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TELEPHONE & DATA SYSTEMS INC /DE/

TELEPHONE & DATA SYSTEMS INC /DE/TDSEarnings & Financial Report

NYSE · telecommunications

Telephone and Data Systems, Inc. is a Chicago-based telecommunications service company primarily providing broadband, cable, telephone, and wireless services, and radio tower leasing, through its subsidiaries TDS Telecom and Array Digital Infrastructure, the latter of which was formerly the cell phone company United States Cellular.

What changed in TELEPHONE & DATA SYSTEMS INC /DE/'s 10-K — 2024 vs 2025

Top changes in TELEPHONE & DATA SYSTEMS INC /DE/'s 2025 10-K

440 paragraphs added · 576 removed · 247 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

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Through its investments, TDS Telecom intends to improve its broadband services and extend its footprint. TDS Telecom intends to augment that broadband growth by bundling with video, voice, wireless and other value-added services. TDS Telecom seeks to be the preferred broadband provider by offering fiber-rich networks, high-quality products and services, and a seamless customer experience.
Through its investments, TDS Telecom intends to improve its broadband services and extend its footprint. TDS Telecom aims to augment that broadband growth by bundling with video, voice, wireless and other value-added services. TDS Telecom seeks to be the preferred broadband provider by offering fiber-rich networks, high-quality products and services, and a seamless customer experience.
Investors may access, free of charge, through the Investor Relations portion of the website, UScellular’s annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to such reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act as soon as reasonably practical after such material is filed electronically with the SEC.
Investors may access, free of charge, through the Investor Relations portion of the website, Array’s annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to such reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act as soon as reasonably practical after such material is filed electronically with the SEC.
The culture at TDS is based upon the fundamental belief that TDS’ long-term success is inextricably tied to associate engagement and high ethical standards. TDS’ Code of Conduct sets forth expectations for ethical behavior across the enterprise and provides the guiding principles by which all associates must abide in all business activities.
The culture at TDS is based upon the fundamental belief that TDS’ success is inextricably tied to associate engagement and high ethical standards. TDS’ Code of Conduct sets forth expectations for ethical behavior across the enterprise and provides the guiding principles by which all associates must abide in all business activities.
In 2024, TDS Telecom continued to expand its footprint through fiber investments in Wisconsin and the Pacific Northwest. TDS Telecom may seek to grow its operations through additional investments in fiber and through the acquisition of and/or partnership with businesses that support and complement its existing markets or by creating entirely new clusters of markets in attractive locations.
In 2025, TDS Telecom continued to expand its footprint through fiber investments in Wisconsin and the Pacific Northwest. TDS Telecom may seek to grow its operations through additional investments in fiber and through the acquisition of and/or partnership with businesses that support and complement its existing markets or by creating entirely new clusters of markets in attractive locations.
The public may also view electronic filings of TDS by accessing SEC filings at www.sec.gov. UScellular’s website address is www.uscellular.com. UScellular files with, or furnishes to, the SEC annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, as well as various other information.
The public may also view electronic filings of TDS by accessing SEC filings at www.sec.gov. Array’s website address is www.arrayinc.com. Array files with, or furnishes to, the SEC annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, as well as various other information.
TDS Telecom residential customer operations provide high-speed broadband, video, voice and wireless services. These services are bundled at competitive prices to encourage cross-selling within the customer base and to attract and retain customers. • Broadband: TDS Telecom offers reliable high-speed internet connections and whole-home Wi-Fi through fiber-rich networks.
These services are bundled at competitive prices to encourage cross-selling within the customer base and to attract and retain customers. • Broadband: TDS Telecom offers reliable high-speed internet connections and whole-home Wi-Fi through fiber-rich networks.
In many states, local rates paid by end user customers and intrastate access charges paid by carriers continue to be subject to state commission approval. The FCC regulations also cover matters such as technical operations, administrative requirements, consumer protection, access by people with disabilities, customer privacy and content.
Maximum rates for regulated interstate services are prescribed by the FCC. In many states, local rates paid by end user customers and intrastate access charges paid by carriers continue to be subject to state commission approval. The FCC regulations also cover matters such as technical operations, administrative requirements, interconnection, consumer protection, access by people with disabilities, customer privacy and content.
To optimize its portfolio, TDS is exploring opportunities to divest certain markets. TDS Telecom believes that being a good corporate citizen is fundamental to its long-term success. TDS Telecom is committed to growing with its communities and meeting the needs of customers through great products and services, sponsorships, fundraising, and volunteering.
TDS Telecom believes that being a good corporate citizen is fundamental to its long-term success. TDS Telecom is committed to growing with its communities and meeting the needs of customers through great products and services, sponsorships, fundraising, and volunteering.
TDS Telecom continues to standardize equipment and processes to increase efficiency in maintaining its network. Network standardization has aided TDS Telecom in operating its 24-hours-a-day/7-days-per-week Network Management Centers, which continuously monitor the network to proactively identify, minimize, and correct network faults prior to any customer impact. Customers, Services and Products Residential.
TDS Telecom continues to standardize equipment and processes to increase efficiency in maintaining its network. Network standardization has aided TDS Telecom in operating its 24-hours-a-day/7-days-per-week Network Management Centers, which continuously monitor the network to proactively identify, minimize, and correct network faults prior to any customer impact. TDS Telecom continues to invest in initiatives designed to enhance the customer experience.
The public may also view electronic filings of UScellular by accessing SEC filings at www.sec.gov. 8 Table of Contents
The public may also view electronic filings of Array by accessing SEC filings at www.sec.gov. 7 Table of Contents
TDS files with, or furnishes to, the Securities and Exchange Commission (SEC) annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, as well as various other information.
TDS — OTHER ITEMS Company Information TDS’ website address is www.tdsinc.com. TDS files with, or furnishes to, the Securities and Exchange Commission (SEC) annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, as well as various other information.
TDS Telecom’s other operations are subject to similar but reduced regulation compared to ILECs. Providing video services requires TDS Telecom to obtain franchises from state or local governmental authorities to occupy public rights of way with network facilities.
TDS Telecom maintains comprehensive privacy and data security programs and monitors regulatory developments to ensure ongoing compliance. TDS Telecom’s other operations are subject to similar but reduced regulation compared to ILECs. Providing video services requires TDS Telecom to obtain franchises from state or local governmental authorities to occupy public rights of way with network facilities.
TDS Common Shares trade under the ticker symbol “TDS” on the New York Stock Exchange (NYSE). UScellular Common Shares trade on the NYSE under the ticker symbol “USM.” Under listing standards of the NYSE, TDS is a “controlled company” as such term is defined by the NYSE.
Array Common Shares trade on the NYSE under the ticker symbol “AD.” Under listing standards of the NYSE, TDS is a “controlled company” as such term is defined by the NYSE.
TDS Telecom’s marketing plan is focused on acquiring, retaining and growing customer relationships by maintaining a high-quality network, providing outstanding customer service, and offering a comprehensive portfolio of services and products built around customer needs with a local focus. TDS Telecom uses door-to-door selling, digital marketing, targeted mailings and mass advertising to market services and products.
Marketing, Sales and Distribution Channels and Customer Service Marketing. TDS Telecom’s marketing plan is focused on acquiring, retaining and growing customer relationships by maintaining a high-quality network, providing outstanding customer service, and offering a comprehensive portfolio of services and products built around customer needs with a local focus.
The Securities Purchase Agreement also contemplates, among other things, a Short-Term Spectrum Manager Lease Agreement and Short-Term Spectrum Manager Sublease Agreements that will become effective at the closing date, which provide T-Mobile with an exclusive license to use certain UScellular spectrum assets and leases at no cost for up to one-year for the sole purpose of providing continued, uninterrupted service to customers.
In addition, at closing, Array and T-Mobile entered into a Short-Term Spectrum Manager Lease Agreement and Short-Term Spectrum Manager Sublease Agreements which provide T-Mobile with an exclusive license to use certain Array spectrum assets and leases at no cost for up to one-year for the sole purpose of providing continued, uninterrupted service to customers.
Community TDS is committed to supporting and enhancing the communities it serves through local and philanthropic initiatives that enrich the lives of those living where it operates and where its associates live, work and play.
Succession planning for the CEO and executive leadership team is reviewed with the Board of Directors at least annually. Community TDS is committed to supporting and enhancing the communities it serves through local and philanthropic initiatives that enrich the lives of those living where it operates and where its associates live, work and play.
Item 1. Business Telephone and Data Systems, Inc. (TDS) provides high-quality communications services to customers with 4.4 million retail wireless connections and 1.1 million broadband, video and voice connections at December 31, 2024. TDS conducts wireless operations through its majority-owned subsidiary, United States Cellular Corporation (UScellular).
Item 1. Business Telephone and Data Systems, Inc. (TDS) provides high-quality communications services to customers through its wholly-owned subsidiary TDS Telecommunications LLC (TDS Telecom) with 1.1 million broadband, video, voice and wireless connections at December 31, 2025.
Further, the Federal Aviation Administration also regulates the siting, lighting and construction of transmitter towers and antennae. TDS Telecom The FCC generally exercises jurisdiction over all facilities of, and services offered by, TDS Telecom’s Incumbent Local Exchange Carriers (ILEC) as telecommunications common carriers, to the extent they provide, originate or terminate interstate or international telecommunications.
TDS Telecom The FCC generally exercises jurisdiction over all facilities of, and services offered by, TDS Telecom’s Incumbent Local Exchange Carriers (ILEC) as telecommunications common carriers, to the extent they provide, originate or terminate interstate or international telecommunications. State public utility commissions generally exercise jurisdiction over intrastate telecommunications facilities and services.
In certain markets, TDS Telecom partners with a satellite TV provider to offer digital television. TDS video connections are declining due to rising prices and the industry-wide trend toward cord-cutting. • Voice: Call plans include local and long-distance telephone service, Voice over Internet Protocol (VoIP) and enhanced services like Find-Me/Follow-Me, collaboration, instant messaging and more.
TDS video connections are declining due to rising prices and the industry-wide trend toward cord-cutting. 2 Table of Contents • Voice: Call plans include local and long-distance telephone service, Voice over Internet Protocol (VoIP) and enhanced services like Find-Me/Follow-Me, collaboration, instant messaging and more. Many features are bundled with calling plans to give customers the best value.
Federal Connect America Fund (CAF), including ACAM, E-ACAM, and state Universal Service Fund (USF) revenues, which support the cost of providing communication services in underserved high-cost areas, are also included in wholesale service revenues. Marketing, Sales and Distribution Channels and Customer Service Marketing.
TDS Telecom’s wholesale operations include carrying data and voice traffic on TDS Telecom's networks from other interexchange carriers. Federal Connect America Fund (CAF), including ACAM, E-ACAM, and state Universal Service Fund (USF) revenues, which support the cost of providing communication services in underserved high-cost areas, are also included in wholesale service revenues.
Voice offerings continue to be impacted by the industry-wide decline in access lines and TDS Telecom expects to continue to experience erosion in voice connections due to competition from alternative technologies. 5 Table of Contents • Wireless: TDS introduced MVNO plans offering wireless services to customers in certain service areas.
Voice offerings continue to be impacted by the industry-wide decline in access lines and TDS Telecom expects to continue to experience erosion in voice connections due to competition from alternative technologies. • Wireless: TDS offers wireless services to customers through an MVNO. TDS’ MVNO offerings are reliant on third parties to deliver wireless service to these customers.
TDS’ MVNO offerings are reliant on third parties to deliver wireless service to these customers. TDS currently offers By-the-Gig and Unlimited data plans. Commercial. TDS Telecom commercial customer operations provide secure and reliable broadband, IP-based services, and hosted voice and video collaboration services to small- and medium-sized businesses.
TDS currently offers By-the-Gig and Unlimited data plans. Commercial. TDS Telecom commercial customer operations provide secure and reliable broadband, IP-based services, and hosted voice and video collaboration services to small- and medium-sized businesses. TDS Telecom's commercial service focus is to lead with broadband bundled with a voice product and video solution. Wholesale.
In certain non-fiber markets, TDS Telecom has deployed fiber-to-the-node and copper-based vectoring/pair bonding technology to increase data speeds reaching up to 100 Mbps. DOCSIS 3.1 technology is utilized across nearly all cable markets and offers speeds of up to 1 Gbps.
TDS Telecom offers fiber internet with speeds reaching up to 8 Gbps for residential and up to 10 Gbps for select business connections in enabled areas. In certain non-fiber markets, TDS Telecom has deployed fiber-to-the-node and copper-based vectoring/pair bonding technology to increase data speeds reaching up to 100 Mbps.
Local communities are at the center of TDS’ businesses, and TDS takes great pride in giving back to the people and places that contribute to its sustainability and long-term success. TDS — OTHER ITEMS Company Information TDS’ website address is www.tdsinc.com.
TDS is addressing the digital divide and providing critical resources in local communities, and encourages associates to volunteer and support local organizations and community groups. Local communities are at the center of TDS’ businesses, and TDS takes great pride in giving back to the people and places that contribute to its sustainability and long-term success.
TDS is a controlled company because over 50% of the voting power for the election of a majority of the directors of TDS is held by the trustees of the TDS Voting Trust.
TDS is a controlled company because over 50% of the voting power for the election of a majority of the directors of TDS is held by the trustees of the TDS Voting Trust. On August 1, 2025, United States Cellular Corporation changed its name to Array Digital Infrastructure, Inc..
The Communications Act requires, among other things, that telecommunications common carriers offer interstate services when requested at just and reasonable rates at terms and conditions that are non-discriminatory. Maximum rates for regulated interstate services are prescribed by the FCC.
In addition, the ILECs are subject to various other state and local laws, including laws relating to privacy, data security and consumer protection. The Communications Act requires, among other things, that telecommunications common carriers offer interstate services when requested at just and reasonable rates at terms and conditions that are non-discriminatory.
In addition to price, TDS Telecom competes based on a variety of factors including the reliability of its network, faster broadband speeds, the diversity and range of its product offerings and its focus on outstanding customer service. 6 Table of Contents TDS — REGULATION TDS’ operations are subject to federal, state and local regulation. Key regulatory considerations are discussed below.
In addition to price, TDS Telecom competes based on a variety of factors including the reliability of its network, faster broadband speeds, the diversity and range of its product offerings and its focus on outstanding customer service. 3 Table of Contents ARRAY OPERATIONS General Array connects America through digital infrastructure by leasing tower space to tenants and providing ancillary services.
TDS Telecom continues to improve the efficiency of its cost structure to enhance its ability to compete with price-based initiatives from competitors.
Competition TDS Telecom faces broadband, video, voice and wireless competition from wireline providers, cable providers, fiber overbuilders, VoIP providers, satellite providers, wireless providers and providers using other emerging technologies. TDS Telecom continues to improve the efficiency of its cost structure to enhance its ability to compete with price-based initiatives from competitors.
The strategic alternatives review process is ongoing as UScellular works toward closing the transactions signed during 2024, including the T-Mobile, Verizon and AT&T transactions and continues to seek to opportunistically monetize its spectrum assets that are not subject to the Securities Purchase Agreement, the Verizon Purchase Agreement, or the AT&T Purchase Agreement.
See Note 7 — Acquisitions and Divestitures in the Notes to Consolidated Financial Statements for additional information. The strategic alternatives review process is ongoing as Array works toward closing the Verizon and T-Mobile spectrum transactions signed during 2024 and 2025, and seeks to opportunistically monetize its remaining spectrum assets that are not subject to executed agreements.
Whole-home Wi-Fi, security, and support services are available to enhance customers’ high-speed internet experience. • Video: TDS Telecom provides advanced home TV entertainment combined with a digital video recording (DVR) service. TDS Telecom offers TDS TV+, an integrated cloud TV platform that combines linear and on-demand programming, mobile device interfaces, personalized recommendations, and network-based DVR.
DOCSIS 3.1 technology is utilized across nearly all cable markets and offers speeds of up to 1 Gbps. Whole-home Wi-Fi, security, and support services are available to enhance customers’ high-speed internet experience. • Video: TDS Telecom provides advanced home TV entertainment combined with a digital video recording (DVR) service.
TDS Telecom differentiates itself from competitors using a hyper-localized and community-based sales and marketing effort to maximize broadband penetration. Sales and Distribution Channels . TDS Telecom operates and uses sales contact centers, direct sales forces including third-party direct sales, retail stores, sales agents and an online platform to sell services and products. Customer Service.
TDS Telecom uses door-to-door selling, digital marketing, targeted mailings and mass advertising to market services and products. TDS Telecom differentiates itself from competitors using a hyper-localized and community-based sales and marketing effort to maximize broadband penetration. Sales and Distribution Channels .
As part of its business development strategy, UScellular may periodically be engaged in negotiations relating to strategic partnerships and/or the acquisition, exchange or disposition of companies, strategic properties, spectrum licenses and/or investment interests. 2 Table of Contents UScellular has a longstanding commitment to supporting its local communities through donations and volunteerism.
