Hello and welcome to the TDS and Array 3rd Quarter 2025 Operating Results Conference Call. After today's prepared remarks, we will host a question and answer session. If you would like to ask a question, please raise your hand. If you have dialed into today's call, please press star 9 to raise your hand and star 6 to unmute. I would now like to turn the call over to John Toomey. Please go ahead.

Good morning and thank you for joining us today. I'm pleased to be here in my new role as treasurer and vice president of corporate relations. I've been with TDS for 25 years, serving as treasurer since 2018, and I look forward to meeting and talking with you as part of my expanded role. We want to make you aware of the presentation that has been prepared to accompany our comments this morning, which you can find on the investor relations sections of the TDS and Array websites. With me today and offering prepared comments are from TDS, Walter Carlson, President and CEO, Vicki Villacres, Executive Vice President and Chief Financial Officer, from TDS Telecom, Ken Dixon, President and CEO, Chris Botfeld, Vice President of Finance, and from Array Digital Infrastructure, Doug Chambers, Interim President and CEO. This call is being simultaneously webcast on the TDS and Array Investor Relations websites. Please see the websites for the slides referred to on this call, including non-GAAP reconciliations. TDS and Array filed their SEC Forms 8K, including the press releases in our 10-Qs earlier this morning. Finally, as shown on slide 2, the information set forth in the presentation and discussed during this call contains statements about expected future events and financial results that are forward-looking and subject to risks and uncertainties. Please review the Safe Harbor paragraphs in our press releases and the extended version included in our SEC filings. I will now turn over the call to Walter Carlson.

Thanks, John, and good morning, everyone. We are pleased to report to you on our third quarter performance and the progress we have made on our priorities for 2025. Our priorities for 2025 are set forth on slide three. As we reported to you in August, the T-Mobile transaction closed on August 1. The close of that transaction and the subsequent transition activities have gone well, And the successful close has enabled us to continue our progress on all our other priorities. Array Digital Infrastructure has seamlessly transitioned into an independent tower company and has hit the ground running, already showing nice growth, as Doug Chambers will highlight shortly. Doug has done an excellent job leading Array during this transition. With Array established as a stand-alone tower company, we are pleased to name Anthony Carlson as the President and CEO to lead the Array team into the future. Anthony has an outstanding business background and has led significant teams at both U.S. Cellular and TDS Telecom for the past six years. We are confident that he will be an excellent leader for Array. Turning to TDS Telecom, the third quarter was Ken Dixon's first full quarter as its CEO. TDS Telecom continues to be laser focused on its fiber transformation. In the quarter, the company achieved an important milestone of one million fiber addresses. You'll hear more from Ken and Chris Bothveld on this achievement and TDS Telecom's other accomplishments later in the presentation. TDS has also strengthened its capital structure, having received a $1.6 billion special dividend from Array in August, and we expect to receive additional proceeds after the close of the pending spectrum transactions. The proceeds received to date have enabled the substantial paydown of debt and will support the existing fiber expansion program at TDS Telecom. As we receive the proceeds from the additional spectrum sales, we expect to further expand our fiber program and to use a significant portion to support the new $500 million share repurchase program that the company announced this morning. Vicki Villekres will provide additional details on our capital allocation program during her remarks. And lastly, we are keenly focused on our culture. Transformational changes are never easy, but TDS has a strong culture and our associates are effectively executing against our objectives through their continued hard work, collaboration, and professionalism. I want to personally thank all of the teams whose efforts have put the enterprise in this strong position heading into 2026. I will

