Telephone and Data Systems - 10-Q quarterly report FY2026 Q2

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


(Mark One)
☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2026


☐			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


TELEPHONE AND DATA SYSTEMS, INC.
(Exact name of Registrant as specified in its charter)
Delaware						36-2669023
(State or other jurisdiction of incorporation or organization)						(IRS Employer Identification No.)

30 North LaSalle Street, Suite 4000, Chicago, Illinois 60602

(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

Common Shares, $.01 par value

TDS

New York Stock Exchange

Depositary Shares each representing a 1/1000th interest in a share of 6.625% Series UU Cumulative Redeemable Perpetual Preferred Stock, $.01 par value

TDSPrU

New York Stock Exchange

Depositary Shares each representing a 1/1000th interest in a share of 6.000% Series VV Cumulative Redeemable Perpetual Preferred Stock, $.01 par value

TDSPrV

New York Stock Exchange

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.

Yes

☒

☐

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).

Yes

☒

☐

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.

Large accelerated filer

☒

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

☐

☒

The number of shares outstanding of each of the issuer's classes of common stock, as of June 30, 2026, is 107.6 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 June 30, 2026


Index			Page No.

Management's Discussion and Analysis of Financial Condition and Results of Operations			1
Executive Overview			1
Terms Used by TDS			4
Results of Operations – TDS Consolidated			5
TDS Telecom Operations			8
Array Operations			14


Liquidity and Capital Resources			19
Consolidated Cash Flow Analysis			22
Consolidated Balance Sheet Analysis			23
Supplemental Information Relating to Non-GAAP Financial Measures			24
Application of Critical Accounting Policies and Estimates			28


Private Securities Litigation Reform Act of 1995 Safe Harbor Cautionary Statement			29

Risk Factors			31

Quantitative and Qualitative Disclosures About Market Risk			32

Financial Statements (Unaudited)			33
Consolidated Statement of Operations			33

Consolidated Statement of Cash Flows			35
Consolidated Balance Sheet			37
Consolidated Statement of Changes in Equity			39
Notes to Consolidated Financial Statements			43

Controls and Procedures			56

Legal Proceedings			57

Unregistered Sales of Equity Securities and Use of Proceeds			58

Other Information			59

Exhibits			60

Form 10-Q Cross Reference Index			61

Signatures			62

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			Telephone and Data Systems, Inc. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Executive Overview

The following discussion and analysis compares Telephone and Data Systems, Inc.’s (TDS) financial results for the three and six months ended June 30, 2026, to the three and six months ended June 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 11 — Business Segment Information in the Notes to Consolidated Financial Statements for additional information about TDS' segments.

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TDS Mission and Strategy

TDS’ mission is to provide outstanding communications services to its customers and meet the needs of its shareholders, its people, and its communities. In pursuing this mission, TDS seeks to grow its businesses, create opportunities for its associates, support the communities it serves, and build 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 June 30, 2026, Array recorded an estimated purchase price true-up payable to T-Mobile of $24.9 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 the following material agreements to sell spectrum assets.

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 MHz1

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 MHz2

T-Mobile

19,613

June 5, 2026

Estimated 2026

1 This license transaction involves multiple closing dates. The first group of spectrum licenses received regulatory approval and closed on May 5, 2026. The additional spectrum licenses remain subject to regulatory approval and other customary closing conditions.

2 This license transaction remains subject to regulatory approval and other customary closing conditions.

See Note 6 — Acquisitions and Divestitures in the Notes to Consolidated Financial Statements for additional information related to the spectrum license transactions.

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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”). A special committee of independent and disinterested directors of the Array Board of Directors has been formed to evaluate this proposal. For additional information on the Array Proposal, see TDS’ Current Report on Form 8-K, filed with the U.S. Securities and Exchange Commission on May 8, 2026.

In addition to the spectrum transactions at Array and the Array Proposal, 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 $8.6 million and $9.8 million for the three and six months ended June 30, 2026, respectively, and $0.8 million and $2.1 million for the three and six months ended June 30, 2025, respectively, which are included in Selling, general and administrative expenses for continuing operations and excluded from Adjusted OIBDA and Adjusted EBITDA non-GAAP financial measures.

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Terms Used by TDS

The following is a list of definitions of certain industry terms that are used throughout this document:

▪Adjusted EBITDA – non-GAAP metric referring to earnings before interest, taxes, depreciation, amortization and accretion, gains and losses and other 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.

▪Free Cash Flow – non-GAAP metric defined as Cash flows from operating activities less Cash paid for additions to property, plant and equipment and less Cash paid for software license agreements. See Supplemental Information Relating to Non-GAAP Financial Measures within this MD&A for additional information.

▪Incumbent Markets – markets where TDS is positioned as the traditional local telephone company.

▪IPTV – internet protocol television.

▪Residential Revenue per Connection – metric which is calculated by dividing total residential revenue by the average number of residential connections and by the number of months in the period.

▪Residential Fiber Churn Rate – represents the percentage of incumbent and expansion fiber connections that disconnected service each month. These rates represent the average monthly churn rate for each respective period.

▪Service Addresses – number of single residence homes, multi-dwelling units, and business locations that are capable of being connected to the TDS network, based on best available information.

▪Tower Tenancy Rate – calculated as total number of colocations divided by total number of towers.

▪Universal Service Fund (USF) – a system of telecommunications collected fees and support payments managed by the 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.

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Results of Operations — TDS Consolidated

The following discussion and analysis compares financial results for the three and six months ended June 30, 2026, to the three and six months ended June 30, 2025.


	Three Months Ended June 30,						Six Months Ended June 30,
	2026		2025		2026 vs. 2025		2026		2025		2026 vs. 2025
(Dollars in thousands)
Operating revenues
TDS Telecom	$	248,406	$	264,931	(6)	%	$	497,978	$	522,291	(5)	%
Array	54,070		28,529		90	%	106,082		55,513		91	%
All Other1	6,805		5,081		34	%	14,671		11,170		31	%
Total operating revenues	309,281		298,541		4	%	618,731		588,974		5	%
Operating expenses
TDS Telecom	256,684		250,959		2	%	509,988		508,460		—
Array	(345,193)		46,719		N/M		(453,966)		103,329		N/M
All Other1	24,578		13,170		87	%	45,679		23,426		95	%
Total operating expenses	(63,931)		310,848		N/M		101,701		635,215		(84)	%
Operating income (loss)
TDS Telecom	(8,278)		13,972		N/M		(12,010)		13,831		N/M
Array	399,263		(18,190)		N/M		560,048		(47,816)		N/M
All Other1	(17,773)		(8,089)		N/M		(31,008)		(12,256)		N/M
Total operating income (loss)	373,212		(12,307)		N/M		517,030		(46,241)		N/M
Other income (expense)
Equity in earnings of unconsolidated entities	37,126		42,952		(14)	%	79,028		79,471		(1)	%
Interest and dividend income	19,631		6,110		N/M		33,417		12,381		N/M

Interest expense	(11,388)		(29,166)		61	%	(16,709)		(53,074)		69	%
Short-term imputed spectrum lease income	23,770		—		N/M		57,970		—		N/M
Other, net	5,346		2,395		N/M		10,796		5,117		N/M
Total other income	74,485		22,291		N/M		164,502		43,895		N/M

Income (loss) before income taxes	447,697		9,984		N/M		681,532		(2,346)		N/M
Income tax expense (benefit)	106,410		(4,224)		N/M		160,819		(12,347)		N/M
Net income from continuing operations	341,287		14,208		N/M		520,713		10,001		N/M
Less: Net income from continuing operations attributable to noncontrolling interests, net of tax	63,332		2,943		N/M		96,143		4,667		N/M
Net income from continuing operations attributable to TDS shareholders	277,955		11,265		N/M		424,570		5,334		N/M

Net income from discontinued operations	25,071		3,578		N/M		22,683		19,749		15	%
Less: Net income from discontinued operations attributable to noncontrolling interests, net of tax	4,660		3,272		42	%	4,292		6,041		(29)	%
Net income from discontinued operations attributable to TDS shareholders	20,411		306		N/M		18,391		13,708		34	%

Net income	366,358		17,786		N/M		543,396		29,750		N/M
Less: Net income attributable to noncontrolling interests, net of tax	67,992		6,215		N/M		100,435		10,708		N/M
Net income attributable to TDS shareholders	298,366		11,571		N/M		442,961		19,042		N/M
TDS Preferred Share dividends	17,306		17,306		—		34,613		34,613		—
Net income (loss) attributable to TDS common shareholders	$	281,060	$	(5,735)	N/M		$	408,348	$	(15,571)	N/M

Adjusted OIBDA from continuing operations (Non-GAAP)2	$	77,126	$	68,800	12	%	$	160,529	$	120,285	33	%
Adjusted EBITDA from continuing operations (Non-GAAP)2	$	139,229	$	120,257	16	%	$	283,770	$	217,254	31	%
Capital expenditures from continuing operations3	$	183,633	$	94,588	94	%	$	319,862	$	158,731	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.

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Equity in earnings of unconsolidated entities

Equity in earnings of unconsolidated entities represents TDS' share of net income from entities in which it has a noncontrolling interest and that are accounted for using the equity method or the net asset value practical expedient. See Note 7 — Investments in Unconsolidated Entities in the Notes to Consolidated Financial Statements for additional information.

Interest expense

Interest expense decreased for the three and six months ended June 30, 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.

Income tax expense (benefit)

Income tax expense on continuing operations increased for the three and six months ended June 30, 2026, due primarily to the increase in Income before income taxes that resulted from the gains on license sales in the current period.

Net income from continuing operations attributable to noncontrolling interests, net of tax


	Three Months Ended June 30,				Six Months Ended June 30,
	2026		2025		2026		2025
(Dollars in thousands)
Array noncontrolling public shareholders’	$	60,545	$	2,564	$	93,038	$	3,350
Noncontrolling shareholders’ or partners’	2,787		379		3,105		1,317
Net income from continuing operations attributable to noncontrolling interests, net of tax	$	63,332	$	2,943	$	96,143	$	4,667

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 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.

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Earnings

(Dollars in millions)

Three Months Ended

Net income increased due primarily to gains on the sale of wireless spectrum licenses, short-term imputed spectrum lease income, lower interest expense and higher interest and dividend income, partially offset by higher income tax expense.

Adjusted EBITDA increased due primarily to higher interest and dividend income and higher operating revenues, partially offset by lower equity in earnings of unconsolidated entities.

Six Months Ended

Net income increased due primarily to gains on the sale of wireless spectrum licenses, short-term imputed spectrum lease income, lower interest expense, higher operating revenues and higher interest and dividend income, partially offset by higher income tax expense.

Adjusted EBITDA increased due primarily to higher operating revenues, higher interest and dividend income and lower operating expenses.

*Represents a non-GAAP financial measure. Refer to Supplemental Information Relating to Non-GAAP Financial Measures within this MD&A for a reconciliation of this measure.