As part of its business development strategy, Array may periodically be engaged in negotiations relating to strategic partnerships and/or the acquisition or disposition of assets and/or investment interests. Competition Array primarily faces competition from other companies that own tower assets in the areas in which Array operates.
As of December 31, 2024, there were 7,010 cell sites in service of which UScellular owned 4,409 . 4 Table of Contents TDS TELECOM OPERATIONS General TDS Telecom provides communications services to 1.1 million connections in 31 states through its high-quality fiber, coaxial and copper networks.
See Note 20 — Business Segment Information in the Notes to Consolidated Financial Statements for additional information about TDS' segments. 1 Table of Contents TDS TELECOM OPERATIONS General TDS Telecom provides communications services to 1.1 million connections in 30 states through its high-quality fiber, coaxial and copper networks.
Training Since its founding, TDS has been committed to associate development, including for emerging and existing leaders, which is critical to its success. TDS provides job specific, safety, and fraud awareness training for all associates – and also offers programs that further develop its associates including educational assistance, developmental assignments, and mentoring programs.
Development and Leader Effectiveness TDS is committed to advancing associate development and leadership effectiveness, recognizing these are essential to long-term success. All associates receive job-specific, safety, security, and fraud awareness training, supported by programs that promote continuous growth, including educational assistance, developmental assignments, and mentoring opportunities.
As of December 31, 2024, TDS owned 83% of the combined total of the outstanding Common Shares and Series A Common Shares of UScellular and controlled 96% of the combined voting power of both classes of UScellular common stock. TDS provides broadband, video, voice and wireless services through its wholly-owned subsidiary TDS Telecommunications LLC (TDS Telecom).
As of December 31, 2025, TDS owned 82.0% of the combined total of the outstanding Common Shares and Series A Common Shares of Array and controlled 95.9% of the combined voting power of both classes of Array common stock. TDS Common Shares trade under the ticker symbol “TDS” on the New York Stock Exchange (NYSE).
HMS' and Suttle-Straus’ financial results were not significant to TDS’ operations. All of TDS' segments operate entirely in the United States. See Note 20 — Business Segment Information in the Notes to Consolidated Financial Statements for additional information about TDS' segments.
Array is used throughout this report even when referring to historical periods. TDS has two reportable segments: TDS Telecom and Array. TDS operations also include the operations of its wholly-owned subsidiary Suttle-Straus, Inc. (Suttle-Straus). Suttle-Straus’ financial results were not significant to TDS’ operations. All of TDS' segments operate entirely in the United States.
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During the second quarter of 2024, TDS and UScellular modified their reporting structure due to the planned disposal of the UScellular wireless operations and, as a result, disaggregated the UScellular operations into two reportable segments – Wireless and Towers. TDS has three reportable segments: UScellular Wireless, UScellular Towers and TDS Telecom.
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TDS leases tower space to tenants and provides ancillary services, holds noncontrolling interests in primarily wireless operating companies and holds certain wireless spectrum licenses through its majority-owned subsidiary Array Digital Infrastructure, Inc. (Array).
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TDS operations also include the operations of its wholly-owned subsidiary Suttle-Straus, Inc. (Suttle-Straus). TDS' wholly-owned hosted and managed services (HMS) subsidiary, which operated under the OneNeck IT Solutions brand was sold to a third-party on September 3, 2024. See Note 7 — Divestitures in the Notes to Consolidated Financial Statements for additional information.
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As part of a multi-year transformation program, TDS Telecom is executing IT modernization plans aimed at delivering improvement in customer interactions. These investments are expected to strengthen operational efficiency and drive long-term cost savings while supporting growth. Customers, Services and Products Residential. TDS Telecom residential customer operations provide high-speed broadband, video, voice and wireless services.
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The map below highlights TDS’ consolidated areas of operations: 1 Table of Contents UScellular OPERATIONS General UScellular provides wireless telecommunications services to customers with 4.4 million retail connections in portions of 21 states collectively representing a total population of 33 million. UScellular operates in two reportable segments – Wireless and Towers.
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TDS Telecom offers TDS TV+, an integrated cloud TV platform that combines linear and on-demand programming, mobile device interfaces, personalized recommendations, and network-based DVR. In certain markets, TDS Telecom partners with a satellite TV provider to offer digital television.
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All of its wireless operating markets are in the United States. Operating Strategy, Recent Developments and Community Focus UScellular’s strategy is to attract and retain customers by providing a high-quality network, outstanding customer service and competitive devices, plans and pricing - all provided with a community focus. UScellular operates a regional wireless network.
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TDS Telecom operates and uses sales contact centers, direct sales forces including third-party direct sales, retail stores, sales agents and an online platform to sell services and products. Customer Service. TDS Telecom manages customer retention by focusing on outstanding customer service through training of front-line sales and support associates.
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UScellular’s interests in wireless spectrum licenses include both direct interests whereby UScellular is the licensee and investment interests in entities which are licensees; together, these direct and investment interests involve operating and non-operating wireless spectrum licenses covering portions of 30 states and a total population of approximately 51 million as of December 31, 2024.
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As of December 31, 2025 , Array owns 4,450 towers in 19 states. Array also holds noncontrolling interests in primarily wireless operating companies and holds certain wireless spectrum licenses. As of December 31, 2025 , Array is an 82.0%-owned subsidiary of TDS.
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UScellular owns and operates towers which support UScellular's wireless network. UScellular also leases space on its owned towers to other wireless service providers. As of December 31, 2024, UScellular owned 4,409 towers with 2,444 third-party colocations.
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Through July 31, 2025, Array provided wireless communication services; these operations and certain wireless spectrum licenses were disposed of on August 1, 2025, as discussed further below. Operating Strategy and Recent Developments Array is the fifth largest tower owner and operator of shared wireless communications infrastructure in the United States.
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On August 4, 2023, TDS and UScellular announced that the Boards of Directors of both companies decided to initiate a process to explore a range of strategic alternatives for UScellular.
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With 4,450 cell towers, Array enables the deployment of 5G and other wireless technologies throughout the country. Array has a unique wireless carrier heritage and has owned and operated towers for over 40 years. This experience gives Array a robust understanding of the needs of its wireless customers and enables the delivery of exceptional service.
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On May 28, 2024, UScellular announced that its Board of Directors unanimously approved the execution of a Securities Purchase Agreement (Securities Purchase Agreement) by and among TDS, UScellular, T-Mobile US, Inc.
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Array has built a strong and focused organization that has been and will be relied upon as an efficient and cost-effective partner for colocation. Array’s strategy is to drive increased colocation on its portfolio of unique tower locations and support the delivery of connectivity to the communities in which it operates.
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(T-Mobile) and USCC Wireless Holdings, LLC, pursuant to which, among other things, UScellular agreed to sell its wireless operations and select spectrum assets to T-Mobile for a purchase price, subject to adjustments, as specified in the Securities Purchase Agreement, of $4,400 million, which is payable in a combination of cash and the assumption of up to approximately $2,000 million in debt.
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Array’s operations are characterized by: • Array’s tenants lease space on Array's communications infrastructure, installing network equipment on Array tower structures. Revenues vary by tenant and are dependent on numerous factors, such as quantity of installed equipment, location of installed equipment on the tower structure and tower location, amongst others.
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The purchase price includes $100 million contingent on the satisfaction of certain financial and operational metrics. The purchase price also includes $400 million allocated to certain wireless spectrum licenses held by entities in which UScellular is a non-controlling limited partner.
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Array has entered into long-term Master License Agreements (MLAs) with its largest customers, which ensures a defined lease term and defined lease escalators. Array generally experiences very limited tenant churn and high lease renewal rates driven by the high cost tenants incur to move sites as well as the potential lack of availability of suitable alternative tower structures.
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The closing with respect to these wireless spectrum licenses is contingent upon UScellular's purchase, which is pending receipt of regulatory approval, of the remaining equity in the entities that UScellular does not currently own.
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Array's largest tenants include T-Mobile, AT&T and Verizon. • Array's towers are generally located on leased land, though approximately 18% of the portfolio is located on deeded land or land where there is a perpetual easement. Additionally, over 65% of towers on leased land have a lease expiration date ten years or more in the future.
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The sale of the wireless business to T-Mobile is expected to close in mid-2025, subject to the receipt of regulatory approvals and the satisfaction of customary closing conditions. On October 17, 2024, UScellular, and certain subsidiaries of UScellular, entered into a License Purchase Agreement (Verizon Purchase Agreement) with Verizon Communications Inc.
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Array's towers generally sit within a fenced compound that contains the tower itself as well as space for tenant equipment including shelters and generators. The average height of an Array tower is 260 feet, with tower heights ranging from 60 to 600 feet. Array's portfolio consists of monopole, self-support (lattice), and guyed towers.
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(Verizon) to sell certain AWS, Cellular and PCS wireless spectrum licenses and agreed to grant Verizon certain rights to lease such licenses prior to the transaction close for total proceeds of $1,0 00 million. As of December 31, 2024, the book value of the wireless spectrum licenses to be sold was $586 million .
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In addition to the tower structure, guyed towers have guy-wires that extend down to guy anchors. Substantially all of Array's towers have adequate tower capacity and ground space to accommodate additional tenants. • Demand for tower infrastructure continues to be high, driven primarily by continued growth in mobile data consumption.
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The transaction is subject to regulatory approval and other customary closing conditions, and is contingent on the closing of the T-Mobile transaction and the termination of the T-Mobile Short-Term Spectrum Manager Lease Agreement.
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Array is in a unique position of having a lower tenancy rate than other tower operators due to the tower portfolio being part of the broader legacy wireless business prior to August 2025.
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On November 6, 2024, UScellular, and certain subsidiaries of UScellular, entered into a License Purchase Agreement (AT&T Purchase Agreement) with New Cingular Wireless PCS, LLC (AT&T), a subsidiary of AT&T Inc., to sell certain 3.45 GHz and 700 MHz wireless spectrum licenses and agreed to grant AT&T certain rights to lease and sub-lease such licenses prior to the transaction close for total proceeds of $1,018 million, subject to certain purchase price adjustments.
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This provides Array with ample remaining leasable vertical real estate in attractive rural, suburban and urban areas in the communities in which Array operates. • Array's direct tower operations costs consist of ground rent, tower maintenance, utilities, property tax and property insurance.
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As of December 31, 2024 , the book value of the wireless spectrum licenses to be sold was $859 million. The transaction is subject to regulatory approval and other customary closing conditions and substantially all of the licenses subject to the transaction are contingent on the closing of the T-Mobile transaction.
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Ground rent is the largest of these operating costs and is generally governed by long-term ground lease agreements with periodic escalators. • Array’s Selling, general and administrative expenses include employee related expenses, bad debts expense, consulting fees, and other general and administrative expenses.
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The purchase price includes $232 million allocated to certain wireless spectrum licenses that are held by an entity in which UScellular is a non-controlling limited partner. The closing with respect to these wireless spectrum licenses is contingent upon UScellular's purchase, which is pending receipt of regulatory approval, of the remaining equity in the entity that UScellular does not currently own.
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In 2025, Selling, general and administrative expenses also included significant costs associated with the wind down of the wireless operations that were not included in discontinued operations. These expenses are expected to persist at a declining rate into future periods.
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UScellular focuses its Corporate Social Responsibility program on addressing gaps in STEM (Science, Technology, Engineering and Math) education and connecting tomorrow’s innovators with the resources they need today to help shape their future opportunities. UScellular serves its local communities through exclusive partnerships with acclaimed national nonprofit partners.
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Array’s strategy is focused on: • T-Mobile MLA integration: Continued partnership with T-Mobile to implement the provisions of the long-term MLA.
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In 2024, UScellular continued exploring ways to leverage its assets, brand, partnerships, and resources to close the digital divide with a focus on helping to ensure youth in its markets have reliable and fast internet access in school and at home through the After School Access Project .
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This includes the execution of the 2,015 committed site lease agreements (SLAs), caring for interim site terminations, and partnering to drive incremental tenancies above the MLA commitment. • Growing colocation revenue: Array is focused on increasing the cash flow generated from its tower portfolio and is positioned to drive growth over the coming years.
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In addition, UScellular continues to participate in the TDS Environmental, Social and Governance (ESG) program. UScellular believes in serving as a good steward of the environment and enacting governance practices that align with its corporate values and commitment to its customers, associates, communitie s and shareholders. Customers, Services, Products and Seasonality Customers.
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First, over one-third of Array's portfolio of towers has no competing structure within a two-mile radius. Second, Array's tenancy rate is lower than other tower companies, providing sufficient capacity for additional tenants and greater opportunity for lease up.
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UScellular focuses on consumer, business and government customers located in its operating markets. These customers are served primarily through UScellular’s retail stores and digital platform, as well as its direct and indirect sales channels. Services. UScellular provides a wide variety of wireless services accessible on a broad range of devices.
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Third, Array has a dedicated sales team supporting its carrier customers and has recently added dedicated team members to support its non-carrier customers and continue to grow those relationships.
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Customers can obtain wireless services on a postpaid or prepaid basis. A single account may include monthly wireless services for a variety of handsets, connected devices and IoT Solutions.
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From an industry perspective, Array believes that continued growth in demand for wireless services, spectrum build-outs, efforts to bridge the digital divide and the emergence of next-generation technologies will drive the need for additional communications infrastructure. • Ground lease optimization: Array seeks to increase its ground ownership position through continued ground lease purchases as well as proactively renewing ground leases well before lease expiration. 4 Table of Contents • Evaluation of towers without tenants portfolio: At the conclusion of the T-Mobile integration, Array expects to have 800 – 1,800 towers without tenants.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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If TDS’ or its vendors’ networks and information technology are not adequately adapted to changes in technology or are damaged or fail to function properly, and/or if TDS’ or its vendors’ security is breached or otherwise compromised, TDS could suffer adverse consequences, including theft, destruction or other loss of critical and private data, including customer and/or employee data, interruptions or delays in its operations, inaccurate billings, inaccurate financial reporting, and significant costs to remedy the problems.
If TDS’ or its vendors’ networks and information technology are not adequately adapted to changes in technology or are damaged or fail to function properly, and/or if TDS’ or its vendors’ security is breached or otherwise compromised, TDS could suffer adverse consequences, including theft, destruction or other loss of critical and private data, including customer and/or employee data, interruptions or delays in its operations, inaccurate financial reporting, and significant costs to remedy the problems.
In addition, the TDS Restated Certificate of Incorporation includes a provision which authorizes the TDS Board of Directors to consider various factors, including effects on customers, taxes, and the long-term and short-term interests of TDS, in the context of a proposal or offer to acquire or merge the corporation, or to sell its assets, and to reject such offer if the TDS Board of Directors determines that the proposal is not in the best interests of the corporation based on such factors.
In addition, the TDS Restated Certificate of Incorporation includes a provision that authorizes the TDS Board of Directors to consider various factors, including effects on customers, taxes, and the long-term and short-term interests of TDS, in the context of a proposal or offer to acquire or merge the corporation, or to sell its assets, and to reject such offer if the TDS Board of Directors determines that the proposal is not in the best interests of the corporation based on such factors.
Changes in the administration of the various regulatory agencies and legislative bodies are resulting in and could continue to result in different policies with respect to many federal laws and regulations, including but not limited to changes to fiscal and tax policies, trade policies, tariffs on imported goods, climate change and workforce-related practices.
In addition, changes in the administration of the various regulatory agencies and legislative bodies are resulting in and could continue to result in different policies with respect to many federal laws and regulations, including but not limited to changes to fiscal and tax policies, trade policies, tariffs on imported goods, climate change and workforce-related practices.
If regulatory support is discontinued or reduced from current levels, or if receipt of future regulatory support is contingent upon making certain network-related expenditures, this could have an adverse effect on TDS’ business, financial condition or operating results and cash flows.
If financial support is discontinued or reduced from current levels, or if receipt of future support is contingent upon making certain network-related expenditures, this could have an adverse effect on TDS’ business, financial condition or operating results and cash flows.
Any difficulties in supply chain constraints, labor shortages, project management, engineering or construction resources, or difficulties in build activities, including inadvertently damaging other utility lines or pipes, could delay construction and expansion of operations, cause reputational harm or result in increased costs.
Supply chain constraints, labor shortages, or difficulties in project management, engineering, construction resources or build activities, including inadvertently damaging other utility lines or pipes, could delay construction and expansion of operations, cause reputational harm or result in increased costs.
Operational problems associated with such functions, including any failure by the vendor to provide the required level of service under the outsourcing arrangements, including possible cyber-attacks or other breaches of network or information technology security, data protection or privacy, could have adverse effects on TDS’ business, financial condition or results of operations. 15) A failure by TDS to maintain flexible and capable telecommunication networks or information technologies, or a material disruption thereof, could have an adverse effect on TDS’ business, financial condition or results of operations.