now turn the call over to Vicki. Thank you Walter and good morning everyone. At TDS we are focusing heavily on capital allocation decisions in light of the U.S. cellular transaction to T-Mobile, the debt reduction at TDS and Array and the anticipated closing of Array's spectrum sales to AT&T and Verizon within the next year. At Array we anticipate as we have disclosed previously that cash received upon closing of the AT&T and Verizon transactions will be used subject to the determination of the Array Board primarily to fund ongoing business operations and special dividends. We anticipate the pending AT&T transaction of $1 billion to close either in the fourth quarter of 2025 or the first half of 2026, depending on government approval. While any decision on dividends will be made by the Array Board, we anticipate that following the closing of the AT&T transaction, the Array Board would declare a special dividend in the amount of approximately $10 per share. At TDS, our capital allocation plan has three priorities. The first is to invest in our fiber business. As Walter highlighted, we continue to believe that our fiber business has numerous opportunities for investments with attractive return profiles we will use a portion of the anticipated special dividend proceeds to fund both our current fiber program and additional fiber builds that are incremental to our current goals these additional opportunities are mostly edge out communities adjacent to our markets and could be at least several hundred thousand service addresses or more we We believe there's an immediate window of opportunity to plant our flag and pursue investments in communities without a fiber provider. We are currently working through the business cases and will update you in February. Our second priority is to achieve inorganic growth through M&A. We intend to be opportunistic and disciplined, only considering those opportunities that are accretive and meet our return objectives. To that end, we would specifically be interested in smaller, highly synergistic, accretive M&A fiber opportunities, particularly adjacent to our existing markets. As we have demonstrated in the past, TDS will remain financially disciplined and business case driven in any M&A pursuits. Clustering to achieve synergies will continue to be an important strategy at TDS Telecom. company has recently divested ILAC markets that were not a strategic fit to its fiber objectives. Our third priority is to return capital directly to shareholders. In September, TDS began repurchasing its stock and bought back a little over 1 million shares during the third quarter under its existing stock repurchase authorization. In addition, TDS's board authorized a 500 million increase to our existing share repurchase program, leaving the remaining authorization intact. This authorization reflects the board's confidence in the company's long-term strategy and the belief that repurchasing TDS shares at present valuation is an attractive use of the company's capital. The timing and manner will be determined at the company's discretion and will be dependent on closings of the announced spectrum transactions as well as general business and market conditions. We believe share repurchase is tax-efficient for our shareholders while also providing flexibility for the company. To be clear, TDS also expects to retain its current regular quarterly dividend. All decisions regarding dividends in future quarters, of course, are subject to the determination of our board. I think these balanced capital allocation priorities will make TDS stronger, both operationally as we make investments in our fiber business and by returning capital to our shareholders in a measured way. Thank you, and I now will turn the call over to Ken Dixon to discuss his vision for TDS's fiber business.

Thank you, Vicki. Good morning, everyone. My first quarter at TDS Telecom has been fantastic. One highlight, of course, was achieving one million fiber passings. It was a significant milestone for the business and years in the making. I have also enjoyed traveling to our markets and listening to our TDS frontline associates who are executing every day on our fiber build plans and growth strategy. Before we get into the slides, I'd like to take a moment to reaffirm our strategic priorities. These include executing on our build plan, accelerating fiber penetration, advancing our business transformation program, and delivering an excellent customer experience. These pillars are central to our long-term growth strategy and will continue to shape our path forward. Turning to slide 6, we delivered 42,000 fiber addresses in the quarter, which puts us just over halfway to our goal of 150,000 service addresses for the full year. Consistent with historical trends, we expect to have our strongest address delivery here in the fourth quarter. We generated 11,200 residential fiber net ads in the quarter, contributing to a 19% growth in residential fiber connections since last year. Fiber net ads have improved sequentially every quarter this year. On the sales and build front, we recognize that performance isn't where we want it to be. We are taking actions to change this trajectory. Since the end of the second quarter, we have nearly doubled the number of construction crews we have across our markets and are continuing to increase crew counts through the end of the year. We are focused on executing our build plan so we have a large funnel of addresses to sell into and increasing penetration rates in our existing launched fiber areas. And lastly, our enhanced ACAM or EACAM builds are very well underway, which will help bring fiber to the most rural markets in our footprint over the next several years. On the next slide, I want to share a little bit more about EACAM, which will be absolutely a transformative program to our network, our business, and our customers. First, this program enables us to replace a substantial portion of legacy copper infrastructure. This will add approximately 300,000 new fiber addresses, which includes EACAM addresses, as well as addresses that will be picked up along the route. This directly supports our long-term goal of reducing copper to less than 5% of our total network footprint. This will greatly improve network reliability and the customer experience. As construction activity ramps up, we expect to see strong copper-to-fiber conversions, as well as new customer growth throughout our rural footprint. Second, the program delivers over $1.2 billion in regulatory revenue support over a 15-year period, providing a funding stream that supports this continued investment in fiber. Third, these markets are uniquely positioned for success. With no gig-capable competitors, we anticipate penetration rates between 65% and 75%, which translates into very attractive returns. In short, EACAM is an outstanding program strategically, operationally, and financially. It allows us to bring world-class fiber services to communities that were previously cost-prohibitive, while delivering meaningful value to both our customers and to our business. Before turning over the call, I want to say how much I've enjoyed my first quarter here. We have a lot of work to do, but I'm excited about the direction we're heading and the opportunities ahead as we transform TDS Telecom into a fiber-centric company. I'll now let Chris Boffeld take us through the quarterly results. Chris.

