TDS reports second quarter 2026 results

TDS reports second quarter 2026 results

PR Newswire

CHICAGO, Aug. 7, 2026

TDS Telecom and Array both update guidance for 2026CHICAGO, Aug. 7, 2026 /PRNewswire/ --

As previously announced, TDS will hold a teleconference on August 7, 2026, at 9:00 a.m. CT. Listen to the call live via the Events & Presentations page of investors.tdsinc.com.Telephone and Data Systems, Inc. (NYSE: TDS) reported second quarter 2026 operating results."I am pleased with the progress our teams continue to make in executing our strategic objectives," said Walter Carlson, TDS President and CEO. "During the quarter, TDS Telecom expanded its marketable fiber service footprint by approximately 66,000 addresses and increased its fiber service address guidance for the year. Array delivered another quarter of sequential tower tenancy growth, highlighting the value of our assets. In addition, Array completed the previously announced spectrum sale to Verizon, now having completed transactions to monetize virtually all of its spectrum outside of the C-Band."Highlights*TDS TelecomExecuting on fiber broadband strategyDelivered approximately 66,000 marketable fiber service addressesGrew fiber connections —15,100 residential fiber net additionsService revenue down 6%Residential fiber revenue growth of 13% more than offset by impacts of divestitures and continued legacy declinesUpdated 2026 GuidanceCurrent service address delivery momentum drives increase in 2026 guidance to 250,000 - 300,000 marketable fiber service addresses, increased capital expenditure guidance to $625 million - $675 millionUpdated 2026 Financial guidanceRevenues of $1,000 million to $1,025 millionAdjusted EBITDA of $310 million to $330 millionAdjusted OIBDA of $300 million to $320 millionArrayOptimizing tower operationsSite rental revenues grew 95% year over yearDelivered consecutive quarter over quarter tower tenancy growthContinuing to close pending sales of wireless spectrumClosed on sale of certain 700 MHz wireless spectrum licenses for total proceeds of $74.8 million on May 5, 2026Closed on sale of certain 600 MHz wireless spectrum licenses for total proceeds of $86.4 million on May 12, 2026Closed on sale of certain cellular and other spectrum licenses for total proceeds of $1 billion on June 1, 2026Issued special dividend of $11 per common share on June 25, 2026Updated 2026 GuidanceNarrowed Revenue range to $205 million - $215 million on higher interim site revenueIncreased Adjusted EBITDA range to $220 million - $235 millionCapital expenditures range remains unchanged at $25 million - $35 million*Comparisons are 2Q'25 to 2Q'26 unless otherwise notedTDS reported total operating revenues from continuing operations of $309.3 million for the second quarter of 2026, versus $298.5 million for the same period one year ago. Net income (loss) attributable to TDS common shareholders and diluted earnings (loss) per share from continuing operations were $260.6 million and $2.24, respectively, for the second quarter of 2026 compared to $(6.0) million and $(0.05), respectively, in the same period one year ago. Recent Development On May 7, 2026, TDS delivered to the Array Board of Directors a letter setting forth a non-binding proposal to acquire all of the outstanding Array Common Shares that are not owned by TDS (the "Array Proposal"). A special committee of independent and disinterested directors of the Array Board of Directors has been formed to evaluate this proposal. For additional information on the Array Proposal, see TDS' Current Report on Form 8-K, filed with the U.S. Securities and Exchange Commission on May 8, 2026.2026 Estimated ResultsTDS' current estimates of full-year 2026 results for TDS Telecom and Array are shown below. Such estimates represent management's view as of August 7, 2026 and should not be assumed to be current as of any future date. TDS undertakes no duty to update such estimates, whether as a result of new information, future events, or otherwise. There can be no assurance that final results will not differ materially from estimated results.TDS TelecomPreviousCurrent(Dollars in millions)Total operating revenues$1,015-$1,055$1,000-$1,025Adjusted OIBDA1 (Non-GAAP)$300-$340$300-$320Adjusted EBITDA1 (Non-GAAP)$310-$350$310-$330Capital expenditures$550-$600$625-$675ArrayPreviousCurrent(Dollars