.
Upon receipt of regulatory approval, TDS and Array accelerated the recognition of certain cash and non-cash obligations related to employee compensation, severance and stock awards. Additional significant costs that include contingent advisory fees, income tax expense, administrative costs, restructuring expenses and other wind down costs were recorded upon and following the close on August 1, 2025. Significant additional transaction costs related to pending and potential future spectrum sales, ongoing restructuring expenses and wind down costs have been incurred and are expected to be incurred into the foreseeable future as the strategic alternatives process is completed. Additionally, it is uncertain which towers T-Mobile will choose to permanently locate on, and therefore, it is unknown how many and which towers with no tenants will remain in Array's tower portfolio. Array may incur significant decommissioning costs for certain towers that Array elects to retire, and such decommissioning costs are also expected to include remaining obligations under related ground leases for certain towers. These decommissioning costs may have a significant adverse impact on TDS’ future cash flows and financial results.
At the closing of the T-Mobile transaction, Array and T-Mobile entered into a MLA, pursuant to which, among other things, T-Mobile will lease space on certain additional Array-owned towers for a minimum of 15 years and also commit to 15 year minimum extensions of existing leases for Array-owned towers. As a result, Array’s business is substantially dependent upon T-Mobile, and if T-Mobile fails to meet its obligations under these leases to Array, this would have a significant adverse impact on TDS’ business and financial results.
See Note 2 — Discontinued Operations and Note 7 — Acquisitions and Divestitures in the Notes to Consolidated Financial Statements for additional information.
2) Array entered into License Purchase Agreements with Verizon and T-Mobile to sell certain wireless spectrum licenses. There is no guarantee that such transactions contemplated by the License Purchase Agreements will be consummated. Costs and uncertainties related to these transactions could have adverse effects on Array's financial condition or results of operations.
On October 17, 2024, Array entered into the Verizon License Purchase Agreement to sell certain AWS, Cellular and PCS wireless spectrum licenses and agreed to grant Verizon certain rights to lease such licenses prior to the transaction close.
On August 29, 2025, Array entered into the T-Mobile License Purchase Agreement to sell certain 700 MHz wireless spectrum licenses and agreed to grant T-Mobile certain rights to lease such licenses prior to the transaction close.
On September 22, 2025, T-Mobile exercised its call option under the Put/Call Agreement for certain 600 MHz wireless spectrum licenses and on October 7, 2025, Array and T-Mobile entered into a License Purchase Agreement.
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The Verizon and T-Mobile spectrum transactions are subject to regulatory approval, which Array may not be able to obtain on the terms or timeline currently contemplated, or at all. Similarly, Array may not be able to satisfy the other closing conditions applicable to each of the transactions, which in the case of the Verizon transaction, includes the termination of the T-Mobile Short-Term Spectrum Manager Lease Agreement. If the Verizon and T-Mobile spectrum transactions are not consummated, the funds contemplated to be received as a result of such transactions will not be available for investment in Array’s business, repayment of debt, or dividends to Array stockholders, including TDS. Further, TDS’ and Array’s stock price may decline to the extent that the current market price reflects an assumption that these transactions will be completed. The uncertainty regarding the Verizon and T-Mobile spectrum transactions and the continued efforts to monetize the remaining spectrum assets could result in adverse effects on TDS’ financial condition or results of operations and volatility in TDS’ and Array's stock price.
The strategic alternatives review process has already resulted in the incurrence of significant expense primarily related to legal and financial advisors - this is expected to continue. Further, as a result of changes to its spectrum units of accounting, Array recognized significant impairments on its spectrum assets during 2024 and 2025 and further events and circumstances may result in additional impairments for the remaining spectrum assets, including the spectrum that is pending sale if such sales do not close as expected.
There can be no assurance that the strategic alternatives review process, which is ongoing, will result in the spectrum transactions with Verizon and T-Mobile being successfully completed, or the successful monetization of other remaining spectrum, or that these processes or any outcomes of these processes will not have an adverse impact on TDS’ business or financial statements.
See Note 7 — Acquisitions and Divestitures in the Notes to Consolidated Financial Statements for additional information related to the Verizon and T-Mobile spectrum transactions.
Operational Risk Factors
3) An inability to monetize the remaining spectrum assets as well as the ongoing costs to retain the spectrum could adversely affect TDS’ operations.
Array may be unable to find buyers at mutually agreeable prices for its spectrum assets not subject to the pending Verizon and T-Mobile transactions. Further, the opportunity to monetize the remaining spectrum assets will depend on a variety of factors, including industry data usage, availability of new spectrum through FCC spectrum auctions and the potential disposition of other wireless businesses.
In addition, most of the remaining spectrum licenses not subject to the Verizon and T-Mobile spectrum transactions have FCC build-out requirements that have not yet been fully satisfied. Compliance with such requirements would drive significant investments and Array no longer has an existing wireless business to operate the retained spectrum. Additionally, if the Verizon and T-Mobile spectrum transactions are not completed, Array would retain additional wireless spectrum licenses with no wireless business to operate the spectrum. As renewal of all wireless spectrum licenses is predicated upon their initial and continued operation in accordance with FCC requirements, such licenses could be subject to forfeiture if Array does not incur significant costs and expenses to operate the spectrum prior to renewal or engage another carrier to do so. All of these events could decrease the value of retained spectrum and could have a significant adverse effect on TDS’ financial condition, cash flows, and results of operations.
4) A delay or failure by TDS to complete significant network construction and systems implementation activities as part of its plans to expand and improve the quality and capacity of its network and support systems could adversely affect its operations.
TDS’ business plan includes significant construction activities and enhancements to its network, support and other systems and infrastructure. As TDS continues to build out and enhance its network, TDS must, among other things, continue to:
▪ Obtain zoning variances or other local governmental or third-party approvals or permits for network construction; and
▪ Improve, expand and maintain customer care, network management, billing and other financial and management systems.
Any difficulties encountered in completing these activities, as well as problems in vendor equipment availability, labor availability, inflation or other pressures on costs, technical resources, system performance or system adequacy, could delay expansion of operations and product capabilities in new or existing markets or result in increased costs. Failure to successfully build-out and enhance TDS’ network, support facilities and other systems and infrastructure in a cost-effective manner, and in a manner that satisfies consumers' expectations for quality could adversely affect TDS’ business, business prospects, financial condition or results of operations.
TDS’ wireline business is devoting a substantial amount of capital for fiber builds in its markets using a combination of internal and third-party construction crews. TDS is also often reliant on third parties for items such as franchises, utility locates and easements, aerial attachments and other permits. Difficulties with third-party performance could cause delays or additional costs. Supply chain constraints, labor shortages, or difficulties in project management, engineering, construction resources or build activities, including inadvertentlydamaging other utility lines or pipes, could delay construction and expansion of operations, cause reputational harm or result in increased costs. Delays or failure to complete its deployment activities could weaken TDS' competitive position in certain of its markets, causing TDS to modify its deployment plans or write-off investments, which could have an adverse effect on TDS’ business, business prospects, financial condition or results of operations.
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5) Increasing competition in the wireline and tower industries could adversely affect TDS’ revenues, negatively impact future growth and increase its costs to compete.
Competition in the wireline industry is intensified with the increasing deployment of broadband technologies, MVNO plans offering wireless services, and enhanced video services. Incumbent carriers are upgrading existing networks with higher speed broadband services and overbuilders are deploying broadband to compete with legacy incumbent carriers. Overbuilding activity is increasing with investments by venture capital and private equity and with additional access to state and federal funding. Sources of competition to TDS’ wireline and cable businesses include, but are not limited to, other cable companies, fiber overbuilders, incumbent carriers, wireless communications providers, resellers of local exchange services, interexchange carriers, satellite broadband providers, access providers, VoIP providers and providers using other emerging technologies. Customers may choose to substitute their wireline services using satellite, wireless and other technologies, which may be preferred to technologies offered by TDS. If TDS cannot keep pace with its competition in deploying higher speed technologies, offering competitive products and services at competitive prices and providing attractive video content and wireless mobility options, TDS' financial condition, results of operations or ability to do business could be adversely affected.
TDS’ wireline business offers MVNO plans providing wireless services to customers in its service areas. TDS’ MVNO offerings are reliant on third parties to deliver adequate wireless service to these customers and may not be able to successfully compete with wireless options provided by other industry competitors who have access to greater scale and financial resources than TDS. There is no assurance that these MVNO plans will attract or retain broadband customers.
Competition in the tower industry is robust, as Array competes with public and private tower companies, private equity sponsored tower companies, and owners of non-communications sites such as utility towers, rooftop structures, water towers, and other alternative structures. Many of these competitors are larger than Array, have greater financial and other resources, have more advantageous tower locations than Array, and have more scale nationwide than Array. Such factors could result in difficulty in leasing tower space or renewing leases, or cause lease revenue to decline in the future. Specifically, Array could be negatively impacted by the following factors, among others:
▪ Increased pressure on pricing resulting from increased tenant churn, sustained low tenancy rates or further reductions in such rates;
▪ Low profit margins and returns on investment that are below Array’s cost of capital;
▪ Limited opportunities for strategic partnerships.
6) There are economic and business risks associated with fixed rate annual escalators on Array's colocation revenue contracts.
A majority of Array's ground leases with its ground lessors, and a majority of Array's colocation contracts with its tenants contain fixed rate annual escalation rates. To the extent average ground lease escalation rates exceed average colocation revenue escalation rates, Array's results of operations, cash flows, and financial condition could be adversely impacted.
Further, to the extent future U.S. inflation rates would persist at higher rates for sustained periods of time, revenues and margins in real dollars could erode, and this could have an adverse affect on Array's results of operations, cash flows and financial condition.
7) A substantial portion of Array revenues are derived from a small number of tenants concentrated in the wireless industry and the loss or financial difficulties of such tenants may adversely affect Array’s business, financial condition, results of operations and future growth. Array is particularly reliant on its relationship with T-Mobile. DISH Wireless has failed to make certain payments due to Array under their contractual commitment. Lower demand for wireless services, negative trends in the wireless industry or changes in customer business models may decrease the revenues Array receives from its tenants, which could adversely affect Array’s business, financial condition, results of operations and future growth.
A substantial portion of Array revenues are derived from a small number of tenants concentrated in the wireless industry including Verizon, AT&T and particularly T-Mobile (collectively, large carriers). As it relates to the large carriers, a reduction in the demand for tower leasing, reduced capital expenditures or operating expenses on networks, financial difficulties, or other business factors at such large carriers, may adversely affect Array’s revenues, results of operations, cash flows, financial condition, liquidity and future growth. If the large carriers or other current or potential tenants are unable to raise adequate capital to fund their business plans or encounter capital constraints, they may reduce spending; file for bankruptcy; or consolidate, reduce or terminate operations, which could adversely affect the demand for leasing space on towers and negatively impact both Array’s current revenue and cash flows, as well as future growth opportunities. Array’s revenues may be adversely affected by negative trends in the wireless industry, changes in the business model of its tenants or reduced demand for its large carriers’ services among their end users. Specifically, Array’s business, financial condition, revenues, liquidity, results of operations and future growth may be adversely affected by the following factors, among others:
▪ The overall size and growth rate of Array’s tenant base;
▪ Demand for or usage of wireless services, particularly data services;
▪ Delays or failures of FCC spectrum auctions and wireless carriers ability to deploy new spectrum;
▪ Emergence of new technologies that reduce the need for towers;
▪ Lack of use cases to monetize new 6G technologies that require deploying equipment on towers;
▪ Consolidation, co-location and/or spectrum sharing by wireless carriers that reduces the need for towers;
▪ Wireless carriers may change the mix of their network investments away from tower related investments;
▪ Economic downturns that result in wireless carriers reducing network capital expenditures; and
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▪ Large carriers' exercise of pricing power to reduce tower rents
In addition, Array received a letter from DISH Wireless dated in September 2025 claiming that its obligations under its Master Lease Agreement with Array are excused due to actions taken by the FCC and subsequent agreements to sell spectrum assets. See Management Discussion and Analysis - Array Operations for additional information.
8) TDS’ lack of scale relative to larger competitors that may have greater financial and other resources than TDS could cause TDS to be unable to compete successfully, which could adversely affect its business, financial condition or results of operations.
TDS has lack of scale compared to larger competitors. TDS may be unable to compete successfully with larger companies that have substantially greater financial, technical, marketing, sales and purchasing or that offer more services than TDS, and this could adversely affect TDS’ revenues and costs of doing business. Specifically, TDS’ lack of scale relative to most of its competitors could have the following impacts, among others:
▪ Low profit margins and returns on investment that are below TDS’ cost of capital;
▪ Increased operating and capital expenditure costs due to lack of leverage with vendors and dispersed geography;
▪ Limited opportunities for strategic partnerships as potential partners are focused on telecommunications companies with greater scale and scope;
▪ Limited access to content, as well as limited ability to obtain acceptably priced content and programming;
▪ Limited ability to influence industry standards;
▪ Reduced ability to invest in research and development of new services and products;
▪ Lower risk tolerance when evaluating new markets;
▪ Vendors may deem TDS non-strategic and not develop or sell services and products to TDS;
▪ Limited access to intellectual property;
▪ Other limited opportunities such as for software development; and
▪ Limited ability to acquire and subsidize mobile handsets that customers may desire.
9) Inability to protect TDS’ real estate rights, with respect to land leases, could have an adverse effect on TDS’ business, financial condition or results of operations.
A significant number of Array’s towers are located on land subject to operating leases. For various reasons, landowners may not want to renew their ground agreements with Array, may lose rights to their land, or may transfer their land interests to other parties, including ground lease aggregators, which could adversely affect Array’s ability to renew ground agreements, or to renew such ground agreements on commercially viable terms or require Array to renew on terms that are significantly less favorable than those that have historically been in place. Array’s inability to protect rights to the land under its towers, or its inability to lease such land on commercially viable terms or it needs to accept terms that are significantly less favorable than those that have historically been in place, may have a material adverse effect on TDS’ business, cash flows, results of operations or financial condition.
