Telephone & Data Systems Inc 10-Q for FY2026 Q3
Telephone & Data Systems Inc (TDS)
10-Q
2026-11-06
For: 2026-09-30
View Original
Added on
November 06, 2026
About this 10-Q
Telephone & Data Systems Inc filed this 10-Q on November 6, 2026, covering the quarter ended September 30, 2026 (FY2026 Q3).
Headline figures
Quarter ended September 30, 2026, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $306.69M
- down 0.6% from $308.52M a year earlier
- Net income
- $45.86M
- compared with a net loss of $81.75M a year earlier
- Diluted EPS
- $0.25
- compared with -$0.84 a year earlier
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 September 30, 2026
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 September 30, 2026, is 101.7 million Common Shares, $.01 par value, and 7.5 million Series A Common Shares, $.01 par value.
Telephone and Data Systems, Inc.
Quarterly Report on Form 10-Q
For the Period Ended September 30, 2026
| Index | Page No. | ||||
| 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 nine months ended September 30, 2026, to the three and nine months ended September 30, 2025. 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, 2025. Certain numbers included herein are rounded to thousands or millions for ease of presentation; however, certain calculated amounts and percentages are determined using the unrounded numbers.
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.
General
TDS is a diversified telecommunications company that provides high-quality communications services. TDS provides broadband, video, voice and wireless services through its wholly-owned subsidiary, TDS Telecommunications LLC (TDS Telecom). Array Digital Infrastructure, Inc. (Array), an 81.9%-owned subsidiary of TDS, leases tower space to tenants and provides ancillary services, holds noncontrolling interests in primarily wireless operating companies and holds certain wireless spectrum licenses. TDS operates entirely in the United States. See Note 13 — Business Segment Information in the Notes to Consolidated Financial Statements for additional information about TDS' segments.
1
TDS Mission and Strategy
TDS’ mission is to provide outstanding communications services to its customers and meet the needs of its shareholders, its people, and its communities. In pursuing this mission, TDS seeks to grow its businesses, create opportunities for its associates, support the communities it serves, and build and return value for its shareholders. Since its founding, TDS has been committed to bringing high-quality communications services to rural and underserved communities.
TDS’ strategy has been to re-invest the majority of its operating capital in its businesses to strengthen their competitive positions and financial performance, while also returning value to TDS shareholders.
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:
▪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 seeks to drive growth by investing in fiber deployment and growing 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.
▪Array seeks to grow tower revenue primarily through increasing colocations on existing towers and amendments to existing colocations. Array seeks to provide unique tower locations, attractive terms and streamlined implementation to wireless network operators, internet service providers, government and public safety agencies, broadcast and media companies, and other businesses.
▪Array holds noncontrolling interests in primarily wireless operating companies that generate material amounts of income and cash distributions.
▪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.
Strategic Alternatives Review
On August 1, 2025, Array sold its wireless operations and select spectrum assets to T-Mobile US, Inc. (T-Mobile) under a Securities Purchase Agreement (Securities Purchase Agreement). Total consideration received was $4,293.8 million after adjustments which included a combination of $2,628.8 million in cash proceeds and $1,665.0 million in debt assumed by T-Mobile through an exchange offer made to Array's debtholders. The final cash proceeds are subject to adjustment according to the terms and conditions of the Securities Purchase Agreement. As of September 30, 2026, Array recorded an estimated purchase price true-up payable to T-Mobile of $24.3 million. The wireless operations and select spectrum assets sold to T-Mobile are presented as discontinued operations throughout this report. See Note 2 — Discontinued Operations in the Notes to Consolidated Financial Statements for additional information.
In addition to the sale of Array's wireless operations and select spectrum assets to T-Mobile pursuant to the Securities Purchase Agreement, Array also separately entered into agreements to sell spectrum assets, including the following.
| Spectrum Licenses | Buyer | Purchase Price | Signing Date | Close Date | |||||||||||||
| (Dollars in thousands) | |||||||||||||||||
| AWS, Cellular and PCS | Verizon | $ | 1,000,000 | October 17, 2024 | June 1, 2026 | ||||||||||||
| 3.45 GHz and 700 MHz | AT&T | $ | 1,018,044 | November 6, 2024 | January 13, 2026 | ||||||||||||
| 700 MHz | T-Mobile | $ | 74,800 | August 29, 2025 | May 5, 2026 | ||||||||||||
700 MHz1 | T-Mobile | $ | 10,200 | August 29, 2025 | Estimated 2026 | ||||||||||||
| 600 MHz | T-Mobile | $ | 86,387 | October 7, 2025 | May 12, 2026 | ||||||||||||
600 MHz1 | T-Mobile | $ | 19,613 | June 5, 2026 | Estimated 2026 | ||||||||||||
1 This license transaction received regulatory approval on October 7, 2026, yet remains subject to FCC finality and other customary closing conditions.
See Note 7 — Acquisitions and Divestitures in the Notes to Consolidated Financial Statements for additional information related to the spectrum license transactions.
2
The strategic alternatives review process is ongoing as Array works toward closing the remaining T-Mobile spectrum transactions signed during 2025 and 2026. Array also continues to seek to opportunistically monetize its remaining spectrum assets that are not subject to executed agreements.
Recent Development
On May 7, 2026, TDS delivered to the Array Board of Directors a letter setting forth a non-binding proposal to acquire all of the outstanding Array Common Shares that are not owned by TDS (the “Array Proposal”). On September 1, 2026, TDS announced that it is no longer pursuing the Array Proposal. For additional information, see TDS' Current Report on Form 8-K, filed with the U.S. Securities and Exchange Commission on September 2, 2026.
In addition to these initiatives, TDS continues to explore opportunities to transform its business operations given the change in scale of the overall TDS organization following the divestiture of the wireless operations. Together, these initiatives are referred to as the strategic alternatives review throughout this report. TDS incurred third-party expenses related to the strategic alternatives review of $12.9 million and $22.7 million for the three and nine months ended September 30, 2026, respectively, and $4.1 million and $6.2 million for the three and nine months ended September 30, 2025, respectively, which are included in Selling, general and administrative (SG&A) and Cost of operations expenses for continuing operations and excluded from Adjusted OIBDA and Adjusted EBITDA non-GAAP financial measures.
3
Terms Used by TDS
The following is a list of definitions of certain industry terms that are used throughout this document:
▪Adjusted EBITDA – non-GAAP metric referring to earnings before interest, taxes, depreciation, amortization and accretion, gains and losses and other specified items. See Supplemental Information Relating to Non-GAAP Financial Measures within this MD&A for additional information.
▪Adjusted OIBDA – non-GAAP measure referring to operating income before depreciation, amortization and accretion, gains and losses and other specified items. See Supplemental Information Relating to Non-GAAP Financial Measures within this MD&A for additional information.
▪Broadband Connections – refers to the individual customers provided internet access through various transmission technologies, including fiber, coaxial and copper.
▪Cable Markets – markets where TDS provides service as the cable provider using coaxial cable and fiber technologies.
▪Colocations – represents instances where a third-party leases space on a company-owned tower.
▪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.
▪Incumbent Markets – markets where TDS is positioned as the traditional local telephone company.
▪IPTV – internet protocol television.
▪Residential Revenue per Connection – metric which is calculated by dividing total residential revenue by the average number of residential connections and by the number of months in the period.
▪Residential Fiber Churn Rate – represents the percentage of incumbent and expansion fiber connections that disconnected service each month. These rates represent the average monthly churn rate for each respective period.
▪Service Addresses – number of single residence homes, multi-dwelling units, and business locations that are capable of being connected to the TDS network, based on best available information.
▪Tower Tenancy Rate – calculated as total number of colocations divided by total number of towers.
▪Universal Service Fund (USF) – a system of telecommunications collected fees and support payments managed by the 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 customer services that provide voice calling capability with the public switched telephone network, including both traditional wireline voice services and interconnected VoIP services delivered over broadband.
▪Wireless Connections – refers to an individual mobile line provisioned through TDS' mobile virtual network operator (MVNO) arrangement and delivered under the TDS-branded wireless offering.
4
Results of Operations — TDS Consolidated
The following discussion and analysis compares financial results for the three and nine months ended September 30, 2026, to the three and nine months ended September 30, 2025.
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||
| 2026 | 2025 | 2026 vs. 2025 | 2026 | 2025 | 2026 vs. 2025 | ||||||||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||||||||
| Operating revenues | |||||||||||||||||||||||||||||||||||
| TDS Telecom | $ | 247,265 | $ | 255,111 | (3) | % | $ | 745,243 | $ | 777,403 | (4) | % | |||||||||||||||||||||||
| Array | 53,870 | 47,119 | 14 | % | 159,952 | 102,632 | 56 | % | |||||||||||||||||||||||||||
All Other1 | 5,559 | 6,291 | (12) | % | 20,230 | 17,460 | 16 | % | |||||||||||||||||||||||||||
| Total operating revenues | 306,694 | 308,521 | (1) | % | 925,425 | 897,495 | 3 | % | |||||||||||||||||||||||||||
| Operating expenses | |||||||||||||||||||||||||||||||||||
| TDS Telecom | 264,736 | 263,403 | 1 | % | 774,723 | 771,865 | — | ||||||||||||||||||||||||||||
| Array | 56,196 | 100,432 | (44) | % | (397,770) | 203,761 | N/M | ||||||||||||||||||||||||||||
All Other1 | 15,775 | 12,660 | 25 | % | 61,456 | 36,084 | 70 | % | |||||||||||||||||||||||||||
| Total operating expenses | 336,707 | 376,495 | (11) | % | 438,409 | 1,011,710 | (57) | % | |||||||||||||||||||||||||||
| Operating income (loss) | |||||||||||||||||||||||||||||||||||
| TDS Telecom | (17,471) | (8,292) | N/M | (29,480) | 5,538 | N/M | |||||||||||||||||||||||||||||
| Array | (2,326) | (53,313) | 96 | % | 557,722 | (101,129) | N/M | ||||||||||||||||||||||||||||
All Other1 | (10,216) | (6,369) | (60) | % | (41,226) | (18,624) | N/M | ||||||||||||||||||||||||||||
| Total operating income (loss) | (30,013) | (67,974) | 56 | % | 487,016 | (114,215) | N/M | ||||||||||||||||||||||||||||
| Other income (expense) | |||||||||||||||||||||||||||||||||||
| Equity in earnings of unconsolidated entities | 41,414 | 69,838 | (41) | % | 120,442 | 149,309 | (19) | % | |||||||||||||||||||||||||||
| Interest and dividend income | 22,001 | 15,663 | 40 | % | 55,418 | 28,044 | 98 | % | |||||||||||||||||||||||||||
| Interest expense | (11,575) | (47,278) | 76 | % | (28,284) | (100,352) | 72 | % | |||||||||||||||||||||||||||
| Short-term imputed spectrum lease income | 7,669 | 30,413 | (75) | % | 65,639 | 30,413 | N/M | ||||||||||||||||||||||||||||
| Other, net | 4,523 | 5,347 | (15) | % | 15,320 | 10,464 | 46 | % | |||||||||||||||||||||||||||
| Total other income | 64,032 | 73,983 | (13) | % | 228,535 | 117,878 | 94 | % | |||||||||||||||||||||||||||
| Income before income taxes | 34,019 | 6,009 | N/M | 715,551 | 3,663 | N/M | |||||||||||||||||||||||||||||
| Income tax expense (benefit) | (25,869) | (72,772) | 64 | % | 134,950 | (85,119) | N/M | ||||||||||||||||||||||||||||
| Net income from continuing operations | 59,888 | 78,781 | (24) | % | 580,601 | 88,782 | N/M | ||||||||||||||||||||||||||||
| Less: Net income from continuing operations attributable to noncontrolling interests, net of tax | 12,999 | 21,236 | (39) | % | 109,142 | 25,903 | N/M | ||||||||||||||||||||||||||||
| Net income from continuing operations attributable to TDS shareholders | 46,889 | 57,545 | (19) | % | 471,459 | 62,879 | N/M | ||||||||||||||||||||||||||||
| Net income (loss) from discontinued operations | (1,173) | (151,899) | 99 | % | 21,510 | (132,150) | N/M | ||||||||||||||||||||||||||||
| Less: Net income (loss) from discontinued operations attributable to noncontrolling interests, net of tax | (144) | (12,604) | 99 | % | 4,148 | (6,563) | N/M | ||||||||||||||||||||||||||||
| Net income (loss) from discontinued operations attributable to TDS shareholders | (1,029) | (139,295) | 99 | % | 17,362 | (125,587) | N/M | ||||||||||||||||||||||||||||
| Net income (loss) | 58,715 | (73,118) | N/M | 602,111 | (43,368) | N/M | |||||||||||||||||||||||||||||
| Less: Net income attributable to noncontrolling interests, net of tax | 12,855 | 8,632 | 49 | % | 113,290 | 19,340 | N/M | ||||||||||||||||||||||||||||
| Net income (loss) attributable to TDS shareholders | 45,860 | (81,750) | N/M | 488,821 | (62,708) | N/M | |||||||||||||||||||||||||||||
| TDS Preferred Share dividends | 17,306 | 17,306 | — | 51,919 | 51,919 | — | |||||||||||||||||||||||||||||
| Net income (loss) attributable to TDS common shareholders | $ | 28,554 | $ | (99,056) | N/M | $ | 436,902 | $ | (114,627) | N/M | |||||||||||||||||||||||||
5
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||
| 2026 | 2025 | 2026 vs. 2025 | 2026 | 2025 | 2026 vs. 2025 | ||||||||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||||||||
Adjusted OIBDA from continuing operations (Non-GAAP)2 | $ | 75,038 | $ | 77,833 | (4) | % | $ | 235,567 | $ | 198,119 | 19 | % | |||||||||||||||||||||||
Adjusted EBITDA from continuing operations (Non-GAAP)2 | $ | 142,976 | $ | 168,681 | (15) | % | $ | 426,747 | $ | 385,936 | 11 | % | |||||||||||||||||||||||
Capital expenditures from continuing operations3 | $ | 256,109 | $ | 109,998 | N/M | $ | 575,971 | $ | 268,729 | N/M | |||||||||||||||||||||||||
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.
Equity in earnings of unconsolidated entities
Equity in earnings of unconsolidated entities represents TDS' share of net income from entities in which it has a noncontrolling interest and that are accounted for using the equity method or the net asset value practical expedient. Array holds noncontrolling interests in three entities in the state of Iowa that sold their wireless operations to T-Mobile in three separate transactions on August 1, 2025, the same date that Array sold its wireless operations to T-Mobile. As a result of the Iowa entities' sale of their wireless operations, these entities recognized a gain on sale, and Array's proportionate share of that gain was included in Equity in earnings of unconsolidated entities in the amount of $34.1 million, which is the primary driver of the year-over-year decrease in the three and nine months ended September 30, 2026. See Note 8 — Investments in Unconsolidated Entities in the Notes to Consolidated Financial Statements for additional information.
