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Note 1 Basis of Presentation

The accounting policies of Telephone and Data Systems, Inc. (TDS) conform to accounting principles generally accepted in the United States of America (GAAP) as set forth in the Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC). Unless otherwise specified, references to accounting provisions and GAAP in these notes refer to the requirements of the FASB ASC. The consolidated financial statements include the accounts of TDS and subsidiaries in which it has a controlling financial interest, including TDS’ wholly-owned subsidiary, TDS Telecommunications LLC (TDS Telecom) and Array Digital Infrastructure, Inc. (Array), a 81.9%-owned subsidiary of TDS. In addition, the consolidated financial statements include certain entities in which TDS has a variable interest that requires consolidation into the TDS financial statements under GAAP. Intercompany accounts and transactions have been eliminated. The Notes to Consolidated Financial Statements are presented for continuing operations, except for Note 2 — Discontinued Operations.

TDS has the following reportable segments: TDS Telecom and Array. TDS' non-reportable other business activities are presented as "All Other", which includes its wholly-owned subsidiary Suttle-Straus, Inc. (Suttle-Straus). Suttle-Straus’ financial results were not significant to TDS’ operations. All of TDS’ segments operate only in the United States. See Note 11 — Business Segment Information for summary financial information on each business segment.

Certain numbers included herein are rounded to thousands or millions for ease of presentation; however, certain calculated amounts and percentages are determined using the unrounded numbers. These unaudited consolidated financial statements should be read in conjunction with the consolidated financial statements and the notes thereto included in TDS’ Annual Report on Form 10-K (Form 10-K) for the year ended December 31, 2025.

The accompanying unaudited consolidated financial statements contain all adjustments (consisting of normal recurring items, unless otherwise disclosed) necessary for the fair statement of TDS’ financial position as of June 30, 2026 and December 31, 2025, its results of operations and changes in equity for the three and six months ended June 30, 2026 and 2025 and its cash flows for the six months ended June 30, 2026 and 2025. The Consolidated Statement of Comprehensive Income was not included because comprehensive income for the three and six months ended June 30, 2026 and 2025, does not materially differ from net income. These results are not necessarily indicative of the results to be expected for the full year. TDS has not changed its significant accounting and reporting policies from those disclosed in its Form 10-K for the year ended December 31, 2025.

Restricted Cash

TDS presents restricted cash with cash and cash equivalents in the Consolidated Statement of Cash Flows. The following table provides a reconciliation of Cash and cash equivalents and restricted cash reported in the Consolidated Balance Sheet to the total of the amounts in the Consolidated Statement of Cash Flows.

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

Dividend

On January 13, 2026, the Array Board of Directors declared a special dividend per Common and Series A outstanding share of $10.25 for shareholders of record on January 23, 2026, which was paid on February 2, 2026 for a total amount of $885.5 million. TDS received its pro-rata share of the $10.25 per share special dividend in the amount of $725.6 million. On June 1, 2026, the Array Board of Directors declared a special dividend per Common and Series A outstanding share of $11.00 for shareholders of record on June 11, 2026, which was paid on June 25, 2026 for a total amount of $951.3 million. TDS received its pro-rata share of the $11.00 per share special dividend in the amount of $778.7 million.

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Note 2 Discontinued Operations

On August 1, 2025, Array sold its wireless operations and select spectrum assets to T-Mobile US, Inc. (T-Mobile) pursuant to a Securities Purchase Agreement (Securities Purchase Agreement).