10) TDS’ business, financial condition or results of operations may be adversely impacted by extreme weather events, climate-related events, natural disasters (including wildfires) and other unforeseen events.
Array’s towers and TDS Telecom’s network are subject to risks from unforeseen events such as extreme weather events, wildfires or natural disasters (including as a result of any potential effects of climate change). Array’s towers may collapse for any number of reasons, including structural deficiencies. In the event Array’s towers or TDS Telecom’s network are adversely impacted by an unforeseen event, customers may not be obligated or willing to pay for their services while Array and TDS Telecom may be required to continue paying related fixed expenses, including expenses for ground leases and other property interests. Any such unforeseen event impacting a material portion of Array’s towers or TDS Telecom’s network could, among other things, interrupt or delay service to customers, damage or delay deployment of new towers, damage network equipment, or result in legal claims or penalties, reputational damage, negative market perception, or costly response measures. All of these events could adversely affect TDS’ business, cash flows, financial condition or results of operations. In addition, TDS Telecom has electrical lines on certain of its poles and any unforeseen event may cause damage to surrounding property. Array and TDS Telecom currently maintain insurance to cover the estimated cost of replacing damaged towers, network equipment and damage to surrounding property, but there can be no assurance that such coverage will remain readily available in the insurance marketplace or be adequate to cover exposure from such events.
11) An inability to attract people of outstanding talent throughout all levels of the organization, to develop their potential through education and assignments, and to retain them by keeping them engaged, challenged and properly rewarded could have an adverse effect on TDS' business, financial condition or results of operations.
TDS’ ability to sustain and grow its business and execute on its strategy requires TDS, in part, to attract, recruit and retain qualified and experienced associates, including key management personnel and other talent. Due to competition, limited supply, and/or rising wage levels for qualified management, technical and other personnel, there can be no assurance that TDS will be able to attract and/or retain people of outstanding potential for leadership and development of its business. The loss of existing key personnel due to competition, wage levels and/or retirements, the failure to recruit highly skilled personnel in a timely and cost-effective manner or the failure to have effective succession planning, could have an adverse effect on TDS’ business, financial condition or results of operations.
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12) Changes in various business factors, including changes in demand, consumer preferences and perceptions, price competition, cost increases and other factors, could have an adverse effect on TDS’ business, financial condition or results of operations.
Changes in any of several factors could have an adverse effect on TDS’ business, financial condition or results of operations. These factors include, but are not limited to:
▪ Consumer preferences, including internet speed;
▪ Consumer perceptions of network quality and performance;
▪ Consumer expectations for self-service options through digital means;
▪ Competitive pressure to deliver higher speed;
▪ Competitive pressure from promotional activity;
▪ The pricing of services, including an increase in price-based competition;
▪ Inflationary pressures on costs without corresponding price increases for TDS' services;
▪ Access to and cost of programming;
▪ The overall size and growth rate of TDS’ customer base;
▪ Selling expenses;
▪ Net customer acquisition and retention costs;
▪ Customers’ ability to pay for services and the potential impact on bad debts expense;
▪ Third-party vendor support;
▪ Capacity constraints;
▪ The mix of services and products offered by TDS and purchased by customers; and
▪ The costs of providing services and products.
13) Advances or changes in technology could render certain technologies used by TDS obsolete, could put TDS at a competitive disadvantage, could reduce TDS’ revenues or could increase its costs of doing business. Artificial intelligence advancements may put TDS at a competitive disadvantage, in particular if TDS is not able to keep pace with its competitors, which could have an adverse effect on TDS' business, financial condition or results of operations.
The telecommunications industry is experiencing significant changes in technologies and services expected by customers, as evidenced by evolving industry standards, ongoing improvements in the capacity and quality of digital technology, shorter development cycles for new services and products, and enhancements and changes in end-user requirements and preferences. Also, high-speed wireless networks (wireless broadband) represent a risk for TDS’ wireline and cable businesses as customers may elect to substitute their wireline or cable broadband connection with wireless broadband. Future technological changes or advancements, including investments in artificial intelligence capabilities, may enable other technologies to equal or exceed TDS’ current levels of service and render its system infrastructure obsolete. TDS may not be able to respond to such changes and implement new technology on a timely or cost-effective basis, which could reduce its revenues or increase its costs of doing business. Artificial intelligence advancements may put TDS at a competitive disadvantage, in particular if TDS is not able to keep pace with its competitors, which could have an adverse effect on TDS' business, financial condition or results of operations.
The development and implementation of new technologies designed to enhance the efficiency, architecture and design of wireless networks could lead to a reduction in demand for tower leasing by wireless companies. Certain emerging technologies and architectures, such as satellites and mesh transmission systems, may serve as substitutes for, or alternatives to, the traditional tower infrastructure, particularly in rural markets. The extent and timing of widespread adoption of these emerging technologies is uncertain, but any significant shift could have an adverse effect on TDS' business, financial condition or results of operations.
14) Costs, integration problems or other factors associated with acquisitions or divestitures and/or expansion of TDS’ businesses could have an adverse effect on TDS’ business, financial condition or results of operations.
In addition to the transactions described above, TDS has entered into and may continue to enter into agreements to acquire or divest certain assets. TDS may change the markets in which it operates and the services that it provides through such acquisitions or divestitures. In general, TDS may not disclose the negotiation of such transactions until a definitive agreement has been reached. These transactions commonly involve a number of risks, including:
▪ Identification of assets for acquisition or divestiture;
▪ Competition for acquisition targets and the ability to acquire at reasonable prices;
▪ Possible lack of buyers for assets that TDS desires to divest and the ability to divest such assets at reasonable prices;
▪ Ability to negotiate favorable terms and conditions for acquisitions and divestitures;
▪ Significant expenditures associated with acquisitions and divestitures;
▪ Risks associated with integrating new businesses or markets, including risks relating to cybersecurity and privacy;
▪ Ability to enter markets in which TDS has limited or no direct prior experience and competitors have stronger positions;
▪ Uncertain revenues and expenses associated with acquisitions or the entry into new expansion markets, with the result that TDS may not realize the growth in revenues, anticipated cost structure, profitability, or return on investment that it expects;
▪ Difficulty of integrating and managing the technologies, services, products, operations and personnel of the acquired businesses, or of separating such matters for divested businesses or assets;
▪ Diversion of management’s attention;
▪ Disruption of ongoing business;
▪ Impact on TDS’ cash and available credit lines for use in financing future growth and working capital needs;
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▪ Inability to retain key personnel;
▪ Inability to successfully incorporate acquired assets and rights into TDS’ service offerings; and
▪ Possible conditions to, or lack of, approvals by government bodies, including the FCC, the Department of Justice and State regulators.
No assurance can be given that TDS will be successful with respect to any of its future acquisition or divestiture strategies or initiatives.
15) Difficulties involving third parties TDS does business with, including changes in the relationship with TDS or financial or operational difficulties, including supply chain disruptions of key suppliers, could adversely affect TDS’ business, financial condition or results of operations.
TDS depends upon certain vendors to provide it with equipment, services and content that meet its quality and cost requirements on a timely basis to continue its network construction and upgrades, and to operate its business. Key suppliers may experience supply chain challenges beyond their control that result in difficulties providing the services and products typically requested by TDS on a timely basis. If these key suppliers (i) experience product availability shortages, (ii) require extended lead times to fulfill orders, (iii) experience financial difficulties or file for bankruptcy or experience other operational difficulties or (iv) deem TDS non-strategic and do not develop or sell services and products to TDS, particularly where technical requirements differ from those of larger companies, they may not provide equipment, services or content to TDS on a timely basis, or at all, or they may otherwise fail to honor their obligations to TDS. Furthermore, consolidation among key suppliers may result in less competition, higher prices, the discontinuation of equipment and/or services typically purchased by TDS or the discontinuation of support for equipment owned by TDS.
Operation of TDS’ supply chain and management of its network equipment, including customer premise equipment, require accurate forecasting of customer growth and demand. If network equipment is not available or requires extended lead times due to supply chain challenges, or if overall demand for services or the mix of demand for services is significantly different than TDS' expectations, TDS may not be able to adequately maintain a network that supports customer demand. Also, if TDS fails to accurately forecast customer usage and network demands, TDS may have excess supply of network equipment inventory that may need to be written down, depreciated or disposed at a loss. Further, TDS' supply chain could be disruptedunexpectedly by tariffs, governmental restrictions, raw material shortages, wars, natural disasters, disease or other factors. Supply chain disruptions may result in constraints on network or other equipment, extended lead times, delayed construction and additional uncertainty.
Also, TDS has other arrangements with third parties, including arrangements pursuant to which TDS outsources certain support and billing functions to third-party vendors, including service providers and third-party wireless network operators for TDS' wireline MVNO product. Operational problems associated with such functions, including any failure by the vendor to provide the required level of service under the outsourcing arrangements, including possible cyber-attacks or other breaches of network or information technology security, data protection or privacy, could have adverse effects on TDS’ business, financial condition or results of operations.
16) A failure by TDS to maintain flexible and capable telecommunication networks or information technologies, or a material disruption thereof, could have an adverse effect on TDS’ business, financial condition or results of operations.
TDS relies extensively on its telecommunication networks and information technologies to operate and manage its businesses, process transactions and summarize and report results. These networks and technologies are subject to obsolescence and, consequently, must be upgraded, replaced and/or otherwise enhanced over time. Enhancements must be more flexible and dependable than ever before. All of this is capital intensive and challenging.
The increased provision of data services has introduced significant demands on TDS’ network and also has increased complexities related to network management which creates an increased level of risk related to quality of service and data speeds. This is due to the fact that many customers increasingly rely on data communications to execute and validate transactions. As a result, redundancy and geographical diversity of TDS’ network facilities are critical to providing uninterrupted service. Also, the speed of repair and maintenance procedures in the event of network interruptions is critical to maintaining customer satisfaction. TDS’ ability to maintain high-quality, uninterrupted service to its customers is critical, particularly given the increasingly competitive environment and customers’ ability to choose other service providers.
In addition, TDS’ networks and information technologies and the networks and information technologies of vendors on which TDS relies are subject to damage or interruption due to various events, including power outages, computer, network and telecommunications failures, computer viruses, security breaches, hackers and other cybersecurity risks, catastrophic events, natural disasters, severe weather, adverse climate changes, errors or unauthorized actions by employees and vendors, flawed conversion of systems, disruptive technologies and technology changes.
Financial Risk Factors
17) Uncertainty in TDS’ or Array's future cash flow and liquidity, their level of indebtedness or their inability to access capital, deterioration in the capital markets, changes in interest rates, changes in TDS' or Array’s credit ratings or other factors could limit or restrict the availability of financing on terms and prices acceptable to TDS, which may require TDS to reduce or delay its construction, development or acquisition programs, divest assets, and/or reduce or cease share repurchases and/or the payment of common shareholder dividends.
TDS’ ability to make scheduled payments on its indebtedness or to refinance it will depend on its financial and operating performance which, in turn, is subject to prevailing economic and competitive conditions and other factors beyond its control.
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TDS expects to fund its current fiber plans and E-ACAM builds through its plans and actions to allocate capital among its businesses and investments. TDS’ liquidity would be adversely affected if, among other things, cash flows from operations significantly decline from anticipated levels, TDS is unable to implement cost reduction initiatives, TDS is unable to obtain short or long-term financing on acceptable terms, TDS is not able to comply with certain debt covenants or TDS is unsuccessful in negotiating related consents, waivers, or amendments, interest rates increase, TDS makes significant capital investments, TDS makes significant business acquisitions, the Los Angeles SMSA Limited Partnership (LA Partnership) and other minority-owned investment interests discontinue or significantly reduce distributions compared to historical levels, or regulatory support payments decline. These or other developments at Array may negatively affect TDS' ability to obtain short- or long-term financing on acceptable terms or obtain favorable terms and conditions from third-party vendors.
The TDS and Array revolving credit agreements, and the Array term loan agreement require TDS or Array, as applicable, to comply with certain affirmative and negative covenants, including certain financial covenants. Depending on the actual financial performance of TDS and Array, there is a risk that TDS and/or Array could fail to satisfy the required covenants. Restrictions included in such debt instruments may limit TDS’ operating and financial flexibility. TDS’ and Array’s restrictions contained in debt instruments and/or possible breaches of covenants, defaults, and acceleration of indebtedness could have an adverse effect on TDS’ business, financial condition, revenues, results of operations and cash flows.
TDS’ credit ratings from nationally recognized credit agencies or other factors could limit or restrict the availability of financing on terms and prices acceptable to TDS, which could impact TDS’ business operations. Given Array’s ownership structure, the rating agencies often consider rating actions related to TDS and Array in tandem. To the extent that Array’s credit rating is downgraded, it may adversely affect TDS’ credit rating, which could impact TDS’ liquidity.
18) TDS’ assets and revenue are concentrated primarily in the U.S. telecommunications industry. Consequently, its operating results may fluctuate based on factors related primarily to conditions in this industry.
TDS’ focus on the U.S. telecommunications industry, together with its lack of scale relative to larger competitors with greater resources within the industry, may represent increased risk for investors due to the lack of diversification. This could have an adverse effect on TDS’ ability to attain and sustain long-term, profitable revenue growth and could have an adverse effect on its business, financial condition, cash flows, or results of operations.
19) TDS has significant investments in wireless operating entities that it does not control. Losses in the value of or cash flows from such investments could have an adverse effect on TDS’ financial condition, cash flows or results of operations.