Operational problems associated with such functions, including any failure by the vendor to provide the required level of service under the outsourcing arrangements, including possible cyber-attacks or other breaches of network or information technology security, data protection or privacy, could have adverse effects on TDS’ business, financial condition or results of operations. 16) A failure by TDS to maintain flexible and capable telecommunication networks or information technologies, or a material disruption thereof, could have an adverse effect on TDS’ business, financial condition or results of operations.
Further, key suppliers may experience supply chain challenges beyond their control that result in difficulties providing the services and products typically requested by TDS on a timely basis.
Key suppliers may experience supply chain challenges beyond their control that result in difficulties providing the services and products typically requested by TDS on a timely basis.
The trustees of the TDS Voting Trust have advised TDS that they intend to maintain the ability to keep or dispose of voting control of TDS. 21 Table of Contents The TDS Restated Certificate of Incorporation also authorizes the TDS Board of Directors to designate and issue TDS Undesignated Shares in one or more classes or series of preferred or common stock from time to time.
The trustees of the TDS Voting Trust have advised TDS that they intend to maintain the ability to keep or dispose of voting control of TDS. 15 Table of Contents The TDS Restated Certificate of Incorporation also authorizes the TDS Board of Directors to designate and issue TDS Undesignated Shares in one or more classes or series of preferred or common stock from time to time.
Furthermore, consolidation among key suppliers may result in less competition, higher prices, the discontinuation of equipment and/or services typically purchased by TDS or the discontinuation of support for equipment owned by TDS. Operation of TDS’ supply chain and management of its device inventory and network equipment, including customer premise equipment, require accurate forecasting of customer growth and demand.
Furthermore, consolidation among key suppliers may result in less competition, higher prices, the discontinuation of equipment and/or services typically purchased by TDS or the discontinuation of support for equipment owned by TDS. Operation of TDS’ supply chain and management of its network equipment, including customer premise equipment, require accurate forecasting of customer growth and demand.
The increased provision of data services, including IPTV, has introduced significant demands on TDS’ network and also has increased complexities related to network management which creates an increased level of risk related to quality of service and data speeds. This is due to the fact that many customers increasingly rely on data communications to execute and validate transactions.
The increased provision of data services has introduced significant demands on TDS’ network and also has increased complexities related to network management which creates an increased level of risk related to quality of service and data speeds. This is due to the fact that many customers increasingly rely on data communications to execute and validate transactions.
Regulatory, Legal and Governance Risk Factors 21) 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.
Regulatory, Legal and Governance Risk Factors 20) Failure by TDS to timely or fully comply with any existing applicable legislative and/or regulatory requirements or changes thereto could adversely affect TDS’ business, financial condition or results of operations.
If TDS cannot keep pace with its competition in deploying higher speed technologies, offering competitive products and services at competitive prices and providing attractive video content options, TDS' financial condition, results of operations or ability to do business could be adversely affected. TDS’ wireline business introduced MVNO plans offering wireless services to customers in its service areas.
If TDS cannot keep pace with its competition in deploying higher speed technologies, offering competitive products and services at competitive prices and providing attractive video content and wireless mobility options, TDS' financial condition, results of operations or ability to do business could be adversely affected. TDS’ wireline business offers MVNO plans providing wireless services to customers in its service areas.
Also, if TDS fails to accurately forecast customer usage and network demands, TDS may have excess supply of network equipment inventory that may need to be written down, depreciated or disposed at a loss. Further, TDS' supply chain could be disrupted unexpectedly by raw material shortages, wars, natural disasters, disease or other factors.
Also, if TDS fails to accurately forecast customer usage and network demands, TDS may have excess supply of network equipment inventory that may need to be written down, depreciated or disposed at a loss. Further, TDS' supply chain could be disrupted unexpectedly by tariffs, governmental restrictions, raw material shortages, wars, natural disasters, disease or other factors.
The rapid evolution and increased adoption of artificial intelligence technologies may intensify TDS' cybersecurity risk. TDS maintains administrative, technical and physical controls, as well as other preventative actions, to reduce the risk of security breaches.
The rapid evolution and increased adoption of artificial intelligence technologies may intensify TDS' cybersecurity risk. TDS maintains administrative, technical and physical controls, as well as other preventative measures, to reduce the risk of security breaches.
General Risk Factors 27) TDS has experienced, and in the future expects to experience, cyber-attacks or other breaches of network or information technology security of varying degrees on a regular basis, which could have an adverse effect on TDS' business, financial condition or results of operations. TDS experiences cyber-attacks of varying degrees on a regular basis.
General Risk Factors 24) TDS has experienced, and in the future expects to experience, cyber-attacks or other breaches of network or information technology security of varying degrees on a regular basis, which could have an adverse effect on TDS' business, financial condition or results of operations.
Any difficulties encountered in completing these activities, as well as problems in vendor equipment availability, labor availability, inflation or other pressures on costs, technical resources, system performance or system adequacy, could delay implementation and deployment of new technologies, delay expansion of operations and product capabilities in new or existing markets or result in increased costs.
Any difficulties encountered in completing these activities, as well as problems in vendor equipment availability, labor availability, inflation or other pressures on costs, technical resources, system performance or system adequacy, could delay expansion of operations and product capabilities in new or existing markets or result in increased costs.
TDS’ wireline and cable businesses are devoting a substantial amount of capital for fiber builds in its markets using a combination of internal and third-party construction crews. TDS is also often reliant on third parties for items such as franchises, utility locates and easements, aerial attachments and other permits. Difficulties with third-party performance could cause delays or additional costs.
TDS’ wireline business is devoting a substantial amount of capital for fiber builds in its markets using a combination of internal and third-party construction crews. TDS is also often reliant on third parties for items such as franchises, utility locates and easements, aerial attachments and other permits. Difficulties with third-party performance could cause delays or additional costs.
Supply chain disruptions may result in limited component availability, constraints on certain devices and network equipment, extended lead times, delayed construction and additional uncertainty. Also, TDS has other arrangements with third parties, including arrangements pursuant to which TDS outsources certain support and billing functions to third-party vendors, including service providers and third-party wireless network operators for TDS' wireline MVNO product.
Supply chain disruptions may result in constraints on network or other equipment, extended lead times, delayed construction and additional uncertainty. Also, TDS has other arrangements with third parties, including arrangements pursuant to which TDS outsources certain support and billing functions to third-party vendors, including service providers and third-party wireless network operators for TDS' wireline MVNO product.
TDS’ liquidity would be adversely affected if, among other things, cash flows from operations significantly decline, TDS is unable to implement cost reduction initiatives, TDS is unable to obtain short or long-term financing on acceptable terms, TDS is not able to comply with certain debt covenants or TDS is unsuccessful in negotiating related consents, waivers, or amendments, interest rates increase, TDS makes significant spectrum license purchases, TDS makes significant capital investments, TDS makes significant business acquisitions, the Los Angeles SMSA Limited Partnership (LA Partnership) and other minority-owned partnerships discontinue or significantly reduce distributions compared to historical levels, or Federal USF and/or other regulatory support payments decline.
TDS’ liquidity would be adversely affected if, among other things, cash flows from operations significantly decline from anticipated levels, TDS is unable to implement cost reduction initiatives, TDS is unable to obtain short or long-term financing on acceptable terms, TDS is not able to comply with certain debt covenants or TDS is unsuccessful in negotiating related consents, waivers, or amendments, interest rates increase, TDS makes significant capital investments, TDS makes significant business acquisitions, the Los Angeles SMSA Limited Partnership (LA Partnership) and other minority-owned investment interests discontinue or significantly reduce distributions compared to historical levels, or regulatory support payments decline.
Competition in the tower industry is also challenging, as TDS competes with public and private tower companies, private equity sponsored tower companies, and owners of non-communications sites such as utility towers, rooftop structures, water towers, and other alternative structures.
Competition in the tower industry is robust, as Array competes with public and private tower companies, private equity sponsored tower companies, and owners of non-communications sites such as utility towers, rooftop structures, water towers, and other alternative structures.
As renewal of all wireless spectrum licenses is predicated upon their initial and continued operation in accordance with FCC requirements, such licenses could be subject to forfeiture should UScellular not incur significant expenses to operate the spectrum or engage another carrier to do so.
As renewal of all wireless spectrum licenses is predicated upon their initial and continued operation in accordance with FCC requirements, such licenses could be subject to forfeiture if Array does not incur significant costs and expenses to operate the spectrum prior to renewal or engage another carrier to do so.
There is no assurance that regulatory support payments will continue for TDS Telecom, and no assurance that TDS Telecom will qualify for future regulatory support programs.
There is no assurance that these financial support payments will continue for TDS Telecom, and there is no assurance that TDS Telecom will qualify for future programs.
TDS may be unable to compete successfully with larger companies that have substantially greater financial, technical, marketing, sales, purchasing and distribution resources or that offer more services than TDS, which has adversely affected and could continue to adversely affect TDS’ revenues and costs of doing business.
TDS may be unable to compete successfully with larger companies that have substantially greater financial, technical, marketing, sales and purchasing or that offer more services than TDS, and this could adversely affect TDS’ revenues and costs of doing business.
Similarly, UScellular may not be able to satisfy the other closing conditions applicable to each of the transactions, which in the case of the Verizon and AT&T transactions include the closing of the T-Mobile transaction and, for the Verizon transaction, the termination of the T-Mobile Short-Term Spectrum Manager Lease Agreement.
Similarly, Array may not be able to satisfy the other closing conditions applicable to each of the transactions, which in the case of the Verizon transaction, includes the termination of the T-Mobile Short-Term Spectrum Manager Lease Agreement.
This could have an adverse effect on TDS’ ability to attain and sustain long-term, profitable revenue growth and could have an adverse effect on its business, financial condition or results of operations. 18 Table of Contents 20) TDS has significant investments in entities that it does not control.
This could have an adverse effect on TDS’ ability to attain and sustain long-term, profitable revenue growth and could have an adverse effect on its business, financial condition, cash flows, or results of operations. 19) TDS has significant investments in wireless operating entities that it does not control.
UScellular expects to incur significant decommissioning costs for certain towers that UScellular elects to retire, and such decommissioning costs are also expected to include remaining obligations under related ground leases. These costs are expected to have a significant impact on TDS' cash flows and financial statements.
Array may incur significant decommissioning costs for certain towers that Array elects to retire, and such decommissioning costs are also expected to include remaining obligations under related ground leases for certain towers. These decommissioning costs may have a significant adverse impact on TDS’ future cash flows and financial results.
TDS’ MVNO offerings are reliant on third parties to deliver adequate wireless service to these customers and may not be able to successfully compete with wireless options provided by other industry competitors who have access to greater scale and financial resources than TDS.
TDS’ MVNO offerings are reliant on third parties to deliver adequate wireless service to these customers and may not be able to successfully compete with wireless options provided by other industry competitors who have access to greater scale and financial resources than TDS. There is no assurance that these MVNO plans will attract or retain broadband customers.
Financial Risk Factors 16) Uncertainty in TDS’ or UScellular's future cash flow and liquidity or the inability to access capital, deterioration in the capital markets, changes in interest rates, other changes in TDS’ or UScellular's performance or market conditions, changes in TDS’ or UScellular's credit ratings or other factors could limit or restrict the availability of financing on terms and prices acceptable to TDS, which has required and is expected in the future to require TDS to reduce or delay its construction, development or acquisition programs, divest assets or businesses, and/or reduce or cease share repurchases and/or the payment of common shareholder dividends.
Financial Risk Factors 17) Uncertainty in TDS’ or Array's future cash flow and liquidity, their level of indebtedness or their inability to access capital, deterioration in the capital markets, changes in interest rates, changes in TDS' or Array’s credit ratings or other factors could limit or restrict the availability of financing on terms and prices acceptable to TDS, which may require TDS to reduce or delay its construction, development or acquisition programs, divest assets, and/or reduce or cease share repurchases and/or the payment of common shareholder dividends.
The U.S. telecommunications industry is facing significant change and an uncertain operating environment. TDS’ focus on the U.S. telecommunications industry, together with its lack of scale relative to larger competitors with greater resources within the industry, may represent increased risk for investors due to the lack of diversification.
TDS’ focus on the U.S. telecommunications industry, together with its lack of scale relative to larger competitors with greater resources within the industry, may represent increased risk for investors due to the lack of diversification.
Additionally, following the close of the T-Mobile transaction, it is uncertain which towers T-Mobile will choose to locate on, and therefore, it is unknown how many and which towers with no tenants will remain in UScellular's tower portfolio.
Additionally, it is uncertain which towers T-Mobile will choose to permanently locate on, and therefore, it is unknown how many and which towers with no tenants will remain in Array's tower portfolio.
Further, as a result of changes to its spectrum units of accounting, UScellular recognized a significant impairment on its spectrum assets during 2024 and there may be further events and circumstances that occur which may result in additional impairments for the spectrum that is retained, or for the spectrum that is pending sale if such sales do not close as expected.
Further, as a result of changes to its spectrum units of accounting, Array recognized significant impairments on its spectrum assets during 2024 and 2025 and further events and circumstances may result in additional impairments for the remaining spectrum assets, including the spectrum that is pending sale if such sales do not close as expected.
Many of these competitors are larger than TDS, have greater financial and other resources, have more advantageous tower locations than TDS, have greater capacity on their towers, and have more scale and coverage nationwide than TDS – such factors could result in an inability to acquire or build additional towers, difficulty in leasing tower space or renewing leases, or cause lease revenue to decline in the future.
Many of these competitors are larger than Array, have greater financial and other resources, have more advantageous tower locations than Array, and have more scale nationwide than Array. Such factors could result in difficulty in leasing tower space or renewing leases, or cause lease revenue to decline in the future.
Failure to successfully deploy new technologies, including the continued deployment of 5G, and/or build-out and enhance TDS’ network, support facilities and other systems and infrastructure in a cost-effective manner, and in a manner that satisfies consumers' expectations for quality and coverage, has adversely affected and could continue to adversely affect TDS’ business, business prospects, financial condition or results of operations.
Failure to successfully build-out and enhance TDS’ network, support facilities and other systems and infrastructure in a cost-effective manner, and in a manner that satisfies consumers' expectations for quality could adversely affect TDS’ business, business prospects, financial condition or results of operations.
Additionally, if the T-Mobile transaction is successfully completed, but the Verizon and AT&T transactions are not completed, UScellular would retain additional wireless spectrum licenses with no existing wireless business to operate the spectrum.
Additionally, if the Verizon and T-Mobile spectrum transactions are not completed, Array would retain additional wireless spectrum licenses with no wireless business to operate the spectrum.
TDS has relationships with independent agents and third-party national retailers who market TDS’ services. TDS depends upon certain vendors to provide it with equipment, services and content that meet its quality and cost requirements on a timely basis to continue its network construction and upgrades, and to operate its business.
TDS depends upon certain vendors to provide it with equipment, services and content that meet its quality and cost requirements on a timely basis to continue its network construction and upgrades, and to operate its business.
In addition, if the T-Mobile, Verizon and AT&T transactions are not consummated, the funds contemplated to be received as a result of such transactions would not be available for investment in other UScellular businesses, repayment of debt or the payment of dividends to UScellular stockholders, including TDS.
If the Verizon and T-Mobile spectrum transactions are not consummated, the funds contemplated to be received as a result of such transactions will not be available for investment in Array’s business, repayment of debt, or dividends to Array stockholders, including TDS.
These transactions commonly involve a number of risks, including: ▪ Identification of attractive companies, businesses, properties, spectrum or other assets for acquisition or exchange, and/or the selection of TDS’ businesses or assets for divestiture or exchange; ▪ Competition for acquisition targets and the ability to acquire or exchange businesses at reasonable prices; ▪ Inability to make acquisitions that would achieve sufficient scale or substantial benefit to be competitive with competitors with greater scale; ▪ Possible lack of buyers for businesses or assets that TDS desires to divest and the ability to divest or exchange such businesses or assets at reasonable prices; ▪ Ability to negotiate favorable terms and conditions for acquisitions, divestitures and exchanges; ▪ Significant expenditures associated with acquisitions, divestitures and exchanges; ▪ Risks associated with integrating new businesses or markets, including risks relating to cybersecurity and privacy; ▪ Ability to enter markets in which TDS has limited or no direct prior experience and competitors have stronger positions; ▪ Ability to integrate and manage TDS’ different business operations and services, including wireless services, traditional wireline services and cable businesses; ▪ Uncertain revenues and expenses associated with acquisitions or the entry into new expansion markets, with the result that TDS may not realize the growth in revenues, anticipated cost structure, profitability, or return on investment that it expects; ▪ Difficulty of integrating the technologies, services, products, operations and personnel of the acquired businesses, or of separating such matters for divested businesses or assets; 15 Table of Contents ▪ Diversion of management’s attention; ▪ Disruption of ongoing business; ▪ Impact on TDS’ cash and available credit lines for use in financing future growth and working capital needs; ▪ Inability to retain key personnel; ▪ Inability to successfully incorporate acquired assets and rights into TDS’ service offerings; ▪ Inability to utilize acquired wireless spectrum; ▪ Inability to maintain uniform standards, controls, procedures and policies; ▪ Possible conditions to approval by the FCC, the Federal Trade Commission and/or the Department of Justice; and ▪ Impairment of relationships with employees, customers or vendors.