Total consideration received was $4,293.8 million after adjustments which included a combination of $2,628.8 million in cash proceeds and $1,665.0 million in debt assumed by T-Mobile through the preliminary results of an exchange offer made to Array's debtholders, which subsequently closed on August 5, 2025. The final cash proceeds are subject to adjustment according to the terms and conditions of the Securities Purchase Agreement. Array recorded an estimated purchase price true-up payable to T-Mobile of $24.9 million and $20.2 million, as of June 30, 2026 and December 31, 2025, respectively, which is classified as Current liabilities of discontinued operations in the Consolidated Balance Sheet. Certain licenses included in the T-Mobile transaction did not transfer to T-Mobile at the time of close and are subject to FCC approval. At closing, a $16.7 million deferral of the purchase price was recorded related to these spectrum licenses, which is classified as Other current liabilities in the Consolidated Balance Sheet as of June 30, 2026 and Other deferred liabilities and credits in the Consolidated Balance Sheet as of December 31, 2025. As of June 30, 2026, the book value of the wireless spectrum licenses that did not transfer to T-Mobile was $16.7 million and is classified as held for sale in the Consolidated Balance Sheet. The transfer of the wireless spectrum licenses is expected to occur in 2026, subject to regulatory approval and other customary closing conditions. Array also may incur significant decommissioning costs for certain equipment that T-Mobile retains the right to return to Array and recorded a liability of $65.8 million at closing. During the second quarter of 2026, Array updated its estimate for decommissioning costs and recorded a reduction of $25.5 million, which was recognized to (Gain) loss on sale of business and other exit costs, net within discontinued operations. In addition, during the second quarter of 2026, certain equipment was returned by T-Mobile and Array recognized an asset retirement obligation of $10.2 million, which is included in Other deferred liabilities and credits in the Consolidated Balance Sheet. The remaining estimated liability for decommissioning costs is $30.1 million as of June 30, 2026, and is classified as Other deferred liabilities and credits in the Consolidated Balance Sheet.

On August 1, 2025, a Short-Term Spectrum Manager Lease Agreement and Short-Term Spectrum Manager Sublease Agreements became effective, which provide T-Mobile with an exclusive license to use certain Array spectrum assets and leases at no cost for up to one year from closing for the sole purpose of providing continued, uninterrupted service to customers. The portion of the purchase price allocated to the use of this spectrum was $149.3 million based on an estimate for fair market value and will be recognized to Short-term imputed spectrum lease income in the continuing operations Consolidated Statement of Operations over the one year term. Effective April 1, 2026, the Short-Term Spectrum Manager Lease Agreement with T-Mobile was terminated for certain spectrum assets. The remaining deferred purchase price related to the terminated leases was $11.7 million and was recognized to (Gain) loss on sale of business and other exit costs, net within discontinued operations during the second quarter of 2026. As of June 30, 2026, the remaining balance of the deferred purchase price is $7.5 million and is classified as Customer deposits and deferred revenues in the Consolidated Balance Sheet. Effective August 2, 2026, an Amended and Restated Spectrum Manager Lease Agreement became effective, which provided T-Mobile with an exclusive license to continue using certain Array spectrum assets for up to one year and at no cost until February 2, 2027.

Following the close of the transaction, TDS entered into a transition services agreement (TSA) with T-Mobile to provide ongoing services and support. TDS recognized $4.2 million and $8.4 million of income related to the TSA in Other, net in the Consolidated Statement of Operations for the three and six months ended June 30, 2026, respectively.

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

			Three Months Ended June 30,												Six Months Ended June 30,
			2026						2025						2026						2025
(Dollars in thousands)
Operating revenues
Service			$	—					$	707,780					$	—					$	1,421,714
Equipment sales			—						180,027						—						330,117
Total operating revenues			—						887,807						—						1,751,831
Operating expenses
System operations (excluding Depreciation, amortization and accretion reported below)			—						162,546						509						321,492
Cost of equipment sold			—						207,793						—						383,580
Selling, general and administrative			(1,255)						312,521						263						620,940
Depreciation, amortization and accretion			—						150,272						—						300,806
(Gain) loss on asset disposals, net			—						2,682						—						4,401
(Gain) loss on sale of business and other exit costs, net			(31,904)						—						(31,015)						—
Total operating expenses			(33,159)						835,814						(30,243)						1,631,219
Operating income			33,159						51,993						30,243						120,612
Other income (expense)
Interest expense			(11)						(40,475)						(324)						(76,460)
Other, net			—						(203)						—						(209)
Total other expense			(11)						(40,678)						(324)						(76,669)
Income before income taxes			33,148						11,315						29,919						43,943
Income tax expense			8,077						7,737						7,236						24,194
Net income from discontinued operations			$	25,071					$	3,578					$	22,683					$	19,749

Note 3 Revenue Recognition

Disaggregation of Revenue

In the following table, TDS' revenues are disaggregated by type of service, which represents the relevant categorization of revenues for TDS' reportable segments, and timing of recognition. Service revenues are recognized over time and Equipment and product sales are recognized at a point in time.

