TDS reports first quarter 2025 results

, /PRNewswire/ -- As previously announced, TDS will hold a teleconference on May 2, 2025, at 9:00 a.m. CDT. Listen to the call live via the Events & Presentations page of investors.tdsinc.com. Telephone and Data Systems, Inc. (NYSE:TDS) reported total operating revenues of $1,154 million for the first quarter of 2025, versus $1,262 million for the same period one year ago. Net income (loss) attributable to TDS common shareholders and related diluted earnings (loss) per share were $(10) million and $(0.09), respectively, for the first quarter of 2025 compared to $12 million and $0.10, respectively, in the same period one year ago. Recent Highlights* UScellular Improved postpaid handset results Postpaid handset gross additions increased; postpaid handset net losses improved Third-party tower rental revenues increased 6% Ongoing 5G mid-band network deployment Providing capacity and enhanced speed for our mobility and fixed wireless customers TDS Telecom TDS Telecom revenues down 3%, impacted by 2024 divestitures of non-strategic assets Executing on fiber broadband strategy Delivered 14,000 marketable fiber services addresses in Q1 Added 2,800 residential broadband net additions; 8,300 from fiber markets * Comparisons are 1Q'24 to 1Q'25 unless otherwise noted "As we work towards the expected mid-2025 closing of the sale of the wireless operations, the remaining businesses – fiber and towers – are making foundational changes that will support TDS' transformation," said Walter Carlson, TDS President and CEO. "In the first quarter, TDS and TDS Telecom results were impacted from the prior year divestitures of non-strategic assets, including the sale of One Neck and certain ILECs. TDS Telecom is continuing its fiber deployment adding 14,000 marketable fiber service addresses in the quarter while also investing in programs to streamline operations, enhance the customer experience and improve margins over time. And the tower business is continuing to grow the number of colocations and revenues, with third-party tower revenues increasing 6% in the quarter." Announced Transactions and Exploration of Strategic Alternatives for UScellular On May 24, 2024, TDS and UScellular entered into a Securities Purchase Agreement to sell UScellular's wireless operations and select spectrum assets to T-Mobile US, Inc. (T-Mobile). The transaction is expected to close in mid-2025, subject to regulatory approval and the satisfaction of customary closing conditions. When the proposed T-Mobile transaction closes, UScellular expects the UScellular Board of Directors to declare the first of potentially several, special dividends to UScellular shareholders. On October 17, 2024, UScellular, and certain subsidiaries of UScellular, entered into a License Purchase Agreement with Verizon Communications, Inc. (Verizon) to sell certain AWS, Cellular and PCS wireless spectrum licenses, subject to receipt of regulatory approvals, and agreed to grant Verizon certain rights to lease such licenses prior to the transaction close. Additionally, UScellular also entered into agreements with Nsight Spectrum, LLC and Nex-Tech Wireless, LLC for the sale of select spectrum licenses. On November 6, 2024, UScellular, and certain subsidiaries of UScellular, entered into a License Purchase Agreement with New Cingular Wireless PCS, LLC (AT&T), a subsidiary of AT&T, Inc. to sell certain 3.45 GHz and 700 MHz wireless spectrum licenses, subject to receipt of regulatory approvals, and agreed to grant AT&T certain rights to lease and sub-lease such licenses prior to the transaction close. Due to the pending transaction with T-Mobile, UScellular is not providing 2025 financial guidance. 2025 Estimated ResultsTDS' current estimates of full-year 2025 results for TDS Telecom are shown below. Such estimates represent management's view as of May 2, 2025 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. 2025 Estimated Results TDS Telecom Previous Current (Dollars in millions) Total operating revenues $1,030-$1,070 Unchanged Adjusted OIBDA1 (Non-GAAP) $310-$350 Unchanged Adjusted EBITDA1 (Non-GAAP) $320-$360 Unchanged Capital expenditures $375-$425 Unchanged The following tables reconcile EBITDA, Adjusted EBITDA and Adjusted OIBDA to the corresponding GAAP measures, Net income or Income before income taxes. In providing 2025 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. 