[10-Q] Telephone and Data Systems Inc. Quarterly Earnings Report
Filing Impact
Filing Sentiment
Form Type
10-Q
Rhea-AI Filing Summary
Telephone and Data Systems, Inc. reported consolidated operating revenues of $1,186 million for the quarter, down 4% year-over-year, with net income of $18 million (versus $7 million a year earlier) and Adjusted EBITDA of $340 million (down 5%). Free cash flow for the six months was $301 million. Array (82.5% owned) generated $916 million of operating revenue in the quarter, with towers revenue rising and a 1.57 tower tenancy rate as of June 30, 2025.
Material subsequent events reshaped the company: Array closed the sale of its wireless operations to T-Mobile on August 1, 2025, receiving cash proceeds of $2,629 million, completed a debt exchange that exchanged $1,680 million of Array debt, and declared a special dividend of $23.00 per Array common share. TDS expects a cash tax liability on the T-Mobile transaction of $125鈥�$175 million and noted potential exit, decommissioning and wind-down costs; Array also completed acquisitive and financing adjustments in July 2025.
Telephone and Data Systems, Inc. ha registrato ricavi operativi consolidati di $1,186 million per il trimestre, in calo del 4% rispetto all'anno precedente, con un utile netto di $18 million (contro $7 million un anno prima) e un EBITDA rettificato di $340 million (in calo del 5%). Il flusso di cassa libero per i sei mesi 猫 stato di $301 million. Array (posseduta per l'82,5%) ha generato nel trimestre ricavi operativi per $916 million, con ricavi dalle torri in aumento e un tasso di affitto per torre pari a 1,57 al 30 giugno 2025.
Eventi successivi rilevanti hanno rimodellato la societ脿: Array ha chiuso la vendita delle sue attivit脿 wireless a T-Mobile il 1 agosto 2025, incassando proventi in contanti di $2,629 million, ha completato uno scambio di debito che ha interessato $1,680 million di debito di Array e ha dichiarato un dividendo straordinario di $23.00 per azione ordinaria di Array. TDS prevede un'imposta in contanti sulla transazione con T-Mobile compresa tra $125鈥�$175 million e ha segnalato possibili costi di uscita, dismissione e smantellamento; Array ha inoltre completato acquisizioni e adeguamenti finanziari a luglio 2025.
Telephone and Data Systems, Inc. registr贸 ingresos operativos consolidados de $1,186 million en el trimestre, una ca铆da del 4% interanual, con un beneficio neto de $18 million (frente a $7 million un a帽o antes) y un EBITDA ajustado de $340 million (baj贸 un 5%). El flujo de caja libre en los seis meses fue de $301 million. Array (82,5% propiedad) gener贸 $916 million de ingresos operativos en el trimestre, con mayores ingresos por torres y una tasa de ocupaci贸n por torre de 1,57 al 30 de junio de 2025.
Hechos posteriores significativos remodelaron la compa帽铆a: Array cerr贸 la venta de sus operaciones inal谩mbricas a T-Mobile el 1 de agosto de 2025, recibiendo ingresos en efectivo de $2,629 million, complet贸 un canje de deuda que intercambi贸 $1,680 million de deuda de Array y declar贸 un dividendo extraordinario de $23.00 por acci贸n ordinaria de Array. TDS espera una obligaci贸n fiscal en efectivo por la transacci贸n con T-Mobile de $125鈥�$175 million y advirti贸 sobre posibles costes de salida, desmantelamiento y liquidaci贸n; Array tambi茅n complet贸 ajustes de adquisici贸n y financiaci贸n en julio de 2025.
Telephone and Data Systems, Inc.電� 頃措嫻 攵勱赴鞐� 鞐瓣舶 鞓侅梾靾橃澋 $1,186 million鞚� 氤搓碃頄堨溂氅� 鞝勲厔 霃欔赴 雽�牍� 4% 臧愳唽頄堦碃, 靾滌澊鞚奠潃 $18 million(鞝勲厔 霃欔赴 $7 million)鞚措┌ 臁办爼 EBITDA電� $340 million(5% 臧愳唽)鞓�鞀惦媹雼�. 6臧滌洈 雸勳爜 旮办 鞛夓棳順勱笀頋愲鞚� $301 million鞚挫棃鞀惦媹雼�. Array(歆�攵� 82.5%)電� 攵勱赴 霃欖晥 $916 million鞚� 鞓侅梾靾橃澋鞚� 彀届稖頄堨溂氅�, 韮�鞗� 靾橃澋鞚� 歃濌皜頄堦碃 2025雲� 6鞗� 30鞚� 旮办 韮�鞗� 雼� 鞛勲寑鞙潃 1.57鞚挫棃鞀惦媹雼�.
欷戨寑頃� 頉勳啀 靷贝霌れ澊 須岇偓毳� 鞛幐頄堨姷雼堧嫟: Array電� 2025雲� 8鞗� 1鞚� T鈥慚obile鞐� 氍挫劆 靷梾鞚� 毵り皝鞚� 毵堧毽晿鞐� 順勱笀 靾橃澋 $2,629 million鞚� 頇曤炒頄堦碃, Array 攵�毂� $1,680 million鞚� 甑愴櫂頃橂姅 攵�毂� 甑愴櫂鞚� 鞕勲頄堨溂氅�, Array 氤错喌欤检棎 雽�頃� 欤茧嫻 $23.00鞚� 韸闺硠氚半嫻鞚� 靹犾柛頄堨姷雼堧嫟. TDS電� T鈥慚obile 瓯半灅鞐� 霐半ジ 順勱笀 雮╇秬 靹胳暋鞚� $125鈥�$175 million鞙茧 鞓堨儊頃橂┌, 韮堩嚧, 頃挫泊 氚� 鞝曤Μ 牍勳毄 臧�電レ劚鞚� 鞏戈笁頄堨姷雼堧嫟. 霕愴暅 Array電� 2025雲� 7鞗旍棎 鞚胳垬 氚� 鞛愱笀 臁半嫭 甏�霠� 臁办爼霃� 鞕勲頄堨姷雼堧嫟.
Telephone and Data Systems, Inc. a annonc茅 un chiffre d'affaires d'exploitation consolid茅 de $1,186 million pour le trimestre, en baisse de 4% sur un an, avec un b茅n茅fice net de $18 million (contre $7 million un an plus t么t) et un EBITDA ajust茅 de $340 million (en recul de 5%). Le free cash flow sur six mois s'est 茅lev茅 脿 $301 million. Array (d茅tenue 脿 82,5%) a g茅n茅r茅 $916 million de revenus d'exploitation au trimestre, avec une hausse des revenus tours et un taux d'occupation par tour de 1,57 au 30 juin 2025.
Des 茅v茅nements post茅rieurs importants ont reconfigur茅 la soci茅t茅聽: Array a finalis茅 la vente de ses activit茅s sans fil 脿 T鈥慚obile le 1er ao没t 2025, percevant des produits en esp猫ces de $2,629 million, a r茅alis茅 un 茅change de dette portant sur $1,680 million de dettes d'Array, et a d茅clar茅 un dividende exceptionnel de $23.00 par action ordinaire Array. TDS pr茅voit un passif fiscal en esp猫ces li茅 脿 la transaction T鈥慚obile de $125鈥�$175 million et a mentionn茅 des co没ts potentiels de sortie, de d茅mant猫lement et de cl么ture聽; Array a 茅galement finalis茅 des ajustements d'acquisition et de financement en juillet 2025.
Telephone and Data Systems, Inc. meldete konsolidierte Umsatzerl枚se von $1,186 million f眉r das Quartal, ein R眉ckgang um 4% gegen眉ber dem Vorjahr, mit einem Nettogewinn von $18 million (驳别驳别苍眉产别谤 $7 million im Vorjahr) und einem bereinigten EBITDA von $340 million (minus 5%). Der Free Cashflow f眉r die sechs Monate belief sich auf $301 million. Array (zu 82,5% gehalten) erzielte im Quartal operative Ums盲tze von $916 million, mit steigenden Turmeinnahmen und einer Turmmietquote von 1,57 zum 30. Juni 2025.
Bedeutsame nachfolgende Ereignisse ver盲nderten das Unternehmen: Array schloss den Verkauf seiner Wireless-Gesch盲fte an T鈥慚obile am 1. August 2025 ab und erhielt Barerl枚se in H枚he von $2,629 million, vollzog einen Debt-Exchange, der $1,680 million an Array-Schulden umtauschte, und erkl盲rte eine Sonderdividende von $23.00 je Stammaktie von Array. TDS erwartet eine Cash-Steuerverbindlichkeit aus der T鈥慚obile-Transaktion von $125鈥�$175 million und wies auf m枚gliche Exit-, Stilllegungs- und Abwicklungskosten hin; Array nahm im Juli 2025 au脽erdem akquisitions- und finanzierungsbedingte Anpassungen vor.
Positive
- Received $2,629 million in cash proceeds from the sale of Array's wireless operations to T-Mobile, providing significant liquidity.
- Debt reduction via exchange: $1,680 million of Array long-term debt was exchanged, leaving $364 million retained principal after the exchange.
- Free cash flow of $301 million for the six months ended June 30, 2025 (non-GAAP), improving cash generation versus the prior year period.
- Tower business growth: Third-party tower revenues increased (Q2 towers third-party revenue $28 million, up 12% year-over-year) and tower tenancy rate was 1.57 as of June 30, 2025.
- Credit actions following close: Standard & Poor's upgraded TDS and Array to BBB- with a stable outlook and Moody's confirmed Ba1 and moved to stable (explicitly disclosed subsequent events).
Negative
- Expected cash income tax liability of $125鈥�$175 million related to the T-Mobile transaction will reduce net cash proceeds available.
- Anticipated exit and disposal costs, decommissioning and wind-down expenses tied to the Array sale and tower decommissioning may significantly impact future results.
- Adjusted EBITDA and operating revenues declined year-over-year (Total operating revenues down 4% in Q2; Adjusted EBITDA down 5% for the quarter), reflecting operating pressures.
- Higher churn and net postpaid handset losses: Total postpaid net losses worsened (Q2 postpaid handset net loss (44,000) vs (29,000) prior year), noted as pressure from industry competition.
- Receivables securitization and special purpose entity changes: Array terminated the receivables securitization agreement and dissolved the USCC Master Note Trust, indicating structural changes in funding.
Insights
TL;DR: Sale to T-Mobile materially strengthens liquidity but creates near-term tax and transaction costs.
TDS consolidated results show modest revenue pressure and margin compression year-over-year, while free cash flow improved to $301 million for the first half. The August 1, 2025 closing of Array's wireless sale to T-Mobile produced substantial cash proceeds of $2,629 million and a significant debt exchange that removed $1,680 million of Array notes, improving balance sheet flexibility. Near-term items to monitor include the company-stated cash tax liability of $125鈥�$175 million, the $48 million of unamortized discount and issuance costs to be recorded as interest expense, and anticipated exit, decommissioning and wind-down costs that management disclosed will affect future periods. Overall, the transaction is a material liquidity and strategic inflection point explicitly described in the filing.
TL;DR: Transaction execution is significant, but multiple contingent costs and pending spectrum deals leave material uncertainty.
Array's strategic review culminated in the T-Mobile sale and a long-term Master License Agreement for towers, both disclosed as closed or effective. The filing explicitly notes pending spectrum sales to Verizon and AT&T (totaling contract proceeds of about $1,000 million and $1,018 million respectively) that remain subject to regulatory approval and closing conditions. Management disclosed expected recognition of exit and disposal costs, potential decommissioning obligations tied to ground leases, and continued advisor and restructuring expenses. These explicit contingencies mean the ultimate impact on TDS' capital structure and shareholder returns depends on outcomes of the remaining spectrum transactions and actual wind-down costs; therefore the near-term deal execution is material but outcome-dependent.
Telephone and Data Systems, Inc. ha registrato ricavi operativi consolidati di $1,186 million per il trimestre, in calo del 4% rispetto all'anno precedente, con un utile netto di $18 million (contro $7 million un anno prima) e un EBITDA rettificato di $340 million (in calo del 5%). Il flusso di cassa libero per i sei mesi 猫 stato di $301 million. Array (posseduta per l'82,5%) ha generato nel trimestre ricavi operativi per $916 million, con ricavi dalle torri in aumento e un tasso di affitto per torre pari a 1,57 al 30 giugno 2025.
Eventi successivi rilevanti hanno rimodellato la societ脿: Array ha chiuso la vendita delle sue attivit脿 wireless a T-Mobile il 1 agosto 2025, incassando proventi in contanti di $2,629 million, ha completato uno scambio di debito che ha interessato $1,680 million di debito di Array e ha dichiarato un dividendo straordinario di $23.00 per azione ordinaria di Array. TDS prevede un'imposta in contanti sulla transazione con T-Mobile compresa tra $125鈥�$175 million e ha segnalato possibili costi di uscita, dismissione e smantellamento; Array ha inoltre completato acquisizioni e adeguamenti finanziari a luglio 2025.
Telephone and Data Systems, Inc. registr贸 ingresos operativos consolidados de $1,186 million en el trimestre, una ca铆da del 4% interanual, con un beneficio neto de $18 million (frente a $7 million un a帽o antes) y un EBITDA ajustado de $340 million (baj贸 un 5%). El flujo de caja libre en los seis meses fue de $301 million. Array (82,5% propiedad) gener贸 $916 million de ingresos operativos en el trimestre, con mayores ingresos por torres y una tasa de ocupaci贸n por torre de 1,57 al 30 de junio de 2025.
Hechos posteriores significativos remodelaron la compa帽铆a: Array cerr贸 la venta de sus operaciones inal谩mbricas a T-Mobile el 1 de agosto de 2025, recibiendo ingresos en efectivo de $2,629 million, complet贸 un canje de deuda que intercambi贸 $1,680 million de deuda de Array y declar贸 un dividendo extraordinario de $23.00 por acci贸n ordinaria de Array. TDS espera una obligaci贸n fiscal en efectivo por la transacci贸n con T-Mobile de $125鈥�$175 million y advirti贸 sobre posibles costes de salida, desmantelamiento y liquidaci贸n; Array tambi茅n complet贸 ajustes de adquisici贸n y financiaci贸n en julio de 2025.
Telephone and Data Systems, Inc.電� 頃措嫻 攵勱赴鞐� 鞐瓣舶 鞓侅梾靾橃澋 $1,186 million鞚� 氤搓碃頄堨溂氅� 鞝勲厔 霃欔赴 雽�牍� 4% 臧愳唽頄堦碃, 靾滌澊鞚奠潃 $18 million(鞝勲厔 霃欔赴 $7 million)鞚措┌ 臁办爼 EBITDA電� $340 million(5% 臧愳唽)鞓�鞀惦媹雼�. 6臧滌洈 雸勳爜 旮办 鞛夓棳順勱笀頋愲鞚� $301 million鞚挫棃鞀惦媹雼�. Array(歆�攵� 82.5%)電� 攵勱赴 霃欖晥 $916 million鞚� 鞓侅梾靾橃澋鞚� 彀届稖頄堨溂氅�, 韮�鞗� 靾橃澋鞚� 歃濌皜頄堦碃 2025雲� 6鞗� 30鞚� 旮办 韮�鞗� 雼� 鞛勲寑鞙潃 1.57鞚挫棃鞀惦媹雼�.
欷戨寑頃� 頉勳啀 靷贝霌れ澊 須岇偓毳� 鞛幐頄堨姷雼堧嫟: Array電� 2025雲� 8鞗� 1鞚� T鈥慚obile鞐� 氍挫劆 靷梾鞚� 毵り皝鞚� 毵堧毽晿鞐� 順勱笀 靾橃澋 $2,629 million鞚� 頇曤炒頄堦碃, Array 攵�毂� $1,680 million鞚� 甑愴櫂頃橂姅 攵�毂� 甑愴櫂鞚� 鞕勲頄堨溂氅�, Array 氤错喌欤检棎 雽�頃� 欤茧嫻 $23.00鞚� 韸闺硠氚半嫻鞚� 靹犾柛頄堨姷雼堧嫟. TDS電� T鈥慚obile 瓯半灅鞐� 霐半ジ 順勱笀 雮╇秬 靹胳暋鞚� $125鈥�$175 million鞙茧 鞓堨儊頃橂┌, 韮堩嚧, 頃挫泊 氚� 鞝曤Μ 牍勳毄 臧�電レ劚鞚� 鞏戈笁頄堨姷雼堧嫟. 霕愴暅 Array電� 2025雲� 7鞗旍棎 鞚胳垬 氚� 鞛愱笀 臁半嫭 甏�霠� 臁办爼霃� 鞕勲頄堨姷雼堧嫟.
Telephone and Data Systems, Inc. a annonc茅 un chiffre d'affaires d'exploitation consolid茅 de $1,186 million pour le trimestre, en baisse de 4% sur un an, avec un b茅n茅fice net de $18 million (contre $7 million un an plus t么t) et un EBITDA ajust茅 de $340 million (en recul de 5%). Le free cash flow sur six mois s'est 茅lev茅 脿 $301 million. Array (d茅tenue 脿 82,5%) a g茅n茅r茅 $916 million de revenus d'exploitation au trimestre, avec une hausse des revenus tours et un taux d'occupation par tour de 1,57 au 30 juin 2025.
Des 茅v茅nements post茅rieurs importants ont reconfigur茅 la soci茅t茅聽: Array a finalis茅 la vente de ses activit茅s sans fil 脿 T鈥慚obile le 1er ao没t 2025, percevant des produits en esp猫ces de $2,629 million, a r茅alis茅 un 茅change de dette portant sur $1,680 million de dettes d'Array, et a d茅clar茅 un dividende exceptionnel de $23.00 par action ordinaire Array. TDS pr茅voit un passif fiscal en esp猫ces li茅 脿 la transaction T鈥慚obile de $125鈥�$175 million et a mentionn茅 des co没ts potentiels de sortie, de d茅mant猫lement et de cl么ture聽; Array a 茅galement finalis茅 des ajustements d'acquisition et de financement en juillet 2025.
Telephone and Data Systems, Inc. meldete konsolidierte Umsatzerl枚se von $1,186 million f眉r das Quartal, ein R眉ckgang um 4% gegen眉ber dem Vorjahr, mit einem Nettogewinn von $18 million (驳别驳别苍眉产别谤 $7 million im Vorjahr) und einem bereinigten EBITDA von $340 million (minus 5%). Der Free Cashflow f眉r die sechs Monate belief sich auf $301 million. Array (zu 82,5% gehalten) erzielte im Quartal operative Ums盲tze von $916 million, mit steigenden Turmeinnahmen und einer Turmmietquote von 1,57 zum 30. Juni 2025.
Bedeutsame nachfolgende Ereignisse ver盲nderten das Unternehmen: Array schloss den Verkauf seiner Wireless-Gesch盲fte an T鈥慚obile am 1. August 2025 ab und erhielt Barerl枚se in H枚he von $2,629 million, vollzog einen Debt-Exchange, der $1,680 million an Array-Schulden umtauschte, und erkl盲rte eine Sonderdividende von $23.00 je Stammaktie von Array. TDS erwartet eine Cash-Steuerverbindlichkeit aus der T鈥慚obile-Transaktion von $125鈥�$175 million und wies auf m枚gliche Exit-, Stilllegungs- und Abwicklungskosten hin; Array nahm im Juli 2025 au脽erdem akquisitions- und finanzierungsbedingte Anpassungen vor.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
| (Mark One) | ||||||||
| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | ||||||||
For the quarterly period ended June 30, 2025
OR
| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | ||||||||
For the transition period from to
Commission file number 001-14157
| (Exact name of Registrant as specified in its charter) | ||||||||
| (State or other jurisdiction of incorporation or organization) | (IRS Employer Identification No.) | |||||||
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (312) 630-1900
| Securities registered pursuant to Section 12(b) of the Act: | ||||||||||||||||||||
| Title of each class | Trading Symbol | Name of each exchange on which registered | ||||||||||||||||||
| Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. | ☒ | No | ☐ | ||||||||||||||||||||
| Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). | ☒ | No | ☐ | ||||||||||||||||||||
| Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. | |||||||||||||||||||||||
| ☒ | Accelerated filer | ☐ | |||||||||||||||||||||
| Non-accelerated filer | ☐ | Smaller reporting company | |||||||||||||||||||||
| Emerging growth company | |||||||||||||||||||||||
| If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. | ☐ | ||||||||||||||||||||||
| Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). | Yes | No | ☒ | ||||||||||||||||||||
The number of shares outstanding of each of the issuer's classes of common stock, as of June 30, 2025, is 108 million Common Shares, $.01 par value, and 7 million Series A Common Shares, $.01 par value.
Telephone and Data Systems, Inc.
Quarterly Report on Form 10-Q
For the Period Ended June 30, 2025
| Index | Page No. | ||||
Management Discussion and Analysis of Financial Condition and Results of Operations | 1 | ||||
Executive Overview | 1 | ||||
Terms Used by TDS | 4 | ||||
Results of Operations – TDS Consolidated | 5 | ||||
Array Operations | 8 | ||||
Wireless Operations | 9 | ||||
Towers Operations | 13 | ||||
TDS Telecom Operations | 15 | ||||
Liquidity and Capital Resources | 21 | ||||
Consolidated Cash Flow Analysis | 26 | ||||
Consolidated Balance Sheet Analysis | 27 | ||||
Supplemental Information Relating to Non-GAAP Financial Measures | 28 | ||||
Application of Critical Accounting Policies and Estimates | 32 | ||||
Private Securities Litigation Reform Act of 1995 Safe Harbor Cautionary Statement | 33 | ||||
Risk Factors | 35 | ||||
Quantitative and Qualitative Disclosures About Market Risk | 45 | ||||
Financial Statements (Unaudited) | 46 | ||||
Consolidated Statement of Operations | 46 | ||||
Consolidated Statement of Cash Flows | 47 | ||||
Consolidated Balance Sheet | 48 | ||||
Consolidated Statement of Changes in Equity | 50 | ||||
Notes to Consolidated Financial Statements | 54 | ||||
Controls and Procedures | 71 | ||||
Legal Proceedings | 72 | ||||
Unregistered Sales of Equity Securities and Use of Proceeds | 73 | ||||
Other Information | 74 | ||||
Exhibits | 75 | ||||
Form 10-Q Cross Reference Index | 76 | ||||
Signatures | 77 | ||||
Table of Contents
| Telephone and Data Systems, Inc. Management’s Discussion and Analysis of Financial Condition and Results of Operations | ||||
Executive Overview
The following discussion and analysis compares Telephone and Data Systems, Inc.’s (TDS) financial results for the three and six months ended June 30, 2025, to the three and six months ended June 30, 2024. It should be read in conjunction with TDS’ interim consolidated financial statements and notes included herein, and with the description of TDS’ business, its audited consolidated financial statements and Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) included in TDS’ Annual Report on Form 10-K (Form 10-K) for the year ended December 31, 2024. Certain numbers included herein are rounded to millions for ease of presentation; however, certain calculated amounts and percentages are determined using the unrounded numbers.