Thanks, Ken. Turning to slide 8, you can see our progress towards the long-term fiber goals we shared earlier this year. We are targeting 1.8 million marketable fiber service addresses, and we crossed the 1 million fiber address mark this quarter. Across our entire footprint, our goal is to have 80% of total addresses served by fiber, compared to 55% today. We expect this percentage to grow as our EACAM deployments ramp. And finally, we expect to offer speeds of 1 gig or higher to at least 95% of our footprint. footprint. We finished the quarter with 76% of our footprint at gig speeds. As a reminder, we will use a combination of fiber and coax technologies to reach this target. Turning to slide 9, the graph on the left shows the most recent five quarters of fiber service address delivery. Address delivery typically increases throughout the year given seasonality impacts. As Ken said, we are behind schedule for the year and we are working to get our build plan back on track and are expecting the fourth quarter to be the strongest of the year the graph on the right shows the significant growth in our fiber footprint nearly doubling over the last three years turning to slide 10 the graph on the left shows the last five quarters of residential fiber net additions we delivered 11 200 this quarter up eight percent year over year we have seen year over year and sequential improvement in residential fiber net ads this quarter and we expect to see improvement in fiber net ads in the fourth quarter the graph on the right highlights our residential fiber connection growth connections have nearly doubled over the last three years driven by our expansion efforts and copper to fiber conversions as we continue to invest in fiber we expect broadband connection growth to continue Broadband penetration remains a key metric for our fiber program, with our expansion markets hitting 20 to 25 percent penetration on average within the first 12 months of launch and approximately 40 percent in steady state by year four to five. On slide 11, average residential revenue per connection was up slightly year over year. Consistent with industry trends, fewer broadband customers are bundling with our video product which dilutes this metric. As we shared earlier this year we anticipate more modest growth in residential revenue per connection as we focus on driving penetration the chart on the right shows our revenue comparison year over year as a reminder divested markets accounted for a six million dollar decrease in revenues compared to the prior year now let's talk about revenues on slide 12. total operating revenues were down three percent in the quarter compared to prior year excluding the impact of divestitures revenues were down one percent driven by continued declines in our legacy cable and copper markets partially offset by growth from our fiber investments adjusted ebitda is down three percent year over year which is pressured by the divestitures and legacy revenue stream declines offset in part by discipline cost control a key priority for the company is to drive business transformation and we are starting to see benefits from these efforts to improve our cost structure capital expenditures are up compared to the same period last year due to spending on the ea cam program as well as higher expansion address delivery we expect both capex and service address delivery to continue to increase in the fourth quarter as we accelerate construction to meet our full year address target over 80 of our 2025 capital expenditures will be focused on fiber slide 13 shows our 2025 guidance which remains unchanged from last quarter in closing ken and i want to thank the entire tds telecom team we have significant opportunities and transformation ahead of us and it would not be possible without the hard work and dedication of our associates i will now turn the call over to doug thanks chris good morning the third quarter