Three Months Ended June 30, 2026			TDS Telecom						Array						All Other						Total
(Dollars in thousands)
Revenues from contracts with customers:
Type of service:
Residential			$	177,764					$	—					$	—					$	177,764
Commercial			32,776						—						—						32,776
Wholesale			37,006						—						—						37,006
Other service			—						895						(24)						871
Service revenues from contracts with customers			247,546						895						(24)						248,417
Equipment and product sales			49						—						6,878						6,927
Total revenues from contracts with customers			247,595						895						6,854						255,344
Operating lease income			811						53,175						(49)						53,937
Total operating revenues			$	248,406					$	54,070					$	6,805					$	309,281

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Three Months Ended June 30, 2025			TDS Telecom						Array						All Other						Total
(Dollars in thousands)
Revenues from contracts with customers:
Type of service:
Residential			$	183,419					$	—					$	—					$	183,419
Commercial			34,617						—						—						34,617
Wholesale			45,960						—						—						45,960
Other service			—						1,299						(816)						483
Service revenues from contracts with customers			263,996						1,299						(816)						264,479
Equipment and product sales			191						—						5,992						6,183
Total revenues from contracts with customers			264,187						1,299						5,176						270,662
Operating lease income			744						27,230						(95)						27,879
Total operating revenues			$	264,931					$	28,529					$	5,081					$	298,541

Six Months Ended June 30, 2026			TDS Telecom						Array						All Other						Total
(Dollars in thousands)
Revenues from contracts with customers:
Type of service:
Residential			$	356,360					$	—					$	—					$	356,360
Commercial			65,571						—						—						65,571
Wholesale			74,380						—						—						74,380
Other service			—						1,883						(50)						1,833
Service revenues from contracts with customers			496,311						1,883						(50)						498,144
Equipment and product sales			113						—						14,819						14,932
Total revenues from contracts with customers			496,424						1,883						14,769						513,076
Operating lease income			1,554						104,199						(98)						105,655
Total operating revenues			$	497,978					$	106,082					$	14,671					$	618,731

Six Months Ended June 30, 2025			TDS Telecom						Array						All Other						Total
(Dollars in thousands)
Revenues from contracts with customers:
Type of service:
Residential			$	367,267					$	—					$	—					$	367,267
Commercial			69,251						—						—						69,251
Wholesale			83,882						—						—						83,882
Other service			—						1,688						(1,644)						44
Service revenues from contracts with customers			520,400						1,688						(1,644)						520,444
Equipment and product sales			392						—						13,013						13,405
Total revenues from contracts with customers			520,792						1,688						11,369						533,849
Operating lease income			1,499						53,825						(199)						55,125
Total operating revenues			$	522,291					$	55,513					$	11,170					$	588,974

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

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

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

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Transaction price allocated to the remaining performance obligations

TDS Telecom provides residential internet, video, mobile, and voice services primarily through monthly subscription arrangements. Each subscription period is treated as a distinct performance obligation, with revenue recognized on a straight-line basis over the service period as the services are delivered. Customers are typically billed in advance and may cancel their subscriptions at the end of any monthly term without incurring penalties.

In addition, as of June 30, 2026, TDS Telecom expects to recognize approximately $70.2 million of revenue in the future related to performance obligations associated with existing circuit contracts that are partially or wholly unsatisfied. As of June 30, 2026, the transaction price related to unsatisfied performance obligations that are expected to be recognized for the remainder of 2026, 2027 and thereafter was $16.3 million, $25.5 million, and $28.4 million, respectively.

