Slides
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Second Quarter 2025 Results August 11, 2025
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Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995 All information set forth in this presentation 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: the manner in which Array's remaining business is conducted; whether the previously announced spectrum license sales to Verizon and AT&T will be consummated; whether Array can monetize its remaining spectrum assets; strategic decisions regarding the tower business; intense competition; 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; changes in demand, consumer preferences and perceptions, price competition, or churn rates; advances in technology; impacts of costs, integration problems 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; the effect on TDS' business if the collateral securing its secured term loan is foreclosed upon; 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; extreme weather events; and the impact, duration and severity of public health emergencies. 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. 2 This presentation contains certain non-GAAP financial measures. Information about these non-GAAP financial measures and reconciliations between each non-GAAP financial measure and the most directly comparable GAAP measure are contained in the appendix to this presentation.
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TDS 2025 Priorities 3 Successfully closed the T-Mobile transaction Position tower company for success Invest in fiber expansion at TDS Telecom Optimize post-transaction capital structure Ensure culture remains strong
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4 Enterprise Update Strengthening balance sheet • $1.7 billion of Array debt exchanged into T-Mobile debt • TDS to receive $1.6 billion from Array special dividend Positioning TDS for financial flexibility • Maintain preferreds • Array expected to have $700 million debt S&P upgrade issuer credit rating to BBB- Significant Debt Reduction ($ in millions) Array TDS 6/30/2025 Proforma (1) $0 $1,000 $2,000 $3,000 $4,000 $5,000 $3 Billion (1) Proforma is the expected debt profile as of 30 days post closing of the transaction with T-Mobile
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6 Dollars in millions Gross purchase price (2) $ 4,400 Contingent purchase price adjustment (89) Debt exchange (1,680) Cash obligations to employees (200) Array cash tax obligation (275) Other adjustments, proceeds, and costs, net (38) Net proceeds from close of T-Mobile transaction 2,118 Repayment of term loans (863) Proceeds from new term loan 325 Cash (1) 420 Net cash available for distribution (2) $ 2,000 The following table provides a reconciliation between the gross purchase price and net cash available for distribution following the close of the T-Mobile transaction. Certain amounts in the table are estimates: Net Proceeds from T-Mobile Transaction (1) Excess cash - Represents a substantial majority of both cash on hand at the beginning of 2025, and cash generated by Array’s business in 2025 through the close date of T-Mobile transaction. (2) Proceeds at closing include $400 million of funds from the sale of spectrum licenses held by designated entities. Final Array buyout of the equity interest in the designated entities was completed prior to the close of the T-Mobile transaction. As such, those licenses were conveyed to T-Mobile. On August 1, 2025 the Array board of directors approved a special dividend of $23.00 per Common Share and Series A Common Share. Aggregate amount of the special dividend is $2.0 billion. Note: Array expects that when 1099-DIV’s are issued for 2025, this special dividend will be largely designated as an ordinary and qualified dividend, subject to the shareholder's holding period requirements. However, it is possible that a portion will be designated as a return of capital. Ultimate determination will depend on several factors including Array's 2025 taxable income, as well as the amount and timing of any additional special dividends issued by Array in 2025.
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AT&T Verizon(2) Gross purchase price $1.018B $1.0B Cash taxes Array remits its taxes to TDS and is included in the TDS consolidated tax return. At the TDS Consolidated level, the cash tax liability is expected to be less due to additional net operating losses and interest carryforwards that TDS may apply to reduce the taxable gain. ~$125 M represents the estimated tax liability at the Array level. TDS tax liability is expected to be similar to the Array level. $200 M - $250 M represents the estimated tax liability at the Array level. TDS tax liability is expected to be ~$50 M less. Transaction fees and other costs (3) TBD TBD Timing Subject to regulatory approval - Expected close 2H 2025 Subject to regulatory approval - Expected close 3Q 2026 Spectrum sales to AT&T and Verizon (1) (1) Both spectrum sales were contingent on the close of the sale of the wireless business and select spectrum to T-Mobile (2) This is a summary of significant items and may not include all potential cash inflows and outflows related to these transactions. See Notice of Written Consent and Information Statements filed on 1/23/2025 which contain the respective License Purchase Agreements and other related information (3) The Verizon transaction is also subject to expiration of the one-year T-Mobile spectrum lease. (4) There will also be incremental transaction fees at the TDS consolidated level. 7 (1) See Notice of Written Consent and Information Statements filed on January 23, 2025 which contain the respective License Purchase Agreements and other related information (2) The Verizon transaction is also subject to expiration of the one-year T-Mobile spectrum lease. (3) There will also be incremental transaction fees at the TDS consolidated level.