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			TDS TELECOM OPERATIONS

Business Overview

TDS Telecom owns, operates and invests in high-quality networks, services and products in a mix of small to mid-sized urban, suburban and rural communities throughout the United States. TDS Telecom is a wholly-owned subsidiary of TDS and provides a wide range of broadband, video, voice and wireless communications services to residential, commercial and wholesale customers, with a constant focus on delivering outstanding customer service.

OPERATIONS

▪Serves 1.1 million connections in 30 states

▪Employs approximately 3,700 associates

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Operational Overview — TDS Telecom

Total Service Address Mix

As of June 30,

TDS Telecom increased its service addresses 7% from a year ago to 1.9 million as of June 30, 2026 through footprint expansion. TDS Telecom serves 52% of incumbent service addresses with fiber.

TDS Telecom offers 1Gig+ service to 80% of its total footprint as of June 30, 2026, compared to 75% a year ago.


As of or for the Quarter Ended June 30,	2026		2025		2026 vs. 2025
Residential connections
Broadband
Incumbent Fiber	134,300		121,200		11	%
Incumbent Copper	77,700		106,500		(27)	%
Expansion Fiber	179,600		141,800		27	%
Cable	176,100		188,200		(6)	%
Total Broadband	567,700		557,700		2	%
Video	105,600		116,500		(9)	%
Voice	209,300		248,700		(16)	%
Wireless	8,100		1,600		N/M
Total Residential Connections	890,700		924,500		(4)	%
Commercial connections	163,600		184,300		(11)	%
Total connections	1,054,200		1,108,800		(5)	%

Total residential fiber net adds	15,100		10,300		47	%
Total residential broadband net adds	5,700		3,900		46	%

Residential fiber churn	1.2	%	1.1	%
Total residential broadband churn	1.7	%	1.5	%

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 12,900 connections, including 5,300 residential broadband connections.

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Residential Broadband Connections by Speed

As of June 30,

Residential broadband customers continue to take higher speeds with 89% on 100 Mbps or higher products and 51% on 1Gig+ products.

Residential Revenue per Connection

Total residential revenue per connection increased by 1% for the three and six months ended June 30, 2026, due primarily to price increases, partially offset by promotional activity and customer product mix.

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Financial Overview — TDS Telecom

The following discussion and analysis compares financial results for the three and six months ended June 30, 2026, to the three and six months ended June 30, 2025.


	Three Months Ended June 30,						Six Months Ended June 30,
	2026		2025		2026 vs. 2025		2026		2025		2026 vs. 2025
(Dollars in thousands)
Residential
Incumbent	$	75,868	$	84,665	(10)	%	$	153,160	$	170,259	(10)	%
Expansion	45,656		36,580		25	%	89,218		70,986		26	%
Cable	56,240		62,174		(10)	%	113,982		126,022		(10)	%
Total residential	177,764		183,419		(3)	%	356,360		367,267		(3)	%
Commercial	32,776		34,617		(5)	%	65,571		69,251		(5)	%
Wholesale	37,817		46,704		(19)	%	75,934		85,381		(11)	%
Total service revenues	248,357		264,740		(6)	%	497,865		521,899		(5)	%
Equipment revenues	49		191		(74)	%	113		392		(71)	%
Total operating revenues	248,406		264,931		(6)	%	497,978		522,291		(5)	%

Cost of operations (excluding Depreciation, amortization and accretion reported below)	100,583		97,049		4	%	197,765		198,013		—
Cost of equipment and products	118		116		2	%	229		380		(40)	%
Selling, general and administrative	79,038		82,555		(4)	%	160,098		165,702		(3)	%
Depreciation, amortization and accretion	73,585		73,137		1	%	146,142		144,577		1	%
(Gain) loss on asset disposals, net	4,960		6,206		(20)	%	5,792		7,868		(26)	%
(Gain) loss on sale of business and other exit costs, net	—		(8,104)		N/M		1,562		(8,080)		N/M
(Gain) loss on license sales and exchanges, net	(1,600)		—		N/M		(1,600)		—		N/M
Total operating expenses	256,684		250,959		2	%	509,988		508,460		—

Operating income (loss)	$	(8,278)	$	13,972	N/M		$	(12,010)	$	13,831	N/M

Net income (loss)	$	(4,993)	$	16,084	N/M		$	(3,946)	$	19,611	N/M
Adjusted OIBDA (Non-GAAP)1	$	68,667	$	85,211	(19)	%	$	139,973	$	158,196	(12)	%
Adjusted EBITDA (Non-GAAP)1	$	70,375	$	88,537	(21)	%	$	144,214	$	164,861	(13)	%
Capital expenditures2	$	179,197	$	90,187	99	%	$	305,160	$	149,056	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 June 30, 2026 and 2025

(Dollars in millions)

Operating Revenues

Six Months Ended June 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

Wholesale revenues consist of:

•Network access services primarily related to interexchange and wireless carriers for carrying data and voice traffic on TDS Telecom's networks

•Federal and state regulatory support, including E-ACAM

Key components of changes in the statement of operations items were as follows:

Total operating revenues

Residential revenues decreased for the three and six months ended June 30, 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 six months ended June 30, 2026, due primarily to declining connections in legacy markets and divestitures.

Wholesale revenues decreased for the three and six months ended June 30, 2026, due primarily to divestitures, the continued decline of special access circuits and discrete reserve adjustments in the prior year.

The 2025 divestitures contributed a decrease of $5.3 million in operating revenues from the comparable three months ended June 30, 2025 and a decrease of $11.2 million in operating revenues from the comparable six months ended June 30, 2025.

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Cost of operations

Cost of operations increased for the three months ended June 30, 2026, due primarily to increased vehicle and plant costs, partially offset by lower video programming and employee-related costs.

Selling, general and administrative

Selling, general and administrative expenses decreased for the three months ended June 30, 2026, due primarily to decreases in regulatory fees and employee-related costs.

Selling, general and administrative expenses decreased for the six months ended June 30, 2026, due primarily to decreases in regulatory fees, employee-related costs, and IT application costs, partially offset by higher bad debt expense and professional service costs.

(Gain) loss on asset disposals, net

Losses on asset disposals decreased for the three and six months ended June 30, 2026 due primarily to the write-off of cancelled projects in 2025.

(Gain) loss on sale of business and other exit costs, net

Gains on sale of business decreased for the three and six months ended June 30, 2026 due to the divestitures of certain markets in 2025.

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			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 June 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 June 30, 2026, Array owns 4,456 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 June 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 of $2.1 million and $4.0 million as a standalone tower company during the three and six months ended June 30, 2026.

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OPERATIONS


As of June 30, 2026
Owned towers			4,456
Number of colocations1			4,362
Tower tenancy rate1			0.98

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 June 30, 2026, the Number of colocations and the Tower tenancy rate exclude DISH Wireless due to the low probability of fulfilling its lease commitments. 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 six months ended June 30, 2026, to the three and six months ended June 30, 2025.


	Three Months Ended June 30,						Six Months Ended June 30,
	2026		2025		2026 vs. 2025		2026		2025		2026 vs. 2025
(Dollars in thousands)
Operating revenues
Site rental	$	53,175	$	27,230	95	%	$	104,199	$	53,825	94	%
Services	895		1,299		(31)	%	1,883		1,688		12	%
Total operating revenues	54,070		28,529		90	%	106,082		55,513		91	%

Operating expenses
Cost of operations (excluding Depreciation, amortization and accretion reported below)	23,497		19,396		21	%	45,106		35,687		26	%
Selling, general and administrative	22,906		19,337		18	%	35,651		48,537		(27)	%
Depreciation, amortization and accretion	14,428		11,999		20	%	27,032		23,992		13	%

(Gain) loss on asset disposals, net	3,809		(313)		N/M		4,713		(87)		N/M

(Gain) loss on license sales and exchanges, net	(409,833)		(3,700)		N/M		(566,468)		(4,800)		N/M
Total operating expenses	(345,193)		46,719		N/M		(453,966)		103,329		N/M

Operating income (loss)	399,263		(18,190)		N/M		560,048		(47,816)		N/M

Other income (expense)
Equity in earnings of unconsolidated entities	34,726		41,714		(17)	%	75,135		77,641		(3)	%
Interest and dividend income	6,431		3,701		74	%	10,653		6,358		68	%

Interest expense	(10,860)		(3,711)		N/M		(18,040)		(7,378)		N/M
Short-term imputed spectrum lease income	23,770		—		N/M		57,970		—		N/M
Other, net	(13)		—		N/M		(26)		—		N/M
Total other income	54,054		41,704		30	%	125,692		76,621		64	%
Income before income taxes	453,317		23,514		N/M		685,740		28,805		N/M
Income tax expense	115,870		8,415		N/M		168,268		8,222		N/M
Net income from continuing operations	$	337,447	$	15,099	N/M		$	517,472	$	20,583	N/M









Adjusted OIBDA from continuing operations (Non-GAAP)1	$	15,058	$	(9,489)	N/M		$	32,903	$	(26,851)	N/M
Adjusted EBITDA from continuing operations (Non-GAAP)1	$	56,202	$	35,926	56	%	$	118,665	$	57,148	N/M

Capital expenditures from continuing operations2	$	3,895	$	4,211	(8)	%	$	12,541	$	9,051	39	%

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 six months ended June 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 $6.7 million and $14.9 million for the three and six months ended June 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 $1.7 million and $6.0 million decrease in site rental revenues from DISH Wireless for the three and six months ended June 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 in the three and six months ended June 30, 2026 due primarily to a change in the classification of property tax and property insurance following the sale of the wireless business, an increase in maintenance expenses 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 increased for the three months ended June 30, 2026 due primarily to an increase in strategic alternatives review expenses, partially offset by a decrease in shared overhead costs and a change in the classification of property tax and property insurance following the sale of the wireless business.

Selling, general and administrative expenses decreased for the six months ended June 30, 2026 due primarily to decreases in shared overhead costs and employee expenses 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 2026 include costs to support the winddown of the legacy wireless operations. These expenses are expected to persist at a declining rate into future periods.

(Gain) loss on asset disposals, net

(Gain) loss on asset disposals, net increased for the three and six months ended June 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 three and six months ended June 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 6 — 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. See Note 7 — Investments in Unconsolidated Entities in the Notes to Consolidated Financial Statements for additional information.

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 and six months ended June 30, 2026 is primarily attributable to the new term loan that Array entered into in August 2025 and a decrease in capitalized interest.

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Short-term imputed spectrum lease income

Short-term imputed spectrum lease income increased for the three and six months ended June 30, 2026 due to the execution of the Short-Term Spectrum Manager Lease Agreement and Short-Term Spectrum Manager Sublease Agreements, which provide T-Mobile with an exclusive license to use certain Array spectrum assets and leases at no cost for up to one year from closing. The portion of the purchase price allocated to the use of this spectrum will be amortized over one year following the close. See Note 2 — Discontinued Operations in the Notes to Consolidated Financial Statements for additional information related to the spectrum leases.