Contract Cost Assets

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

			June 30, 2026						December 31, 2025
(Dollars in thousands)
Costs to obtain contracts
Sales commissions			$	18,498					$	14,770
Fulfillment costs
Installation costs			1,769						1,872
Total contract cost assets			$	20,267					$	16,642

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

Note 4 Fair Value Measurements

As of June 30, 2026 and December 31, 2025, TDS did not have any material financial or nonfinancial assets or liabilities that were required to be recorded at fair value in its Consolidated Balance Sheet in accordance with GAAP.

The provisions of GAAP establish a fair value hierarchy that contains three levels for inputs used in fair value measurements. Level 1 inputs include quoted market prices for identical assets or liabilities in active markets. Level 2 inputs include quoted market prices for similar assets and liabilities in active markets or quoted market prices for identical assets and liabilities in inactive markets. Level 3 inputs are unobservable. A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. A financial instrument’s level within the fair value hierarchy is not representative of its expected performance or its overall risk profile and, therefore, Level 3 assets are not necessarily higher risk than Level 2 assets or Level 1 assets.

TDS has applied the provisions of fair value accounting for purposes of computing the fair value of financial instruments for disclosure purposes as displayed below.

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

Long-term debt excludes lease obligations, the current portion of Long-term debt and debt financing costs. The fair value of Long-term debt was estimated using various methods, including quoted market prices and discounted cash flow analyses.

The fair values of Cash and cash equivalents and restricted cash approximate their book values due to the short-term nature of these financial instruments.

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Note 5 Earnings Per Share

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

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

			Three Months Ended June 30,												Six Months Ended June 30,
			2026						2025						2026						2025
(Dollars and shares in thousands, except per share amounts)
Net income (loss) from continuing operations attributable to TDS common shareholders			$	260,649					$	(6,041)					$	389,957					$	(29,279)
Net income from discontinued operations attributable to TDS common shareholders			20,411						306						18,391						13,708
Net income (loss) attributable to TDS common shareholders used in basic earnings (loss) per share			281,060						(5,735)						408,348						(15,571)
Adjustments to compute diluted earnings (loss):
Noncontrolling interest adjustment			(90)						(278)						(242)						(452)
Net income (loss) attributable to TDS common shareholders used in diluted earnings (loss) per share			$	280,970					$	(6,013)					$	408,106					$	(16,023)
Weighted average number of shares used in basic earnings (loss) per share:
Common Shares			106,958						107,693						106,651						107,373
Series A Common Shares			7,542						7,536						7,542						7,535
Total			114,500						115,229						114,193						114,908
Effects of dilutive securities			1,791						—						2,272						—
Weighted average number of shares used in diluted earnings (loss) per share			116,291						115,229						116,465						114,908
Basic earnings (loss) per share from continuing operations attributable to TDS common shareholders			$	2.28					$	(0.05)					$	3.42					$	(0.25)
Basic earnings from discontinued operations attributable to TDS common shareholders			0.17						—						0.16						0.11
Basic earnings (loss) per share attributable to TDS common shareholders			$	2.45					$	(0.05)					$	3.58					$	(0.14)
Diluted earnings (loss) per share from continuing operations attributable to TDS common shareholders			$	2.24					$	(0.05)					$	3.35					$	(0.26)
Diluted earnings from discontinued operations attributable to TDS common shareholders			0.18						—						0.15						0.12
Diluted earnings (loss) per share attributable to TDS common shareholders			$	2.42					$	(0.05)					$	3.50					$	(0.14)

Certain Common Shares issuable upon the exercise of stock options or vesting of performance and restricted stock units were not included in weighted average diluted shares outstanding for the calculation of Diluted earnings (loss) per share attributable to TDS common shareholders because their effects were antidilutive. The number of such Common Shares excluded was less than 0.1 million for both the three and six months ended June 30, 2026 and 3.5 million and 3.8 million for the three and six months ended June 30, 2025, respectively.

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Note 6 Acquisitions and Divestitures

Array

In addition to the divestiture of Array's wireless operations, as disclosed in Note 2 — Discontinued Operations, other divestiture transactions are disclosed below.