in millions)Total operating revenues$200-$215$205-$215Adjusted OIBDA1 (Non-GAAP)$50-$65$60-$75Adjusted EBITDA1 (Non-GAAP)$200-$215$220-$235Capital expenditures$25-$35UnchangedThe following tables reconcile EBITDA, Adjusted EBITDA and Adjusted OIBDA to the corresponding GAAP measures, Net income or Income (loss) before income taxes. In providing 2026 estimated results, TDS has not completed the below reconciliation to Net income because it does not provide guidance for income taxes. Although potentially significant, TDS believes that the impact of income taxes cannot be reasonably predicted; therefore, TDS is unable to provide such guidance.2026 Estimated ResultsTDS TelecomArray(Dollars in millions)Net income from continuing operations (GAAP)N/AN/AAdd back:Income tax expenseN/AN/AIncome (loss) before income taxes (GAAP)($15)-$5$775-$790Add back:Interest expense—45Depreciation, amortization and accretion expense32550EBITDA (Non-GAAP)1$310-$330$870-$885Add back or deduct:(Gain) loss on license sales and exchanges, net—(585)Short-term imputed spectrum lease income—(65)Adjusted EBITDA (Non-GAAP)1$310-$330$220-$235Deduct:Equity in earnings of unconsolidated entities—145Interest and dividend income515Other, net5—Adjusted OIBDA (Non-GAAP)1$300-$320$60-$75Actual ResultsSix Months EndedJune 30, 2026Year EndedDecember 31, 2025TDS TelecomArrayTDS TelecomArray(Dollars in millions)Net income (loss) from continuing operations (GAAP)$ (4)$ 517$ 28$ 172Add back:Income tax expense (benefit)(4)16810(31)Income (loss) before income taxes (GAAP)$ (8)$ 686$ 38$ 141Add back:Interest expense—18(7)28Depreciation, amortization and accretion expense1462730048EBITDA (Non-GAAP)1$ 138$ 731$ 331$ 218Add back or deduct:Expenses related to strategic alternatives review—862(Gain) loss on impairment of intangible assets——148(Gain) loss on asset disposals, net65152(Gain) loss on sale of business and other exit costs, net2—(23)—(Gain) loss on license sales and exchanges, net(2)(566)—(6)Short-term imputed spectrum lease income—(58)—(69)Adjusted EBITDA (Non-GAAP)1$ 144$ 119$ 330$ 194Deduct:Equity in earnings of unconsolidated entities—75—174Interest and dividend income211619Other, net3—5—Adjusted OIBDA (Non-GAAP)1$ 140$ 33$ 319$ 1Numbers may not foot due to rounding.1EBITDA, Adjusted EBITDA and Adjusted OIBDA are defined as net income from continuing operations adjusted for the items set forth in the reconciliation above. EBITDA, Adjusted EBITDA and Adjusted OIBDA are not measures of financial performance under Generally Accepted Accounting Principles in the United States (GAAP) and should not be considered as alternatives to Net income or Cash flows from operating activities, as indicators of cash flows or as measures of liquidity. TDS does not intend to imply that any such items set forth in the reconciliation above are infrequent or unusual; such items may occur in the future. Management uses Adjusted EBITDA and Adjusted OIBDA as measurements of profitability, and therefore reconciliations to Net income are deemed appropriate. Management believes Adjusted EBITDA and Adjusted OIBDA are useful measures of TDS' operating results before significant recurring non-cash charges, nonrecurring expenses, gains and losses, and other items as presented above 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. Adjusted EBITDA shows adjusted earnings before interest, taxes, depreciation, amortization and accretion, gains and losses, 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.Conference Call InformationTDS will hold a conference call on August 7, 2026 at 9:00 a.m. CT.Access the live call on the Events & Presentations page of investors.tdsinc.com or athttps://events.q4inc.com/attendee/198119429 Before the call, certain financial and statistical information to be discussed during the call will be posted to investors.tdsinc.com. The call will be archived on the Events & Presentations page of investors.tdsinc.com. About TDSTelephone and Data Systems, Inc. (TDS) provides broadband, video, voice and wireless services through its TDS Telecom business. Array leases tower space to tenants and provides ancillary services, holds noncontrolling interests in primarily wireless operating companies and holds certain wireless spectrum licenses. Founded in 1969, TDS is headquartered in Chicago.Visit investors.tdsinc.com for comprehensive financial information, including earnings releases, quarterly and annual filings, shareholder information and more.Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995: All information set forth in this news release about Telephone and Data Systems, Inc., including its subsidiaries Array and TDS Telecom, except historical and factual information, represents forward-looking statements. This includes all statements about the Company's plans, beliefs, estimates and expectations. These statements are based on current estimates, projections, and assumptions, which involve certain risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Important factors that may affect these forward-looking statements include, but are not limited to: whether any transaction related to the TDS non-binding proposal delivered to the Array Board of Directors to acquire all of the outstanding Array Common Shares not owned by TDS will be accepted, rejected, consummated, or abandoned; whether any such transaction, if accepted or completed, will result in additional value for shareholders and whether the process could result in adverse effects on either business; the manner in which Array's remaining business is conducted; strategic decisions regarding the tower business; whether the additional spectrum license sales to T-Mobile are consummated; whether Array can monetize its remaining spectrum assets; intense competition, including fixed wireless and satellite; economic and business risks associated with fixed rate annual escalators on colocation revenue contracts; Array's reliance on a small number of tenants for a substantial portion of its revenue; the ability to attract people of outstanding talent throughout all levels of the organization; TDS' lack of scale relative to larger competitors; TDS' inability to protect rights to the land under its towers; changes in demand, consumer preferences and perceptions, price competition, or cost; advances or changes in technology; impacts of costs, integration issues or other factors associated with acquisitions, divestitures or exchanges of properties and/or expansion of TDS' businesses; the ability of the company to successfully construct and manage its networks; difficulties involving third parties with which TDS does business; uncertainties in TDS' future cash flows and liquidity and access to the capital markets; the ability to make payments on TDS and Array indebtedness or comply with the terms of debt covenants; conditions in the U.S. telecommunications industry; the value of assets and investments, including significant investments in wireless operating entities that Array does not control; the state and federal regulatory environment, including changes in regulatory support received and the ability to pass through certain regulatory fees to customers; pending and future litigation; cyber-attacks or other breaches of network or information technology security; control by the TDS Voting Trust; disruption in credit or other financial markets; deterioration of U.S. or global economic conditions; and extreme weather events. Investors are encouraged to consider these and other risks and uncertainties that are more fully described under "Risk Factors" in the most recent filing of TDS' Form 10-K as updated by any TDS Form 10-Q filed subsequent to such Form 10-K.For more information about TDS and its subsidiaries, visit:TDS: www.tdsinc.com TDS Telecom: www.tdstelecom.com Array: investors.arrayinc.com TDS TelecomSummary Operating Data (Unaudited)As of or for the Quarter Ended6/30/20263/31/202612/31/20259/30/20256/30/2025Residential connectionsBroadbandIncumbent Fiber134,300130,200127,300123,500121,200Incumbent Copper77,70084,20091,200102,000106,500Expansion Fiber179,600168,500160,600150,700141,800Cable176,100179,100182,800186,100188,200Total Broadband567,700561,900561,900562,400557,700Video105,600107,200111,500114,300116,500Voice209,300216,900228,900242,200248,700Wireless8,1005,3003,3002,2001,600Total Residential connections890,700891,400905,600921,100924,500Commercial connections163,600166,500173,900180,300184,300Total connections11,054,2001,058,0001,079,5001,101,3001,108,800Total residential fiber net adds15,10010,90015,10011,20010,300Total residential broadband net adds5,7001004,5004,6003,900Residential fiber churn21.2 %1.3 %1.2 %1.5 %1.1 %Total residential broadband churn1.7 %1.8 %1.6 %1.7 %1.5 %Residential revenue per connection3$ 66.50$ 66.41$ 65.95$ 65.66$ 65.85Capital expenditures (thousands)$ 179,197$ 125,963$ 154,904$ 102,429$ 90,187Numbers may not foot due to rounding.1Q2 2025 total connections include 12,900 connections, including 5,300 residential broadband connections, that were part of subsequent divestitures. 