Interest and dividend income
Interest and dividend income increased for the three and nine months ended September 30, 2026, due primarily to higher cash balances following the sale of the wireless spectrum licenses in 2026.
Interest expense
Interest expense decreased for the three and nine months ended September 30, 2026 due primarily to the repayment of TDS debt facilities in August 2025 and January 2026, partially offset by the new term loan that Array entered into in August 2025 and a decrease in capitalized interest. Interest expense from continuing operations excludes interest costs in all periods associated with Array term loans repaid, and Array debt exchanged, in conjunction with the sale of Array's wireless operations to T-Mobile. See Market Risk for additional information regarding maturities of long-term debt and weighted average interest rates.
Short-term imputed spectrum lease income
Short-term imputed spectrum lease income decreased for the three months ended September 30, 2026 due to the expiration of the Short-Term Spectrum Manager Lease Agreement and Short-Term Spectrum Manager Sublease Agreements on July 31, 2026. The agreements provided T-Mobile with an exclusive license to use certain Array spectrum assets and leases at no cost for up to one year from closing. The portion of the purchase price allocated to the use of this spectrum was amortized over one year following the close.
Short-term imputed spectrum lease income increased for the nine months ended September 30, 2026 due to the execution of the Short-Term Spectrum Manager Lease Agreement and Short-Term Spectrum Manager Sublease Agreements. See Note 2 — Discontinued Operations in the Notes to Consolidated Financial Statements for additional information related to the spectrum leases.
Income tax expense (benefit)
Income tax benefit on continuing operations decreased for the three months ended September 30, 2026, due primarily to favorable reductions to valuation allowances on deferred tax assets recorded in the third quarter of 2025 that did not recur in 2026, partially offset by favorable changes in estimated state taxes on the sale of wireless spectrum licenses and a benefit related to transferable federal tax credits purchased during the current period.
Income tax expense on continuing operations increased for the nine months ended September 30, 2026, due primarily to the increase in Income before income taxes that resulted from the gains on license sales in the current period and favorable reductions to valuation allowances on deferred tax assets recorded in the third quarter of 2025 that did not recur in 2026, partially offset by a benefit related to transferable federal tax credits purchased during the current period.
6
Net income from continuing operations attributable to noncontrolling interests, net of tax
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| (Dollars in thousands) | |||||||||||||||||||||||
| Array noncontrolling public shareholders’ | $ | 12,622 | $ | 20,125 | $ | 105,660 | $ | 23,474 | |||||||||||||||
| Noncontrolling shareholders’ or partners’ | 377 | 1,111 | 3,482 | 2,429 | |||||||||||||||||||
| Net income from continuing operations attributable to noncontrolling interests, net of tax | $ | 12,999 | $ | 21,236 | $ | 109,142 | $ | 25,903 | |||||||||||||||
Net income from continuing operations attributable to noncontrolling interests, net of tax includes the noncontrolling public shareholders’ share of Array’s net income from continuing operations, the noncontrolling shareholders’ or partners’ share of certain Array subsidiaries’ net income from continuing operations and other TDS noncontrolling interests.
Net income (loss) from discontinued operations attributable to TDS shareholders
See Note 2 — Discontinued Operations in the Notes to Consolidated Financial Statements for additional information related to the components of Net income from discontinued operations.
7
 | 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. TDS Telecom seeks to deliver outstanding customer service.
OPERATIONS
▪Serves 1.1 million connections in 30 states
▪Employs approximately 3,900 associates
8
Operational Overview — TDS Telecom
Total Service Address Mix
As of September 30,
TDS Telecom increased its service addresses 8% from a year ago to 2.0 million as of September 30, 2026 through footprint expansion and acquisition. TDS Telecom serves 56% of incumbent service addresses with fiber.
TDS Telecom offers 1Gig+ service to 82% of its total footprint as of September 30, 2026, compared to 76% a year ago.
As of or for the Quarter Ended September 30, | 2026 | 2025 | 2026 vs. 2025 | ||||||||||||||
| Residential connections | |||||||||||||||||
| Broadband | |||||||||||||||||
| Incumbent Fiber | 144,100 | 123,500 | 17 | % | |||||||||||||
| Incumbent Copper | 71,100 | 102,000 | (30) | % | |||||||||||||
| Expansion Fiber | 191,200 | 150,700 | 27 | % | |||||||||||||
| Cable | 173,200 | 186,100 | (7) | % | |||||||||||||
| Total Broadband | 579,600 | 562,400 | 3 | % | |||||||||||||
| Video | 104,000 | 114,300 | (9) | % | |||||||||||||
| Voice | 204,100 | 242,200 | (16) | % | |||||||||||||
| Wireless | 10,500 | 2,200 | N/M | ||||||||||||||
| Total Residential Connections | 898,200 | 921,100 | (2) | % | |||||||||||||
| Commercial connections | 162,600 | 180,300 | (10) | % | |||||||||||||
| Total connections | 1,060,800 | 1,101,300 | (4) | % | |||||||||||||
Total residential fiber net adds | 16,700 | 11,200 | 50 | % | |||||||||||||
| Total residential broadband net adds | 7,200 | 4,600 | 55 | % | |||||||||||||
| Residential fiber churn | 1.3 | % | 1.5 | % | |||||||||||||
| Total residential broadband churn | 1.7 | % | 1.7 | % | |||||||||||||
N/M - Percentage change not meaningful
Numbers may not foot due to rounding.
Total connections decreased due to declines in legacy voice and video products, as well as broadband connections in copper and cable markets, partially offset by growth in fiber markets and wireless connections.
Divestitures in 2025 resulted in a decrease of 12,500 connections, including 5,100 residential broadband connections. Acquisition in 2026 resulted in an increase of 7,800 connections, including 4,700 residential broadband connections.
9
Residential Broadband Connections by Speed
As of September 30,
Residential broadband customers continue to take higher speeds with 89% on 100 Mbps or higher products and 54% on 1Gig+ products.
Residential Revenue per Connection
Total residential revenue per connection increased by 2% for the three months ended September 30, 2026, and 1% for the nine months ended September 30, 2026 due primarily to price increases and customer product mix, partially offset by promotional activity.
10
Financial Overview — TDS Telecom
The following discussion and analysis compares financial results for the three and nine months ended September 30, 2026, to the three and nine months ended September 30, 2025.
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||
| 2026 | 2025 | 2026 vs. 2025 | 2026 | 2025 | 2026 vs. 2025 | ||||||||||||||||||||||||||||||
| (Dollars in thousands) | |||||||||||||||||||||||||||||||||||
| Residential | |||||||||||||||||||||||||||||||||||
| Incumbent | $ | 74,948 | $ | 81,910 | (8) | % | $ | 228,108 | $ | 252,168 | (10) | % | |||||||||||||||||||||||
| Expansion | 48,310 | 39,610 | 22 | % | 137,528 | 110,596 | 24 | % | |||||||||||||||||||||||||||
| Cable | 55,909 | 60,231 | (7) | % | 169,891 | 186,253 | (9) | % | |||||||||||||||||||||||||||
| Total residential | 179,167 | 181,751 | (1) | % | 535,527 | 549,017 | (2) | % | |||||||||||||||||||||||||||
| Commercial | 32,451 | 34,066 | (5) | % | 98,022 | 103,317 | (5) | % | |||||||||||||||||||||||||||
| Wholesale | 35,588 | 39,153 | (9) | % | 111,522 | 124,534 | (10) | % | |||||||||||||||||||||||||||
| Total service revenues | 247,206 | 254,970 | (3) | % | 745,071 | 776,868 | (4) | % | |||||||||||||||||||||||||||
| Equipment revenues | 59 | 141 | (58) | % | 172 | 535 | (68) | % | |||||||||||||||||||||||||||
| Total operating revenues | 247,265 | 255,111 | (3) | % | 745,243 | 777,403 | (4) | % | |||||||||||||||||||||||||||
| Cost of operations (excluding Depreciation, amortization and accretion reported below) | 103,180 | 102,253 | 1 | % | 300,944 | 300,265 | — | ||||||||||||||||||||||||||||
| Cost of equipment and products | 173 | 182 | (5) | % | 402 | 562 | (28) | % | |||||||||||||||||||||||||||
| Selling, general and administrative | 84,648 | 79,201 | 7 | % | 244,747 | 244,905 | — | ||||||||||||||||||||||||||||
| Depreciation, amortization and accretion | 75,985 | 78,901 | (4) | % | 222,127 | 223,478 | (1) | % | |||||||||||||||||||||||||||
| (Gain) loss on asset disposals, net | 1,265 | 22 | N/M | 7,057 | 7,890 | (11) | % | ||||||||||||||||||||||||||||
| (Gain) loss on sale of business and other exit costs, net | (515) | 2,844 | N/M | 1,046 | (5,235) | N/M | |||||||||||||||||||||||||||||
| (Gain) loss on license sales and exchanges, net | — | — | — | (1,600) | — | N/M | |||||||||||||||||||||||||||||
| Total operating expenses | 264,736 | 263,403 | 1 | % | 774,723 | 771,865 | — | ||||||||||||||||||||||||||||
| Operating income (loss) | $ | (17,471) | $ | (8,292) | N/M | $ | (29,480) | $ | 5,538 | N/M | |||||||||||||||||||||||||
| Net income (loss) | $ | (11,954) | $ | (282) | N/M | $ | (15,900) | $ | 19,329 | N/M | |||||||||||||||||||||||||
Adjusted OIBDA (Non-GAAP)1 | $ | 63,493 | $ | 76,972 | (18) | % | $ | 203,466 | $ | 235,168 | (13) | % | |||||||||||||||||||||||
Adjusted EBITDA (Non-GAAP)1 | $ | 65,859 | $ | 80,491 | (18) | % | $ | 210,071 | $ | 245,352 | (14) | % | |||||||||||||||||||||||
Capital expenditures2 | $ | 251,463 | $ | 102,429 | N/M | $ | 556,623 | $ | 251,486 | N/M | |||||||||||||||||||||||||
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 September 30, 2026 and 2025
(Dollars in millions)
Operating Revenues
Nine Months Ended September 30, 2026 and 2025
(Dollars in millions)
Residential revenues consist of:
•Broadband services
•Video services, including cloud-based video services, 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
•Wireless 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 nine months ended September 30, 2026, due primarily to declines in legacy markets and divestitures, partially offset by growth in expansion markets and price increases.
Commercial revenues decreased for the three and nine months ended September 30, 2026, due primarily to declining connections in legacy markets and divestitures.
Wholesale revenues decreased for the three and nine months ended September 30, 2026, due primarily to divestitures and the continued decline of special access circuits.
The 2025 divestitures contributed a decrease of $4.1 million in operating revenues from the comparable three months ended September 30, 2025 and a decrease of $15.4 million in operating revenues from the comparable nine months ended September 30, 2025.
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Selling, general and administrative
Selling, general and administrative expenses increased for the three months ended September 30, 2026, due primarily to higher employee-related costs to support growth and reflect inflationary pressures, as well as severance charges, partially offset by lower regulatory fees.
(Gain) loss on sale of business and other exit costs, net
(Gain) loss on sale of business fluctuated for the three and nine months ended September 30, 2026 due to the divestitures of certain markets in 2025.
13
 | ARRAY OPERATIONS | ||||
Business Overview
Array connects America through digital infrastructure by leasing tower space to tenants and providing ancillary services. Array also holds noncontrolling interests in primarily wireless operating companies and holds certain wireless spectrum licenses. As of September 30, 2026, Array is an 81.9%-owned subsidiary of Telephone and Data Systems, Inc. (TDS).
Towers
Array seeks to grow tower revenue primarily through increasing colocations on existing towers and amendments to existing colocations. Array seeks to provide unique tower locations, attractive terms and streamlined implementation to wireless network operators, internet service providers, government and public safety agencies, broadcast and media companies, and other businesses. As of September 30, 2026, Array owns 4,455 towers in 19 states.
Noncontrolling interest investments
Array holds noncontrolling interests in primarily wireless operating companies that generate material amounts of income and cash distributions. These entities primarily consist of wireless entities managed by Verizon and AT&T. The noncontrolling entities that are managed by Array consist primarily of tower operations.
Retained spectrum
Array holds wireless spectrum that is subject to sale agreements described above, and additional wireless spectrum not subject to pending sale agreements that Array seeks to opportunistically monetize. As of September 30, 2026, the book value of the remaining spectrum not subject to pending sale agreements was $1,584.7 million and includes primarily C-Band spectrum. Array incurred costs related to the management of the retained spectrum as a standalone tower company of $3.1 million and $7.1 million during the three and nine months ended September 30, 2026, respectively and $2.4 million during the three months ended September 30, 2025.
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OPERATIONS
| As of September 30, | 2026 | 2025 | |||||||||||||||
| Owned towers | 4,455 | 4,449 | |||||||||||||||
Number of colocations1 | 4,372 | 4,517 | |||||||||||||||
Tower tenancy rate1 | 0.98 | 1.02 | |||||||||||||||
1Includes T-Mobile MLA committed site minimum of 2,015. Excludes Interim Sites whereby T-Mobile is leasing up to 1,800 sites for a period of up to 30 months subject to the terms and conditions of the MLA. As of March 31, 2026, the Number of colocations and the Tower tenancy rate exclude DISH Wireless. Normalized to exclude DISH Wireless, the prior period Tower tenancy rate would have been 0.94. See Financial Overview within this MD&A for additional information.
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Financial Overview — Array
The following discussion and analysis compares financial results for the three and nine months ended September 30, 2026, to the three and nine months ended September 30, 2025.