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Opportunistically monetizing spectrum Low & Mid-Band MHz-Pops Footnotes (1) ~39% subject to a put/call agreement. (2) Quantification of mmWave MHz-Pops not included in the graph. 8 Included in sale of wireless operations to T- Mobile (Closed August 1, 2025) Included in sale to Verizon and two other carriers (Announced October 18, 2024) Included in sale to AT&T (Announced November 7, 2024) Retained Spectrum Reached agreements to monetize ~70% of Array's total spectrum holdings, measured on a MHz-Pops basis, including the T-Mobile transaction Band MHz-Pops 600 MHz (1) 594 700 MHz (A Block) 319 AWS 563 PCS 443 2.5 GHz 50 24 GHz (2) Band MHz-Pops Cellular 663 AWS 11 PCS 19 700 MHz B/C 2 CBRS 3 C-Band 7 Band MHz-Pops 700 MHz (A Block) 133 AWS 13 CBRS 75 C-Band 1,640 28 GHz (2) 37/39 GHz (2) 1,969M MHz-Pops (2) 1,581M MHz-Pops 1,861M MHz-Pops (2) Band MHz-Pops 3.45 GHz 1,250 700 MHz B/C 331 705M MHz-Pops Closed Pending Further Opportunity
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Retained SpectrumGrowing Tower Business Non-controlling Investment Interests Will look to opportunistically monetize Principally C-Band 100% U.S. 4,400 Owned towers Retained non-controlling investment interests generate meaningful income and distributions $169 million cash distributions in 2024 Going Forward 9
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• Close pending spectrum transactions • Opportunistically monetize remaining spectrum • Ground lease optimization • Colocation growth Strategic Priorities 10
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T-Mobile MLA MLA commenced August 1, 2025 • 15 year initial term on a minimum of 2,015 sites • Extended license term on 600 existing sites to a new 15-year term • Provides for interim license for up to 30 months on remaining 1,800 towers to ensure a smooth network transition 11
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Towers - Q2 2025 operating metrics 34% 27% 25% 14% AT&T Verizon T-Mobile Other 2Q 2025 Third-Party Tower Revenue Distribution 12 Tower Locations (1) Proforma for disposition of Array wireless operations and implementation of T-Mobile MLA effective August 1, 2025. Array ceased being a tenant August 1 and the T-Mobile MLA began. Proforma tenancy rate excludes 1,800 interim leases under the T-Mobile MLA. June 30, 2025 Owned Towers 4,418 Tower Tenancy Rate 1.57 Number of Colocations 2,527 Proforma tenancy rate after sale of wireless operations and implementation of T-Mobile MLA ~1.0 (1) Tower Metrics
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($M) Q2'25 Q2'24 % Change Third-party revenues $ 28 $ 25 12 % Intra-company revenues 34 33 3 % Total tower revenues 62 58 7 % System operations expense 20 19 6 % SG&A expenses (1) 9 9 (1) % Total cash expenses (2) 29 28 4 % Adjusted EBITDA (2) (Non-GAAP) 34 31 9 % Towers segment - operating performance (1) SG&A expenses presented include $1M of expenses related to the strategic alternatives review for 2025 and 2024. (2) See appendix for explanation. 13
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Quarterly Highlights 15 Ken Dixon appointed as new CEO of TDS Telecom Deployed 27,000 new marketable fiber addresses, on track for 150,000 goal in 2025 Launched E-ACAM construction in multiple states Grew fiber connections; 10,300 net broadband adds from fiber markets
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Goal: 1.8 million marketable fiber service addresses** Goal: 80% of service addresses to be served by fiber Goal: 95% service addresses with speeds of 1 Gig+ Where are we: 968,000 Where are we: 53% **Marketable service addresses includes single family households, commercial locations, and multiple dwelling units where we have gained right of entry across all of our markets. Progress on long-term fiber program Where are we: 75% 16 Deployed 27,000 marketable fiber service addresses in Q2'25