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.
As of June 30, 2025, United States Cellular Corporation (UScellular) is a 82.5%-owned subsidiary of TDS. On August 1, 2025, UScellular 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. Array leases and offers tower space to third-party tenants on owned towers, holds noncontrolling interests in wireless operating companies and holds certain wireless spectrum licenses not included in the sale of its wireless operations, which was divested on August 1, 2025. TDS also provides broadband, video, voice and wireless services through its wholly-owned subsidiary, TDS Telecommunications LLC (TDS Telecom). TDS operates entirely in the United States. See Note 11 — Business Segment Information in the Notes to Consolidated Financial Statements for additional information about TDS' segments.
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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 value over the long term for its shareholders. Since its founding, TDS has been committed to bringing high-quality communications services to rural and underserved communities.
TDS’ historical long-term 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.
TDS plans to build shareholder value by continuing to execute on its strategies to build strong, competitive businesses providing high-quality, data-focused services and products. Strategic efforts include:
▪Array seeks to grow revenue in its Towers operations primarily through increasing third-party colocations on existing towers through providing unique tower locations, attractive terms and streamlined implementation to third-party wireless operators.
▪Array also holds noncontrolling interests in wireless operating companies that generate material amounts of income and cash distributions. Further, 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.
▪Through July 31, 2025, Array provided wireless communication services; these operations were disposed of on August 1, 2025, as discussed further below.
▪TDS Telecom strives to provide high-quality broadband services in its markets with the ability to provide value-added bundling with video, voice and wireless service options. TDS Telecom focuses on driving 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.
Following the conclusion of the strategic alternatives review process for Array, TDS expects to focus its strategic efforts on its remaining businesses. TDS also expects to have additional opportunities to invest further in its remaining businesses, improve its liquidity and return value to its shareholders.
Announced Transactions and Strategic Alternatives Review
On August 4, 2023, TDS and Array announced that the Boards of Directors of both companies decided to initiate a process to explore a range of strategic alternatives for Array. On May 28, 2024, Array announced that its Board of Directors unanimously approved the execution of a Securities Purchase Agreement (Securities Purchase Agreement) by and among TDS, Array, T-Mobile US, Inc. (T-Mobile) and USCC Wireless Holdings, LLC, pursuant to which, among other things, Array agreed to sell its wireless operations and select spectrum assets to T-Mobile. The Securities Purchase Agreement also contemplated, among other things, a Short-Term Spectrum Manager Lease Agreement and Short-Term Spectrum Manager Sublease Agreements that would become effective at the closing date, 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. The sale of the wireless operations to T-Mobile was subject to the receipt of regulatory approvals and the satisfaction of customary closing conditions. As of June 30, 2025, the transaction did not meet the accounting criteria to be presented as discontinued operations. Regulatory approval was received in July 2025 and the closing occurred on August 1, 2025, as discussed further below.
On October 17, 2024, Array, and certain subsidiaries of Array, entered into a License Purchase Agreement (Verizon Purchase Agreement) with Verizon Communications Inc. (Verizon) 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 for total proceeds of $1,000 million. As of June 30, 2025, Array's book value of the wireless spectrum licenses to be sold was $586 million. The transaction is expected to close in the third quarter of 2026, subject to regulatory approval and other customary closing conditions, and the termination of the T-Mobile Short-Term Spectrum Manager Lease Agreement.
On November 6, 2024, Array, and certain subsidiaries of Array, entered into a License Purchase Agreement (AT&T Purchase Agreement) with New Cingular Wireless PCS, LLC (AT&T), a subsidiary of AT&T Inc. to sell certain 3.45 GHz and 700 MHz wireless spectrum licenses and agreed to grant AT&T certain rights to lease and sub-lease such licenses prior to the transaction close for total proceeds of $1,018 million, subject to certain purchase price adjustments. As of June 30, 2025, Array's book value of the wireless spectrum licenses to be sold was $860 million. The transaction is expected to close in 2025, subject to regulatory approval and other customary closing conditions.
The strategic alternatives review process is ongoing as Array works toward closing the Verizon and AT&T spectrum transactions signed during 2024, and continues to seek to opportunistically monetize its spectrum assets that are not subject to the Securities Purchase Agreement, the Verizon Purchase Agreement, or the AT&T Purchase Agreement.
TDS incurred third-party expenses related to the announced transactions and strategic alternatives review of $16 million and $32 million for the three and six months ended June 30, 2025, respectively and $21 million and $33 million for the three and six months ended June 30, 2024, respectively.
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Subsequent Events
The following events occurred subsequent to June 30, 2025 and are not reflected in the financial results, statements, or footnotes (unless otherwise explicitly stated) for the three and six months ended June 30, 2025.
•On July 14, 2025, Array completed the acquisition of King Street Wireless, Inc. and Sunshine Spectrum, Inc. for a total purchase price of $17 million, of which $10 million was paid in prior periods and $7 million was paid at time of closing. Following the acquisitions, King Street Wireless, King Street Wireless, Inc., Advantage Spectrum and Sunshine Spectrum, Inc., are no longer classified as variable interest entities (VIEs). The acquisitions result in the expected realization of certain deferred tax assets, and therefore TDS expects to record a reduction to valuation allowance on deferred tax assets and associated discrete income tax benefit of approximately $50 million during the three months ending September 30, 2025.
•On July 31, 2025, Array terminated the receivables securitization agreement. In addition, the USCC Master Note Trust, a special purpose entity used to facilitate securitized borrowings using equipment installment plan receivables, was dissolved and, therefore, the entity will no longer be classified as a VIE.
•On August 1, 2025, the sale of the wireless operations to T-Mobile closed and Array received cash proceeds of $2,629 million. TDS expects a cash income tax liability on the T-Mobile transaction of between $125 million and $175 million. The transaction 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 cash portion of the purchase price was also reduced by unearned contingent consideration of $89 million as well as other purchase price adjustments outlined in the Securities Purchase Agreement. The final cash proceeds are subject to adjustment according to the terms and conditions of the Securities Purchase Agreement. Array expects to record exit and disposal costs and recognize a loss on the transaction that will be based on the carrying value of net assets sold as of the close date. As of June 30, 2025, the carrying value of the net assets sold to T-Mobile was approximately $2,400 million.
•The debt exchange offering period concluded on August 1, 2025 and resulted in the exchange of $1,680 million of long-term debt comprised of the following Array notes: $489 million of 6.7% Senior Notes, $394 million of 6.25% Senior Notes, $402 million of 5.5% March 2070 Senior Notes and $395 million of 5.5% June 2070 Senior Notes. As a result, on August 1, 2025, after the debt exchange, Array retained $364 million of senior notes, consisting of $55 million 6.7% Senior Notes, $106 million 6.25% Senior Notes, $98 million 5.5% March 2070 Senior Notes, and $105 million 5.5% June 2070 Senior Notes. The unamortized discount and debt issuance costs related to the exchanged debt was $48 million and will be recorded as interest expense during the three months ending September 30, 2025.
•On August 1, 2025, 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, for a minimum of 15 years, space on a minimum of 2,015 existing or to-be-constructed towers owned by Array. The MLA also provided that T-Mobile extend the license term for approximately 600 towers owned by Array for a new 15-year term commencing on August 1, 2025. In addition, the MLA provides terms and conditions for T-Mobile, at its option, to revert certain equipment back to Array and would make Array responsible for any decommissioning, remediation, restoration, or disposal costs of such assets.
•The closing of the T-Mobile transaction triggered the recognition of certain cash and non-cash obligations. Such obligations include contingent advisory fees, employee compensation and severance, employee stock award costs, debt extinguishment, income tax expense, administrative costs, restructuring expenses and other wind down costs. In future periods, Array also may incur significant decommissioning costs for certain towers and equipment, and such decommissioning costs may also include remaining obligations under related ground leases. These costs may have a significant impact on Array's financial statements in future periods.
•On August 1, 2025, the Array Board of Directors declared a special dividend per Common and Series A outstanding share of $23.00 for shareholders of record on August 11, 2025, which will be payable on August 19, 2025. TDS, which owns 82.5% of the equity of Array as of June 30, 2025, will receive its pro-rata share of the special dividend.
•On August 1, 2025, certain wireless service companies in Iowa that are not consolidated into the Array financial statements but are accounted for as equity method investments sold specific wireless assets and wireless customers to T-Mobile under separate asset purchase agreements. Array expects to receive a distribution from these transactions in August 2025.
•On August 4, 2025, Array repaid the entire outstanding borrowings under all of its term loan agreements and export credit financing agreement of $863 million. Array expects to draw $325 million from its term loan agreement in August 2025.
Other
TDS continues to monitor developments related to proposed increases in tariffs on imported goods and the impacts they may have on TDS operations and financial results. An increase in future tariffs may impact the price of procured goods and services, such as devices and network equipment. TDS is working closely with its suppliers to determine the impacts of any potential tariffs, and assess potential modifications or exemptions. The outcome of the potential tariff increases could negatively impact TDS operations and financial results in future periods.
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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:
▪5G – fifth generation wireless technology that helps address customers’ growing demand for data services and creates opportunities for new services requiring high speed and reliability as well as low latency.
▪Account – represents an individual or business financially responsible for one or multiple associated connections. An account may include a variety of types of connections such as handsets and connected devices.
▪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.
▪Churn Rate – represents the percentage of the connections that disconnect service each month. These rates represent the average monthly churn rate for each respective period.
▪Colocations – represents instances where a third-party wireless carrier rents or leases space on a company-owned tower.
▪Connected Devices – non-handset devices that connect directly to the Array network. Connected devices include products such as tablets, wearables, modems, fixed wireless, and hotspots.
▪EBITDA – refers to earnings before interest, taxes, depreciation, amortization and accretion and is used in the non-GAAP metric Adjusted EBITDA throughout this document. See Supplemental Information Relating to Non-GAAP Financial Measures within this MD&A for additional information.
▪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.
▪Gross Additions – represents the total number of new connections added during the period, without regard to connections that were terminated during that period.
▪Incumbent Markets – markets where TDS is positioned as the traditional local telephone company.
▪IPTV – internet protocol television.
▪Net Additions (Losses) – represents the total number of new connections added during the period, net of connections that were terminated during that period.
▪OIBDA – refers to operating income before depreciation, amortization and accretion and is used in the non-GAAP metric Adjusted OIBDA throughout this document. See Supplemental Information Relating to Non-GAAP Financial Measures within this MD&A for additional information.
▪Postpaid Average Revenue per Account (Postpaid ARPA) – metric which is calculated by dividing total postpaid service revenues by the average number of postpaid accounts and by the number of months in the period.
▪Postpaid Average Revenue per User (Postpaid ARPU) – metric which is calculated by dividing total postpaid service revenues by the average number of postpaid connections and by the number of months in the period.
▪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.
▪Retail Connections – individual lines of service associated with each device activated by a postpaid or prepaid customer. Connections are associated with all types of devices that connect directly to the Array network.
▪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 – average number of tenants that lease space on company-owned towers, measured on a per-tower basis.
▪Universal Service Fund (USF) – a system of telecommunications collected fees and support payments managed by the Federal Communications Commission (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.
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Results of Operations — TDS Consolidated
The following discussion and analysis compares financial results for the three and six months ended June 30, 2025, to the three and six months ended June 30, 2024. The financial results include the wireless operations that were sold to T-Mobile on August 1, 2025.
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||||||||||||
| 2025 | 2024 | 2025 vs. 2024 | 2025 | 2024 | 2025 vs. 2024 | ||||||||||||||||||||||||||||||
| (Dollars in millions) | |||||||||||||||||||||||||||||||||||
| Operating revenues | |||||||||||||||||||||||||||||||||||
| Array | $ | 916 | $ | 927 | (1) | % | $ | 1,807 | $ | 1,877 | (4) | % | |||||||||||||||||||||||
| TDS Telecom | 265 | 267 | (1) | % | 522 | 534 | (2) | % | |||||||||||||||||||||||||||
All other1 | 5 | 44 | (88) | % | 12 | 89 | (88) | % | |||||||||||||||||||||||||||
| Total operating revenues | 1,186 | 1,238 | (4) | % | 2,341 | 2,500 | (6) | % | |||||||||||||||||||||||||||
| Operating expenses | |||||||||||||||||||||||||||||||||||
| Array | 881 | 891 | (1) | % | 1,731 | 1,789 | (3) | % | |||||||||||||||||||||||||||
| TDS Telecom | 251 | 248 | 1 | % | 508 | 488 | 4 | % | |||||||||||||||||||||||||||
All other1 | 14 | 60 | (77) | % | 28 | 117 | (77) | % | |||||||||||||||||||||||||||
| Total operating expenses | 1,146 | 1,199 | (4) | % | 2,267 | 2,394 | (5) | % | |||||||||||||||||||||||||||
| Operating income (loss) | |||||||||||||||||||||||||||||||||||
| Array | 35 | 36 | (4) | % | 76 | 88 | (13) | % | |||||||||||||||||||||||||||
| TDS Telecom | 14 | 19 | (27) | % | 14 | 46 | (70) | % | |||||||||||||||||||||||||||
All other1 | (9) | (16) | 45 | % | (16) | (28) | 42 | % | |||||||||||||||||||||||||||
| Total operating income | 40 | 39 | 2 | % | 74 | 106 | (30) | % | |||||||||||||||||||||||||||
| Other income (expense) | |||||||||||||||||||||||||||||||||||
| Equity in earnings of unconsolidated entities | 43 | 39 | 9 | % | 79 | 82 | (3) | % | |||||||||||||||||||||||||||
| Interest and dividend income | 6 | 7 | (18) | % | 13 | 12 | 1 | % | |||||||||||||||||||||||||||
| Interest expense | (70) | (73) | 5 | % | (129) | (131) | 2 | % | |||||||||||||||||||||||||||
| Other, net | 2 | 1 | N/M | 5 | 2 | N/M | |||||||||||||||||||||||||||||
| Total other expense | (19) | (26) | 28 | % | (32) | (35) | 8 | % | |||||||||||||||||||||||||||
| Income before income taxes | 21 | 13 | 61 | % | 42 | 71 | (41) | % | |||||||||||||||||||||||||||
| Income tax expense | 3 | 6 | (46) | % | 12 | 26 | (54) | % | |||||||||||||||||||||||||||
| Net income | 18 | 7 | N/M | 30 | 45 | (34) | % | ||||||||||||||||||||||||||||
| Less: Net income attributable to noncontrolling interests, net of tax | 6 | 4 | 61 | % | 11 | 13 | (16) | % | |||||||||||||||||||||||||||
| Net income attributable to TDS shareholders | 12 | 3 | N/M | 19 | 32 | (41) | % | ||||||||||||||||||||||||||||
| TDS Preferred Share dividends | 17 | 17 | — | 35 | 35 | — | |||||||||||||||||||||||||||||
| Net income (loss) attributable to TDS common shareholders | $ | (5) | $ | (14) | 60 | % | $ | (16) | $ | (3) | N/M | ||||||||||||||||||||||||
Adjusted OIBDA (Non-GAAP)2 | $ | 289 | $ | 310 | (7) | % | $ | 576 | $ | 629 | (8) | % | |||||||||||||||||||||||
Adjusted EBITDA (Non-GAAP)2 | $ | 340 | $ | 357 | (5) | % | $ | 673 | $ | 725 | (7) | % | |||||||||||||||||||||||
Capital expenditures3 | $ | 170 | $ | 244 | (30) | % | $ | 282 | $ | 464 | (39) | % | |||||||||||||||||||||||
Numbers may not foot due to rounding.
N/M - Percentage change not meaningful
1Consists of corporate and other operations and intercompany eliminations.
2Refer to Supplemental Information Relating to Non-GAAP Financial Measures within this MD&A for a reconciliation of this measure.
3Refer 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.
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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. TDS’ investment in the Los Angeles SMSA Limited Partnership (LA Partnership) contributed pre-tax income of $20 million and $17 million for the three months ended June 30, 2025 and 2024, respectively and $35 million and $33 million for the six months ended June 30, 2025 and 2024, respectively. See Note 7 — Investments in Unconsolidated Entities in the Notes to Consolidated Financial Statements for additional information.
Interest expense
Interest expense decreased for the three and six months ended June 30, 2025 due primarily to a decrease in the average principal balance outstanding on the Array term loan and receivables securitization agreements and the TDS revolving credit agreement, partially offset by an increase in borrowings under the TDS term loan agreements and lower capitalized interest. See Market Risk for additional information regarding maturities of long-term debt and weighted average interest rates.
Income tax expense
Income tax expense decreased for the three and six months ended June 30, 2025, due primarily to excess stock compensation deductions for awards vesting in the current period.
TDS calculated income taxes for the three and six months ended June 30, 2025, based on an estimated year-to-date tax rate. The effective tax rates are expected to vary in subsequent interim periods in 2025 due to fluctuations in Income (loss) before income taxes.
On July 4, 2025, H.R.1 – the One big beautiful bill Act (OBBBA) was enacted into law. The OBBBA makes several impactful changes, including 100% bonus depreciation for qualifying assets, domestic research cost expensing, and increasing the business interest expense limitation threshold. TDS expects these changes to result in favorable deferral of cash taxes in future periods.
Net income attributable to noncontrolling interests, net of tax
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| (Dollars in millions) | |||||||||||||||||||||||
| Array noncontrolling public shareholders’ | $ | 5 | $ | 3 | $ | 9 | $ | 6 | |||||||||||||||
| Noncontrolling shareholders’ or partners’ | 1 | 1 | 2 | 7 | |||||||||||||||||||
| Net income attributable to noncontrolling interests, net of tax | $ | 6 | $ | 4 | $ | 11 | $ | 13 | |||||||||||||||
Net income attributable to noncontrolling interests, net of tax includes the noncontrolling public shareholders’ share of Array’s net income, the noncontrolling shareholders’ or partners’ share of certain Array subsidiaries’ net income and other TDS noncontrolling interests.
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Earnings
(Dollars in millions)
Three Months Ended
Net income increased due primarily to lower operating and tax expenses and higher equity in earnings of unconsolidated entities, partially offset by lower operating revenues.
Adjusted EBITDA decreased due primarily to lower operating revenues, partially offset by lower operating expenses and higher equity in earnings of unconsolidated entities
Six Months Ended
Net income decreased due primarily to lower operating revenues, partially offset by lower operating and tax expenses.
Adjusted EBITDA decreased due primarily to lower operating revenues, partially offset by lower operating expenses.
*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.
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 | Array OPERATIONS | ||||
Business Overview
Array leases and offers tower space to third-party tenants on 4,418 Array-owned towers, holds noncontrolling interests in wireless operating companies and holds certain wireless spectrum licenses not included in the sale of its wireless operations, which was divested on August 1, 2025. As of June 30, 2025, Array is an 82.5%-owned subsidiary of TDS.
Financial Overview — Array
The following discussion and analysis compares financial results for the three and six months ended June 30, 2025, to the three and six months ended June 30, 2024. The financial results include the wireless operations that were sold to T-Mobile on August 1, 2025.
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||||||||||||
| 2025 | 2024 | 2025 vs. 2024 | 2025 | 2024 | 2025 vs. 2024 | ||||||||||||||||||||||||||||||
| (Dollars in millions) | |||||||||||||||||||||||||||||||||||
| Operating Revenues | |||||||||||||||||||||||||||||||||||
| Wireless | $ | 888 | $ | 902 | (1) | % | $ | 1,751 | $ | 1,826 | (4) | % | |||||||||||||||||||||||
| Towers | 62 | 58 | 7 | % | 123 | 116 | 6 | % | |||||||||||||||||||||||||||
| Intra-company eliminations | (34) | (33) | (3) | % | (67) | (65) | (3) | % | |||||||||||||||||||||||||||
| Total operating revenues | 916 | 927 | (1) | % | 1,807 | 1,877 | (4) | % | |||||||||||||||||||||||||||
| Operating expenses | |||||||||||||||||||||||||||||||||||
| Wireless | 874 | 885 | (1) | % | 1,717 | 1,779 | (3) | % | |||||||||||||||||||||||||||
| Towers | 41 | 39 | 5 | % | 81 | 75 | 8 | % | |||||||||||||||||||||||||||
| Intra-company eliminations | (34) | (33) | (3) | % | (67) | (65) | (3) | % | |||||||||||||||||||||||||||
| Total operating expenses | 881 | 891 | (1) | % | 1,731 | 1,789 | (3) | % | |||||||||||||||||||||||||||
| Operating income | $ | 35 | $ | 36 | (4) | % | $ | 76 | $ | 88 | (13) | % | |||||||||||||||||||||||
| Net income | $ | 32 | $ | 18 | 77 | % | $ | 52 | $ | 42 | 24 | % | |||||||||||||||||||||||
Adjusted OIBDA (Non-GAAP)1 | $ | 208 | $ | 227 | (9) | % | $ | 422 | $ | 456 | (7) | % | |||||||||||||||||||||||
Adjusted EBITDA (Non-GAAP)1 | $ | 254 | $ | 268 | (6) | % | $ | 506 | $ | 542 | (7) | % | |||||||||||||||||||||||
Capital expenditures2 | $ | 80 | $ | 165 | (52) | % | $ | 132 | $ | 295 | (55) | % | |||||||||||||||||||||||
1Refer to Supplemental Information Relating to Non-GAAP Financial Measures within this MD&A for a reconciliation of this measure.