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||
| 2026 | 2025 | 2026 vs. 2025 | 2026 | 2025 | 2026 vs. 2025 | ||||||||||||||||||||||||||||||
| (Dollars in thousands) | |||||||||||||||||||||||||||||||||||
| Operating revenues | |||||||||||||||||||||||||||||||||||
| Site rental | $ | 52,475 | $ | 45,838 | 14 | % | $ | 156,674 | $ | 99,663 | 57 | % | |||||||||||||||||||||||
| Services | 1,395 | 1,281 | 9 | % | 3,278 | 2,969 | 10 | % | |||||||||||||||||||||||||||
| Total operating revenues | 53,870 | 47,119 | 14 | % | 159,952 | 102,632 | 56 | % | |||||||||||||||||||||||||||
| Operating expenses | |||||||||||||||||||||||||||||||||||
| Cost of operations (excluding Depreciation, amortization and accretion reported below) | 23,349 | 20,976 | 11 | % | 68,455 | 56,662 | 21 | % | |||||||||||||||||||||||||||
| Selling, general and administrative | 18,200 | 20,525 | (11) | % | 53,851 | 69,063 | (22) | % | |||||||||||||||||||||||||||
| Depreciation, amortization and accretion | 13,405 | 11,868 | 13 | % | 40,437 | 35,860 | 13 | % | |||||||||||||||||||||||||||
| Loss on impairment of licenses | — | 47,679 | N/M | — | 47,679 | N/M | |||||||||||||||||||||||||||||
| (Gain) loss on asset disposals, net | 1,233 | 707 | 74 | % | 5,946 | 620 | N/M | ||||||||||||||||||||||||||||
| (Gain) loss on license sales and exchanges, net | 9 | (1,323) | N/M | (566,459) | (6,123) | N/M | |||||||||||||||||||||||||||||
| Total operating expenses | 56,196 | 100,432 | (44) | % | (397,770) | 203,761 | N/M | ||||||||||||||||||||||||||||
| Operating income (loss) | (2,326) | (53,313) | 96 | % | 557,722 | (101,129) | N/M | ||||||||||||||||||||||||||||
| Other income (expense) | |||||||||||||||||||||||||||||||||||
| Equity in earnings of unconsolidated entities | 41,009 | 69,811 | (41) | % | 116,144 | 147,453 | (21) | % | |||||||||||||||||||||||||||
| Interest and dividend income | 4,442 | 8,909 | (50) | % | 15,095 | 15,267 | (1) | % | |||||||||||||||||||||||||||
| Interest expense | (10,972) | (8,855) | (24) | % | (29,013) | (16,233) | (79) | % | |||||||||||||||||||||||||||
| Short-term imputed spectrum lease income | 7,669 | 30,413 | (75) | % | 65,639 | 30,413 | N/M | ||||||||||||||||||||||||||||
| Other, net | 35 | 254 | (86) | % | 9 | 253 | (97) | % | |||||||||||||||||||||||||||
| Total other income | 42,183 | 100,532 | (58) | % | 167,874 | 177,153 | (5) | % | |||||||||||||||||||||||||||
| Income before income taxes | 39,857 | 47,219 | (16) | % | 725,596 | 76,024 | N/M | ||||||||||||||||||||||||||||
| Income tax expense (benefit) | (30,121) | (62,701) | 52 | % | 138,147 | (54,479) | N/M | ||||||||||||||||||||||||||||
| Net income from continuing operations | $ | 69,978 | $ | 109,920 | (36) | % | $ | 587,449 | $ | 130,503 | N/M | ||||||||||||||||||||||||
Adjusted OIBDA from continuing operations (Non-GAAP)1 | $ | 18,255 | $ | 6,107 | N/M | $ | 51,158 | $ | (20,744) | N/M | |||||||||||||||||||||||||
Adjusted EBITDA from continuing operations (Non-GAAP)1 | $ | 63,741 | $ | 85,081 | (25) | % | $ | 182,406 | $ | 142,229 | 28 | % | |||||||||||||||||||||||
Capital expenditures from continuing operations2 | $ | 3,915 | $ | 7,927 | (51) | % | $ | 16,456 | $ | 16,978 | (3) | % | |||||||||||||||||||||||
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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Key components of changes in the statement of operations items were as follows:
Site rental revenues
Site rental revenues increased for the three and nine months ended September 30, 2026, primarily as a result of the execution of the T-Mobile MLA, pursuant to which T-Mobile leases space on an additional minimum 2,015 Array-owned towers, which were not under existing leases for T-Mobile, for a minimum of 15 years and leases space on approximately 1,800 Array-owned towers on an interim basis. The duration of the interim lease is 30 months, and T-Mobile may cancel such interim leases at their option on a tower-by-tower basis at any time. Array expects interim lease revenue, which was $4.9 million and $19.8 million for the three and nine months ended September 30, 2026, respectively, to continue to decline in future periods as T-Mobile terminates these interim leases over the course of the 30-month integration period, which ends January 2028. Further, the MLA extended the license term for approximately 600 existing T-Mobile colocations on Array towers for a new 15-year term that commenced on August 1, 2025.
This was partially offset by a $1.8 million and $7.8 million decrease in site rental revenues from DISH Wireless for the three and nine months ended September 30, 2026, including a $2.9 million write-off of contractual assets and liabilities that was recorded in the first quarter of 2026. In September 2025, Array received a letter from DISH Wireless claiming that its obligations under its Master Lease Agreement with Array were excused due to actions taken by the FCC and subsequent agreements to sell spectrum assets. DISH Wireless subsequently failed to make certain payments due to Array under its contractual commitment. Beginning in the first quarter of 2026, Array is no longer recognizing revenue in connection with DISH. Site rental revenues from DISH Wireless were $6.5 million in 2025. In June 2026, DISH Wireless and other DISH entities filed for bankruptcy and Array is monitoring those proceedings.
Cost of operations
Cost of operations increased for the three and nine months ended September 30, 2026 due primarily to a change in the classification of property tax and property insurance following the sale of the wireless business and an increase in cell site ground rent due to incremental expense related to customer growth, new leases, lease amendments and escalations.
Selling, general and administrative
Selling, general and administrative expenses decreased for the three and nine months ended September 30, 2026 due primarily to decreases in shared overhead costs, employee expenses, bad debts expense and a change in the classification of property tax and property insurance following the sale of the wireless business, partially offset by an increase in strategic alternatives review expenses.
Selling, general and administrative expenses in the three months ended September 30, 2025, and the three and nine months ended September 30, 2026, include costs to support the winddown of the legacy wireless operations.
Loss on impairment of licenses
Loss on impairment of licenses decreased for the three and nine months ended September 30, 2026, due to an impairment recorded in the third quarter of 2025 on high-band wireless spectrum licenses.
(Gain) loss on asset disposals, net
(Gain) loss on asset disposals, net increased for the three and nine months ended September 30, 2026 due primarily to the disposal of assets no longer required to maintain certain spectrum licenses.
(Gain) loss on license sales and exchanges, net
(Gain) loss on license sales and exchanges, net increased for the nine months ended September 30, 2026 due primarily to the sale of certain AWS, Cellular and PCS wireless spectrum licenses to Verizon in the second quarter of 2026 and the sale of certain 3.45 GHz and 700 MHz wireless spectrum licenses to AT&T in the first quarter of 2026. See Note 7 — Acquisitions and Divestitures in the Notes to Consolidated Financial Statements for additional information.
Equity in earnings of unconsolidated entities
Equity in earnings of unconsolidated entities represents Array’s share of net income from entities in which it has a noncontrolling interest and that are accounted for using the equity method or the net asset value practical expedient. Array holds noncontrolling interests in three entities in the state of Iowa that sold their wireless operations to T-Mobile in three separate transactions on August 1, 2025, the same date that Array sold its wireless operations to T-Mobile. As a result of the Iowa entities' sale of their wireless operations, these entities recognized a gain on sale, and Array's proportionate share of that gain was included in Equity in earnings of unconsolidated entities in the amount of $34.1 million, which is the primary driver of the year-over-year decrease in the three and nine months ended September 30, 2026. See Note 8 — Investments in Unconsolidated Entities in the Notes to Consolidated Financial Statements for additional information.
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Interest and dividend income
Interest and dividend income decreased for the three months ended September 30, 2026 due primarily to a decrease in interest income earned on the proceeds from the sale of the wireless operations to T-Mobile.
Interest expense
Interest expense from continuing operations excludes interest costs in all periods associated with term loans repaid, and debt exchanged, in conjunction with the sale of Array's wireless operations to T-Mobile. As a result, the increase in interest expense for the three months ended September 30, 2026 is primarily attributable to the new term loan that Array entered into in August 2025, and the increase in interest expense for the nine months ended September 30, 2026 is primarily attributable to the new term loan that Array entered into in August 2025 and a decrease in capitalized interest.
Short-term imputed spectrum lease income
Short-term imputed spectrum lease income decreased for the three months ended September 30, 2026 due to the expiration of the Short-Term Spectrum Manager Lease Agreement and Short-Term Spectrum Manager Sublease Agreements on July 31, 2026. The agreements provided T-Mobile with an exclusive license to use certain Array spectrum assets and leases at no cost for up to one year from closing. The portion of the purchase price allocated to the use of this spectrum was amortized over one year following the close.
Short-term imputed spectrum lease income increased for the nine months ended September 30, 2026 due to the execution of the Short-Term Spectrum Manager Lease Agreement and Short-Term Spectrum Manager Sublease Agreements. See Note 2 — Discontinued Operations in the Notes to Consolidated Financial Statements for additional information related to the spectrum leases.
Income tax expense (benefit)
Income tax benefit on continuing operations decreased for the three months ended September 30, 2026, due primarily to favorable reductions to valuation allowances on deferred tax assets recorded in the third quarter of 2025 that did not recur in 2026, partially offset by favorable changes in estimated state taxes on the sale of wireless spectrum licenses and a benefit related to transferable federal tax credits purchased during the current period.
Income tax expense on continuing operations increased for the nine months ended September 30, 2026, due primarily to the increase in Income before income taxes that resulted from the gains on license sales in the current period and favorable reductions to valuation allowances on deferred tax assets recorded in the third quarter of 2025 that did not recur in 2026, partially offset by a benefit related to transferable federal tax credits purchased during the current period.
18
Liquidity and Capital Resources
Sources of Liquidity
TDS believes that existing cash and investment balances, dividends, distributions from unconsolidated entities, expected cash flows from operating activities and funds available under its financing agreements will provide sufficient liquidity for TDS to meet its funding needs. TDS requires funding for, among other uses, day-to-day operations, capital expenditures, fiber deployments and E-ACAM builds, payment of dividends, debt service requirements, repurchases of shares and potential acquisitions of businesses, land, land easements or additional towers.
Cash and Cash Equivalents
Cash and cash equivalents include cash and money market investments. TDS does not have direct access to Array cash. Refer to Common Share Repurchase Program within this MD&A for additional information related to changes in Cash and cash equivalents subsequent to September 30, 2026.
In the first and second quarters of 2026, Array closed on various sales of certain wireless spectrum licenses to AT&T, Verizon and T-Mobile for total proceeds of $2,185.7 million and TDS incurred tax liabilities on the transactions of approximately $280.0 million. As of September 30, 2026, TDS has paid cash taxes related to these transactions of approximately $260.0 million, and expects to pay the remaining amounts during the fourth quarter of 2026.
Cash and Cash Equivalents
(Dollars in millions)
The majority of TDS’ Cash and cash equivalents are held in money market funds that purchase only debt issued by the U.S. Treasury or U.S. government agencies and bank deposit accounts. Refer to the Consolidated Cash Flow Analysis for additional information related to changes in Cash and cash equivalents.
Financing
Revolving Credit Agreements
TDS and Array have unsecured revolving credit agreements with maximum borrowing capacities of $400.0 million and $100.0 million, respectively. Amounts under the agreements may be borrowed, repaid and reborrowed from time to time until maturity in December 2030. As of September 30, 2026, there were no outstanding borrowings under the agreements, except for letters of credit, and TDS' and Array's unused borrowing capacity was $399.5 million and $99.9 million, respectively.
Term Loan Agreement
As of September 30, 2026, Array has outstanding borrowings of $323.0 million under a term loan agreement with CoBank, ACB. The maturity date of the term loan is June 2030. Borrowings bear interest at a rate of Secured Overnight Financing Rate (SOFR) plus 2.50%.
19
Export Credit Financing Agreement
In January 2026, TDS repaid the entire outstanding borrowings under its term loan agreement with Export Development Canada of $150.0 million.
Debt Covenants
The TDS and Array revolving credit agreements and the Array term loan agreement with CoBank 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 a Consolidated Leverage Ratio, as defined in the agreements, as of the end of any fiscal quarter at a level not to exceed 3.50 to 1.00. TDS and Array are also required to maintain the Consolidated Interest Coverage Ratio at a level not lower than 3.00 to 1.00 as of the end of any fiscal quarter. TDS and Array believe that they were in compliance as of September 30, 2026 with all such financial covenants.
Capital Expenditures
TDS makes substantial investments to acquire, construct and upgrade telecommunications networks and facilities to remain competitive, meet E-ACAM build-out requirements and as a basis for creating long-term value for shareholders. In recent years, changes in technology have required substantial investments in TDS’ networks to remain competitive. Costs related to the deployment of fiber for TDS Telecom have increased in recent periods and could increase in future periods, in particular as TDS Telecom continues to meet its E-ACAM build-out obligations.
Capital expenditures for continuing operations (i.e., additions to property, plant and equipment), which include the effects of accruals and capitalized interest, for the nine months ended September 30, 2026 and 2025, were as follows:
Capital Expenditures
(Dollars in millions)
TDS Telecom’s capital expenditures for the nine months ended September 30, 2026 and 2025, were $556.6 million and $251.5 million, respectively.
Capital expenditures for the full year 2026 are expected to be approximately $750 million. These expenditures are expected to be used principally for the following purposes:
▪Continue fiber deployment in expansion markets and to meet E-ACAM build-out requirements;
▪Support broadband growth and success-based spending; and
▪Maintain and enhance existing infrastructure.
Array's capital expenditures for the nine months ended September 30, 2026 and 2025, were $16.5 million and $17.0 million, respectively.
Array's capital expenditures for 2026 are expected to be between $25.0 million and $35.0 million. These capital expenditures are expected to be used for purchases of land interests which are opportunistic in nature, tower maintenance, tower builds and one-time costs of migrating the tower light monitoring function to Array's long-term solution.
TDS intends to finance its capital expenditures for 2026 using existing cash balances and cash flows from operating activities.
20
Acquisitions and Divestitures
TDS is engaged and may in the future be engaged in negotiations (subject to all applicable regulations) relating to the acquisition or divestiture of companies, properties and assets. In general, TDS does not disclose such transactions until there is a definitive agreement.
See Note 7 — Acquisitions and Divestitures in the Notes to Consolidated Financial Statements for additional information related to acquisitions and 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; and tax payments related to the 2026 wireless spectrum license transactions. Refer to the discussion elsewhere within this Liquidity and Capital Resources section for additional information.
Common Share Repurchase Program
During the three months ended September 30, 2026, TDS repurchased 5,958,218 Common Shares for $218.4 million, excluding commissions and taxes, at an average price per share of $36.65. As of September 30, 2026, the total maximum dollar value of the TDS Common Shares that may yet be repurchased under TDS' program was $305.8 million.