2Residential fiber churn represents the percentage of incumbent and expansion fiber connections that disconnected service each month. These rates represent the average monthly churn rate for each respective period.3Total residential revenue per connection is calculated by dividing total residential revenue by the average number of residential connections and by the number of months in the period.Array Digital Infrastructure, Inc.Summary Operating Data (Unaudited)As of or for the Quarter Ended6/30/20263/31/202612/31/20259/30/2025Capital expenditures from continuing operations (thousands)$ 3,895$ 8,645$ 12,933$ 7,927Owned towers4,4564,4524,4504,449Number of colocations14,3624,2904,5724,517Tower tenancy rate20.980.961.031.021Represents instances where a third-party leases space on a company-owned tower. Includes T-Mobile MLA committed site minimum of 2,015. Excludes Interim Sites whereby T-Mobile is leasing up to 1,800 sites for a period of up to 30 months subject to the terms and conditions of the MLA. As of March 31, 2026, the Number of colocations and the Tower tenancy rate exclude DISH Wireless due to the low probability of fulfilling its lease commitments.2Calculated as total number of colocations divided by total number of towers. Includes T-Mobile MLA committed site minimum of 2,015. Excludes Interim Sites whereby T-Mobile is leasing up to 1,800 sites for a period of up to 30 months subject to the terms and conditions of the MLA. As of March 31, 2026, the Number of colocations and the Tower tenancy rate exclude DISH Wireless due to the low probability of fulfilling its lease commitments. Normalized to exclude DISH, tenancy ratios would have been 0.95 and 0.94 for December 31, 2025 and September 30, 2025, respectively.Telephone and Data Systems, Inc.Consolidated Statement of Operations Highlights(Unaudited)Three Months EndedJune 30,Six Months EndedJune 30,202620252026vs. 2025202620252026vs. 2025(Dollars and shares in thousands, except per share amounts)Operating revenuesTDS Telecom$ 248,406$ 264,931(6) %$ 497,978$ 522,291(5) %Array54,07028,52990 %106,08255,51391 %All Other16,8055,08134 %14,67111,17031 %Total operating revenues309,281298,5414 %618,731588,9745 %Operating expensesTDS Telecom256,684250,9592 %509,988508,460—Array(345,193)46,719N/M(453,966)103,329N/MAll Other124,57813,17087 %45,67923,42695 %Total operating expenses(63,931)310,848N/M101,701635,215(84) %Operating income (loss)TDS Telecom(8,278)13,972N/M(12,010)13,831N/MArray399,263(18,190)N/M560,048(47,816)N/MAll Other1(17,773)(8,089)N/M(31,008)(12,256)N/MTotal operating income (loss)373,212(12,307)N/M517,030(46,241)N/MOther income (expense)Equity in earnings of unconsolidated entities37,12642,952(14) %79,02879,471(1) %Interest and dividend income19,6316,110N/M33,41712,381N/MInterest expense(11,388)(29,166)61 %(16,709)(53,074)69 %Short-term imputed spectrum lease income23,770—N/M57,970—N/MOther, net5,3462,395N/M10,7965,117N/MTotal other income74,48522,291N/M164,50243,895N/MIncome (loss) before income taxes447,6979,984N/M681,532(2,346)N/MIncome tax expense (benefit)106,410(4,224)N/M160,819(12,347)N/MNet income from continuing operations341,28714,208N/M520,71310,001N/MLess: Net income from continuing operations attributable to noncontrolling interests, net of tax63,3322,943N/M96,1434,667N/MNet income from continuing operations attributable to TDS shareholders277,95511,265N/M424,5705,334N/MNet income from discontinued operations25,0713,578N/M22,68319,74915 %Less: Net income from discontinued operations attributable to noncontrolling interests, net of tax4,6603,27242 %4,2926,041(29) %Net income from discontinued operations attributable to TDS shareholders20,411306N/M18,39113,70834 %Net income366,35817,786N/M543,39629,750N/MLess: Net income attributable to noncontrolling interests, net of tax67,9926,215N/M100,43510,708N/MNet income attributable to TDS shareholders298,36611,571N/M442,96119,042N/MTDS Preferred Share dividends17,30617,306—34,61334,613—Net income (loss) attributable