2025 Estimated Results Actual Results TDS Telecom Three Months Ended March 31, 2025 Year Ended December 31, 2024 (Dollars in millions) Net income (GAAP) N/A $ 4 $ 85 Add back: Income tax expense N/A 1 35 Income before income taxes (GAAP) $20-$60 $ 5 $ 120 Add back: Interest expense — (1) (5) Depreciation, amortization and accretion expense 300 71 271 EBITDA (Non-GAAP)1 $320-$360 $ 75 $ 385 Add back or deduct: Loss on impairment of intangible assets — — 1 (Gain) loss on asset disposals, net — 2 12 (Gain) loss on sale of business and other exit costs, net — — (49) Adjusted EBITDA (Non-GAAP)1 $320-$360 $ 76 $ 350 Deduct: Interest and dividend income 5 1 5 Other, net 5 2 4 Adjusted OIBDA (Non-GAAP)1 $310-$350 $ 73 $ 340 Numbers may not foot due to rounding. 1 EBITDA, Adjusted EBITDA and Adjusted OIBDA are defined as net income 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. The table above reconciles EBITDA, Adjusted EBITDA and Adjusted OIBDA to the corresponding GAAP measure, Net income or Income before income taxes. Conference Call InformationTDS will hold a conference call on May 2, 2025 at 9:00 a.m. Central Time. Access the live call on the Events & Presentations page of investors.tdsinc.com or athttps://events.q4inc.com/attendee/224819726 Access the call by phone at (888)330-2384, conference ID: 1328528. 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 wireless, broadband, video and voice to approximately 5.5 million connections nationwide through its businesses, UScellular and TDS Telecom. Founded in 1969 and headquartered in Chicago, TDS employed approximately 7,800 associates as of March 31, 2025. 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, except historical and factual information, represents forward-looking statements. This includes all statements about the company's plans, beliefs, estimates, and expectations, including with respect to the expected closing date of the transaction with T-Mobile. 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 the announced transactions whereby UScellular has agreed to sell its wireless operations and selected spectrum assets will be successfully completed; whether any such strategic alternative will result in additional value for TDS or its shareholders and whether the process will have an adverse impact on TDS' businesses; intense competition; 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 UScellular 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; 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 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, 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 UScellular: www.uscellular.com TDS Telecom: www.tdstelecom.com United States Cellular Corporation Summary Operating Data (Unaudited) As of or for the Quarter Ended 3/31/2025 12/31/2024 9/30/2024 6/30/2024 3/31/2024 Retail Connections Postpaid Total at end of period1 3,946,000 3,985,000 3,999,000 4,027,000 4,051,000 Gross additions 105,000 140,000 123,000 117,000 106,000 Handsets 68,000 93,000 84,000 73,000 63,000 Connected devices 37,000 47,000 39,000 44,000 43,000 Net additions (losses)1 (39,000) (14,000) (28,000) (24,000) (44,000) Handsets (38,000) (19,000) (28,000) (29,000) (47,000) Connected devices (1,000) 5,000 — 5,000 3,000 ARPU2 $ 52.06 $ 51.73 $ 52.04 $ 51.45 $ 51.96 ARPA3 $ 132.25 $ 131.10 $ 131.81 $ 130.41 $ 132.00 Handset upgrade rate4 3.1 % 4.8 % 3.5 % 4.1 % 4.5 % Churn rate5 1.21 % 1.29 % 1.25 % 1.16 % 1.22 % Handsets 1.03 % 1.08 % 1.07 % 0.97 % 1.03 % Connected devices 2.40 % 2.67 % 2.47 % 2.47 % 2.52 % Prepaid Total at end of period1 431,000 448,000 452,000 439,000 436,000 Gross additions 38,000 46,000 57,000 50,000 41,000 Net additions (losses)1 (17,000) (4,000) 13,000 3,000 (13,000) ARPU2 $ 30.76 $ 30.59 $ 32.01 $ 32.37 $ 32.25 Churn rate5 4.17 % 3.70 % 3.30 % 3.60 % 4.06 % Market penetration at end of period Consolidated operating population 31,390,000 32,550,000 32,550,000 32,550,000 32,550,000 Consolidated operating penetration6 17 % 15 % 15 % 15 % 14 % Capital expenditures (millions) $ 53 $ 162 $ 120 $ 165 $ 131 Total cell sites in service 7,009 7,010 7,007 6,990 6,995 Owned towers 4,413 4,409 4,407 4,388 4,382 Number of colocations7 2,469 2,444 2,418 2,392 2,397 Tower tenancy rate8 1.56 1.55 1.55 1.55 1.55 1 First quarter 2024 connections were adjusted to remove subscribers that could no longer access the UScellular network due to the CDMA shutdown. This resulted in 11,000 and 2,000 subscribers removed from the postpaid and prepaid base, respectively, that are not included in Net additions (losses) for the quarter. 