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Fiber drives footprint growth 17 Total Marketable Service Addresses (2022 - 2025) Q2 2022 Q2 2023 Q2 2024 Q2 2025 1,000,000 1,200,000 1,400,000 1,600,000 1,800,000 2,000,000 New Marketable Fiber Addresses Q2'24 Q3'24 Q4'24 Q1'25 Q2'25 10,000 20,000 30,000 40,000 50,000 27% footprint growth
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Fiber drives residential connection growth 18 Residential Fiber Connections (2022 - 2025) Q2 2022 Q2 2023 Q2 2024 Q2 2025 50,000 100,000 150,000 200,000 250,000 300,000 Residential Fiber Net Additions Q2'24 Q3'24 Q4'24 Q1'25 Q2'25 — 2,500 5,000 7,500 10,000 12,500 15,000 1.9x connection growth
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Growing fiber footprint driving faster speeds 13% 12% 14% 13% 24% 22% 49% 53% Copper <25 Mbps Copper 25 to 100 Mbps Coaxial Fiber Q2'24 Q2'25 0% 25% 50% 75% 100% 19 Total Service Address Mix 1.7M Service Addresses 1.8M 5% Y/Y growth 75% 1 Gig+ 21% 17% 50% 44% 10% 13% 19% 26% <100 Mbps 100-300 Mbps 600 Mbps 1Gig+ Q2'24 Q2'25 0% 25% 50% 75% 100% Residential Broadband Connections by Speed
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20 $267 $265 $44 $47 $37 $35 $69 $62 $90 $85 $28 $37 Residential - Expansion Residential - Incumbent Residential - Cable Commercial Wholesale Q2'24 Q2'25 $— $100 $200 $300 Operating Revenues ($M) $65.26 $65.85 Q2'24 Q2'25 $50.00 $55.00 $60.00 $65.00 $70.00Residential Revenue per Connection 1% Y/Y growth Quarterly revenue results Note: Divested markets accounted for a $4M decrease year-over-year.
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TDS Telecom operating performance ($M) Q2’25 Q2’24 % Change Total operating revenues $ 265 $ 267 (1) % Cash expenses (1) 180 178 1 % Adjusted EBITDA (1) (Non-GAAP) $ 89 $ 91 (3) % Capital expenditures $ 90 $ 78 16 % 21 (1) See appendix for explanation.
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2025 TDS Telecom guidance* ($M) As of August 11, 2025 2024 Actual 2025 Previous Estimates 2025 Current Estimates Total operating revenues $1,061 $1,030-$1,070 $1,030-$1,050 Adjusted EBITDA (1) (Non-GAAP) $350 $320-$360 $320-$350 Adjusted OIBDA (1) (Non-GAAP) $340 $310-$350 $310-$340 Capital expenditures $324 $375-$425 Unchanged (1) See appendix for explanation. *There can be no assurance that final results will not differ materially from such estimated results. See Safe Harbor Statement on Slide 2.22
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Appendix
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Adjusted OIBDA and Adjusted EBITDA Reconciliation Three Months Ended June 30, 2025 Three Months Ended June 30, 2024 ($M) Array TDS Telecom TDS* Array TDS Telecom TDS* Net income (GAAP) $32 $16 $18 $18 $18 $7 Add back: Income tax expense 4 2 3 14 3 6 Income before income taxes (GAAP) $36 $18 $21 $32 $21 $13 Add back: Interest expense 45 (1) 70 45 — 73 Depreciation, amortization and accretion expense 163 73 236 165 67 233 EBITDA (1) (Non-GAAP) $244 $90 $327 $242 $88 $319 Add back or deduct: Expenses related to strategic alternatives review 12 — 16 13 — 21 (Gain) loss on asset disposals, net 2 6 9 5 4 9 (Gain) loss on sale of business and other exit costs, net — (8) (8) — — — (Gain) loss on license sales and exchanges, net (4) — (4) 8 — 8 Adjusted EBITDA (1) (Non-GAAP) $254 $89 $340 $268 $91 $357 Add back or deduct: Equity in earnings of unconsolidated entities 42 — 43 38 — 39 Interest and dividend income 4 2 6 3 1 7 Other, net — 2 2 — 1 1 Adjusted OIBDA (1) (Non-GAAP) $208 $85 $289 $227 $89 $310 24 Numbers may not foot due to rounding. * The TDS column includes Array, TDS Telecom and also the impacts of consolidating eliminations, corporate operations and non-reportable segments. (1) See final slide for explanation.