Income tax expense

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Liquidity and Capital Resources

Sources of Liquidity

TDS believes that existing cash and investment balances, dividends, distributions from unconsolidated entities, expected cash flows from operating activities and funds available under its financing agreements will provide sufficient liquidity for TDS to meet its funding needs. TDS requires funding for, among other uses, day-to-day operations, capital expenditures, fiber deployments and E-ACAM builds, payment of dividends, debt service requirements, repurchases of shares and potential acquisitions of land, land easements or additional towers.

Cash and Cash Equivalents

Cash and cash equivalents include cash and money market investments. TDS does not have direct access to Array cash.

In the second quarter of 2026, Array closed on various sales of certain wireless spectrum licenses to Verizon and T-Mobile for total proceeds of $1,167.6 million and expects a cash income tax liability on the transactions of approximately $170.0 million, most of which will be paid during the third 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 June 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 June 30, 2026, Array has outstanding borrowings of $325.0 million under a term loan agreement with CoBank, ACB. The maturity date of the term loan is June 2030. Borrowings bear interest at a rate of Secured Overnight Financing Rate (SOFR) plus 2.50%.

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.

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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 June 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 and as a basis for creating long-term value for shareholders. In recent years, changes in technology have required substantial investments in TDS’ networks to remain competitive; this is expected to continue in 2026 and future years with the continued deployment of fiber for TDS Telecom.

Capital expenditures for continuing operations (i.e., additions to property, plant and equipment), which include the effects of accruals and capitalized interest, for the six months ended June 30, 2026 and 2025, were as follows:

Capital Expenditures

(Dollars in millions)

TDS Telecom’s capital expenditures for the six months ended June 30, 2026 and 2025, were $305.2 million and $149.1 million, respectively.

Capital expenditures for the full year 2026 are expected to be between $625.0 million and $675.0 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 six months ended June 30, 2026 and 2025, were $12.5 million and $9.1 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.

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 6 — Acquisitions and Divestitures in the Notes to Consolidated Financial Statements for additional information related to acquisitions and divestitures.

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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; tax payments related to announced wireless spectrum license transactions; and acquisitions. Refer to Liquidity and Capital Resources within this MD&A for additional information.

Dividends

TDS paid quarterly dividends per outstanding share of $0.04 in the second quarter of 2026 and 2025. It is uncertain at this time how the outcome of the strategic review process for Array, TDS' available opportunities to reinvest in its businesses, or TDS' ongoing liquidity needs, may impact the decisions of the TDS Board of Directors regarding the declaration of future cash dividends.

TDS paid quarterly dividends per outstanding Series UU depositary share (each representing 1/1,000th of a Preferred Share) of $0.414 in the second 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 second 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.

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Consolidated Cash Flow Analysis

The following discussion summarizes TDS' cash flow activities for the six months ended June 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 $1,428.1 million. Net cash provided by operating activities related to continuing operations was $151.1 million due to net income of $520.7 million adjusted for non-cash items of $562.2 million, distributions received from unconsolidated entities of $66.6 million, including $26.1 million in distributions from the LA Partnership, and changes in working capital items which increased net cash by $126.0 million. The working capital changes were primarily driven by the timing of tax payments on the sale of spectrum licenses, partially offset by the payment of associate bonuses and deferred revenue related to spectrum leases. Cash flows used in operating activities related to discontinued operations were $28.0 million.

Cash flows provided by investing activities related to continuing operations were $1,872.2 million, due primarily to cash received from divestitures of $2,188.2 million, partially offset by payments for property, plant and equipment of $317.9 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 $567.2 million, due primarily to the payment of $332.5 million in Array dividends to noncontrolling public shareholders, repayments on TDS long-term debt agreements of $150.7 million, the payment of $43.8 million in TDS dividends and tax withholdings, net of cash receipts, for TDS and Array stock-based compensation awards of $36.3 million. There were no cash flows used for financing activities related to discontinued operations.

2025 Commentary

TDS’ Cash, cash equivalents and restricted cash increased $176.0 million. Net cash provided by operating activities related to continuing operations was $126.0 million due to net income of $10.0 million adjusted for non-cash items of $93.8 million and distributions received from unconsolidated entities of $87.9 million, including $34.3 million in distributions from the LA Partnership. 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. The changes in working capital items decreased net cash by $65.8 million. The working capital changes were primarily driven by the payment of associate bonuses and an increase in receivable balances. Cash flows provided by operating activities related to discontinued operations were $481.3 million.

Cash flows used for investing activities related to continuing operations were $128.0 million, due primarily to payments for property, plant and equipment of $150.5 million, partially offset by cash received from divestitures of $24.2 million. Cash flows used for investing activities related to discontinued operations were $135.6 million.

Cash flows used for financing activities related to continuing operations were $148.0 million, due primarily to tax withholdings, net of cash receipts, for TDS and Array stock-based compensation awards of $59.7 million, the payment of $43.8 million in TDS dividends, the repurchase of Array Common Shares of $21.4 million, and repayments on TDS and Array long-term debt agreements of $17.1 million. Cash flows used for financing activities related to discontinued operations were $19.7 million.

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Consolidated Balance Sheet Analysis

The following discussion addresses certain captions in the consolidated balance sheet and changes therein. This discussion is intended to highlight the significant changes and is not intended to fully reconcile the changes. Notable balance sheet changes during 2026 were as follows:

Non-current assets held for sale

Non-current assets held for sale decreased $1,550.7 million due primarily to the sale of wireless spectrum licenses to AT&T, Verizon and T-Mobile in 2026. See Note 6 — Acquisitions and Divestitures in the Notes to Consolidated Financial Statements for additional information.

Customer deposits and deferred revenues

Customer deposits and deferred revenues decreased $58.9 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 increased $213.4 million due primarily to the taxable gain on the sale of wireless spectrum licenses to AT&T, Verizon and T-Mobile in 2026.

Accrued compensation

Accrued compensation decreased $16.4 million due primarily to associate bonus payments in March 2026.

Deferred income tax liability, net

Deferred income tax liability, net decreased $142.7 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 $152.7 million due primarily to the repayment of the TDS export credit financing agreement.

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Supplemental Information Relating to Non-GAAP Financial Measures

TDS sometimes uses information derived from consolidated financial information but not presented in its financial statements prepared in accordance with GAAP to evaluate the performance of its business. Specifically, TDS has referred to the following measures in this report:

▪EBITDA

▪Adjusted EBITDA

▪Adjusted OIBDA

▪Free cash flow

These measures are considered “non-GAAP financial measures” under U.S. Securities and Exchange Commission Rules. Following are explanations of each of these measures.

EBITDA, Adjusted EBITDA and Adjusted OIBDA

EBITDA, Adjusted EBITDA and Adjusted OIBDA are defined as Net income (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 11 — Business Segment Information in the Notes to Consolidated Financial Statements for additional information.

Management uses Adjusted EBITDA and Adjusted OIBDA as measurements of profitability, and therefore reconciliations to applicable GAAP income measures are deemed appropriate. Management believes Adjusted EBITDA and Adjusted OIBDA are useful measures of TDS’ operating results before significant recurring non-cash charges, nonrecurring expenses, gains and losses, and other items as presented below as 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 June 30,				Six Months Ended June 30,
TDS - CONSOLIDATED	2026		2025		2026		2025
(Dollars in thousands)
Net income from continuing operations (GAAP)	$	341,287	$	14,208	$	520,713	$	10,001
Add back:
Income tax expense (benefit)	106,410		(4,224)		160,819		(12,347)
Interest expense	11,388		29,166		16,709		53,074
Depreciation, amortization and accretion	88,777		86,022		174,720		170,349
EBITDA (Non-GAAP)	547,862		125,172		872,961		221,077
Add back or deduct:
Expenses related to strategic alternatives review	8,648		758		9,796		2,059

(Gain) loss on asset disposals, net	8,769		5,906		10,579		7,795
(Gain) loss on sale of business and other exit costs, net	—		(7,879)		1,562		(8,877)
(Gain) loss on license sales and exchanges, net	(402,280)		(3,700)		(553,158)		(4,800)

Short-term imputed spectrum lease income	(23,770)		—		(57,970)		—
Adjusted EBITDA (Non-GAAP)	139,229		120,257		283,770		217,254
Deduct:
Equity in earnings of unconsolidated entities	37,126		42,952		79,028		79,471
Interest and dividend income	19,631		6,110		33,417		12,381
Other, net	5,346		2,395		10,796		5,117
Adjusted OIBDA (Non-GAAP)	77,126		68,800		160,529		120,285
Deduct:
Depreciation, amortization and accretion	88,777		86,022		174,720		170,349
Expenses related to strategic alternatives review	8,648		758		9,796		2,059

(Gain) loss on asset disposals, net	8,769		5,906		10,579		7,795
(Gain) loss on sale of business and other exit costs, net	—		(7,879)		1,562		(8,877)
(Gain) loss on license sales and exchanges, net	(402,280)		(3,700)		(553,158)		(4,800)
Operating income (loss) (GAAP)	$	373,212	$	(12,307)	$	517,030	$	(46,241)

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	Three Months Ended June 30,				Six Months Ended June 30,
TDS TELECOM	2026		2025		2026		2025
(Dollars in thousands)
Net income (loss) (GAAP)	$	(4,993)	$	16,084	$	(3,946)	$	19,611
Add back:
Income tax expense (benefit)	(1,909)		2,174		(3,998)		3,309
Interest expense	332		(960)		175		(2,424)
Depreciation, amortization and accretion	73,585		73,137		146,142		144,577
EBITDA (Non-GAAP)	67,015		90,435		138,373		165,073
Add back or deduct:
Expenses related to strategic alternatives review	—		—		87		—

(Gain) loss on asset disposals, net	4,960		6,206		5,792		7,868
(Gain) loss on sale of business and other exit costs, net	—		(8,104)		1,562		(8,080)
(Gain) loss on license sales and exchanges, net	(1,600)		—		(1,600)		—
Adjusted EBITDA (Non-GAAP)	70,375		88,537		144,214		164,861
Deduct:

Interest and dividend income	463		1,693		1,608		3,094
Other, net	1,245		1,633		2,633		3,571
Adjusted OIBDA (Non-GAAP)	68,667		85,211		139,973		158,196
Deduct:
Depreciation, amortization and accretion	73,585		73,137		146,142		144,577
Expenses related to strategic alternatives review	—		—		87		—
(Gain) loss on asset disposals, net	4,960		6,206		5,792		7,868
(Gain) loss on sale of business and other exit costs, net	—		(8,104)		1,562		(8,080)
(Gain) loss on license sales and exchanges, net	(1,600)		—		(1,600)		—
Operating income (loss) (GAAP)	$	(8,278)	$	13,972	$	(12,010)	$	13,831