TDS has significant investments in wireless operating entities that it does not control. TDS’ interests in such entities do not provide TDS with control over the business strategy, financial goals, network build-out plans or other operational aspects of these entities. TDS cannot provide assurance that these entities will operate in a manner that will increase or maintain the value of TDS’ investments, that TDS’ proportionate share of income from these investments will continue at the current level in the future or that TDS will not incur losses from the holding of such investments. Losses in the values of such investments or a reduction in income and distributions from these investments could adversely affect TDS’ financial condition, cash flows or results of operations.
Regulatory, Legal and Governance Risk Factors
20) Failure by TDS to timely or fully comply with any existing applicable legislative and/or regulatory requirements or changes thereto could adversely affect TDS’ business, financial condition or results of operations.
TDS’ operations are subject to varying degrees of regulation by the FCC, FAA, state public utility commissions and other federal, state and local regulatory agencies and legislative bodies. Both the FAA and the FCC regulate the construction, modification, and maintenance of towers and structures that support antennas used for wireless communications and radio and television broadcasts. FAA and FCC regulations govern construction, lighting, painting, marking and registration of towers. Certain proposals to construct new towers, or to modify or add new equipment to existing towers, may require review by the FAA to ensure that the tower will not present a hazard to air navigation. Array bears certain responsibilities under these regulations, including notifying the FAA of any lighting outages. Failure to comply with existing or future applicable requirements may lead to civil penalties or other liabilities and may subject Array to significant indemnification liability to its customers against any such failure to comply.
In addition, changes in the administration of the various regulatory agencies and legislative bodies are resulting in and could continue to result in different policies with respect to many federal laws and regulations, including but not limited to changes to fiscal and tax policies, trade policies, tariffs on imported goods, climate change and workforce-related practices. New or amended regulatory requirements could increase TDS’ costs and divert resources from other initiatives. Adverse decisions, increased regulation, or changes to existing regulation by regulatory bodies could negatively impact TDS’ operations. New regulatory mandates or enforcement may result in lost revenues, higher operating expenses, unexpected or increased capital expenditures, or other changes. Litigation and different objectives among federal and state regulators could create uncertainty and delay TDS’ ability to respond to new regulations. Further, wireless spectrum licenses and cable franchise rights are subject to renewal by a granting authority and could be revoked in the event of a violation of applicable laws or regulatory requirements.
TDS attempts to timely and fully comply with all regulatory requirements. However, TDS is unable to predict the future actions of the various legislative and regulatory bodies that govern TDS, and such actions could have adverse effects on TDS’ business.
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21) TDS' receipt of financial support through various government programs for its deployment of telecommunications and broadband networks and services, its ability to properly calculate and pay fees and surcharges for its services, and its ability to continue to pass through and collect from its customers certain of those fees and surcharges is subject to uncertainty, the result of which could have an adverse effect on TDS’ business, financial condition or results of operations.
TDS Telecom receives financial support from the FCC and state regulatory authorities to facilitate its deployment of telecommunications and broadband networks and services, particularly in designated “high cost” areas. TDS Telecom also receives support under related programs, such as the Connect America Fund support program. The Connect America Fund support program imposes build-out requirements on TDS Telecom that may not be met, and a failure to meet these requirements can result in penalties, loss of support and/or deferral of future revenues. There is no assurance that these financial support payments will continue for TDS Telecom, and there is no assurance that TDS Telecom will qualify for future programs. If financial support is discontinued or reduced from current levels, or if receipt of future support is contingent upon making certain network-related expenditures, this could have an adverse effect on TDS’ business, financial condition or operating results and cash flows.
Telecommunications providers pay a variety of fees and surcharges on their gross revenues from the provision of interstate and intrastate services. Some of these fees and surcharges finance the cost of the support programs from which TDS Telecom benefits. The application of these fees and surcharges can, depending on the circumstances, be complex and difficult to assess. Drawing distinctions between interstate and intrastate services, and thus apportioning fees and surcharges across jurisdictions, also can be complex and involve differing regulatory interpretations, including by the FCC or state authorities. If TDS fails to assess these fees and surcharges in a manner that FCC or state authorities deem compliant, this could have an adverse effect on TDS’ business and financial condition.
Federal, state, and local authorities impose and may continue to impose various surcharges, taxes and fees on the provision of telecommunications services. The applicability of these surcharges, taxes and fees is uncertain in many cases and, periodically, federal, state or local regulators may increase or change the surcharges, taxes and fees that TDS Telecom currently pays. In some instances, where permitted by law, TDS Telecom passes through and collects these sums from its customers. It is possible, however, that regulators may in the future limit the ability of service providers to pass through and collect these sums from customers. Any such limitation could have a material impact on TDS Telecom and thus TDS’ financial condition and business.
22) Settlements, judgments, restraints on its current or future manner of doing business and/or costs resulting from pending and future legal and policy proceedings could have an adverse effect on TDS’ business, financial condition or results of operations.
TDS is regularly involved in a number of legal and policy proceedings before the FCC and various state and federal courts. Such legal and policy proceedings can be complex, costly, protracted and highly disruptive to business operations by diverting the attention and energies of management and other key personnel.
The assessment of legal and policy proceedings is a highly subjective process that requires judgments about future events. Additionally, amounts ultimately received or paid upon settlement or resolution of litigation and other contingencies may differ materially from amounts accrued in the financial statements. Depending on a range of factors, these or similar proceedings could impose restraints on TDS’ current or future manner of doing business.
23) Certain matters, such as control by the TDS Voting Trust and provisions in the TDS Restated Certificate of Incorporation, may serve to discourage or make more difficult a change in control of TDS or have other consequences.
The TDS Restated Certificate of Incorporation and the TDS bylaws contain provisions which may serve to discourage or make more difficult a change in control of TDS without the support of the TDS Voting Trust and the TDS Board of Directors or without meeting various other conditions.
The TDS Restated Certificate of Incorporation authorizes the issuance of different series of common stock, which have different voting rights. The TDS Series A Common Shares have the power to elect approximately 75% (less one) of the directors and have ten votes per share in matters other than the election of directors. The TDS Common Shares (with one vote per share in the election of directors) vote as a separate group with respect to the election of 25% of the total number of directors (rounded up to the nearest whole number plus one director). In addition, the total percentages of voting power in matters other than the election of directors of the Series A Common Shares and Common Shares are fixed, at 56.7% and 43.3%, respectively, subject to adjustment due to changes in the number of outstanding Series A Common Shares.
A substantial majority of the outstanding TDS Series A Common Shares are held in the TDS Voting Trust which expires on June 30, 2035. The TDS Voting Trust was created to facilitate the long-standing relationships among the certificate holders. By virtue of the number of shares held by them, the voting trustees have the power to elect eight directors based on the current TDS Board of Directors’ size of twelve directors, and control a majority of the voting power of TDS with respect to matters other than the election of directors.
The existence of the TDS Voting Trust is likely to deter any potential unsolicited or hostile takeover attempts or other efforts to obtain control of TDS and may make it more difficult for shareholders to sell shares of TDS at higher than market prices. The trustees of the TDS Voting Trust have advised TDS that they intend to maintain the ability to keep or dispose of voting control of TDS.
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The TDS Restated Certificate of Incorporation also authorizes the TDS Board of Directors to designate and issue TDS Undesignated Shares in one or more classes or series of preferred or common stock from time to time. Generally, no further action or authorization by the shareholders is necessary prior to the designation or issuance of the additional TDS Undesignated Shares authorized pursuant to the TDS Restated Certificate of Incorporation unless applicable laws or regulations would require such approval in a given instance. Such TDS Undesignated Shares could be issued in circumstances that would serve to preserve control of TDS’ then existing management.
In addition, the TDS Restated Certificate of Incorporation includes a provision that authorizes the TDS Board of Directors to consider various factors, including effects on customers, taxes, and the long-term and short-term interests of TDS, in the context of a proposal or offer to acquire or merge the corporation, or to sell its assets, and to reject such offer if the TDS Board of Directors determines that the proposal is not in the best interests of the corporation based on such factors.
The provisions of the TDS Restated Certificate of Incorporation and the TDS bylaws and the existence of various classes of capital stock could prevent shareholders from profiting from an increase in the market value of their shares as a result of a change in control of TDS by delaying or preventing such change in control.
The provisions of the TDS Restated Certificate of Incorporation and the existence of different classes of capital stock and voting rights could result in the exclusion of TDS Common Shares from certain major stock indices at some point in the future, unless TDS is grandfathered by such stock indices or qualifies for some other exception.
General Risk Factors
24) TDS has experienced, and in the future expects to experience, cyber-attacks or other breaches of network or information technology security of varying degrees on a regular basis, which could have an adverse effect on TDS' business, financial condition or results of operations.
TDS has historically experienced, and in the future expects to experience, cyber-attacks of varying degrees on a regular basis. These include cyber-attacks intended to wrongfully obtain private and valuable information, or cause other types of malicious events. The number of associates working remotely increases risks associated with data handling and vulnerability management. The rapid evolution and increased adoption of artificial intelligence technologies may intensify TDS' cybersecurity risk. TDS maintains administrative, technical and physical controls, as well as other preventative measures, to reduce the risk of security breaches. Although to date TDS has not discovered a material security breach, these efforts may be insufficient to prevent a material security breach stemming from future cyber-attacks including ransomware. Recently, companies in the telecommunications industry have been the subject of targeted cybersecurity attacks, which may increase the risk for TDS. If TDS’ or its vendors’ networks and information technology are not adequately adapted to changes in technology or are damaged or fail to function properly, and/or if TDS’ or its vendors’ security is breached or otherwise compromised, TDS could sufferadverse consequences, including theft, destruction or other loss of critical and private data, including customer and/or employee data, interruptions or delays in its operations, inaccurate financial reporting, and significant costs to remedy the problems. If TDS’ or its vendors’ systems become unavailable or suffer a security breach of customer or other data, TDS may be required to expend significant resources and take various actions to address the problems, including notification under data privacy laws and regulations, may be subject to fines, sanctions and litigation, and its reputation and operating results could be adversely affected. TDS continues to experience denial of service attacks. Although TDS has implemented and continues to enhance its protection and recovery measures in response to such attacks, these efforts may be insufficient to prevent a material denial of service attack in the future.
25) Disruption in credit or other financial markets, a deterioration of U.S. or global economic conditions or other events could, among other things, impede TDS’ access to or increase the cost of financing its operating and investment activities and/or result in reduced revenues and lower operating income and cash flows, which would have an adverse effect on TDS’ business, financial condition or results of operations.
Disruptions in the credit and financial markets, declines in consumer confidence, increases in unemployment, declines in economic growth, increased tariffs on import goods, sudden increases in inflation and uncertainty about corporate earnings could have a significant negative impact on the U.S. and global financial and credit markets and the overall economy. Such events could have an adverse impact on financial institutions resulting in limited access to capital and credit for many companies. Furthermore, economic uncertainties make it very difficult to accurately forecast and plan future business activities. Changes in economic conditions, changes in financial markets, changes in U.S. trade policies, deterioration in the capital markets or other factors could have an adverse effect on TDS’ business, financial condition, revenues, results of operations and cash flows.
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This report contains statements that are not based on historical facts, which may be identified by words such as “believes,” “anticipates,” “estimates,” “expects,” “plans,” “intends,” “projects,” “will” and similar expressions. These statements constitute and represent “forward looking statements” as this term is defined in the Private Securities Litigation Reform Act of 1995. Such forward looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results, events or developments to be significantly different from any future results, events or developments expressed or implied by such forward looking statements. See the disclosure under the heading Private Securities Litigation Reform Act of 1995 Safe Harbor Cautionary Statement elsewhere in this report for additional information.
The accounting policies of TDS conform to accounting principles generally accepted in the United States of America (GAAP). However, TDS uses certain “non-GAAP financial measures” in the MD&A and the business segment information. A discussion of the reasons TDS determines these metrics to be useful and reconciliations of these measures to their most directly comparable measures determined in accordance with GAAP are included in the disclosure under the heading Supplemental Information Relating to Non-GAAP Financial Measures within the MD&A of this report.
On August 1, 2025, United States Cellular Corporation, a 82.0%-owned subsidiary of TDS, changed its name to Array Digital Infrastructure, Inc. (Array). Array is used throughout this report even when referring to historical periods.
General
TDS is a diversified telecommunications company that provides high-quality communications services. TDS provides broadband, video, voice and wireless services through its wholly-owned subsidiary, TDS Telecommunications LLC (TDS Telecom). Array leases tower space to tenants and provides ancillary services, holds noncontrolling interests in primarily wireless operating companies and holds certain wireless spectrum licenses. TDS operates entirely in the United States. See Note 20 — Business Segment Information in the Notes to Consolidated Financial Statements for additional information about TDS' segments.
2025 Operating Revenues by Segment*
* Represents revenues related to continuing operations.
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TDS Mission and Strategy
TDS’ mission is to provide outstanding communications services to its customers and meet the needs of its shareholders, its people, and its communities. In pursuing this mission, TDS seeks to grow its businesses, create opportunities for its associates, support the communities it serves, and build and return value for its shareholders. Since its founding, TDS has been committed to bringing high-quality communications services to rural and underserved communities.
TDS’ strategy has been to re-invest the majority of its operating capital in its businesses to strengthen their competitive positions and financial performance, while also returning value to TDS shareholders.