to TDS common shareholders$ 281,060$ (5,735)N/M$ 408,348$ (15,571)N/MBasic weighted average shares outstanding114,500115,229(1) %114,193114,908(1) %Basic earnings (loss) per share from continuing operations attributable to TDS common shareholders$ 2.28$ (0.05)N/M$ 3.42$ (0.25)N/MBasic earnings from discontinued operations attributable to TDS common shareholders$ 0.17$ —N/M$ 0.16$ 0.1135 %Basic earnings (loss) per share attributable to TDS common shareholders$ 2.45$ (0.05)N/M$ 3.58$ (0.14)N/MDiluted weighted average shares outstanding116,291115,2291 %116,465114,9081 %Diluted earnings (loss) per share from continuing operations attributable to TDS common shareholders$ 2.24$ (0.05)N/M$ 3.35$ (0.26)N/MDiluted earnings from discontinued operations attributable to TDS common shareholders$ 0.18$ —N/M$ 0.15$ 0.1232 %Diluted earnings (loss) per share attributable to TDS common shareholders$ 2.42$ (0.05)N/M$ 3.50$ (0.14)N/MN/M - Percentage change not meaningful.1Consists of corporate and other operations and intercompany eliminations.Telephone and Data Systems, Inc.Consolidated Statement of Cash Flows(Unaudited)Six Months EndedJune 30,20262025(Dollars in thousands)Cash flows from operating activitiesNet income$ 543,396$ 29,750Net income from discontinued operations22,68319,749Net income from continuing operations520,71310,001Add (deduct) adjustments to reconcile net income to net cash flows from operating activitiesDepreciation, amortization and accretion174,720170,349Bad debts expense5,1222,994Stock-based compensation expense8,42817,502Deferred income taxes, net(130,935)(14,312)Equity in earnings of unconsolidated entities(79,028)(79,471)Distributions from unconsolidated entities66,55387,938(Gain) loss on asset disposals, net10,5797,795(Gain) loss on sale of business and other exit costs, net1,562(8,877)(Gain) loss on license sales and exchanges, net(553,158)(4,800)Other operating activities4872,619Changes in assets and liabilities from operationsAccounts receivable(3,896)(17,607)Inventory287212Accounts payable6,732415Customer deposits and deferred revenues(57,165)(724)Accrued taxes232,212(1,911)Accrued interest(563)(604)Other assets and liabilities(51,585)(45,560)Net cash provided by operating activities - continuing operations151,065125,959Net cash provided by (used in) operating activities - discontinued operations(28,037)481,307Net cash provided by operating activities123,028607,266Cash flows from investing activitiesCash paid for additions to property, plant and equipment(317,919)(150,482)Cash paid for licenses—(4,145)Cash received from divestitures2,188,23524,162Other investing activities1,9252,512Net cash provided by (used in) investing activities - continuing operations1,872,241(127,953)Net cash used in investing activities - discontinued operations—(135,561)Net cash provided by (used in) investing activities1,872,241(263,514)Cash flows from financing activitiesIssuance of long-term debt1,300—Repayment of long-term debt(150,729)(17,076)Tax withholdings, net of cash receipts, for TDS stock-based compensation awards(34,219)(24,483)Tax withholdings, net of cash receipts, for Array stock-based compensation awards(2,068)(35,250)Repurchase of Array Common Shares—(21,360)Dividends paid to TDS shareholders(43,771)(43,830)Array dividends paid to noncontrolling public shareholders(332,480)—Payment of debt issuance costs—(2,467)Distributions to noncontrolling interests(3,540)(2,391)Cash paid for software license agreements(1,180)(839)Payments to acquire additional interest in subsidiaries(593)—Other financing activities73(314)Net cash used in financing activities - continuing operations(567,207)(148,010)Net cash used in financing activities - discontinued operations—(19,702)Net cash used in financing activities$ (567,207)$ (167,712)Net increase in cash, cash equivalents and restricted cash$ 1,428,062$ 176,040Cash, cash equivalents and restricted cashBeginning of period770,150383,222End of period$ 2,198,212$ 559,262Telephone and Data Systems, Inc.Consolidated Balance Sheet Highlights(Unaudited)ASSETSJune 30, 2026December 31, 2025(Dollars in thousands)Current assetsCash and cash equivalents$ 2,194,014$ 765,952Accounts receivable, net105,830109,981Inventory, net3,7754,062Prepaid expenses33,69728,206Income taxes receivable—1,292Other current assets13,31413,976Total current assets2,350,630923,469Non-current