These transactions commonly involve a number of risks, including: ▪ Identification of assets for acquisition or divestiture; ▪ Competition for acquisition targets and the ability to acquire at reasonable prices; ▪ Possible lack of buyers for assets that TDS desires to divest and the ability to divest such assets at reasonable prices; ▪ Ability to negotiate favorable terms and conditions for acquisitions and divestitures; ▪ Significant expenditures associated with acquisitions and divestitures; ▪ Risks associated with integrating new businesses or markets, including risks relating to cybersecurity and privacy; ▪ Ability to enter markets in which TDS has limited or no direct prior experience and competitors have stronger positions; ▪ Uncertain revenues and expenses associated with acquisitions or the entry into new expansion markets, with the result that TDS may not realize the growth in revenues, anticipated cost structure, profitability, or return on investment that it expects; ▪ Difficulty of integrating and managing the technologies, services, products, operations and personnel of the acquired businesses, or of separating such matters for divested businesses or assets; ▪ Diversion of management’s attention; ▪ Disruption of ongoing business; ▪ Impact on TDS’ cash and available credit lines for use in financing future growth and working capital needs; 12 Table of Contents ▪ Inability to retain key personnel; ▪ Inability to successfully incorporate acquired assets and rights into TDS’ service offerings; and ▪ Possible conditions to, or lack of, approvals by government bodies, including the FCC, the Department of Justice and State regulators.
Losses in the values of such investments or a reduction in income from these investments could adversely affect TDS’ financial condition or results of operations. In addition, certain investments have historically contributed significant cash flows to TDS and a reduction or suspension of such cash flows could adversely affect TDS’ cash flows and financial condition.
Losses in the values of such investments or a reduction in income and distributions from these investments could adversely affect TDS’ financial condition, cash flows or results of operations.
TDS’ ability to maintain high-quality, uninterrupted service to its customers is critical, particularly given the increasingly competitive environment and customers’ ability to choose other service providers. 16 Table of Contents In addition, TDS’ networks and information technologies and the networks and information technologies of vendors on which TDS relies are subject to damage or interruption due to various events, including power outages, computer, network and telecommunications failures, computer viruses, security breaches, hackers and other cyber security risks, catastrophic events, natural disasters, severe weather, adverse climate changes, errors or unauthorized actions by employees and vendors, flawed conversion of systems, disruptive technologies and technology changes.
In addition, TDS’ networks and information technologies and the networks and information technologies of vendors on which TDS relies are subject to damage or interruption due to various events, including power outages, computer, network and telecommunications failures, computer viruses, security breaches, hackers and other cybersecurity risks, catastrophic events, natural disasters, severe weather, adverse climate changes, errors or unauthorized actions by employees and vendors, flawed conversion of systems, disruptive technologies and technology changes.
No assurance can be given that TDS will be successful with respect to its acquisition, divestiture or exchange strategies or initiatives. 14) Difficulties involving third parties with which TDS does business, including changes in TDS’ relationships with or financial or operational difficulties, including supply chain disruptions, of key suppliers or independent agents and third-party national retailers who market TDS’ services, could adversely affect TDS’ business, financial condition or results of operations.
No assurance can be given that TDS will be successful with respect to any of its future acquisition or divestiture strategies or initiatives. 15) Difficulties involving third parties TDS does business with, including changes in the relationship with TDS or financial or operational difficulties, including supply chain disruptions of key suppliers, could adversely affect TDS’ business, financial condition or results of operations.
Losses in the value of such investments could have an adverse effect on TDS’ financial condition or results of operations. TDS has significant investments in entities that it does not control, including equity investments and interests in certain variable interest entities.
Losses in the value of or cash flows from such investments could have an adverse effect on TDS’ financial condition, cash flows or results of operations. TDS has significant investments in wireless operating entities that it does not control.
TDS’ businesses are highly technical and competition for skilled talent in the telecommunications industry is intense. Due to competition, limited supply, and/or rising wage levels for qualified management, technical, sales and other personnel, there can be no assurance that TDS will be able to continue to attract and/or retain people of outstanding potential for the development of its business.
Due to competition, limited supply, and/or rising wage levels for qualified management, technical and other personnel, there can be no assurance that TDS will be able to attract and/or retain people of outstanding potential for leadership and development of its business.
The TDS Common Shares (with one vote per share) vote as a separate group only with respect to the election of 25% (plus one) of the directors.
The TDS Common Shares (with one vote per share in the election of directors) vote as a separate group with respect to the election of 25% of the total number of directors (rounded up to the nearest whole number plus one director).
There can be no assurance that the strategic alternatives review process, which is ongoing, will result in the transactions or any strategic alternative of any kind being successfully completed or that the process or any outcomes of the process will not have an adverse impact on UScellular's business or financial statements.
There can be no assurance that the strategic alternatives review process, which is ongoing, will result in the spectrum transactions with Verizon and T-Mobile being successfully completed, or the successful monetization of other remaining spectrum, or that these processes or any outcomes of these processes will not have an adverse impact on TDS’ business or financial statements.
Continued delays, incremental delays or failure to complete its deployment activities could weaken TDS' competitive position in certain of its markets, causing TDS to modify its deployment plans or write-off investments, which could have an adverse effect on TDS’ business, business prospects, financial condition or results of operations. 5) Intense competition involving products, services, pricing, promotions and network speed and technologies could adversely affect TDS’ revenues or increase its costs to compete.
Delays or failure to complete its deployment activities could weaken TDS' competitive position in certain of its markets, causing TDS to modify its deployment plans or write-off investments, which could have an adverse effect on TDS’ business, business prospects, financial condition or results of operations. 9 Table of Contents 5) Increasing competition in the wireline and tower industries could adversely affect TDS’ revenues, negatively impact future growth and increase its costs to compete.
The applicability of these surcharges and fees to TDS’ services is uncertain in many cases and periodically, state and federal regulators may increase or change the surcharges and fees TDS currently pays. In some instances, TDS passes through these charges to its customers.
The applicability of these surcharges, taxes and fees is uncertain in many cases and, periodically, federal, state or local regulators may increase or change the surcharges, taxes and fees that TDS Telecom currently pays. In some instances, where permitted by law, TDS Telecom passes through and collects these sums from its customers.
TDS may not be able to respond to such changes and implement new technology on a timely or cost-effective basis, which could reduce its revenues or increase its costs of doing business. 12) Complexities associated with deploying new technologies present substantial risk and TDS’ investments in unproven technologies may not produce the benefits that TDS expects.
TDS may not be able to respond to such changes and implement new technology on a timely or cost-effective basis, which could reduce its revenues or increase its costs of doing business.
TDS’ ability to make scheduled payments on its indebtedness or to refinance it will depend on its financial and operating performance which, in turn, is subject to prevailing economic and competitive conditions and other factors beyond its control.
TDS’ ability to make scheduled payments on its indebtedness or to refinance it will depend on its financial and operating performance which, in turn, is subject to prevailing economic and competitive conditions and other factors beyond its control. 13 Table of Contents TDS expects to fund its current fiber plans and E-ACAM builds through its plans and actions to allocate capital among its businesses and investments.
On October 17, 2024, UScellular, and certain subsidiaries of UScellular, entered into the Verizon Purchase Agreement to sell certain AWS, Cellular and PCS wireless spectrum licenses and agreed to grant Verizon certain rights to lease such licenses prior to the transaction close.
Costs and uncertainties related to these transactions could have adverse effects on Array's financial condition or results of operations. On October 17, 2024, Array entered into the Verizon License Purchase Agreement to sell certain AWS, Cellular and PCS wireless spectrum licenses and agreed to grant Verizon certain rights to lease such licenses prior to the transaction close.
Cybersecurity of this Form 10-K for additional information. 28) 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.
Although TDS has implemented and continues to enhance its protection and recovery measures in response to such attacks, these efforts may be insufficient to prevent a material denial of service attack in the future. 25) Disruption in credit or other financial markets, a deterioration of U.S. or global economic conditions or other events could, among other things, impede TDS’ access to or increase the cost of financing its operating and investment activities and/or result in reduced revenues and lower operating income and cash flows, which would have an adverse effect on TDS’ business, financial condition or results of operations.
These factors include, but are not limited to: ▪ Demand for or usage of services, particularly data services; ▪ Demand for leasing space on a tower; ▪ Consumer preferences, including internet speed and type of wireless devices; ▪ Consumer perceptions of network quality and performance; ▪ Consumer expectations for self-service options through digital means; ▪ Competitive pressure to deliver higher speed; ▪ Competitive pressure from promotional activity; ▪ The pricing of services, including an increase in price-based competition; ▪ The pricing of tower leases that can be charged to third parties; ▪ Increases in ground lease rates for owned towers; ▪ Inflationary pressures on costs without corresponding price increases for TDS' services; ▪ Access to and cost of programming; ▪ The overall size and growth rate of TDS’ customer base; ▪ Penetration rates; ▪ Churn rates; ▪ Selling expenses; ▪ Net customer acquisition and retention costs; ▪ Customers’ ability to pay for services and the potential impact on bad debts expense; ▪ Roaming agreements and rates; ▪ Third-party vendor support; ▪ Capacity constraints; ▪ The mix of services and products offered by TDS and purchased by customers; and ▪ The costs of providing services and products. 10) A failure by TDS to obtain access to adequate radio spectrum to meet current or anticipated future needs and/or to accurately predict future needs for radio spectrum could have an adverse effect on TDS’ business, financial condition or results of operations.
These factors include, but are not limited to: ▪ Consumer preferences, including internet speed; ▪ Consumer perceptions of network quality and performance; ▪ Consumer expectations for self-service options through digital means; ▪ Competitive pressure to deliver higher speed; ▪ Competitive pressure from promotional activity; ▪ The pricing of services, including an increase in price-based competition; ▪ Inflationary pressures on costs without corresponding price increases for TDS' services; ▪ Access to and cost of programming; ▪ The overall size and growth rate of TDS’ customer base; ▪ Selling expenses; ▪ Net customer acquisition and retention costs; ▪ Customers’ ability to pay for services and the potential impact on bad debts expense; ▪ Third-party vendor support; ▪ Capacity constraints; ▪ The mix of services and products offered by TDS and purchased by customers; and ▪ The costs of providing services and products. 13) Advances or changes in technology could render certain technologies used by TDS obsolete, could put TDS at a competitive disadvantage, could reduce TDS’ revenues or could increase its costs of doing business.
Changes in economic conditions, changes in financial markets, changes in U.S. trade policies, deterioration in the capital markets or other factors could have an adverse effect on TDS’ business, financial condition, revenues, results of operations and cash flows. 29) The impact of public health emergencies on TDS' business is uncertain, but depending on duration and severity could have a material adverse effect on TDS' business, financial condition or results of operations.
Changes in economic conditions, changes in financial markets, changes in U.S. trade policies, deterioration in the capital markets or other factors could have an adverse effect on TDS’ business, financial condition, revenues, results of operations and cash flows. 16 Table of Contents Item 1B. Unresolved Staff Comments None.
Also, as TDS continues to build out and enhance its network, TDS must, among other things, continue to: ▪ Lease, acquire or otherwise obtain rights to cell and switch sites, transport facilities or other facilities; ▪ Obtain zoning variances or other local governmental or third-party approvals or permits for network construction; ▪ Complete and update the radio frequency design, including cell site design, frequency planning and network optimization, for each of TDS’ wireless markets; and ▪ Improve, expand and maintain customer care, network management, billing and other financial and management systems.
As TDS continues to build out and enhance its network, TDS must, among other things, continue to: ▪ Obtain zoning variances or other local governmental or third-party approvals or permits for network construction; and ▪ Improve, expand and maintain customer care, network management, billing and other financial and management systems.
Depending on the actual financial performance of TDS and UScellular, there is a risk that TDS and/or UScellular could fail to satisfy the required financial covenants. This risk has increased with TDS' recent financial and operating performance.
Depending on the actual financial performance of TDS and Array, there is a risk that TDS and/or Array could fail to satisfy the required covenants. Restrictions included in such debt instruments may limit TDS’ operating and financial flexibility.
On November 6, 2024, UScellular, and certain subsidiaries of UScellular, entered into the AT&T Purchase Agreement to sell certain 3.45 GHz and 700 MHz wireless spectrum licenses and agreed to grant AT&T certain rights to lease and sub-lease such licenses prior to the transaction close.
On August 29, 2025, Array entered into the T-Mobile License Purchase Agreement to sell certain 700 MHz wireless spectrum licenses and agreed to grant T-Mobile certain rights to lease such licenses prior to the transaction close.
TDS’ operations are subject to varying degrees of regulation by the FCC, state public utility commissions and other federal, state and local regulatory agencies and legislative bodies.
TDS’ operations are subject to varying degrees of regulation by the FCC, FAA, state public utility commissions and other federal, state and local regulatory agencies and legislative bodies. Both the FAA and the FCC regulate the construction, modification, and maintenance of towers and structures that support antennas used for wireless communications and radio and television broadcasts.
The loss of existing key personnel due to competition, wage levels and/or retirements, the failure to recruit highly skilled personnel in a timely and cost-effective manner, the inability to foster and maintain an inclusive work environment, or failure to maintain its commitment to environmental and social responsibility could have an adverse effect on TDS’ business, financial condition or results of operations.
The loss of existing key personnel due to competition, wage levels and/or retirements, the failure to recruit highly skilled personnel in a timely and cost-effective manner or the failure to have effective succession planning, could have an adverse effect on TDS’ business, financial condition or results of operations. 11 Table of Contents 12) Changes in various business factors, including changes in demand, consumer preferences and perceptions, price competition, cost increases and other factors, could have an adverse effect on TDS’ business, financial condition or results of operations.
TDS may change the markets in which it operates and the services that it provides through such acquisitions, divestitures and/or exchanges. In general, TDS may not disclose the negotiation of such transactions until a definitive agreement has been reached.
In general, TDS may not disclose the negotiation of such transactions until a definitive agreement has been reached.
However, TDS is unable to predict the future actions of the various legislative and regulatory bodies that govern TDS, and such actions could have adverse effects on TDS’ business. 19 Table of Contents 22) TDS receives significant regulatory support, and is also subject to numerous surcharges and fees from federal, state and local governments – the applicability and the amount of the support and fees are subject to uncertainty, including the ability to pass through certain fees to customers, and this uncertainty could have an adverse effect on TDS’ business, financial condition or results of operations.
However, TDS is unable to predict the future actions of the various legislative and regulatory bodies that govern TDS, and such actions could have adverse effects on TDS’ business. 14 Table of Contents 21) TDS' receipt of financial support through various government programs for its deployment of telecommunications and broadband networks and services, its ability to properly calculate and pay fees and surcharges for its services, and its ability to continue to pass through and collect from its customers certain of those fees and surcharges is subject to uncertainty, the result of which could have an adverse effect on TDS’ business, financial condition or results of operations.
These include cyber-attacks intended to wrongfully obtain private and valuable information, or cause other types of malicious events, including denial of service attacks which may cause TDS' services to be disrupted or unavailable to customers. The number of associates working remotely increases risks associated with data handling and vulnerability management.
TDS has historically experienced, and in the future expects to experience, cyber-attacks of varying degrees on a regular basis. These include cyber-attacks intended to wrongfully obtain private and valuable information, or cause other types of malicious events. The number of associates working remotely increases risks associated with data handling and vulnerability management.
Specifically, TDS’ lack of scale and structural disadvantages, particularly in the wireless business, relative to most of its competitors could have the following impacts, among others: ▪ Low profit margins and returns on investment that are below TDS’ cost of capital; ▪ Increased operating and capital expenditure costs due to lack of leverage with vendors and dispersed geography; ▪ Higher costs per wireless subscriber; ▪ Inability to timely and successfully deploy 5G or other wireless technologies, execute on fiber expansion plans, or to realize significant incremental revenues from their deployment; ▪ Inability to meet build-out requirements of state and federal broadband programs; ▪ Limited opportunities for strategic partnerships as potential partners are focused on telecommunications companies with greater scale and scope; ▪ For TDS' wireless business, limited opportunities for bundling wireless service with other services such as home internet; ▪ Limited access to content, as well as limited ability to obtain acceptably priced content and programming; ▪ Limited access to devices as larger competitors enter into exclusive device arrangements; ▪ Consumer expectations that TDS provides lower-priced wireless offerings relative to larger competitors; ▪ Limited ability to influence industry standards; ▪ Limited ability to acquire or build additional towers; ▪ Reduced ability to invest in research and development of new services and products; ▪ Lower risk tolerance when evaluating new markets; 12 Table of Contents ▪ Vendors may deem TDS non-strategic and not develop or sell services and products to TDS, particularly where technical requirements differ from those of larger companies; ▪ Limited access to intellectual property; and ▪ Other limited opportunities such as for software development or third-party distribution.