Strategic Alternatives Review
On August 1, 2025, Array sold its wireless operations and select spectrum assets to T-Mobile US, Inc. (T-Mobile) under a Securities Purchase Agreement (Securities Purchase Agreement). Total consideration received was $4,293.8 million after adjustments which included a combination of $2,628.8 million in cash proceeds and $1,665.0 million in debt assumed by T-Mobile through the preliminary results of an exchange offer made to Array's debtholders, which subsequently closed on August 5, 2025. The final cash proceeds are subject to adjustment according to the terms and conditions of the Securities Purchase Agreement. As of December 31, 2025, Array recorded an estimated purchase price true-up due to T-Mobile of $20.2 million. At closing, a $16.7 million deferral of the purchase price was recorded related to certain spectrum licenses included in the transaction that did not transfer to T-Mobile and are subject to FCC approval. In addition, at closing, Array and T-Mobile entered into a Short-Term Spectrum Manager Lease Agreement and Short-Term Spectrum Manager Sublease Agreements which provide T-Mobile with an exclusive license to use certain Array spectrum assets and leases at no cost for up to one-year for the sole purpose of providing continued, uninterrupted service to customers. Further, at closing, Array and T-Mobile entered into a Master License Agreement (MLA), pursuant to which, among other things, T-Mobile has agreed to license from Array space on towers owned by Array. The wireless operations and select spectrum assets sold to T-Mobile are presented as discontinued operations throughout this report. See Note 2 — Discontinued Operations in Notes to Consolidated Financial Statements for additional information.
In addition to the sale of Array's wireless operations and select spectrum assets sold to T-Mobile pursuant to the Securities Purchase Agreement, Array also separately entered into the following agreements to sell spectrum license assets.
Spectrum Licenses
Buyer
Purchase Price
TDS Book Value as of December 31, 2025
Signing Date
Estimated or Actual Close Date
(Dollars in thousands)
AWS, Cellular and PCS 1
Verizon
October 17, 2024
3.45 GHz and 700 MHz 2
November 6, 2024
January 13, 2026
700 MHz 1
T-Mobile
August 29, 2025
600 MHz 1
T-Mobile
October 7, 2025
1 These license transactions remain subject to regulatory approval and other customary closing conditions, and in the case of the sale to Verizon, the termination of the T-Mobile Short-Term Spectrum Manager Lease Agreement. See Note 7 — Acquisitions and Divestitures in the Notes to Consolidated Financial Statements for additional information.
2 Following the close of the transaction on January 13, 2026, TDS expects to record a book gain on the transaction of approximately $150.0 million ($114.0 million net of tax expense) during the first quarter of 2026. The expected book gain recorded at TDS is lower than the expected book gain recorded at Array due primarily to transaction costs paid by TDS.
The strategic alternatives review process is ongoing as Array works toward closing the Verizon and T-Mobile spectrum transactions signed during 2024 and 2025, and seeks to opportunistically monetize its remaining spectrum assets that are not subject to executed agreements. In addition to the transactions at Array, TDS continues to explore opportunities to transform its business operations given the change in scale of the overall TDS organization following the divestiture of the wireless operations. These processes are collectively referred to as the strategic alternatives review throughout this report.
TDS incurred expenses related to the announced transactions and strategic alternatives review o f $9.1 million, $33.3 million and $13.0 million for the years ended December 31, 2025, 2024 and 2023 , respectively, which are included in Selling, general and administrative (SG&A) and Cost of operations expenses for continuing operations.
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Terms Used by TDS
The following is a list of definitions of certain industry terms that are used throughout this document:
▪ Adjusted EBITDA – non-GAAP metric referring to earnings before interest, taxes, depreciation, amortization and accretion, gains and losses and other nonrecurring expenses. See Supplemental Information Relating to Non-GAAP Financial Measures within this MD&A for additional information.
▪ Adjusted OIBDA – non-GAAP measure referring to operating income before depreciation, amortization and accretion, gains and losses and other nonrecurring expenses. See Supplemental Information Relating to Non-GAAP Financial Measures within this MD&A for additional information
▪ Alternative Connect America Cost Model (ACAM) – a USF support mechanism for certain carriers, which provides revenue support through 2028. This support comes with an obligation to build defined broadband speeds to a certain number of locations.
▪ Broadband Connections – refers to the individual customers provided internet access through various transmission technologies, including fiber, coaxial and copper.
▪ Broadband Penetration – metric which is calculated by dividing total broadband connections by total service addresses.
▪ Cable Markets – markets where TDS provides service as the cable provider using coaxial cable and fiber technologies.
▪ Colocations – represents instances where a third-party leases space on a company-owned tower.
▪ DOCSIS – Data Over Cable Service Interface Specification is an international telecommunications standard that permits the addition of high-bandwidth data transfer to an existing cable TV (CATV) system. DOCSIS 3.1 is a system specification that increases data transmission rates.
▪ Enhanced Alternative Connect America Cost Model (E-ACAM) – a USF support mechanism for certain carriers, which provides revenue support through 2038. This support comes with an obligation to provide 100 megabits per second (Mbps) of download speed and 20 Mbps of upload speed (100/20 Mbps) to a certain number of locations.
▪ Expansion Markets – markets utilizing fiber networks in areas where TDS does not serve as the cable or incumbent service provider.
▪ Free Cash Flow – non-GAAP metric defined as Cash flows from operating activities less Cash paid for additions to property, plant and equipment and less Cash paid for software license agreements. See Supplemental Information Relating to Non-GAAP Financial Measures within this MD&A for additional information.
▪ Incumbent Markets – markets where TDS is positioned as the traditional local telephone company.
▪ IPTV – internet protocol television.
▪ Residential Revenue per Connection – metric which is calculated by dividing total residential revenue by the average number of residential connections and by the number of months in the period.
▪ Residential Fiber Churn Rate – represents the percentage of incumbent and expansion fiber connections that disconnected service each month. These rates represent the average monthly churn rate for each respective period.
▪ Service Addresses – number of single residence homes, multi-dwelling units, and business locations that are capable of being connected to the TDS network, based on best available information.
▪ Tower Tenancy Rate – calculated as total number of colocations divided by total number of towers.
▪ Universal Service Fund (USF) – a system of telecommunications collected fees and support payments managed by the FCC intended to promote universal access to telecommunications services in the United States.
▪ Video Connections – represents the individual customers provided video services.
▪ Voice Connections – refers to the individual circuits connecting a customer to TDS’ central office facilities that provide voice services or the billable number of lines into a building for voice services.
▪ Wireless Connections – refers to an individual mobile line provisioned through TDS' mobile virtual network operator (MVNO) arrangement and delivered under the TDS-branded wireless offering.
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Results of Operations — TDS Consolidated
The following discussion and analysis compares financial results for the year ended December 31, 2025, to the year ended December 31, 2024 and the year ended December 31, 2024, to the year ended December 31, 2023.
Year Ended December 31,
(Dollars in thousands)
Operating revenues
TDS Telecom
Array
All other 1
Total operating revenues
Operating expenses
TDS Telecom
Array
All other 1
Total operating expenses
Operating income (loss)
TDS Telecom
Array
All other 1
Total operating income (loss)
Other income (expense)
Equity in earnings of unconsolidated entities
Interest and dividend income
Interest expense
Short-term imputed spectrum lease income
Other, net
Total other income
Income (loss) before income taxes
Income tax benefit
Net income (loss) from continuing operations
Less: Net income (loss) from continuing operations attributable to noncontrolling interests, net of tax
Net income (loss) from continuing operations attributable to TDS shareholders
Net income (loss) from discontinued operations
Less: Net income (loss) from discontinued operations attributable to noncontrolling interests, net of tax
Net income (loss) from discontinued operations attributable to TDS shareholders
Net income (loss)
Less: Net income attributable to noncontrolling interests, net of tax
Net income (loss) attributable to TDS shareholders
TDS Preferred Share dividends
Net income (loss) attributable to TDS common shareholders
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Year Ended December 31,
(Dollars in thousands)
Adjusted OIBDA from continuing operations (Non-GAAP) 2
Adjusted EBITDA from continuing operations (Non-GAAP) 2
Capital expenditures from continuing operations 3
N/M - Percentage change not meaningful
1 Consists of corporate and other operations and intercompany eliminations.
2 Refer to Supplemental Information Relating to Non-GAAP Financial Measures within this MD&A for a reconciliation of this measure.
3 Refer to Liquidity and Capital Resources within this MD&A for additional information on Capital expenditures.
Refer to individual segment discussions in this MD&A for additional details on operating revenues and expenses at the segment level.
2025-2024 Commentary
Equity in earnings of unconsolidated entities
Equity in earnings of unconsolidated entities represents TDS' share of net income from entities in which it has a noncontrolling interest and that are accounted for using the equity method or the net asset value practical expedient. Array holds noncontrolling interests in three entities managed by Array in the state of Iowa that sold their wireless operations to T-Mobile in three separate transactions on August 1, 2025, the same date that Array sold its wireless operations to T-Mobile. As a result of the Iowa entities' sale of their wireless operations, these entities recognized a gain on sale, and Array's proportionate share of that gain was included in Equity in earnings of unconsolidated entities in the amount of $33.4 million, which was the primary driver of the year-over-year increase in 2025. See Note 9 — Investments in Unconsolidated Entities in the Notes to Consolidated Financial Statements for additional information.
Interest expense
Interest expense increased in 2025 du e primarily to the write-off of unamortized debt costs for TDS debt facilities that were repaid in August 2025, a borrowing on the Array CoBank term loan in August 2025 and lower capitalized interest at Array. Interest expense from continuing operations excludes interest costs in all periods associated with Array term loans repaid, and Array debt exchanged, in conjunction with the sale of Array's wireless operations to T-Mobile. See Market Risk for additional information regarding maturities of long-term debt and weighted average interest rates.
Income tax expense (benefit)
Income tax benefit on continuing operations increased in 2025 due primarily to favorable reductions to valuation allowances related to deferred tax assets that are now likely to be realized by the taxable income generated from the sale of wireless operations and select spectrum assets to T-Mobile, and/or the future License Purchase Agreements classified as held for sale as of December 31, 2025. This increase was partially offset by a decrease in the deferred tax benefit on the impairment of certain wireless spectrum licenses, which was smaller in 2025 than the impairment recorded in 2024.
See Note 5 — Income Taxes in the Notes to Consolidated Financial Statements for additional information.
Net income (loss) from discontinued operations attributable to TDS shareholders
Net income (loss) from discontinued operations attributable to TDS shareholders decreased for the year ended December 31, 2025, as a result of the sale of the wireless operations on August 1, 2025 and the corresponding loss on sale recognized on that date. See Note 2 — Discontinued Operations in the Notes to Consolidated Financial Statements for additional information related to the components of Net income (loss) from discontinued operations.
Net income (loss) from continuing operations attributable to noncontrolling interests, net of tax
Year Ended December 31,
(Dollars in thousands)
Array noncontrolling public shareholders’
Noncontrolling shareholders’ or partners’
Net income (loss) from continuing operations attributable to noncontrolling interests, net of tax
Net income (loss) from continuing operations attributable to noncontrolling interests, net of tax includes the noncontrolling public shareholders’ share of Array’s net income (loss) from continuing operations, the noncontrolling shareholders’ or partners’ share of certain Array subsidiaries’ net income (loss) from continuing operations and other TDS noncontrolling interests.
Index to MD&A
2024-2023 Commentary
Equity in earnings of unconsolidated entities
Equity in earnings of unconsolidated entities represents TDS’ share of net income from entities in which it has a noncontrolling interest and that are accounted for using the equity method or the net asset value practical expedient. See Note 9 — Investments in Unconsolidated Entities in the Notes to Consolidated Financial Statements for additional information.
Interest expense
Interest expense increased in 2024 due primarily to an increase in borrowings under the TDS term loan agreements. See Market Risk for additional information regarding maturities of long-term debt and weighted average interest rates.
Income tax expense (benefit)
Income tax expense decreased in 2024 due primarily to the deferred tax impact of the wireless spectrum license impairment charge recorded in the third quarter of 2024 and a decrease in state tax expense in 2024, partially offset by the deferred tax impact of the Goodwill impairment recorded in the fourth quarter of 2023. See Note 5 — Income Taxes in the Notes to Consolidated Financial Statements for additional information.
Net income (loss) from discontinued operations attributable to TDS shareholders
See Note 2 — Discontinued Operations in the Notes to Consolidated Financial Statements for additional information related to the components of Net income (loss) from discontinued operations.
Net income (loss) from continuing operations attributable to noncontrolling interests, net of tax
Year Ended December 31,
(Dollars in thousands)
Array noncontrolling public shareholders’
Noncontrolling shareholders’ or partners’
Net income (loss) from continuing operations attributable to noncontrolling interests, net of tax
Net income (loss) from continuing operations attributable to noncontrolling interests, net of tax includes the noncontrolling public shareholders’ share of Array’s net income (loss) from continuing operations, the noncontrolling shareholders’ or partners’ share of certain Array subsidiaries’ net income (loss) from continuing operations and other TDS noncontrolling interests.
Index to MD&A
Earnings
(Dollars in millions)
2025-2024 Commentary
Net income from continuing operations increased in 2025 due primarily to lower operating expenses, an income tax benefit and short-term imputed spectrum lease income, partially offset by lower operating revenues. Adjusted EBITDA from continuing operations increased in 2025 due primarily to lower operating expenses, partially offset by lower operating revenues.
2024-2023 Commentary
Net loss from continuing operations decreased in 2024 due primarily to lower operating and interest expenses, partially offset by lower operating revenues. Adjusted EBITDA from continuing operations increased in 2024 due primarily to lower operating expenses, partially offset by lower operating revenues.
*Represents a non-GAAP financial measure. Refer to Supplemental Information Relating to Non-GAAP Financial Measures within this MD&A for a reconciliation of this measure.
Index to MD&A
TDS TELECOM OPERATIONS
Business Overview
TDS Telecom owns, operates and invests in high-quality networks, services and products in a mix of small to mid-sized urban, suburban and rural communities throughout the United States. TDS Telecom is a wholly-owned subsidiary of TDS and provides a wide range of broadband, video, voice and wireless communications services to residential, commercial and wholesale customers, with the constant focus on delivering outstanding customer service.