Subsequent to September 30, 2026, TDS repurchased 8,717,162 Common Shares for $301.7 million, excluding commissions and taxes, at an average price per share of $34.61. On November 6, 2026, TDS announced that its Board of Directors had authorized an additional $250.0 million stock repurchase program for TDS Common Shares.
For additional information related to the current repurchase authorization, see Unregistered Sales of Equity Securities and Use of Proceeds.
Dividends
TDS paid quarterly dividends per outstanding share of $0.04 in the third quarter of 2026 and 2025. TDS has no current plans to change its policy of paying 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 third quarter of 2026 and 2025.
TDS paid quarterly dividends per outstanding Series VV depositary share (each representing 1/1,000th of a Preferred Share) of $0.375 in the third quarter of 2026 and 2025.
Array has not paid any regular cash dividends in past periods. In conjunction with the close of the transaction of the sale of spectrum licenses to AT&T on January 13, 2026, on this same date, the Array Board of Directors declared a special dividend per Common and Series A outstanding share of $10.25 for shareholders of record on January 23, 2026, which was paid on February 2, 2026 for a total amount of $885.5 million. TDS received its pro-rata share of the $10.25 per share special dividend in the amount of $725.6 million. In conjunction with the close of the transaction of the sale of spectrum licenses to Verizon on June 1, 2026, on this same date, the Array Board of Directors declared a special dividend per Common and Series A outstanding share of $11.00 for shareholders of record on June 11, 2026, which was paid on June 25, 2026 for a total amount of $951.3 million. TDS received its pro-rata share of the $11.00 per share special dividend in the amount of $778.7 million.
21
Consolidated Cash Flow Analysis
The following discussion summarizes TDS' cash flow activities for the nine months ended September 30, 2026 and 2025. Cash flows may fluctuate from quarter to quarter and year to year due to timing and other factors. This discussion is intended to highlight the significant changes and is not intended to fully reconcile the changes.
2026 Commentary
TDS’ Cash, cash equivalents and restricted cash increased $869.5 million. Net cash provided by operating activities related to continuing operations was $44.7 million due to net income of $580.6 million adjusted for non-cash items of $497.2 million, distributions received from unconsolidated entities of $89.6 million, including $26.1 million in distributions from the Los Angeles SMSA Limited Partnership (LA Partnership), and changes in working capital items which decreased net cash by $128.2 million. The working capital changes were primarily driven by deferred revenue related to spectrum leases, the timing of rent payments and increased prepaid contracts. Cash flows used in operating activities related to discontinued operations were $29.6 million.
Cash flows provided by investing activities related to continuing operations were $1,650.3 million, due primarily to cash received from divestitures of $2,188.2 million, partially offset by payments for property, plant and equipment of $515.6 million and cash paid for acquisitions of $25.1 million. There were no cash flows provided by investing activities related to discontinued operations.
Cash flows used for financing activities related to continuing operations were $796.0 million, due primarily to the payment of $332.5 million in Array dividends, the repurchase of TDS Common Shares of $205.1 million, repayments on TDS long-term debt agreements of $153.1 million, the payment of $65.6 million in TDS dividends and tax withholdings, net of cash receipts, for TDS and Array stock-based compensation awards of $34.8 million. There were no cash flows used for financing activities related to discontinued operations.
2025 Commentary
TDS’ Cash, cash equivalents and restricted cash increased $554.0 million. Net cash provided by operating activities related to continuing operations was $224.8 million due to net income of $88.8 million adjusted for non-cash items of $124.1 million and distributions received from unconsolidated entities of $149.7 million. Distributions from noncontrolling wireless entities managed by Array included a special distribution of $42.5 million related to the proceeds received by three entities in the state of Iowa that sold their wireless operations to T-Mobile on August 1, 2025. In addition, distributions from certain equity method investments operated by Verizon included a special distribution of $25.3 million related to proceeds received by Verizon managed entities related to Verizon's tower transaction with Vertical Bridge that closed in December 2024. This was partially offset by lower current year distributions due to adjustments made by certain equity method investees for prior period activity. The changes in working capital items which decreased net cash by $137.8 million were primarily driven by the payment of associate bonuses, deferred revenue related to spectrum leases and the timing of tax payments, partially offset by the timing of vendor payments. Cash flows provided by operating activities related to discontinued operations were $345.5 million.
Cash flows used for investing activities related to continuing operations were $233.7 million, due primarily to payments for property, plant and equipment of $262.1 million, partially offset by cash received from divestitures of $29.4 million. Cash flows used for investing activities related to discontinued operations were $2,462.4 million.
Cash flows used for financing activities related to continuing operations were $2,224.5 million, due primarily to repayments on TDS and Array long-term debt agreements of $1,961.8 million, the payment of $358.6 million in Array dividends, the payment of $65.8 million in TDS dividends, tax withholdings, net of cash receipts for Array stock-based compensation awards of $63.5 million due to Array awards that accelerated upon change in control and associate terminations, the repurchase of TDS Common Shares of $40.7 million, the repurchase of Array Common Shares of $21.4 million, and distributions to noncontrolling interests of $21.1 million due to the sale of the wireless operations to T-Mobile. These were partially offset by $325.0 million borrowed under the Array CoBank term loan agreement. Cash flows used for financing activities related to discontinued operations were $20.5 million.
22
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 2026 were as follows:
Non-current assets held for sale
Non-current assets held for sale decreased $1,540.3 million due primarily to the sale of wireless spectrum licenses to AT&T, Verizon and T-Mobile in 2026. See Note 7 — Acquisitions and Divestitures in the Notes to Consolidated Financial Statements for additional information.
Other intangible assets, net of accumulated amortization
Other intangible assets, net of accumulated amortization decreased $21.4 million due primarily to amortization of TDS Telecom franchise rights.
Accounts payable
Accounts payable increased $80.8 million due primarily to increased capital expenditures, the timing of vendor payments, and the repurchase of TDS Common Shares.
Customer deposits and deferred revenues
Customer deposits and deferred revenues decreased $66.3 million due primarily to the recognition of the deferral of a portion of the T-Mobile purchase price related to T-Mobile's use of certain spectrum assets at no cost for up to one year from closing. See Note 2 — Discontinued Operations in the Notes to Consolidated Financial Statements for additional information.
Accrued taxes
Accrued taxes decreased $19.8 million due primarily to tax payments made in 2026 that relate to the 2025 tax year.
Deferred income tax liability, net
Deferred income tax liability, net decreased $128.1 million due primarily to reversals of temporary differences related to prior amortization of wireless spectrum licenses, triggered by the sale of wireless spectrum licenses to AT&T, Verizon and T-Mobile during 2026.
Long-term debt, net
Long-term debt, net decreased $154.6 million due primarily to the repayment of the TDS export credit financing agreement.
23
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
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 (loss) from continuing operations adjusted for the items set forth in the reconciliation below. EBITDA, Adjusted EBITDA and Adjusted OIBDA are not measures of financial performance under GAAP and should not be considered as alternatives to Net income (loss) from continuing operations or Cash flows from operating activities - continuing operations, as indicators of cash flows or as measures of liquidity. TDS does not intend to imply that any such items set forth in the reconciliation below are non-recurring, infrequent or unusual; such items may occur in the future.
Adjusted EBITDA is a segment measure reported to the chief operating decision maker for purposes of assessing the segments' performance. See Note 13 — 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, expenses related to strategic alternatives review, gains and losses, and other items as presented below as it provides additional relevant and useful information to investors and other users of TDS’ financial data in evaluating the effectiveness of its operations and underlying business trends in a manner that is consistent with management’s evaluation of business performance. Adjusted EBITDA shows adjusted earnings before interest, taxes, depreciation, amortization and accretion, gains and losses, expenses related to the strategic alternatives review and short-term imputed spectrum lease income, while Adjusted OIBDA reduces this measure further to exclude Equity in earnings of unconsolidated entities and Interest and dividend income in order to more effectively show the performance of operating activities excluding investment activities. The following tables reconcile EBITDA, Adjusted EBITDA and Adjusted OIBDA to the corresponding GAAP measures, Net income (loss) from continuing operations and/or Operating income (loss).
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| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| TDS - CONSOLIDATED | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
| (Dollars in thousands) | |||||||||||||||||||||||
| Net income from continuing operations (GAAP) | $ | 59,888 | $ | 78,781 | $ | 580,601 | $ | 88,782 | |||||||||||||||
| Add back: | |||||||||||||||||||||||
| Income tax expense (benefit) | (25,869) | (72,772) | 134,950 | (85,119) | |||||||||||||||||||
| Interest expense | 11,575 | 47,278 | 28,284 | 100,352 | |||||||||||||||||||
| Depreciation, amortization and accretion | 90,166 | 91,746 | 264,889 | 262,095 | |||||||||||||||||||
| EBITDA (Non-GAAP) | 135,760 | 145,033 | 1,008,724 | 366,110 | |||||||||||||||||||
| Add back or deduct: | |||||||||||||||||||||||
| Expenses related to strategic alternatives review | 12,884 | 4,132 | 22,679 | 6,191 | |||||||||||||||||||
| Loss on impairment of licenses | — | 47,679 | — | 47,679 | |||||||||||||||||||
| (Gain) loss on asset disposals, net | 2,498 | 729 | 13,077 | 8,524 | |||||||||||||||||||
| (Gain) loss on sale of business and other exit costs, net | (515) | 2,844 | 1,046 | (6,032) | |||||||||||||||||||
| (Gain) loss on license sales and exchanges, net | 18 | (1,323) | (553,140) | (6,123) | |||||||||||||||||||
| Short-term imputed spectrum lease income | (7,669) | (30,413) | (65,639) | (30,413) | |||||||||||||||||||
| Adjusted EBITDA (Non-GAAP) | 142,976 | 168,681 | 426,747 | 385,936 | |||||||||||||||||||
| Deduct: | |||||||||||||||||||||||
| Equity in earnings of unconsolidated entities | 41,414 | 69,838 | 120,442 | 149,309 | |||||||||||||||||||
| Interest and dividend income | 22,001 | 15,663 | 55,418 | 28,044 | |||||||||||||||||||
| Other, net | 4,523 | 5,347 | 15,320 | 10,464 | |||||||||||||||||||
| Adjusted OIBDA (Non-GAAP) | 75,038 | 77,833 | 235,567 | 198,119 | |||||||||||||||||||
| Deduct: | |||||||||||||||||||||||
| Depreciation, amortization and accretion | 90,166 | 91,746 | 264,889 | 262,095 | |||||||||||||||||||
| Expenses related to strategic alternatives review | 12,884 | 4,132 | 22,679 | 6,191 | |||||||||||||||||||
| Loss on impairment of licenses | — | 47,679 | — | 47,679 | |||||||||||||||||||
| (Gain) loss on asset disposals, net | 2,498 | 729 | 13,077 | 8,524 | |||||||||||||||||||
| (Gain) loss on sale of business and other exit costs, net | (515) | 2,844 | 1,046 | (6,032) | |||||||||||||||||||
| (Gain) loss on license sales and exchanges, net | 18 | (1,323) | (553,140) | (6,123) | |||||||||||||||||||
| Operating income (loss) (GAAP) | $ | (30,013) | $ | (67,974) | $ | 487,016 | $ | (114,215) | |||||||||||||||
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| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| TDS TELECOM | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
| (Dollars in thousands) | |||||||||||||||||||||||
| Net income (loss) (GAAP) | $ | (11,954) | $ | (282) | $ | (15,900) | $ | 19,329 | |||||||||||||||
| Add back: | |||||||||||||||||||||||
| Income tax expense (benefit) | (3,306) | (2,748) | (7,305) | 561 | |||||||||||||||||||
| Interest expense | 155 | (1,743) | 330 | (4,168) | |||||||||||||||||||
| Depreciation, amortization and accretion | 75,985 | 78,901 | 222,127 | 223,478 | |||||||||||||||||||
| EBITDA (Non-GAAP) | 60,880 | 74,128 | 199,252 | 239,200 | |||||||||||||||||||
| Add back or deduct: | |||||||||||||||||||||||
| Expenses related to strategic alternatives review | 4,229 | 3,497 | 4,316 | 3,497 | |||||||||||||||||||
| (Gain) loss on asset disposals, net | 1,265 | 22 | 7,057 | 7,890 | |||||||||||||||||||
| (Gain) loss on sale of business and other exit costs, net | (515) | 2,844 | 1,046 | (5,235) | |||||||||||||||||||
| (Gain) loss on license sales and exchanges, net | — | — | (1,600) | — | |||||||||||||||||||
| Adjusted EBITDA (Non-GAAP) | 65,859 | 80,491 | 210,071 | 245,352 | |||||||||||||||||||
| Deduct: | |||||||||||||||||||||||
| Equity in earnings of unconsolidated entities | 2 | 3 | 2 | 4 | |||||||||||||||||||
| Interest and dividend income | 2,126 | 1,824 | 3,734 | 4,918 | |||||||||||||||||||
| Other, net | 238 | 1,692 | 2,869 | 5,262 | |||||||||||||||||||
| Adjusted OIBDA (Non-GAAP) | 63,493 | 76,972 | 203,466 | 235,168 | |||||||||||||||||||
| Deduct: | |||||||||||||||||||||||
| Depreciation, amortization and accretion | 75,985 | 78,901 | 222,127 | 223,478 | |||||||||||||||||||
| Expenses related to strategic alternatives review | 4,229 | 3,497 | 4,316 | 3,497 | |||||||||||||||||||
| (Gain) loss on asset disposals, net | 1,265 | 22 | 7,057 | 7,890 | |||||||||||||||||||
| (Gain) loss on sale of business and other exit costs, net | (515) | 2,844 | 1,046 | (5,235) | |||||||||||||||||||
| (Gain) loss on license sales and exchanges, net | — | — | (1,600) | — | |||||||||||||||||||
| Operating income (loss) (GAAP) | $ | (17,471) | $ | (8,292) | $ | (29,480) | $ | 5,538 | |||||||||||||||
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| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| ARRAY | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
| (Dollars in thousands) | |||||||||||||||||||||||
| Net income from continuing operations (GAAP) | $ | 69,978 | $ | 109,920 | $ | 587,449 | $ | 130,503 | |||||||||||||||
| Add back: | |||||||||||||||||||||||
| Income tax expense (benefit) | (30,121) | (62,701) | 138,147 | (54,479) | |||||||||||||||||||
| Interest expense | 10,972 | 8,855 | 29,013 | 16,233 | |||||||||||||||||||
| Depreciation, amortization and accretion | 13,405 | 11,868 | 40,437 | 35,860 | |||||||||||||||||||
| EBITDA (Non-GAAP) | 64,234 | 67,942 | 795,046 | 128,117 | |||||||||||||||||||
| Add back or deduct: | |||||||||||||||||||||||
| Expenses related to strategic alternatives review | 5,934 | 489 | 13,512 | 2,349 | |||||||||||||||||||
| Loss on impairment of licenses | — | 47,679 | — | 47,679 | |||||||||||||||||||
| (Gain) loss on asset disposals, net | 1,233 | 707 | 5,946 | 620 | |||||||||||||||||||
| (Gain) loss on license sales and exchanges, net | 9 | (1,323) | (566,459) | (6,123) | |||||||||||||||||||
| Short-term imputed spectrum lease income | (7,669) | (30,413) | (65,639) | (30,413) | |||||||||||||||||||
| Adjusted EBITDA (Non-GAAP) | 63,741 | 85,081 | 182,406 | 142,229 | |||||||||||||||||||
| Deduct: | |||||||||||||||||||||||
| Equity in earnings of unconsolidated entities | 41,009 | 69,811 | 116,144 | 147,453 | |||||||||||||||||||
| Interest and dividend income | 4,442 | 8,909 | 15,095 | 15,267 | |||||||||||||||||||
| Other, net | 35 | 254 | 9 | 253 | |||||||||||||||||||
| Adjusted OIBDA (Non-GAAP) | 18,255 | 6,107 | 51,158 | (20,744) | |||||||||||||||||||
| Deduct: | |||||||||||||||||||||||
| Depreciation, amortization and accretion | 13,405 | 11,868 | 40,437 | 35,860 | |||||||||||||||||||
| Expenses related to strategic alternatives review | 5,934 | 489 | 13,512 | 2,349 | |||||||||||||||||||
| Loss on impairment of licenses | — | 47,679 | — | 47,679 | |||||||||||||||||||
| (Gain) loss on asset disposals, net | 1,233 | 707 | 5,946 | 620 | |||||||||||||||||||
| (Gain) loss on license sales and exchanges, net | 9 | (1,323) | (566,459) | (6,123) | |||||||||||||||||||
| Operating income (loss) (GAAP) | $ | (2,326) | $ | (53,313) | $ | 557,722 | $ | (101,129) | |||||||||||||||
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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 and Recent Accounting Pronouncements, Note 3 — 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, 2025. 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, 2025.