	Three Months Ended June 30,				Six Months Ended June 30,
ARRAY	2026		2025		2026		2025
(Dollars in thousands)
Net income from continuing operations (GAAP)	$	337,447	$	15,099	$	517,472	$	20,583
Add back:
Income tax expense	115,870		8,415		168,268		8,222
Interest expense	10,860		3,711		18,040		7,378
Depreciation, amortization and accretion	14,428		11,999		27,032		23,992
EBITDA (Non-GAAP)	478,605		39,224		730,812		60,175
Add back or deduct:
Expenses related to strategic alternatives review	7,391		715		7,578		1,860

(Gain) loss on asset disposals, net	3,809		(313)		4,713		(87)

(Gain) loss on license sales and exchanges, net	(409,833)		(3,700)		(566,468)		(4,800)

Short-term imputed spectrum lease income	(23,770)		—		(57,970)		—
Adjusted EBITDA (Non-GAAP)	56,202		35,926		118,665		57,148
Deduct:
Equity in earnings of unconsolidated entities	34,726		41,714		75,135		77,641
Interest and dividend income	6,431		3,701		10,653		6,358
Other, net	(13)		—		(26)		—
Adjusted OIBDA (Non-GAAP)	15,058		(9,489)		32,903		(26,851)
Deduct:
Depreciation, amortization and accretion	14,428		11,999		27,032		23,992
Expenses related to strategic alternatives review	7,391		715		7,578		1,860

(Gain) loss on asset disposals, net	3,809		(313)		4,713		(87)

(Gain) loss on license sales and exchanges, net	(409,833)		(3,700)		(566,468)		(4,800)
Operating income (loss) (GAAP)	$	399,263	$	(18,190)	$	560,048	$	(47,816)

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Free Cash Flow

The following table presents Free cash flow from continuing operations, which is defined as Cash flows from operating activities less Cash paid for additions to property, plant and equipment and Cash paid for software license agreements. Free cash flow is a non-GAAP financial measure which TDS believes may be useful to investors and other users of its financial information in evaluating liquidity, specifically, the amount of net cash generated by continuing business operations after deducting Cash paid for additions to property, plant and equipment and Cash paid for software license agreements.


	Six Months Ended June 30,
TDS - CONSOLIDATED	2026		2025
(Dollars in thousands)
Cash flows from operating activities - continuing operations (GAAP)	$	151,065	$	125,959
Cash paid for additions to property, plant and equipment	(317,919)		(150,482)
Cash paid for software license agreements	(1,180)		(839)
Free cash flow - continuing operations (Non-GAAP)	$	(168,034)	$	(25,362)

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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 and in this Form 10-Q. Each of the following risks could have a material adverse effect on TDS’ business, financial condition or results of operations. However, such factors are not necessarily all of the important factors that could cause actual results, performance or achievements to differ materially from those expressed in, or implied by, the forward-looking statements contained in this document. Other unknown or unpredictable factors also could have material adverse effects on future results, performance or achievements. TDS undertakes no obligation to update publicly any forward-looking statements whether as a result of new information, future events or otherwise. You should carefully consider the following factors and other information contained in, or incorporated by reference into, this Form 10-Q to understand the material risks relating to TDS’ business, financial condition or results of operations.

Announced Transactions and Strategic Alternatives Review Risk Factors

▪Closing of the T-Mobile transaction occurred on August 1, 2025, and 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.

▪On May 7, 2026, TDS delivered to the Array Board of Directors a non-binding proposal to acquire all of the outstanding Array Common Shares that are not owned by TDS. There can be no guarantee whether any transaction will be accepted, rejected, consummated or abandoned. Further, the proposal (whether accepted, rejected, consummated or abandoned) could result in adverse effects on TDS’ business, 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.

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▪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.

▪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.

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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. The following additional risk factor should be read in conjunction with the risk factors previously disclosed in TDS’ Annual Report on Form 10-K for the year ended December 31, 2025.

Announced Transactions and Strategic Alternatives Review Risk Factors

On May 7, 2026, TDS delivered to the Array Board of Directors a non-binding proposal to acquire all of the outstanding Array Common Shares that are not owned by TDS. There can be no guarantee whether any transaction will be accepted, rejected, consummated or abandoned. Further, the proposal (whether accepted, rejected, consummated or abandoned) could result in adverse effects on TDS’ business, financial condition or results of operations.

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. For additional information, see TDS’ Current Report on Form 8-K, filed with the U.S. Securities and Exchange Commission on May 8, 2026. There is no guarantee that any definitive agreement will be entered into or that any transaction will be accepted, rejected, consummated or abandoned, and the terms of any such transaction may differ materially from those originally proposed by TDS. The uncertainty regarding the proposal (whether accepted, rejected, consummated or abandoned) could result in: a diversion of management's attention from TDS’ existing business; a failure to achieve financial and operating objectives; adverse effects on TDS' financial condition or results of operations; a failure to retain key personnel, customers, business partners or contracts; and volatility in TDS' stock price. In addition, the proposal (whether accepted, rejected, consummated or abandoned) may result in the incurrence of significant expenses.

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Quantitative and Qualitative Disclosures About Market Risk

Market Risk

As of June 30, 2026, approximately 50% of TDS' long-term debt was in fixed-rate senior notes and approximately 50% in variable-rate debt. Fluctuations in market interest rates can lead to volatility in the fair value of fixed-rate notes and interest expense on variable-rate debt.

The following table presents the scheduled principal payments on long-term debt, lease obligations, and the related weighted average interest rates by maturity dates at June 30, 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	$	4,760	6.2	%
2027	9,074		6.2	%
2028	8,566		6.1	%
2029	12,647		6.1	%
2030	293,105		6.2	%
Thereafter	365,986		5.9	%
Total	$	694,138	6.0	%

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 June 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 June 30, 2026.

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Financial Statements


Telephone and Data Systems, Inc.
Consolidated Statement of Operations
(Unaudited)
	Three Months Ended June 30,				Six Months Ended June 30,
	2026		2025		2026		2025
(Dollars and shares in thousands, except per share amounts)
Operating revenues
Services	$	249,179	$	265,128	$	499,600	$	521,744
Site rental	53,175		27,230		104,199		53,825
Equipment and product sales	6,927		6,183		14,932		13,405
Total operating revenues	309,281		298,541		618,731		588,974
Operating expenses
Cost of operations (excluding Depreciation, amortization and accretion reported below)	124,031		116,395		242,773		233,602
Cost of equipment and products	5,294		5,500		11,040		12,127
Selling, general and administrative	111,478		108,604		214,185		225,019
Depreciation, amortization and accretion	88,777		86,022		174,720		170,349

(Gain) loss on asset disposals, net	8,769		5,906		10,579		7,795
(Gain) loss on sale of business and other exit costs, net	—		(7,879)		1,562		(8,877)
(Gain) loss on license sales and exchanges, net	(402,280)		(3,700)		(553,158)		(4,800)
Total operating expenses	(63,931)		310,848		101,701		635,215
Operating income (loss)	373,212		(12,307)		517,030		(46,241)
Other income (expense)
Equity in earnings of unconsolidated entities	37,126		42,952		79,028		79,471
Interest and dividend income	19,631		6,110		33,417		12,381

Interest expense	(11,388)		(29,166)		(16,709)		(53,074)
Short-term imputed spectrum lease income	23,770		—		57,970		—
Other, net	5,346		2,395		10,796		5,117
Total other income	74,485		22,291		164,502		43,895
Income (loss) before income taxes	447,697		9,984		681,532		(2,346)
Income tax expense (benefit)	106,410		(4,224)		160,819		(12,347)
Net income from continuing operations	341,287		14,208		520,713		10,001
Less: Net income from continuing operations attributable to noncontrolling interests, net of tax	63,332		2,943		96,143		4,667
Net income from continuing operations attributable to TDS shareholders	277,955		11,265		424,570		5,334

Net income from discontinued operations	25,071		3,578		22,683		19,749
Less: Net income from discontinued operations attributable to noncontrolling interests, net of tax	4,660		3,272		4,292		6,041
Net income from discontinued operations attributable to TDS shareholders	20,411		306		18,391		13,708

Net income	366,358		17,786		543,396		29,750
Less: Net income attributable to noncontrolling interests, net of tax	67,992		6,215		100,435		10,708
Net income attributable to TDS shareholders	298,366		11,571		442,961		19,042
TDS Preferred Share dividends	17,306		17,306		34,613		34,613
Net income (loss) attributable to TDS common shareholders	$	281,060	$	(5,735)	$	408,348	$	(15,571)

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Telephone and Data Systems, Inc.
Consolidated Statement of Operations
(Unaudited)
	Three Months Ended June 30,				Six Months Ended June 30,
	2026		2025		2026		2025
(Dollars and shares in thousands, except per share amounts)
Basic weighted average shares outstanding	114,500		115,229		114,193		114,908
Basic earnings (loss) per share from continuing operations attributable to TDS common shareholders	$	2.28	$	(0.05)	$	3.42	$	(0.25)
Basic earnings per share from discontinued operations attributable to TDS common shareholders	$	0.17	$	—	$	0.16	$	0.11
Basic earnings (loss) per share attributable to TDS common shareholders	$	2.45	$	(0.05)	$	3.58	$	(0.14)

Diluted weighted average shares outstanding	116,291		115,229		116,465		114,908
Diluted earnings (loss) per share from continuing operations attributable to TDS common shareholders	$	2.24	$	(0.05)	$	3.35	$	(0.26)
Diluted earnings per share from discontinued operations attributable to TDS common shareholders	$	0.18	$	—	$	0.15	$	0.12
Diluted earnings (loss) per share attributable to TDS common shareholders	$	2.42	$	(0.05)	$	3.50	$	(0.14)

The accompanying notes are an integral part of these consolidated financial statements.