was momentous as we closed the sale of our wireless operations and returned significant value to shareholders in the form of a special dividend we also launched our operations as an independent tower company and the team has done an outstanding job of executing a seamless transition and delivering strong results, which were bolstered by the new T-Mobile MLA that commenced on August 1st. In addition, we continue to make progress on our process to opportunistically monetize our spectrum as we enter it into additional agreements to sell spectrum. As a reminder, Array's business has three significant value drivers, retained wireless spectrum tower operations and non-controlling investment interests further our strategic imperatives included on slide 17 continue to be focused on fully optimizing our tower operations and monetizing our spectrum i will discuss these value drivers and progress on our strategic imperatives as i walk through our third quarter results from a financial reporting standpoint given the divestiture of our wireless business in the third quarter results from wireless operations including the book loss on sale of such operations are presented as discontinued operations in our financial statements this discussion is solely focused on our continuing operations and therefore excludes wireless operations results and the related book loss on sale further now that we are an independent tower company we have adjusted our reporting to include relevant tower company financial measures including adjusted free cash flow which is similar to the adjusted funds from operations or a ffo measure reported by other tower companies and also includes the cash flows from our non-controlling investment interests which are a significant portion of a raised total cash flows starting with an update on our spectrum monetization process as shown on slide 18 we have made substantial progress and to date have reached agreements to monetize 70 of our spectrum holdings in conjunction with the sale of our wireless operations on august 1st we conveyed 30 of our spectrum to t-mobile in addition as previously announced we signed agreements to sell spectrum to Verizon and AT&T in separate transactions in exchange for $1 billion on each transaction. In August and October of 2025, we signed additional agreements with T-Mobile to sell Spectrum for total gross proceeds of $178 million. This primarily includes the sale of 700 MHz A-block and the exercise of approximately 80% of T-Mobile's call option on the 600 MHz spectrum. The pending spectrum transactions are subject to regulatory approval and closing conditions. As it relates to expected close dates on the pending spectrum transactions, we expect the timing of regulatory approval to be impacted by the ongoing federal government shutdown. Given this, as mentioned by Vicki, we expect the pending AT&T transaction to close in either the fourth quarter of 2025 or the first half of 2026, and the remaining transactions to close in 2026. Our remaining spectrum principally consists of C-band spectrum, and we continue to believe this is attractive beachfront spectrum for 5G, and there is an existing ecosystem so carriers are easily able to put this spectrum to use. And although there are build-out requirements for this spectrum, the first one does not apply until 2029, so there is plenty of time to monetize this spectrum. Turning to slide 21, the T-Mobile MLA significantly increases our revenue, and we are focused on partnering with T-Mobile to ensure the integration process is well executed. Growing co-location revenue outside of the T-Mobile MLA also remains a priority, and both revenue growth and new co-location application volume remain strong. Overall, site rental revenue, excluding non-cash amortization components, grew 68% on a year-over-year basis in the third quarter of 2025, and excluding the impact of T-Mobile revenue on interim sites, grew 46%. This reflects both the significant impact of the MLA with T-Mobile, as well as strong revenue growth from other tenants. Further, our decision to insource our sales and intake operations at the beginning of 2025 has helped enhance our sales results, as new co-location applications, excluding T-Mobile applications which are subject to the MLA, have increased 125% on a year-to-date basis through September 30, 2025, relative to 2024. Related to site rental revenues, we received a letter dated September 2025 from DISH Wireless, whereby DISH asserts its master lease agreement with Array has been impacted by unforeseeable actions by the FCC, and therefore DISH believes it is relieved of its obligations under the MLA, and despite this, DISH plans to continue to operate certain sites for a period of time. Array believes DISH's assertions are completely without merit, and DISH's obligations under the MLA remain intact. Array plans to enforce DISH's performance and payment obligations under the MLA. Array expects to recognize approximately $7 million of site rental revenue from the DISH MLA in 2025, and DISH has obligations at similar levels from 2026 through 2031, with a declining revenue commitment in 2032 through 2035. Slide 22 summarizes the raised financial results. In the third quarter of 2025, we estimate approximately 40% of selling general and administrative, or SG&A, expenses include costs to support the following activities. Wireless operations prior to divestiture that are not reflected as discontinued operations, wireless operations wind-down costs incurred after the August 1st close date, administrative expenses associated with managing spectrum assets, and expenses associated with the ongoing strategic alternatives review. We expect legacy wireless operations wind-down expenses to persist into the first half of 2026 at levels similar to the third quarter of 2025, and while some wind-down expenses will remain after that time, we expect such expenses to begin declining in the second half of 2026. turning to slide 24 t-mobile has until january 2028 to finalize a selection of 2015 committed sites under the new mla based on these final selections array expects to have between 800 to 1800 tenantless or naked towers we are aggressively continuing our efforts to lease these naked towers and we'll also plan on working with our ground lessors to rationalize ground rents based on the economics associated with naked towers over time based on the results of these efforts and the projected future lease potential of each tower we will assess the economics of each naked tower and evaluate alternatives including potential decommissioning Slide 25 summarizes the result of non-controlling investment interests. As noted, historically, greater than 80% of our investment income and related distributions are attributable to four wireless operating entities operated and managed by Verizon and AT&T. Investment income and distributions for the nine months ended September 30, 2025, were impacted by several events, including the following two items. First, we owned non-controlling interest in three additional entities that had wireless operations and have tower operations in the state of Iowa. These three entities sold their wireless operations to T-Mobile in three separate transactions on August 1, 2025, the same date that Array sold its wireless operations to T-Mobile. As a result of these three separate transactions, Array recognized $34 million of equity income and received $42 million of distributions in the third quarter of 2025. Second, in the first half of 2025, Array received distributions from Verizon-managed entities of $25 million related to proceeds from Verizon's prepaid tower lease transaction with Vertical Bridge. I want to thank the entire Array and TDS teams who have worked tirelessly to close the sale of our wireless operations and stand up an independent tower company. It has been a transformational and highly successful quarter. I also want to thank the Array Board for their trust in me to lead Array for the past several months. It has been an absolute pleasure to lead our outstanding Array team. Lastly, I am pleased to turn the reins over to Anthony. I had the pleasure of working alongside Anthony while we were both members of the U.S. Cellular Leadership Team and have great confidence in Anthony as both an outstanding strategic thinker and leader, and combined with the existing Array team, I am confident that Array has a very bright future. I will now turn the call back to Walter.