Specifically, TDS’ lack of scale relative to most of its competitors could have the following impacts, among others: ▪ Low profit margins and returns on investment that are below TDS’ cost of capital; ▪ Increased operating and capital expenditure costs due to lack of leverage with vendors and dispersed geography; ▪ Limited opportunities for strategic partnerships as potential partners are focused on telecommunications companies with greater scale and scope; ▪ Limited access to content, as well as limited ability to obtain acceptably priced content and programming; ▪ Limited ability to influence industry standards; ▪ Reduced ability to invest in research and development of new services and products; ▪ Lower risk tolerance when evaluating new markets; ▪ Vendors may deem TDS non-strategic and not develop or sell services and products to TDS; ▪ Limited access to intellectual property; ▪ Other limited opportunities such as for software development; and ▪ Limited ability to acquire and subsidize mobile handsets that customers may desire. 9) Inability to protect TDS’ real estate rights, with respect to land leases, could have an adverse effect on TDS’ business, financial condition or results of operations.
As a result, TDS’ level of indebtedness, restrictions contained in debt instruments and/or possible breaches of covenants, defaults, and acceleration of indebtedness could have an adverse effect on TDS’ business, financial condition, revenues, results of operations and cash flows. 18) TDS has entered into a Senior Secured Credit Agreement that imposes certain restrictions on its business and operations that may affect its ability to operate its business and make payments on its indebtedness.
TDS’ and Array’s restrictions contained in debt instruments and/or possible breaches of covenants, defaults, and acceleration of indebtedness could have an adverse effect on TDS’ business, financial condition, revenues, results of operations and cash flows.
This could produce operational, cost and borrowing disadvantages relative to its current operations. At the T-Mobile closing, UScellular and T-Mobile will enter into a Master License Agreement, pursuant to which, among other things, T-Mobile will lease space on certain additional UScellular-owned towers for a minimum of 15 years and extend the term of certain existing leases to 15 years.
At the closing of the T-Mobile transaction, Array and T-Mobile entered into a MLA, pursuant to which, among other things, T-Mobile will lease space on certain additional Array-owned towers for a minimum of 15 years and also commit to 15 year minimum extensions of existing leases for Array-owned towers.
Operational Risk Factors 4) A delay or failure by TDS to complete significant network construction and systems implementation activities as part of its plans to improve the quality, coverage, capabilities and capacity of its network, support and other systems and infrastructure as well as renew wireless spectrum licenses, could adversely affect its operations.
All of these events could decrease the value of retained spectrum and could have a significant adverse effect on TDS’ financial condition, cash flows, and results of operations. 4) A delay or failure by TDS to complete significant network construction and systems implementation activities as part of its plans to expand and improve the quality and capacity of its network and support systems could adversely affect its operations.
These or other developments at UScellular may negatively affect TDS' ability to obtain short or long-term financing on acceptable terms or obtain favorable terms and conditions from third-party vendors. TDS’ credit rating currently is sub-investment grade.
These or other developments at Array may negatively affect TDS' ability to obtain short- or long-term financing on acceptable terms or obtain favorable terms and conditions from third-party vendors. The TDS and Array revolving credit agreements, and the Array term loan agreement require TDS or Array, as applicable, to comply with certain affirmative and negative covenants, including certain financial covenants.
There is no guarantee that these MVNO plans will attract or retain broadband customers. 6) TDS’ lack of scale and structural disadvantages, particularly in the wireless business, relative to larger competitors that may have greater financial and other resources than TDS has caused and could continue to cause TDS to be unable to compete successfully, which has adversely affected and could continue to adversely affect its business, financial condition or results of operations.
See Management Discussion and Analysis - Array Operations for additional information. 8) TDS’ lack of scale relative to larger competitors that may have greater financial and other resources than TDS could cause TDS to be unable to compete successfully, which could adversely affect its business, financial condition or results of operations. TDS has lack of scale compared to larger competitors.
TDS may or may not be able to recover some or all those taxes from its customers and the amount of taxes may deter demand for its services or increase its cost to provide service. 23) 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.
Any such limitation could have a material impact on TDS Telecom and thus TDS’ financial condition and business. 22) Settlements, judgments, restraints on its current or future manner of doing business and/or costs resulting from pending and future legal and policy proceedings could have an adverse effect on TDS’ business, financial condition or results of operations.
If TDS' indebtedness were to be accelerated, there can be no assurance that the assets would be sufficient to repay such indebtedness in full. 19) 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.
To the extent that Array’s credit rating is downgraded, it may adversely affect TDS’ credit rating, which could impact TDS’ liquidity. 18) TDS’ assets and revenue are concentrated primarily in the U.S. telecommunications industry. Consequently, its operating results may fluctuate based on factors related primarily to conditions in this industry.
Future technological changes or advancements may enable other technologies to equal or exceed TDS’ current levels of service and render its system infrastructure obsolete.
Also, high-speed wireless networks (wireless broadband) represent a risk for TDS’ wireline and cable businesses as customers may elect to substitute their wireline or cable broadband connection with wireless broadband. Future technological changes or advancements, including investments in artificial intelligence capabilities, may enable other technologies to equal or exceed TDS’ current levels of service and render its system infrastructure obsolete.
The ACAM and E-ACAM programs have build-out requirements that may not be met, which would result in penalties, loss of support and/or deferral of future revenues. In 2024 , TDS Telecom received $114 million under all federal regulatory support programs.
The Connect America Fund support program imposes build-out requirements on TDS Telecom that may not be met, and a failure to meet these requirements can result in penalties, loss of support and/or deferral of future revenues.
Any claims of infringement of intellectual property and proprietary rights of others could prevent TDS from using necessary technology to provide its services or subject TDS to expensive intellectual property litigation or monetary penalties. 26) 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.
Depending on a range of factors, these or similar proceedings could impose restraints on TDS’ current or future manner of doing business. 23) Certain matters, such as control by the TDS Voting Trust and provisions in the TDS Restated Certificate of Incorporation, may serve to discourage or make more difficult a change in control of TDS or have other consequences.
In terms of costs, UScellular expects that the closing of the transaction will trigger or accelerate the recognition of certain cash and non-cash obligations. Such obligations include contingent advisory fees, employee compensation and severance, employee stock award costs, debt extinguishment, income tax expense, administrative costs, restructuring expenses and other wind down costs.
Upon receipt of regulatory approval, TDS and Array accelerated the recognition of certain cash and non-cash obligations related to employee compensation, severance and stock awards. Additional significant costs that include contingent advisory fees, income tax expense, administrative costs, restructuring expenses and other wind down costs were recorded upon and following the close on August 1, 2025.
If customer demand for these new services, products and solutions does not develop as expected, TDS’ business, financial condition or results of operations could be adversely affected. 13) Costs, integration problems or other factors associated with acquisitions, divestitures or exchanges of properties or wireless spectrum licenses and/or expansion of TDS’ businesses could have an adverse effect on TDS’ business, financial condition or results of operations.
The extent and timing of widespread adoption of these emerging technologies is uncertain, but any significant shift could have an adverse effect on TDS' business, financial condition or results of operations. 14) Costs, integration problems or other factors associated with acquisitions or divestitures and/or expansion of TDS’ businesses could have an adverse effect on TDS’ business, financial condition or results of operations.
This presents a risk to TDS in that, to the extent TDS is not able to enter into economically viable roaming arrangements with these other carriers, this could impact TDS’ ability to service its customers in geographic areas where TDS does not have its own network. 8) 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.
Array and TDS Telecom currently maintain insurance to cover the estimated cost of replacing damaged towers, network equipment and damage to surrounding property, but there can be no assurance that such coverage will remain readily available in the insurance marketplace or be adequate to cover exposure from such events. 11) An inability to attract people of outstanding talent throughout all levels of the organization, to develop their potential through education and assignments, and to retain them by keeping them engaged, challenged and properly rewarded could have an adverse effect on TDS' business, financial condition or results of operations.
New regulatory mandates or enforcement may require unexpected or increased capital expenditures, lost revenues, higher operating expenses or other changes.
New or amended regulatory requirements could increase TDS’ costs and divert resources from other initiatives. Adverse decisions, increased regulation, or changes to existing regulation by regulatory bodies could negatively impact TDS’ operations. New regulatory mandates or enforcement may result in lost revenues, higher operating expenses, unexpected or increased capital expenditures, or other changes.
If the transactions from the strategic alternatives process are successfully completed, the remaining UScellular business, which includes the tower business, interests in certain non-operating equity method investments and wireless spectrum licenses not included in the announced transactions, will be of a significantly smaller scale than its current operations.
The remaining Array business, which includes the tower business, non-controlling interests in certain wireless operating companies and wireless spectrum licenses, certain of which are subject to other sale agreements, is of a significantly smaller scale than its historical operations. This could produce operational, cost and borrowing disadvantages relative to its historical operations.
Further, if the T-Mobile, Verizon and AT&T transactions are not consummated, the stock price of TDS and UScellular likely would decline to the extent that the current market price reflects an assumption that the transactions will be completed. 3) If the T-Mobile, Verizon and AT&T transactions are consummated, substantial costs will be triggered and substantial changes will be required to the manner in which UScellular’s remaining business is conducted, which could have a material adverse effect on TDS' financial condition and results of operations.
Announced Transactions and Strategic Alternatives Review Risk Factors 1) Closing of the T-Mobile transaction occurred on August 1, 2025, and has required substantial changes to the manner in which Array’s remaining business is conducted, which could have a material adverse effect on Array's financial condition and results of operations.
If T-Mobile fails to meet its obligations to UScellular, it would likely have an adverse impact on TDS' business and financial statements. 10 Table of Contents In addition, if the transactions are successfully completed, UScellular will retain certain wireless spectrum licenses with FCC build-out requirements that have not yet been satisfied.
In addition, most of the remaining spectrum licenses not subject to the Verizon and T-Mobile spectrum transactions have FCC build-out requirements that have not yet been fully satisfied. Compliance with such requirements would drive significant investments and Array no longer has an existing wireless business to operate the retained spectrum.
TDS cannot provide assurance that circumstances that could have a material adverse effect on its liquidity or capital resources will not occur. UScellular's credit rating from nationally recognized credit agencies may impact TDS' credit rating as, given UScellular's ownership structure, the rating agencies often consider rating actions related to TDS and UScellular in tandem.
TDS’ credit ratings from nationally recognized credit agencies or other factors could limit or restrict the availability of financing on terms and prices acceptable to TDS, which could impact TDS’ business operations. Given Array’s ownership structure, the rating agencies often consider rating actions related to TDS and Array in tandem.
See Note 7 — Divestitures in the Notes to Consolidated Financial Statements for additional information related to the T-Mobile, Verizon and AT&T transactions, including the uncertainty related to certain portions of the transaction proceeds. 2) If the T-Mobile, Verizon and AT&T transactions are not consummated, substantial changes will be required to the manner in which UScellular’s wireless business is conducted, and we expect there will be a material adverse effect on TDS' financial condition and results of operations.
See Note 2 — Discontinued Operations and Note 7 — Acquisitions and Divestitures in the Notes to Consolidated Financial Statements for additional information. 2) Array entered into License Purchase Agreements with Verizon and T-Mobile to sell certain wireless spectrum licenses. There is no guarantee that such transactions contemplated by the License Purchase Agreements will be consummated.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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To date TDS has not identified nor become aware of any cybersecurity incidents that individually or in aggregate have materially affected or are reasonably likely to materially affect the company, including its business strategy, results of operations, or financial condition. The full Board of Directors engages in oversight of TDS' cybersecurity risks.
To date, TDS has not identified nor become aware of any cybersecurity incidents that individually or in aggregate have materially affected or are reasonably likely to materially affect TDS, including its business strategy, results of operations, or financial condition. 17 Table of Contents
Identified risks are evaluated against a risk classification framework to direct remediation, mitigation and management efforts based on severity. Cybersecurity risks are integrated into the TDS Enterprise Risk Management (ERM) program with updates provided on a quarterly basis.
Risks are identified across the threat and vulnerability landscape using commercial, government, vendor and publicly available information sources and tools. Identified risks are evaluated against a risk classification framework to direct remediation, mitigation and management efforts based on severity. Cybersecurity risks are integrated into the TDS Enterprise Risk Management (ERM) program with updates provided on a quarterly basis.
The TDS Audit Committee oversees the processes over internal controls and financial reporting that includes controls and procedures that are designed to ensure that significant cybersecurity incidents are communicated to both senior management and the Audit Committee. The Audit Committee meets with the TDS CISO and UScellular Senior Vice President of Information Technology at least two times per year.
The TDS CISO provides the full Board of Directors an annual update and discussion of the cybersecurity program. The Audit Committee oversees the processes over internal controls and financial reporting that includes controls and procedures regarding cybersecurity risk. The TDS CISO briefs the Audit Committee at least two times per year.
As part of their accountability for incident response, significant incidents are communicated to an internal committee including the Chief Financial Officer and general counsel to assess their materiality and if materiality is confirmed it is reported by the defined process.
Cybersecurity is also discussed with the Technology Advisory Group of the Board of Directors as warranted. Materiality and Disclosure Significant cybersecurity incidents are communicated directly to senior management and the Board of Directors. These incidents are reviewed by an internal committee, including the Chief Financial Officer and General Counsel, to assess their materiality in accordance with SEC requirements.
Item 1C. Cybersecurity The TDS information security program is based on a defense-in-depth approach and aligns with the National Institute of Standards and Technology (NIST) cybersecurity framework. Security control and maturity assessments are conducted periodically leveraging this standard. TDS also leverages internal and external auditors and consultants to perform independent assessments and tests of security controls.
Item 1C. Cybersecurity Cybersecurity Program Overview The TDS cybersecurity program is based on a defense-in-depth approach aligned with the National Institute of Standards and Technology (NIST) Cybersecurity Framework. Led by the TDS Chief Information Security Officer (CISO), the program is designed to identify, assess and mitigate cyber risks to TDS' business, associates and stakeholders.
The TDS security operations program includes active monitoring of the internal data environment and regular assessment of the environments of third-party service providers who manage sensitive data. In addition, TDS security leaders conduct regular cyber incident simulations to ensure preparedness in the event of a cyber-attack and further test potential risks.
This includes active monitoring of the internal environment as well as regular assessment of the environments of third-party service providers who manage sensitive data. TDS has a robust security awareness program. All associates complete security awareness training during onboarding and annually, with additional targeted training and frequent phishing simulations conducted throughout the year.
Risks related to third-party providers who have access to TDS data and systems are identified, assessed and managed through a formal third-party risk assessment process. Third-parties who access sensitive company or customer information are contractually obligated to meet specific privacy and security requirements.
This includes evidence-based reviews, such as SOC 2 Type 2 reports. Third-parties who access sensitive company or customer information are contractually obligated to meet specific privacy and security requirements. The TDS security operations program provides advanced monitoring, threat detection and response to security events.
Removed
The assessment results are used to drive continuous improvement in the TDS cybersecurity control environment, as well as to manage potential data security risks of third-party service providers. TDS identifies risks across the threat and vulnerability landscape using various commercial, government, vendor and publicly available information sources and tools.
Added
TDS maintains a robust cybersecurity controls environment, underpinning TDS' Sarbanes-Oxley (SOX) compliance efforts, to foster confidentiality, integrity and availability of data. Security control and maturity assessments leveraging the NIST Cybersecurity Framework are conducted regularly with results reported to the Audit Committee on an annual basis.
Removed
The TDS Chief Information Security Officer (CISO) and UScellular Senior Vice President of Information Technology are responsible for assessing and managing cybersecurity risks. Each has over twenty years of experience at the company, encompassing network engineering, information technology and cyber security.
Added
TDS also leverages internal and external auditors and consultants to perform independent assessments and tests of security controls. These assessment results are used to drive continuous improvement in the TDS cybersecurity control environment. Third-party providers with access to TDS data and systems are subject to a formal risk assessment process.
Removed
Management has a depth of cybersecurity experience focused on increasing the organization's resilience to security threats and stays current on new developments through continuing education and monitoring of the cybersecurity landscape.
Added
Regular cyber incident simulations are conducted at the technical, executive management and board levels to evaluate and improve preparedness for a cyber incident. Governance and Oversight Cyber risk management is led by the TDS CISO, who has over twenty-five years of experience at TDS across network engineering, information technology and cybersecurity, including over four years of board-level reporting on cybersecurity.
Removed
The Board of Directors receives regular updates from management on technology and security updates and TDS’ assessment of cybersecurity threats and mitigation plans. The TDS CISO and UScellular Senior Vice President of Information Technology provide the full Board of Directors an annual update and discussion of the cybersecurity program.
Added
The CISO has extensive cybersecurity experience in the telecommunications industry and stays current on new developments through continuing education and collaboration with private sector and government partners. The full Board of Directors engages in oversight of TDS' cybersecurity risks. The Board of Directors receives regular updates from management on technology developments, cybersecurity threats and mitigation plans.