2Refer to Liquidity and Capital Resources within this MD&A for additional information on Capital expenditures.
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Wireless Operations
| As of June 30, | 2025 | 2024 | |||||||||||||||
| Retail Connections – End of Period | |||||||||||||||||
| Postpaid | 3,904,000 | 4,027,000 | |||||||||||||||
| Prepaid | 429,000 | 439,000 | |||||||||||||||
| Total | 4,333,000 | 4,466,000 | |||||||||||||||
| Q2 2025 | Q2 2024 | Q2 2025 vs. Q2 2024 | YTD 2025 | YTD 2024 | YTD 2025 vs. YTD 2024 | |||||||||||||||||||||||||||
| Postpaid Activity and Churn | ||||||||||||||||||||||||||||||||
| Gross Additions | ||||||||||||||||||||||||||||||||
| Handsets | 70,000 | 73,000 | (4) | % | 138,000 | 136,000 | 1 | % | ||||||||||||||||||||||||
| Connected Devices | 39,000 | 44,000 | (11) | % | 76,000 | 87,000 | (13) | % | ||||||||||||||||||||||||
| Total Gross Additions | 109,000 | 117,000 | (7) | % | 214,000 | 223,000 | (4) | % | ||||||||||||||||||||||||
| Net Additions (Losses) | ||||||||||||||||||||||||||||||||
| Handsets | (44,000) | (29,000) | (52) | % | (82,000) | (76,000) | (8) | % | ||||||||||||||||||||||||
| Connected Devices | 2,000 | 5,000 | (60) | % | 1,000 | 9,000 | (89) | % | ||||||||||||||||||||||||
| Total Net Additions (Losses) | (42,000) | (24,000) | (75) | % | (81,000) | (67,000) | (21) | % | ||||||||||||||||||||||||
| Churn | ||||||||||||||||||||||||||||||||
| Handsets | 1.12 | % | 0.97 | % | 1.08 | % | 1.00 | % | ||||||||||||||||||||||||
| Connected Devices | 2.36 | % | 2.47 | % | 2.38 | % | 2.50 | % | ||||||||||||||||||||||||
| Total Churn | 1.29 | % | 1.16 | % | 1.25 | % | 1.19 | % | ||||||||||||||||||||||||
N/M - Percentage change not meaningful
Total postpaid handset net losses increased for the three and six months ended June 30, 2025, when compared to the same period last year due to higher defections as a result of elevated churn and aggressive industry-wide competition.
Total postpaid connected device net additions decreased for the three and six months ended June 30, 2025 when compared to the same period last year due to lower gross additions for home internet and connected watches, partially offset by higher gross additions for tablets and a decrease in mobile hotspot defections.
Postpaid Revenue
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||||||||||||
| 2025 | 2024 | 2025 vs. 2024 | 2025 | 2024 | 2025 vs. 2024 | ||||||||||||||||||||||||||||||
Average Revenue Per User (ARPU) | $ | 51.91 | $ | 51.45 | 1 % | $ | 51.98 | $ | 51.69 | 1 % | |||||||||||||||||||||||||
Average Revenue Per Account (ARPA) | $ | 131.89 | $ | 130.41 | 1 % | $ | 132.07 | $ | 131.18 | 1 % | |||||||||||||||||||||||||
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Financial Overview — Wireless
The following discussion and analysis compares financial results for the three and six months ended June 30, 2025, to the three and six months ended June 30, 2024. The financial results include the wireless operations that were sold to T-Mobile on August 1, 2025.
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||||||||||||
| 2025 | 2024 | 2025 vs. 2024 | 2025 | 2024 | 2025 vs. 2024 | ||||||||||||||||||||||||||||||
| (Dollars in millions) | |||||||||||||||||||||||||||||||||||
| Retail service | $ | 652 | $ | 666 | (2) | % | $ | 1,312 | $ | 1,344 | (2) | % | |||||||||||||||||||||||
| Other | 56 | 52 | 7 | % | 109 | 102 | 7 | % | |||||||||||||||||||||||||||
| Service revenues | 708 | 718 | (1) | % | 1,421 | 1,446 | (2) | % | |||||||||||||||||||||||||||
| Equipment sales | 180 | 184 | (2) | % | 330 | 380 | (13) | % | |||||||||||||||||||||||||||
| Total operating revenues | 888 | 902 | (1) | % | 1,751 | 1,826 | (4) | % | |||||||||||||||||||||||||||
| System operations (excluding Depreciation, amortization and accretion reported below) | 197 | 194 | 1 | % | 387 | 390 | (1) | % | |||||||||||||||||||||||||||
| Cost of equipment sold | 209 | 211 | (1) | % | 387 | 427 | (9) | % | |||||||||||||||||||||||||||
| Selling, general and administrative | 319 | 313 | 2 | % | 643 | 637 | 1 | % | |||||||||||||||||||||||||||
| Depreciation, amortization and accretion | 151 | 154 | (2) | % | 302 | 308 | (2) | % | |||||||||||||||||||||||||||
| (Gain) loss on asset disposals, net | 2 | 5 | (59) | % | 3 | 10 | (66) | % | |||||||||||||||||||||||||||
| (Gain) loss on license sales and exchanges, net | (4) | 8 | N/M | (5) | 7 | N/M | |||||||||||||||||||||||||||||
| Total operating expenses | 874 | 885 | (1) | % | 1,717 | 1,779 | (3) | % | |||||||||||||||||||||||||||
| Operating income | $ | 14 | $ | 17 | (21) | % | $ | 34 | $ | 47 | (27) | % | |||||||||||||||||||||||
Adjusted OIBDA (Non-GAAP)1 | $ | 174 | $ | 196 | (11) | % | $ | 355 | $ | 392 | (9) | % | |||||||||||||||||||||||
Adjusted EBITDA (Non-GAAP)1 | $ | 174 | $ | 196 | (11) | % | $ | 355 | $ | 392 | (9) | % | |||||||||||||||||||||||
Capital expenditures2 | $ | 77 | $ | 160 | (52) | % | $ | 127 | $ | 286 | (55) | % | |||||||||||||||||||||||
N/M - Percentage change not meaningful
1Refer to Supplemental Information Relating to Non-GAAP Financial Measures within this MD&A for a reconciliation of this measure.
2Refer to Liquidity and Capital Resources within this MD&A for additional information on Capital expenditures.
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Operating Revenues
Three Months Ended June 30, 2025 and 2024
(Dollars in millions)
Operating Revenues
Six Months Ended June 30, 2025 and 2024
(Dollars in millions)
Service revenues consist of:
▪Retail Service - Postpaid and prepaid charges for voice, data and value-added services and cost recovery surcharges
▪Other Service - Amounts received from the Federal USF, inbound roaming, miscellaneous other service revenues and Internet of Things (IoT)
Equipment revenues consist of:
▪Sales of wireless devices and related accessories to new and existing customers, agents, and third-party distributors
Key components of changes in the statement of operations line items were as follows:
Total operating revenues
Retail service revenues decreased for the three and six months ended June 30, 2025, primarily as a result of a decrease in average postpaid and prepaid connections, partially offset by an increase in Postpaid ARPU.
Equipment sales revenues decreased for the six months ended June 30, 2025, primarily driven by a lower volume of upgrades.
Wireless service providers have been aggressive promotionally and on price to attract and retain customers. This includes both traditional carriers and cable wireless companies. Additionally, other wireless service providers have more developed networks and coverage as well as lower costs per subscriber than Array, which has negatively affected Array's ability to compete over time. Operating revenues and Operating income have been negatively impacted by these factors in current and prior periods.
System operations expenses
System operations expenses increased for the three months ended June 30, 2025, due primarily to an increase in maintenance, utilities, and cell site expenses, partially offset by decreases in customer usage and roaming expenses.
System operations expenses decreased for the six months ended June 30, 2025, due primarily to a decrease in expenses driven by the shutdown of the 3G Code Division Multiple Access (CDMA) network in the first quarter of 2024 partially offset by an increase in maintenance, utilities, and cell site expenses.
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Cost of equipment sold
Cost of equipment sold decreased for the six months ended June 30, 2025, due primarily to a decline in smartphone devices sold partially offset by a higher average cost per unit sold.
(Gain) loss on license sales and exchanges, net
(Gain) loss on license sales and exchanges increased for the three and six months ended June 30, 2025, due to the write-off of the liability associated with the Put/Call Agreement with T-Mobile in 2025.
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Towers Operations
| As of June 30, | 2025 | 2024 | 2025 vs. 2024 | ||||||||||||||
| Owned towers | 4,418 | 4,388 | 1 | % | |||||||||||||
| Number of colocations | 2,527 | 2,392 | 6 | % | |||||||||||||
| Tower tenancy rate | 1.57 | 1.55 | 2 | % | |||||||||||||
Financial Overview — Towers
The following discussion and analysis compares financial results for the three and six months ended June 30, 2025, to the three and six months ended June 30, 2024.
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||||||||||||
| 2025 | 2024 | 2025 vs. 2024 | 2025 | 2024 | 2025 vs. 2024 | ||||||||||||||||||||||||||||||
| (Dollars in millions) | |||||||||||||||||||||||||||||||||||
| Third-party revenues | $ | 28 | $ | 25 | 12 | % | $ | 56 | $ | 51 | 9 | % | |||||||||||||||||||||||
| Intra-company revenues | 34 | 33 | 3 | % | 67 | 65 | 3 | % | |||||||||||||||||||||||||||
| Total tower revenues | 62 | 58 | 7 | % | 123 | 116 | 6 | % | |||||||||||||||||||||||||||
| System operations (excluding Depreciation, amortization and accretion reported below) | 20 | 19 | 6 | % | 39 | 37 | 5 | % | |||||||||||||||||||||||||||
| Selling, general and administrative | 9 | 9 | (1) | % | 18 | 16 | 14 | % | |||||||||||||||||||||||||||
| Depreciation, amortization and accretion | 12 | 11 | 7 | % | 23 | 21 | 6 | % | |||||||||||||||||||||||||||
| (Gain) loss on asset disposals, net | — | — | 14 | % | 1 | 1 | 60 | % | |||||||||||||||||||||||||||
| Total operating expenses | 41 | 39 | 5 | % | 81 | 75 | 8 | % | |||||||||||||||||||||||||||
| Operating income | $ | 21 | $ | 19 | 11 | % | $ | 42 | $ | 41 | 2 | % | |||||||||||||||||||||||
Adjusted OIBDA (Non-GAAP)1 | $ | 34 | $ | 31 | 9 | % | $ | 67 | $ | 64 | 4 | % | |||||||||||||||||||||||
Adjusted EBITDA (Non-GAAP)1 | $ | 34 | $ | 31 | 9 | % | $ | 67 | $ | 64 | 4 | % | |||||||||||||||||||||||
| Capital expenditures | $ | 3 | $ | 5 | (51) | % | $ | 5 | $ | 9 | (47) | % | |||||||||||||||||||||||
1Refer to Supplemental Information Relating to Non-GAAP Financial Measures within this MD&A for a reconciliation of this measure.
Key components of changes in the statement of operations line items were as follows:
Total tower revenues
Third-party revenues increased for the three and six months ended June 30, 2025, primarily as a result of new colocations, escalators on renewed leases and inbound colocation application revenues.
Intra-company revenues increased for the three and six months ended June 30, 2025, primarily as a result of rent escalations and an increase in the number of owned towers.
As of the August 1, 2025 closing of the transaction to dispose of the wireless operations and select spectrum assets to T-Mobile, Array expects an increase in Third-party revenues that will be recognized under the MLA that has been executed in connection with the Securities Purchase Agreement. However, as of August 1, 2025, Intra-company revenues have ceased, which will significantly lower tower rental revenues in future periods.
Total operating expenses
Total operating expenses increased for the three and six months ended June 30, 2025 due primarily to increases in System operations expense as a result of increases in cell site rent and maintenance expenses. Selling, general and administrative expenses increased for the six months ended June 30, 2025 due primarily to increases in bad debts expense due to payments received on aged receivables in the first quarter of 2024.
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Upon and following closing of the transaction to dispose of the wireless operations and select spectrum assets to T-Mobile on August 1, 2025, Array expects costs may be incurred in the remainder of 2025 and the next several years related to the separation including costs to decommission certain towers and record remaining ground lease obligations on such decommissioned towers. Further, Array expects to incur expenses related to the wind-down of Array's wireless operations after the sale of such operations to T-Mobile, and continuing expenses to execute strategic alternatives, including closing of the pending spectrum sales to Verizon and AT&T, and initiatives to opportunistically monetize Array's remaining wireless spectrum. These factors and other uncertainties may significantly impact operating expenses and cash flows recorded in periods following the close.
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 | 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.
OPERATIONS
▪Serves 1.1 million connections in 31 states
▪Employs approximately 3,400 associates
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Operational Overview — TDS Telecom
Total Service Address Mix
As of June 30,
TDS Telecom increased its service addresses 5% from a year ago to 1.8 million as of June 30, 2025 through footprint expansion. TDS Telecom serves 45% of incumbent service addresses with fiber.
TDS Telecom offers 1Gig+ service to 75% of its total footprint as of June 30, 2025, compared to 73% a year ago.
As of June 30, | 2025 | 2024 | 2025 vs. 2024 | ||||||||||||||
| Residential connections | |||||||||||||||||
| Broadband | |||||||||||||||||
| Incumbent Fiber | 121,200 | 113,100 | 7 | % | |||||||||||||
| Incumbent Copper | 106,500 | 130,600 | (18) | % | |||||||||||||
| Expansion Fiber | 141,800 | 107,800 | 32 | % | |||||||||||||
| Cable | 188,200 | 198,500 | (5) | % | |||||||||||||
| Total Broadband | 557,700 | 550,000 | 1 | % | |||||||||||||
| Video | 116,500 | 124,800 | (7) | % | |||||||||||||
| Voice | 248,700 | 275,600 | (10) | % | |||||||||||||
| Wireless | 1,600 | — | N/M | ||||||||||||||
| Total Residential Connections | 924,500 | 950,400 | (3) | % | |||||||||||||
| Commercial connections | 184,300 | 201,500 | (9) | % | |||||||||||||
| Total connections | 1,108,800 | 1,152,000 | (4) | % | |||||||||||||
Total residential fiber net adds | 10,300 | 10,700 | |||||||||||||||
| Total residential broadband net adds | 3,900 | 2,100 | |||||||||||||||
| Residential fiber churn | 1.1 | % | 1.2 | % | |||||||||||||
| Total residential broadband churn | 1.5 | % | 1.7 | % | |||||||||||||
N/M - Percentage change not meaningful
Numbers may not foot due to rounding.
Total connections decreased due to legacy voice, video, and competitive local exchange carrier (CLEC) connections declines, partially offset by broadband connection growth.
Q2 2024 total connections include 23,700 connections that were part of subsequent divestitures.
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Residential Broadband Connections by Speed
As of June 30,
Residential broadband customers continue to take higher speeds with 83% on 100 Mbps or higher products and 26% on 1Gig+ products.
Residential Revenue per Connection
Total residential revenue per connection increased 1% for the three and six months ended June 30, 2025, due primarily to price increases.
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Financial Overview — TDS Telecom
The following discussion and analysis compares financial results for the three and six months ended June 30, 2025, to the three and six months ended June 30, 2024.
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||||||||||||
| 2025 | 2024 | 2025 vs. 2024 | 2025 | 2024 | 2025 vs. 2024 | ||||||||||||||||||||||||||||||
| (Dollars in millions) | |||||||||||||||||||||||||||||||||||
| Residential | |||||||||||||||||||||||||||||||||||
| Incumbent | $ | 85 | $ | 90 | (6) | % | $ | 170 | $ | 180 | (5) | % | |||||||||||||||||||||||
| Expansion | 37 | 28 | 31 | % | 71 | 54 | 32 | % | |||||||||||||||||||||||||||
| Cable | 62 | 69 | (10) | % | 126 | 138 | (9) | % | |||||||||||||||||||||||||||
| Total residential | 183 | 186 | (2) | % | 367 | 372 | (1) | % | |||||||||||||||||||||||||||
| Commercial | 35 | 37 | (6) | % | 69 | 74 | (6) | % | |||||||||||||||||||||||||||
| Wholesale | 47 | 44 | 7 | % | 85 | 88 | (3) | % | |||||||||||||||||||||||||||
| Total service revenues | 265 | 267 | (1) | % | 522 | 534 | (2) | % | |||||||||||||||||||||||||||
| Equipment revenues | — | — | (14) | % | — | — | 2 | % | |||||||||||||||||||||||||||
| Total operating revenues | 265 | 267 | (1) | % | 522 | 534 | (2) | % | |||||||||||||||||||||||||||
| Cost of services (excluding Depreciation, amortization and accretion reported below) | 97 | 98 | (1) | % | 198 | 196 | 1 | % | |||||||||||||||||||||||||||
| Cost of equipment and products | — | — | (6) | % | — | — | 25 | % | |||||||||||||||||||||||||||
| Selling, general and administrative | 83 | 80 | 3 | % | 166 | 155 | 7 | % | |||||||||||||||||||||||||||
| Depreciation, amortization and accretion | 73 | 67 | 10 | % | 145 | 131 | 10 | % | |||||||||||||||||||||||||||
| (Gain) loss on asset disposals, net | 6 | 4 | 61 | % | 8 | 6 | 39 | % | |||||||||||||||||||||||||||
| (Gain) loss on sale of business and other exit costs, net | (8) | — | N/M | (8) | — | N/M | |||||||||||||||||||||||||||||
| Total operating expenses | 251 | 248 | 1 | % | 508 | 488 | 4 | % | |||||||||||||||||||||||||||
| Operating income | $ | 14 | $ | 19 | (27) | % | $ | 14 | $ | 46 | (70) | % | |||||||||||||||||||||||
| Net income | $ | 16 | $ | 18 | (10) | % | $ | 20 | $ | 42 | (53) | % | |||||||||||||||||||||||
Adjusted OIBDA (Non-GAAP)1 | $ | 85 | $ | 89 | (5) | % | $ | 158 | $ | 183 | (13) | % | |||||||||||||||||||||||
Adjusted EBITDA (Non-GAAP)1 | $ | 89 | $ | 91 | (3) | % | $ | 165 | $ | 187 | (12) | % | |||||||||||||||||||||||
Capital expenditures2 | $ | 90 | $ | 78 | 16 | % | $ | 149 | $ | 164 | (9) | % | |||||||||||||||||||||||
N/M - Percentage change not meaningful
Numbers may not foot due to rounding.
1Refer to Supplemental Information Relating to Non-GAAP Financial Measures within this MD&A for a reconciliation of this measure.
2Refer to Liquidity and Capital Resources within this MD&A for additional information on Capital expenditures.
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Operating Revenues
Three Months Ended June 30, 2025 and 2024
(Dollars in millions)
Operating Revenues
Six Months Ended June 30, 2025 and 2024
(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 the three and six months ended June 30, 2025, due primarily to a decline in legacy markets and divestitures, partially offset by growth in expansion markets and price increases.
Commercial revenues decreased for the three and six months ended June 30, 2025, due primarily to declining connections in CLEC markets.
Wholesale revenues increased for the three months ended due primarily to discrete reserve adjustments, partially offset by continued decline of special access circuits and decreased for the six months ended June 30, 2025, due primarily to the continued decline of special access circuits, partially offset by discrete reserve adjustments.
The 2024 and 2025 divestitures contributed a decrease of $4 million in operating revenues from the comparable three months ended June 30, 2024 and a decrease of $8 million in operating revenues from the comparable six months ended June 30, 2024.
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Cost of services
Cost of services remained consistent for the three months ended June 30, 2025, and increased for the six months ended June 30, 2025 due primarily to an increase in employee-related expenses, partially offset by lower video programming and maintenance costs.
Selling, general and administrative
Selling, general and administrative expenses increased for the three and six months ended June 30, 2025, due primarily to an increase in employee-related expenses and advertising costs.
Depreciation, amortization and accretion
Depreciation, amortization and accretion increased for the three and six months ended June 30, 2025, due primarily to capital expenditures on fiber assets.
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Liquidity and Capital Resources
Sources of Liquidity
TDS believes that existing cash and investment balances, distributions from unconsolidated entities, funds available under its financing agreements, its ability to obtain future external financing, expected and potential dispositions, dividends and expected cash flows from operating activities will provide sufficient liquidity for TDS to meet its day-to-day operating needs and debt service requirements. In addition, TDS retains the ability, as described below, to reduce its capital expenditures to lower its funding needs.
TDS may require substantial additional funding for, among other uses, capital expenditures, fiber deployments and E-ACAM builds, making additional investments including acquisition of land, land easements or additional towers, agreements to purchase goods or services, leases, repurchases of shares, or payment of dividends. It may be necessary from time to time to increase the size of its existing credit facilities, to amend existing or put in place new credit agreements, to obtain other forms of financing, issue equity securities, or to divest assets in order to fund potential expenditures. TDS' liquidity would be adversely affected if it is unable to obtain short or long-term financing with acceptable terms.
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.
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. Refer to the Consolidated Cash Flow Analysis for additional information related to changes in Cash and cash equivalents.