The following MD&A omits discussion of 2024 compared to 2023. Refer to Management's Discussion and Analysis of Financial Condition and Results of Operations in TDS' Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on February 21, 2025, for that discussion.
OPERATIONS
▪ Serves 1.1 million connections in 30 states.
▪ Employs approximately 3,500 associates.
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TDS Telecom Mission and Strategy
TDS Telecom's mission is to provide high-quality communications services to connect people and businesses, support education, and strengthen communities.
TDS Telecom seeks to be the preferred broadband provider by offering fiber-rich networks, high-quality products and services, and a seamless customer experience. TDS Telecom's strategic efforts include:
▪ Provide high-quality broadband services in its markets with the ability to provide value-added bundling with video, voice and wireless service options.
▪ Drive growth by investing in fiber deployment. TDS Telecom seeks to grow its operations by creating clusters of markets in attractive, growing locations and may seek to acquire and/or divest of assets to support its strategy.
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Operational Overview — TDS Telecom
Total Service Address Mix
As of December 31,
TDS Telecom increased its service addresses 4% from a year ago to 1.9 million as of December 31, 2025, through footprint expansion. TDS Telecom services 48% of incumbent service addresses with fiber.
TDS Telecom offers 1Gig+ service to 78% of its total footprint as of December 31, 2025, compared to 74% a year ago.
As of or for the Quarter Ended December 31,
Residential connections
Broadband
Incumbent Fiber
Incumbent Copper
Expansion Fiber
Cable
Total Broadband
Video
Voice
Wireless
Total Residential Connections
Commercial connections
Total connections
Total residential fiber net adds
Total residential broadband net adds
Residential fiber churn
Total residential broadband churn
Numbers may not foot due to rounding.
Total connections decreased due to legacy voice, video, and competitive local exchange carrier (CLEC) connection declines, partially offset by broadband and wireless connection growth.
Divestitures in 2025 resulted in a decrease of 19,400 connections, including 7,700 residential broadband connections and 45,000 service addresses.
Index to MD&A
Residential Broadband Connections by Speed
As of December 31,
Residential broadband customers continue to take higher speeds with 86% taking speeds of 100 Mbps or greater and 43% taking 1Gig+.
Residential Revenue per Connection
For the year ended December 31,
Total residential revenue per connection increased 1% for 2025, due primarily to price increases.
Index to MD&A
Financial Overview — TDS Telecom
The following discussion and analysis compares financial results for the year ended December 31, 2025, to the year ended December 31, 2024.
Year Ended December 31,
(Dollars in thousands)
Residential
Incumbent
Expansion
Cable
Total residential
Commercial
Wholesale
Total service revenues
Equipment revenues
Total operating revenues
Cost of operations (excluding Depreciation, amortization and accretion reported below)
Cost of equipment and products
Selling, general and administrative
Depreciation, amortization and accretion
Loss on impairment of intangible assets
(Gain) loss on asset disposals, net
(Gain) loss on sale of business and other exit costs, net
Total operating expenses
Operating income (loss)
Net income (loss)
Adjusted OIBDA (Non-GAAP) 1
Adjusted EBITDA (Non-GAAP) 1
Capital expenditures 2
N/M - Percentage change not meaningful.
1 Refer to Supplemental Information Relating to Non-GAAP Financial Measures within this MD&A for a reconciliation of this measure.
2 Refer to Liquidity and Capital Resources within this MD&A for additional information on Capital expenditures.
Index to MD&A
Operating Revenues
(Dollars in millions)
Residential revenues consist of:
• Broadband services
• Video services, including IPTV, traditional cable programming and satellite offerings
• Voice services
• Wireless services
Commercial revenues consist of:
• High-speed and dedicated business internet services
• Video services
• Voice services
Wholesale revenues consist of:
• Network access services primarily related to interexchange and wireless carriers for carrying data and voice traffic on TDS Telecom's networks
• Federal and state regulatory support, including E-ACAM
Key components of changes in the statement of operations items were as follows:
Total operating revenues
Residential revenues decreased for 2025 due primarily to divestitures, declines in voice and video connections, and promotional activity, partially offset by growth in broadband connections and price increases.
Commercial revenues decreased for 2025 due primarily to declining connections in CLEC markets, decreases in ad revenue, and divestitures.
Wholesale revenues decreased for 2025, due primarily to the continued decline of special access circuits and divestitures, partially offset by final E-ACAM support adjustments.
Total operating revenues decreased for 2025 by $18.5 million due to the 2024 and 2025 divestitures.
Cost of operations
Cost of operations decreased for 2025 due primarily to lower video programming costs, costs to provide legacy services, plant and maintenance costs, and information processing costs, partially offset by higher employee-related expenses, vehicle costs, and lease acceleration costs.
Selling, general and administrative
Selling, general and administrative expenses increased for 2025 due primarily to increased employee-related expenses and lease acceleration costs, partially offset by lower bad debts expense and property taxes.
Depreciation, amortization and accretion
Depreciation, amortization and accretion increased for 2025 due primarily to changes in asset useful lives and capital expenditures on fiber assets.
(Gain) loss on asset disposals, net
Losses on asset disposals increased for 2025 due primarily to the write-off of cancelled projects.
(Gain) loss on sale of business and other exit costs, net
See Note 7 — Acquisitions and Divestitures in the Notes to Consolidated Financial Statements for additional information regarding divestitures of certain markets in both 2025 and 2024.
Index to MD&A
ARRAY OPERATIONS
Business Overview
Array connects America through digital infrastructure by leasing tower space to tenants and providing ancillary services. Array also holds noncontrolling interests in primarily wireless operating companies and holds certain wireless spectrum licenses. As of December 31, 2025, Array is an 82.0%-owned subsidiary of Telephone and Data Systems, Inc. (TDS). Through July 31, 2025, Array provided wireless communication services; these operations and certain wireless spectrum licenses were disposed of on August 1, 2025, as discussed further below.
Towers
Array seeks to grow tower revenue primarily through increasing colocations on existing towers and amendments to existing colocations. Array seeks to provide unique tower locations, attractive terms and streamlined implementation to wireless network operators, internet service providers, government and public safety agencies, broadcast and media companies, and other businesses. As of December 31, 2025 , Array owns 4,450 towers in 19 states.
Noncontrolling interest investments
Array holds noncontrolling interests in primarily wireless operating companies that generate material amounts of income and cash distributions. These entities primarily consist of wireless entities managed by Verizon and AT&T. The noncontrolling wireless entities managed by Array also sold their wireless operations to T-Mobile in separate transactions on August 1, 2025, coterminous with the sale of Array's consolidated wireless operations sold to T-Mobile on the same date. Going forward, these noncontrolling entities that are managed by Array consist primarily of tower operations.
Retained spectrum
Array holds wireless spectrum that is subject to sale agreements described below, and additional wireless spectrum not subject to pending sale agreements that Array seeks to opportunistically monetize. As of December 31, 2025, the book value of the remaining spectrum not subject to pending sale agreements was $1,584.8 million and includes primarily C-Band spectrum. Array incurred costs related to the management of the retained spectrum of $3.8 million as a standalone tower company during the six months ended December 31, 2025.
Index to MD&A
OPERATIONS
As of December 31, 2025
Owned towers
Number of colocations 1
Tower tenancy rate 1
1 Includes T-Mobile MLA committed site minimum of 2,015. Excludes Interim Sites whereby T-Mobile is leasing up to 1,800 sites for a period of up to 30 months subject to the terms and conditions of the MLA.
Index to MD&A
Financial Overview — Array
The following discussion and analysis compares financial results for the year ended December 31, 2025, to the year ended December 31, 2024 and the year ended December 31, 2024, to the year ended December 31, 2023.
Year Ended December 31,
(Dollars in thousands)
Operating revenues
Site rental
Services
Total operating revenues
Operating expenses
Cost of operations (excluding Depreciation, amortization and accretion reported below
Selling, general and administrative
Depreciation, amortization and accretion
Loss on impairment of licenses
(Gain) loss on asset disposals, net
(Gain) loss on license sales and exchanges, net
Total operating expenses
Operating income (loss)
Other income (expense)
Equity in earnings of unconsolidated entities
Interest and dividend income
Interest expense
Short-term imputed spectrum lease income
Other, net
Total other income
Income (loss) before income taxes
Income tax expense (benefit)
Net income (loss) from continuing operations
Adjusted OIBDA from continuing operations (Non-GAAP) 1
Adjusted EBITDA from continuing operations (Non-GAAP) 1
Capital expenditures from continuing operations 2
N/M - Percentage change not meaningful
1 Refer to Supplemental Information Relating to Non-GAAP Financial Measures within this MD&A for a reconciliation of this measure.
2 Refer to Liquidity and Capital Resources within this MD&A for additional information on Capital expenditures.
Key components of changes in the statement of operations items were as follows:
2025-2024 Commentary
Site rental revenues
Site rental revenues increased in 2025 primarily as a result of the execution of the T-Mobile MLA, pursuant to which T-Mobile leases space on an additional minimum 2,015 Array-owned towers, which were not under existing leases with T-Mobile, for a minimum of 15 years and leases space on approximately 1,800 Array-owned towers on an interim basis. The duration of the interim lease is 30 months, and T-Mobile may cancel such interim leases at their option on a tower-by-tower basis at any time. Array expects T-Mobile to cancel the interim leases prior to the full 30-month duration, and expects revenue to decline correspondingly. Revenue from the interim leases in 2025, which represents five months of revenue from the August 1, 2025 MLA commencement date, was $13.6 million. Further, the MLA extends the license term for approximately 600 existing T-Mobile colocations on Array towers for a new 15-year term commencing on August 1, 2025.
Index to MD&A
Array received a letter from DISH Wireless dated in September 2025 claiming that its obligations under its Master Lease Agreement with Array are excused due to actions taken by the FCC and subsequent agreements to sell spectrum assets. Site rental revenues from DISH Wireless were $6.5 million in 2025. Further, DISH Wireless is contractually committed to levels of revenue commensurate with 2025, subject to escalators, through 2031, and a declining revenue commitment in 2032-2035. DISH Wireless has failed to make certain payments due to Array under their contractual commitment. While Array believes that DISH Wireless' claim that its obligation under its Agreement with Array are excused is without merit, Array cannot predict with certainty whether and the degree to which its current or future year revenues will be negatively impacted as a result of this claim.
Services revenues
Services revenue increased in 2025 due primarily to an increase in application and related fees as a result of Array fully insourcing sales and leasing operations in early 2025. Additionally, the T-Mobile integration drove significant service revenue due to fees collected for structural analysis performed. Prior to this operational change, a large majority of these fees were retained by the outsourced provider as a component of their compensation.
Cost of operations
Cost of operations increased in 2025 due primarily to an increase in cell site ground rent related to annual escalators and additional sites, and an increase in structural analysis expense as a result of the T-Mobile MLA.
Selling, general and administrative
Selling, general and administrative expenses decreased in 2025 due primarily to decreases in expenses related to the strategic alternative review, partially offset by an increase in bad debts expense. Selling, general and administrative expenses in the second half of 2025 include costs to support the winddown of the legacy wireless operations. These expenses are expected to persist at a declining rate into future periods.
Loss on impairment of licenses
Loss on impairment of licenses decreased in 2025 due to decreases in the amount of impairments recorded on wireless spectrum licenses. See Note 8 — Intangible Assets in the Notes to Consolidated Financial Statements for additional information regarding these impairments.
Equity in earnings of unconsolidated entities
Equity in earnings of unconsolidated entities represents Array’s share of net income from entities in which it has a noncontrolling interest and that are accounted for u sing the equity method or the net asset value practical expedient. Array holds noncontrolling interests in three entities in the state of Iowa that sold their wireless operations to T-Mobile in three separate transactions on August 1, 2025, the same date that Array sold its wireless operations to T-Mobile. As a result of the Iowa entities' sale of their wireless operations, these entities recognized a gain on sale, and Array's proportionate share of the gain was included in Equity in earnings of unconsolidated entities in the amount of $33.4 million, which was the primary driver of the year-over-year increase in 2025. See Note 9 — Investments in Unconsolidated Entities in the Notes to Consolid ated Financial Statements for additional information.
Interest and dividend income
Interest and dividend income increased in 2025 due primarily to an increase in interest income earned on the proceeds from the sale of the wireless operations to T-Mobile.
Interest expense
Interest expense from continuing operations excludes interest costs in all periods associated with term loans repaid, and debt exchanged, in conjunction with the sale of Array's wireless operations to T-Mobile. As a result, Interest expense increased in 2025 due primarily to the new term loan that Array entered into in August 2025, and lower capitalized interest.
Short-term imputed spectrum lease income
Short-term imputed spectrum lease income increased in 2025 due to the execution of the Short-Term Spectrum Manager Lease Agreement and Short-Term Spectrum Manager Sublease Agreements, which provide T-Mobile with an exclusive license to use certain Array spectrum assets and leases at no cost for up to one year. The portion of the purchase price allocated to the use of this spectrum will be amortized over one year.
Income tax expense (benefit)
Income tax benefit on continuing operations increased in 2025 due primarily to favorable reductions to valuation allowances related to deferred tax assets that are now likely to be realized by the taxable income generated from the sale of wireless operations and select spectrum assets to T-Mobile, and/or the future License Purchase Agreements classified as held for sale as of December 31, 2025. This increase was partially offset by a decrease in the deferred tax benefit on the impairment of certain wireless spectrum licenses, which was smaller in 2025 than the impairment recorded in 2024.
Index to MD&A
2024-2023 Commentary
Site rental revenues
Site rental revenues increased in 2024 due primarily to an increase in new tenant lease executions.