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Adjusted OIBDA and Adjusted EBITDA Reconciliation Three Months Ended June 30, 2025 Three Months Ended June 30, 2024 ($M) Array Towers Array Towers EBITDA (Non-GAAP) (1) $33 $30 Add back or deduct: Expenses related to strategic alternatives review 1 1 Adjusted EBITDA and Adjusted OIBDA (Non-GAAP) (1) $34 $31 Deduct: Depreciation, amortization and accretion expense 12 11 Expenses related to strategic alternatives review 1 1 Operating income (GAAP) $21 $19 25 (1) See final slide for explanation.
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Adjusted OIBDA and Adjusted EBITDA Reconciliation – 2025 Estimated Results and 2024 Actual Results 2025 Estimated Results Actual Results Year ended December 31, 2024 ($M) TDS Telecom TDS Telecom Net income (GAAP) N/A $85 Add back: Income tax expense N/A 35 Income before income taxes (GAAP) $20-$50 $120 Add back: Interest expense — (5) Depreciation, amortization and accretion expense 300 271 EBITDA (1) (Non-GAAP) $320-$350 $385 Add back or deduct: Loss on impairment of intangible assets — 1 (Gain) loss on asset disposals, net — 12 (Gain) loss on sale of business and other exit costs, net — (49) Adjusted EBITDA (1) (Non-GAAP) $320-$350 $350 Deduct: Interest and dividend income 5 5 Other, net 5 4 Adjusted OIBDA (1) (Non-GAAP) $310-$340 $340 26 In providing 2025 estimated results, TDS has not completed the below reconciliation to net income because it does not provide guidance for income taxes. TDS believes that the impact of income taxes cannot be reasonably predicted; therefore, the company is unable to provide such guidance. Numbers may not foot due to rounding. (1) See final slide for explanation.
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Cash Expenses Total cash expenses represent total operating expenses as shown in the Consolidated Statement of Operations Highlights in the TDS and Array SEC Forms 8-K, less depreciation, amortization and accretion and gain/losses. EBITDA, Adjusted EBITDA and Adjusted OIBDA EBITDA, Adjusted EBITDA and Adjusted OIBDA are defined as net income adjusted for the items set forth in the reconciliations on slides 24 through 26. 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 and Array do not intend to imply that any such items set forth in the reconciliations on slides 24 through 26 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’ and Array's 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’ and Array's 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, and expenses related to the strategic alternatives review of Array while Adjusted OIBDA reduces this measure further to exclude Equity in earnings of unconsolidated entities and Interest and dividend income in order to more effectively show the performance of operating activities excluding investment activities. The tables on slide 24 through 26 reconcile EBITDA, Adjusted EBITDA and Adjusted OIBDA flow to the corresponding GAAP measure, Net income or Income before income taxes. Income and expense items below Operating income are not provided at the individual segment level for Array Wireless and Array Towers; therefore, the reconciliations begin with EBITDA and the most directly comparable GAAP measure is Operating income rather than Net Income at the segment level. Additional information and reconciliations related to Non-GAAP financial measures for June 30, 2025, can be found on TDS’ and Array's websites at investors.tdsinc.com and investors.arrayinc.com. 27