On June 1, 2026, Array closed on the sale of certain AWS, Cellular and PCS wireless spectrum licenses to Verizon Communications Inc. (Verizon) for $1,000.0 million and TDS recorded a book gain of $400.2 million ($304.2 million net of tax) during the second quarter of 2026. The book gain recorded at TDS is lower than the book gain recorded at Array due primarily to transaction costs paid by TDS.

On January 13, 2026, Array closed on the sale of certain 3.45 GHz and 700 MHz wireless spectrum licenses to New Cingular Wireless PCS, LLC (AT&T), a subsidiary of AT&T Inc., for $1,018.0 million and TDS recorded a book gain of $150.9 million ($114.7 million net of tax expense) during the first quarter of 2026. The book gain recorded at TDS is lower than the book gain recorded at Array due primarily to transaction costs paid by TDS.

On August 29, 2025, Array entered into a License Purchase Agreement (T-Mobile License Purchase Agreement) with T-Mobile to sell three groups of 700 MHz wireless spectrum licenses and agreed to grant T-Mobile certain rights to lease such licenses prior to the transaction close for total proceeds of $85.0 million. On May 5, 2026, Array closed on the sale of the first group of wireless spectrum licenses under the T-Mobile License Purchase Agreement for total proceeds of $74.8 million and recorded a book gain on the transaction of $0.1 million. At the closing of the first group of licenses, $18.6 million of the total proceeds of $74.8 million was deferred based on the fair market value of all wireless spectrum licenses included in the T-Mobile License Purchase Agreement. As of June 30, 2026, the book value of the remaining groups of wireless spectrum licenses to be sold was $11.2 million and is classified as held for sale in the Consolidated Balance Sheet. The sale of the remaining groups of wireless spectrum licenses is expected to close in 2026, subject to regulatory approval and other customary closing conditions.

As part of the T-Mobile transaction to sell the wireless operations, Array entered into a Put/Call Agreement with T-Mobile whereby T-Mobile has the right to call certain spectrum assets and Array has the right to put certain spectrum assets to T-Mobile for an aggregate agreed upon price of $106.0 million. The call option notice period started on May 24, 2024, and the put exercise period started on August 1, 2025. There was no cash exchanged at the inception of the Put/Call Agreement. All license transfers pursuant to any put/call are subject to Federal Communications Commission (FCC) approval. Array accounted for this instrument as a net written call option and wrote off the entire fair value in 2025. In September 2025, T-Mobile exercised $86.4 million of the call option and the transaction closed on May 12, 2026. TDS recorded a book gain on the transaction of $0.3 million. In June 2026, T-Mobile exercised the second call option for $19.6 million. As of June 30, 2026, the book value of the wireless spectrum licenses subject to the second call notice was $19.5 million and is classified as held for sale in the Consolidated Balance Sheet. The transaction is expected to close in 2026, subject to regulatory approval and other customary closing conditions.

TDS Telecom

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

Note 7 Investments in Unconsolidated Entities

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

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

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

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

Note 8 Debt

Export Credit Financing Agreement

In January 2026, TDS repaid the entire outstanding borrowings under its term loan agreement with Export Development Canada of $150.0 million.

Note 9 Variable Interest Entities

Consolidated VIEs

TDS consolidates VIEs in which it has a controlling financial interest as defined by GAAP and is therefore deemed the primary beneficiary. TDS reviews the criteria for a controlling financial interest at the time it enters into agreements and subsequently when events warranting reconsideration occur. These VIEs have risks similar to those described in the “Risk Factors” in this Form 10-Q and TDS' Form 10-K for the year ended December 31, 2025.

TDS consolidates VIEs that are limited partnerships that lease tower space to tenants. A limited partnership is a variable interest entity unless the limited partners hold substantive participating rights or kick-out rights over the general partner. For certain limited partnerships, Array is the general partner and manages the operations. In these partnerships, the limited partners do not have substantive kick-out or participating rights and, further, such limited partners do not have the authority to remove the general partner. Therefore, these limited partnerships also are recognized as VIEs and are consolidated into the TDS financial statements under the variable interest model.