Thank you, Doug. As you can see, TDS is in a vital period of transformative change. The successful close of the T-Mobile transaction has unlocked tremendous value. enabling us to expand and deepen our fiber program, stand up a strong and growing tower business, and strengthen our capital structure. We are making good progress, but there is much more to do. Let me again thank all of the outstanding associates across the TDS enterprise for the fine work you do every day to serve our customers and advance our business. Operator, please now open the line for questions.

Thank you. We will now begin the question and answer session. If you would like to ask a question, please raise your hand now. If you have dialed into today's call, please press star 9 on your telephone keypad to raise your hand and star 6 to unmute yourself when it is your turn to speak. Please stand by while we compile the Q&A roster. Your first question comes from the line of Rick Prentiss with Raymond James and Associates. Please go ahead.

Thanks. Good morning, everybody. Good morning, Rick. Hey, a lot of moving pieces, but a lot of interesting things going on here. First, Doug, I've enjoyed working with you. Good luck in the future and i appreciate the adjusted free cash flow similar to affo uh calculation that you know we've been asking for so thanks for that again thanks for working with you thanks rick i appreciate it yeah um vicky i think you know one of the more interesting things is is obviously uh we're looking for an update in february on the fiber plan um you mentioned several hundred thousand or more might be added so that helps us frame it a little bit one of the other things we're interested in is can you give us some cohort analysis or something to take a look at how the older markets of fiber say one two three four years ago are doing because it's it's kind of blurred right you guys are spending capex you're spending opex and trying to understand the progress towards those penetration rates so any thoughts on on when you give that update in february can we start getting some maybe some cohort analysis or some thoughts on how the

prior markets are doing. Yeah, thank you, Rick. Two piece parts to your question. Let me take the first one and then address the several hundred thousand fiber opportunity. First of all, we are a fiber-centric company and we love the markets that we're operating in. And so we see a lot of opportunity and I'm going to have Ken talk about some of that opportunity he sees. as he's joined the company. We are currently right now in the process of evaluating our business cases and our engineering designs as we evaluate those opportunities. And we do see several hundred thousand or more, and we'll come back and update investors in February on what that looks like from a capital allocation perspective. Second, on the cohort, penetration. We've heard you loud and clear for sure. And, you know, to be honest, we did go back and we looked at what the industry is reporting and we didn't find a lot. You know, there seems to be little reporting out there. And quite frankly, it wasn't enough information really to set a clear industry standard for us. With that said, with Ken just coming on board, We are internally aligning as a team as we're ramping up our fiber builds in a number of markets, evaluating our edge-out opportunities. And so we're aligning on what the appropriate success measures are going to look like.

All right. Good morning. As Vicki said, I'm very bullish on the markets that we've selected. I think they're fantastic. The EACAM program, along with our expansion program, gives us tremendous fiber opportunities going forward, especially to convert our copper to fiber transition. So great programs all along. But as Vicki said, when we look at these expansion markets as we've been first to fiber and have planted our flag, we look around and we see adjacent neighborhoods, adjacent communities that candidly do not have a fiber provider, and we can continue to be first to fiber. And so we're evaluating all those markets now, but we do see several hundred thousand as

an opportunity. Okay. I think one of the other interesting and exciting things, actually, Vicki, was the stock buyback program. Historically, TDSUSM, now AD, have not done a lot of buybacks except for really kind of handling stock comp kind of creep. So it sounds like this is something, a big change for you guys, that you are seeing, you did something in September, you're seeing value in the stock. How should we think about that sizing of the 500 million, the execution of that? And am I right to interpret that this is actually a pretty big change for TDS?

Yes. Well, thanks, Rick. First off, I think that this move and the authorization, the recent authorization by the board, really demonstrates the board's confidence in the company's long-term strategy and belief that, you know, repurchasing its shares is an attractive use of capital. I see it as a really important part of our capital allocation plan, and we're going to balance that with investment back into the business. So, you know, first and foremost is investing into the business. We see a lot of fiber opportunity. We're in the process of evaluating and quantifying that. But I think this is a real balance, and it's going to be something that's balanced with timing and the opportunity and the timing of our builds over time. Execution of it, I would say, certainly to the management's discretion, but the timing and matter, first and foremost, is dependent on the successful closing of our spectrum transactions. And that is a priority. It's a top focus for the leadership team. And, you know, and then and then, of course, we'll execute in a disciplined, opportunistic manner. as we evaluate the current business environment and the market environment.