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Telephone and Data Systems, Inc. Consolidated Statement of Cash Flows (Unaudited)
	Six Months Ended June 30,
	2026		2025
(Dollars in thousands)
Cash flows from operating activities
Net income	$	543,396	$	29,750
Net income from discontinued operations	22,683		19,749
Net income from continuing operations	520,713		10,001
Add (deduct) adjustments to reconcile net income to net cash flows from operating activities
Depreciation, amortization and accretion	174,720		170,349
Bad debts expense	5,122		2,994
Stock-based compensation expense	8,428		17,502
Deferred income taxes, net	(130,935)		(14,312)
Equity in earnings of unconsolidated entities	(79,028)		(79,471)
Distributions from unconsolidated entities	66,553		87,938

(Gain) loss on asset disposals, net	10,579		7,795
(Gain) loss on sale of business and other exit costs, net	1,562		(8,877)
(Gain) loss on license sales and exchanges, net	(553,158)		(4,800)

Other operating activities	487		2,619
Changes in assets and liabilities from operations
Accounts receivable	(3,896)		(17,607)

Inventory	287		212
Accounts payable	6,732		415
Customer deposits and deferred revenues	(57,165)		(724)
Accrued taxes	232,212		(1,911)
Accrued interest	(563)		(604)
Other assets and liabilities	(51,585)		(45,560)
Net cash provided by operating activities - continuing operations	151,065		125,959
Net cash provided by (used in) operating activities - discontinued operations	(28,037)		481,307
Net cash provided by operating activities	123,028		607,266

Cash flows from investing activities
Cash paid for additions to property, plant and equipment	(317,919)		(150,482)
Cash paid for licenses	—		(4,145)


Cash received from divestitures	2,188,235		24,162

Other investing activities	1,925		2,512
Net cash provided by (used in) investing activities - continuing operations	1,872,241		(127,953)
Net cash used in investing activities - discontinued operations	—		(135,561)
Net cash provided by (used in) investing activities	$	1,872,241	$	(263,514)

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Telephone and Data Systems, Inc. Consolidated Statement of Cash Flows (Unaudited)
	Six Months Ended June 30,
	2026		2025
(Dollars in thousands)
Cash flows from financing activities
Issuance of long-term debt	$	1,300	$	—
Repayment of long-term debt	(150,729)		(17,076)


Tax withholdings, net of cash receipts, for TDS stock-based compensation awards	(34,219)		(24,483)
Tax withholdings, net of cash receipts, for Array stock-based compensation awards	(2,068)		(35,250)

Repurchase of Array Common Shares	—		(21,360)
Dividends paid to TDS shareholders	(43,771)		(43,830)
Array dividends paid to noncontrolling public shareholders	(332,480)		—
Payment of debt issuance costs	—		(2,467)
Distributions to noncontrolling interests	(3,540)		(2,391)
Cash paid for software license agreements	(1,180)		(839)
Payments to acquire additional interest in subsidiaries	(593)		—
Other financing activities	73		(314)
Net cash used in financing activities - continuing operations	(567,207)		(148,010)
Net cash used in financing activities - discontinued operations	—		(19,702)
Net cash used in financing activities	(567,207)		(167,712)

Net increase in cash, cash equivalents and restricted cash	1,428,062		176,040

Cash, cash equivalents and restricted cash
Beginning of period	770,150		383,222
End of period	$	2,198,212	$	559,262

The accompanying notes are an integral part of these consolidated financial statements.

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Telephone and Data Systems, Inc.

Consolidated Balance Sheet — Assets

(Unaudited)


	June 30, 2026		December 31, 2025
(Dollars in thousands)
Current assets
Cash and cash equivalents	$	2,194,014	$	765,952

Accounts receivable
Customers, less allowances of $4,495 and $3,406, respectively	63,300		68,737
Other, less allowances of $2,934 and $3,203, respectively	42,530		41,244
Inventory, net	3,775		4,062
Prepaid expenses	33,697		28,206
Income taxes receivable	—		1,292


Other current assets	13,314		13,976
Total current assets	2,350,630		923,469

Non-current assets held for sale	47,475		1,598,131



Licenses	1,595,349		1,642,972



Other intangible assets, net of accumulated amortization of $171,773 and $157,208, respectively	117,108		131,673

Investments in unconsolidated entities	475,077		461,922




Property, plant and equipment, net of accumulated depreciation and amortization of $4,246,931 and $4,156,666, respectively	3,123,477		2,965,455

Operating lease right-of-use assets	506,665		515,081

Other assets and deferred charges	167,559		159,600

Total assets1	$	8,383,340	$	8,398,303

The accompanying notes are an integral part of these consolidated financial statements.

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Telephone and Data Systems, Inc.

Consolidated Balance Sheet — Liabilities and Equity

(Unaudited)


	June 30, 2026		December 31, 2025
(Dollars and shares in thousands, except per share amounts)
Current liabilities
Current portion of long-term debt	$	9,444	$	5,274
Accounts payable	130,314		115,822
Customer deposits and deferred revenues	66,280		125,140
Accrued interest	2,273		2,836
Accrued taxes	260,113		46,721
Accrued compensation	40,335		56,774
Short-term operating lease liabilities	27,634		26,180

Current liabilities of discontinued operations	24,856		20,242
Other current liabilities	54,387		41,322
Total current liabilities	615,636		440,311





Deferred liabilities and credits
Deferred income tax liability, net	600,947		743,633
Long-term operating lease liabilities	541,268		549,617
Other deferred liabilities and credits	552,629		574,025

Long-term debt, net	670,646		823,364

Commitments and contingencies



Equity
TDS shareholders’ equity
Series A Common and Common Shares
Authorized 290,000 shares (25,000 Series A Common and 265,000 Common Shares)
Issued 133,238 shares (7,543 Series A Common and 125,695 Common Shares) and 133,236 shares (7,541 Series A Common and 125,695 Common Shares), respectively
Outstanding 115,116 shares (7,543 Series A Common and 107,573 Common Shares) and 113,783 shares (7,541 Series A Common and 106,242 Common Shares), respectively
Par Value ($0.01 per share)	1,332		1,332
Capital in excess of par value	2,488,372		2,483,654
Preferred Shares, 279,000 shares authorized, par value $0.01 per share, 44,400 shares outstanding (16,800 Series UU and 27,600 Series VV)	1,073,963		1,073,963
Treasury shares, at cost, 18,122 and 19,453 Common Shares, respectively	(435,903)		(473,072)
Accumulated other comprehensive income	20,684		21,506
Retained earnings	2,022,189		1,694,224
Total TDS shareholders' equity	5,170,637		4,801,607
Noncontrolling interests	231,577		465,746
Total equity	5,402,214		5,267,353

Total liabilities and equity1	$	8,383,340	$	8,398,303

The accompanying notes are an integral part of these consolidated financial statements.

1The consolidated total assets as of June 30, 2026 and December 31, 2025, include assets held by current consolidated variable interest entities (VIEs) of $34.3 million and $35.5 million, respectively, which are not available to be used to settle the obligations of TDS. The consolidated total liabilities as of June 30, 2026 and December 31, 2025, include certain liabilities of current consolidated VIEs of $9.2 million and $9.6 million, respectively, for which the creditors of the VIEs have no recourse to the general credit of TDS. See Note 9 — Variable Interest Entities for additional information.

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Telephone and Data Systems, Inc.

Consolidated Statement of Changes in Equity

(Unaudited)


	TDS Shareholders
	Series A Common and Common shares		Capital in excess of par value		Preferred Shares		Treasury shares		Accumulated other comprehensive income (loss)		Retained earnings		Total TDS shareholders' equity		Noncontrolling interests		Total equity
(Dollars in thousands, except per share amounts)
March 31, 2026	$	1,332	$	2,485,605	$	1,073,963	$	(471,232)	$	21,095	$	1,813,519	$	4,924,282	$	338,616	$	5,262,898

Net income attributable to TDS shareholders	—		—		—		—		—		298,366		298,366		—		298,366
Net income attributable to noncontrolling interests classified as equity	—		—		—		—		—		—		—		67,991		67,991
Other comprehensive income (loss)	—		—		—		—		(411)		—		(411)		—		(411)
TDS Common and Series A Common share dividends ($0.04 per share)	—		—		—		—		—		(4,605)		(4,605)		—		(4,605)
Array dividends paid to noncontrolling public shareholders ($11.00 per share)	—		—		—		—		—		—		—		(172,589)		(172,589)

TDS Preferred share dividends ($414 per Series UU share and $375 per Series VV share)	—		—		—		—		—		(17,306)		(17,306)		—		(17,306)

Dividend reinvestment plan	—		98		—		49		—		—		147		—		147
Incentive and compensation plans	—		3,910		—		35,280		—		(67,785)		(28,595)		—		(28,595)
Adjust investment in subsidiaries for issuances, acquisitions and other compensation plans	—		(1,241)		—		—		—		—		(1,241)		461		(780)
Distributions to noncontrolling interests	—		—		—		—		—		—		—		(2,902)		(2,902)

June 30, 2026	$	1,332	$	2,488,372	$	1,073,963	$	(435,903)	$	20,684	$	2,022,189	$	5,170,637	$	231,577	$	5,402,214

The accompanying notes are an integral part of these consolidated financial statements.

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Telephone and Data Systems, Inc.

Consolidated Statement of Changes in Equity

(Unaudited)


	TDS Shareholders
	Series A Common and Common shares		Capital in excess of par value		Preferred Shares		Treasury shares		Accumulated other comprehensive income (loss)		Retained earnings		Total TDS shareholders' equity		Noncontrolling interests		Total equity
(Dollars in thousands, except per share amounts)
March 31, 2025	$	1,332	$	2,580,615	$	1,073,963	$	(413,969)	$	17,918	$	1,818,476	$	5,078,335	$	773,176	$	5,851,511

Net income attributable to TDS shareholders	—		—		—		—		—		11,571		11,571		—		11,571
Net income attributable to noncontrolling interests classified as equity	—		—		—		—		—		—		—		6,214		6,214
Other comprehensive income (loss)	—		—		—		—		(323)		—		(323)		—		(323)
TDS Common and Series A Common share dividends ($0.04 per share)	—		—		—		—		—		(4,628)		(4,628)		—		(4,628)

TDS Preferred share dividends ($414 per Series UU share and $375 per Series VV share)	—		—		—		—		—		(17,306)		(17,306)		—		(17,306)

Dividend reinvestment plan	—		97		—		77		—		—		174		—		174
Incentive and compensation plans	—		4,108		—		24,426		—		(43,318)		(14,784)		—		(14,784)
Adjust investment in subsidiaries for issuances and other compensation plans	—		(48,886)		—		—		—		—		(48,886)		32,446		(16,440)
Distributions to noncontrolling interests	—		—		—		—		—		—		—		(752)		(752)
June 30, 2025	$	1,332	$	2,535,934	$	1,073,963	$	(389,466)	$	17,595	$	1,764,795	$	5,004,153	$	811,084	$	5,815,237

The accompanying notes are an integral part of these consolidated financial statements.

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Telephone and Data Systems, Inc.