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In addition to Cash and cash equivalents, TDS and Array had available undrawn borrowing capacity from the following debt facilities at June 30, 2025.
| TDS | Array | ||||||||||
| (Dollars in millions) | |||||||||||
| Revolving Credit Agreement | $ | 399 | $ | 300 | |||||||
| Term Loan Agreements | 75 | 800 | |||||||||
| Receivables Securitization Agreement | — | 450 | |||||||||
| Total available undrawn borrowing capacity | $ | 474 | $ | 1,550 | |||||||
Financing
Revolving Credit Agreements
TDS and Array have unsecured revolving credit agreements with maximum borrowing capacities of $400 million and $300 million, respectively. Amounts under the agreements may be borrowed, repaid and reborrowed from time to time until maturity. In April 2025, TDS and Array amended the revolving credit agreements to extend the maturity dates to July 2027 and allow for permitted dispositions, as specified in the amendments. The amendments also include a provision that was triggered upon the sale of the Array wireless operations to T-Mobile, which occurred on August 1, 2025, which accelerated the maturity date to the earliest of (i) 270 days following the consummation of the sale of the Array wireless operations to T-Mobile, (ii) the date on which Array receives net proceeds from the cumulative sale of wireless spectrum licenses to AT&T, Verizon and other parties that equals or exceeds $1.1 billion, or (iii) July 20, 2027. Additionally, the amendment to the Array revolving credit agreement includes a provision that will be triggered upon Array receiving net proceeds from the cumulative sale of wireless spectrum licenses to AT&T, Verizon and other parties that equals or exceeds $500 million, which provision would automatically reduce the maximum borrowing capacity of the Array revolving credit agreement from $300 million to $150 million five business days after Array's receipt of such net proceeds. As of June 30, 2025, there were no outstanding borrowings under the agreements, and TDS' and Array's unused borrowing capacity was $399 million and $300 million, respectively.
Unsecured Term Loan Agreements
At June 30, 2025, TDS had unsecured term loan agreements with $781 million of principal outstanding and unused borrowing capacity of $75 million. On August 1, 2025, TDS terminated the commitment for the $75 million unused borrowing capacity. In August 2025, TDS expects to repay the entire outstanding borrowings under these term loans.
At June 30, 2025, Array had unsecured term loan agreements with $713 million of principal outstanding. On August 4, 2025, Array repaid the entire outstanding borrowings under these term loans.
In June 2025, Array entered into an amendment to its term loan agreement with CoBank, ACB for an additional $800 million of borrowing capacity. The term loan may be drawn prior to November 1, 2025; amounts not drawn by that time will cease to be available. 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%. Array expects to draw $325 million under the amended agreement in August 2025.
Secured Term Loan Agreement
TDS has a secured term loan agreement with maximum borrowing capacity of $300 million. In February 2025, TDS amended the agreement to extend the maturity date to the earlier of (i) September 2026 and (ii) the scheduled maturity date of TDS' existing revolving credit agreement (which had a then existing maturity date of July 2026, which has since been extended as described above). In April 2025, TDS amended the secured term loan agreement to extend the maturity date to the earliest of (i) 270 days following the consummation of the sale of the Array wireless operations to T-Mobile, (ii) the date on which Array receives net proceeds from the cumulative sale of wireless spectrum licenses to AT&T, Verizon and other parties that equals or exceeds $1.1 billion, or (iii) July 20, 2027, and to allow for permitted dispositions, as specified in the amendment. As of June 30, 2025, the outstanding borrowings under the agreement were $300 million, which is the full amount available under the agreement. In August 2025, TDS expects to repay the entire outstanding borrowings under its secured term loan agreement.
Export Credit Financing Agreements
At June 30, 2025, TDS and Array each have a term loan credit facility with Export Development Canada with $150 million of principal outstanding. On August 4, 2025, Array repaid the entire outstanding borrowings under its agreement.
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Receivables Securitization Agreement
Array, through its subsidiaries, had a receivables securitization agreement that permitted securitized borrowings using its equipment installment plan receivables. During the six months ended June 30, 2025, Array repaid $2 million under the agreement. As of June 30, 2025, there were no outstanding borrowings under the agreement, and the unused borrowing capacity was $450 million, subject to sufficient collateral to satisfy the asset borrowing base provisions of the agreement. On July 31, 2025, Array terminated the receivables securitization agreement.
Debt Covenants
The TDS and Array revolving credit agreements, term loan agreements including the secured term loan, export credit financing agreements and the Array receivables securitization 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. TDS and Array are required to maintain the Consolidated Leverage Ratio, based on gross debt, as of the end of any fiscal quarter at a level not to exceed 3.75 to 1.00 from April 1, 2025 and thereafter. 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 they were in compliance as of June 30, 2025 with all such financial covenants.
The TDS $375 million term loan agreement with a maturity date of May 2029 requires TDS to comply with certain affirmative and negative covenants, which includes a financial covenant that may restrict the borrowing capacity available. TDS is required to maintain the Consolidated Leverage Ratio as of the end of any fiscal quarter at a level not to exceed 4.25 to 1.00 from April 1, 2025 and thereafter. TDS believes that it was in compliance as of June 30, 2025 with such financial covenant.
In April 2025, the TDS and Array revolving credit agreements, Array $300 million unsecured term loan agreement and TDS $300 million secured term loan agreement were amended to require, upon the consummation of the sale of the Array wireless operations to T-Mobile, TDS and Array to maintain the Consolidated Leverage Ratio, based on net debt, 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.
In June 2025, the TDS export credit financing agreement was amended to require, upon the consummation of the sale of the Array wireless operations to T-Mobile, TDS to maintain the Consolidated Leverage Ratio, based on net debt, 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.
In June 2025, the Array term loan agreement with CoBank, ACB was amended to require, upon the consummation of the sale of the Array wireless operations to T-Mobile, Array to maintain the Consolidated Leverage Ratio, based on net debt, 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.
See Note 8 — Debt and Note 12 — Subsequent Events in the Notes to Consolidated Financial Statements for additional information related to financing activities.
Credit Ratings
On August 1, 2025, Standard & Poor’s updated the TDS and Array issuer credit ratings from BB to BBB- with a stable outlook. On August 8, 2025, Moody’s confirmed the TDS and Array Ba1 issuer credit ratings and changed the outlook to stable.
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Capital Expenditures
Capital expenditures (i.e., additions to property, plant and equipment and system development expenditures; excludes wireless spectrum license additions), which include the effects of accruals and capitalized interest, for the six months ended June 30, 2025 and 2024, were as follows:
Capital Expenditures
(Dollars in millions)
Array’s capital expenditures for the six months ended June 30, 2025 and 2024, were $132 million and $295 million, respectively.
In 2019-2023, Array focused capital expenditures on 5G coverage and predominantly used low-band spectrum to launch 5G services in portions of substantially all of its markets. During 2023 and 2024, Array focused on deploying 5G over its mid-band spectrum, largely overlapping areas already covered with low-band 5G service to enhance speed and capacity for Array’s mobility and fixed wireless services. Capital expenditures decreased by $163 million or 55% in line with the expectations that continued 5G deployment in 2025 focused on adding speed and capacity to existing areas.
Capital expenditures for the full year 2025 were used principally for the following purposes:
▪Continued deployment of 5G using mid-band spectrum to provide additional speed and capacity to accommodate increased data usage by wireless customers; and
▪Investment in information technology to support existing and new services and products.
TDS Telecom’s capital expenditures for the six months ended June 30, 2025 and 2024, were $149 million and $164 million, respectively.
Capital expenditures for the full year 2025 are expected to be between $375 million and $425 million. These expenditures are expected to be used principally for the following purposes:
▪Continue to expand fiber deployment;
▪Support broadband growth and success-based spending; and
▪Maintain and enhance existing infrastructure including build-out requirements of state broadband and E-ACAM programs.
TDS intends to finance its capital expenditures for 2025 using primarily Cash flows from operating activities, dividends and existing cash balances.
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 6 — 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; E-ACAM obligations; agreements for software licensing; long-term marketing programs; and other agreements to purchase products or services. TDS has taken steps to reduce and defer capital expenditures to lower its funding needs. Refer to Liquidity and Capital Resources within this MD&A for additional information.
Common Share Repurchase Program
During the six months ended June 30, 2025, Array repurchased 328,835 Common Shares for $21 million at an average cost per share of $63.49. As of June 30, 2025, the total cumulative amount of Array Common Shares authorized to be repurchased is 658,107.
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Dividends
TDS paid quarterly dividends per outstanding share of $0.04 and $0.19 in the second quarter of 2025 and 2024, respectively. 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 dividends.
TDS paid quarterly dividends per outstanding Series UU depositary share (each representing 1/1,000th of a Preferred Share) of $0.414 in the second quarter of 2025 and 2024.
TDS paid quarterly dividends per outstanding Series VV depositary share (each representing 1/1,000th of a Preferred Share) of $0.375 in the second quarter of 2025 and 2024.
Array has not paid any regular cash dividends in recent periods. In conjunction with the close of the transaction of the sale of Array's wireless operations to T-Mobile on August 1, 2025, on this same date, the Array Board of Directors declared a special dividend per Common and Series A outstanding share of $23.00 for shareholders of record on August 11, 2025, which will be payable on August 19, 2025. TDS, which owns 82.5% of the equity of Array as of June 30, 2025, will receive its pro-rata share of the special dividend. Array expects its pending sales of spectrum licenses to AT&T and Verizon, which are subject to regulatory approvals and customary closing conditions, to deliver substantial proceeds and expects its Board of Directors to declare special dividends upon closure of these transactions. The Array Board of Directors may declare regular cash dividends after the close of these transactions.
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Consolidated Cash Flow Analysis
The following discussion summarizes Array's cash flow activities for the six months ended June 30, 2025 and 2024. Cash flows may fluctuate from quarter to quarter and year to year due to seasonality, 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 $175 million. Net cash provided by operating activities was $607 million due to net income of $30 million adjusted for non-cash items of $488 million and distributions received from unconsolidated entities of $88 million, including $34 million in distributions from the LA Partnership. Distributions from certain equity method investments operated by Verizon included a special distribution of $25 million related to proceeds received by Verizon managed entities related to Verizon's tower transaction with Vertical Bridge that closed in December 2024. The changes in working capital items increased net cash by $1 million. The working capital changes were primarily driven by reduced inventory and receivable balances, partially offset by payment of associate bonuses.
Cash flows used for investing activities were $264 million, due primarily to payments for property, plant and equipment of $286 million, partially offset by cash received from divestitures of $24 million.
Cash flows used for financing activities were $168 million, due primarily to tax withholdings, net of cash receipts, for TDS and Array stock-based compensation awards of $61 million, the payment of $44 million in dividends, the repurchase of Array Common Shares of $21 million, cash paid for software license agreements of $20 million and repayments on long-term debt agreements of $17 million.
2024 Commentary
TDS’ Cash, cash equivalents and restricted cash increased $76 million. Net cash provided by operating activities was $626 million due to net income of $45 million adjusted for non-cash items of $509 million, distributions received from unconsolidated entities of $80 million, including $37 million in distributions from the LA Partnership, and changes in working capital items which decreased net cash by $8 million. The working capital changes were primarily driven by payment of associate bonuses and timing of vendor payments, partially offset by reduced inventory balances.
Cash flows used for investing activities were $465 million, due primarily to payments for property, plant and equipment of $451 million.
Cash flows provided by financing activities were $85 million, due primarily to $300 million borrowed under the TDS term loan agreements, $100 million borrowed under the TDS revolving credit agreement and a $40 million borrowing under the Array receivables securitization agreement. These were partially offset by $200 million in repayments on the TDS revolving credit agreement, $188 million in repayments on the Array receivables securitization agreement, the payment of $61 million in dividends and cash paid for software license agreements of $21 million.
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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:
Inventory, net
Inventory, net decreased $53 million due primarily to the sell through of inventory on hand and relatively higher balances at December 31, 2024 due to seasonality.
Accrued compensation
Accrued compensation decreased $53 million due primarily to associate bonus payments in March 2025.
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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. Specifically, TDS has referred to the following measures in this report:
▪EBITDA
▪Adjusted EBITDA
▪Adjusted OIBDA
▪Free cash flow
These measures are considered “non-GAAP financial measures” under U.S. Securities and Exchange Commission Rules. 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 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 or Cash flows from operating activities, 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 11 — 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 they provide 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 of Array, 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 and/or Operating income. Income and expense items below Operating income are not provided at the individual segment level for Array Wireless and Array Towers; therefore, the reconciliations begin with EBITDA and the most directly comparable GAAP measure is Operating income rather than Net income at the segment level.
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| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| TDS - CONSOLIDATED | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||
| (Dollars in millions) | |||||||||||||||||||||||
| Net income (GAAP) | $ | 18 | $ | 7 | $ | 30 | $ | 45 | |||||||||||||||
| Add back: | |||||||||||||||||||||||
| Income tax expense | 3 | 6 | 12 | 26 | |||||||||||||||||||
| Interest expense | 70 | 73 | 129 | 131 | |||||||||||||||||||
| Depreciation, amortization and accretion | 236 | 233 | 472 | 467 | |||||||||||||||||||
| EBITDA (Non-GAAP) | 327 | 319 | 643 | 669 | |||||||||||||||||||
| Add back or deduct: | |||||||||||||||||||||||
| Expenses related to strategic alternatives review | 16 | 21 | 32 | 33 | |||||||||||||||||||
| (Gain) loss on asset disposals, net | 9 | 9 | 12 | 16 | |||||||||||||||||||
| (Gain) loss on sale of business and other exit costs, net | (8) | — | (9) | — | |||||||||||||||||||
| (Gain) loss on license sales and exchanges, net | (4) | 8 | (5) | 7 | |||||||||||||||||||
| Adjusted EBITDA (Non-GAAP) | 340 | 357 | 673 | 725 | |||||||||||||||||||
| Deduct: | |||||||||||||||||||||||
| Equity in earnings of unconsolidated entities | 43 | 39 | 79 | 82 | |||||||||||||||||||
| Interest and dividend income | 6 | 7 | 13 | 12 | |||||||||||||||||||
| Other, net | 2 | 1 | 5 | 2 | |||||||||||||||||||
| Adjusted OIBDA (Non-GAAP) | 289 | 310 | 576 | 629 | |||||||||||||||||||
| Deduct: | |||||||||||||||||||||||
| Depreciation, amortization and accretion | 236 | 233 | 472 | 467 | |||||||||||||||||||
| Expenses related to strategic alternatives review | 16 | 21 | 32 | 33 | |||||||||||||||||||
| (Gain) loss on asset disposals, net | 9 | 9 | 12 | 16 | |||||||||||||||||||
| (Gain) loss on sale of business and other exit costs, net | (8) | — | (9) | — | |||||||||||||||||||
| (Gain) loss on license sales and exchanges, net | (4) | 8 | (5) | 7 | |||||||||||||||||||
| Operating income (GAAP) | $ | 40 | $ | 39 | $ | 74 | $ | 106 | |||||||||||||||
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| Array | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||
| (Dollars in millions) | |||||||||||||||||||||||
| Net income (GAAP) | $ | 32 | $ | 18 | $ | 52 | $ | 42 | |||||||||||||||
| Add back: | |||||||||||||||||||||||
| Income tax expense | 4 | 14 | 24 | 41 | |||||||||||||||||||
| Interest expense | 45 | 45 | 84 | 91 | |||||||||||||||||||
| Depreciation, amortization and accretion | 163 | 165 | 325 | 329 | |||||||||||||||||||
| EBITDA (Non-GAAP) | 244 | 242 | 485 | 503 | |||||||||||||||||||
| Add back or deduct: | |||||||||||||||||||||||
| Expenses related to strategic alternatives review | 12 | 13 | 22 | 21 | |||||||||||||||||||
| (Gain) loss on asset disposals, net | 2 | 5 | 4 | 11 | |||||||||||||||||||
| (Gain) loss on license sales and exchanges, net | (4) | 8 | (5) | 7 | |||||||||||||||||||
| Adjusted EBITDA (Non-GAAP) | 254 | 268 | 506 | 542 | |||||||||||||||||||
| Deduct: | |||||||||||||||||||||||
| Equity in earnings of unconsolidated entities | 42 | 38 | 78 | 80 | |||||||||||||||||||
| Interest and dividend income | 4 | 3 | 6 | 6 | |||||||||||||||||||
| Adjusted OIBDA (Non-GAAP) | 208 | 227 | 422 | 456 | |||||||||||||||||||
| Deduct: | |||||||||||||||||||||||
| Depreciation, amortization and accretion | 163 | 165 | 325 | 329 | |||||||||||||||||||
| Expenses related to strategic alternatives review | 12 | 13 | 22 | 21 | |||||||||||||||||||
| (Gain) loss on asset disposals, net | 2 | 5 | 4 | 11 | |||||||||||||||||||
| (Gain) loss on license sales and exchanges, net | (4) | 8 | (5) | 7 | |||||||||||||||||||
| Operating income (GAAP) | $ | 35 | $ | 36 | $ | 76 | $ | 88 | |||||||||||||||
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| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| Array Wireless | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||
| (Dollars in millions) | |||||||||||||||||||||||
| EBITDA (Non-GAAP) | $ | 165 | $ | 171 | $ | 336 | $ | 355 | |||||||||||||||
| Add back or deduct: | |||||||||||||||||||||||
| Expenses related to strategic alternatives review | 11 | 12 | 21 | 20 | |||||||||||||||||||
| (Gain) loss on asset disposals, net | 2 | 5 | 3 | 10 | |||||||||||||||||||
| (Gain) loss on license sales and exchanges, net | (4) | 8 | (5) | 7 | |||||||||||||||||||
| Adjusted EBITDA and Adjusted OIBDA (Non-GAAP) | 174 | 196 | 355 | 392 | |||||||||||||||||||
| Deduct: | |||||||||||||||||||||||
| Depreciation, amortization and accretion | 151 | 154 | 302 | 308 | |||||||||||||||||||
| Expenses related to strategic alternatives review | 11 | 12 | 21 | 20 | |||||||||||||||||||
| (Gain) loss on asset disposals, net | 2 | 5 | 3 | 10 | |||||||||||||||||||
| (Gain) loss on license sales and exchanges, net | (4) | 8 | (5) | 7 | |||||||||||||||||||
| Operating income (GAAP) | $ | 14 | $ | 17 | $ | 34 | $ | 47 | |||||||||||||||
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| Array Towers | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||
| (Dollars in millions) | |||||||||||||||||||||||
| EBITDA (Non-GAAP) | $ | 33 | $ | 30 | $ | 65 | $ | 62 | |||||||||||||||
| Add back or deduct: | |||||||||||||||||||||||
| Expenses related to strategic alternatives review | 1 | 1 | 1 | 1 | |||||||||||||||||||
| (Gain) loss on asset disposals | — | — | 1 | 1 | |||||||||||||||||||
| Adjusted EBITDA and Adjusted OIBDA (Non-GAAP) | 34 | 31 | 67 | 64 | |||||||||||||||||||
| Deduct: | |||||||||||||||||||||||
| Depreciation, amortization and accretion | 12 | 11 | 23 | 21 | |||||||||||||||||||
| Expenses related to strategic alternatives review | 1 | 1 | 1 | 1 | |||||||||||||||||||
| (Gain) loss on asset disposals, net | — | — | 1 | 1 | |||||||||||||||||||
| Operating income (GAAP) | $ | 21 | $ | 19 | $ | 42 | $ | 41 | |||||||||||||||
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| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
TDS TELECOM | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||
(Dollars in millions) | |||||||||||||||||||||||
Net income (GAAP) | $ | 16 | $ | 18 | $ | 20 | $ | 42 | |||||||||||||||
| Add back: | |||||||||||||||||||||||
| Income tax expense | 2 | 3 | 3 | 10 | |||||||||||||||||||
| Interest expense | (1) | — | (2) | (2) | |||||||||||||||||||
| Depreciation, amortization and accretion | 73 | 67 | 145 | 131 | |||||||||||||||||||
| EBITDA (Non-GAAP) | 90 | 88 | 165 | 181 | |||||||||||||||||||
| Add back or deduct: | |||||||||||||||||||||||
| (Gain) loss on asset disposals, net | 6 | 4 | 8 | 6 | |||||||||||||||||||
| (Gain) loss on sale of business and other exit costs, net | (8) | — | (8) | — | |||||||||||||||||||
| Adjusted EBITDA (Non-GAAP) | 89 | 91 | 165 | 187 | |||||||||||||||||||
| Deduct: | |||||||||||||||||||||||
| Interest and dividend income | 2 | 1 | 3 | 2 | |||||||||||||||||||
| Other, net | 2 | 1 | 4 | 2 | |||||||||||||||||||
| Adjusted OIBDA (Non-GAAP) | 85 | 89 | 158 | 183 | |||||||||||||||||||
| Deduct: | |||||||||||||||||||||||
| Depreciation, amortization and accretion | 73 | 67 | 145 | 131 | |||||||||||||||||||
| (Gain) loss on asset disposals, net | 6 | 4 | 8 | 6 | |||||||||||||||||||
| (Gain) loss on sale of business and other exit costs, net | (8) | — | (8) | — | |||||||||||||||||||
Operating income (GAAP) | $ | 14 | $ | 19 | $ | 14 | $ | 46 | |||||||||||||||
Numbers may not foot due to rounding.
Free Cash Flow
The following table presents Free cash flow, 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 business operations after deducting Cash paid for additions to property, plant and equipment and Cash paid for software license agreements.
| Six Months Ended June 30, | |||||||||||
| 2025 | 2024 | ||||||||||
| (Dollars in millions) | |||||||||||
| Cash flows from operating activities (GAAP) | $ | 607 | $ | 626 | |||||||
| Cash paid for additions to property, plant and equipment | (286) | (451) | |||||||||
| Cash paid for software license agreements | (20) | (21) | |||||||||
| Free cash flow (Non-GAAP) | $ | 301 | $ | 154 | |||||||
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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, Note 2 — Revenue Recognition and Note 11 — Leases in the Notes to Consolidated Financial Statements included in TDS' Form 10-K for the year ended December 31, 2024. TDS’ application of critical accounting policies and estimates is discussed in detail in Management’s Discussion and Analysis of Financial Condition and Results of Operations, included in TDS’ Form 10-K for the year ended December 31, 2024.