2 Average Revenue Per User (ARPU) - metric is calculated by dividing a revenue base by an average number of connections and by the number of months in the period. These revenue bases and connection populations are shown below: • Postpaid ARPU consists of total postpaid service revenues and postpaid connections. • Prepaid ARPU consists of total prepaid service revenues and prepaid connections. 3 Average Revenue Per Account (ARPA) - metric is calculated by dividing total postpaid service revenues by the average number of postpaid accounts and by the number of months in the period. 4 Handset upgrade rate calculated as total handset upgrade transactions divided by average postpaid handset connections. 5 Churn rate represents the percentage of the connections that disconnect service each month. These rates represent the average monthly churn rate for each respective period. 6 Market penetration is calculated by dividing the number of wireless connections at the end of the period by the total estimated population of consolidated operating markets. 7 Represents instances where a third-party wireless carrier rents or leases space on a company-owned tower. 8 Average number of tenants that lease space on company-owned towers, measured on a per-tower basis. TDS Telecom Summary Operating Data (Unaudited) As of or for the Quarter Ended 3/31/2025 12/31/2024 9/30/2024 6/30/2024 3/31/2024 Residential connections Broadband Incumbent Fiber 119,700 118,500 115,900 113,100 109,800 Incumbent Copper 112,600 116,900 125,600 130,600 135,300 Expansion Fiber 133,200 126,100 115,300 107,800 100,400 Cable 190,200 191,500 195,900 198,500 202,400 Total Broadband1 555,800 553,000 552,700 550,000 547,900 Video 118,700 121,000 122,100 124,800 128,800 Voice 256,900 261,600 271,300 275,600 279,400 Total Residential connections 931,400 935,600 946,100 950,400 956,100 Commercial connections 187,600 190,500 197,200 201,500 206,200 Total connections2 1,119,000 1,126,100 1,143,300 1,152,000 1,162,200 Total residential broadband net adds 2,800 7,900 2,700 2,100 6,400 Residential fiber churn3 0.9 % 1.0 % 1.3 % 1.2 % 1.0 % Total residential broadband churn 1.3 % 1.4 % 1.7 % 1.7 % 1.4 % Residential revenue per connection4 $ 65.67 $ 64.72 $ 65.41 $ 65.26 $ 64.58 Capital expenditures (millions) $ 59 $ 82 $ 78 $ 78 $ 87 Numbers may not foot due to rounding. 1 Total residential broadband connections increased by 8,100 during the three months ended March 31, 2024, due primarily to net additions of 6,400 as well as certain other adjustments. 2 Q1 2024 total connections include 18,100 subscribers that were part of the 2024 divestitures. 3 Residential 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. 4 Total 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. Telephone and Data Systems, Inc. Consolidated Statement of Operations Highlights (Unaudited) Three Months Ended March 31, 2025 2024 2025 vs. 2024 (Dollars and shares in millions, except per share amounts) Operating revenues UScellular $ 891 $ 950 (6) % TDS Telecom 257 266 (3) % All Other1 6 46 (87) % 1,154 1,262 (9) % Operating expenses UScellular Expenses excluding depreciation, amortization and accretion 686 729 (6) % Depreciation, amortization and accretion 163 165 (2) % (Gain) loss on asset disposals, net 2 6 (65) % (Gain) loss on license sales and exchanges, net (1) (1) 18 % 850 899 (5) % TDS Telecom Expenses excluding depreciation, amortization and accretion 184 173 6 % Depreciation, amortization and accretion 71 65 10 % (Gain) loss on asset disposals, net 2 2 (9) % 258 240 7 % All Other1 Expenses excluding depreciation and amortization 13 53 (76) % Depreciation and amortization — 4 (74) % (Gain) loss on asset disposals, net — (1) N/M (Gain) loss on sale of business and other exit costs, net (1) — N/M 11 56 (77) % Total operating expenses 1,119 1,195 (6) % Operating income (loss) UScellular 41 51 (19) % TDS Telecom — 27 N/M All Other1 (6) (11) 