Removed
Cybersecurity is also discussed with the Technology Advisory Group of the Board of Directors as warranted, typically on an annual basis. 23 Table of Contents

Item 2. Properties

Properties — owned and leased real estate

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See Note 10 — Property, Plant and Equipment in the Notes to Consolidated Financial Statements for additional information. Item 3. Legal Proceedings For more information related to legal proceedings, see Note 15 — Commitments and Contingencies in the Notes to Consolidated Financial Statements. Item 4. Mine Safety Disclosures Not applicable. 24 Table of Contents PART II
See Note 10 — Property, Plant and Equipment in the Notes to Consolidated Financial Statements for additional information. Item 3. Legal Proceedings For more information related to legal proceedings, see Note 15 — Commitments and Contingencies in the Notes to Consolidated Financial Statements. Item 4. Mine Safety Disclosures Not applicable. 18 Table of Contents PART II
These properties are either owned or leased by UScellular, one of its subsidiaries, or the partnership, limited liability company or corporation which holds the license issued by the FCC. TDS Telecom owns or leases its physical assets consisting of cable and telephone distribution networks, headends, network electronic equipment, customer premise equipment, land and buildings.
TDS Telecom owns or leases its physical assets consisting of cable and telephone distribution networks, headends, network electronic equipment, customer premise equipment, land and buildings. TDS Telecom's corporate headquarters is located in Madison, WI. Parent and Other fixed assets consist of assets, which are either owned or leased, at TDS Corporate and Suttle-Straus.
Parent and Other fixed assets consist of assets, which are either owned or leased, at TDS Corporate and Suttle-Straus. As of December 31, 2024, the gross investment in property, plant and equipment was $8,387 million at UScellular, $5,890 million at TDS Telecom and $85 million at Parent & Other.
Item 2. Properties TDS has properties located throughout the United States. As of December 31, 2025, the gross investment in property, plant and equipment was $5,962.3 million at TDS Telecom, $1,079.0 million at Array and $80.8 million at Parent & Other. As of December 31, 2025, Array owns 4,450 towers in 19 states.
Removed
Item 2. Properties TDS has properties located throughout the United States. As of December 31, 2024, TDS’ gross investment in property, plant and equipment was as follows: UScellular’s local business offices, cell sites, cell site equipment, connectivity centers, data centers, call centers and retail stores are located primarily in UScellular’s operating markets.
Added
These sites are primarily located in New England, the Mid-Atlantic, the Midwest and Great Plains, and the Pacific Northwest. Array's portfolio consists of monopole, self-support (lattice), and guyed towers. Array’s corporate headquarters is located in Chicago, IL.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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TDS did not determine to terminate the foregoing Common Share repurchase program, or cease making further purchases thereunder, during the fourth quarter of 2024.
TDS did not determine to terminate the foregoing Common Share repurchase program, or cease making further purchases thereunder, during the fourth quarter of 2025.
Telecommunications Index. 25 Table of Contents Dividend Reinvestment Plan TDS’ dividend reinvestment plans provide its common shareholders with a convenient and economical way to participate in the future growth of TDS. Holders of record of ten (10) or more Common Shares may purchase Common Shares with their reinvested dividends at a five percent discount from market price.
Dividend Reinvestment Plan TDS’ dividend reinvestment plans provide its common shareholders with a convenient and economical way to participate in the future growth of TDS. Holders of record of ten (10) or more Common Shares may purchase Common Shares with their reinvested dividends at a five percent discount from market price.
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Common Stock Information TDS' Common Shares are listed on the New York Stock Exchange under the symbol “TDS.” As of January 31, 2025, the last trading day of the month, TDS Common Shares were held by 1,490 record owners, and the Series A Common Shares were held by 64 record owners.
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Common Stock Information TDS' Common Shares are listed on the New York Stock Exchange under the symbol “TDS.” As of January 30, 2026, the last trading day of the month, TDS Common Shares were held by 1,411 record owners, and the Series A Common Shares were held by 65 record owners.
It is uncertain at this time how the outcome of the ongoing strategic alternatives review process for UScellular, TDS' available opportunities to reinvest in its businesses, or TDS' ongoing liquidity needs, may impact the decisions of the TDS Board of Directors regarding the declaration of future dividends.
TDS paid quarterly dividends per outstanding share of $0.04 in 2025. It is uncertain at this time how the outcome of the ongoing strategic alternatives review process for Array, TDS' available opportunities to reinvest in its businesses, or TDS' ongoing liquidity needs, may impact the decisions of the TDS Board of Directors regarding the declaration of future dividends.
The Common Shares of United States Cellular Corporation, an 83%-owned subsidiary of TDS, are listed on the New York Stock Exchange under the symbol “USM.” Stock Performance Graph The following chart provides a comparison of TDS’ cumulative total return to shareholders (stock price appreciation plus dividends) during the previous five years to the returns of the Standard & Poor's 500 Composite Stock Price Index and the Dow Jones U.S.
Stock Performance Graph The following chart provides a comparison of TDS’ cumulative total return to shareholders (stock price appreciation plus dividends) during the previous five years to the returns of the Standard & Poor's 500 Composite Stock Price Index and the Dow Jones U.S. Telecommunications Index.
Telecommunications Index 100 94.08 85.93 80.99 83.83 108.72 The comparison above assumes $100.00 invested at the close of trading on the last trading day of 2019, in TDS Common Shares, S&P 500 Index and the Dow Jones U.S.
Telecommunications Index 100 91.34 86.09 89.10 115.57 123.65 The comparison above assumes $100.00 invested at the close of trading on the last trading day of 2020, in TDS Common Shares, S&P 500 Index and the Dow Jones U.S. Telecommunications Index.
Subject to these considerations and to legal requirements, TDS may approve the repurchase of its shares from time to time when circumstances warrant. The maximum dollar value of shares that may yet be purchased under this program was $132 million as of December 31, 2024.
Subject to these considerations and to legal requirements, TDS may approve the repurchase of its shares from time to time when circumstances warrant.
There were no purchases made by or on behalf of TDS, or any open market purchases made by any "affiliated purchaser" (as defined by the SEC) of TDS, of TDS Common Shares during the fourth quarter of 2024. Item 6. [Reserved] 26 Table of Contents
The following table provides certain information with respect to all purchases made by or on behalf of TDS, or any open market purchases made by any "affiliated purchaser" (as defined by the SEC) of TDS, of TDS Common Shares during the quarter covered by this Form 10-K. The purchases below were made under a Rule 10b5-1 stock repurchase plan.
Telecommunications Index. Note: Cumulative total return assumes reinvestment of dividends. 2019 2020 2021 2022 2023 2024 TDS Common Shares (NYSE: TDS) $ 100 $ 75.69 $ 84.84 $ 46.43 $ 86.50 $ 163.50 S&P 500 Index 100 118.40 152.39 124.79 157.59 197.02 Dow Jones U.S.
Note: Cumulative total return assumes reinvestment of dividends. 19 Table of Contents 2020 2021 2022 2023 2024 2025 TDS Common Shares (NYSE: TDS) $ 100 $ 112.09 $ 61.34 $ 114.27 $ 216.01 $ 260.75 S&P 500 Index 100 128.71 105.40 133.10 166.40 196.16 Dow Jones U.S.
Removed
TDS paid dividends per outstanding share of $0.19 in the first quarter of 2024 and $0.04 in each of the second, third and fourth quarters of 2024. TDS paid quarterly dividends per outstanding share of $0.185 in 2023 and $0.180 in 2022. TDS has paid cash dividends on its common stock since 1974.
Added
The Common Shares of Array, an 82.0%-owned subsidiary of TDS, are listed on the New York Stock Exchange under the symbol “AD”. Array has not paid any regular cash dividends in past periods.
Added
In conjunction with the close of the transaction of the sale of Array's wireless operations to T-Mobile on August 1, 2025, on this same date, the Array Board of Directors declared a special dividend per Common and Series A outstanding share of $23.00 for shareholders of record on August 11, 2025, which was paid on August 19, 2025.
Added
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, 202 6.
Added
Array expects its pending sale of spectrum licenses to Verizon, which is subject to regulatory approval and customary closing conditions, to deliver substantial proceeds and expects its Board of Directors to declare a special dividend upon closure of the transaction.
Added
While no decisions have been made, the Array Board of Directors may declare regular cash dividends after the close of the Verizon transaction.
Added
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.
Added
Period Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Maximum Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs October 1 - 31, 2025 460,282 $ 38.36 460,282 $ 573,680,646 November 1 - 30, 2025 673,219 $ 38.09 673,219 $ 548,038,426 December 1 - 31, 2025 632,362 $ 38.16 632,362 $ 523,905,080 Total for or as of the end of the quarter ended December 31, 2025 1,765,863 $ 38.19 1,765,863 $ 523,905,080 Item 6. [Reserved] 20 Table of Contents

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

107 edited+109 added−134 removed22 unchanged
Adjusted EBITDA shows adjusted earnings before interest, taxes, depreciation, amortization and accretion, gains and losses, and expenses related to the strategic alternatives review of UScellular, 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.
Adjusted EBITDA shows adjusted earnings before interest, taxes, depreciation, amortization and accretion, gains and losses, and expenses related to the strategic alternatives review, while Adjusted OIBDA reduces this measure further to exclude Equity in earnings of unconsolidated entities and Interest and dividend income in order to more effectively show the performance of operating activities excluding investment activities.
Income tax expense Income tax expense decreased in 2024 due primarily to the deferred tax impact of the wireless spectrum license impairment charge recorded in the third quarter of 2024 and a decrease in state tax expense in 2024, partially offset by the deferred tax impact of the Goodwill impairment recorded in the fourth quarter of 2023.
Income tax expense (benefit) Income tax expense decreased in 2024 due primarily to the deferred tax impact of the wireless spectrum license impairment charge recorded in the third quarter of 2024 and a decrease in state tax expense in 2024, partially offset by the deferred tax impact of the Goodwill impairment recorded in the fourth quarter of 2023.
Substantially all of the impairment loss related to the retained high-band spectrum unit of accounting which includes the 28 GHz, 37 GHz and 39 GHz frequency bands, the carrying value of which was $161 million after the impairment loss.
The impairment loss was substantially all related to the retained high-band spectrum unit of accounting which includes the 28 GHz, 37 GHz and 39 GHz frequency bands, the carrying value of which was $161.1 million after the impairment loss.
Management’s judgment is required in determining the provision for income taxes, deferred income tax assets and liabilities and any valuation allowance that is established for deferred income tax assets. 57 Index to MD&A TDS recognizes the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities based on the technical merits of the position.
Management’s judgment is required in determining the provision for income taxes, deferred income tax assets and liabilities and any valuation allowance that is established for deferred income tax assets. 47 Index to MD&A TDS recognizes the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities based on the technical merits of the position.
Certain numbers included herein are rounded to millions for ease of presentation; however, certain calculated amounts and percentages are determined using the unrounded numbers. This report contains statements that are not based on historical facts, which may be identified by words such as “believes,” “anticipates,” “estimates,” “expects,” “plans,” “intends,” “projects,” “will” and similar expressions.
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.
TDS and UScellular, at their discretion, may from time to time seek to retire or purchase their outstanding debt through cash purchases and/or exchanges for other securities, in open market purchases, privately negotiated transactions, tender offers, exchange offers or otherwise. Such repurchases or exchanges, if any, will depend on prevailing market conditions, liquidity requirements, contractual restrictions and other factors.
TDS and Array, at their discretion, may from time to time seek to retire or purchase their outstanding debt through cash purchases and/or exchanges for other securities, in open market purchases, privately negotiated transactions, tender offers, exchange offers or otherwise. Such repurchases or exchanges, if any, will depend on prevailing market conditions, liquidity requirements, contractual restrictions and other factors.
Fluctuations in market interest rates can lead to volatility in the fair value of fixed-rate notes and interest expense on variable-rate debt. The following table presents the scheduled principal payments on long-term debt, lease obligations and the related weighted average interest rates by maturity dates at December 31, 2024: Principal Payments Due by Period Long-Term Debt Obligations 1 Weighted-Avg.
Fluctuations in market interest rates can lead to volatility in the fair value of fixed-rate notes and interest expense on variable-rate debt. The following table presents the scheduled principal payments on long-term debt, lease obligations and the related weighted average interest rates by maturity dates at December 31, 2025: Principal Payments Due by Period Long-Term Debt Obligations 1 Weighted-Avg.
Total connections decreased due to legacy voice, video, and competitive local exchange carrier (CLEC) connections declines, partially offset by broadband connection growth.
Total connections decreased due to legacy voice, video, and competitive local exchange carrier (CLEC) connection declines, partially offset by broadband and wireless connection growth.
Management’s Discussion and Analysis of Financial Condition and Results of Operations Executive Overview The following Management’s Discussion and Analysis (MD&A) should be read in conjunction with the audited consolidated financial statements and notes of Telephone and Data Systems, Inc. (TDS) for the year ended December 31, 2024, and with the description of TDS’ business included herein.
Management’s Discussion and Analysis of Financial Condition and Results of Operations Executive Overview The following Management’s Discussion and Analysis (MD&A) should be read in conjunction with the audited consolidated financial statements and notes of Telephone and Data Systems, Inc. (TDS) for the year ended December 31, 2025, and with the description of TDS’ business included herein.
TDS Telecom is a wholly-owned subsidiary of TDS and provides a wide range of broadband, video, voice and wireless communications services to residential, commercial and wholesale customers, with the constant focus on delivering outstanding customer service. The following MD&A omits discussion of 2023 compared to 2022.
TDS Telecom is a wholly-owned subsidiary of TDS and provides a wide range of broadband, video, voice and wireless communications services to residential, commercial and wholesale customers, with the constant focus on delivering outstanding customer service. The following MD&A omits discussion of 2024 compared to 2023.
The impairment loss is driven by the change in the units of accounting described above combined with lower fair value primarily attributed to high-band spectrum as a result of industry-wide challenges encountered related to the operationalization of this spectrum.
The impairment loss was driven by a change in the units of accounting described above combined with lower fair value primarily attributed to high-band spectrum as a result of industry-wide challenges encountered related to the operationalization of this spectrum.
Credit Ratings In certain circumstances, TDS’ and UScellular’s interest cost on their various agreements may be subject to increase if their current credit ratings from nationally recognized credit rating agencies are lowered, and may be subject to decrease if the ratings are raised.
Credit Ratings In certain circumstances, TDS’ and Array’s interest cost on their various agreements may be subject to increase if their current credit ratings from nationally recognized credit rating agencies are lowered, and may be subject to decrease if the ratings are raised.
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) or Cash flows from operating activities, as indicators of cash flows or as measures of liquidity.
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.
Management believes Adjusted EBITDA and Adjusted OIBDA are useful measures of TDS’ operating results before significant recurring non-cash charges, nonrecurring expenses, gains and losses, and other items as presented below as they provide additional relevant and useful information to investors and other users of TDS’ financial data in evaluating the effectiveness of its operations and underlying business trends in a manner that is consistent with management’s evaluation of business performance.
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.
The ability of TDS or UScellular to complete an offering pursuant to such shelf registration statements is subject to market conditions and other factors at the time.
The ability of TDS or Array to complete an offering pursuant to such shelf registration statements is subject to market conditions and other factors at the time.
Consequently, its operating results may fluctuate based on factors related primarily to conditions in this industry. ▪ TDS has significant investments in entities that it does not control. Losses in the value of such investments could have an adverse effect on TDS’ financial condition or results of operations.
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.
TDS and UScellular 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 UScellular believe that they were in compliance as of December 31, 2024 with all such financial covenants.
TDS and Array are also required to maintain the Consolidated Interest Coverage Ratio at a level not lower than 3.00 to 1.00 as of the end of any fiscal quarter. TDS and Array believe that they were in compliance as of December 31, 2025 with all such financial covenants.
UScellular concluded that there were events and circumstances in the third quarter of 2024 that caused UScellular to believe the carrying values of five of the units of accounting may exceed their respective fair values (i.e. triggering event), and accordingly a quantitative impairment assessment was performed for those units. There was no triggering event for the other units of accounting.
During the third quarter of 2024, Array concluded that there were events and circumstances that caused Array to believe the carrying values of five units of accounting may exceed their respective fair values (i.e., triggering event), and accordingly a quantitative impairment assessment was performed for those units. There was no triggering event for the other units of accounting.
Quantitative and Qualitative Disclosures About Market Risk See section entitled "Market Risk" in Item 7 of this Form 10-K. 68 Table of Contents
Quantitative and Qualitative Disclosures About Market Risk See section entitled "Market Risk" in Item 7 of this Form 10-K. 56 Table of Contents
See Note 3 — Fair Value Measurements in the Notes to Consolidated Financial Statements for additional information. 62 Index to MD&A Supplemental Information Relating to Non-GAAP Financial Measures TDS sometimes uses information derived from consolidated financial information but not presented in its financial statements prepared in accordance with GAAP to evaluate the performance of its business.
See Note 4 — Fair Value Measurements in the Notes to Consolidated Financial Statements for additional information. 51 Index to MD&A Supplemental Information Relating to Non-GAAP Financial Measures TDS sometimes uses information derived from consolidated financial information but not presented in its financial statements prepared in accordance with GAAP to evaluate the performance of its business.