assets held for sale47,4751,598,131Licenses1,595,3491,642,972Other intangible assets, net117,108131,673Investments in unconsolidated entities475,077461,922Property, plant and equipment, net3,123,4772,965,455Operating lease right-of-use assets506,665515,081Other assets and deferred charges167,559159,600Total assets$ 8,383,340$ 8,398,303Telephone and Data Systems, Inc.Consolidated Balance Sheet Highlights(Unaudited)LIABILITIES AND EQUITYJune 30, 2026December 31, 2025(Dollars in thousands, except per share amounts)Current liabilitiesCurrent portion of long-term debt$ 9,444$ 5,274Accounts payable130,314115,822Customer deposits and deferred revenues66,280125,140Accrued interest2,2732,836Accrued taxes260,11346,721Accrued compensation40,33556,774Short-term operating lease liabilities27,63426,180Current liabilities of discontinued operations24,85620,242Other current liabilities54,38741,322Total current liabilities615,636440,311Deferred liabilities and creditsDeferred income tax liability, net600,947743,633Long-term operating lease liabilities541,268549,617Other deferred liabilities and credits552,629574,025Long-term debt, net670,646823,364Total equity5,402,2145,267,353Total liabilities and equity$ 8,383,340$ 8,398,303Balance Sheet Highlights(Unaudited)June 30, 2026TDSTDS CorporateIntercompanyTDSTelecomArray& OtherEliminationsConsolidated(Dollars in thousands)Cash and cash equivalents$ 222,844$ 416,436$ 1,780,879$ (226,145)$ 2,194,014Licenses and other intangible assets$ 117,260$ 1,594,649$ 548$ —$ 1,712,457Investment in unconsolidated entities3,947421,60760,838(11,315)475,077$ 121,207$ 2,016,256$ 61,386$ (11,315)$ 2,187,534Property, plant and equipment, net$ 2,733,837$ 374,700$ 14,940$ —$ 3,123,477Long-term debt, net:Current portion$ 164$ 8,125$ 1,155$ —$ 9,444Non-current portion2,765666,7571,124—670,646$ 2,929$ 674,882$ 2,279$ —$ 680,090TDS Telecom Highlights(Unaudited)Three Months EndedJune 30,Six Months EndedJune 30,202620252026vs. 2025202620252026vs. 2025(Dollars in thousands)Operating revenuesResidentialIncumbent$ 75,868$ 84,665(10) %$ 153,160$ 170,259(10) %Expansion45,65636,58025 %89,21870,98626 %Cable56,24062,174(10) %113,982126,022(10) %Total residential177,764183,419(3) %356,360367,267(3) %Commercial32,77634,617(5) %65,57169,251(5) %Wholesale37,81746,704(19) %75,93485,381(11) %Total service revenues248,357264,740(6) %497,865521,899(5) %Equipment revenues49191(74) %113392(71) %Total operating revenues248,406264,931(6) %497,978522,291(5) %Cost of operations (excluding Depreciation, amortization and accretion reported below)100,58397,0494 %197,765198,013—Cost of equipment and products1181162 %229380(40) %Selling, general and administrative79,03882,555(4) %160,098165,702(3) %Depreciation, amortization and accretion73,58573,1371 %146,142144,5771 %(Gain) loss on asset disposals, net4,9606,206(20) %5,7927,868(26) %(Gain) loss on sale of business and other exit costs, net—(8,104)N/M1,562(8,080)N/M(Gain) loss on license sales and exchanges, net(1,600)—N/M(1,600)—N/MTotal operating expenses256,684250,9592 %509,988508,460—Operating income (loss)$ (8,278)$ 13,972N/M$ (12,010)$ 13,831N/MN/M - Percentage change not meaningfulArray Digital Infrastructure, Inc. Highlights(Unaudited)Three Months EndedJune 30,Six Months EndedJune 30,202620252026vs. 2025202620252026vs. 2025(Dollars in thousands)Operating revenuesSite rental$ 53,175$ 27,23095 %$ 104,199$ 53,82594 %Services8951,299(31) %1,8831,68812 %Total operating revenues54,07028,52990 %106,08255,51391 %Operating expensesCost of operations (excluding Depreciation, amortization and accretion reported below)23,49719,39621 %45,10635,68726 %Selling, general and administrative22,90619,33718 %35,65148,537(27) %Depreciation, amortization and accretion 14,42811,99920 %27,03223,99213 %(Gain) loss on asset disposals, net3,809(313)N/M4,713(87)N/M(Gain) loss on license sales and exchanges, net(409,833)(3,700)N/M(566,468)(4,800)N/MTotal operating expenses(345,193)46,719N/M(453,966)103,329N/MOperating income (loss)$ 399,263$ (18,190)N/M$ 560,048$ (47,816)N/MN/M - Percentage change not meaningfulTelephone and Data Systems, Inc.Financial Measures(Unaudited)Free Cash FlowSix Months EndedJune 30,TDS CONSOLIDATED20262025(Dollars in thousands)Cash flows from operating activities - continuing operations (GAAP)$ 151,065$ 125,959Cash paid for additions to