38 % 35 67 (49) % Other income (expense) Equity in earnings of unconsolidated entities 37 42 (14) % Interest and dividend income 6 5 28 % Interest expense (61) (57) (3) % Other, net 3 1 N/M Total other expense (15) (9) (46) % Income before income taxes 20 58 (65) % Income tax expense 8 20 (57) % Net income 12 38 (69) % Less: Net income attributable to noncontrolling interests, net of tax 5 9 (49) % Net income attributable to TDS shareholders 7 29 (74) % TDS Preferred Share dividends 17 17 — Net income (loss) attributable to TDS common shareholders $ (10) $ 12 N/M Basic weighted average shares outstanding 115 113 1 % Basic earnings (loss) per share attributable to TDS common shareholders $ (0.09) $ 0.11 N/M Diluted weighted average shares outstanding 115 117 (2) % Diluted earnings (loss) per share attributable to TDS common shareholders $ (0.09) $ 0.10 N/M N/M - Percentage change not meaningful. Numbers may not foot due to rounding. 1 Consists of TDS corporate, intercompany eliminations and all other business operations not included in the UScellular and TDS Telecom segments. Telephone and Data Systems, Inc. Consolidated Statement of Cash Flows (Unaudited) Three Months Ended March 31, 2025 2024 (Dollars in millions) Cash flows from operating activities Net income $ 12 $ 38 Add (deduct) adjustments to reconcile net income to net cash flows from operating activities Depreciation, amortization and accretion 234 234 Bad debts expense 21 31 Stock-based compensation expense 28 14 Deferred income taxes, net 7 14 Equity in earnings of unconsolidated entities (37) (42) Distributions from unconsolidated entities 11 22 (Gain) loss on asset disposals, net 4 7 (Gain) loss on sale of business and other exit costs, net (1) — (Gain) loss on license sales and exchanges, net (1) (1) Other operating activities 2 1 Changes in assets and liabilities from operations Accounts receivable 1 27 Equipment installment plans receivable 38 2 Inventory — 24 Accounts payable (17) (35) Customer deposits and deferred revenues (7) 6 Accrued taxes 1 4 Accrued interest 9 9 Other assets and liabilities (119) (131) Net cash provided by operating activities 186 224 Cash flows from investing activities Cash paid for additions to property, plant and equipment (129) (235) Cash paid for licenses (2) (11) Cash received from divestitures 8 — Net cash used in investing activities (123) (246) Cash flows from financing activities Issuance of long-term debt — 140 Repayment of long-term debt (8) (57) Tax payments, net of cash receipts, for TDS stock-based compensation awards (6) (1) Tax payments, net of cash receipts, for UScellular stock-based compensation awards (7) — Repurchase of UScellular Common Shares (21) — Dividends paid to TDS shareholders (22) (39) Distributions to noncontrolling interests (2) (2) Cash paid for software license agreements (10) (9) Other financing activities — (2) Net cash provided by (used in) financing activities (76) 30 Net increase (decrease) in cash, cash equivalents and restricted cash (13) 8 Cash, cash equivalents and restricted cash Beginning of period 384 270 End of period $ 371 $ 278 Telephone and Data Systems, Inc. Consolidated Balance Sheet Highlights (Unaudited) ASSETS March 31, 2025 December 31, 2024 (Dollars in millions) Current assets Cash and cash equivalents $ 348 $ 364 Accounts receivable, net 1,004 1,041 Inventory, net 182 183 Prepaid expenses 98 72 Income taxes receivable 3 2 Other current assets 38 33 Total current assets 1,673 1,695 Assets held for sale 14 — Licenses 4,590 4,588 Other intangible assets, net 154 161 Investments in unconsolidated entities 527 500 Property, plant and equipment, net 4,871 4,994 Operating lease right-of-use assets 978 982 Other assets and deferred charges 729 762 Total assets $ 13,536 $ 13,682 Telephone and Data Systems, Inc. Consolidated Balance Sheet Highlights (Unaudited) LIABILITIES AND EQUITY March 31, 2025 December 31, 2024 (Dollars in millions, except per share amounts) Current liabilities Current portion of long-term debt $ 35 $ 31 Accounts payable 247 280 Customer deposits and deferred revenues 276 283 Accrued interest 25 16 Accrued taxes 41 39 Accrued compensation 62 150 Short-term operating lease liabilities 151 153 Other current liabilities 123 138 Total current liabilities 960 1,090 Liabilities held for sale 