Consolidated Statement of Changes in Equity

(Unaudited)



	TDS Shareholders
	Series A Common and Common shares		Capital in excess of par value		Preferred Shares		Treasury shares		Accumulated other comprehensive income (loss)		Retained earnings		Total TDS shareholders' equity		Noncontrolling interests		Total equity
(Dollars in thousands, except per share amounts)
December 31, 2025	$	1,332	$	2,483,654	$	1,073,963	$	(473,072)	$	21,506	$	1,694,224	$	4,801,607	$	465,746	$	5,267,353

Net income attributable to TDS shareholders	—		—		—		—		—		442,961		442,961		—		442,961
Net income attributable to noncontrolling interests classified as equity	—		—		—		—		—		—		—		100,435		100,435
Other comprehensive income (loss)	—		—		—		—		(822)		—		(822)		—		(822)
TDS Common and Series A Common share dividends ($0.08 per share)	—		—		—		—		—		(9,158)		(9,158)		—		(9,158)
Array dividends paid to noncontrolling public shareholders ($21.25 per share)	—		—		—		—		—		—		—		(332,480)		(332,480)

TDS Preferred share dividends ($828 per Series UU share and $750 per Series VV share)	—		—		—		—		—		(34,613)		(34,613)		—		(34,613)

Dividend reinvestment plan	—		118		—		92		—		—		210		—		210
Incentive and compensation plans	—		7,849		—		37,077		—		(71,225)		(26,299)		—		(26,299)
Adjust investment in subsidiaries for issuances, acquisitions and other compensation plans	—		(3,249)		—		—		—		—		(3,249)		1,416		(1,833)
Distributions to noncontrolling interests	—		—		—		—		—		—		—		(3,540)		(3,540)

June 30, 2026	$	1,332	$	2,488,372	$	1,073,963	$	(435,903)	$	20,684	$	2,022,189	$	5,170,637	$	231,577	$	5,402,214

The accompanying notes are an integral part of these consolidated financial statements.

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Telephone and Data Systems, Inc.

Consolidated Statement of Changes in Equity

(Unaudited)



	TDS Shareholders
	Series A Common and Common shares		Capital in excess of par value		Preferred Shares		Treasury shares		Accumulated other comprehensive income (loss)		Retained earnings		Total TDS shareholders' equity		Noncontrolling interests		Total equity
(Dollars in thousands, except per share amounts)
December 31, 2024	$	1,332	$	2,574,042	$	1,073,963	$	(425,342)	$	18,238	$	1,849,009	$	5,091,242	$	776,770	$	5,868,012

Net income attributable to TDS shareholders	—		—		—		—		—		19,042		19,042		—		19,042
Net income attributable to noncontrolling interests classified as equity	—		—		—		—		—		—		—		10,120		10,120
Other comprehensive income (loss)	—		—		—		—		(643)		—		(643)		—		(643)
TDS Common and Series A Common share dividends ($0.08 per share)	—		—		—		—		—		(9,217)		(9,217)		—		(9,217)

TDS Preferred share dividends ($828 per Series UU share and $750 per Series VV share)	—		—		—		—		—		(34,613)		(34,613)		—		(34,613)

Dividend reinvestment plan	—		189		—		159		—		—		348		—		348
Incentive and compensation plans	—		15,128		—		35,717		—		(59,426)		(8,581)		—		(8,581)
Adjust investment in subsidiaries for repurchases, issuances and other compensation plans	—		(53,425)		—		—		—		—		(53,425)		26,585		(26,840)
Distributions to noncontrolling interests	—		—		—		—		—		—		—		(2,391)		(2,391)
June 30, 2025	$	1,332	$	2,535,934	$	1,073,963	$	(389,466)	$	17,595	$	1,764,795	$	5,004,153	$	811,084	$	5,815,237

The accompanying notes are an integral part of these consolidated financial statements.

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Telephone and Data Systems, Inc.

Notes to Consolidated Financial Statements

Note 1 Basis of Presentation

The accounting policies of Telephone and Data Systems, Inc. (TDS) conform to accounting principles generally accepted in the United States of America (GAAP) as set forth in the Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC). Unless otherwise specified, references to accounting provisions and GAAP in these notes refer to the requirements of the FASB ASC. 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), a 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 11 — 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.

The accompanying unaudited consolidated financial statements contain all adjustments (consisting of normal recurring items, unless otherwise disclosed) necessary for the fair statement of TDS’ financial position as of June 30, 2026 and December 31, 2025, its results of operations and changes in equity for the three and six months ended June 30, 2026 and 2025 and its cash flows for the six months ended June 30, 2026 and 2025. The Consolidated Statement of Comprehensive Income was not included because comprehensive income for the three and six months ended June 30, 2026 and 2025, does not materially differ from net income. These results are not necessarily indicative of the results to be expected for the full year. TDS has not changed its significant accounting and reporting policies from those disclosed in its 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.


	June 30, 2026		December 31, 2025
(Dollars in thousands)
Cash and cash equivalents	$	2,194,014	$	765,952
Restricted cash included in Other current assets	4,198		4,198
Cash, cash equivalents and restricted cash in the statement of cash flows	$	2,198,212	$	770,150

Dividend

On January 13, 2026, 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. On June 1, 2026, 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.

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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 $24.9 million and $20.2 million, as of June 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 and are subject to FCC approval. 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 June 30, 2026 and Other deferred liabilities and credits in the Consolidated Balance Sheet as of December 31, 2025. As of June 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 is expected to occur in 2026, subject to regulatory approval 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 million, which was recognized to (Gain) loss on sale of business and other exit costs, net within discontinued operations. In addition, during the second quarter of 2026, certain equipment was returned by T-Mobile and Array recognized an asset retirement obligation of $10.2 million, which is included in Other deferred liabilities and credits in the Consolidated Balance Sheet. The remaining estimated liability for decommissioning costs is $30.1 million as of June 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 will be 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. As of June 30, 2026, the remaining balance of the deferred purchase price is $7.5 million and is classified as Customer deposits and deferred revenues in the Consolidated Balance Sheet. 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 $4.2 million and $8.4 million of income related to the TSA in Other, net in the Consolidated Statement of Operations for the three and six months ended June 30, 2026, respectively.

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Net income from discontinued operations in the Consolidated Statement of Operations consists of the following:


	Three Months Ended June 30,				Six Months Ended June 30,
	2026		2025		2026		2025
(Dollars in thousands)
Operating revenues
Service	$	—	$	707,780	$	—	$	1,421,714
Equipment sales	—		180,027		—		330,117
Total operating revenues	—		887,807		—		1,751,831

Operating expenses
System operations (excluding Depreciation, amortization and accretion reported below)	—		162,546		509		321,492
Cost of equipment sold	—		207,793		—		383,580
Selling, general and administrative	(1,255)		312,521		263		620,940
Depreciation, amortization and accretion	—		150,272		—		300,806

(Gain) loss on asset disposals, net	—		2,682		—		4,401
(Gain) loss on sale of business and other exit costs, net	(31,904)		—		(31,015)		—

Total operating expenses	(33,159)		835,814		(30,243)		1,631,219

Operating income	33,159		51,993		30,243		120,612

Other income (expense)



Interest expense	(11)		(40,475)		(324)		(76,460)
Other, net	—		(203)		—		(209)

Total other expense	(11)		(40,678)		(324)		(76,669)

Income before income taxes	33,148		11,315		29,919		43,943
Income tax expense	8,077		7,737		7,236		24,194
Net income from discontinued operations	$	25,071	$	3,578	$	22,683	$	19,749

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 June 30, 2026	TDS Telecom		Array		All Other		Total
(Dollars in thousands)
Revenues from contracts with customers:
Type of service:


Residential	$	177,764	$	—	$	—	$	177,764
Commercial	32,776		—		—		32,776
Wholesale	37,006		—		—		37,006
Other service	—		895		(24)		871
Service revenues from contracts with customers	247,546		895		(24)		248,417
Equipment and product sales	49		—		6,878		6,927
Total revenues from contracts with customers	247,595		895		6,854		255,344
Operating lease income	811		53,175		(49)		53,937
Total operating revenues	$	248,406	$	54,070	$	6,805	$	309,281

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Three Months Ended June 30, 2025	TDS Telecom		Array		All Other		Total
(Dollars in thousands)
Revenues from contracts with customers:
Type of service:


Residential	$	183,419	$	—	$	—	$	183,419
Commercial	34,617		—		—		34,617
Wholesale	45,960		—		—		45,960
Other service	—		1,299		(816)		483
Service revenues from contracts with customers	263,996		1,299		(816)		264,479
Equipment and product sales	191		—		5,992		6,183
Total revenues from contracts with customers	264,187		1,299		5,176		270,662
Operating lease income	744		27,230		(95)		27,879
Total operating revenues	$	264,931	$	28,529	$	5,081	$	298,541


Six Months Ended June 30, 2026	TDS Telecom		Array		All Other		Total
(Dollars in thousands)
Revenues from contracts with customers:
Type of service:


Residential	$	356,360	$	—	$	—	$	356,360
Commercial	65,571		—		—		65,571
Wholesale	74,380		—		—		74,380
Other service	—		1,883		(50)		1,833
Service revenues from contracts with customers	496,311		1,883		(50)		498,144
Equipment and product sales	113		—		14,819		14,932
Total revenues from contracts with customers	496,424		1,883		14,769		513,076
Operating lease income	1,554		104,199		(98)		105,655
Total operating revenues	$	497,978	$	106,082	$	14,671	$	618,731


Six Months Ended June 30, 2025	TDS Telecom		Array		All Other		Total
(Dollars in thousands)
Revenues from contracts with customers:
Type of service:


Residential	$	367,267	$	—	$	—	$	367,267
Commercial	69,251		—		—		69,251
Wholesale	83,882		—		—		83,882
Other service	—		1,688		(1,644)		44
Service revenues from contracts with customers	520,400		1,688		(1,644)		520,444
Equipment and product sales	392		—		13,013		13,405
Total revenues from contracts with customers	520,792		1,688		11,369		533,849
Operating lease income	1,499		53,825		(199)		55,125
Total operating revenues	$	522,291	$	55,513	$	11,170	$	588,974

The following table provides balances for contract assets from contracts with customers, which are recorded in Other current assets and Other assets and deferred charges in the Consolidated Balance Sheet, and contract liabilities from contracts with customers, which are recorded in Customer deposits and deferred revenues and Other deferred liabilities and credits in the Consolidated Balance Sheet.


	June 30, 2026		December 31, 2025
(Dollars in thousands)
Contract assets	$	11,152	$	3,508
Contract liabilities	$	50,749	$	39,936

Revenue recognized related to contract liabilities existing at January 1, 2026 was $36.1 million for the six months ended June 30, 2026.

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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 June 30, 2026, TDS Telecom expects to recognize approximately $70.2 million of revenue in the future related to performance obligations associated with existing circuit contracts that are partially or wholly unsatisfied. As of June 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 $16.3 million, $25.5 million, and $28.4 million, respectively.

Contract Cost Assets

TDS Telecom expects that commission fees paid as a result of obtaining contracts are recoverable, and therefore TDS defers and amortizes these costs. As a practical expedient, costs with an amortization period of one year or less are expensed as incurred. TDS also incurs fulfillment costs, such as installation costs, where there is an expectation that a future benefit will be realized. Deferred commission fees and fulfillment costs are amortized based on the timing of transfer of the goods or services to which the assets relate, typically the contract term. Contract cost asset balances, which are recorded in Other assets and deferred charges in the Consolidated Balance Sheet, were as follows:


	June 30, 2026		December 31, 2025
(Dollars in thousands)
Costs to obtain contracts
Sales commissions	$	18,498	$	14,770
Fulfillment costs
Installation costs	1,769		1,872

Total contract cost assets	$	20,267	$	16,642

Amortization of contract cost assets was $2.4 million and $4.8 million for the three and six months ended June 30, 2026, respectively and $2.6 million and $5.1 million for the three and six months ended June 30, 2025, respectively, and was included in Selling, general and administrative expenses and Cost of operations expenses.