Great. Okay. And last one for me, a more mundane question back to Doug. Obviously calling out the SG&A at array, 40% kind of not your tower operating kind of numbers. Can you help us understand how much was that wind down component so we can understand a little more what run rate going forward might be for the next couple of quarters? And I got to admit, I'm just wanting to understand a little bit more about spectrum management. What is that? How long will that go on as you kind of wind down your spectrum position? Because I think there was some spectrum management up in cost of service as well.

Yeah, thanks, Greg. So with respect to the 40%, we're not going to break down those four components individually. What I would say about that, though, if you're trying to triangulate to a run rate is there's that 40%, but in addition, there's structural costs that we have being a large wireless company that we also have to work on within the SG&A infrastructure. So it's not just that 40%. It goes beyond that. Think about IT platforms that we use to support wireless and the related IT support we add for that. That's an example of additional opportunity that is beyond the 40%. So just keep that in mind as you're thinking about a run rate for SG&A. There's still quite a bit of work for us to do on SG&A. We completely expected the SG&A cost to be high in Q3. We expect them to be high through the first half of next year, as we indicated. Spectrum management costs, I mean, we still hold spectrum, as you know. And so we incur costs, so we're still fulfilling coverage requirements for a certain spectrum. incurring some cell site rental costs on that. We have legal costs. We have personnel that manage the spectrum. All that is components of costs we're incurring that will ultimately be temporary as we're, of course, in our process of opportunistically monetizing the spectrum. So with time, those will eventually go away. Okay. Thanks, everybody.

Thank you, Rick. You're welcome.

Your next question comes from the line of Eric Lubchow with Wells Fargo. A reminder to please press star six on your telephone keypad to unmute. Eric, a reminder to unmute yourself locally by pressing star six on your telephone keypad. We will move on to our next question from Vikash Harlalka with New Street Research. Vikash, please go ahead.

Hi, thanks so much for taking my questions. I have a couple of questions on the Array side and then some on the TDS Telecom side. On the Array side, what is the Naked Tower strategy from a go-to-market standpoint, but also from a sale or decommissioning standpoint? How long is too long to wait? And do you have exit rights on the land leases? And then I'll ask the PDS questions after this.

Good morning, Vikash. So with respect to the naked towers, in the slide that we included, it at a high level articulates a strategy, which obviously we're working hard to lease up all our towers. You know, that continues. And we hope over time that minimizes the naked towers. The other thing we're doing is an initiative going to our ground lessors, and we obviously can't rationalize the rents we're paying on a lot of our naked towers, and we're going to seek to reduce those rents over time. We also have fairly robust analysis, and we're continuing to refine it on future leasability of the towers, so where competitive towers are using crowdsourced traffic, understanding our view of what the leasability is. And then after going through all those steps, you know, and this will be a multi-year process, and it'll be on a tower-by-tower basis, we will make decisions as to what to do with each tower, hold, you know, some other strategic option, and then potentially decommission some as well. And then, Vikash, and so you asked a question. What was your second question?

My question was, do you have exit rights on the land leases? Exit price, I'm sorry, what? Exit rights. Exit rights on the land leases.

Oh, the land commitments, by and large, we have some that are extended, but they're fairly minimal. A large portion of our ground leases were able to terminate upon very short notice. So those are not significant commitments overall in our portfolio. There's some, but they're minor.

Got it. And then I have one sort of financial question on TDS side, and then one strategic question. On your leverage target of 1.5 times for TDS Telecom, it's probably the lowest that I've heard from any of the wireline operators. One, does it include the impact from the several hundred thousand fiber passings that you're going to announce next year in February? And then, two, just help us understand, like, how did you land on this target? And, I mean, why not just lever up more and return more capital to share orders?

Okay. Thank you. Yes, let me – this is Vicky. Let me address the leverage target question. First off, let me just say, we're really pleased with where our current leverage is and our balance sheet strength with our preferreds. We think it maximizes our future flexibility, and we feel comfortable with where our leverage is at currently. When you think about our leverage at TDS, currently, as of the end of the quarter, on a gross basis, we're at 1.4 times. And we intend to stay under that leverage ratio. Now, we've got cash on the balance sheet as we're anticipating the funding, the fiber builds through the rest of the fourth quarter and into 2026 and through 2026. And at the same time, we also have tax obligations that will come due with the closing in the sale of the transaction to T-Mobile. So our leverage targets are intended, you know, to with the principle that we're going to put our cash to use over time. And therefore, that that plays into our philosophy on our capital allocation strategy.