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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 TDS' Form 10-K for the year ended December 31, 2025. 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 has required substantial changes to the manner in which Array’s remaining business is conducted, which could have a material adverse effect on Array's financial condition and results of operations.
▪Array entered into License Purchase Agreements with T-Mobile to sell certain wireless spectrum licenses. There is no guarantee that such transactions contemplated by the License Purchase Agreements will be consummated. Costs and uncertainties related to these transactions could have adverse effects on Array's financial condition or results of operations.
Operational Risk Factors
▪An inability to monetize the remaining spectrum assets as well as the ongoing costs to retain the spectrum could adversely affect TDS’ operations.
▪A delay or failure by TDS to complete significant network construction and systems implementation activities as part of its plans to expand and improve the quality and capacity of its network and support systems could adversely affect its operations.
▪Increasing competition in the wireline industry, including fixed wireless and satellites, and in the tower industry could adversely affect TDS’ revenues, negatively impact future growth and increase its costs to compete.
▪There are economic and business risks associated with fixed rate annual escalators on Array's colocation revenue contracts.
▪A substantial portion of Array revenues are derived from a small number of tenants concentrated in the wireless industry and the loss or financial difficulties of such tenants may adversely affect Array’s business, financial condition, results of operations and future growth. Array is particularly reliant on its relationship with T-Mobile. DISH Wireless has failed to make certain payments due to Array under their contractual commitment. Lower demand for wireless services, negative trends in the wireless industry or changes in customer business models may decrease the revenues Array receives from its tenants, which could adversely affect Array’s business, financial condition, results of operations and future growth.
▪TDS’ lack of scale relative to larger competitors that may have greater financial and other resources than TDS could cause TDS to be unable to compete successfully, which could adversely affect its business, financial condition or results of operations.
▪Inability to protect TDS’ real estate rights, with respect to land leases, could have an adverse effect on TDS’ business, financial condition or results of operations.
▪TDS’ business, financial condition or results of operations may be adversely impacted by extreme weather events, climate-related events, natural disasters (including wildfires) and other unforeseen events.
▪An inability to attract people of outstanding talent throughout all levels of the organization, to develop their potential through education and assignments, and to retain them by keeping them engaged, challenged and properly rewarded could have an adverse effect on TDS' business, financial condition or results of operations.
▪Changes in various business factors, including changes in demand, consumer preferences and perceptions, price competition, cost increases and other factors, could have an adverse effect on TDS’ business, financial condition or results of operations.
29
▪Advances or changes in technology could render certain technologies used by TDS obsolete, could put TDS at a competitive disadvantage, could reduce TDS’ revenues or could increase its costs of doing business. Artificial intelligence advancements may put TDS at a competitive disadvantage, in particular if TDS is not able to keep pace with its competitors, which could have an adverse effect on TDS' business, financial condition or results of operations.
▪Costs, integration problems or other factors associated with acquisitions or divestitures and/or expansion of TDS’ businesses could have an adverse effect on TDS’ business, financial condition or results of operations.
▪Difficulties involving third parties TDS does business with, including changes in the relationship with TDS or financial or operational difficulties, including supply chain disruptions of key suppliers, could adversely affect TDS’ business, financial condition or results of operations.
▪A failure by TDS to maintain flexible and capable telecommunication networks or information technologies, or a material disruption thereof, could have an adverse effect on TDS’ business, financial condition or results of operations.
Financial Risk Factors
▪Uncertainty in TDS’ or Array's future cash flow and liquidity, their level of indebtedness or their inability to access capital, deterioration in the capital markets, changes in interest rates, changes in TDS' or Array’s credit ratings or other factors could limit or restrict the availability of financing on terms and prices acceptable to TDS, which may require TDS to reduce or delay its construction, development or acquisition programs, divest assets, and/or reduce or cease share repurchases and/or the payment of common shareholder dividends.
▪TDS’ assets and revenue are concentrated primarily in the U.S. telecommunications industry. Consequently, its operating results may fluctuate based on factors related primarily to conditions in this industry.
▪TDS has significant investments in wireless operating entities that it does not control. Losses in the value of or cash flows from such investments could have an adverse effect on TDS’ financial condition, cash flows or results of operations.
Regulatory, Legal and Governance Risk Factors
▪Failure by TDS to timely or fully comply with any existing applicable legislative and/or regulatory requirements or changes thereto could adversely affect TDS’ business, financial condition or results of operations.
▪TDS' receipt of financial support through various government programs for its deployment of telecommunications and broadband networks and services, its ability to properly calculate and pay fees and surcharges for its services, and its ability to continue to pass through and collect from its customers certain of those fees and surcharges is subject to uncertainty, the result of which could have an adverse effect on TDS’ business, financial condition or results of operations.
▪Settlements, judgments, restraints on its current or future manner of doing business and/or costs resulting from pending and future legal and policy proceedings could have an adverse effect on TDS’ business, financial condition or results of operations.
▪Certain matters, such as control by the TDS Voting Trust and provisions in the TDS Restated Certificate of Incorporation, may serve to discourage or make more difficult a change in control of TDS or have other consequences.
General Risk Factors
▪TDS has experienced, and in the future expects to experience, cyber-attacks or other breaches of network or information technology security of varying degrees on a regular basis, which could have an adverse effect on TDS' business, financial condition or results of operations.
▪Disruption in credit or other financial markets, a deterioration of U.S. or global economic conditions or other events could, among other things, impede TDS’ access to or increase the cost of financing its operating and investment activities and/or result in reduced revenues and lower operating income and cash flows, which would have an adverse effect on TDS’ business, financial condition or results of operations.
30
Risk Factors
In addition to the information set forth in this Form 10-Q, you should carefully consider the factors discussed in Part I, “Item 1A. Risk Factors” in TDS’ Form 10-K for the year ended December 31, 2025, which could materially affect TDS’ business, financial condition or future results. The risks described in this Form 10-Q and the Form 10-K for the year ended December 31, 2025, 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. Subject to the foregoing, TDS has not identified for disclosure any material changes to the risk factors as previously disclosed in TDS’ Annual Report on Form 10-K for the year ended December 31, 2025.
31
Quantitative and Qualitative Disclosures About Market Risk
Market Risk
As of September 30, 2026, approximately 55% of TDS' long-term debt was in fixed-rate senior notes and approximately 45% 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 September 30, 2026.
| Principal Payments Due by Period | |||||||||||
Long-Term Debt and Lease Obligations1 | Weighted-Avg. Interest Rates on Long-Term Debt Obligations2 | ||||||||||
| (Dollars in thousands) | |||||||||||
| Remainder of 2026 | $ | 2,385 | 6.4 | % | |||||||
| 2027 | 9,074 | 6.4 | % | ||||||||
| 2028 | 8,566 | 6.4 | % | ||||||||
| 2029 | 12,647 | 6.4 | % | ||||||||
| 2030 | 293,105 | 6.4 | % | ||||||||
| Thereafter | 365,986 | 5.9 | % | ||||||||
| Total | $ | 691,763 | 6.1 | % | |||||||
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.
2Represents the weighted average stated interest rates at September 30, 2026, for debt maturing in the respective periods.
See Note 4 — 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 September 30, 2026.
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Financial Statements
| Telephone and Data Systems, Inc. | |||||||||||||||||||||||
| Consolidated Statement of Operations | |||||||||||||||||||||||
| (Unaudited) | |||||||||||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| (Dollars and shares in thousands, except per share amounts) | |||||||||||||||||||||||
| Operating revenues | |||||||||||||||||||||||
| Services | $ | $ | $ | $ | |||||||||||||||||||
| Site rental | |||||||||||||||||||||||
| Equipment and product sales | |||||||||||||||||||||||
| Total operating revenues | |||||||||||||||||||||||
| Operating expenses | |||||||||||||||||||||||
| Cost of operations (excluding Depreciation, amortization and accretion reported below) | |||||||||||||||||||||||
| Cost of equipment and products | |||||||||||||||||||||||
| Selling, general and administrative | |||||||||||||||||||||||
| Depreciation, amortization and accretion | |||||||||||||||||||||||
| Loss on impairment of licenses | |||||||||||||||||||||||
| (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 (loss) | ( | ( | ( | ||||||||||||||||||||
| Other income (expense) | |||||||||||||||||||||||
| Equity in earnings of unconsolidated entities | |||||||||||||||||||||||
| Interest and dividend income | |||||||||||||||||||||||
| Interest expense | ( | ( | ( | ( | |||||||||||||||||||
| Short-term imputed spectrum lease income | |||||||||||||||||||||||
| Other, net | |||||||||||||||||||||||
| Total other income | |||||||||||||||||||||||
| Income before income taxes | |||||||||||||||||||||||
| Income tax expense (benefit) | ( | ( | ( | ||||||||||||||||||||
| Net income from continuing operations | |||||||||||||||||||||||
| Less: Net income from continuing operations attributable to noncontrolling interests, net of tax | |||||||||||||||||||||||
| Net income from continuing operations attributable to TDS shareholders | |||||||||||||||||||||||
| Net income (loss) from discontinued operations | ( | ( | ( | ||||||||||||||||||||
| Less: Net income (loss) from discontinued operations attributable to noncontrolling interests, net of tax | ( | ( | ( | ||||||||||||||||||||
| Net income (loss) from discontinued operations attributable to TDS shareholders | ( | ( | ( | ||||||||||||||||||||
| Net income (loss) | ( | ( | |||||||||||||||||||||
| Less: Net income attributable to noncontrolling interests, net of tax | |||||||||||||||||||||||
| Net income (loss) attributable to TDS shareholders | ( | ( | |||||||||||||||||||||
| TDS Preferred Share dividends | |||||||||||||||||||||||
| Net income (loss) attributable to TDS common shareholders | $ | $ | ( | $ | $ | ( | |||||||||||||||||
33
| Telephone and Data Systems, Inc. | |||||||||||||||||||||||
| Consolidated Statement of Operations | |||||||||||||||||||||||
| (Unaudited) | |||||||||||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| (Dollars and shares in thousands, except per share amounts) | |||||||||||||||||||||||
| Basic weighted average shares outstanding | |||||||||||||||||||||||
| Basic earnings per share from continuing operations attributable to TDS common shareholders | $ | $ | $ | $ | |||||||||||||||||||
| Basic earnings (loss) per share from discontinued operations attributable to TDS common shareholders | $ | ( | $ | ( | $ | $ | ( | ||||||||||||||||
| Basic earnings (loss) per share attributable to TDS common shareholders | $ | $ | ( | $ | $ | ( | |||||||||||||||||
| Diluted weighted average shares outstanding | |||||||||||||||||||||||
| Diluted earnings per share from continuing operations attributable to TDS common shareholders | $ | $ | $ | $ | |||||||||||||||||||
| Diluted earnings (loss) per share from discontinued operations attributable to TDS common shareholders | $ | ( | $ | ( | $ | $ | ( | ||||||||||||||||
| Diluted earnings (loss) per share attributable to TDS common shareholders | $ | $ | ( | $ | $ | ( | |||||||||||||||||
The accompanying notes are an integral part of these consolidated financial statements.
34
Telephone and Data Systems, Inc. Consolidated Statement of Cash Flows (Unaudited) | |||||||||||
| Nine Months Ended September 30, | |||||||||||
| 2026 | 2025 | ||||||||||
(Dollars in thousands) | |||||||||||
| Cash flows from operating activities | |||||||||||
| Net income (loss) | $ | $ | ( | ||||||||
| Net income (loss) from discontinued operations | ( | ||||||||||
| Net income from continuing operations | |||||||||||
| 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 | |||||||||||
| Loss on impairment of licenses | |||||||||||
| (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 | ( | ( | |||||||||
| Inventory | |||||||||||
| Accounts payable | |||||||||||
| Customer deposits and deferred revenues | ( | ( | |||||||||
| Accrued taxes | ( | ( | |||||||||
| Accrued interest | ( | ||||||||||
| Other assets and liabilities | ( | ( | |||||||||
| Net cash provided by operating activities - continuing operations | |||||||||||
| Net cash provided by (used in) operating activities - discontinued operations | ( | ||||||||||
| Net cash provided by operating activities | |||||||||||
| Cash flows from investing activities | |||||||||||
| Cash paid for additions to property, plant and equipment | ( | ( | |||||||||
| Cash paid for acquisitions and licenses | ( | ( | |||||||||
| Cash received from divestitures | |||||||||||
| Other investing activities | |||||||||||
| Net cash provided by (used in) investing activities - continuing operations | ( | ||||||||||
| Net cash provided by investing activities - discontinued operations | |||||||||||
| Net cash provided by investing activities | $ | $ | |||||||||
35
Telephone and Data Systems, Inc. Consolidated Statement of Cash Flows (Unaudited) | |||||||||||
| Nine Months Ended September 30, | |||||||||||
| 2026 | 2025 | ||||||||||
(Dollars in thousands) | |||||||||||
| 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 TDS Common Shares | ( | ( | |||||||||
| Repurchase of Array Common Shares | ( | ||||||||||
| Dividends paid to TDS shareholders | ( | ( | |||||||||
| Array dividends paid to noncontrolling public shareholders | ( | ( | |||||||||
| Payment of debt issuance costs | ( | ||||||||||
| Distributions to noncontrolling interests | ( | ( | |||||||||
| Cash paid for software license agreements | ( | ( | |||||||||
| Payments to acquire additional interest in subsidiaries | ( | ||||||||||
| Other financing activities | ( | ||||||||||
| Net cash used in financing activities - continuing operations | ( | ( | |||||||||
| Net cash used in financing activities - discontinued operations | ( | ||||||||||
| 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.