The following table presents the classification and balances of the consolidated VIEs’ assets and liabilities in TDS’ Consolidated Balance Sheet.

			June 30, 2026						December 31, 2025
(Dollars in thousands)
Assets
Accounts receivable			$	771					$	1,116
Other current assets			160						313
Property, plant and equipment, net			11,901						12,471
Operating lease right-of-use assets			20,303						20,564
Other assets and deferred charges			1,163						1,041
Total assets			$	34,298					$	35,505
Liabilities
Current liabilities			$	1,607					$	2,675
Long-term operating lease liabilities			22,118						22,400
Other deferred liabilities and credits			10,658						11,693
Total liabilities			$	34,383					$	36,768

Other Related Matters

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

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Note 10 Noncontrolling Interests

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

Six Months Ended June 30,			2026						2025
(Dollars in thousands)
Net income attributable to TDS shareholders			$	442,961					$	19,042
Transfers (to) from noncontrolling interests
Change in TDS' Capital in excess of par value from Array's issuance of Array shares			(3,425)						(74,529)
Change in TDS' Capital in excess of par value from Array's repurchases of Array shares			—						(3,199)
Net transfers (to) from noncontrolling interests			(3,425)						(77,728)
Net income (loss) attributable to TDS shareholders after transfers (to) from noncontrolling interests			$	439,536					$	(58,686)

Note 11 Business Segment Information

TDS has the following reportable segments: TDS Telecom and Array. TDS Telecom generates its revenues by providing broadband, video, voice and wireless services. Array generates its revenues primarily by leasing tower space on Array-owned towers to customers.

The reportable segments are billed for services they receive from TDS, consisting primarily of information processing, accounting, finance, and general management services. Such billings are based on expenses specifically identified to the reportable segments and on allocations of common expenses. Management believes the method used to allocate common expenses is reasonable and that all expenses and costs applicable to the reportable segments are reflected in the accompanying business segment information.

Adjusted earnings before interest, taxes, depreciation, amortization and accretion (Adjusted EBITDA) is the segment measure of profit or loss reported to the chief operating decision maker for purposes of assessing the segments' performance and making capital allocation decisions. Adjusted EBITDA is a non-GAAP financial measure that shows adjusted earnings before interest, taxes, depreciation, amortization and accretion, gains and losses, and expenses related to the strategic alternatives review. TDS believes Adjusted EBITDA is a useful measure of TDS’ operating results before significant recurring non-cash charges, gains and losses, and other items as presented below as it provides additional relevant and useful information to investors and other users of TDS' financial data in evaluating the effectiveness of its operations and underlying business trends in a manner that is consistent with management's evaluation of business performance. TDS’ chief operating decision maker is its President and Chief Executive Officer.

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

Three Months Ended June 30, 2026			TDS Telecom			Array			Total
(Dollars in thousands)
Revenues from external customers			$	248,402		$	54,025		$	302,427
Intersegment revenues			4			45			49
			248,406			54,070			302,476
Reconciliation of revenue:
All Other revenues1									6,854
Elimination of intersegment revenues									(49)
Total operating revenues									$	309,281
Add back or deduct2:
Cost of operations (excluding Depreciation, amortization and accretion reported below)			(100,583)			(23,497)
Cost of equipment and products			(118)			—
Selling, general and administrative			(79,038)			(22,906)
Expenses related to strategic alternatives review (included in Selling, general and administrative)			—			7,391
Equity in earnings of unconsolidated entities			—			34,726
Interest and dividend income			463			6,431
Other segment items			1,245			(13)
Segment Adjusted EBITDA (Non-GAAP)			$	70,375		$	56,202		$	126,577
Reconciliation of Segment Adjusted EBITDA to Income before income taxes:
All Other income before income taxes1									1,282
Short-term imputed spectrum lease income									23,770
Depreciation, amortization and accretion									(88,013)
Expenses related to strategic alternatives review (included in Selling, general and administrative)									(7,391)
Loss on asset disposals, net									(8,769)
Gain on license sales and exchanges, net									411,433
Interest expense									(11,192)
Income before income taxes									$	447,697