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Private Securities Litigation Reform Act of 1995
Safe Harbor Cautionary Statement
This Form 10-Q, 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, but are not limited to, those set forth below, as more fully described under “Risk Factors” in this Form 10-Q. 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. You should carefully consider the following factors and other information contained in, or incorporated by reference into, this Form 10-Q to understand the material risks relating to TDS’ business, financial condition or results of operations.
Announced Transactions and Strategic Alternatives Review Risk Factors
▪Closing of the T-Mobile transaction occurred on August 1, 2025, and will require 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 and certain subsidiaries of Array entered into the Verizon Purchase Agreement on October 17, 2024 and the AT&T Purchase Agreement on November 6, 2024 to sell certain wireless spectrum licenses. There is no guarantee that the transactions contemplated by the Verizon Purchase Agreement or the AT&T Purchase Agreement 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 improve the quality and capacity of its network, support and other systems and infrastructure, could adversely affect its operations.
▪Increasing competition in the tower and wireline industries could adversely affect TDS’ revenues, negatively impact future growth and increase its costs to compete.
▪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 will be particularly reliant on its relationship with T-Mobile. 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.
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▪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.
▪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, its level of indebtedness or the inability to access capital, deterioration in the capital markets, changes in interest rates, other changes in TDS’ or Array's performance or market conditions, 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 has entered into a Senior Secured Credit Agreement that imposes certain restrictions on its business and operations that may affect its ability to operate its business and make payments on its indebtedness.
▪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 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 receives significant regulatory support, and is also subject to numerous surcharges and fees from federal, state and local governments – the applicability and the amount of the support and fees are subject to uncertainty, including the ability to pass through certain fees to customers, and this uncertainty 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.
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Risk Factors
Due to the close of the T-Mobile transaction, the risk factors discussed in Part I, “Item 1A. Risk Factors” in TDS’ Form 10-K for the year ended December 31, 2024 have been updated as disclosed below. Each of the following risks could have a material adverse effect on TDS’ business, financial condition or results of operations. The risks described in this Form 10-Q may not be the only risks that could affect TDS. Additional unidentified or unrecognized risks and uncertainties could materially adversely affect TDS’ business, financial condition and/or operating results.
Announced Transactions and Strategic Alternatives Review Risk Factors
1)Closing of the T-Mobile transaction occurred on August 1, 2025, and will require 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 successful closing of the T-Mobile transaction on August 1, 2025 will require 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 are anticipated to be 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 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 statements.
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 statements.
See Note 6 — Divestitures and Note 12 — Subsequent Events in the Notes to Consolidated Financial Statements for additional information.
2)Array and certain subsidiaries of Array entered into the Verizon Purchase Agreement on October 17, 2024 and the AT&T Purchase Agreement on November 6, 2024 to sell certain wireless spectrum licenses. There is no guarantee that the transactions contemplated by the Verizon Purchase Agreement or the AT&T Purchase Agreement 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, and certain subsidiaries of Array, entered into the Verizon 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 November 6, 2024, Array, and certain subsidiaries of Array, entered into the AT&T Purchase Agreement to sell certain 3.45 GHz and 700 MHz wireless spectrum licenses and agreed to grant AT&T certain rights to lease and sub-lease such licenses prior to the transaction close.
The Verizon and AT&T 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 AT&T 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 likely would decline to the extent that the current market price reflects an assumption that these transactions will be completed. The uncertainty regarding the Verizon and AT&T 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 a significant impairment on its spectrum assets during 2024 and expects further events and circumstances may result in additional impairments for the spectrum that is retained after the close of the T-Mobile transaction, including the spectrum that is pending sale if such sales do not close as expected.
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There can be no assurance that the strategic alternatives review process, which is ongoing, will result in the transactions with Verizon and AT&T being successfully completed, or 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 6 — Divestitures in the Notes to Consolidated Financial Statements for additional information related to the Verizon and AT&T 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 AT&T 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 AT&T transactions have FCC build-out requirements that have not yet been fully satisfied. Compliance with such requirements would require significant investments and Array no longer has an existing wireless business to operate the retained spectrum. Additionally, if the Verizon and AT&T 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 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 improve the quality and capacity of its network, support and other systems and infrastructure, 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 and cable businesses are 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. Any difficulties in supply chain constraints, labor shortages, project management, engineering or construction resources, or difficulties in build activities, including inadvertently damaging other utility lines or pipes, could delay construction and expansion of operations, cause reputational harm or result in increased costs. Continued delays, incremental 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.
5)Increasing competition in the tower and wireline 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 options, TDS' financial condition, results of operations or ability to do business could be adversely affected.
TDS’ wireline business introduced MVNO plans offering 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 guarantee that these MVNO plans will attract or retain broadband customers.
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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, have greater capacity on their towers, and have more scale nationwide than Array. Such factors could result in an inability to acquire or build additional towers, 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 or reduced tenancy rates;
▪Low profit margins and returns on investment that are below Array’s cost of capital;
▪Increased operating and capital expenditure costs due to inflation and other factors; and
▪Limited opportunities for strategic partnerships.
6)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 will be particularly reliant on its relationship with T-Mobile. 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, Echostar Communications, 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 downturn that results in wireless carriers reducing network capital expenditures; and
▪Large carriers exercise of pricing power to reduce tower rents
7)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, purchasing and distribution resources 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;
▪Inability to meet build-out requirements of state and federal broadband programs;
▪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; and
▪Other limited opportunities such as for software development or third-party distribution.
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8)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 and/or 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 and/or 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.
9)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), or 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 could result in legal claims or penalties, reputational damage, negative market perception, or costly response measures, which could adversely affect TDS’ business, cash flows, financial condition or results of operations. In addition, Array has energy sources on certain of its tower sites and TDS Telecom has electrical lines on certain of its poles, and any unforeseen event may cause damage to surrounding property. Array and TDS Telecom maintain insurance to cover the estimated cost of replacing damaged towers and damage to surrounding property and network equipment, but there can be no assurances that such coverage will be adequate to cover exposure from such events.
10)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, the failure of the leadership transition following the close of the T-Mobile transaction, or the failure to have effective succession planning, could have an adverse effect on TDS’ business, financial condition or results of operations.
11)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.
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12)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.
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. Advances in technology could change the amount of tower space needed by wireless companies. 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. Further, fixed-mobile bundled services that combine wireline broadband services with mobile services represent a competitive threat. If the trend toward bundling continues, TDS is at a competitive disadvantage compared to larger competitors, including cable companies, the national wireless carriers and other potential large new entrants with much greater financial and other resources in adapting to such bundling. Future technological changes or advancements 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.
13)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, and/or the selection of TDS’ assets for divestiture;
▪Competition for acquisition targets and the ability to acquire at reasonable prices;
▪Inability to make acquisitions that would achieve sufficient scale or substantial benefit to be competitive with competitors with greater scale;
▪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;
▪Inability to retain key personnel;
▪Inability to successfully incorporate acquired assets and rights into TDS’ service offerings; and
▪Possible conditions to, or lack of, approval by the FCC, the Federal Trade Commission and/or the Department of Justice.
No assurance can be given that TDS will be successful with respect to any of its future acquisition or divestiture strategies or initiatives.
14)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 disrupted unexpectedly by raw material shortages, wars, natural disasters, disease or other factors. Supply chain disruptions may result in constraints on network equipment, extended lead times, delayed construction and additional uncertainty.
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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.
15)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
16)Uncertainty in TDS’ or Array's future cash flow and liquidity, its level of indebtedness or the inability to access capital, deterioration in the capital markets, changes in interest rates, other changes in TDS’ or Array's performance or market conditions, 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. A portion of TDS’ debt is subject to variable interest rates, which causes TDS to be vulnerable to unfavorable changes in market interest rates.
TDS expects to fund its current fiber plans and E-ACAM builds through its plans and actions to reallocate capital among its businesses and investments, including seeking to obtain funding from planned and potential future divestitures. 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 E-ACAM and/or other regulatory support payments decline. TDS' liquidity may also be adversely affected by changes in the liquidity of Array that impact Array's or TDS' ability to comply with certain debt covenants or if Array or TDS is unsuccessful in negotiating related consents, waivers, or amendments. 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, the TDS and Array term loan agreements, and the TDS export credit financing 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 with 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.
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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.
17)TDS has entered into a Senior Secured Credit Agreement that imposes certain restrictions on its business and operations that may affect its ability to operate its business and make payments on its indebtedness.
TDS entered into a senior secured credit agreement on September 28, 2023 (the Senior Secured Credit Agreement). The Senior Secured Credit Agreement provides TDS with a $300 million secured term loan credit facility for general corporate purposes. Pursuant to the Senior Secured Credit Agreement, TDS granted a perfected security interest in certain assets of TDS, including, without limitation, and subject to customary exceptions, (i) 26,417,915 fully paid and nonassessable Common Shares, par value $1 per share, of Array, (ii) equity interests in certain wholly-owned subsidiaries of TDS and (iii) all or substantially all of TDS’ personal property that does not constitute equity interests. The Senior Secured Credit Agreement is also secured by a perfected security interest in certain assets of certain wholly-owned subsidiaries of TDS that are also guarantors of the indebtedness incurred under the Senior Secured Credit Agreement, including, without limitation, and subject to customary exceptions, (i) equity interests in certain wholly-owned subsidiaries of such subsidiaries and (ii) all or substantially all of the personal property of such guarantor subsidiaries that does not consist of equity interests.
The Senior Secured Credit Agreement includes representations and warranties, covenants, events of default and other terms and conditions that are substantially similar to TDS’ existing term loan and revolving credit agreements. Under the Senior Secured Credit Agreement, TDS is required to comply with certain financial covenants. Depending on the actual financial performance of TDS, there is a risk that TDS could fail to satisfy the required financial covenants. A failure to comply with the financial covenants in the Senior Secured Credit Agreement could result in an event of default, which, if not cured or waived could have a material adverse effect on TDS' business, financial condition, and profitability. Upon the occurrence and during the continuance of an event of default under the Senior Secured Credit Agreement, the lenders and certain parties to the Senior Secured Credit Agreement may require all borrowings outstanding under the Senior Secured Credit Agreement to be due and payable. Further, upon the occurrence of and during the continuance of an event of default, such parties may exercise remedies with respect to the collateral securing the Senior Secured Credit Agreement, which remedies may include foreclosing upon, credit bidding and/or liquidating such collateral. If TDS' indebtedness were to be accelerated, there can be no assurance that the assets would be sufficient to repay such indebtedness in full. In August 2025, TDS expects to repay the entire outstanding borrowings under its secured term loan agreement.
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 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.
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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.
21)TDS receives significant regulatory support, and is also subject to numerous surcharges and fees from federal, state and local governments – the applicability and the amount of the support and fees are subject to uncertainty, including the ability to pass through certain fees to customers, and this uncertainty could have an adverse effect on TDS’ business, financial condition or results of operations.
TDS Telecom has been designated by states, or in some cases by the FCC, as an Eligible Telecommunications Carrier (ETC) to receive universal service support payments if they provide specified services in “high-cost” areas. TDS Telecom also received support under the Connect America Fund support program. The ACAM and E-ACAM programs have build-out requirements that may not be met, which would result in penalties, loss of support and/or deferral of future revenues. There is no assurance that regulatory support payments will continue for TDS Telecom, and no assurance that TDS Telecom will qualify for future regulatory support programs. If regulatory support is discontinued or reduced from current levels, or if receipt of future regulatory 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. On July 24, 2024, differing from earlier decisions at the Sixth and Eleventh Circuits, the U.S. Court of Appeals for the Fifth Circuit ruled the universal service fund program is unconstitutional as currently administered, and remanded the case to the FCC. On November 22, 2024, the Supreme Court granted the FCC's petition for certiorari to review the U.S. Court of Appeals for the Fifth Circuit ruling. On June 27, 2025, the U.S. Supreme Court ruled in favor of the constitutionality of the Federal Universal Service Fund program. This ruling provides predictability and future clarity on funding that TDS Telecom receives for federal government spending programs such as E-ACAM.
Telecommunications providers pay a variety of surcharges and fees on their gross revenues from interstate and intrastate services, including USF fees and common carrier regulatory fees. The division of services between interstate services and intrastate services, including the divisions associated with Federal USF fees, is a matter of interpretation and in the future may be contested by the FCC or state authorities. The FCC in the future also may change the basis on which Federal USF fees are charged. The Federal government and many states also apply transaction-based taxes to sales of telecommunications services and products and to purchases of telecommunications services from various carriers. In addition, state regulators and local governments have imposed and may continue to impose various surcharges, taxes and fees on telecommunications services. The applicability of these surcharges and fees to TDS’ services is uncertain in many cases and periodically, state and federal regulators may increase or change the surcharges and fees TDS currently pays. In some instances, TDS passes through these charges to its customers. However, Congress, the FCC, state regulatory agencies or state legislatures may limit the ability to pass through transaction-based tax liabilities, regulatory surcharges and regulatory fees imposed on TDS to customers. TDS may or may not be able to recover some or all those taxes from its customers and the amount of taxes may deter demand for its services or increase its cost to provide service.
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.
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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) vote as a separate group only with respect to the election of 25% (plus one) of the directors. 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.
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 which 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 actions, 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 suffer adverse 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.
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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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Quantitative and Qualitative Disclosures about Market Risk
Market Risk
As of June 30, 2025, approximately 50% of TDS' long-term debt was in fixed-rate senior notes and approximately 50% 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 June 30, 2025.
| Principal Payments Due by Period | |||||||||||
Long-Term Debt Obligations1 | Weighted-Avg. Interest Rates on Long-Term Debt Obligations2 | ||||||||||
| (Dollars in millions) | |||||||||||
| Remainder of 2025 | $ | 15 | 6.8 | % | |||||||
| 2026 | 46 | 6.5 | % | ||||||||
| 2027 | 814 | 6.2 | % | ||||||||
| 2028 | 485 | 6.5 | % | ||||||||
| 2029 | 299 | 11.1 | % | ||||||||
| Thereafter | 2,487 | 6.2 | % | ||||||||
| Total | $ | 4,146 | 6.6 | % | |||||||
1The 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. The debt exchange offer with T-Mobile concluded on August 1, 2025 and resulted in the exchange of $1,680 million of long-term debt. On August 4, 2025, Array repaid the entire outstanding borrowings under all of its term loan agreements of $713 million and the entire outstanding borrowings under its export credit financing agreement of $150 million. In August 2025, TDS expects to repay outstanding borrowings under certain long-term debt obligations.
2Represents the weighted average stated interest rates at June 30, 2025, for debt maturing in the respective periods.
See Note 3 — Fair Value Measurements in the Notes to Consolidated Financial Statements for additional information related to the fair value of TDS’ Long-term debt as of June 30, 2025.
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Financial Statements
Telephone and Data Systems, Inc.
Consolidated Statement of Operations
(Unaudited)
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| (Dollars and shares in millions, except per share amounts) | |||||||||||||||||||||||
| Operating revenues | |||||||||||||||||||||||
| Service | $ | $ | $ | $ | |||||||||||||||||||
| Equipment and product sales | |||||||||||||||||||||||
| Total operating revenues | |||||||||||||||||||||||
| Operating expenses | |||||||||||||||||||||||
| Cost of services (excluding Depreciation, amortization and accretion reported below) | |||||||||||||||||||||||
| Cost of equipment and products | |||||||||||||||||||||||
| Selling, general and administrative | |||||||||||||||||||||||
| Depreciation, amortization and accretion | |||||||||||||||||||||||
| (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 | ( | ( | |||||||||||||||||||||
| Total operating expenses | |||||||||||||||||||||||
| Operating income | |||||||||||||||||||||||
| Other income (expense) | |||||||||||||||||||||||
| Equity in earnings of unconsolidated entities | |||||||||||||||||||||||
| Interest and dividend income | |||||||||||||||||||||||
| Interest expense | ( | ( | ( | ( | |||||||||||||||||||
| Other, net | |||||||||||||||||||||||
| Total other expense | ( | ( | ( | ( | |||||||||||||||||||
| Income before income taxes | |||||||||||||||||||||||
| Income tax expense | |||||||||||||||||||||||
| Net income | |||||||||||||||||||||||
| Less: Net income attributable to noncontrolling interests, net of tax | |||||||||||||||||||||||
| Net income attributable to TDS shareholders | |||||||||||||||||||||||
| TDS Preferred Share dividends | |||||||||||||||||||||||
| Net income (loss) attributable to TDS common shareholders | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
| Basic weighted average shares outstanding | |||||||||||||||||||||||
| Basic earnings (loss) per share attributable to TDS common shareholders | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
| Diluted weighted average shares outstanding | |||||||||||||||||||||||
| Diluted earnings (loss) per share attributable to TDS common shareholders | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
The accompanying notes are an integral part of these consolidated financial statements.
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Telephone and Data Systems, Inc.
Consolidated Statement of Cash Flows
(Unaudited)
| Six Months Ended June 30, | |||||||||||
| 2025 | 2024 | ||||||||||
| (Dollars in millions) | |||||||||||
| Cash flows from operating activities | |||||||||||
| Net income | $ | $ | |||||||||
| Add (deduct) adjustments to reconcile net income to net cash flows from operating activities | |||||||||||
| Depreciation, amortization and accretion | |||||||||||
| Bad debts expense | |||||||||||
| Stock-based compensation expense | |||||||||||
| Deferred income taxes, net | |||||||||||
| Equity in earnings of unconsolidated entities | ( | ( | |||||||||
| Distributions from unconsolidated entities | |||||||||||
| (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 | ( | ||||||||||
| Other operating activities | |||||||||||
| Changes in assets and liabilities from operations | |||||||||||
| Accounts receivable | ( | ||||||||||
| Equipment installment plans receivable | |||||||||||
| Inventory | |||||||||||
| Accounts payable | ( | ( | |||||||||
| Customer deposits and deferred revenues | ( | ||||||||||
| Accrued taxes | |||||||||||
| Accrued interest | ( | ||||||||||
| Other assets and liabilities | ( | ( | |||||||||
| Net cash provided by operating activities | |||||||||||
| Cash flows from investing activities | |||||||||||
| Cash paid for additions to property, plant and equipment | ( | ( | |||||||||
| Cash paid for licenses | ( | ( | |||||||||
| Cash received from divestitures | |||||||||||
| Other investing activities | |||||||||||
| Net cash used in investing activities | ( | ( | |||||||||
| Cash flows from financing activities | |||||||||||
| Issuance of long-term debt | |||||||||||
| Repayment of long-term debt | ( | ( | |||||||||
| Tax withholdings, net of cash receipts, for TDS stock-based compensation awards | ( | ( | |||||||||
| Tax withholdings, net of cash receipts, for Array stock-based compensation awards | ( | ( | |||||||||
| Repurchase of Array Common Shares | ( | ||||||||||
| Dividends paid to TDS shareholders | ( | ( | |||||||||
| Payment of debt issuance costs | ( | ( | |||||||||
| Distributions to noncontrolling interests | ( | ( | |||||||||
| Cash paid for software license agreements | ( | ( | |||||||||
| Other financing activities | ( | ( | |||||||||
| Net cash used in financing activities | ( | ( | |||||||||
| Net increase in cash, cash equivalents and restricted cash | |||||||||||
| Cash, cash equivalents and restricted cash | |||||||||||
| Beginning of period | |||||||||||
| End of period | $ | $ | |||||||||
The accompanying notes are an integral part of these consolidated financial statements.
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Telephone and Data Systems, Inc.
Consolidated Balance Sheet — Assets
(Unaudited)
| June 30, 2025 | December 31, 2024 | ||||||||||
| (Dollars in millions) | |||||||||||
| Current assets | |||||||||||
| Cash and cash equivalents | $ | $ | |||||||||
| Accounts receivable | |||||||||||
Customers and agents, less allowances of $ | |||||||||||
Other, less allowances of $ | |||||||||||
| Inventory, net | |||||||||||
| Prepaid expenses | |||||||||||
| Income taxes receivable | |||||||||||
| Other current assets | |||||||||||
| Total current assets | |||||||||||
| Licenses | |||||||||||
Other intangible assets, net of accumulated amortization of $ | |||||||||||
| Investments in unconsolidated entities | |||||||||||
| Property, plant and equipment | |||||||||||
| In service and under construction | |||||||||||
| Less: Accumulated depreciation and amortization | |||||||||||
| Property, plant and equipment, net | |||||||||||
| Operating lease right-of-use assets | |||||||||||
| Other assets and deferred charges | |||||||||||
Total assets1 | $ | $ | |||||||||
The accompanying notes are an integral part of these consolidated financial statements.
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Telephone and Data Systems, Inc.
Consolidated Balance Sheet — Liabilities and Equity
(Unaudited)
| June 30, 2025 | December 31, 2024 | ||||||||||
| (Dollars and shares in millions, except per share amounts) | |||||||||||
| Current liabilities | |||||||||||
| Current portion of long-term debt | $ | $ | |||||||||
| Accounts payable | |||||||||||
| Customer deposits and deferred revenues | |||||||||||
| Accrued interest | |||||||||||
| Accrued taxes | |||||||||||
| Accrued compensation | |||||||||||
| Short-term operating lease liabilities | |||||||||||
| Other current liabilities | |||||||||||
| Total current liabilities | |||||||||||
| Deferred liabilities and credits | |||||||||||
| Deferred income tax liability, net | |||||||||||
| Long-term operating lease liabilities | |||||||||||
| Other deferred liabilities and credits | |||||||||||
| Long-term debt, net | |||||||||||
| Commitments and contingencies | |||||||||||
| Noncontrolling interests with redemption features | |||||||||||
| Equity | |||||||||||
| TDS shareholders’ equity | |||||||||||
| Series A Common and Common Shares | |||||||||||
Authorized | |||||||||||
Issued | |||||||||||
Outstanding | |||||||||||
Par Value ($ | |||||||||||
| Capital in excess of par value | |||||||||||
Preferred Shares, | |||||||||||
Treasury shares, at cost, | ( | ( | |||||||||
| Accumulated other comprehensive income | |||||||||||
| Retained earnings | |||||||||||
| Total TDS shareholders' equity | |||||||||||
| Noncontrolling interests | |||||||||||
| Total equity | |||||||||||
Total liabilities and equity1 | $ | $ | |||||||||
The accompanying notes are an integral part of these consolidated financial statements.