Cost of operations
Cost of operations increased in 2024 as a result of increases in cell site ground rent and maintenance expenses.
Loss on impairment of licenses
Loss on impairment of licenses increased in 2024 due to the wireless spectrum license impairment change recorded during the third quarter of 2024. See Note 8 — Intangible Assets in the Notes to Consolidated Financial Statements for additional information regarding this impairment.
Equity in earnings of unconsolidated entities
Equity in earnings of unconsolidated entities represents Array’s share of net income from entities in which it has a noncontrolling interest and that are accounted for u sing the equity method or the net asset value practical expedient. See Note 9 — Investments in Unconsolidated Entities in the Notes to Consolid ated Financial Statements for additional information.
Income tax expense (benefit)
Income tax expense decreased in 2024 due primarily to the deferred tax impact of the wireless spectrum license impairment charge recorded in the third quarter of 2024.
Index to MD&A
Liquidity and Capital Resources
Sources of Liquidity
TDS believes that existing cash and investment balances, dividends, distributions from unconsolidated entities, expected cash flows from operating activities and funds available under its financing agreements will provide sufficient liquidity for TDS to meet its funding needs. TDS requires funding for, among other uses, day-to-day operations, capital expenditures, fiber deployments and E-ACAM builds, payment of dividends, debt service requirements, repurchases of shares and potential acquisitions of land, land easements or additional towers.
Cash and Cash Equivalents
Cash and cash equivalents include cash and money market investments. The primary objective of TDS’ Cash and cash equivalents investment activities is to preserve principal. TDS does not have direct access to Array cash.
In January 2026, Array closed on the sale of certain 3.45 GHz and 700MHz wireless spectrum licenses to AT&T for total proceeds of $1,018.0 million and expects a cash income tax liability on the transaction of approximately $130.0 million, most of which will be paid during the second quarter of 2026. In February 2026, Array paid a special dividend per Common and Series A outstanding share of $10.25 for a total amount paid of $885.5 million. TDS, which owns 82.0% of the equity of Array as of December 31, 2025, received its pro-rata share of the special dividend in the amount of $725.6 million.
Cash and Cash Equivalents
(Dollars in millions)
The majority of TDS’ Cash and cash equivalents are held in money market funds that purchase only debt issued by the U.S. Treasury or U.S. government agencies and bank deposit accounts. Refer to the Consolidated Cash Flow Analysis for additional information related to changes in Cash and cash equivalents.
Financing
Revolving Credit Agreements
TDS and Array have unsecured revolving credit agreements with maximum borrowing capacities of $400.0 million and $100.0 million, respectively. Amounts under the agreements may be borrowed, repaid and reborrowed from time to time until maturity in December 2030. As of December 31, 2025, there were no outstanding borrowings under the agreements, except for letters of credit, and TDS' and Array’s unused borrowing capacity was $399.4 million and $99.9 million, respectively.
Unsecured Term Loan Agreements
In August 2025, TDS repaid the entire outstanding borrowings under all of its unsecured term loan agreements of $781.3 million. TDS incurred a terminationpenalty of $8.9 million as a result of the repayment of one of its agreements, which was recorded to Interest expense in the Consolidated Statement of Operations.
In August 2025, Array repaid the entire outstanding borrowings under its unsecured term loan agreements of $713.3 million.
Index to MD&A
In August 2025, Array borrowed $325.0 million under a term loan agreement with CoBank, ACB. The maturity date of the term loan is June 2030. Borrowings bear interest at a rate of Secured Overnight Financing Rate (SOFR) plus 2.50%.
Secured Term Loan Agreement
In August 2025, TDS repaid the entire outstanding borrowing under its secured term loan agreement of $300.0 million.
Export Credit Financing Agreements
At December 31, 2025, TDS had a term loan credit facility with Export Development Canada with $150.0 million of principal outstanding.
In January 2026, TDS repaid the entire outstanding borrowing of $150.0 million.
In August 2025, Array repaid the entire outstanding borrowings under its term loan agreement with Export Development Canada of $150.0 million.
Debt Covenants
The TDS and Array revolving credit agreements, the Array term loan agreement with CoBank and the TDS export credit financing agreement require TDS or Array, as applicable, to comply with certain affirmative and negative covenants, which include certain financial covenants that may restrict the borrowing capacity available. Following the sale of the Array wireless operations to T-Mobile, TDS and Array are required to maintain a Consolidated Leverage Ratio, as defined in the agreements, as of the end of any fiscal quarter from and including the quarter in which such sale occurs at a level not to exceed 3.50 to 1.00. TDS and Array are also required to maintain the Consolidated Interest Coverage Ratio at a level not lower than 3.00 to 1.00 as of the end of any fiscal quarter. TDS and Array believe that they were in compliance as of December 31, 2025 with all such financial covenants.
TDS believes that it and/or its subsidiaries were in compliance as of December 31, 2025, with all covenants and other requirements set forth in the TDS and Array long-term debt indentures. TDS and Array have not failed to make nor do they expect to fail to make any scheduled payment of principal or interest under such indentures.
Other Long-Term Financing
The T-Mobile transaction to sell the wireless operations and select spectrum assets included a debt exchange offer whereby debt issued by Array could be exchanged for debt issued by T-Mobile, which reduced the cash portion of the purchase price. The debt exchange offering closed on August 5, 2025 and resulted in the exchange of $1,680.1 million of long-term debt comprised of the following Array notes: $488.9 million of 6.7% Senior Notes, $394.2 million of 6.25% Senior Notes, $401.5 million of 5.5% March 2070 Senior Notes and $395.5 million of 5.5% June 2070 Senior Notes. As a result, on August 5, 2025, after the debt exchange, Array retained $363.9 million of senior notes, consisting of $55.1 million of 6.7% Senior Notes, $105.8 million of 6.25% Senior Notes, $98.5 million of 5.5% March 2070 Senior Notes, and $104.5 million of 5.5% June 2070 Senior Notes. The write-off of the unamortized discount and debt issuance costs related to the exchanged debt of $47.7 million was recorded to (Gain) loss on sale of business and other exit costs, net within discontinued operations in 2025.
TDS and Array each have an effective shelf registration statement on Form S-3 to issue senior or subordinated debt securities, preferred shares and depositary shares. The proceeds from any such issuances may be used for general corporate purposes, including the possible reduction of other short-term or long-term debt; spectrum purchases; capital expenditures; acquisition, construction and development programs; working capital; additional investments in subsidiaries; or the repurchase of shares. The ability of TDS or Array to complete an offering pursuant to such shelf registration statements is subject to market conditions and other factors at the time.
TDS and Array, at their discretion, may from time to time seek to retire or purchase their outstanding debt through cash purchases and/or exchanges for other securities, in open market purchases, privately negotiated transactions, tender offers, exchange offers or otherwise. Such repurchases or exchanges, if any, will depend on prevailing market conditions, liquidity requirements, contractual restrictions and other factors. The amounts involved may be material.
Refer to Market Risk — Long-Term Debt for additional information regarding required principal payments and the weighted average interest rates related to TDS’ Long-term debt.
See Note 2 — Discontinued Operations and 13 — Debt in the Notes to Consolidated Financial Statements for additional information related to financing activities.
Credit Ratings
In certain circumstances, TDS’ and Array’s interest cost on their various agreements may be subject to increase if their current credit ratings from nationally recognized credit rating agencies are lowered, and may be subject to decrease if the ratings are raised. The agreements do not cease to be available nor do the maturity dates accelerate solely as a result of a downgrade in TDS’ or Array’s credit rating. However, downgrades in TDS’ or Array’s credit rating could adversely affect their ability to renew the agreements, obtain consents, waivers, or amendments, or obtain access to other credit agreements in the future.
Index to MD&A
The TDS and Array issuer credit ratings as of December 31, 2025, and the dates such ratings were issued were as follows:
Rating Agency
Rating
Outlook
Moody's (issued August 2025)
stable outlook
Standard & Poor's (issued August 2025)
BBB-
stable outlook
Fitch Ratings (issued September 2025)
stable outlook
Capital Requirements
The discussion below is intended to highlight some of the significant cash outlays expected during 2026 and beyond and to highlight the spending incurred in current and prior years for these items. This discussion does not include cash required to fund normal operations, and is not a comprehensive list of capital requirements. Significant cash requirements that are not routine or in the normal course of business could arise from time to time.
Capital Expenditures
TDS makes substantial investments to acquire, construct and upgrade telecommunications networks and facilities to remain competitive and as a basis for creating long-term value for shareholders. In recent years, changes in technology have required substantial investments in TDS’ networks to remain competitive; this is expected to continue in 2026 and future years with the continued deployment of fiber for TDS Telecom.
Capital expenditures for continuing operations (i.e., additions to property, plant and equipment), which include the effects of accruals and capitalized interest, in 2025, 2024 and 2023 were as follows:
Capital Expenditures
(Dollars in millions)
TDS Telecom’s capital expenditures were $406.4 million, $323.8 million and $576.5 million in 2025, 2024 and 2023, respectively. In 2025, these capital expenditures were used for the following purposes:
• Continue fiber deployment in expansion markets and to meet E-ACAM build-out requirements;
• Support broadband growth and success-based spending; and
• Maintain and enhance existing infrastructure.
TDS Telecom's capital expenditures for 2026 are expected to be between $550 million and $600 million. These expenditures are expected to be used for similar purposes as those listed above.
Array’s capital expenditures were $29.9 million, $19.1 million and $41.0 million in 2025, 2024 and 2023, respectively. Capital expenditures were used principally for tower maintenance, purchases of land interests, tower builds and one-time costs of migrating the tower light monitoring function to Array's long-term solution.
Array's capital expenditures for 2026 are expected to be between $25.0 and $35.0 million. These capital expenditures are expected to be used for purchases of land interests which are opportunistic in nature, tower maintenance, tower builds and one-time costs of migrating the tower light monitoring function to Array's long-term solution.
TDS intends to finance its capital expenditures for 2026 using primarily Cash flows from operating activities, dividends and existing cash balances.
Index to MD&A
Divestitures
TDS is engaged and may in the future be engaged in negotiations (subject to all applicable regulations) relating to the divestiture of companies, properties and assets. In general, TDS does not disclose such transactions until there is a definitive agreement.
See Note 7 — Acquisitions and Divestitures in the Notes to Consolidated Financial Statements for additional information related to divestitures.
Other Obligations
TDS will require capital for future spending on existing contractual obligations, including long-term debt obligations; preferred stock dividend obligations; lease commitments; and E-ACAM obligations. Refer to Liquidity and Capital Resources within this MD&A for additional information.
Common Share Repurchase Programs
During 2025, TDS repurchased 2,843,427 Common Shares for $108.1 million at an average cost per share of $38.03. As of December 31, 2025, the maximum dollar value of TDS Common Shares that may yet be purchased under TDS' program was $523.9 million.
During 2025, Array repurchased 328,835 Common Shares for $20.9 million at an average cost per share of $63.49. As of December 31, 2025, the total cumulative amount of Array Common Shares authorized to be repurchased is 658,107.
For additional information related to the current TDS and Array repurchase authorizations, see Note 18 — Shareholders’ Equity in the Notes to Consolidated Financial Statements.
Dividends
TDS paid quarterly dividends per outstanding share of $0.04 in 2025. TDS paid quarterly dividends per outstanding share of $0.19 in the first quarter of 2024 and $0.04 in each of the second, third and fourth quarters of 2024. TDS paid quarterly dividends per outstanding share of $0.185 in 2023. It is uncertain at this time how the outcome of the strategic review process for Array, TDS' available opportunities to reinvest in its businesses, or TDS' ongoing liquidity needs, may impact the decisions of the TDS Board of Directors regarding the declaration of future cash dividends.
TDS paid quarterly dividends per outstanding Series UU depositary share (each representing 1/1,000th of a Preferred Share) of $0.414 in 2025, 2024 and 2023.
TDS paid quarterly dividends per outstanding Series VV depositary share (each representing 1/1,000th of a Preferred Share) of $0.375 in 2025, 2024 and 2023.
Array has not paid any regular cash dividends in past periods. In conjunction with the close of the transaction of the sale of Array's wireless operations to T-Mobile o n August 1, 2025, on this same date, the Array Board of Directors declared a special dividend per Common and Series A outstanding sh are of $23.00 for shareholders of record on August 11, 2025, which was paid on August 19, 2025. In conjunction with the close of the transaction of the sale of spectrum licenses to AT&T o n January 13, 2026, on this same date, the Array Board of Directors declared a special dividend per Common and Series A outstanding sh are of $10.25 for shareholders of record on January 23, 2026, which was paid on February 2, 2026. TDS, which owns 82.0% of the equity of Array as of December 31, 2025 , received its pro-rata share of the special dividend. Array expects its pending sale of spectrum licenses to Verizon, which is subject to regulatory approval and customary closing conditions, to deliver substantial proceeds and expects its Board of Directors to declare a special dividend upon closure of the transaction. While no decisions have been made, the Ar ray Board of Directors may declare regular cash dividends after the close of the Verizon transaction.
Index to MD&A
Consolidated Cash Flow Analysis
The following discussion summarizes TDS' cash flow activities in 2025, 2024 and 2023. Cash flows may fluctuate from quarter to quarter and year to year due to timing and other factors. This discussion is intended to highlight the significant changes and is not intended to fully reconcile the changes.