Note 4 Fair Value Measurements

As of June 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	June 30, 2026				December 31, 2025
		Book Value		Fair Value		Book Value		Fair Value
(Dollars in thousands)
Long-term debt	2	$	681,286	$	590,502	$	834,726	$	757,485

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.

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Note 5 Earnings Per Share

Basic earnings (loss) per share attributable to TDS common shareholders is computed by dividing Net income (loss) attributable to TDS common shareholders by the weighted average number of Common Shares outstanding during the period. Diluted earnings (loss) per share attributable to TDS common shareholders is computed by dividing Net income (loss) attributable to TDS common shareholders by the weighted average number of Common Shares outstanding during the period adjusted to include the effects of potentially dilutive securities. Potentially dilutive securities primarily include incremental shares issuable upon the exercise of outstanding stock options and the vesting of performance and restricted stock units, as calculated using the treasury stock method.

The amounts used in computing basic and diluted earnings (loss) per share attributable to TDS common shareholders were as follows:


	Three Months Ended June 30,				Six Months Ended June 30,
	2026		2025		2026		2025
(Dollars and shares in thousands, except per share amounts)
Net income (loss) from continuing operations attributable to TDS common shareholders	$	260,649	$	(6,041)	$	389,957	$	(29,279)
Net income from discontinued operations attributable to TDS common shareholders	20,411		306		18,391		13,708
Net income (loss) attributable to TDS common shareholders used in basic earnings (loss) per share	281,060		(5,735)		408,348		(15,571)
Adjustments to compute diluted earnings (loss):
Noncontrolling interest adjustment	(90)		(278)		(242)		(452)
Net income (loss) attributable to TDS common shareholders used in diluted earnings (loss) per share	$	280,970	$	(6,013)	$	408,106	$	(16,023)

Weighted average number of shares used in basic earnings (loss) per share:
Common Shares	106,958		107,693		106,651		107,373
Series A Common Shares	7,542		7,536		7,542		7,535
Total	114,500		115,229		114,193		114,908

Effects of dilutive securities	1,791		—		2,272		—
Weighted average number of shares used in diluted earnings (loss) per share	116,291		115,229		116,465		114,908

Basic earnings (loss) per share from continuing operations attributable to TDS common shareholders	$	2.28	$	(0.05)	$	3.42	$	(0.25)
Basic earnings from discontinued operations attributable to TDS common shareholders	0.17		—		0.16		0.11
Basic earnings (loss) per share attributable to TDS common shareholders	$	2.45	$	(0.05)	$	3.58	$	(0.14)

Diluted earnings (loss) per share from continuing operations attributable to TDS common shareholders	$	2.24	$	(0.05)	$	3.35	$	(0.26)
Diluted earnings from discontinued operations attributable to TDS common shareholders	0.18		—		0.15		0.12
Diluted earnings (loss) per share attributable to TDS common shareholders	$	2.42	$	(0.05)	$	3.50	$	(0.14)

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 less than 0.1 million for both the three and six months ended June 30, 2026 and 3.5 million and 3.8 million for the three and six months ended June 30, 2025, respectively.

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Note 6 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 June 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 is expected to close in 2026, subject to regulatory approval 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. All license transfers pursuant to any put/call are subject to Federal Communications Commission (FCC) approval. 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 June 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 is expected to close in 2026, subject to regulatory approval and other customary closing conditions.

TDS Telecom

On April 17, 2026, TDS Telecom entered into a stock purchase agreement with Granite State Communications, a fiber operator in New Hampshire, to acquire 100% of the outstanding equity for a base purchase price of $25.4 million, subject to customary purchase price adjustments. The transaction is expected to close in the third quarter of 2026, subject to regulatory approvals and other customary closing conditions.

Note 7 Investments in Unconsolidated Entities

Investments in unconsolidated entities consist of amounts invested in entities in which TDS holds a noncontrolling interest. TDS’ Investments in unconsolidated entities are accounted for using the equity method, measurement alternative method or net asset value practical expedient method as shown in the table below. The carrying value of measurement alternative method investments represents cost minus any impairments plus or minus any observable price changes.


	June 30, 2026		December 31, 2025
(Dollars in thousands)
Equity method investments	$	446,104	$	433,636
Measurement alternative method investments	21,514		20,834
Investments recorded using the net asset value practical expedient	7,459		7,452
Total investments in unconsolidated entities	$	475,077	$	461,922

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The following table, which is based on unaudited information provided in part by third parties, summarizes the combined results of operations of TDS’ equity method investments.


	Three Months Ended June 30,				Six Months Ended June 30,
	2026		2025		2026		2025
(Dollars in thousands)
Revenues	$	1,853,234	$	1,939,122	$	3,725,043	$	3,855,154
Operating expenses	1,476,288		1,516,445		2,998,846		3,039,971
Operating income	376,946		422,677		726,197		815,183
Other income (expense), net	(7,753)		(2,713)		(15,244)		(14,726)
Net income	$	369,193	$	419,964	$	710,953	$	800,457

Note 8 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 9 Variable Interest Entities

Consolidated VIEs

TDS consolidates VIEs in which it has a controlling financial interest as defined by GAAP and is therefore deemed the primary beneficiary. TDS reviews the criteria for a controlling financial interest at the time it enters into agreements and subsequently when events warranting reconsideration occur. These VIEs have risks similar to those described in the “Risk Factors” in this Form 10-Q and 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.


	June 30, 2026		December 31, 2025
(Dollars in thousands)
Assets


Accounts receivable	$	771	$	1,116

Other current assets	160		313



Property, plant and equipment, net	11,901		12,471
Operating lease right-of-use assets	20,303		20,564
Other assets and deferred charges	1,163		1,041
Total assets	$	34,298	$	35,505

Liabilities
Current liabilities	$	1,607	$	2,675
Long-term operating lease liabilities	22,118		22,400
Other deferred liabilities and credits	10,658		11,693
Total liabilities	$	34,383	$	36,768

Other Related Matters

TDS made contributions, loans or advances to its VIEs totaling $3.0 million and $4.5 million during the six months ended June 30, 2026 and 2025, respectively.

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Note 10 Noncontrolling Interests

The following schedule discloses the effects of Net income attributable to TDS shareholders and changes in TDS’ ownership interest in Array on TDS’ equity:


Six Months Ended June 30,	2026		2025
(Dollars in thousands)
Net income attributable to TDS shareholders	$	442,961	$	19,042
Transfers (to) from noncontrolling interests
Change in TDS' Capital in excess of par value from Array's issuance of Array shares	(3,425)		(74,529)
Change in TDS' Capital in excess of par value from Array's repurchases of Array shares	—		(3,199)

Net transfers (to) from noncontrolling interests	(3,425)		(77,728)
Net income (loss) attributable to TDS shareholders after transfers (to) from noncontrolling interests	$	439,536	$	(58,686)

Note 11 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, and expenses related to the strategic alternatives review. TDS believes Adjusted EBITDA is a useful measure of TDS’ operating results before significant recurring non-cash charges, gains and losses, and other items as presented below as it provides additional relevant and useful information to investors and other users of TDS' financial data in evaluating the effectiveness of its operations and underlying business trends in a manner that is consistent with management's evaluation of business performance. TDS’ chief operating decision maker is its President and Chief Executive Officer.

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Financial data from continuing operations for TDS’ reportable segments for the three and six months ended June 30, 2026 and 2025, is as follows:



Three Months Ended June 30, 2026	TDS Telecom		Array		Total
(Dollars in thousands)
Revenues from external customers	$	248,402	$	54,025	$	302,427
Intersegment revenues	4		45		49
	248,406		54,070		302,476
Reconciliation of revenue:
All Other revenues1					6,854
Elimination of intersegment revenues					(49)
Total operating revenues					$	309,281

Add back or deduct2:
Cost of operations (excluding Depreciation, amortization and accretion reported below)	(100,583)		(23,497)
Cost of equipment and products	(118)		—
Selling, general and administrative	(79,038)		(22,906)
Expenses related to strategic alternatives review (included in Selling, general and administrative)	—		7,391
Equity in earnings of unconsolidated entities	—		34,726
Interest and dividend income	463		6,431
Other segment items	1,245		(13)
Segment Adjusted EBITDA (Non-GAAP)	$	70,375	$	56,202	$	126,577

Reconciliation of Segment Adjusted EBITDA to Income before income taxes:
All Other income before income taxes1					1,282
Short-term imputed spectrum lease income					23,770
Depreciation, amortization and accretion					(88,013)
Expenses related to strategic alternatives review (included in Selling, general and administrative)					(7,391)

Loss on asset disposals, net					(8,769)

Gain on license sales and exchanges, net					411,433
Interest expense					(11,192)
Income before income taxes					$	447,697


Other segment disclosures
Three Months Ended or as of June 30, 2026	TDS Telecom		Array		Segment Total		All Other1		TDS Consolidated Total
Short-term imputed spectrum lease income	$	—	$	23,770	$	23,770	$	—	$	23,770
Depreciation, amortization and accretion	(73,585)		(14,428)		(88,013)		(764)		(88,777)

Loss on asset disposals, net	(4,960)		(3,809)		(8,769)		—		(8,769)

Gain (loss) on license sales and exchanges, net	1,600		409,833		411,433		(9,153)		402,280
Interest expense	(332)		(10,860)		(11,192)		(196)		(11,388)

Investments in unconsolidated entities	3,947		421,607		425,554		49,523		475,077
Total assets	3,133,568		3,371,359		6,504,927		1,878,413		8,383,340
Capital expenditures from continuing operations	$	179,197	$	3,895	$	183,092	$	541	$	183,633

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Three Months Ended June 30, 2025	TDS Telecom		Array		Total
(Dollars in thousands)
Revenues from external customers	$	264,142	$	28,529	$	292,671
Intersegment revenues	789		—		789
	264,931		28,529		293,460
Reconciliation of revenue:
All Other revenues1					5,870
Elimination of intersegment revenues					(789)
Total operating revenues					$	298,541

Add back or deduct2:
Cost of operations (excluding Depreciation, amortization and accretion reported below)	(97,049)		(19,396)
Cost of equipment and products	(116)		—
Selling, general and administrative	(82,555)		(19,337)
Expenses related to strategic alternatives review (included in Selling, general and administrative)	—		715
Equity in earnings of unconsolidated entities	—		41,714
Interest and dividend income	1,693		3,701
Other segment items	1,633		—
Segment Adjusted EBITDA (Non-GAAP)	$	88,537	$	35,926	$	124,463