Other segment disclosures
Three Months Ended or as of June 30, 2026			TDS Telecom			Array			Segment Total			All Other1			TDS Consolidated Total
Short-term imputed spectrum lease income			$	—		$	23,770		$	23,770		$	—		$	23,770
Depreciation, amortization and accretion			(73,585)			(14,428)			(88,013)			(764)			(88,777)
Loss on asset disposals, net			(4,960)			(3,809)			(8,769)			—			(8,769)
Gain (loss) on license sales and exchanges, net			1,600			409,833			411,433			(9,153)			402,280
Interest expense			(332)			(10,860)			(11,192)			(196)			(11,388)
Investments in unconsolidated entities			3,947			421,607			425,554			49,523			475,077
Total assets			3,133,568			3,371,359			6,504,927			1,878,413			8,383,340
Capital expenditures from continuing operations			$	179,197		$	3,895		$	183,092		$	541		$	183,633

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Three Months Ended June 30, 2025			TDS Telecom			Array			Total
(Dollars in thousands)
Revenues from external customers			$	264,142		$	28,529		$	292,671
Intersegment revenues			789			—			789
			264,931			28,529			293,460
Reconciliation of revenue:
All Other revenues1									5,870
Elimination of intersegment revenues									(789)
Total operating revenues									$	298,541
Add back or deduct2:
Cost of operations (excluding Depreciation, amortization and accretion reported below)			(97,049)			(19,396)
Cost of equipment and products			(116)			—
Selling, general and administrative			(82,555)			(19,337)
Expenses related to strategic alternatives review (included in Selling, general and administrative)			—			715
Equity in earnings of unconsolidated entities			—			41,714
Interest and dividend income			1,693			3,701
Other segment items			1,633			—
Segment Adjusted EBITDA (Non-GAAP)			$	88,537		$	35,926		$	124,463
Reconciliation of Segment Adjusted EBITDA to Income before income taxes:
All Other income (loss) before income taxes1									(31,788)
Depreciation, amortization and accretion									(85,136)
Expenses related to strategic alternatives review (included in Selling, general and administrative)									(715)
Loss on asset disposals, net									(5,893)
Gain on sale of business and other exit costs, net									8,104
Gain on license sales and exchanges, net									3,700
Interest expense									(2,751)
Income before income taxes									$	9,984

Other segment disclosures
Three Months Ended or as of June 30, 2025			TDS Telecom			Array			Segment Total			All Other1			TDS Consolidated Total
Depreciation, amortization and accretion			$	(73,137)		$	(11,999)		$	(85,136)		$	(886)		$	(86,022)
Gain (loss) on asset disposals, net			(6,206)			313			(5,893)			(13)			(5,906)
Gain (loss) on sale of business and other exit costs, net			8,104			—			8,104			(225)			7,879
Gain on license sales and exchanges, net			—			3,700			3,700			—			3,700
Interest expense			960			(3,711)			(2,751)			(26,415)			(29,166)
Investments in unconsolidated entities			3,942			444,157			448,099			44,853			492,952
Total assets			2,903,379			5,024,778			7,928,157			245,856			8,174,013
Capital expenditures from continuing operations			$	90,187		$	4,211		$	94,398		$	190		$	94,588