36
Telephone and Data Systems, Inc.
Consolidated Balance Sheet — Assets
(Unaudited)
| September 30, 2026 | December 31, 2025 | ||||||||||
| (Dollars in thousands) | |||||||||||
| Current assets | |||||||||||
| Cash and cash equivalents | $ | $ | |||||||||
| Accounts receivable | |||||||||||
Customers, less allowances of $ | |||||||||||
Other, less allowances of $ | |||||||||||
| Inventory, net | |||||||||||
| Prepaid expenses | |||||||||||
| Income taxes receivable | |||||||||||
| Other current assets | |||||||||||
| Total current assets | |||||||||||
| Non-current assets held for sale | |||||||||||
| Licenses | |||||||||||
| Goodwill | |||||||||||
Other intangible assets, net of accumulated amortization of $ | |||||||||||
| Investments in unconsolidated entities | |||||||||||
Property, plant and equipment, net of accumulated depreciation and amortization of $ | |||||||||||
| 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.
37
Telephone and Data Systems, Inc.
Consolidated Balance Sheet — Liabilities and Equity
(Unaudited)
| September 30, 2026 | December 31, 2025 | ||||||||||
| (Dollars and shares in thousands, 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 | |||||||||||
| Current liabilities of discontinued operations | |||||||||||
| 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 | |||||||||||
| 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 September 30, 2026 and December 31, 2025, include assets held by current consolidated variable interest entities (VIEs) of $33.3 million and $35.5 million, respectively, which are not available to be used to settle the obligations of TDS. The consolidated total liabilities for both September 30, 2026 and December 31, 2025, include certain liabilities of current consolidated VIEs of $9.6
38
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 (loss) | Retained earnings | Total TDS shareholders' equity | Noncontrolling interests | Total equity | |||||||||||||||||||||||||||||||||||||||||||||
| (Dollars in thousands, except per share amounts) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| June 30, 2026 | $ | $ | $ | $ | ( | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||
| Net income attributable to TDS shareholders | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
| Net income attributable to noncontrolling interests classified as equity | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive income (loss) | — | — | — | — | ( | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
TDS Common and Series A Common share dividends ($ | — | — | — | — | — | ( | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
TDS Preferred share dividends ($ | — | — | — | — | — | ( | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
| Repurchase of Common Shares | — | — | — | ( | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
| Dividend reinvestment plan | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
Incentive and compensation plans | — | — | — | ( | — | ||||||||||||||||||||||||||||||||||||||||||||||||
| Adjust investment in subsidiaries for compensation plans | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
Distributions to noncontrolling interests | — | — | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
| September 30, 2026 | $ | $ | $ | $ | ( | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||
The accompanying notes are an integral part of these consolidated financial statements.
39
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 (loss) | Retained earnings | Total TDS shareholders' equity | Noncontrolling interests | Total equity | |||||||||||||||||||||||||||||||||||||||||||||
| (Dollars in thousands, except per share amounts) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| June 30, 2025 | $ | $ | $ | $ | ( | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||
| Net income (loss) attributable to TDS shareholders | — | — | — | — | — | ( | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
| Net income attributable to noncontrolling interests classified as equity | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive income (loss) | — | — | — | — | ( | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
TDS Common and Series A Common share dividends ($ | — | — | — | — | — | ( | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
Array dividends paid to noncontrolling public shareholders ($ | — | — | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
TDS Preferred share dividends ($ | — | — | — | — | — | ( | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
| Repurchase of Common Shares | — | — | — | ( | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
Dividend reinvestment plan | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
Incentive and compensation plans | — | — | — | ( | — | ||||||||||||||||||||||||||||||||||||||||||||||||
| Adjust investment in subsidiaries for issuances and other compensation plans | — | ( | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
Distributions to noncontrolling interests | — | — | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
| September 30, 2025 | $ | $ | $ | $ | ( | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||
The accompanying notes are an integral part of these consolidated financial statements.
40
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 (loss) | Retained earnings | Total TDS shareholders' equity | Noncontrolling interests | Total equity | |||||||||||||||||||||||||||||||||||||||||||||
| (Dollars in thousands, except per share amounts) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| December 31, 2025 | $ | $ | $ | $ | ( | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||
| Net income attributable to TDS shareholders | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
| Net income attributable to noncontrolling interests classified as equity | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive income (loss) | — | — | — | — | ( | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
TDS Common and Series A Common share dividends ($ | — | — | — | — | — | ( | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
Array dividends paid to noncontrolling public shareholders ($ | — | — | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
TDS Preferred share dividends ($ | — | — | — | — | — | ( | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
| Repurchase of Common Shares | — | — | — | ( | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
| Dividend reinvestment plan | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
Incentive and compensation plans | — | — | — | ( | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||||||
| Adjust investment in subsidiaries for issuances, acquisitions and other compensation plans | — | ( | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
Distributions to noncontrolling interests | — | — | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
| September 30, 2026 | $ | $ | $ | $ | ( | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||
The accompanying notes are an integral part of these consolidated financial statements.
41
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 (loss) | Retained earnings | Total TDS shareholders' equity | Noncontrolling interests | Total equity | |||||||||||||||||||||||||||||||||||||||||||||
| (Dollars in thousands, except per share amounts) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| December 31, 2024 | $ | $ | $ | $ | ( | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||
| Net income (loss) attributable to TDS shareholders | — | — | — | — | — | ( | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
| Net income attributable to noncontrolling interests classified as equity | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive income (loss) | — | — | — | — | ( | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
TDS Common and Series A Common share dividends ($ | — | — | — | — | — | ( | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
Array dividends paid to noncontrolling public shareholders ($ | — | — | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
TDS Preferred share dividends ($ | — | — | — | — | — | ( | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
| Repurchase of Common Shares | — | — | — | ( | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
| Dividend reinvestment plan | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
Incentive and compensation plans | — | — | — | ( | — | ||||||||||||||||||||||||||||||||||||||||||||||||
| Adjust investment in subsidiaries for repurchases, issuances and other compensation plans | — | ( | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
Distributions to noncontrolling interests | — | — | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
| September 30, 2025 | $ | $ | $ | $ | ( | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||
The accompanying notes are an integral part of these consolidated financial statements.
42
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. The consolidated financial statements include the accounts of TDS and subsidiaries in which it has a controlling financial interest, including TDS’ wholly-owned subsidiary, TDS Telecommunications LLC (TDS Telecom) and Array Digital Infrastructure, Inc. (Array), an 81.9 %-owned subsidiary of TDS. 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. The Notes to Consolidated Financial Statements are presented for continuing operations, except for Note 2 — Discontinued Operations.
TDS has the following reportable segments: TDS Telecom and Array. TDS' non-reportable other business activities are presented as "All 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 13 — Business Segment Information for summary financial information on each business segment.
Certain numbers included herein are rounded to thousands or millions for ease of presentation; however, certain calculated amounts and percentages are determined using the unrounded numbers. 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, 2025.
Restricted Cash
TDS presents restricted cash with cash and cash equivalents in the Consolidated Statement of Cash Flows. 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.
| September 30, 2026 | December 31, 2025 | ||||||||||
| (Dollars in thousands) | |||||||||||
| Cash and cash equivalents | $ | $ | |||||||||
| Restricted cash included in Other current assets | |||||||||||
| Cash, cash equivalents and restricted cash in the statement of cash flows | $ | $ | |||||||||
Dividend
On January 13, 2026, the Array Board of Directors declared a special dividend per Common and Series A outstanding share of $10.25 885.5 million. TDS received its pro-rata share of the $10.25 725.6 million. On June 1, 2026, the Array Board of Directors declared a special dividend per Common and Series A outstanding share of $11.00 951.3 million. TDS received its pro-rata share of the $11.00 778.7 million.
43
Revision of Prior Period Interim Financial Statements
Note 2 Discontinued Operations
On August 1, 2025, Array sold its wireless operations and select spectrum assets to T-Mobile US, Inc. (T-Mobile) pursuant to a Securities Purchase Agreement (Securities Purchase Agreement).
Total consideration received was $4,293.8 million after adjustments which included a combination of $2,628.8 million in cash proceeds and $1,665.0 million in debt assumed by T-Mobile through the preliminary results of an exchange offer made to Array's debtholders, which subsequently closed on August 5, 2025. The final cash proceeds are subject to adjustment according to the terms and conditions of the Securities Purchase Agreement. Array recorded an estimated purchase price true-up payable to T-Mobile of $24.3 million and $20.2 million, as of September 30, 2026 and December 31, 2025, respectively, which is classified as Current liabilities of discontinued operations in the Consolidated Balance Sheet. Certain licenses included in the T-Mobile transaction did not transfer to T-Mobile at the time of close. At closing, a $16.7 million deferral of the purchase price was recorded related to these spectrum licenses, which is classified as Other current liabilities in the Consolidated Balance Sheet as of September 30, 2026 and Other deferred liabilities and credits in the Consolidated Balance Sheet as of December 31, 2025. As of September 30, 2026, the book value of the wireless spectrum licenses that did not transfer to T-Mobile was $16.7 million and is classified as held for sale in the Consolidated Balance Sheet. The transfer of the wireless spectrum licenses received regulatory approval on October 7, 2026 and is expected to occur in 2026, subject to Federal Communications Commission (FCC) finality and other customary closing conditions. Array also may incur significant decommissioning costs for certain equipment that T-Mobile retains the right to return to Array and recorded a liability of $65.8 million at closing. During the second quarter of 2026, Array updated its estimate for decommissioning costs and recorded a reduction of $25.5 10.2 million and $5.5 million, respectively, which are a reclassification from the liability for decommissioning costs and included in Other deferred liabilities and credits in the Consolidated Balance Sheet. The remaining estimated liability for decommissioning costs is $25.5 million as of September 30, 2026, and is classified as Other deferred liabilities and credits in the Consolidated Balance Sheet.
On August 1, 2025, a Short-Term Spectrum Manager Lease Agreement and Short-Term Spectrum Manager Sublease Agreements became effective, which provide T-Mobile with an exclusive license to use certain Array spectrum assets and leases at no cost for up to one year from closing for the sole purpose of providing continued, uninterrupted service to customers. The portion of the purchase price allocated to the use of this spectrum was $149.3 million based on an estimate for fair market value and was recognized to Short-term imputed spectrum lease income in the continuing operations Consolidated Statement of Operations over the one year term. Effective April 1, 2026, the Short-Term Spectrum Manager Lease Agreement with T-Mobile was terminated for certain spectrum assets. The remaining deferred purchase price related to the terminated leases was $11.7 million and was recognized to (Gain) loss on sale of business and other exit costs, net within discontinued operations during the second quarter of 2026. Effective August 2, 2026, an Amended and Restated Spectrum Manager Lease Agreement became effective, which provided T-Mobile with an exclusive license to continue using certain Array spectrum assets for up to one year and at no cost until February 2, 2027.
Following the close of the transaction, TDS entered into a transition services agreement (TSA) with T-Mobile to provide ongoing services and support. TDS recognized income related to the TSA of $4.3 million and $12.7 million for the three and nine months ended September 30, 2026, respectively, and $3.0
44
Net income (loss) from discontinued operations in the Consolidated Statement of Operations consists of the following:
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| (Dollars in thousands) | |||||||||||||||||||||||
| Operating revenues | |||||||||||||||||||||||
| Service | $ | $ | $ | $ | |||||||||||||||||||
| Equipment sales | |||||||||||||||||||||||
| Total operating revenues | |||||||||||||||||||||||
| Operating expenses | |||||||||||||||||||||||
| System operations (excluding Depreciation, amortization and accretion reported below) | |||||||||||||||||||||||
| Cost of equipment sold | |||||||||||||||||||||||
| 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 | ( | ||||||||||||||||||||||
| Total operating expenses | ( | ||||||||||||||||||||||
| Operating income (loss) | ( | ( | ( | ||||||||||||||||||||
| Other income (expense) | |||||||||||||||||||||||
| Interest expense | ( | ( | ( | ||||||||||||||||||||
| Other, net | |||||||||||||||||||||||
| Total other expense | ( | ( | ( | ||||||||||||||||||||
| Income (loss) before income taxes | ( | ( | ( | ||||||||||||||||||||
| Income tax expense (benefit) | ( | ( | ( | ||||||||||||||||||||
| Net income (loss) from discontinued operations | $ | ( | $ | ( | $ | $ | ( | ||||||||||||||||
Note 3 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 September 30, 2026 | TDS Telecom | Array | All Other | Total | |||||||||||||||||||
| (Dollars in thousands) | |||||||||||||||||||||||
| Revenues from contracts with customers: | |||||||||||||||||||||||
| Type of service: | |||||||||||||||||||||||
| Residential | $ | $ | $ | $ | |||||||||||||||||||
| Commercial | |||||||||||||||||||||||
| Wholesale | |||||||||||||||||||||||
| Other service | ( | ||||||||||||||||||||||
| Service revenues from contracts with customers | ( | ||||||||||||||||||||||
| Equipment and product sales | |||||||||||||||||||||||
| Total revenues from contracts with customers | |||||||||||||||||||||||
| Operating lease income | ( | ||||||||||||||||||||||
| Total operating revenues | $ | $ | $ | $ | |||||||||||||||||||
45
| Three Months Ended September 30, 2025 | TDS Telecom | Array | All Other | Total | |||||||||||||||||||
| (Dollars in thousands) | |||||||||||||||||||||||
| Revenues from contracts with customers: | |||||||||||||||||||||||
| Type of service: | |||||||||||||||||||||||
| Residential | $ | $ | $ | $ | |||||||||||||||||||
| Commercial | |||||||||||||||||||||||
| Wholesale | |||||||||||||||||||||||
| Other service | ( | ||||||||||||||||||||||
| Service revenues from contracts with customers | ( | ||||||||||||||||||||||
| Equipment and product sales | |||||||||||||||||||||||
| Total revenues from contracts with customers | |||||||||||||||||||||||
| Operating lease income | |||||||||||||||||||||||
| Total operating revenues | $ | $ | $ | $ | |||||||||||||||||||
| Nine Months Ended September 30, 2026 | TDS Telecom | Array | All Other | Total | |||||||||||||||||||
| (Dollars in thousands) | |||||||||||||||||||||||
| Revenues from contracts with customers: | |||||||||||||||||||||||
| Type of service: | |||||||||||||||||||||||
| Residential | $ | $ | $ | $ | |||||||||||||||||||
| Commercial | |||||||||||||||||||||||
| Wholesale | |||||||||||||||||||||||
| Other service | ( | ||||||||||||||||||||||
| Service revenues from contracts with customers | ( | ||||||||||||||||||||||
| Equipment and product sales | |||||||||||||||||||||||
| Total revenues from contracts with customers | |||||||||||||||||||||||
| Operating lease income | ( | ||||||||||||||||||||||
| Total operating revenues | $ | $ | $ | $ | |||||||||||||||||||
| Nine Months Ended September 30, 2025 | TDS Telecom | Array | All Other | Total | |||||||||||||||||||
| (Dollars in thousands) | |||||||||||||||||||||||
| Revenues from contracts with customers: | |||||||||||||||||||||||
| Type of service: | |||||||||||||||||||||||
| Residential | $ | $ | $ | $ | |||||||||||||||||||
| Commercial | |||||||||||||||||||||||
| Wholesale | |||||||||||||||||||||||
| Other service | ( | ||||||||||||||||||||||
| Service revenues from contracts with customers | ( | ||||||||||||||||||||||
| Equipment and product sales | |||||||||||||||||||||||
| Total revenues from contracts with customers | |||||||||||||||||||||||
| Operating lease income | |||||||||||||||||||||||
| Total operating revenues | $ | $ | $ | $ | |||||||||||||||||||
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.