1The consolidated total assets as of June 30, 2025 and December 31, 2024, include assets held by consolidated variable interest entities (VIEs) of $850 million and $983 million, respectively, which are not available to be used to settle the obligations of TDS. The consolidated total liabilities as of June 30, 2025 and December 31, 2024, include certain liabilities of consolidated VIEs of $24 million and $24 million, respectively, for which the creditors of the VIEs have no recourse to the general credit of TDS. See Note 9 — Variable Interest Entities for additional information.
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Telephone and Data Systems, Inc.
Consolidated Statement of Changes in Equity
(Unaudited)
| TDS Shareholders | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Series A Common and Common shares | Capital in excess of par value | Preferred Shares | Treasury shares | Accumulated other comprehensive income | Retained earnings | Total TDS shareholders' equity | Noncontrolling interests | Total equity | |||||||||||||||||||||||||||||||||||||||||||||
| (Dollars in millions, except per share amounts) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| March 31, 2025 | $ | $ | $ | $ | ( | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||
| Net income attributable to TDS shareholders | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
| Net income attributable to noncontrolling interests classified as equity | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
TDS Common and Series A Common share dividends ($ | — | — | — | — | — | ( | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
TDS Preferred share dividends ($ | — | — | — | — | — | ( | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
Incentive and compensation plans | — | — | — | ( | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||||||
| Adjust investment in subsidiaries for issuances and other compensation plans | — | ( | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
| June 30, 2025 | $ | $ | $ | $ | ( | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||
The accompanying notes are an integral part of these consolidated financial statements.
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Telephone and Data Systems, Inc.
Consolidated Statement of Changes in Equity
(Unaudited)
| TDS Shareholders | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Series A Common and Common shares | Capital in excess of par value | Preferred Shares | Treasury shares | Accumulated other comprehensive income | Retained earnings | Total TDS shareholders' equity | Noncontrolling interests | Total equity | |||||||||||||||||||||||||||||||||||||||||||||
| (Dollars in millions, except per share amounts) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| March 31, 2024 | $ | $ | $ | $ | ( | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||
| Net income attributable to TDS shareholders | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
| Net income attributable to noncontrolling interests classified as equity | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
TDS Common and Series A Common share dividends ($ | — | — | — | — | — | ( | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
TDS Preferred share dividends ($ | — | — | — | — | — | ( | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
Incentive and compensation plans | — | — | — | ( | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||||||
Adjust investment in subsidiaries for repurchases, issuances and other compensation plans | — | ( | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
Distributions to noncontrolling interests | — | — | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
| June 30, 2024 | $ | $ | $ | $ | ( | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||
The accompanying notes are an integral part of these consolidated financial statements.
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Telephone and Data Systems, Inc.
Consolidated Statement of Changes in Equity
(Unaudited)
| TDS Shareholders | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Series A Common and Common shares | Capital in excess of par value | Preferred Shares | Treasury shares | Accumulated other comprehensive income | Retained earnings | Total TDS shareholders' equity | Noncontrolling interests | Total equity | |||||||||||||||||||||||||||||||||||||||||||||
| (Dollars in millions, except per share amounts) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| December 31, 2024 | $ | $ | $ | $ | ( | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||
| Net income attributable to TDS shareholders | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
| Net income attributable to noncontrolling interests classified as equity | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
TDS Common and Series A Common share dividends ($ | — | — | — | — | — | ( | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
TDS Preferred share dividends ($ | — | — | — | — | — | ( | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
Incentive and compensation plans | — | — | — | ( | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||||||
| Adjust investment in subsidiaries for issuances and other compensation plans | — | ( | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
Distributions to noncontrolling interests | — | — | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
| June 30, 2025 | $ | $ | $ | $ | ( | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||
The accompanying notes are an integral part of these consolidated financial statements.
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Telephone and Data Systems, Inc.
Consolidated Statement of Changes in Equity
(Unaudited)
| TDS Shareholders | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Series A Common and Common shares | Capital in excess of par value | Preferred Shares | Treasury shares | Accumulated other comprehensive income | Retained earnings | Total TDS shareholders' equity | Noncontrolling interests | Total equity | |||||||||||||||||||||||||||||||||||||||||||||
| (Dollars in millions, except per share amounts) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| December 31, 2023 | $ | $ | $ | $ | ( | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||
| Net income attributable to TDS shareholders | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
| Net income attributable to noncontrolling interests classified as equity | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
TDS Common and Series A Common share dividends ($ | — | — | — | — | — | ( | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
TDS Preferred share dividends ($ | — | — | — | — | — | ( | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
| Dividend reinvestment plan | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
Incentive and compensation plans | — | — | — | ( | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||||||
| Adjust investment in subsidiaries for issuances and other compensation plans | — | ( | — | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||||
Distributions to noncontrolling interests | — | — | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
| June 30, 2024 | $ | $ | $ | $ | ( | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||
The accompanying notes are an integral part of these consolidated financial statements.
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Telephone and Data Systems, Inc.
Notes to Consolidated Financial Statements
Note 1 Basis of Presentation
The accounting policies of Telephone and Data Systems, Inc. (TDS) conform to accounting principles generally accepted in the United States of America (GAAP) as set forth in the Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC). Unless otherwise specified, references to accounting provisions and GAAP in these notes refer to the requirements of the FASB ASC. United States Cellular Corporation (UScellular) is a 82.5 %-owned subsidiary of TDS. On August 1, 2025, UScellular changed its name to Array Digital Infrastructure, Inc. (Array). Array is used throughout this report even when referring to historical periods. The consolidated financial statements include the accounts of TDS and subsidiaries in which it has a controlling financial interest, including Array and TDS’ wholly-owned subsidiary, TDS Telecommunications LLC (TDS Telecom). In addition, the consolidated financial statements include certain entities in which TDS has a variable interest that requires consolidation into the TDS financial statements under GAAP. Intercompany accounts and transactions have been eliminated.
TDS’ business segments reflected in this Quarterly Report on Form 10-Q for the period ended June 30, 2025, are Array Wireless, Array Towers and TDS Telecom. TDS’ non-reportable other business activities are presented as “Corporate, Eliminations and Other”, which includes its wholly-owned subsidiary Suttle-Straus, Inc. (Suttle-Straus). Suttle-Straus’ financial results were not significant to TDS’ operations. All of TDS’ segments operate only in the United States. See Note 11 — Business Segment Information for summary financial information on each business segment.
Certain numbers included herein are rounded to millions for ease of presentation; however, certain calculated amounts and percentages are determined using the unrounded numbers. These unaudited consolidated financial statements should be read in conjunction with the consolidated financial statements and the notes thereto included in TDS’ Annual Report on Form 10-K (Form 10-K) for the year ended December 31, 2024.
Restricted Cash
TDS presents restricted cash with cash and cash equivalents in the Consolidated Statement of Cash Flows. Restricted cash primarily consists of balances required under the receivables securitization agreement. The following table provides a reconciliation of Cash and cash equivalents and restricted cash reported in the Consolidated Balance Sheet to the total of the amounts in the Consolidated Statement of Cash Flows.
| June 30, 2025 | December 31, 2024 | ||||||||||
| (Dollars in millions) | |||||||||||
| Cash and cash equivalents | $ | $ | |||||||||
| Restricted cash included in Other current assets | |||||||||||
| Cash, cash equivalents and restricted cash in the statement of cash flows | $ | $ | |||||||||
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Note 2 Revenue Recognition
Disaggregation of Revenue
In the following table, TDS' revenues are disaggregated by type of service, which represents the relevant categorization of revenues for TDS' reportable segments, and timing of recognition. Service revenues are recognized over time and Equipment and product sales are recognized at a point in time.
| Three Months Ended June 30, 2025 | Array | TDS Telecom | Corporate, Eliminations and Other | Total | |||||||||||||||||||
| (Dollars in millions) | |||||||||||||||||||||||
| Revenues from contracts with customers: | |||||||||||||||||||||||
| Type of service: | |||||||||||||||||||||||
| Retail service | $ | $ | $ | $ | |||||||||||||||||||
| Residential | |||||||||||||||||||||||
| Commercial | |||||||||||||||||||||||
| Wholesale | |||||||||||||||||||||||
| Other service | ( | ||||||||||||||||||||||
| Service revenues from contracts with customers | ( | ||||||||||||||||||||||
| Equipment and product sales | |||||||||||||||||||||||
Total revenues from contracts with customers1 | |||||||||||||||||||||||
Operating lease income1 | |||||||||||||||||||||||
| Total operating revenues | $ | $ | $ | $ | |||||||||||||||||||
| Three Months Ended June 30, 2024 | Array | TDS Telecom | Corporate, Eliminations and Other | Total | |||||||||||||||||||
| (Dollars in millions) | |||||||||||||||||||||||
| Revenues from contracts with customers: | |||||||||||||||||||||||
| Type of service: | |||||||||||||||||||||||
| Retail service | $ | $ | $ | $ | |||||||||||||||||||
| Residential | |||||||||||||||||||||||
| Commercial | |||||||||||||||||||||||
| Wholesale | |||||||||||||||||||||||
| Other service | |||||||||||||||||||||||
| Service revenues from contracts with customers | |||||||||||||||||||||||
| Equipment and product sales | |||||||||||||||||||||||
Total revenues from contracts with customers1 | |||||||||||||||||||||||
Operating lease income1 | |||||||||||||||||||||||
| Total operating revenues | $ | $ | $ | $ | |||||||||||||||||||
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| Six Months Ended June 30, 2025 | Array | TDS Telecom | Corporate, Eliminations and Other | Total | |||||||||||||||||||
| (Dollars in millions) | |||||||||||||||||||||||
| Revenues from contracts with customers: | |||||||||||||||||||||||
| Type of service: | |||||||||||||||||||||||
| Retail service | $ | $ | $ | $ | |||||||||||||||||||
| Residential | |||||||||||||||||||||||
| Commercial | |||||||||||||||||||||||
| Wholesale | |||||||||||||||||||||||
| Other service | ( | ||||||||||||||||||||||
| Service revenues from contracts with customers | ( | ||||||||||||||||||||||
| Equipment and product sales | |||||||||||||||||||||||
Total revenues from contracts with customers1 | |||||||||||||||||||||||
Operating lease income1 | |||||||||||||||||||||||
| Total operating revenues | $ | $ | $ | $ | |||||||||||||||||||
| Six Months Ended June 30, 2024 | Array | TDS Telecom | Corporate, Eliminations and Other | Total | |||||||||||||||||||
| (Dollars in millions) | |||||||||||||||||||||||
| Revenues from contracts with customers: | |||||||||||||||||||||||
| Type of service: | |||||||||||||||||||||||
| Retail service | $ | $ | $ | $ | |||||||||||||||||||
| Residential | |||||||||||||||||||||||
| Commercial | |||||||||||||||||||||||
| Wholesale | |||||||||||||||||||||||
| Other service | |||||||||||||||||||||||
| Service revenues from contracts with customers | |||||||||||||||||||||||
| Equipment and product sales | |||||||||||||||||||||||
Total revenues from contracts with customers1 | |||||||||||||||||||||||
Operating lease income1 | |||||||||||||||||||||||
| Total operating revenues | $ | $ | $ | $ | |||||||||||||||||||
Numbers may not foot due to rounding.
1Array's Total revenues from contracts with customers represents revenues related to the Wireless segment and Operating lease income represents revenues related to the Towers segment.
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Contract Balances
The following table provides balances for contract assets from contracts with customers, which are recorded in Other current assets and Other assets and deferred charges in the Consolidated Balance Sheet, and contract liabilities from contracts with customers, which are recorded in Customer deposits and deferred revenues and Other deferred liabilities and credits in the Consolidated Balance Sheet.
| June 30, 2025 | December 31, 2024 | ||||||||||
| (Dollars in millions) | |||||||||||
| Contract assets | $ | $ | |||||||||
| Contract liabilities | $ | $ | |||||||||
Revenue recognized related to contract liabilities existing at January 1, 2025 was $198 million for the six months ended June 30, 2025.
Transaction price allocated to the remaining performance obligations
The following table includes estimated service revenues expected to be recognized related to performance obligations that are unsatisfied (or partially unsatisfied) at the end of the reporting period. These estimates represent service revenues to be recognized when services are delivered to customers pursuant to service plan contracts and under certain roaming agreements with other carriers. These estimates are based on contracts in place as of June 30, 2025 and may vary from actual results. As practical expedients, revenue related to contracts of less than one year, generally month-to-month contracts, and contracts with a fixed per-unit price and variable quantity, are excluded from these estimates.
A significant portion of TDS Telecom's residential revenue is derived from customers who may generally cancel their subscriptions at any time without penalty. For these contracts, the amount of revenue related to unsatisfied performance obligations is not necessarily indicative of the future revenue to be recognized from TDS Telecom's existing customer base and therefore is excluded from these estimates.
| Service Revenues | |||||
| (Dollars in millions) | |||||
| Remainder of 2025 | $ | ||||
| 2026 | |||||
| Thereafter | |||||
Total | $ | ||||
Contract Cost Assets
| June 30, 2025 | December 31, 2024 | ||||||||||
| (Dollars in millions) | |||||||||||
| Costs to obtain contracts | |||||||||||
| Sales commissions | $ | $ | |||||||||
| Fulfillment costs | |||||||||||
| Installation costs | |||||||||||
| Total contract cost assets | $ | $ | |||||||||
Amortization of contract cost assets was $26 million and $51 million for the three and six months ended June 30, 2025, respectively, and $25 million and $50 million for the three and six months ended June 30, 2024, respectively, and was included in Selling, general and administrative expenses and Cost of services expenses.
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Note 3 Fair Value Measurements
As of June 30, 2025 and December 31, 2024, TDS did not have any material financial or nonfinancial assets or liabilities that were required to be recorded at fair value in its Consolidated Balance Sheet in accordance with GAAP.
The provisions of GAAP establish a fair value hierarchy that contains three levels for inputs used in fair value measurements. Level 1 inputs include quoted market prices for identical assets or liabilities in active markets. Level 2 inputs include quoted market prices for similar assets and liabilities in active markets or quoted market prices for identical assets and liabilities in inactive markets. Level 3 inputs are unobservable. A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. A financial instrument’s level within the fair value hierarchy is not representative of its expected performance or its overall risk profile and, therefore Level 3 assets are not necessarily higher risk than Level 2 assets or Level 1 assets.
TDS has applied the provisions of fair value accounting for purposes of computing the fair value of financial instruments for disclosure purposes as displayed below.
| Level within the Fair Value Hierarchy | June 30, 2025 | December 31, 2024 | |||||||||||||||||||||||||||
| Book Value | Fair Value | Book Value | Fair Value | ||||||||||||||||||||||||||
| (Dollars in millions) | |||||||||||||||||||||||||||||
| Long-term debt | 2 | $ | $ | $ | $ | ||||||||||||||||||||||||
Long-term debt excludes lease obligations, the current portion of Long-term debt and debt financing costs. The fair value of Long-term debt was estimated using various methods, including quoted market prices and discounted cash flow analyses.
The fair values of Cash and cash equivalents and restricted cash approximate their book values due to the short-term nature of these financial instruments.
Note 4 Equipment Installment Plans
Array sells devices to customers under equipment installment plans over a specified time period. For certain equipment installment plans, after a specified period of time or amount of payments, the customer may have the right to upgrade to a new device and have the remaining unpaid equipment installment contract balance waived, subject to certain conditions, including trading in the original device in good working condition and signing a new equipment installment contract.
The following table summarizes equipment installment plan receivables.
| June 30, 2025 | December 31, 2024 | ||||||||||
| (Dollars in millions) | |||||||||||
| Equipment installment plan receivables, gross | $ | $ | |||||||||
| Allowance for credit losses | ( | ( | |||||||||
| Equipment installment plan receivables, net | $ | $ | |||||||||
| Net balance presented in the Consolidated Balance Sheet as: | |||||||||||
| Accounts receivable — Customers and agents (Current portion) | $ | $ | |||||||||
| Other assets and deferred charges (Non-current portion) | |||||||||||
| Equipment installment plan receivables, net | $ | $ | |||||||||
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Array uses various inputs to evaluate the credit profiles of its customers, including internal data, information from credit bureaus and other sources. From this evaluation, a credit class is assigned to the customer that determines the number of eligible lines, the amount of credit available, and the down payment requirement, if any. These credit classes are grouped into four credit categories: lowest risk, lower risk, slight risk and higher risk. A customer's assigned credit class is reviewed periodically and a change is made, if appropriate. An equipment installment plan billed amount is considered past due if not paid within 30 days. The balance and aging of the equipment installment plan receivables on a gross basis by credit category were as follows:
| June 30, 2025 | December 31, 2024 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Lowest Risk | Lower Risk | Slight Risk | Higher Risk | Total | Lowest Risk | Lower Risk | Slight Risk | Higher Risk | Total | ||||||||||||||||||||||||||||||||||||||||||||||||||
| (Dollars in millions) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Unbilled | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||||
| Billed — current | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Billed — past due | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||||
The balance of the equipment installment plan receivables as of June 30, 2025 on a gross basis by year of origination were as follows:
| 2022 | 2023 | 2024 | 2025 | Total | |||||||||||||||||||||||||
| (Dollars in millions) | |||||||||||||||||||||||||||||
| Lowest Risk | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Lower Risk | |||||||||||||||||||||||||||||
| Slight Risk | |||||||||||||||||||||||||||||
| Higher Risk | |||||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
The write-offs, net of recoveries for the six months ended June 30, 2025 on a gross basis by year of origination were as follows:
| 2022 | 2023 | 2024 | 2025 | Total | |||||||||||||||||||||||||
| (Dollars in millions) | |||||||||||||||||||||||||||||
| Write-offs, net of recoveries | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Activity for the six months ended June 30, 2025 and 2024, in the allowance for credit losses for equipment installment plan receivables was as follows:
| June 30, 2025 | June 30, 2024 | ||||||||||
| (Dollars in millions) | |||||||||||
| Allowance for credit losses, beginning of period | $ | $ | |||||||||
| Bad debts expense | |||||||||||
| Write-offs, net of recoveries | ( | ( | |||||||||
| Allowance for credit losses, end of period | $ | $ | |||||||||
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Note 5 Earnings Per Share
Basic earnings (loss) per share attributable to TDS common shareholders is computed by dividing Net income (loss) attributable to TDS common shareholders by the weighted average number of Common Shares outstanding during the period. Diluted earnings (loss) per share attributable to TDS common shareholders is computed by dividing Net income (loss) attributable to TDS common shareholders by the weighted average number of Common Shares outstanding during the period adjusted to include the effects of potentially dilutive securities. Potentially dilutive securities primarily include incremental shares issuable upon the exercise of outstanding stock options and the vesting of performance and restricted stock units, as calculated using the treasury stock method.
The amounts used in computing basic and diluted earnings (loss) per share attributable to TDS common shareholders were as follows:
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| (Dollars and shares in millions, except per share amounts) | |||||||||||||||||||||||
| Net income (loss) attributable to TDS common shareholders | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
| Weighted average number of shares used in basic and diluted earnings (loss) per share: | |||||||||||||||||||||||
| Common Shares | |||||||||||||||||||||||
| Series A Common Shares | |||||||||||||||||||||||
| Total | |||||||||||||||||||||||
| Basic earnings (loss) per share attributable to TDS common shareholders | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
| Diluted earnings (loss) per share attributable to TDS common shareholders | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Note 6 Divestitures
Array
On August 4, 2023, TDS and Array announced that the Boards of Directors of both companies decided to initiate a process to explore a range of strategic alternatives for Array. On May 28, 2024, Array announced that its Board of Directors unanimously approved the execution of a Securities Purchase Agreement (Securities Purchase Agreement) by and among TDS, Array, T-Mobile US, Inc. (T-Mobile) and USCC Wireless Holdings, LLC, pursuant to which, among other things, Array agreed to sell its wireless operations and select spectrum assets to T-Mobile. The Securities Purchase Agreement also contemplated, among other things, a Short-Term Spectrum Manager Lease Agreement and Short-Term Spectrum Manager Sublease Agreements that would become effective at the closing date, 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. The sale of the wireless operations to T-Mobile was subject to the receipt of regulatory approvals and the satisfaction of customary closing conditions. As of June 30, 2025, the transaction did not meet the accounting criteria to be presented as discontinued operations.
On October 17, 2024, Array, and certain subsidiaries of Array, entered into a License Purchase Agreement (Verizon Purchase Agreement) with Verizon Communications Inc. (Verizon) 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 for total proceeds of $1,000 million. As of June 30, 2025, Array's book value of the wireless spectrum licenses to be sold was $586 million. The transaction is expected to close in the third quarter of 2026, subject to regulatory approval and other customary closing conditions, and the termination of the T-Mobile Short-Term Spectrum Manager Lease Agreement.
On November 6, 2024, Array, and certain subsidiaries of Array, entered into a License Purchase Agreement (AT&T Purchase Agreement) with New Cingular Wireless PCS, LLC (AT&T), a subsidiary of AT&T Inc. to sell certain 3.45 GHz and 700 MHz wireless spectrum licenses and agreed to grant AT&T certain rights to lease and sub-lease such licenses prior to the transaction close for total proceeds of $1,018 million, subject to certain purchase price adjustments. As of June 30, 2025, Array's book value of the wireless spectrum licenses to be sold was $860 million. The transaction is expected to close in 2025, subject to regulatory approval and other customary closing conditions.