2025 Commentary
TDS’ Cash, cash equivalents and restricted cash increased $386.9 million. Net cash provided by operating activities related to continuing operations was $338.3 million due to net income of $151.1 million adjusted for non-cash items of $209.9 million and distributions received from unconsolidated entities of $215.6 million, including $79.5 million in distributions from the Los Angeles SMSA Limited Partnership (LA Partnership). Distributions from noncontrolling wireless entities managed by Array included a special distribution of $42.5 million related to the proceeds received by three entities in the state of Iowa that sold their wireless operations to T-Mobile on August 1, 2025. In addition, distributions from certain equity method investments operated by Verizon included a special distribution of $25.3 million related to proceeds received by Verizon managed entities related to Verizon's tower transaction with Vertical Bridge that closed in December 2024. This was partially offset by lower current year distributions due to adjustments made by certain equity method investees for prior period activity. The changes in working capital items which decreased net cash by $238.4 million were primarily driven by the payment of associate bonuses, deferred revenue related to spectrum leases, increase in receivable balances and the timing of tax payments. Net cash provided by operating activities related to discontinued operations were $251.6 million.
Cash flows used for investing activities related to continuing operations were $318.3 million, due primarily to payments for property, plant and equipment of $390.5 million, partially offset by cash received from divestitures of $72.3 million. Cash flows provided by investing activities related to discontinued operations were $2,462.4 million.
Cash flows used for financing activities related to continuing operations were $2,326.5 million, due primarily to repayments on TDS and Array long-term debt agreements of $1,962.1 million, the payment of $358.6 million in Array dividends, the repurchase of TDS Common Shares of $108.1 million, the payment of $87.7 million in TDS dividends, tax withholdings, net of cash receipts, for Array stock-based compensation awards of $63.4 million due to Array awards that accelerated upon change in control and associate terminations, distributions to noncontrolling interests of $21.9 million due to the sale of the wireless operations to T-Mobile and the repurchase of Array Common Shares of $21.4 million. These were partially offset by $325.0 million borrowed under the Array CoBank term loan agreement. Cash flows used for financing activities related to discontinued operations were $20.5 million.
2024 Commentary
TDS’ Cash, cash equivalents and restricted cash increased $113.9 million. Net cash provided by operating activities related to continuing operations was $295.8 million due to net loss of $81.3 million adjusted for non-cash items of $257.0 million and distributions received from unconsolidated entities of $168.7 million, including $74.8 million in distributions from the LA Partnership. This was partially offset by changes in working capital items which decreased net cash by $48.6 million. The working capital changes were primarily driven by the timing of vendor payments. Net cash provided by operating activities related to discontinued operations were $850.1 million.
Cash flows used for investing activities related to continuing operations were $235.9 million, due primarily to payments for property, plant and equipment of $365.4 million and payments for wireless spectrum licenses of $19.2 million, partially offset by cash received from divestitures of $147.3 million. Cash flows used for investing activities related to discontinued operations were $518.6 million.
Cash flows used for financing activities related to continuing operations were $210.8 million, due primarily to repayments on TDS and Array long-term debt agreements of $455.5 million, the payment of $104.4 million in TDS dividends, the repurchase of Array Common Shares of $54.1 million, and the payment of debt issuance costs of $16.2 million. These were partially offset by $440.0 million borrowed under TDS and Array long-term debt agreements. Cash flows used for financing activities related to discontinued operations were $66.6 million.
2023 Commentary
TDS’ Cash, cash equivalents and restricted cash decreased $130.0 million. Net cash provided by operating activities related to continuing operations was $306.7 million due to net loss of $547.7 million adjusted for non-cash items of $715.0 million and distributions received from unconsolidated entities of $150.3 million, including $69.1 million in distributions from the LA Partnership. This was partially offset by changes in working capital items which decreased net cash by $10.9 million. The working capital changes were primarily driven by an increase in receivable balances and changes in other assets and liabilities, partially offset by the timing of tax payments. Net cash provided by operating activities related to discontinued operations were $834.4 million.
Cash flows used for investing activities related to continuing operations were $759.1 million, due primarily to payments for property, plant and equipment of $643.1 million and payments for wireless spectrum licenses of $128.6 million. Cash flows used for investing activities related to discontinued operations were $568.0 million.
Cash flows provided for financing activities related to continuing operations were $121.6 million, due primarily to borrowings on TDS and Array long-term debt agreements of $1,081.0 million. These were partially offset by repayments on TDS and Array long-term debt agreements of $723.3 million, repayments on an Array short-term debt agreement of $60.0 million and the payment of $152.7 million in TDS dividends. Cash flows used for financing activities related to discontinued operations were $65.6 million.
Index to MD&A
Consolidated Balance Sheet Analysis
The following discussion addresses certain captions in the consolidated balance sheet and changes therein. This discussion is intended to highlight the significant changes and is not intended to fully reconcile the changes. Notable balance sheet changes during 2025 were as follows:
Current assets of discontinued operations
Current assets of discontinued operations decreased $1,163.0 million due to the sale of wireless operations to T-Mobile on August 1, 2025. See Note 2 — Discontinued Operations in the Notes to Consolidated Financial Statements for additional information.
Other current assets
Other current assets decreased $17.1 million due primarily to a decrease in restricted cash required under the Array receivables securitization agreement.
Non-current assets held for sale
Non-current assets held for sale increased $1,598.1 million due to spectrum license transactions executed in 2024 and 2025. See Note 7 — Acquisitions and Divestitures in the Notes to Consolidated Financial Statements for additional information.
Non-current assets of discontinued operations
Non-current assets of discontinued operations decreased $4,499.6 million due to the sale of wireless operations to T-Mobile on August 1, 2025. See Note 2 — Discontinued Operations in the Notes to Consolidated Financial Statements for additional information.
Licenses
Licenses decreased $1,646.7 million due primarily to the transfer of spectrum licenses related to transactions executed in 2024 and 2025 to Non-current assets held for sale. See Note 7 — Acquisitions and Divestitures in the Notes to Consolidated Financial Statements for additional information.
Other intangible assets, net of accumulated amortization
Other intangible assets, net of accumulated amortization decreased $29.1 million due primarily to amortization of TDS Telecom franchise rights.
Current portion of long-term debt
Current portion of long-term debt decreased $25.9 million due primarily to the repayment of outstanding debt on the TDS and Array term loan agreements and the Array receivables securitization agreement.
Accounts payable
Accounts payable increased $41.0 million due primarily to increased capital expenditures and the timing of vendor payments.
Customer deposits and deferred revenues
Customer deposits and deferred revenues increased $78.1 million due primarily to the deferral of a portion of the T-Mobile purchase price related to T-Mobile's use of certain spectrum assets at no cost for up to one year. See Note 2 — Discontinued Operations in the Notes to Consolidated Financial Statements for additional information.
Accrued compensation
Accrued compensation decreased $90.3 million due primarily to associate bonus payments in March 2025 and reduction of headcount related to the sale of wireless operations.
Current liabilities of discontinued operations
Current liabilities of discontinued operations decreased $651.3 million, due to the sale of wireless operations to T-Mobile on August 1, 2025. See Note 2 — Discontinued Operations in the Notes to Consolidated Financial Statements for additional information.
Non-current liabilities of discontinued operations
Non-current liabilities of discontinued operations decreased $2,310.7 million due to the sale of wireless operations to T-Mobile on August 1, 2025. See Note 2 — Discontinued Operations in the Notes to Consolidated Financial Statements for additional information.
Index to MD&A
Deferred income tax liability, net
Deferred income tax liability, net decreased $237.1 million due primarily to tax impacts of the sale of the wireless operations to T-Mobile on August 1, 2025, as well as reductions to valuation allowances related to deferred tax assets that are now likely to be realized by the taxable income generated from the pending License Purchase Agreements classified as held for sale as of December 31, 2025. See Note 2 — Discontinued Operations and Note 7 — Acquisitions and Divestitures in the Notes to Consolidated Financial Statements for additional information.
Other deferred liabilities and credits
Other deferred liabilities and credits increased $113.3 million due primarily to expected decommissioning costs for certain equipment under the terms of the Securities Purchase Agreement and an increase in the asset retirement obligation due to updated removal cost estimates.
Long-term debt, net
Long-term debt, net decreased $1,592.3 million due primarily to the repayment of the TDS term loan agreements and repayment of Array's term loan and export credit financing agreements. See Note 13 — Debt in the Notes to Consolidated Financial Statements for additional information.
Noncontrolling interests with redemption features
Noncontrolling interests with redemption features decreased $15.8 million due to the acquisition of the remaining interest of King Street Wireless, LLC and Sunshine Spectrum, LLC. See Note 7 — Acquisitions and Divestitures in the Notes to Consolidated Financial Statements for additional information.
Index to MD&A
Application of Critical Accounting Policies and Estimates
TDS prepares its consolidated financial statements in accordance with GAAP. TDS’ significant accounting policies are discussed in detail in Note 1 — Summary of Significant Accounting Policies and Recent Accounting Pronouncements, Note 3 — Revenue Recognition and Note 11 — Leases in the Notes to Consolidated Financial Statements.
Management believes the application of the following critical accounting policies and the estimates required by such application reflect its most significant judgments and estimates used in the preparation of TDS’ consolidated financial statements.
Wireless Spectrum License Impairment – Array
Wireless spectrum licenses are considered to be indefinite-lived assets, and therefore, are not amortized but are tested for impairment annually or more frequently if there are events or circumstances that cause Array to believe that their carrying values exceed their fair values. Wireless spectrum licenses are tested for impairment at the level of reporting referred to as a unit of accounting.
During the third quarter of 2025, Array continued its efforts to monetize its spectrum assets not subject to pending sale agreements. Based on information obtained through that process, specifically suppressed pricing and decrease in demand for high-band spectrum, Array concluded that there were events and circumstances in the third quarter of 2025 that caused Array to believe the carrying value of one of the units of accounting for remaining spectrum not subject to a pending sale agreement may exceed its respective fair value (i.e., triggering event), and accordingly a quantitative impairment assessment was performed for that unit.
A market approach was used for purposes of the quantitative impairment assessment to value the wireless spectrum licenses for the high-band unit of accounting tested, selecting a point within a range of values established largely through industry benchmarks, FCC auction data, and precedent transactions. The fair value of the wireless spectrum licenses was less than the respective carrying value, and a $47.7 million impairment was recorded to Loss on impairment of licenses for continuing operations in the Consolidated Statement of Operations during the third quarter of 2025. The impairmentloss was related to the retained high-band spectrum unit of accounting which includes the 28 GHz, 37 GHz and 39 GHz frequency bands, the carrying value of which was $113.4 million after the impairmentloss. The impairmentloss is driven by lower fair value attributed to high-band spectrum as a result of industry-wide challenges encountered related to the operationalization of this spectrum.
For purposes of its annual impairment test as of November 1, 2025, Array performed a qualitative test for all seven of its units of accounting. The test considered several factors, including the results of the quantitative impairment assessment performed in the third quarter of 2025 as well as purchase prices of executed agreements to sell certain wireless spectrum licenses and other market factors. Based on these assessments, Array concluded that it was more likely than not that the fair value of each unit of accounting exceeded its respective carrying value. Therefore, no quantitative impairment evaluation was completed.
During the third quarter of 2024, Array concluded that there were events and circumstances that caused Array to believe the carrying values of five units of accounting may exceed their respective fair values (i.e., triggering event), and accordingly a quantitative impairment assessment was performed for those units. There was no triggering event for the other units of accounting.
Based on a market approach valuation, the fair value of the wireless spectrum licenses exceeded their respective carrying values by amounts ranging from 9% to 80% for three of the units of accounting. For two of the units of accounting, the fair value of the wireless spectrum licenses was less than the respective carrying value, and a $136.2 million impairment was recorded to Loss on impairment of licenses for continuing operations in the Consolidated Statement of Operations during the third quarter of 2024. The impairmentloss was substantially all related to the retained high-band spectrum unit of accounting which includes the 28 GHz, 37 GHz and 39 GHz frequency bands, the carrying value of which was $161.1 million after the impairmentloss. The impairmentloss was driven by a change in the units of accounting described above combined with lower fair value primarily attributed to high-band spectrum as a result of industry-wide challenges encountered related to the operationalization of this spectrum.
For purposes of its annual impairment test as of November 1, 2024, Array performed a qualitative test for all twelve of its units of accounting. The test considered several factors, including the results of the quantitative impairment assessment performed in the third quarter of 2024 as well as purchase prices of executed agreements to sell certain wireless spectrum licenses and other market factors. Based on these assessments, Array concluded that it was more likely than not that the fair value of each unit of accounting exceeded its respective carrying value. Therefore, no quantitative impairment evaluation was completed.
Income Taxes
The amounts of income tax assets and liabilities, the related income tax provision and the amount of unrecognized tax benefits are critical accounting estimates because such amounts are significant to TDS’ financial condition and results of operations.
The preparation of the consolidated financial statements requires TDS to calculate a provision for income taxes. This process involves estimating the actual current income tax liability together with assessing temporary differences resulting from the different treatment of items for tax purposes. These temporary differences result in deferred income tax assets and liabilities which are included on a net basis in TDS’ Consolidated Balance Sheet. TDS must then assess the likelihood that deferred income tax assets will be realized based on future taxable income and, to the extent management believes that realization is not likely, establish a valuation allowance. Management’s judgment is required in determining the provision for income taxes, deferred income tax assets and liabilities and any valuation allowance that is established for deferred income tax assets.
Index to MD&A
TDS recognizes the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position are measured based on management’s judgment as to the possible outcome that has a greater than 50% cumulative likelihood of being realized upon ultimate resolution.
See Note 5 — Income Taxes in the Notes to Consolidated Financial Statements for additional information.