Refer to individual segment discussions in this MD&A for additional details on operating revenues and expenses at the segment level. 32 Index to MD&A 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.
Refer to individual segment discussions in this MD&A for additional details on operating revenues and expenses at the segment level. 2025-2024 Commentary Equity in earnings of unconsolidated entities Equity in earnings of unconsolidated entities represents TDS' share of net income from entities in which it has a noncontrolling interest and that are accounted for using the equity method or the net asset value practical expedient.
It is uncertain at this time how the outcome of the ongoing strategic alternatives review process for UScellular, TDS' available opportunities to reinvest in its businesses, or TDS' ongoing liquidity needs, may impact the decisions of the TDS Board of Directors regarding the declaration of future dividends.
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.
For purposes of its annual impairment test as of November 1, 2024, UScellular performed a qualitative test for all twelve of its units of accounting.
For purposes of its annual impairment test as of November 1, 2024, Array performed a qualitative test for all twelve of its units of accounting.
In pursuing this mission, TDS seeks to grow its businesses, create opportunities for its associates, support the communities it serves, and build value over the long term for its shareholders. Since its founding, TDS has been committed to bringing high-quality communications services to rural and underserved communities.
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 Telecom seeks to be the preferred broadband provider by offering fiber-rich networks, high-quality products and services, and a seamless customer experience. TDS Telecom's strategic efforts include: ▪ 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 be the preferred broadband provider by offering fiber-rich networks, high-quality products and services, and a seamless customer experience. TDS Telecom's strategic efforts include: ▪ Provide high-quality broadband services in its markets with the ability to provide value-added bundling with video, voice and wireless service options. ▪ Drive growth by investing in fiber deployment.
Refer to Management's Discussion and Analysis of Financial Condition and Results of Operations in TDS' Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on February 16, 2024, for that discussion.
Refer to Management's Discussion and Analysis of Financial Condition and Results of Operations in TDS' Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on February 21, 2025, for that discussion.
In recent years, changes in technology have required substantial investments in TDS’ networks to remain competitive; this is expected to continue in 2025 and future years with the continued deployment of 5G technology for UScellular, and the continued deployment of fiber for TDS Telecom.
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.
The amounts involved may be material. Refer to Market Risk — Long-Term Debt for additional information regarding required principal payments and the weighted average interest rates related to TDS’ Long-term debt. See Note 13 — Debt in the Notes to Consolidated Financial Statements for additional information related to the financing agreements.
The amounts involved may be material. Refer to Market Risk — Long-Term Debt for additional information regarding required principal payments and the weighted average interest rates related to TDS’ Long-term debt. See Note 2 — Discontinued Operations and 13 — Debt in the Notes to Consolidated Financial Statements for additional information related to financing activities.
For two of the units of accounting, the fair value of the wireless spectrum licenses was less than the respective carrying value, and a $136 million impairment was recorded to Loss on impairment of licenses in the Consolidated Statement of Operations within UScellular’s Wireless segment during the third quarter of 2024.
For two of the units of accounting, the fair value of the wireless spectrum licenses was less than the respective carrying value, and a $136.2 million impairment was recorded to Loss on impairment of licenses for continuing operations in the Consolidated Statement of Operations during the third quarter of 2024.
Based on this valuation, the fair value of the wireless spectrum licenses exceeded their respective carrying values by amounts ranging from 9% to 80% for three of the units of accounting.
Based on a market approach valuation, the fair value of the wireless spectrum licenses exceeded their respective carrying values by amounts ranging from 9% to 80% for three of the units of accounting.
TDS’ significant accounting policies are discussed in detail in Note 1 — Summary of Significant Accounting Policies, Note 2 — Revenue Recognition and Note 11 — Leases in the Notes to Consolidated Financial Statements.
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.
Specifically, TDS has referred to the following measures in this Form 10-K Report: ▪ EBITDA ▪ Adjusted EBITDA ▪ Adjusted OIBDA ▪ Free cash flow ▪ Intangible assets impairment, net of tax 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) adjusted for the items set forth in the reconciliation below.
Specifically, TDS has referred to the following measures in this Form 10-K Report: ▪ EBITDA ▪ Adjusted EBITDA ▪ Adjusted OIBDA ▪ Free cash flow Following are explanations of each of these measures: EBITDA, Adjusted EBITDA and Adjusted OIBDA EBITDA, Adjusted EBITDA and Adjusted OIBDA are defined as Net income (loss) from continuing operations adjusted for the items set forth in the reconciliation below.
See Note 20 — Business Segment Information in the Notes to Consolidated Financial Statements for additional information about TDS' segments. 2024 Operating Revenues by Segment 28 Index to MD&A 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.
See Note 20 — Business Segment Information in the Notes to Consolidated Financial Statements for additional information about TDS' segments. 2025 Operating Revenues by Segment* * Represents revenues related to continuing operations. 22 Index to MD&A 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.
The tax benefits recognized in the financial statements from such a position are measured based on management’s judgment as to the possible outcome that has a greater than 50% cumulative likelihood of being realized upon ultimate resolution. See Note 5 — Income Taxes in the Notes to Consolidated Financial Statements for additional information.
The tax benefits recognized in the financial statements from such a position are measured based on management’s judgment as to the possible outcome that has a greater than 50% cumulative likelihood of being realized upon ultimate resolution.
Cash and Cash Equivalents Cash and cash equivalents include cash and money market investments. The primary objective of TDS’ Cash and cash equivalents investment activities is to preserve principal. TDS does not have direct access to UScellular cash.
The primary objective of TDS’ Cash and cash equivalents investment activities is to preserve principal. TDS does not have direct access to Array cash.
In 2024, these capital expenditures were used for the following purposes: • Continue to expand fiber deployment primarily in expansion markets; • Support broadband growth and success-based spending; and • Maintain and enhance existing infrastructure including build-out requirements of state broadband and E-ACAM programs. TDS Telecom's capital expenditures for 2025 are expected to be between $375 million and $425 million.
In 2025, these capital expenditures were used for the following purposes: • Continue fiber deployment in expansion markets and to meet E-ACAM build-out requirements; • Support broadband growth and success-based spending; and • Maintain and enhance existing infrastructure. TDS Telecom's capital expenditures for 2026 are expected to be between $550 million and $600 million.
OPERATIONS ▪ Serves 1.1 million connections in 31 states. ▪ Employs approximately 3,300 associates. 44 Index to MD&A TDS Telecom Mission and Strategy TDS Telecom's mission is to create a better world by providing high-quality communications services to connect people and businesses, support education, and strengthen communities.
OPERATIONS ▪ Serves 1.1 million connections in 30 states. ▪ Employs approximately 3,500 associates. 29 Index to MD&A TDS Telecom Mission and Strategy TDS Telecom's mission is to provide high-quality communications services to connect people and businesses, support education, and strengthen communities.
A market approach was used for purposes of the quantitative impairment assessment to value the wireless spectrum licenses for the five units tested, using a range of values established largely through industry benchmarks, FCC auction data, and precedent transactions. The midpoint of the range was established as the estimate of fair value for each unit of accounting.
A market approach was used for purposes of the quantitative impairment assessment to value the wireless spectrum licenses for the high-band unit of accounting tested, selecting a point within a range of values established largely through industry benchmarks, FCC auction data, and precedent transactions.
For additional information related to the current TDS and UScellular repurchase authorizations, see Note 18 — Shareholders’ Equity in the Notes to Consolidated Financial Statements. Dividends TDS paid quarterly dividends per outstanding share of $0.19 in the first quarter of 2024 and $0.04 in each of the second, third and fourth quarters of 2024.
For additional information related to the current TDS and Array repurchase authorizations, see Note 18 — Shareholders’ Equity in the Notes to Consolidated Financial Statements. Dividends TDS paid quarterly dividends per outstanding share of $0.04 in 2025.
Wireless spectrum licenses, including those with FCC build-out requirements that have not yet been satisfied, are considered to be indefinite-lived assets, and therefore, are not amortized but are tested for impairment annually or more frequently if there are events or circumstances that cause UScellular to believe that their carrying values exceed their fair values.
Wireless Spectrum License Impairment – Array Wireless spectrum licenses are considered to be indefinite-lived assets, and therefore, are not amortized but are tested for impairment annually or more frequently if there are events or circumstances that cause Array to believe that their carrying values exceed their fair values.
Management believes the application of the following critical accounting policies and the estimates required by such application reflect its most significant judgments and estimates used in the preparation of TDS’ consolidated financial statements. Wireless Spectrum License Impairment – UScellular Wireless spectrum licenses represent a significant component of UScellular’s consolidated assets.
Management believes the application of the following critical accounting policies and the estimates required by such application reflect its most significant judgments and estimates used in the preparation of TDS’ consolidated financial statements.
The Securities Purchase Agreement also contemplates, among other things, a Short-Term Spectrum Manager Lease Agreement and Short-Term Spectrum Manager Sublease Agreements that will become effective at the closing date, which provide T-Mobile with an exclusive license to use certain UScellular spectrum assets and leases at no cost for up to one-year for the sole purpose of providing continued, uninterrupted service to customers.
In addition, at closing, Array and T-Mobile entered into a Short-Term Spectrum Manager Lease Agreement and Short-Term Spectrum Manager Sublease Agreements which provide T-Mobile with an exclusive license to use certain Array spectrum assets and leases at no cost for up to one-year for the sole purpose of providing continued, uninterrupted service to customers.
TDS Telecom focuses on driving growth by investing in fiber deployment. ▪ TDS Telecom seeks to grow its operations by creating clusters of markets in attractive, growing locations and may seek to acquire and/or divest of assets to support its strategy. 45 Index to MD&A Operational Overview — TDS Telecom Total Service Address Mix As of December 31, TDS Telecom increased its service addresses 6% from a year ago to 1.8 million as of December 31, 2024, through network expansion. 44% of incumbent service addresses are served by fiber.
TDS Telecom seeks to grow its operations by creating clusters of markets in attractive, growing locations and may seek to acquire and/or divest of assets to support its strategy. 30 Index to MD&A Operational Overview — TDS Telecom Total Service Address Mix As of December 31, TDS Telecom increased its service addresses 4% from a year ago to 1.9 million as of December 31, 2025, through footprint expansion.
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.
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.
The strategic alternatives review process is ongoing as UScellular works toward closing the transactions signed during 2024, including the T-Mobile, Verizon and AT&T transactions and continues to seek to opportunistically monetize its spectrum assets that are not subject to the Securities Purchase Agreement, the Verizon Purchase Agreement, or the AT&T Purchase Agreement.
The strategic alternatives review process is ongoing as Array works toward closing the Verizon and T-Mobile spectrum transactions signed during 2024 and 2025, and seeks to opportunistically monetize its remaining spectrum assets that are not subject to executed agreements.
TDS paid quarterly dividends per outstanding Series UU depositary share (each representing 1/1,000th of a Preferred Share) of $0.414 in 2024, 2023 and 2022.
TDS paid quarterly dividends per outstanding Series UU depositary share (each representing 1/1,000th of a Preferred Share) of $0.414 in 2025, 2024 and 2023. TDS paid quarterly dividends per outstanding Series VV depositary share (each representing 1/1,000th of a Preferred Share) of $0.375 in 2025, 2024 and 2023. Array has not paid any regular cash dividends in past periods.
See Note 7 — Divestitures in the Notes to Consolidated Financial Statements for additional information. Other current liabilities Other current liabilities decreased $32 million due primarily to payments related to software license agreements. 56 Index to MD&A Application of Critical Accounting Policies and Estimates TDS prepares its consolidated financial statements in accordance with GAAP.
See Note 7 — Acquisitions and Divestitures in the Notes to Consolidated Financial Statements for additional information. 46 Index to MD&A Application of Critical Accounting Policies and Estimates TDS prepares its consolidated financial statements in accordance with GAAP.
TDS Telecom offers 1Gig+ service to 74% of its total footprint as of December 31, 2024, compared to 72% a year ago.
TDS Telecom services 48% of incumbent service addresses with fiber. TDS Telecom offers 1Gig+ service to 78% of its total footprint as of December 31, 2025, compared to 74% a year ago.
Earnings (Dollars in millions) Net loss decreased in 2024 due to lower operating expenses and impairment losses, partially offset by lower operating revenues. Adjusted EBITDA increased in 2024 due primarily to lower operating expenses, partially offset by lower operating revenues. *Represents a non-GAAP financial measure.
Adjusted EBITDA from continuing operations increased in 2024 due primarily to lower operating expenses, partially offset by lower operating revenues. *Represents a non-GAAP financial measure.
Fair Value of Long-Term Debt At December 31, 2024 and 2023, the estimated fair value of long-term debt obligations, excluding lease obligations, the current portion of such long-term debt and debt financing costs, was $4,015 million and $3,651 million, respectively, and the book value was $4,119 million and $4,139 million, respectively.
Fair Value of Long-Term Debt At December 31, 2025 and 2024, the estimated fair value of long-term debt obligations, excluding lease obligations, the current portion of such long-term debt and debt financing costs, was $757.5 million and $2,420.4 million, respectively, and the book value was $834.7 million and $2,445.8 million, respectively.
See Note 5 — Income Taxes in the Notes to Consolidated Financial Statements for additional information.
See Note 9 — Investments in Unconsolidated Entities in the Notes to Consolidated Financial Statements for additional information.
Cash flows used for investing activities were $754 million, due primarily to payments for property, plant and equipment of $884 million and payments for wireless spectrum licenses of $20 million, partially offset by cash received from divestitures of $147 million.
Cash flows used for investing activities related to continuing operations were $235.9 million, due primarily to payments for property, plant and equipment of $365.4 million and payments for wireless spectrum licenses of $19.2 million, partially offset by cash received from divestitures of $147.3 million. Cash flows used for investing activities related to discontinued operations were $518.6 million.
Financial Risk Factors ▪ Uncertainty in TDS’ or UScellular's future cash flow and liquidity or the inability to access capital, deterioration in the capital markets, changes in interest rates, other changes in TDS’ or UScellular's performance or market conditions, changes in TDS’ or UScellular's credit ratings or other factors could limit or restrict the availability of financing on terms and prices acceptable to TDS, which has required and is expected in the future to require TDS to reduce or delay its construction, development or acquisition programs, divest assets or businesses, and/or reduce or cease share repurchases and/or the payment of common shareholder dividends. ▪ TDS has a significant amount of indebtedness which could adversely affect its financial performance and in turn adversely affect its ability to make payments on its indebtedness, comply with terms of debt covenants and incur additional debt. ▪ TDS has entered into a Senior Secured Credit Agreement that imposes certain restrictions on its business and operations that may affect its ability to operate its business and make payments on its indebtedness. ▪ TDS’ assets and revenue are concentrated primarily in the U.S. telecommunications industry.
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.
Commercial revenues decreased for 2024 due primarily to declining connections in CLEC markets, partially offset by increases in ad revenue. Cost of services Cost of services decreased for 2024 due primarily to lower employee-related expenses, plant and maintenance costs, costs to provide legacy services, and information processing costs, partially offset by higher video programming costs.
Cost of operations Cost of operations decreased for 2025 due primarily to lower video programming costs, costs to provide legacy services, plant and maintenance costs, and information processing costs, partially offset by higher employee-related expenses, vehicle costs, and lease acceleration costs.
Based on these assessments, UScellular concluded that it was more likely than not that the fair value of each unit of accounting exceeded its respective carrying value. Therefore, no quantitative impairment evaluation was completed. For purposes of its 2023 impairment test, UScellular had one unit of accounting and used a quantitative market approach to value the wireless spectrum license portfolio.
Based on these assessments, Array concluded that it was more likely than not that the fair value of each unit of accounting exceeded its respective carrying value. Therefore, no quantitative impairment evaluation was completed.
Executive Overview 28 Terms used by TDS 31 Results of Operations – TDS Consolidated 32 UScellular Operations 34 Wireless Operations 37 Towers Operations 42 TDS Telecom Operations 44 Liquidity and Capital Resources 50 Consolidated Cash Flow Analysis 55 Consolidated Balance Sheet Analysis 56 Application of Critical Accounting Policies and Estimates 57 Regulatory Matters 58 Private Securities Litigation Reform Act of 1995 Safe Harbor Cautionary Statement 59 Market Risk 62 Supplemental Information Relating to Non-GAAP Financial Measures 63 27 Index to MD&A Telephone and Data Systems, Inc.
Executive Overview 22 Terms used by TDS 24 Results of Operations – TDS Consolidated 25 TDS Telecom Operations 29 Array Operations 35 Liquidity and Capital Resources 40 Consolidated Cash Flow Analysis 44 Consolidated Balance Sheet Analysis 45 Application of Critical Accounting Policies and Estimates 47 Private Securities Litigation Reform Act of 1995 Safe Harbor Cautionary Statement 49 Market Risk 51 Supplemental Information Relating to Non-GAAP Financial Measures 52 21 Index to MD&A Telephone and Data Systems, Inc.