And because she did ask about, you know, does this include the updated fiber goals? What we publicly stated so far is that we plan to double our fiber addresses from where we ended 2024 from around 900,000 to 1.8 million, and we said we will do that over roughly a five-year period. What that doesn't include are the additional edge-out opportunities that we've been discussing that we believe are several hundred thousand or more, and in February, we will come back and update everyone on our new goals.

Got it. That's super helpful. And my last question, sort of a strategic question. So you obviously gave us some color on potential fiber targets. That's helpful. Just flipping that a little bit, would you be open to getting acquired by someone like a Verizon or AT&T?

Vikash, this is Walter, and thank you for the question. You know, TDS has been in business for a long time. Our objective is to remain in business and be very successful for all of our shareholders for a long time going forward. Thank you very much.

Your next question will come from the line of Eric Lubachow with Wealth Fargo. Eric, a reminder to press star six on your telephone keypad in order to unmute. Eric, are you there? Hello. Hi, guys. Sorry about that. Eric, please press star six on your telephone keypad to unmute.

Hi, guys. Let me try that again. Apologize. Just a couple of questions for Doug on the tower side. You know, Doug, I know you've talked about getting to a 45 to 50 percent margin longer term. Maybe you could just talk about some of the moving parts there between the, you know, the decommissioning of the towers, the expense rationalization. um you know your ability to bring down ground rent like how should we think about the pacing of that over the next couple years as we kind of think about you know the growth not just at the top line but at the bottom line as well yeah thanks eric good morning uh you hit on a lot

of them in your in your question so when we think about increasing margins over time obviously you know growing our colo revenue is is a priority and that uh we're very focused on i talked about the SG&A expenses, you know, we expected them to be high in Q3. We expect them to be high through the first half of next year. But also over time, you know, need those to go down, obviously, as wind down and other costs subside, as well as what I talked about in response to Rick's question, making structural changes as well to some of our SG&A infrastructure. So focused on that. Ground rents, you know, there's really two components of that. One is I talked about rent rationalization with our ground lessors and that initiative, so we're focused on that. And then at the end of the day, if towers are uneconomical, making the decision as to potentially decommissioning them to, again, rationalize ground rents. All of a sudden, that somewhat, I mean, I think the group recognizes that the interim revenues on the T-Mobile sites are going to go away over time. T-Mobile has the ability to cancel those on fairly short notice in a 30-month period. But certainly, margins, we're looking to increase over time. And we expect, as we've launched Array because of all the reasons I just went through, that margins were going to be lower and will increase over time.

Great. I appreciate that. And maybe just one follow-up. I know you're looking at potential spectrum monetization, and you still have some extended build-out timeframes for the C-band, kind of the bulk of your remaining spectrum assets. I guess given there's an auction plan in the upper C-band in a couple years, how does that kind of influence the timing of when you may look to monetize that just in terms of the supply spectrum coming to market?

Eric, all along, our objective has been to get the best price. I mean, certainly injections of supply may impact that, But the reality is mobile traffic is still increasing at a rate of 30% per year. Our spectrum is available now and can be deployed immediately, and the carriers have the ecosystem from an equipment standpoint to do that. So we still think our spectrum has a lot of value, notwithstanding the fact that, you know, supply has been dynamic with that and Equistar sales and so forth. Great. Thank you.

Welcome.

a reminder if you would like to ask a question please raise your hand if you have dialed into today's call please press star nine on your telephone keypad to raise your hand and star six to unmute our next question comes from the line of sergey duchetsky with gamco investors

please go ahead uh good morning guys uh thank you for taking the questions uh first of all uh doug It has been a pleasure working with you over the years, and good luck with everything going

Yeah, likewise, Sergei. Thank you.

And maybe my first question is for you. So you talked a lot about the kind of organic opportunity for the tower business. I guess my question is, what role do you expect M&A to play in the tower business strategy? What types of assets could potentially amplify or accelerate your strategy? And also, on the flip side, are there disposal opportunities? Obviously, you're going to look at naked towers, but just looking maybe at clusters of towers. I mean, you have some towers in California, Oregon, Washington, that appear to be not as clusters maybe as others. So I was wondering if there is monetization opportunity there.