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The strategic alternatives review process is ongoing as Array works toward closing the Verizon and AT&T spectrum transactions signed during 2024, and continues to seek to opportunistically monetize its spectrum assets that are not subject to the Securities Purchase Agreement, the Verizon Purchase Agreement, or the AT&T Purchase Agreement.
TDS incurred third-party expenses related to the announced transactions and strategic alternatives review of $16 million and $32 million for the three and six months ended June 30, 2025, respectively, and $21 million and $33 million for the three and six months ended June 30, 2024, respectively, which are included in Selling, general and administrative expenses.
As part of the transaction, Array entered into a Put/Call Agreement with T-Mobile whereby T-Mobile has the right to call certain spectrum assets and Array has the right to put certain spectrum assets to T-Mobile for an aggregate agreed upon price of $106 million. The call option notice period started on May 24, 2024, and the put exercise period starts at the close of the broader transaction. There was no cash exchanged at the inception of the Put/Call Agreement. All license transfers pursuant to any put/call are subject to Federal Communications Commission (FCC) approval. Array accounts for this instrument as a net written call option and records such option at fair value each reporting period unless/until such option is exercised or terminated. As of June 30, 2025, Array wrote off the entire fair value of the net written call option. The change in fair value is recorded to (Gain) loss on license sales and exchanges, net in the Consolidated Statement of Operations.
TDS Telecom
In February 2025, TDS Telecom entered into agreements with third-parties to sell certain incumbent markets in Colorado for a purchase price of $18 million. The transactions closed on June 2, 2025, and TDS Telecom recognized a book gain of $8 million in (Gain) loss on sale of business and other exit costs, net in the Consolidated Statement of Operations.
See Note 12 — Subsequent Events for additional information related to divestitures.
Note 7 Investments in Unconsolidated Entities
Investments in unconsolidated entities consist of amounts invested in entities in which TDS holds a noncontrolling interest. TDS’ Investments in unconsolidated entities are accounted for using the equity method, measurement alternative method or net asset value practical expedient method as shown in the table below. The carrying value of measurement alternative method investments represents cost minus any impairments plus or minus any observable price changes.
| June 30, 2025 | December 31, 2024 | ||||||||||
| (Dollars in millions) | |||||||||||
| Equity method investments | $ | $ | |||||||||
| Measurement alternative method investments | |||||||||||
| Investments recorded using the net asset value practical expedient | |||||||||||
| Total investments in unconsolidated entities | $ | $ | |||||||||
The following table, which is based on unaudited information provided in part by third parties, summarizes the combined results of operations of TDS’ equity method investments.
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| (Dollars in millions) | |||||||||||||||||||||||
| Revenues | $ | $ | $ | $ | |||||||||||||||||||
| Operating expenses | |||||||||||||||||||||||
| Operating income | |||||||||||||||||||||||
| Other income (expense), net | ( | ( | ( | ||||||||||||||||||||
| Net income | $ | $ | $ | $ | |||||||||||||||||||
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Note 8 Debt
Revolving Credit Agreements
TDS and Array have unsecured revolving credit agreements with maximum borrowing capacities of $400 million and $300 million, respectively. Amounts under the agreements may be borrowed, repaid and reborrowed from time to time until maturity. In April 2025, TDS and Array amended the revolving credit agreements to extend the maturity dates to July 2027 and allow for permitted dispositions, as specified in the amendments. The amendments also include a provision that was triggered upon the sale of the Array wireless operations to T-Mobile, which occurred on August 1, 2025, which accelerated the maturity date to the earliest of (i) 270 days following the consummation of the sale of the Array wireless operations to T-Mobile, (ii) the date on which Array receives net proceeds from the cumulative sale of wireless spectrum licenses to AT&T, Verizon and other parties that equals or exceeds $1.1 500 million, which provision would automatically reduce the maximum borrowing capacity of the Array revolving credit agreement from $300 million to $150 million five business days after Array's receipt of such net proceeds. As of June 30, 2025, there were no 399 million and $300 million, respectively.
Unsecured Term Loan Agreements
TDS had unsecured term loan agreements with maximum borrowing capacities of $875 million. The maturity dates for the agreements range from July 2028 to July 2031. As of June 30, 2025, the outstanding borrowings were $781 million and the unused borrowing capacity was $75 million.
Array had unsecured term loan agreements with maximum borrowing capacities of $800 million. The maturity dates for the agreements range from July 2027 to July 2031. In April 2025, Array amended its $300 million unsecured term loan agreement due July 2026 to extend the maturity date to July 2027 and allow for permitted dispositions, as specified in the amendment. As of June 30, 2025, Array has borrowed the full amount available under the agreements and the outstanding borrowings were $713 million.
In June 2025, Array entered into an amendment to its term loan agreement with CoBank, ACB for an additional $800 million of borrowing capacity. The term loan may be drawn prior to November 1, 2025; amounts not drawn by that time will cease to be available. 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
TDS had a secured term loan agreement with maximum borrowing capacity of $300 million. In February 2025, TDS amended the agreement to extend the maturity date to the earlier of (i) September 2026 and (ii) the scheduled maturity date of TDS' existing revolving credit agreement (which had a then existing maturity date of July 2026, which has since been extended as described above). In April 2025, TDS amended the secured term loan agreement to extend the maturity date to the earliest of (i) 270 days following the consummation of the sale of the Array wireless operations to T-Mobile, (ii) the date on which Array receives net proceeds from the cumulative sale of wireless spectrum licenses to AT&T, Verizon and other parties that equals or exceeds $1.1 billion, or (iii) July 20, 2027, and to allow for permitted dispositions, as specified in the amendment. As of June 30, 2025, the outstanding borrowings under the agreement were $300 million, which is the full amount available under the agreement.
Export Credit Financing Agreements
TDS and Array each had a $150
Receivables Securitization Agreement
Array, through its subsidiaries, had a receivables securitization agreement that permitted securitized borrowings using its equipment installment plan receivables. During the six months ended June 30, 2025, Array repaid $2 million under the agreement. As of June 30, 2025, there were no outstanding borrowings under the agreement, and the unused borrowing capacity was $450 million, subject to sufficient collateral to satisfy the asset borrowing base provisions of the agreement.
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Debt Covenants
The TDS and Array revolving credit agreements, term loan agreements including the secured term loan, export credit financing agreements and the Array receivables securitization 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. TDS and Array are required to maintain the Consolidated Leverage Ratio, based on gross debt, as of the end of any fiscal quarter at a level not to exceed 3.75 to 1.00 from April 1, 2025 and thereafter. 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 they were in compliance as of June 30, 2025 with all such financial covenants.
The TDS $375 million term loan agreement with a maturity date of May 2029 requires TDS to comply with certain affirmative and negative covenants, which includes a financial covenant that may restrict the borrowing capacity available. TDS is required to maintain the Consolidated Leverage Ratio as of the end of any fiscal quarter at a level not to exceed 4.25 to 1.00 from April 1, 2025 and thereafter. TDS believes that it was in compliance as of June 30, 2025 with such financial covenant.
In April 2025, the TDS and Array revolving credit agreements, Array $300 million unsecured term loan agreement and TDS $300 million secured term loan agreement were amended to require, upon the consummation of the sale of the Array wireless operations to T-Mobile, TDS and Array to maintain the Consolidated Leverage Ratio, based on net debt, 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.
In June 2025, the TDS export credit financing agreement was amended to require, upon the consummation of the sale of the Array wireless operations to T-Mobile, TDS to maintain the Consolidated Leverage Ratio, based on net debt, 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.
In June 2025, the Array term loan agreement with CoBank, ACB was amended to require, upon the consummation of the sale of the Array wireless operations to T-Mobile, Array to maintain the Consolidated Leverage Ratio, based on net debt, 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.
See Note 12 — Subsequent Events for additional information related to financing activities.
Note 9 Variable Interest Entities
Consolidated VIEs
TDS consolidates VIEs in which it has a controlling financial interest as defined by GAAP and is therefore deemed the primary beneficiary. TDS reviews the criteria for a controlling financial interest at the time it enters into agreements and subsequently when events warranting reconsideration occur. These VIEs have risks similar to those described in the “Risk Factors” in this Form 10-Q.
Array formed USCC EIP LLC (Seller/Sub-Servicer), USCC Receivables Funding LLC (Transferor) and the USCC Master Note Trust (Trust), collectively the special purpose entities (SPEs), to facilitate a securitized borrowing using its equipment installment plan receivables. Under a Receivables Sale Agreement, Array wholly-owned, majority-owned and unconsolidated entities, collectively referred to as “affiliated entities”, transfer device equipment installment plan contracts to the Seller/Sub-Servicer. The Seller/Sub-Servicer aggregates device equipment installment plan contracts, and performs servicing, collection and all other administrative activities related to accounting for the equipment installment plan contracts. The Seller/Sub-Servicer sells the eligible equipment installment plan receivables to the Transferor, a bankruptcy remote entity, which subsequently sells the receivables to the Trust. The Trust, which is bankruptcy remote and isolated from the creditors of Array, will be responsible for issuing asset-backed variable funding notes (Notes), which are collateralized by the equipment installment plan receivables owned by the Trust. Given that Array has the power to direct the activities of these SPEs, and that these SPEs lack sufficient equity to finance their activities, Array is deemed to have a controlling financial interest in the SPEs, and therefore consolidates them. All transactions with third parties (e.g., issuance of the asset-backed variable funding notes) will be accounted for as a secured borrowing due to the pledging of equipment installment plan contracts as collateral, significant continuing involvement in the transferred assets, subordinated interests of the cash flows, and continued evidence of control of the receivables. See Note 12 — Subsequent Events for additional information related to the SPEs.
The following VIEs were formed to participate in FCC auctions of wireless spectrum licenses and to fund, establish, and provide wireless service with respect to any FCC wireless spectrum licenses won in the auctions:
▪Advantage Spectrum, L.P. (Advantage Spectrum) and Sunshine Spectrum, Inc., the general partner of Advantage Spectrum; and
▪King Street Wireless, L.P. (King Street Wireless) and King Street Wireless, Inc., the general partner of King Street Wireless.
These particular VIEs are collectively referred to as designated entities. The power to direct the activities that most significantly impact the economic performance of these VIEs is shared. Specifically, the general partner of these VIEs has the exclusive right to manage, operate and control the limited partnerships and make all decisions to carry on the business of the partnerships. The general partner of each partnership needs the consent of the limited partner, an indirect TDS subsidiary, to sell or lease certain wireless spectrum licenses, to make certain large expenditures, admit other partners or liquidate the limited partnerships. Although the power to direct the activities of these VIEs is shared, TDS has the most significant level of exposure to the variability associated with the economic performance of the VIEs, indicating that TDS is the primary beneficiary of the VIEs. Therefore, in accordance with GAAP, these VIEs are consolidated into the TDS financial statements. See Note 12 — Subsequent Events for additional information related to the designated entities.
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TDS also consolidates other VIEs that are limited partnerships that provide wireless service. A limited partnership is a variable interest entity unless the limited partners hold substantive participating rights or kick-out rights over the general partner. For certain limited partnerships, Array is the general partner and manages the operations. In these partnerships, the limited partners do not have substantive kick-out or participating rights and, further, such limited partners do not have the authority to remove the general partner. Therefore, these limited partnerships also are recognized as VIEs and are consolidated into the TDS financial statements under the variable interest model.
The following table presents the classification and balances of the consolidated VIEs’ assets and liabilities in TDS’ Consolidated Balance Sheet.
| June 30, 2025 | December 31, 2024 | ||||||||||
| (Dollars in millions) | |||||||||||
| Assets | |||||||||||
| Cash and cash equivalents | $ | $ | |||||||||
| Accounts receivable | |||||||||||
| Inventory, net | |||||||||||
| Other current assets | |||||||||||
| Licenses | |||||||||||
| Property, plant and equipment, net | |||||||||||
| Operating lease right-of-use assets | |||||||||||
| Other assets and deferred charges | |||||||||||
| Total assets | $ | $ | |||||||||
| Liabilities | |||||||||||
| Current liabilities | $ | $ | |||||||||
| Long-term operating lease liabilities | |||||||||||
| Other deferred liabilities and credits | |||||||||||
Total liabilities1 | $ | $ | |||||||||
Unconsolidated VIEs
TDS manages the operations of and holds a variable interest in certain other limited partnerships, but is not the primary beneficiary of these entities, and therefore does not consolidate them into the TDS financial statements under the variable interest model.
TDS’ total investment in these unconsolidated entities was $4 million and $6 million at June 30, 2025 and December 31, 2024, respectively, and is included in Investments in unconsolidated entities in TDS’ Consolidated Balance Sheet. The maximum exposure from unconsolidated VIEs is limited to the investment held by TDS in those entities. See Note 12 — Subsequent Events for additional information related to Investments in unconsolidated entities.
Other Related Matters
TDS made contributions, loans or advances to its VIEs totaling $6 million and $250 million during the six months ended June 30, 2025 and 2024, respectively, of which $219 million in 2024, are related to USCC EIP LLC as discussed above.
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Note 10 Noncontrolling Interests
The following schedule discloses the effects of Net income attributable to TDS shareholders and changes in TDS’ ownership interest in Array on TDS’ equity:
| Six Months Ended June 30, | 2025 | 2024 | |||||||||
| (Dollars in millions) | |||||||||||
| Net income attributable to TDS shareholders | $ | $ | |||||||||
| Transfers (to) from noncontrolling interests | |||||||||||
| Change in TDS' Capital in excess of par value from Array's issuance of Array shares | ( | ( | |||||||||
| Change in TDS' Capital in excess of par value from Array's repurchases of Array shares | ( | ||||||||||
| Net transfers (to) from noncontrolling interests | ( | ( | |||||||||
| Net income (loss) attributable to TDS shareholders after transfers (to) from noncontrolling interests | $ | ( | $ | ( | |||||||
Note 11 Business Segment Information
TDS has the following reportable segments: Array Wireless, Array Towers and TDS Telecom. Array Wireless generates its revenues by providing wireless services and equipment. Array Towers generates its revenues by leasing tower space on Array-owned towers to other wireless carriers. TDS Telecom generates its revenues by providing broadband, video, voice and wireless services. The Towers segment records rental revenue and the Wireless segment records a related expense when the Wireless segment uses company-owned towers to locate its network equipment, using estimated market pricing - this revenue and expense is eliminated in consolidation.
The reportable segments are billed for services they receive from TDS, consisting primarily of information processing, accounting, finance, and general management services. Such billings are based on expenses specifically identified to the reportable segments and on allocations of common expenses. Management believes the method used to allocate common expenses is reasonable and that all expenses and costs applicable to the reportable segments are reflected in the accompanying business segment information.
Adjusted earnings before interest, taxes, depreciation, amortization and accretion (Adjusted EBITDA) is the segment measure of profit or loss reported to the chief operating decision maker for purposes of assessing the segments' performance and making capital allocation decisions. Adjusted EBITDA is a non-GAAP financial measure that shows adjusted earnings before interest, taxes, depreciation, amortization and accretion, gains and losses, and expenses related to the strategic alternatives review of Array. TDS believes Adjusted EBITDA is a useful measure of TDS’ operating results before significant recurring non-cash charges, 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. TDS’ chief operating decision maker is its President and Chief Executive Officer.
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Financial data for TDS’ reportable segments for the three and six months ended June 30, 2025 and 2024, is as follows.
| Three Months Ended June 30, 2025 | Array Wireless | Array Towers | TDS Telecom | Total | ||||||||||
| (Dollars in millions) | ||||||||||||||
| Revenues from external customers | $ | $ | $ | $ | ||||||||||
| Intersegment revenues | ||||||||||||||
| Reconciliation of revenue: | ||||||||||||||
All Other revenues1 | ||||||||||||||
| Elimination of intersegment revenues | ( | |||||||||||||
| Total operating revenues | $ | |||||||||||||
Less2: | ||||||||||||||
| Cost of services (excluding Depreciation, amortization and accretion reported below) | ||||||||||||||
| Cost of equipment and products | ||||||||||||||
| Selling, general and administrative | ||||||||||||||
| Expenses related to strategic alternatives review (included in Selling, general and administrative) | ( | ( | ||||||||||||
| Other segment items | ( | |||||||||||||
| Segment Adjusted EBITDA (Non-GAAP) | $ | $ | $ | $ | ||||||||||
| Reconciliation of Segment Adjusted EBITDA to Income before income taxes: | ||||||||||||||
All Other income (loss) before income taxes1 | ( | |||||||||||||
| Depreciation, amortization and accretion | ( | |||||||||||||
| Expenses related to strategic alternatives review (included in Selling, general and administrative) | ( | |||||||||||||
| Loss on asset disposals, net | ( | |||||||||||||
| Gain on sale of business and other exit costs, net | ||||||||||||||
| Gain on license sales and exchanges, net | ||||||||||||||
| Equity earnings of unconsolidated entities | ||||||||||||||
| Interest and dividend income | ||||||||||||||
| Interest expense | ( | |||||||||||||
| Income before income taxes | $ | |||||||||||||
| Other segment disclosures | |||||||||||||||||||||||
| Three Months Ended or as of June 30, 2025 | Array Wireless | Array Towers | TDS Telecom | Segment Total | Array | All Other1 | TDS Consolidated Total | ||||||||||||||||
| Depreciation, amortization and accretion | $ | ( | $ | ( | $ | ( | $ | ( | $ | $ | ( | ||||||||||||
| Loss on asset disposals, net | ( | ( | ( | ( | ( | ||||||||||||||||||
| Gain on sale of business and other exit costs, net | |||||||||||||||||||||||
| Gain on license sales and exchanges, net | |||||||||||||||||||||||
Investments in unconsolidated entities3 | $ | ||||||||||||||||||||||
Total assets4 | $ | ||||||||||||||||||||||
| Capital expenditures | $ | $ | $ | $ | $ | $ | |||||||||||||||||
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| Three Months Ended June 30, 2024 | Array Wireless | Array Towers | TDS Telecom | Total | ||||||||||
| (Dollars in millions) | ||||||||||||||
| Revenues from external customers | $ | $ | $ | $ | ||||||||||
| Intersegment revenues | ||||||||||||||
| Reconciliation of revenue: | ||||||||||||||
All Other revenues1 | ||||||||||||||
| Elimination of intersegment revenues | ( | |||||||||||||
| Total operating revenues | $ | |||||||||||||
Less2: | ||||||||||||||
| Cost of services (excluding Depreciation, amortization and accretion reported below) | ||||||||||||||
| Cost of equipment and products | ||||||||||||||
| Selling, general and administrative | ||||||||||||||
| Expenses related to strategic alternatives review (included in Selling, general and administrative) | ( | ( | ||||||||||||
| Other segment items | ( | |||||||||||||
| Segment Adjusted EBITDA (Non-GAAP) | $ | $ | $ | $ | ||||||||||
| Reconciliation of Segment Adjusted EBITDA to Income before income taxes: | ||||||||||||||
All Other income (loss) before income taxes1 | ( | |||||||||||||
| Depreciation, amortization and accretion | ( | |||||||||||||
| Expenses related to strategic alternatives review (included in Selling, general and administrative) | ( | |||||||||||||
| Loss on asset disposals, net | ( | |||||||||||||
| Loss on license sales and exchanges, net | ( | |||||||||||||
| Equity earnings of unconsolidated entities | ||||||||||||||
| Interest and dividend income | ||||||||||||||
| Interest expense | ( | |||||||||||||
| Income before income taxes | $ | |||||||||||||
| Other segment disclosures | |||||||||||||||||||||||
| Three Months Ended or as of June 30, 2024 | Array Wireless | Array Towers | TDS Telecom | Segment Total | Array | All Other1 | TDS Consolidated Total | ||||||||||||||||
| Depreciation, amortization and accretion | $ | ( | $ | ( | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||
| Loss on asset disposals, net | ( | ( | ( | ( | |||||||||||||||||||
| Loss on license sales and exchanges, net | ( | ( | ( | ||||||||||||||||||||
Investments in unconsolidated entities3 | $ | ||||||||||||||||||||||
Total assets4 | $ | ||||||||||||||||||||||
| Capital expenditures | $ | $ | $ | $ | $ | $ | |||||||||||||||||
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| Six Months Ended June 30, 2025 | Array Wireless | Array Towers | TDS Telecom | Total | ||||||||||
| (Dollars in millions) | ||||||||||||||
| Revenues from external customers | $ | $ | $ | $ | ||||||||||
| Intersegment revenues | ||||||||||||||
| Reconciliation of revenue: | ||||||||||||||
All Other revenues1 | ||||||||||||||
| Elimination of intersegment revenues | ( | |||||||||||||
| Total operating revenues | $ | |||||||||||||
Less2: | ||||||||||||||
| Cost of services (excluding Depreciation, amortization and accretion reported below) | ||||||||||||||
| Cost of equipment and products | ||||||||||||||
| Selling, general and administrative | ||||||||||||||
| Expenses related to strategic alternatives review (included in Selling, general and administrative) | ( | ( | ||||||||||||
| Other segment items | ( | |||||||||||||
| Segment Adjusted EBITDA (Non-GAAP) | $ | $ | $ | $ | ||||||||||
| Reconciliation of Segment Adjusted EBITDA to Income before income taxes: | ||||||||||||||
All Other income (loss) before income taxes1 | ( | |||||||||||||
| Depreciation, amortization and accretion | ( | |||||||||||||
| Expenses related to strategic alternatives review (included in Selling, general and administrative) | ( | |||||||||||||
| Loss on asset disposals, net | ( | |||||||||||||
| Gain on sale of business and other exit costs, net | ||||||||||||||
| Gain on license sales and exchanges, net | ||||||||||||||
| Equity earnings of unconsolidated entities | ||||||||||||||
| Interest and dividend income | ||||||||||||||
| Interest expense | ( | |||||||||||||
| Income before income taxes | $ | |||||||||||||
| Other segment disclosures | ||||||||||||||||||||
| Six Months Ended June 30, 2025 | Array Wireless | Array Towers | TDS Telecom | Segment Total | All Other1 | TDS Consolidated Total | ||||||||||||||
| Depreciation, amortization and accretion | $ | ( | $ | ( | $ | ( | $ | ( | $ | ( | $ | ( | ||||||||
| Loss on asset disposals, net | ( | ( | ( | ( | ( | |||||||||||||||
| Gain on sale of business and other exit costs, net | ||||||||||||||||||||
| Gain on license sales and exchanges, net | ||||||||||||||||||||
| Capital expenditures | $ | $ | $ | $ | $ | $ | ||||||||||||||
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| Six Months Ended June 30, 2024 | Array Wireless | Array Towers | TDS Telecom | Total | ||||||||||
| (Dollars in millions) | ||||||||||||||
| Revenues from external customers | $ | $ | $ | $ | ||||||||||
| Intersegment revenues | ||||||||||||||
| Reconciliation of revenue: | ||||||||||||||
All Other revenues1 | ||||||||||||||
| Elimination of intersegment revenues | ( | |||||||||||||
| Total operating revenues | $ | |||||||||||||
Less2: | ||||||||||||||
| Cost of services (excluding Depreciation, amortization and accretion reported below) | ||||||||||||||
| Cost of equipment and products | ||||||||||||||
| Selling, general and administrative | ||||||||||||||
| Expenses related to strategic alternatives review (included in Selling, general and administrative) | ( | ( | ||||||||||||
| Other segment items | ( | |||||||||||||
| Segment Adjusted EBITDA (Non-GAAP) | $ | $ | $ | $ | ||||||||||
| Reconciliation of Segment Adjusted EBITDA to Income before income taxes: | ||||||||||||||
All Other income (loss) before income taxes1 | ( | |||||||||||||
| Depreciation, amortization and accretion | ( | |||||||||||||
| Expenses related to strategic alternatives review (included in Selling, general and administrative) | ( | |||||||||||||
| Loss on asset disposals, net | ( | |||||||||||||
| Loss on license sales and exchanges, net | ( | |||||||||||||
| Equity earnings of unconsolidated entities | ||||||||||||||
| Interest and dividend income | ||||||||||||||
| Interest expense | ( | |||||||||||||
| Income before income taxes | $ | |||||||||||||
| Other segment disclosures | ||||||||||||||||||||
| Six Months Ended June 30, 2024 | Array Wireless | Array Towers | TDS Telecom | Segment Total | All Other1 | TDS Consolidated Total | ||||||||||||||
| Depreciation, amortization and accretion | $ | ( | $ | ( | $ | ( | $ | ( | $ | ( | $ | ( | ||||||||
| Gain (loss) on asset disposals, net | ( | ( | ( | ( | ( | |||||||||||||||
| Loss on license sales and exchanges, net | ( | ( | ( | |||||||||||||||||
| Capital expenditures | $ | $ | $ | $ | $ | $ | ||||||||||||||
Numbers may not foot due to rounding.