Index to MD&A
Private Securities Litigation Reform Act of 1995
Safe Harbor Cautionary Statement
This Management's Discussion and Analysis of Financial Condition and Results of Operations and other sections of this Annual Report contain statements that are not based on historical facts and represent forward-looking statements, as this term is defined in the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical facts, that address activities, events or developments that TDS intends, expects, projects, believes, estimates, plans or anticipates will or may occur in the future are forward-looking statements. The words "believes," "anticipates," "estimates," "expects," "plans," "intends," "projects" and similar expressions are intended to identify these forward-looking statements, but are not the exclusive means of identifying them. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results, events or developments to be significantly different from any future results, events or developments expressed or implied by such forward-looking statements. Such risks, uncertainties and other factors include, but are not limited to, those set forth below. See "Risk Factors" in this Form 10-K for a further discussion of these risks. Each of the following risks could have a material adverse effect on TDS' business, financial condition or results of operations. However, such factors are not necessarily all of the important factors that could cause actual results, performance or achievements to differ materially from those expressed in, or implied by, the forward-looking statements contained in this document. Other unknown or unpredictable factors also could have material adverse effects on future results, performance or achievements. TDS undertakes no obligation to update publicly any forward-looking statements whether as a result of new information, future events or otherwise. Readers should evaluate any statements in light of these important factors.
Announced Transactions and Strategic Alternatives Review Risk Factors
▪ Closing of the T-Mobile transaction occurred on August 1, 2025, and has required substantial changes to the manner in which Array’s remaining business is conducted, which could have a material adverse effect on Array's financial condition and results of operations.
▪ Array entered into License Purchase Agreements with Verizon and T-Mobile to sell certain wireless spectrum licenses. There is no guarantee that such transactions contemplated by the License Purchase Agreements will be consummated. Costs and uncertainties related to these transactions could have adverse effects on Array's financial condition or results of operations.
Operational Risk Factors
▪ An inability to monetize the remaining spectrum assets as well as the ongoing costs to retain the spectrum could adversely affect TDS’ operations.
▪ A delay or failure by TDS to complete significant network construction and systems implementation activities as part of its plans to expand and improve the quality and capacity of its network and support systems could adversely affect its operations.
▪ Increasing competition in the wireline and tower industries could adversely affect TDS’ revenues, negatively impact future growth and increase its costs to compete.
▪ There are economic and business risks associated with fixed rate annual escalators on Array's colocation revenue contracts.
▪ A substantial portion of Array revenues are derived from a small number of tenants concentrated in the wireless industry and the loss or financial difficulties of such tenants may adversely affect Array’s business, financial condition, results of operations and future growth. Array is particularly reliant on its relationship with T-Mobile. DISH Wireless has failed to make certain payments due to Array under their contractual commitment. Lower demand for wireless services, negative trends in the wireless industry or changes in customer business models may decrease the revenues Array receives from its tenants, which could adversely affect Array’s business, financial condition, results of operations and future growth.
▪ TDS’ lack of scale relative to larger competitors that may have greater financial and other resources than TDS could cause TDS to be unable to compete successfully, which could adversely affect its business, financial condition or results of operations.
▪ Inability to protect TDS’ real estate rights, with respect to land leases, could have an adverse effect on TDS’ business, financial condition or results of operations.
▪ TDS’ business, financial condition or results of operations may be adversely impacted by extreme weather events, climate-related events, natural disasters (including wildfires) and other unforeseen events.
▪ An inability to attract people of outstanding talent throughout all levels of the organization, to develop their potential through education and assignments, and to retain them by keeping them engaged, challenged and properly rewarded could have an adverse effect on TDS' business, financial condition or results of operations.
▪ Changes in various business factors, including changes in demand, consumer preferences and perceptions, price competition, cost increases and other factors, could have an adverse effect on TDS’ business, financial condition or results of operations.
Index to MD&A
▪ Advances or changes in technology could render certain technologies used by TDS obsolete, could put TDS at a competitive disadvantage, could reduce TDS’ revenues or could increase its costs of doing business. Artificial intelligence advancements may put TDS at a competitive disadvantage, in particular if TDS is not able to keep pace with its competitors, which could have an adverse effect on TDS' business, financial condition or results of operations.
▪ Costs, integration problems or other factors associated with acquisitions or divestitures and/or expansion of TDS’ businesses could have an adverse effect on TDS’ business, financial condition or results of operations.
▪ Difficulties involving third parties TDS does business with, including changes in the relationship with TDS or financial or operational difficulties, including supply chain disruptions of key suppliers, could adversely affect TDS’ business, financial condition or results of operations.
▪ A failure by TDS to maintain flexible and capable telecommunication networks or information technologies, or a material disruption thereof, could have an adverse effect on TDS’ business, financial condition or results of operations.
Financial Risk Factors
▪ Uncertainty in TDS’ or Array's future cash flow and liquidity, their level of indebtedness or their inability to access capital, deterioration in the capital markets, changes in interest rates, changes in TDS' or Array’s credit ratings or other factors could limit or restrict the availability of financing on terms and prices acceptable to TDS, which may require TDS to reduce or delay its construction, development or acquisition programs, divest assets, and/or reduce or cease share repurchases and/or the payment of common shareholder dividends.
▪ TDS’ assets and revenue are concentrated primarily in the U.S. telecommunications industry. Consequently, its operating results may fluctuate based on factors related primarily to conditions in this industry.
▪ TDS has significant investments in wireless operating entities that it does not control. Losses in the value of or cash flows from such investments could have an adverse effect on TDS’ financial condition, cash flows or results of operations.
Regulatory, Legal and Governance Risk Factors
▪ Failure by TDS to timely or fully comply with any existing applicable legislative and/or regulatory requirements or changes thereto could adversely affect TDS’ business, financial condition or results of operations.
▪ TDS' receipt of financial support through various government programs for its deployment of telecommunications and broadband networks and services, its ability to properly calculate and pay fees and surcharges for its services, and its ability to continue to pass through and collect from its customers certain of those fees and surcharges is subject to uncertainty, the result of which could have an adverse effect on TDS’ business, financial condition or results of operations.
▪ Settlements, judgments, restraints on its current or future manner of doing business and/or costs resulting from pending and future legal and policy proceedings could have an adverse effect on TDS’ business, financial condition or results of operations.
▪ Certain matters, such as control by the TDS Voting Trust and provisions in the TDS Restated Certificate of Incorporation, may serve to discourage or make more difficult a change in control of TDS or have other consequences.
General Risk Factors
▪ TDS has experienced, and in the future expects to experience, cyber-attacks or other breaches of network or information technology security of varying degrees on a regular basis, which could have an adverse effect on TDS' business, financial condition or results of operations.
▪ Disruption in credit or other financial markets, a deterioration of U.S. or global economic conditions or other events could, among other things, impede TDS’ access to or increase the cost of financing its operating and investment activities and/or result in reduced revenues and lower operating income and cash flows, which would have an adverse effect on TDS’ business, financial condition or results of operations.
Index to MD&A
Market Risk
Long-Term Debt
As of December 31, 2025, approximately 45% of TDS' long-term debt was in fixed-rate senior notes and approximately 55% in variable-rate debt. Fluctuations in market interest rates can lead to volatility in the fair value of fixed-rate notes and interest expense on variable-rate debt.
The following table presents the scheduled principal payments on long-term debt, lease obligations and the related weighted average interest rates by maturity dates at December 31, 2025:
Principal Payments Due by Period
Long-Term Debt Obligations 1
Weighted-Avg. Interest Rates on Long-Term Debt Obligations 2
(Dollars in thousands)
Thereafter
Total
1 The total long-term debt obligation differs from Long-term debt in the Consolidated Balance Sheet due to unamortized debt issuance costs on all non-revolving debt instruments, and unamortized discounts related to Array's 6.7% Senior Notes. In January 2026, TDS repaid the entire outstanding borrowing of $150.0 million under its term loan credit facility with Export Development Canada, which had a maturity date of December 2027.
2 Represents the weighted average stated interest rates at December 31, 2025, for debt maturing in the respective periods.
Fair Value of Long-Term Debt
At December 31, 2025 and 2024, the estimated fair value of long-term debt obligations, excluding lease obligations, the current portion of such long-term debt and debt financing costs, was $757.5 million and $2,420.4 million, respectively, and the book value was $834.7 million and $2,445.8 million, respectively. See Note 4 — Fair Value Measurements in the Notes to Consolidated Financial Statements for additional information.
Index to MD&A
Supplemental Information Relating to Non-GAAP Financial Measures
TDS sometimes uses information derived from consolidated financial information but not presented in its financial statements prepared in accordance with GAAP to evaluate the performance of its business. Certain of these measures are considered “non-GAAP financial measures” under U.S. Securities and Exchange Commission Rules. Specifically, TDS has referred to the following measures in this Form 10-K Report:
▪ EBITDA
▪ Adjusted EBITDA
▪ Adjusted OIBDA
▪ Free cash flow
Following are explanations of each of these measures:
EBITDA, Adjusted EBITDA and Adjusted OIBDA
EBITDA, Adjusted EBITDA and Adjusted OIBDA are defined as Net income (loss) from continuing operations adjusted for the items set forth in the reconciliation below. EBITDA, Adjusted EBITDA and Adjusted OIBDA are not measures of financial performance under GAAP and should not be considered as alternatives to Net income (loss) from continuing operations or Cash flows from operating activities - continuing operations, as indicators of cash flows or as measures of liquidity. TDS does not intend to imply that any such items set forth in the reconciliation below are non-recurring, infrequent or unusual; such items may occur in the future.
Adjusted EBITDA is a segment measure reported to the chief operating decision maker for purposes of assessing the segments' performance. See Note 20 — Business Segment Information in the Notes to Consolidated Financial Statements for additional information.
Management uses Adjusted EBITDA and Adjusted OIBDA as measurements of profitability, and therefore reconciliations to applicable GAAP income measures are deemed appropriate. Management believes Adjusted EBITDA and Adjusted OIBDA are useful measures of TDS’ operating results before significant recurring non-cash charges, nonrecurring expenses, gains and losses, and other items as presented below as it provides additional relevant and useful information to investors and other users of TDS’ financial data in evaluating the effectiveness of its operations and underlying business trends in a manner that is consistent with management’s evaluation of business performance. Adjusted EBITDA shows adjusted earnings before interest, taxes, depreciation, amortization and accretion, gains and losses, and expenses related to the strategic alternatives review, while Adjusted OIBDA reduces this measure further to exclude Equity in earnings of unconsolidated entities and Interest and dividend income in order to more effectively show the performance of operating activities excluding investment activities. The following tables reconcile EBITDA, Adjusted EBITDA and Adjusted OIBDA to the corresponding GAAP measures, Net income (loss) from continuing operations and/or Operating income (loss).
Index to MD&A
TDS - CONSOLIDATED
(Dollars in thousands)
Net income (loss) from continuing operations (GAAP)
Add back:
Income tax benefit
Interest expense
Depreciation, amortization and accretion
EBITDA (Non-GAAP)
Add back or deduct:
Expenses related to strategic alternatives review
Loss on impairment of intangible assets
(Gain) loss on asset disposals, net
(Gain) loss on sale of business and other exit costs, net
(Gain) loss on license sales and exchanges, net
Short-term imputed spectrum lease income
Adjusted EBITDA (Non-GAAP)
Deduct:
Equity in earnings of unconsolidated entities
Interest and dividend income
Other, net
Adjusted OIBDA (Non-GAAP)
Deduct:
Depreciation, amortization and accretion
Expenses related to strategic alternatives review
Loss on impairment of intangible assets
(Gain) loss on asset disposals, net
(Gain) loss on sale of business and other exit costs, net
(Gain) loss on license sales and exchanges, net
Operating income (loss) (GAAP)
Index to MD&A
TDS TELECOM
(Dollars in thousands)
Net income (loss) (GAAP)
Add back or deduct:
Income tax expense (benefit)
Interest expense
Depreciation, amortization and accretion
EBITDA (Non-GAAP)
Add back or deduct:
Expenses related to strategic alternatives review
Loss on impairment of intangible assets
(Gain) loss on asset disposals, net
(Gain) loss on sale of business and other exit costs, net
Adjusted EBITDA (Non-GAAP)
Deduct:
Equity in earnings of unconsolidated entities
Interest and dividend income
Other, net
Adjusted OIBDA (Non-GAAP)
Deduct:
Depreciation, amortization and accretion
Expenses related to strategic alternatives review
Loss on impairment of intangible assets
(Gain) loss on asset disposals, net
(Gain) loss on sale of business and other exit costs, net
Operating income (loss) (GAAP)
Index to MD&A
ARRAY
(Dollars in thousands)
Net income (loss) from continuing operations (GAAP)
Add back:
Income tax expense (benefit)
Interest expense
Depreciation, amortization and accretion
EBITDA (Non-GAAP)
Add back or deduct:
Expenses related to strategic alternatives review
Loss on impairment of licenses
(Gain) loss on asset disposals, net
(Gain) loss on license sales and exchanges, net
Short-term imputed spectrum lease income
Adjusted EBITDA (Non-GAAP)
Deduct:
Equity in earnings of unconsolidated entities
Interest and dividend income
Other, net
Adjusted OIBDA (Non-GAAP)
Deduct:
Depreciation, amortization and accretion
Expenses related to strategic alternatives review
Loss on impairment of licenses
(Gain) loss on asset disposals, net
(Gain) loss on license sales and exchanges, net
Operating income (loss) (GAAP)
Free Cash Flow
The following table presents Free cash flow from continuing operations, which is defined as Cash flows from operating activities less Cash paid for additions to property, plant and equipment and Cash paid for software license agreements. Free cash flow is a non-GAAP financial measure which TDS believes may be useful to investors and other users of its financial information in evaluating liquidity, specifically, the amount of net cash generated by continuing business operations after deducting Cash paid for additions to property, plant and equipment and Cash paid for software license agreements.
(Dollars in thousands)
Cash flows from operating activities - continuing operations (GAAP)
Cash paid for additions to property, plant and equipment