Yes, Sergey, thanks for the question. So with respect to inorganic acquisition and or disposals, that's not a strategic focus right now. We have so much on our plate operationally and really great things on our plate with integrating the T-Mobile MLA. I mentioned how you saw our tenant growth on a cash basis, cash revenue basis for the quarter, grew 8% this quarter, and our apps are up year to date, 125%. So operationally, things are going so well, and we have so much to execute on. That is our sole focus. You know, longer term, after a few years, whether we start focusing on, you know, inorganic M&A or disposing of towers, that's always something that, you know, will be looked at over time. But right now, that's not our strategic focus.

Got it. Great. And my next question is for Walter or for Ken, kind of also on the M&A side, but also related to edge out opportunities that you're considering at TDS Telecom. So you mentioned that you see a number of edge outs where you have the ability to be first to fiber, but you're not the only one looking, obviously, at those spaces and a number of larger companies are looking at remaining white space as well. So maybe I understand that you're going to provide more guidance in February, but maybe if you could provide more color on how you think about those opportunities in terms of Agile, what is realistic for the company the size of TDS Telecom? And in regards to M&A, what would be the primary determining factors for you in choosing to buy something versus doing an organic fiber build?

All right. From an edge out perspective, the areas that we're really looking at are the areas that are adjacent to current operations. So think of these as tier two, tier three markets, what we would refer to as, you know, not urban areas, but rural markets where we already operate, already have facilities, already have garages. And candidly, already have a brand and customers, and we see the opportunity to edge out into additional communities because we've already been first to plant the fiber flag in these rural markets. It's just extending our plant to these additional communities. And the advantage that we have is because we were first to fiber, these are opportunities. We already have the transport. We already have our operations there. So it's just a natural extension. So when we talk about edge-out opportunities, it's expanding and flexing from where we're today already operating in the Tier 2 and Tier 3 markets.

Okay? Got it. And in terms of kind of buying something versus building organically, what are the primary determining reasons for you?

So, Sergei, this is Walter. I think your question is, in addition to the potential edge-out opportunities, what sort of possible M&A opportunities are we looking at? And without getting into specifics, as Vicki described, we are very much focused on those types of ILEX or other owners who are proximate to our existing footprint, where we believe that in a disciplined way, we could expand our footprint in a clustered basis. We don't know whether that's going to be successful, but there are opportunities there, and they are being very closely looked at.

Yeah, and Sergey, I would just follow up and say again, with respect to M&A, we're going to be highly disciplined. It'll be accretive to our business, and it fits in with the organic cluster strategy that Ken was describing. You know, we've embarked on this fiber strategy out of footprint, and our selection of our markets were very centered around where we saw clusters of growth. And so whether it's organic or we see a synergistic M&A opportunity, that's how the whole picture will fit together. So it's really executing on that strategy going forward.

Right. And my last question is for Ken. So I think earlier this year, TDS Telecom has been making investments in sales and marketing, including door-to-door sales force. I guess with you coming in, what are your thoughts on kind of the level of success and improvement in gross additions that you could attribute to some of those efforts? And what other initiatives as part of your go-to-market strategy do you expect to improve and contribute to kind of improving your conversion rate of fiber passings into paying customers?

Yes, thank you. One of the things that I've noticed is that a lot of our sales activity is based on address delivery. So if we have a quarter where we don't deliver the addresses, we see sales suffer. So mission number one is to get our build plan to execute and to deliver service address delivery in the markets that we're building. And I will tell you that we have doubled our crew counts in our expansion markets here in the third quarter. So we have a record amount of crew counts for 2025, and we actually increased our crew counts here in October of 2025, and that's key to delivering our targets in the fourth So we will execute on that new open for sale when it comes in. We also are looking at additional vendors that we've brought on to canvas our different communities and help us with pre-sale and also with our door-to-door efforts. And I think that variable cost model will help us with penetration. And we're also, as part of our transformation efforts, we are putting a lot of time, effort, and energy into our dot-com business. As you know, website is open 24 hours a day, seven days a week, and we think that's a big opportunity for us as well to penetrate some of these new cohorts. But also, we recognize that we have a lot of ILIC fiber that we can still sell into. So a tremendous amount of initiatives in place. I believe we have some nice momentum, but that is a key focus, is go-to-market strategy, executing on the fundamentals, and delivering sales and penetration goals. Yeah, great. Thank you.

Thank you, Sergey. There are no further questions at this time. This concludes today's call. Thank you for attending. You may now disconnect.