property, plant and equipment(317,919)(150,482)Cash paid for software license agreements(1,180)(839)Free cash flow - continuing operations (Non-GAAP)1$ (168,034)$ (25,362)1Free cash flow is a non-GAAP financial measure which TDS believes may be useful to investors and other users of its financial information in evaluating liquidity, specifically, the amount of net cash generated by business operations after deducting Cash paid for additions to property, plant and equipment and Cash paid for software license agreements.Telephone and Data Systems, Inc.EBITDA, Adjusted EBITDA, Adjusted OIBDA and AFCF Reconciliations(Unaudited)EBITDA, Adjusted EBITDA and Adjusted OIBDAThe following tables reconcile EBITDA, Adjusted EBITDA and Adjusted OIBDA to the corresponding GAAP measures, Net income and Income (loss) before income taxes.Three Months EndedJune 30,Six Months EndedJune 30,TDS Telecom2026202520262025(Dollars in thousands)Net income (loss) (GAAP)$ (4,993)$ 16,084$ (3,946)$ 19,611Add back:Income tax expense (benefit)(1,909)2,174(3,998)3,309Income (loss) before income taxes (GAAP)(6,902)18,258(7,944)22,920Add back:Interest expense332(960)175(2,424)Depreciation, amortization and accretion73,58573,137146,142144,577EBITDA (Non-GAAP)67,01590,435138,373165,073Add back or deduct:Expenses related to strategic alternatives review——87—(Gain) loss on asset disposals, net4,9606,2065,7927,868(Gain) loss on sale of business and other exit costs, net—(8,104)1,562(8,080)(Gain) loss on license sales and exchanges, net(1,600)—(1,600)—Adjusted EBITDA (Non-GAAP)70,37588,537144,214164,861Deduct:Interest and dividend income4631,6931,6083,094Other, net1,2451,6332,6333,571Adjusted OIBDA (Non-GAAP)$ 68,667$ 85,211$ 139,973$ 158,196Three Months EndedJune 30,Six Months EndedJune 30,Array2026202520262025(Dollars in thousands)Net income from continuing operations (GAAP)$ 337,447$ 15,099$ 517,472$ 20,583Add back:Income tax expense115,8708,415168,2688,222Income before income taxes (GAAP)453,31723,514685,74028,805Add back:Interest expense10,8603,71118,0407,378Depreciation, amortization and accretion14,42811,99927,03223,992EBITDA (Non-GAAP)478,60539,224730,81260,175Add back or deduct:Expenses related to strategic alternatives review7,3917157,5781,860(Gain) loss on asset disposals, net3,809(313)4,713(87)(Gain) loss on license sales and exchanges, net(409,833)(3,700)(566,468)(4,800)Short-term imputed spectrum lease income(23,770)—(57,970)—Adjusted EBITDA (Non-GAAP)56,20235,926118,66557,148Deduct:Equity in earnings of unconsolidated entities34,72641,71475,13577,641Interest and dividend income6,4313,70110,6536,358Other, net(13)—(26)—Adjusted OIBDA (Non-GAAP)$ 15,058$ (9,489)$ 32,903$ (26,851)Array Adjusted Free Cash Flow (AFCF)AFCF is a non-GAAP measure defined as Net income from continuing operations adjusted for the items set forth in the reconciliation below. AFCF is not a measure of financial performance under GAAP and should not be considered as an alternative to Net income from continuing operations or as an indicator of cash flows.Management believes AFCF is a useful measure of Array's cash generated from operations and its noncontrolling investment interests. The following table reconciles AFCF to the corresponding GAAP measure, Net income from continuing operations. This measure is presented following the sale of Array's wireless operations to T-Mobile on August 1, 2025, at which time the primary business operations for Array changed from providing wireless communications services to a standalone tower company.Six Months Ended June 30, 2026(Dollars in thousands)Net income from continuing operations - Array (GAAP)$ 517,472Add back or deduct:Income tax expense168,268Cash paid for income taxes(78,623)Stock-based compensation expense540Short-term imputed spectrum lease income(57,970)Amortization of deferred debt charges655Equity in earnings of unconsolidated entities(75,135)Distributions from unconsolidated entities66,553(Gain) loss on license sales and exchanges, net(566,468)(Gain) loss on asset disposals, net4,713Depreciation, amortization and accretion27,032Expenses related to strategic alternatives review7,578Straight line and other non-cash revenue adjustments(8,310)Straight line expense adjustment2,811Maintenance and other capital expenditures(2,511)Adjusted Free Cash Flow from continuing operations - Array (Non-GAAP)$ 6,605