1"All Other" represents TDS' non-reportable other business activities that do not meet the quantitative thresholds for being a reportable segment.
2The significant segment expense categories and amounts align with the segment-level information that is regularly provided to the chief operating decision maker. Intersegment expenses are included within the amounts shown.
3This item is not included in the evaluation of operating performance of the Wireless and Towers segments, and therefore is reported for "Array".
4Assets are not provided at the individual segment level for Wireless and Towers, and therefore are reported for "Array". The Array segments operate under a common capital structure, and management has historically considered its assets collectively as part of a combined wireless network.
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Note 12 Subsequent Events
The following events occurred subsequent to June 30, 2025 and are not reflected in the financial results, statements, or footnotes (unless otherwise explicitly stated) for the three and six months ended June 30, 2025.
▪On July 11, 2025, TDS Telecom entered into an agreement with a third-party to sell incumbent markets in Oklahoma for a purchase price of $43 million. The transaction is expected to close in 2025, subject to customary regulatory approvals and closing conditions.
▪On July 14, 2025, Array completed the acquisition of King Street Wireless, Inc. and Sunshine Spectrum, Inc. for a total purchase price of $17 million, of which $10 million was paid in prior periods and $7 million was paid at time of closing. Following the acquisitions, King Street Wireless, King Street Wireless, Inc., Advantage Spectrum and Sunshine Spectrum, Inc., are no longer classified as variable interest entities (VIEs). The acquisitions result in the expected realization of certain deferred tax assets, and therefore TDS expects to record a reduction to valuation allowance on deferred tax assets and associated discrete income tax benefit of approximately $50 million during the three months ending September 30, 2025.
▪On July 31, 2025, Array terminated the receivables securitization agreement. In addition, the USCC Master Note Trust, a special purpose entity used to facilitate securitized borrowings using equipment installment plan receivables, was dissolved and, therefore, the entity will no longer be classified as a VIE.
▪On August 1, 2025, the sale of the wireless operations to T-Mobile closed and Array received cash proceeds of $2,629 million. TDS expects a cash income tax liability on the T-Mobile transaction of between $125 million and $175 million. The transaction 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 cash portion of the purchase price was also reduced by unearned contingent consideration of $89 million as well as other purchase price adjustments outlined in the Securities Purchase Agreement. The final cash proceeds are subject to adjustment according to the terms and conditions of the Securities Purchase Agreement. Array expects to record exit and disposal costs and recognize a loss on the transaction that will be based on the carrying value of net assets sold as of the close date. As of June 30, 2025, the carrying value of the net assets sold to T-Mobile was approximately $2,400 million.
▪The debt exchange offering period concluded on August 1, 2025 and resulted in the exchange of $1,680 million of long-term debt comprised of the following Array notes: $489 million of 6.7 % Senior Notes, $394 million of 6.25 % Senior Notes, $402 million of 5.5 % March 2070 Senior Notes and $395 million of 5.5 % June 2070 Senior Notes. As a result, on August 1, 2025, after the debt exchange, Array retained $364 million of senior notes, consisting of $55 million 6.7% Senior Notes, $106 million 6.25% Senior Notes, $98 million 5.5% March 2070 Senior Notes, and $105 million 5.5% June 2070 Senior Notes. The unamortized discount and debt issuance costs related to the exchanged debt was $48 million and will be recorded as interest expense during the three months ending September 30, 2025.
▪On August 1, 2025, 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, for a minimum of 15 years, space on a minimum of 2,015 existing or to-be-constructed towers owned by Array. The MLA also provided that T-Mobile extend the license term for approximately 600 towers owned by Array for a new 15-year term commencing on August 1, 2025. In addition, the MLA provides terms and conditions for T-Mobile, at its option, to revert certain equipment back to Array and would make Array responsible for any decommissioning, remediation, restoration, or disposal costs of such assets.
▪The closing of the T-Mobile transaction triggered the recognition of certain cash and non-cash obligations. Such obligations include contingent advisory fees, employee compensation and severance, employee stock award costs, debt extinguishment, income tax expense, administrative costs, restructuring expenses and other wind down costs. In future periods, Array also may incur significant decommissioning costs for certain towers and equipment, and such decommissioning costs may also include remaining obligations under related ground leases. These costs may have a significant impact on Array's financial statements in future periods.
▪On August 1, 2025, the Array Board of Directors declared a special dividend per Common and Series A outstanding share of $23.00 82.5 % of the equity of Array as of June 30, 2025, will receive its pro-rata share of the special dividend.
▪On August 1, 2025, certain wireless service companies in Iowa that are not consolidated into the Array financial statements but are accounted for as equity method investments sold specific wireless assets and wireless customers to T-Mobile under separate asset purchase agreements. Array expects to receive a distribution from these transactions in August 2025.
▪On August 1, 2025, TDS terminated the commitment for the $75 million unused borrowing capacity under its unsecured term loan agreements.
▪On August 4, 2025, Array repaid the entire outstanding borrowings under all of its term loan agreements and export credit financing agreement of $863 million. Array expects to draw $325 million from its term loan agreement in August 2025.
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Telephone and Data Systems, Inc.
Additional Required Information
Controls and Procedures
Evaluation of Disclosure Controls and Procedures
TDS maintains disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the Exchange Act)) that are designed to ensure that information required to be disclosed in its reports filed or submitted under the Exchange Act is processed, recorded, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to TDS’ management, including its principal executive officer and principal financial officer, as appropriate, to allow for timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives.
As required by SEC Rules 13a-15(b), TDS carried out an evaluation, under the supervision and with the participation of management, including its principal executive officer and principal financial officer, of the effectiveness of the design and operation of TDS’ disclosure controls and procedures as of the end of the period covered by this Quarterly Report. Based on this evaluation, TDS’ principal executive officer and principal financial officer concluded that TDS' disclosure controls and procedures were effective as of June 30, 2025, at the reasonable assurance level.
Changes in Internal Control Over Financial Reporting
There have been no changes in internal controls over financial reporting that have occurred during the three months ended June 30, 2025, that have materially affected, or are reasonably likely to materially affect, TDS’ internal control over financial reporting.
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Legal Proceedings
In April 2018, the United States Department of Justice (DOJ) notified TDS that it was conducting inquiries of Array and TDS under the federal False Claims Act relating to Array’s participation in wireless spectrum license auctions 58, 66, 73 and 97 conducted by the FCC. Array is or was a limited partner in several limited partnerships which qualified for the 25% bid credit in each auction. The investigation arose from two civil actions under the Federal False Claims Act brought by private parties in the U.S. District Court for the Western District of Oklahoma. In November and December 2019, following the DOJ’s investigation, the DOJ informed TDS and Array that it would not intervene in the above-referenced actions. Subsequently, the private party plaintiffs decided to continue the actions on their own. In July 2020, these actions were transferred to the U.S. District Court for the District of Columbia. In March 2023, the District Court for the District of Columbia granted Array’s motions to dismiss both actions. The private party plaintiffs appealed the district court’s orders granting the motions to dismiss. On February 11, 2025, the U.S. Court of Appeals for the D.C. Circuit affirmed the dismissal of one matter. In that matter, the private party plaintiffs petitioned the D.C. Circuit to rehear the appeal, but on April 8, 2025, the appellate court denied the petitions. The private party plaintiffs asked the Supreme Court of the United States for an extension of time to file a petition for a writ of certiorari, which the Court granted by extending the time for filing the petition until September 5, 2025. The second matter remains pending before the appellate court. TDS and Array believe that Array’s arrangements with the limited partnerships and the limited partnerships’ participation in the FCC auctions complied with applicable law and FCC rules. At this time, TDS cannot predict the outcome of the matter remaining before the appellate court.
On May 2, 2023, a putative stockholder class action was filed against TDS and Array and certain current and former officers and directors in the United States District Court for the Northern District of Illinois. An Amended Complaint was filed on September 1, 2023, which names TDS, Array, and certain current Array officers and directors as defendants, and alleges that certain public statements made between May 6, 2022 and November 3, 2022 (the potential class period) regarding, among other things, Array’s business strategies to address subscriber demand, violated Section 10(b) and 20(a) of the Securities Exchange Act of 1934. The plaintiff seeks to represent a class of stockholders who purchased TDS equity securities during the potential class period and demands unspecified money damages. On November 1, 2024, the court issued a Memorandum Opinion and Order granting in part and denying in part the defendants' motion to dismiss the lawsuit. On February 28, 2025, the parties reached a settlement in principle. On April 25, 2025, the plaintiff filed a motion for preliminary approval of the settlement. A final approval hearing date is set for September 2025.
On June 18, 2024, a stockholder derivative lawsuit was filed in the Circuit Court of Cook County, Illinois, Chancery Division against Array, certain TDS and Array directors and officers, and nominal defendant TDS. The derivative lawsuit took issue with the same public statements made between May 6, 2022 and November 3, 2022, alleging that the fact that the statements were made was a breach of fiduciary duty on the part of the officer and director defendants, and brought claims for indemnification and contribution against the officer and director defendants and Array. In addition to indemnification and contribution, the plaintiff sought money damages and the implementation of certain governance proposals. On May 20, 2025, the parties filed an agreed order dismissing the case with prejudice as to the named plaintiff and otherwise without prejudice, and the order was granted by the court on May 22, 2025.
On January 31, 2025, a second stockholder derivative lawsuit was filed in the Circuit Court of Cook County, Illinois, Chancery Division against certain TDS and Array directors and officers, and nominal defendant TDS. The derivative lawsuit makes similar claims as in the derivative lawsuit filed in 2024, and seeks similar relief. On April 1, 2025, the parties in both Cook County derivative suits jointly filed a motion seeking to consolidate the two lawsuits. The court denied the motion for consolidation on May 6, 2025. On July 21, 2025, a motion to intervene in the lawsuit was filed by the stockholder plaintiff who filed a stockholder derivative lawsuit in the United States District Court for the Northern District of Illinois and subsequently dismissed that lawsuit. The defendants filed a motion to dismiss the lawsuit on July 23, 2025.
On March 4, 2025, a third stockholder derivative lawsuit was filed in the United States District Court for the Northern District of Illinois against certain TDS and Array directors and officers, and nominal defendant TDS. The derivative lawsuit made similar claims as those in the Cook County derivative lawsuits, and in addition alleged claims against the director and officer defendants for violations of Section 10(b) of the Securities Exchange Act of 1934, and sought similar relief to the Cook County derivative lawsuits. On June 4, 2025, the plaintiff filed a notice of voluntary dismissal of the lawsuit without prejudice and on June 6, 2025, the court dismissed the case without prejudice.
TDS is unable at this time to determine whether the outcome of these actions would have a material impact on its results of operations, financial condition, or cash flows. TDS intends to contest plaintiffs' claims vigorously on the merits.
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Unregistered Sales of Equity Securities and Use of Proceeds
On August 2, 2013, the Board of Directors of TDS authorized, and TDS announced by Form 8-K, a $250 million stock repurchase program for TDS Common Shares. Depending on market conditions, such shares may be repurchased in compliance with Rule 10b-18 of the Exchange Act, pursuant to Rule 10b5-1 under the Exchange Act, or pursuant to accelerated share repurchase arrangements, prepaid share repurchases, private transactions or as otherwise authorized. This authorization does not have an expiration date. TDS did not determine to terminate the foregoing Common Share repurchase program, or cease making further purchases thereunder, during the second quarter of 2025.
The maximum dollar value of shares that may yet be purchased under this program was $132 million as of June 30, 2025. There were no purchases made by or on behalf of TDS, or any open market purchases made by any "affiliated purchaser" (as defined by the SEC) of TDS, of TDS Common Shares during the quarter covered by this Form 10-Q.
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Other Information
Rule 10b5-1 Trading Arrangements
During the three months ended June 30, 2025, none of TDS’ directors or officers (as defined in Rule 16a-1(f) under the Exchange Act) has adopted terminated
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Exhibits
| Exhibit Number | Description of Documents | ||||
| Exhibit 4.1 | Twelfth Supplemental Indenture, dated as of June 17, 2025, between the Registrant and The Bank of New York Mellon Trust Company, N.A., related to the Registrant’s 6.700% Senior Notes due 2033, is hereby incorporated by reference from Exhibit 4.1 to Array's Current Report on Form 8-K dated June 17, 2025. | ||||
| Exhibit 4.2 | Thirteenth Supplemental Indenture, dated as of June 17, 2025, between the Registrant and The Bank of New York Mellon Trust Company, N.A., related to the Registrant’s 6.250% Senior Notes due 2069, is hereby incorporated by reference from Exhibit 4.2 to Array's Current Report on Form 8-K dated June 17, 2025. | ||||
| Exhibit 4.3 | Fourteenth Supplemental Indenture, dated as of June 17, 2025, between the Registrant and The Bank of New York Mellon Trust Company, N.A., related to the Registrant’s 5.500% Senior Notes due 2070 (March), is hereby incorporated by reference from Exhibit 4.3 to Array's Current Report on Form 8-K dated June 17, 2025. | ||||
| Exhibit 4.4 | Fifteenth Supplemental Indenture, dated as of June 17, 2025, between the Registrant and The Bank of New York Mellon Trust Company, N.A., related to the Registrant’s 5.500% Senior Notes due 2070 (June), is hereby incorporated by reference from Exhibit 4.4 to Array's Current Report on Form 8-K dated June 17, 2025. | ||||
| Exhibit 4.5 | Third Amendment to Credit Agreement, between TDS as Borrower and Export Development Canada as Lender, dated as of June 20, 2025. | ||||
| Exhibit 4.6 | Fourth Amended and Restated Credit Agreement among the Registrant, CoBank, ACB, as Administrative Agent, and the other lenders party thereto, dated June 25, 2025, is hereby incorporated by reference Exhibit 4.1 to Array's Current Report on Form 8-K dated June 25, 2025. | ||||
| Exhibit 10.1 | Form of TDS 2022 Long-Term Incentive Plan 2025 Performance Share Award Agreement. | ||||
| Exhibit 10.2 | Form of TDS 2022 Long-Term Incentive Plan 2025 Restricted Stock Unit Award Agreement. | ||||
| Exhibit 10.3 | Transition Agreement between TDS Telecom Service LLC and James Butman, is hereby incorporated by reference from Exhibit 10.1 to TDS' Current Report on Form 8-K dated July 3, 2025. | ||||
| Exhibit 10.4* | Master License Agreement, dated as of August 1, 2025, between ADI Leasing Company, LLC and T-Mobile USA, Inc., is hereby incorporated by reference from Exhibit 10.1 to TDS' Current Report on Form 8-K dated July 31, 2025. | ||||
| Exhibit 31.1 | Principal executive officer certification pursuant to Rule 13a-14 of the Securities Exchange Act of 1934. | ||||
| Exhibit 31.2 | Principal financial officer certification pursuant to Rule 13a-14 of the Securities Exchange Act of 1934. | ||||
| Exhibit 32.1 | Principal executive officer certification pursuant to Section 1350 of Chapter 63 of Title 18 of the United States Code. | ||||
| Exhibit 32.2 | Principal financial officer certification pursuant to Section 1350 of Chapter 63 of Title 18 of the United States Code. | ||||
| Exhibit 101.INS | XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. | ||||
| Exhibit 101.SCH | Inline XBRL Taxonomy Extension Schema Document | ||||
| Exhibit 101.PRE | Inline XBRL Taxonomy Presentation Linkbase Document | ||||
| Exhibit 101.CAL | Inline XBRL Taxonomy Calculation Linkbase Document | ||||
| Exhibit 101.LAB | Inline XBRL Taxonomy Label Linkbase Document | ||||
| Exhibit 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | ||||
| Exhibit 104 | Cover Page Interactive Data File - the cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the inline document. | ||||
*Portions of this Exhibit have been omitted pursuant to Item 601(b) of Regulation S-K promulgated under the Exchange Act.
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Form 10-Q Cross Reference Index
| Item Number | Page No. | ||||||||||||||||
| Part I. | Financial Information | ||||||||||||||||
Item 1. | Financial Statements (Unaudited) | 46 | - | 50 | |||||||||||||
Notes to Consolidated Financial Statements | 54 | - | 65 | ||||||||||||||
Item 2. | Management's Discussion and Analysis of Financial Condition and Results of Operations | 1 | - | 33 | |||||||||||||
Item 3. | Quantitative and Qualitative Disclosures About Market Risk | 45 | |||||||||||||||
Item 4. | Controls and Procedures | 71 | |||||||||||||||
| Part II. | Other Information | ||||||||||||||||
Item 1. | Legal Proceedings | 72 | |||||||||||||||
Item1A. | Risk Factors | 35 | |||||||||||||||
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 73 | |||||||||||||||
Item 5. | Other Information | 74 | |||||||||||||||
Item 6. | Exhibits | 75 | |||||||||||||||
Signatures | 77 | ||||||||||||||||
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| TELEPHONE AND DATA SYSTEMS, INC. | |||||||||||||||||
| (Registrant) | |||||||||||||||||
| Date: | August 11, 2025 | /s/ Walter C. D. Carlson | |||||||||||||||
| Walter C. D. Carlson President and Chief Executive Officer (principal executive officer) | |||||||||||||||||
| Date: | August 11, 2025 | /s/ Vicki L. Villacrez | |||||||||||||||
| Vicki L. Villacrez Executive Vice President and Chief Financial Officer (principal financial officer) | |||||||||||||||||
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FAQ
What did TDS (TDS) report for consolidated operating revenue in Q2 2025?
TDS reported consolidated operating revenues of $1,186 million for the quarter, a 4% decrease year-over-year.
How much cash did Array/TDS receive from the sale to T-Mobile?
Array received $2,629 million in cash proceeds from the sale of its wireless operations to T-Mobile as disclosed in subsequent events.
What is the expected tax impact from the T-Mobile transaction for TDS/Array?
TDS disclosed an expected cash income tax liability on the T-Mobile transaction of $125 million to $175 million.
Did the Array transaction affect Array's debt levels?
Yes. The debt exchange resulted in $1,680 million of Array long-term debt exchanged, leaving $364 million of Array senior notes outstanding after the exchange.
Will TDS or Array pay a dividend after the Array sale?
Array's Board declared a special dividend of $23.00 per Common and Series A share for shareholders of record on August 11, 2025, payable August 19, 2025; TDS owns 82.5% of Array and will receive its pro-rata share.
How did TDS' free cash flow perform in the first half of 2025?
TDS reported non-GAAP Free cash flow of $301 million for the six months ended June 30, 2025 (Cash from operations less capital and software cash payments).
What are the key outstanding contingent items related to Array's strategic review?
The filing explicitly states pending spectrum sales to Verizon and AT&T remain subject to regulatory approval and customary closing conditions, and Array expects additional costs related to separation, decommissioning and wind-down.
Telephone & Data Sys Inc
NYSE:TDS
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4.31B
97.91M
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5.43%
Telecom Services
Telephone Communications (no Radiotelephone)
United States
CHICAGO