Divestitures in the fourth quarter of 2024 resulted in a decrease of 15,700 connections. 46 Index to MD&A Residential Broadband Connections by Speed As of December 31, Residential broadband customers continue to take higher speeds with 81% taking speeds of 100 Mbps or greater and 22% choosing 1Gig+.
Divestitures in 2025 resulted in a decrease of 19,400 connections, including 7,700 residential broadband connections and 45,000 service addresses. 31 Index to MD&A Residential Broadband Connections by Speed As of December 31, Residential broadband customers continue to take higher speeds with 86% taking speeds of 100 Mbps or greater and 43% taking 1Gig+.
Interest expense Interest expense increased in 2024 due primarily to an increase in borrowings under the TDS term loan agreements, partially offset by a decrease in the average principal balance outstanding on the receivables securitization agreement. See Market Risk for additional information regarding maturities of long-term debt and weighted average interest rates.
See Note 9 — Investments in Unconsolidated Entities in the Notes to Consolidated Financial Statements for additional information. Interest expense Interest expense increased in 2024 due primarily to an increase in borrowings under the TDS term loan agreements. See Market Risk for additional information regarding maturities of long-term debt and weighted average interest rates.
Interest Rates on Long-Term Debt Obligations 2 (Dollars in millions) 2025 $ 31 6.7 % 2026 539 6.3 % 2027 322 6.1 % 2028 485 6.5 % 2029 299 11.4 % Thereafter 2,488 6.2 % Total $ 4,164 6.6 % 1 The total long-term debt obligation differs from Long-term debt in the Consolidated Balance Sheet due to unamortized debt issuance costs on all non-revolving debt instruments, and unamortized discounts related to UScellular's 6.7% Senior Notes.
Interest Rates on Long-Term Debt Obligations 2 (Dollars in thousands) 2026 $ 5,276 6.2 % 2027 158,831 5.4 % 2028 8,308 6.2 % 2029 12,373 6.2 % 2030 292,814 6.2 % Thereafter 365,964 5.9 % Total $ 843,566 5.9 % 1 The total long-term debt obligation differs from Long-term debt in the Consolidated Balance Sheet due to unamortized debt issuance costs on all non-revolving debt instruments, and unamortized discounts related to Array's 6.7% Senior Notes.
Price increases are expected to moderate in 2025 relative to 2024. 47 Index to MD&A Financial Overview — TDS Telecom The following discussion and analysis compares financial results for the year ended December 31, 2024, to the year ended December 31, 2023.
Residential Revenue per Connection For the year ended December 31, Total residential revenue per connection increased 1% for 2025, due primarily to price increases. 32 Index to MD&A Financial Overview — TDS Telecom The following discussion and analysis compares financial results for the year ended December 31, 2025, to the year ended December 31, 2024.
TDS Telecom will incur capital expenditures over the next several years to meet its obligations to serve the required locations with 100/20 Mbps service. 58 Index to MD&A Private Securities Litigation Reform Act of 1995 Safe Harbor Cautionary Statement This Management's Discussion and Analysis of Financial Condition and Results of Operations and other sections of this Annual Report contain statements that are not based on historical facts and represent forward-looking statements, as this term is defined in the Private Securities Litigation Reform Act of 1995.
See Note 5 — Income Taxes in the Notes to Consolidated Financial Statements for additional information. 48 Index to MD&A Private Securities Litigation Reform Act of 1995 Safe Harbor Cautionary Statement This Management's Discussion and Analysis of Financial Condition and Results of Operations and other sections of this Annual Report contain statements that are not based on historical facts and represent forward-looking statements, as this term is defined in the Private Securities Litigation Reform Act of 1995.
Connections are associated with all types of devices that connect directly to the UScellular network. ▪ Service Addresses – number of single residence homes, multi-dwelling units, and business locations that are capable of being connected to the TDS network, based on best available information. ▪ Tower Tenancy Rate – average number of tenants that lease space on company-owned towers, measured on a per-tower basis. ▪ Universal Service Fund (USF) – a system of telecommunications collected fees and support payments managed by the FCC intended to promote universal access to telecommunications services in the United States. ▪ Video Connections – represents the individual customers provided video services. ▪ Voice Connections – refers to the individual circuits connecting a customer to TDS’ central office facilities that provide voice services or the billable number of lines into a building for voice services. ▪ VoLTE – Voice over Long-Term Evolution is a technology specification that defines the standards and procedures for delivering voice communications and related services over 4G LTE networks. 31 Index to MD&A Results of Operations — TDS Consolidated The following discussion and analysis compares financial results for the year ended December 31, 2024, to the year ended December 31, 2023 and omits discussion of the year ended December 31, 2023 compared to the year ended December 31, 2022.
These rates represent the average monthly churn rate for each respective period. ▪ Service Addresses – number of single residence homes, multi-dwelling units, and business locations that are capable of being connected to the TDS network, based on best available information. ▪ Tower Tenancy Rate – calculated as total number of colocations divided by total number of towers. ▪ Universal Service Fund (USF) – a system of telecommunications collected fees and support payments managed by the FCC intended to promote universal access to telecommunications services in the United States. ▪ Video Connections – represents the individual customers provided video services. ▪ Voice Connections – refers to the individual circuits connecting a customer to TDS’ central office facilities that provide voice services or the billable number of lines into a building for voice services. ▪ Wireless Connections – refers to an individual mobile line provisioned through TDS' mobile virtual network operator (MVNO) arrangement and delivered under the TDS-branded wireless offering. 24 Index to MD&A Results of Operations — TDS Consolidated The following discussion and analysis compares financial results for the year ended December 31, 2025, to the year ended December 31, 2024 and the year ended December 31, 2024, to the year ended December 31, 2023.
Net cash provided by operating activities was $1,142 million due to a net loss of $487 million adjusted for non-cash items of $1,496 million and distributions received from unconsolidated entities of $150 million, including $69 million in distributions from the LA Partnership. This was partially offset by changes in working capital items which decreased net cash by $17 million.
Net cash provided by operating activities related to continuing operations was $306.7 million due to net loss of $547.7 million adjusted for non-cash items of $715.0 million and distributions received from unconsolidated entities of $150.3 million, including $69.1 million in distributions from the LA Partnership.
The agreements do not cease to be available nor do the maturity dates accelerate solely as a result of a downgrade in TDS’ or UScellular’s credit rating. However, downgrades in TDS’ or UScellular’s credit rating could adversely affect their ability to renew the agreements, obtain consents, waivers, or amendments, or obtain access to other credit agreements in the future.
The agreements do not cease to be available nor do the maturity dates accelerate solely as a result of a downgrade in TDS’ or Array’s credit rating.
See Note 7 — Divestitures in the Notes to Consolidated Financial Statements for additional information related to divestitures. 53 Index to MD&A Other Obligations TDS will require capital for future spending on existing contractual obligations, including long-term debt obligations; preferred stock dividend obligations; lease commitments; commitments for device purchases, network facilities and transport services; E-ACAM obligations; agreements for software licensing; long-term marketing programs; and other agreements to purchase goods or services.
In general, TDS does not disclose such transactions until there is a definitive agreement. See Note 7 — Acquisitions and Divestitures in the Notes to Consolidated Financial Statements for additional information related to divestitures. Other Obligations TDS will require capital for future spending on existing contractual obligations, including long-term debt obligations; preferred stock dividend obligations; lease commitments; and E-ACAM obligations.
See Supplemental Information Relating to Non-GAAP Financial Measures within this MD&A for additional information. ▪ Eligible Telecommunications Carrier (ETC) – designation by states for providing specified services in “high cost” areas which enables participation in universal service support mechanisms. ▪ Enhanced Alternative Connect America Cost Model (E-ACAM) – a USF support mechanism for certain carriers, which provides revenue support through 2038.
See Supplemental Information Relating to Non-GAAP Financial Measures within this MD&A for additional information ▪ Alternative Connect America Cost Model (ACAM) – a USF support mechanism for certain carriers, which provides revenue support through 2028.
TDS believes that it was in compliance as of December 31, 2024 with such financial covenant. TDS believes that it and/or its subsidiaries were in compliance as of December 31, 2024, with all covenants and other requirements set forth in the TDS and UScellular long-term debt indentures.
TDS believes that it and/or its subsidiaries were in compliance as of December 31, 2025, with all covenants and other requirements set forth in the TDS and Array long-term debt indentures. TDS and Array have not failed to make nor do they expect to fail to make any scheduled payment of principal or interest under such indentures.
Capital expenditures (i.e., additions to property, plant and equipment and system development expenditures; excludes wireless spectrum license additions), which include the effects of accruals and capitalized interest, in 2024, 2023 and 2022 were as follows: Capital Expenditures (Dollars in millions) UScellular’s capital expenditures were $577 million, $611 million and $717 million in 2024, 2023 and 2022, respectively.
Capital expenditures for continuing operations (i.e., additions to property, plant and equipment), which include the effects of accruals and capitalized interest, in 2025, 2024 and 2023 were as follows: Capital Expenditures (Dollars in millions) TDS Telecom’s capital expenditures were $406.4 million, $323.8 million and $576.5 million in 2025, 2024 and 2023, respectively.
Loss on impairment of licenses Loss on impairment of licenses increased in 2024 due to the wireless spectrum license impairment charge recorded during the third quarter of 2024.
Cost of operations Cost of operations increased in 2024 as a result of increases in cell site ground rent and maintenance expenses. Loss on impairment of licenses Loss on impairment of licenses increased in 2024 due to the wireless spectrum license impairment change recorded during the third quarter of 2024.
Wireless spectrum licenses are tested for impairment at the level of reporting referred to as a unit of accounting.
Wireless spectrum licenses are tested for impairment at the level of reporting referred to as a unit of accounting. During the third quarter of 2025, Array continued its efforts to monetize its spectrum assets not subject to pending sale agreements.
As of December 31, 2024 2023 2024 vs. 2023 Residential connections Broadband Incumbent Fiber 118,500 110,100 8 % Incumbent Copper 116,900 134,700 (13) % Expansion Fiber 126,100 92,200 37 % Cable 191,500 202,900 (6) % Total Broadband 553,000 539,800 2 % Video 121,000 131,500 (8) % Voice 261,600 281,600 (7) % Total Residential Connections 935,600 952,900 (2) % Commercial connections 190,500 210,200 (9) % Total connections 1,126,100 1,163,100 (3) % Numbers may not foot due to rounding.
As of or for the Quarter Ended December 31, 2025 2024 2025 vs. 2024 Residential connections Broadband Incumbent Fiber 127,300 118,500 7 % Incumbent Copper 91,200 116,900 (22) % Expansion Fiber 160,600 126,100 27 % Cable 182,800 191,500 (5) % Total Broadband 561,900 553,000 2 % Video 111,500 121,000 (8) % Voice 228,900 261,600 (12) % Wireless 3,300 100 N/M Total Residential Connections 905,600 935,700 (3) % Commercial connections 173,900 190,500 (9) % Total connections 1,079,500 1,126,300 (4) % Total residential fiber net adds 15,100 13,600 Total residential broadband net adds 4,500 7,900 Residential fiber churn 1.2 % 1.0 % Total residential broadband churn 1.6 % 1.4 % Numbers may not foot due to rounding.
Selling, general and administrative Selling, general and administrative expenses decreased for 2024 due primarily to decreases in employee-related expenses and professional fees, partially offset by higher property taxes and IT infrastructure costs. Depreciation, amortization and accretion Depreciation, amortization and accretion increased for 2024 due primarily to increased capital expenditures on new fiber assets and customer premise equipment.
Selling, general and administrative Selling, general and administrative expenses increased for 2025 due primarily to increased employee-related expenses and lease acceleration costs, partially offset by lower bad debts expense and property taxes. Depreciation, amortization and accretion Depreciation, amortization and accretion increased for 2025 due primarily to changes in asset useful lives and capital expenditures on fiber assets.
The TDS and UScellular issuer credit ratings as of December 31, 2024, and the dates such ratings were issued were as follows: Rating Agency Rating Outlook Moody's (issued May 2024) Ba1 rating under review Standard & Poor's (issued August 2023) BB watch-developing outlook Fitch Ratings (issued May 2024) BB+ rating watch negative The TDS and UScellular credit ratings may be impacted in the future based on the outcomes of the T-Mobile, Verizon and AT&T transactions and the remaining UScellular business, among other factors. 52 Index to MD&A Capital Requirements The discussion below is intended to highlight some of the significant cash outlays expected during 2025 and beyond and to highlight the spending incurred in current and prior years for these items.
However, downgrades in TDS’ or Array’s credit rating could adversely affect their ability to renew the agreements, obtain consents, waivers, or amendments, or obtain access to other credit agreements in the future. 41 Index to MD&A The TDS and Array issuer credit ratings as of December 31, 2025, and the dates such ratings were issued were as follows: Rating Agency Rating Outlook Moody's (issued August 2025) Ba1 stable outlook Standard & Poor's (issued August 2025) BBB- stable outlook Fitch Ratings (issued September 2025) BB+ stable outlook Capital Requirements The discussion below is intended to highlight some of the significant cash outlays expected during 2026 and beyond and to highlight the spending incurred in current and prior years for these items.
Distributions from certain equity method investments operated by Verizon are expected to include incremental discrete amounts in 2025 related to proceeds received by Verizon in the tower transaction with Vertical Bridge that closed in December 2024.
In addition, distributions from certain equity method investments operated by Verizon included a special distribution of $25.3 million related to proceeds received by Verizon managed entities related to Verizon's tower transaction with Vertical Bridge that closed in December 2024.
Selling, general and administrative expenses Selling, general and administrative expenses decreased in 2023, due primarily to decreases in bad debts expense, commissions, facilities and employee-related expenses, partially offset by an increase in advertising expenses as well as $8 million of expenses related to the strategic alternatives review.
Selling, general and administrative Selling, general and administrative expenses decreased in 2025 due primarily to decreases in expenses related to the strategic alternative review, partially offset by an increase in bad debts expense. Selling, general and administrative expenses in the second half of 2025 include costs to support the winddown of the legacy wireless operations.
This support comes with an obligation to build defined broadband speeds to a certain number of locations. ▪ Auction 107 – Auction 107 was an FCC auction of 3.7-3.98 GHz wireless spectrum licenses that started in December 2020 and concluded in February 2021. ▪ Broadband Connections – refers to the individual customers provided internet access through various transmission technologies, including fiber, coaxial and copper. ▪ Broadband Penetration – metric which is calculated by dividing total broadband connections by total service addresses. ▪ Cable Markets – markets where TDS provides service as the cable provider using coaxial cable and fiber technologies. ▪ Churn Rate – represents the percentage of the connections that disconnect service each month.
This support comes with an obligation to build defined broadband speeds to a certain number of locations. ▪ Broadband Connections – refers to the individual customers provided internet access through various transmission technologies, including fiber, coaxial and copper. ▪ Broadband Penetration – metric which is calculated by dividing total broadband connections by total service addresses. ▪ Cable Markets – markets where TDS provides service as the cable provider using coaxial cable and fiber technologies. ▪ Colocations – represents instances where a third-party leases space on a company-owned tower. ▪ DOCSIS – Data Over Cable Service Interface Specification is an international telecommunications standard that permits the addition of high-bandwidth data transfer to an existing cable TV (CATV) system.
The term loan agreement entered into in May 2024 requires TDS to comply with certain affirmative and negative covenants, which includes a financial covenant that may restrict the borrowing capacity available.
Debt Covenants The TDS and Array revolving credit agreements, the Array term loan agreement with CoBank and the TDS export credit financing agreement require TDS or Array, as applicable, to comply with certain affirmative and negative covenants, which include certain financial covenants that may restrict the borrowing capacity available.
TDS is required to maintain the Consolidated Leverage Ratio as of the end of any fiscal quarter at a level not to exceed the following: 4.50 to 1.00 from April 1, 2024 through March 31, 2025; 4.25 to 1.00 from April 1, 2025 and thereafter.
Following the sale of the Array wireless operations to T-Mobile, TDS and Array are required to maintain a Consolidated Leverage Ratio, as defined in the agreements, as of the end of any fiscal quarter from and including the quarter in which such sale occurs at a level not to exceed 3.50 to 1.00.
TDS and UScellular have not failed to make nor do they expect to fail to make any scheduled payment of principal or interest under such indentures. Other Long-Term Financing TDS and UScellular each have an effective shelf registration statement on Form S-3 to issue senior or subordinated debt securities, preferred shares and depositary shares.
TDS and Array each have an effective shelf registration statement on Form S-3 to issue senior or subordinated debt securities, preferred shares and depositary shares.
TDS paid quarterly dividends per outstanding share of $0.185 in 2023 and $0.180 in 2022.
TDS paid quarterly dividends per outstanding share of $0.19 in the first quarter of 2024 and $0.04 in each of the second, third and fourth quarters of 2024. TDS paid quarterly dividends per outstanding share of $0.185 in 2023.

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