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Six Months Ended June 30, 2026			TDS Telecom			Array			Total
(Dollars in thousands)
Revenues from external customers			$	497,971		$	105,991		$	603,962
Intersegment revenues			7			91			98
			497,978			106,082			604,060
Reconciliation of revenue:
All Other revenues1									14,769
Elimination of intersegment revenues									(98)
Total operating revenues									$	618,731
Add back or deduct2:
Cost of operations (excluding Depreciation, amortization and accretion reported below)			(197,765)			(45,106)
Cost of equipment and products			(229)			—
Selling, general and administrative			(160,098)			(35,651)
Expenses related to strategic alternatives review (included in Selling, general and administrative)			87			7,578
Equity earnings of unconsolidated entities			—			75,135
Interest and dividend income			1,608			10,653
Other segment items			2,633			(26)
Segment Adjusted EBITDA (Non-GAAP)			$	144,214		$	118,665		$	262,879
Reconciliation of Segment Adjusted EBITDA to Income before income taxes:
All Other income before income taxes1									3,736
Short-term spectrum lease income									57,970
Depreciation, amortization and accretion									(173,174)
Expenses related to strategic alternatives review (included in Selling, general and administrative)									(7,665)
Loss on asset disposals, net									(10,505)
Loss on sale of business and other exit costs, net									(1,562)
Gain on license sales and exchanges, net									568,068
Interest expense									(18,215)
Income before income taxes									$	681,532

Other segment disclosures
Six Months Ended June 30, 2026			TDS Telecom			Array			Segment Total			All Other1			TDS Consolidated Total
Short-term imputed spectrum lease income			$	—		$	57,970		$	57,970		$	—		$	57,970
Depreciation, amortization and accretion			(146,142)			(27,032)			(173,174)			(1,546)			(174,720)
Loss on asset disposals, net			(5,792)			(4,713)			(10,505)			(74)			(10,579)
Loss on sale of business and other exit costs, net			(1,562)			—			(1,562)			—			(1,562)
Gain on license sales and exchanges, net			1,600			566,468			568,068			(14,910)			553,158
Interest expense			(175)			(18,040)			(18,215)			1,506			(16,709)
Capital expenditures from continuing operations			$	305,160		$	12,541		$	317,701		$	2,161		$	319,862

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Six Months Ended June 30, 2025			TDS Telecom			Array			Total
(Dollars in thousands)
Revenues from external customers			$	520,700		$	55,513		$	576,213
Intersegment revenues			1,591			—			1,591
			522,291			55,513			577,804
Reconciliation of revenue:
All Other revenues1									12,761
Elimination of intersegment revenues									(1,591)
Total operating revenues									$	588,974
Add back or deduct2:
Cost of operations (excluding Depreciation, amortization and accretion reported below)			(198,013)			(35,687)
Cost of equipment and products			(380)			—
Selling, general and administrative			(165,702)			(48,537)
Expenses related to strategic alternatives review (included in Selling, general and administrative)			—			1,860
Equity earnings of unconsolidated entities			—			77,641
Interest and dividend income			3,094			6,358
Other segment items			3,571			—
Segment Adjusted EBITDA (Non-GAAP)			$	164,861		$	57,148		$	222,009
Reconciliation of Segment Adjusted EBITDA to Income before income taxes:
All Other income (loss) before income taxes1									(54,071)
Depreciation, amortization and accretion									(168,569)
Expenses related to strategic alternatives review (included in Selling, general and administrative)									(1,860)
Loss on asset disposals, net									(7,781)
Gain on sale of business and other exit costs, net									8,080
Gain on license sales and exchanges, net									4,800
Interest expense									(4,954)
Income (loss) before income taxes									$	(2,346)

Other segment disclosures
Six Months Ended June 30, 2025			TDS Telecom			Array			Segment Total						All Other1			TDS Consolidated Total
Depreciation, amortization and accretion			$	(144,577)		$	(23,992)		$	(168,569)					$	(1,780)		$	(170,349)
Gain (loss) on asset disposals, net			(7,868)			87			(7,781)						(14)			(7,795)
Gain on sale of business and other exit costs, net			8,080			—			8,080						797			8,877
Gain on license sales and exchanges, net			—			4,800			4,800						—			4,800
Interest expense			2,424			(7,378)			(4,954)						(48,120)			(53,074)
Capital expenditures from continuing operations			$	149,056		$	9,051		$	158,107					$	624		$	158,731

1"All Other" represents TDS' non-reportable other business activities that do not meet the quantitative thresholds for being a reportable segment and includes cash balances under terms of the TDS cash management arrangement.

2The significant segment expense categories and amounts align with the segment-level information that is regularly provided to the chief operating decision maker. Intersegment expenses are included within the amounts shown.

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