| September 30, 2026 | December 31, 2025 | ||||||||||
| (Dollars in thousands) | |||||||||||
| Contract assets | $ | $ | |||||||||
| Contract liabilities | $ | $ | |||||||||
46
Revenue recognized related to contract liabilities existing at January 1, 2026 was $36.9 million for the nine months ended September 30, 2026.
Transaction price allocated to the remaining performance obligations
TDS Telecom provides residential internet, video, mobile, and voice services primarily through monthly subscription arrangements. Each subscription period is treated as a distinct performance obligation, with revenue recognized on a straight-line basis over the service period as the services are delivered. Customers are typically billed in advance and may cancel their subscriptions at the end of any monthly term without incurring penalties.
In addition, as of September 30, 2026, TDS Telecom expects to recognize approximately $74.4 million of revenue in the future related to performance obligations associated with existing circuit contracts that are partially or wholly unsatisfied. As of September 30, 2026, the transaction price related to unsatisfied performance obligations that are expected to be recognized for the remainder of 2026, 2027 and thereafter was $8.8 million, $28.9 million, and $36.7 million, respectively.
Contract Cost Assets
| September 30, 2026 | December 31, 2025 | ||||||||||
| (Dollars in thousands) | |||||||||||
| Costs to obtain contracts | |||||||||||
| Sales commissions | $ | $ | |||||||||
| Fulfillment costs | |||||||||||
| Installation costs | |||||||||||
| Total contract cost assets | $ | $ | |||||||||
Amortization of contract cost assets was $2.5 million and $7.4 million for the three and nine months ended September 30, 2026, respectively and $2.5 million and $7.7 million for the three and nine months ended September 30, 2025, respectively, and was included in Selling, general and administrative expenses and Cost of operations expenses.
Note 4 Fair Value Measurements
As of September 30, 2026 and December 31, 2025, 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 | September 30, 2026 | December 31, 2025 | |||||||||||||||||||||||||||
| Book Value | Fair Value | Book Value | Fair Value | ||||||||||||||||||||||||||
| (Dollars in thousands) | |||||||||||||||||||||||||||||
| 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.
47
Note 5 Income Taxes
The effective tax rate on Income before income taxes from continuing operations for the three and nine months ended September 30, 2026 was (76.0 )% and 18.9 %, respectively. The effective tax rate for the three month period is not meaningful due to (i) favorable changes in estimated state taxes on the sale of wireless spectrum licenses and (ii) a benefit related to transferable federal tax credits purchased during the period.
The effective tax rate on Income before income taxes from continuing operations for the three and nine months ended September 30, 2025 was (1,211.1 )% and (2,324.1 )%, respectively. These effective tax rates are not meaningful due to low amounts of pretax income and reflect (i) favorable reductions to valuation allowances on deferred tax assets and (ii) the impacts of compensation-related tax adjustments.
48
Note 6 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 September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| (Dollars and shares in thousands, except per share amounts) | |||||||||||||||||||||||
| Net income from continuing operations attributable to TDS common shareholders | $ | $ | $ | $ | |||||||||||||||||||
| Net income (loss) from discontinued operations attributable to TDS common shareholders | ( | ( | ( | ||||||||||||||||||||
| Net income (loss) attributable to TDS common shareholders used in basic earnings (loss) per share | ( | ( | |||||||||||||||||||||
| Adjustments to compute diluted earnings (loss): | |||||||||||||||||||||||
| Noncontrolling interest adjustment | ( | ( | ( | ( | |||||||||||||||||||
| Net income (loss) attributable to TDS common shareholders used in diluted earnings per share | $ | $ | ( | $ | $ | ( | |||||||||||||||||
| Weighted average number of shares used in basic earnings per share: | |||||||||||||||||||||||
| Common Shares | |||||||||||||||||||||||
| Series A Common Shares | |||||||||||||||||||||||
| Total | |||||||||||||||||||||||
| Effects of dilutive securities | |||||||||||||||||||||||
| Weighted average number of shares used in diluted earnings per share | |||||||||||||||||||||||
| Basic earnings per share from continuing operations attributable to TDS common shareholders | $ | $ | $ | $ | |||||||||||||||||||
| Basic earnings (loss) per share from discontinued operations attributable to TDS common shareholders | ( | ( | ( | ||||||||||||||||||||
| Basic earnings (loss) per share attributable to TDS common shareholders | $ | $ | ( | $ | $ | ( | |||||||||||||||||
| Diluted earnings per share from continuing operations attributable to TDS common shareholders | $ | $ | $ | $ | |||||||||||||||||||
| Diluted earnings (loss) per share from discontinued operations attributable to TDS common shareholders | ( | ( | ( | ||||||||||||||||||||
| Diluted earnings (loss) per share attributable to TDS common shareholders | $ | $ | ( | $ | $ | ( | |||||||||||||||||
Certain Common Shares issuable upon the exercise of stock options or vesting of performance and restricted stock units were not included in weighted average diluted shares outstanding for the calculation of Diluted earnings (loss) per share attributable to TDS common shareholders because their effects were antidilutive. The number of such Common Shares excluded was 0.3 million and less than 0.1 million for the three and nine months ended September 30, 2026, respectively, and less than 0.1
49
Note 7 Acquisitions and Divestitures
Array
In addition to the divestiture of Array's wireless operations, as disclosed in Note 2 — Discontinued Operations, other divestiture transactions are disclosed below.
On June 1, 2026, Array closed on the sale of certain AWS, Cellular and PCS wireless spectrum licenses to Verizon Communications Inc. (Verizon) for $1,000.0 million and TDS recorded a book gain of $400.2 million ($304.2 million net of tax) during the second quarter of 2026. The book gain recorded at TDS is lower than the book gain recorded at Array due primarily to transaction costs paid by TDS.
On January 13, 2026, Array closed on the sale of certain 3.45 GHz and 700 MHz wireless spectrum licenses to New Cingular Wireless PCS, LLC (AT&T), a subsidiary of AT&T Inc., for $1,018.0 million and TDS recorded a book gain of $150.9 million ($114.7 million net of tax expense) during the first quarter of 2026. The book gain recorded at TDS is lower than the book gain recorded at Array due primarily to transaction costs paid by TDS.
On August 29, 2025, Array entered into a License Purchase Agreement (T-Mobile License Purchase Agreement) with T-Mobile to sell three groups of 700 MHz wireless spectrum licenses and agreed to grant T-Mobile certain rights to lease such licenses prior to the transaction close for total proceeds of $85.0 million. On May 5, 2026, Array closed on the sale of the first group of wireless spectrum licenses under the T-Mobile License Purchase Agreement for total proceeds of $74.8 million and recorded a book gain on the transaction of $0.1 million. At the closing of the first group of licenses, $18.6 million of the total proceeds of $74.8 million was deferred based on the fair market value of all wireless spectrum licenses included in the T-Mobile License Purchase Agreement. As of September 30, 2026, the book value of the remaining groups of wireless spectrum licenses to be sold was $11.2 million and is classified as held for sale in the Consolidated Balance Sheet. The sale of the remaining groups of wireless spectrum licenses received regulatory approval on October 7, 2026 and is expected to close in 2026, subject to FCC finality and other customary closing conditions.
As part of the T-Mobile transaction to sell the wireless operations, 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 $106.0 million. The call option notice period started on May 24, 2024, and the put exercise period started on August 1, 2025. There was no cash exchanged at the inception of the Put/Call Agreement. Array accounted for this instrument as a net written call option and wrote off the entire fair value in 2025. In September 2025, T-Mobile exercised $86.4 million of the call option and the transaction closed on May 12, 2026. TDS recorded a book gain on the transaction of $0.3 million. In June 2026, T-Mobile exercised the second call option for $19.6 million. As of September 30, 2026, the book value of the wireless spectrum licenses subject to the second call notice was $19.5 million and is classified as held for sale in the Consolidated Balance Sheet. The transaction received regulatory approval on October 7, 2026 and is expected to close in 2026, subject to FCC finality and other customary closing conditions.
TDS Telecom
On September 1, 2026, TDS Telecom closed on a stock purchase agreement with Granite State Communications, a fiber operator in New Hampshire, acquiring 100 % of the outstanding equity for a purchase price of $26.6 million, including adjustments. The allocation of the purchase price included $19.8 million of net tangible assets and liabilities, $6.4 0.4 million of intangible assets subject to amortization.
Note 8 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.
| September 30, 2026 | December 31, 2025 | ||||||||||
| (Dollars in thousands) | |||||||||||
| Equity method investments | $ | $ | |||||||||
| Measurement alternative method investments | |||||||||||
| Investments recorded using the net asset value practical expedient | |||||||||||
| Total investments in unconsolidated entities | $ | $ | |||||||||
50
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 September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| (Dollars in thousands) | |||||||||||||||||||||||
| Revenues | $ | $ | $ | $ | |||||||||||||||||||
| Operating expenses | |||||||||||||||||||||||
| Operating income | |||||||||||||||||||||||
| Other income (expense), net | ( | ( | ( | ( | |||||||||||||||||||
| Net income | $ | $ | $ | $ | |||||||||||||||||||
Note 9 Asset Retirement Obligation
Asset retirement obligations are included in Other deferred liabilities and credits in the Consolidated Balance Sheet.
During the three months ended September 30, 2026, Array and TDS Telecom performed a review of the assumptions and estimated future costs related to asset retirement obligations. The results of the reviews and other changes in asset retirement obligations during the nine months ended September 30, 2026 were as follows:
| Asset Retirement Obligations | |||||
| (Dollars in thousands) | |||||
| Balance at December 31, 2025 | $ | ||||
| Additional liabilities accrued | |||||
| Revisions in estimated cash outflows | |||||
| Acquisition of assets | |||||
| Disposition of assets | ( | ||||
| Accretion expense | |||||
| Balance at September 30, 2026 | $ | ||||
Note 10 Debt
Export Credit Financing Agreement
In January 2026, TDS repaid the entire outstanding borrowings under its term loan agreement with Export Development Canada of $150.0 million.
Note 11 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 TDS' Form 10-K for the year ended December 31, 2025.
TDS consolidates VIEs that are limited partnerships that lease tower space to tenants. 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.
51
| September 30, 2026 | December 31, 2025 | ||||||||||
| (Dollars in thousands) | |||||||||||
| Assets | |||||||||||
| Accounts receivable | $ | $ | |||||||||
| Other current assets | |||||||||||
| 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 liabilities | $ | $ | |||||||||
Other Related Matters
TDS made contributions, loans or advances to its VIEs totaling $3.0 million during the nine months ended September 30, 2026 and made no contributions, loans or advances during the nine months ended September 30, 2025.
Note 12 Noncontrolling Interests
The following schedule discloses the effects of Net income (loss) attributable to TDS shareholders and changes in TDS’ ownership interest in Array on TDS’ equity:
| Nine Months Ended September 30, | 2026 | 2025 | |||||||||
| (Dollars in thousands) | |||||||||||
| Net income (loss) 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 13 Business Segment Information
TDS has the following reportable segments: TDS Telecom and Array. TDS Telecom generates its revenues by providing broadband, video, voice and wireless services. Array generates its revenues primarily by leasing tower space on Array-owned towers to customers.
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, expenses related to the strategic alternatives review, and short-term imputed spectrum lease income. 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.