Reconciliation of Segment Adjusted EBITDA to Income before income taxes:
All Other income (loss) before income taxes1					(31,788)
Depreciation, amortization and accretion					(85,136)
Expenses related to strategic alternatives review (included in Selling, general and administrative)					(715)

Loss on asset disposals, net					(5,893)
Gain on sale of business and other exit costs, net					8,104
Gain on license sales and exchanges, net					3,700
Interest expense					(2,751)
Income before income taxes					$	9,984


Other segment disclosures
Three Months Ended or as of June 30, 2025	TDS Telecom		Array		Segment Total		All Other1		TDS Consolidated Total

Depreciation, amortization and accretion	$	(73,137)	$	(11,999)	$	(85,136)	$	(886)	$	(86,022)

Gain (loss) on asset disposals, net	(6,206)		313		(5,893)		(13)		(5,906)
Gain (loss) on sale of business and other exit costs, net	8,104		—		8,104		(225)		7,879
Gain on license sales and exchanges, net	—		3,700		3,700		—		3,700
Interest expense	960		(3,711)		(2,751)		(26,415)		(29,166)

Investments in unconsolidated entities	3,942		444,157		448,099		44,853		492,952
Total assets	2,903,379		5,024,778		7,928,157		245,856		8,174,013
Capital expenditures from continuing operations	$	90,187	$	4,211	$	94,398	$	190	$	94,588

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Six Months Ended June 30, 2026	TDS Telecom		Array		Total
(Dollars in thousands)
Revenues from external customers	$	497,971	$	105,991	$	603,962
Intersegment revenues	7		91		98
	497,978		106,082		604,060
Reconciliation of revenue:
All Other revenues1					14,769
Elimination of intersegment revenues					(98)
Total operating revenues					$	618,731

Add back or deduct2:
Cost of operations (excluding Depreciation, amortization and accretion reported below)	(197,765)		(45,106)
Cost of equipment and products	(229)		—
Selling, general and administrative	(160,098)		(35,651)
Expenses related to strategic alternatives review (included in Selling, general and administrative)	87		7,578
Equity earnings of unconsolidated entities	—		75,135
Interest and dividend income	1,608		10,653
Other segment items	2,633		(26)
Segment Adjusted EBITDA (Non-GAAP)	$	144,214	$	118,665	$	262,879

Reconciliation of Segment Adjusted EBITDA to Income before income taxes:
All Other income before income taxes1					3,736
Short-term spectrum lease income					57,970
Depreciation, amortization and accretion					(173,174)
Expenses related to strategic alternatives review (included in Selling, general and administrative)					(7,665)

Loss on asset disposals, net					(10,505)
Loss on sale of business and other exit costs, net					(1,562)
Gain on license sales and exchanges, net					568,068
Interest expense					(18,215)
Income before income taxes					$	681,532


Other segment disclosures
Six Months Ended June 30, 2026	TDS Telecom		Array		Segment Total		All Other1		TDS Consolidated Total
Short-term imputed spectrum lease income	$	—	$	57,970	$	57,970	$	—	$	57,970
Depreciation, amortization and accretion	(146,142)		(27,032)		(173,174)		(1,546)		(174,720)

Loss on asset disposals, net	(5,792)		(4,713)		(10,505)		(74)		(10,579)
Loss on sale of business and other exit costs, net	(1,562)		—		(1,562)		—		(1,562)
Gain on license sales and exchanges, net	1,600		566,468		568,068		(14,910)		553,158
Interest expense	(175)		(18,040)		(18,215)		1,506		(16,709)



Capital expenditures from continuing operations	$	305,160	$	12,541	$	317,701	$	2,161	$	319,862

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Six Months Ended June 30, 2025	TDS Telecom		Array		Total
(Dollars in thousands)
Revenues from external customers	$	520,700	$	55,513	$	576,213
Intersegment revenues	1,591		—		1,591
	522,291		55,513		577,804
Reconciliation of revenue:
All Other revenues1					12,761
Elimination of intersegment revenues					(1,591)
Total operating revenues					$	588,974

Add back or deduct2:
Cost of operations (excluding Depreciation, amortization and accretion reported below)	(198,013)		(35,687)
Cost of equipment and products	(380)		—
Selling, general and administrative	(165,702)		(48,537)
Expenses related to strategic alternatives review (included in Selling, general and administrative)	—		1,860
Equity earnings of unconsolidated entities	—		77,641
Interest and dividend income	3,094		6,358
Other segment items	3,571		—
Segment Adjusted EBITDA (Non-GAAP)	$	164,861	$	57,148	$	222,009

Reconciliation of Segment Adjusted EBITDA to Income before income taxes:
All Other income (loss) before income taxes1					(54,071)

Depreciation, amortization and accretion					(168,569)
Expenses related to strategic alternatives review (included in Selling, general and administrative)					(1,860)

Loss on asset disposals, net					(7,781)
Gain on sale of business and other exit costs, net					8,080
Gain on license sales and exchanges, net					4,800
Interest expense					(4,954)
Income (loss) before income taxes					$	(2,346)


Other segment disclosures
Six Months Ended June 30, 2025	TDS Telecom		Array		Segment Total		All Other1		TDS Consolidated Total

Depreciation, amortization and accretion	$	(144,577)	$	(23,992)	$	(168,569)	$	(1,780)	$	(170,349)

Gain (loss) on asset disposals, net	(7,868)		87		(7,781)		(14)		(7,795)
Gain on sale of business and other exit costs, net	8,080		—		8,080		797		8,877
Gain on license sales and exchanges, net	—		4,800		4,800		—		4,800
Interest expense	2,424		(7,378)		(4,954)		(48,120)		(53,074)



Capital expenditures from continuing operations	$	149,056	$	9,051	$	158,107	$	624	$	158,731

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.

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Telephone and Data Systems, Inc.

Additional Required Information

Controls and Procedures

Evaluation of Disclosure Controls and Procedures

TDS maintains disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the Exchange Act)) that are designed to ensure that information required to be disclosed in its reports filed or submitted under the Exchange Act is processed, recorded, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to TDS’ management, including its principal executive officer and principal financial officer, as appropriate, to allow for timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives.

As required by SEC Rules 13a-15(b), TDS carried out an evaluation, under the supervision and with the participation of management, including its principal executive officer and principal financial officer, of the effectiveness of the design and operation of TDS’ disclosure controls and procedures as of the end of the period covered by this Quarterly Report. Based on this evaluation, TDS’ principal executive officer and principal financial officer concluded that TDS' disclosure controls and procedures were effective as of June 30, 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 June 30, 2026, that have materially affected, or are reasonably likely to materially affect, TDS' internal control over financial reporting.

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Legal Proceedings

In April 2018, the United States Department of Justice (DOJ) notified TDS that it was conducting inquiries of Array and TDS under the federal False Claims Act relating to Array’s participation in wireless spectrum license auctions 58, 66, 73 and 97 conducted by the FCC. Array is or was a limited partner in several limited partnerships which qualified for the 25% bid credit in each auction. The investigation arose from 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. The district court set a briefing schedule for defendants' motions to dismiss and stayed all other proceedings. On January 22, 2026, the defendants filed a motion to dismiss in the Advantage case. The motion to dismiss is now fully briefed. 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.

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Unregistered Sales of Equity Securities and Use of Proceeds

On August 2, 2013, the Board of Directors of TDS authorized, and TDS announced by Form 8-K, a $250 million stock repurchase program for TDS Common Shares. Depending on market conditions, such shares may be repurchased in compliance with Rule 10b-18 of the Exchange Act, pursuant to Rule 10b5-1 under the Exchange Act, or pursuant to accelerated share repurchase arrangements, prepaid share repurchases, private transactions or as otherwise authorized. This authorization does not have an expiration date. On November 7, 2025, TDS announced that its Board of Directors had authorized an additional $500 million stock repurchase program for TDS Common Shares, which program is incremental to, and has similar terms as, the existing program.

The maximum dollar value of shares that may yet be purchased was $523.9 million as of June 30, 2026. TDS did not determine to terminate the foregoing Common Share repurchase program. There were no purchases made by or on behalf of TDS, or any purchases made by any "affiliated purchaser" (as defined by the SEC) of TDS, of TDS Common Shares during the quarter covered by this Form 10-Q.

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Other Information

Rule 10b5-1 Trading Arrangements

During the three months ended June 30, 2026, none of TDS' directors or officers (as defined in Rule 16a-1(f) under the Exchange Act) has adopted or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement (each as defined in Item 408 of Regulation S-K).

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Exhibits


Exhibit Number			Description of Documents

Exhibit 3.1			TDS' Restated Certificate of Incorporation (including all amendments ).

Exhibit 10.1			Form of TDS 2022 Long-Term Incentive Plan 2026 Performance Share Award Agreement.

Exhibit 10.2			Form of TDS 2022 Long-Term Incentive Plan 2026 Restricted Stock Unit Award Agreement.

Exhibit 31.1			Principal executive officer certification pursuant to Rule 13a-14 of the Securities Exchange Act of 1934.

Exhibit 31.2			Principal financial officer certification pursuant to Rule 13a-14 of the Securities Exchange Act of 1934.

Exhibit 32.1			Principal executive officer certification pursuant to Section 1350 of Chapter 63 of Title 18 of the United States Code.

Exhibit 32.2			Principal financial officer certification pursuant to Section 1350 of Chapter 63 of Title 18 of the United States Code.

Exhibit 101.INS			XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

Exhibit 101.SCH			Inline XBRL Taxonomy Extension Schema Document

Exhibit 101.PRE			Inline XBRL Taxonomy Presentation Linkbase Document

Exhibit 101.CAL			Inline XBRL Taxonomy Calculation Linkbase Document

Exhibit 101.LAB			Inline XBRL Taxonomy Label Linkbase Document

Exhibit 101.DEF			Inline XBRL Taxonomy Extension Definition Linkbase Document

Exhibit 104			Cover Page Interactive Data File - the cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the inline document.

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Form 10-Q Cross Reference Index

Item Number

Page No.

Part I.

Financial Information

Item 1.

Financial Statements (Unaudited)

Notes to Consolidated Financial Statements

Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Item 4.

Controls and Procedures

Part II.

Other Information

Unregistered Sales of Equity Securities and Use of Proceeds

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

TELEPHONE AND DATA SYSTEMS, INC.

(Registrant)

Date:

August 7, 2026

/s/ Walter C. D. Carlson

Walter C. D. Carlson
President and Chief Executive Officer
(principal executive officer)

Date:

August 7, 2026

/s/ Vicki L. Villacrez

Vicki L. Villacrez
Executive Vice President and Chief Financial Officer
(principal financial officer)

Telephone and Data Systems - 10-Q quarterly report FY2026 Q2

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