52
Financial data from continuing operations for TDS’ reportable segments for the three and nine months ended September 30, 2026 and 2025, is as follows:
| Three Months Ended September 30, 2026 | TDS Telecom | Array | Total | ||||||||
| (Dollars in thousands) | |||||||||||
| Revenues from external customers | $ | $ | $ | ||||||||
| Intersegment revenues | |||||||||||
| Reconciliation of revenue: | |||||||||||
All Other revenues1 | |||||||||||
| Elimination of intersegment revenues | ( | ||||||||||
| Total operating revenues | $ | ||||||||||
Add back or deduct2: | |||||||||||
| Cost of operations (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 and Cost of operations) | |||||||||||
| Equity in earnings of unconsolidated entities | |||||||||||
| Interest and dividend income | |||||||||||
| Other segment items | |||||||||||
| Segment Adjusted EBITDA (Non-GAAP) | $ | $ | $ | ||||||||
| Reconciliation of Segment Adjusted EBITDA to Income before income taxes: | |||||||||||
All Other income before income taxes1 | |||||||||||
| Short-term imputed spectrum lease income | |||||||||||
| Depreciation, amortization and accretion | ( | ||||||||||
| Expenses related to strategic alternatives review (included in Selling, general and administrative and Cost of operations) | ( | ||||||||||
| Loss on asset disposals, net | ( | ||||||||||
| Gain on sale of business and other exit costs, net | |||||||||||
| Loss on license sales and exchanges, net | ( | ||||||||||
| Interest expense | ( | ||||||||||
| Income before income taxes | $ | ||||||||||
| Other segment disclosures | |||||||||||||||||
| Three Months Ended or as of September 30, 2026 | TDS Telecom | Array | Segment Total | All Other1 | TDS Consolidated Total | ||||||||||||
| Short-term imputed spectrum lease income | $ | $ | $ | $ | $ | ||||||||||||
| Depreciation, amortization and accretion | ( | ( | ( | ( | ( | ||||||||||||
| Loss on asset disposals, net | ( | ( | ( | ( | |||||||||||||
| Gain on sale of business and other exit costs, net | |||||||||||||||||
| Loss on license sales and exchanges, net | ( | ( | ( | ( | |||||||||||||
| Interest expense | ( | ( | ( | ( | ( | ||||||||||||
| Investments in unconsolidated entities | |||||||||||||||||
| Total assets | |||||||||||||||||
| Capital expenditures from continuing operations | $ | $ | $ | $ | $ | ||||||||||||
53
| Three Months Ended September 30, 2025 | TDS Telecom | Array | Total | ||||||||
| (Dollars in thousands) | |||||||||||
| Revenues from external customers | $ | $ | $ | ||||||||
| Intersegment revenues | |||||||||||
| Reconciliation of revenue: | |||||||||||
All Other revenues1 | |||||||||||
| Elimination of intersegment revenues | ( | ||||||||||
| Total operating revenues | $ | ||||||||||
Add back or deduct2: | |||||||||||
| Cost of operations (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 and Cost of operations) | |||||||||||
| Equity in earnings of unconsolidated entities | |||||||||||
| Interest and dividend income | |||||||||||
| 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 | ( | ||||||||||
| Short-term imputed spectrum lease income | |||||||||||
| Depreciation, amortization and accretion | ( | ||||||||||
| Expenses related to strategic alternatives review (included in Selling, general and administrative and Cost of operations) | ( | ||||||||||
| Loss on impairment of licenses | ( | ||||||||||
| Loss on asset disposals, net | ( | ||||||||||
| Loss on sale of business and other exit costs, net | ( | ||||||||||
| Gain on license sales and exchanges, net | |||||||||||
| Interest expense | ( | ||||||||||
| Income before income taxes | $ | ||||||||||
| Other segment disclosures | |||||||||||||||||
| Three Months Ended or as of September 30, 2025 | TDS Telecom | Array | Segment Total | All Other1 | TDS Consolidated Total | ||||||||||||
| Short-term imputed spectrum lease income | $ | $ | $ | $ | $ | ||||||||||||
| Depreciation, amortization and accretion | ( | ( | ( | ( | ( | ||||||||||||
| Loss on impairment of licenses | ( | ( | ( | ||||||||||||||
| Loss on asset disposals, net | ( | ( | ( | ( | |||||||||||||
| Loss on sale of business and other exit costs, net | ( | ( | ( | ||||||||||||||
| Gain on license sales and exchanges, net | |||||||||||||||||
| Interest expense | ( | ( | ( | ( | |||||||||||||
| Investments in unconsolidated entities | |||||||||||||||||
| Total assets | |||||||||||||||||
| Capital expenditures from continuing operations | $ | $ | $ | $ | ( | $ | |||||||||||
54
| Nine Months Ended September 30, 2026 | TDS Telecom | Array | Total | ||||||||
| (Dollars in thousands) | |||||||||||
| Revenues from external customers | $ | $ | $ | ||||||||
| Intersegment revenues | |||||||||||
| Reconciliation of revenue: | |||||||||||
All Other revenues1 | |||||||||||
| Elimination of intersegment revenues | ( | ||||||||||
| Total operating revenues | $ | ||||||||||
Add back or deduct2: | |||||||||||
| Cost of operations (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 and Cost of operations) | |||||||||||
| Equity earnings of unconsolidated entities | |||||||||||
| Interest and dividend income | |||||||||||
| Other segment items | |||||||||||
| Segment Adjusted EBITDA (Non-GAAP) | $ | $ | $ | ||||||||
| Reconciliation of Segment Adjusted EBITDA to Income before income taxes: | |||||||||||
All Other income before income taxes1 | |||||||||||
| Short-term imputed spectrum lease income | |||||||||||
| Depreciation, amortization and accretion | ( | ||||||||||
| Expenses related to strategic alternatives review (included in Selling, general and administrative and Cost of operations) | ( | ||||||||||
| Loss on asset disposals, net | ( | ||||||||||
| Loss on sale of business and other exit costs, net | ( | ||||||||||
| Gain on license sales and exchanges, net | |||||||||||
| Interest expense | ( | ||||||||||
| Income before income taxes | $ | ||||||||||
| Other segment disclosures | |||||||||||||||||
| Nine Months Ended September 30, 2026 | TDS Telecom | Array | Segment Total | All Other1 | TDS Consolidated Total | ||||||||||||
| Short-term imputed spectrum lease income | $ | $ | $ | $ | $ | ||||||||||||
| Depreciation, amortization and accretion | ( | ( | ( | ( | ( | ||||||||||||
| Loss on asset disposals, net | ( | ( | ( | ( | ( | ||||||||||||
| Loss on sale of business and other exit costs, net | ( | ( | ( | ||||||||||||||
| Gain (loss) on license sales and exchanges, net | ( | ||||||||||||||||
| Interest expense | ( | ( | ( | ( | |||||||||||||
| Capital expenditures from continuing operations | $ | $ | $ | $ | $ | ||||||||||||
55
| Nine Months Ended September 30, 2025 | TDS Telecom | Array | Total | ||||||||
| (Dollars in thousands) | |||||||||||
| Revenues from external customers | $ | $ | $ | ||||||||
| Intersegment revenues | |||||||||||
| Reconciliation of revenue: | |||||||||||
All Other revenues1 | |||||||||||
| Elimination of intersegment revenues | ( | ||||||||||
| Total operating revenues | $ | ||||||||||
Add back or deduct2: | |||||||||||
| Cost of operations (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 and Cost of operations) | |||||||||||
| Equity earnings of unconsolidated entities | |||||||||||
| Interest and dividend income | |||||||||||
| 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 | ( | ||||||||||
| Short-term imputed spectrum lease income | |||||||||||
| Depreciation, amortization and accretion | ( | ||||||||||
| Expenses related to strategic alternatives review (included in Selling, general and administrative and Cost of operations) | ( | ||||||||||
| Loss on impairment of licenses | ( | ||||||||||
| Loss on asset disposals, net | ( | ||||||||||
| Gain on sale of business and other exit costs, net | |||||||||||
| Gain on license sales and exchanges, net | |||||||||||
| Interest expense | ( | ||||||||||
| Income before income taxes | $ | ||||||||||
| Other segment disclosures | ||||||||||||||||||||
| Nine Months Ended September 30, 2025 | TDS Telecom | Array | Segment Total | All Other1 | TDS Consolidated Total | |||||||||||||||
| Short-term imputed spectrum lease income | $ | $ | $ | $ | $ | |||||||||||||||
| Depreciation, amortization and accretion | ( | ( | ( | ( | ( | |||||||||||||||
| Loss on impairment of licenses | ( | ( | ( | |||||||||||||||||
| Loss on asset disposals, net | ( | ( | ( | ( | ( | |||||||||||||||
| Gain on sale of business and other exit costs, net | ||||||||||||||||||||
| Gain on license sales and exchanges, net | ||||||||||||||||||||
| Interest expense | ( | ( | ( | ( | ||||||||||||||||
| Capital expenditures from continuing operations | $ | $ | $ | $ | $ | |||||||||||||||
1"All Other" represents TDS' non-reportable other business activities that do not meet the quantitative thresholds for being a reportable segment and includes cash balances under terms of the TDS cash management arrangement.
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.
56
Note 14 Subsequent Events
57
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 September 30, 2026, 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 September 30, 2026, that have materially affected, or are reasonably likely to materially affect, TDS' internal control over financial reporting.
58
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 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 2019, following the DOJ’s investigation, the DOJ informed Advantage Spectrum, L.P. (Advantage) and King Street Wireless, L.P. (King Street) 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 upon the request of Advantage and King Street and over the objection of the Relators. In March 2023, the District Court for the District of Columbia granted Advantage’s and King Street’s motion to dismiss the actions with prejudice. The private party plaintiffs appealed the district court’s decision to grant the motions to dismiss. In April 2025, the U.S. Court of Appeals for the D.C. Circuit affirmed the district court’s dismissal as to the case involving King Street. Plaintiffs filed a petition for certiorari with the U.S. Supreme Court on September 5, 2025. On January 12, 2026, the Supreme Court denied the petition. The King Street case is now concluded. In the Advantage case, on September 26, 2025, the D.C. Circuit reversed the district court’s decision dismissing the case and remanded that case to the district court for further proceedings. On January 22, 2026, the defendants filed a motion to dismiss in the Advantage case. On August 7, 2026, the district court denied defendants’ motion to dismiss. On October 6, 2026, the district court entered a scheduling order setting forth the pre-trial deadlines and discovery parameters. TDS and Array believe that the Relators' claims are without merit and that Advantage's and King Street's participation in FCC auctions complied with applicable law and FCC Rules.
On January 31, 2025, a 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 takes issue with certain public statements made between May 6, 2022 and November 3, 2022 regarding, among other things, Array's business strategies to address subscriber demand, 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 bringing claims for indemnification and contribution against the officer and director defendants and Array. In addition to indemnification and contribution, the plaintiff seeks money damages and the implementation of certain governance proposals. On July 21, 2025, a motion to intervene in the lawsuit was filed by the stockholder plaintiff who had previously filed a stockholder derivative lawsuit in the United States District Court for the Northern District of Illinois and subsequently dismissed that federal court lawsuit. The defendants filed a motion to dismiss the Circuit Court lawsuit on July 23, 2025. On September 29, 2025, the proposed intervenor withdrew her motion to intervene. A hearing on the motion to dismiss was held on October 6, 2025, and the motion remains pending. 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.
59
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 $250.0 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. On November 7, 2025, TDS announced that its Board of Directors had authorized an additional $500.0 million stock repurchase program for TDS Common Shares, which program is incremental to, and has similar terms as, the existing program. On November 6, 2026, TDS announced that its Board of Directors had authorized an additional $250.0 million stock repurchase program for TDS Common Shares, which program is incremental to, and has similar terms as, the existing program.
The following table provides certain information with respect to all 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. The purchases made beginning on September 10, 2026, were under a Rule 10b5-1 stock repurchase plan.
| Period | Total Number of Shares Purchased | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Maximum Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs | ||||||||||
| July 1 - 31, 2026 | — | $ | — | — | $ | 523,905,080 | ||||||||
| August 1 - 31, 2026 | — | $ | — | — | $ | 523,905,080 | ||||||||
| September 1 - 30, 2026 | 5,958,218 | $ | 36.65 | 5,958,218 | $ | 305,817,731 | ||||||||
| Total for or as of the end of the quarter ended September 30, 2026 | 5,958,218 | $ | 36.65 | 5,958,218 | $ | 305,817,731 | ||||||||
60
Other Information
Rule 10b5-1 Trading Arrangements
During the three months ended September 30, 2026, none of TDS' directors or officers (as defined in Rule 16a-1(f) under the Exchange Act) has adopted terminated
61
Exhibits
| Exhibit Number | Description of Documents | ||||
| Exhibit 31.1 | |||||
| Exhibit 31.2 | |||||
| Exhibit 32.1 | |||||
| Exhibit 32.2 | |||||
| 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. | ||||
62
Form 10-Q Cross Reference Index
| Item Number | Page No. | ||||||||||||||||
| Part I. | Financial Information | ||||||||||||||||
| - | |||||||||||||||||
| - | |||||||||||||||||
| - | |||||||||||||||||
| Part II. | Other Information | ||||||||||||||||
63
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: | November 6, 2026 | /s/ Walter C. D. Carlson | |||||||||||||||
| Walter C. D. Carlson President and Chief Executive Officer (principal executive officer) | |||||||||||||||||
| Date: | November 6, 2026 | /s/ Vicki L. Villacrez | |||||||||||||||
| Vicki L. Villacrez Executive Vice President and Chief Financial Officer (principal financial officer) | |||||||||||||||||
64
Exhibit 31.1
Certification of principal executive officer
I, Walter C. D. Carlson, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Telephone and Data Systems, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a. designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b. designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c. evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d. disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a. all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b. any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: November 6, 2026
| /s/ Walter C. D. Carlson | ||||||||
| Walter C. D. Carlson President and Chief Executive Officer (principal executive officer) | ||||||||
Exhibit 31.2
Certification of principal financial officer
I, Vicki L. Villacrez, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Telephone and Data Systems, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a. designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b. designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c. evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d. disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a. all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b. any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: November 6, 2026
| /s/ Vicki L. Villacrez | ||||||||
| Vicki L. Villacrez Executive Vice President and Chief Financial Officer (principal financial officer) | ||||||||
Exhibit 32.1
Certification Pursuant to Section 1350 of Chapter 63
of Title 18 of the United States Code
I, Walter C. D. Carlson, the principal executive officer of Telephone and Data Systems, Inc., certify that (i) the quarterly report on Form 10-Q for the third quarter of 2026 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and (ii) the information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of Telephone and Data Systems, Inc.
| /s/ Walter C. D. Carlson | ||||||||
| Walter C. D. Carlson | ||||||||
| November 6, 2026 | ||||||||
A signed original of this written statement required by Section 906 of the Sarbanes-Oxley Act of 2002 has been provided to Telephone and Data Systems, Inc. and will be retained by Telephone and Data Systems, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.
Exhibit 32.2
Certification Pursuant to Section 1350 of Chapter 63
of Title 18 of the United States Code
I, Vicki L. Villacrez, the principal financial officer of Telephone and Data Systems, Inc., certify that (i) the quarterly report on Form 10-Q for the third quarter of 2026 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and (ii) the information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of Telephone and Data Systems, Inc.
| /s/ Vicki L. Villacrez | ||||||||
| Vicki L. Villacrez | ||||||||
| November 6, 2026 | ||||||||
A signed original of this written statement required by Section 906 of the Sarbanes-Oxley Act of 2002 has been provided to Telephone and Data Systems, Inc. and will be retained by Telephone and Data Systems, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.