5 — Deferred liabilities and credits Deferred income tax liability, net 987 981 Long-term operating lease liabilities 867 867 Other deferred liabilities and credits 807 809 Long-term debt, net 4,042 4,051 Noncontrolling interests with redemption features 16 16 Equity TDS shareholders' equity Series A Common and Common Shares, par value $0.01 per share 1 1 Capital in excess of par value 2,581 2,574 Preferred Shares, par value $0.01 per share 1,074 1,074 Treasury shares, at cost (414) (425) Accumulated other comprehensive income 18 18 Retained earnings 1,818 1,849 Total TDS shareholders' equity 5,078 5,091 Noncontrolling interests 774 777 Total equity 5,852 5,868 Total liabilities and equity $ 13,536 $ 13,682 Balance Sheet Highlights (Unaudited) March 31, 2025 TDS TDS Corporate Intercompany TDS UScellular Telecom & Other Eliminations Consolidated (Dollars in millions) Cash and cash equivalents $ 182 $ 124 $ 167 $ (125) $ 348 Licenses and other intangible assets $ 4,581 $ 157 $ 6 $ — $ 4,744 Investment in unconsolidated entities 479 4 51 (7) 527 $ 5,060 $ 161 $ 57 $ (7) $ 5,271 Property, plant and equipment, net $ 2,394 $ 2,459 $ 18 $ — $ 4,871 Long-term debt, net: Current portion $ 26 $ — $ 9 $ — $ 35 Non-current portion 2,829 3 1,210 — 4,042 $ 2,855 $ 3 $ 1,219 $ — $ 4,077 United States Cellular Corporation Segment Results (Unaudited) Three Months Ended March 31, UScellular 2025 2024 2025vs. 2024 (Dollars in millions) Operating Revenues Wireless $ 864 $ 925 (7) % Towers 61 58 5 % Intra-company eliminations (34) (33) (3) % Total operating revenues 891 950 (6) % Operating expenses Wireless 844 896 (6) % Towers 40 36 11 % Intra-company eliminations (34) (33) (3) % Total operating expenses 850 899 (5) % Operating income $ 41 $ 51 (19) % Adjusted OIBDA (Non-GAAP) $ 215 $ 228 (6) % Adjusted EBITDA (Non-GAAP) $ 254 $ 272 (7) % Capital expenditures $ 53 $ 131 (60) % United States Cellular Corporation Segment Results (Unaudited) Three Months Ended March 31, UScellular Wireless 2025 2024 2025vs. 2024 (Dollars in millions) Retail service $ 660 $ 678 (3) % Other 54 51 8 % Service revenues 714 729 (2) % Equipment sales 150 196 (24) % Total operating revenues 864 925 (7) % System operations (excluding Depreciation, amortization and accretion reported below) 191 197 (3) % Cost of equipment sold 178 216 (18) % Selling, general and administrative 322 324 — Depreciation, amortization and accretion 152 154 (2) % (Gain) loss on asset disposals, net 2 6 (73) % (Gain) loss on license sales and exchanges, net (1) (1) 18 % Total operating expenses 844 896 (6) % Operating income $ 20 $ 29 (30) % Adjusted OIBDA (Non-GAAP) $ 182 $ 195 (7) % Adjusted EBITDA (Non-GAAP) $ 182 $ 195 (7) % Capital expenditures $ 51 $ 127 (60) % Three Months Ended March 31, UScellular Towers 2025 2024 2025vs. 2024 (Dollars in millions) Third-party revenues $ 27 $ 25 6 % Intra-company revenues 34 33 3 % Total tower revenues 61 58 5 % System operations (excluding Depreciation, amortization and accretion reported below) 19 18 4 % Selling, general and administrative 10 7 33 % Depreciation, amortization and accretion 11 11 5 % Total operating expenses 40 36 11 % Operating income $ 21 $ 22 (5) % Adjusted OIBDA (Non-GAAP) $ 33 $ 33 (1) % Adjusted EBITDA (Non-GAAP) $ 33 $ 33 (1) % Capital expenditures $ 2 $ 4 (42) % TDS Telecom Highlights (Unaudited) Three Months Ended March 31, 2025 2024 2025 vs. 2024 (Dollars in millions) Operating revenues Residential Incumbent $ 86 $ 90 (5) % Expansion 34 26 33 % Cable 64 70 (8) % Total residential 184 185 (1) % Commercial 35 37 (6) % Wholesale 39 44 (12) % Total service revenues 257 266 (3) % Equipment revenues — — 23 % Total operating revenues 257 266 (3) % Cost of services 101 98 3 % Cost of equipment and products — — 47 % Selling, general and administrative expenses 83 75 10 % Depreciation, amortization and accretion 71 65 10 % (Gain) loss on asset disposals, net 2 2 (9) % Total operating expenses 258 240 7 % Operating income $ — $ 27 N/M N/M - Percentage change not meaningful Numbers may not foot due to rounding. Telephone and Data Systems, Inc. Financial Measures (Unaudited) Free Cash Flow Three Months Ended March 31, TDS CONSOLIDATED 2025 2024 (Dollars in millions) Cash flows from operating activities (GAAP) $ 186 $ 224 Cash paid for additions to property, plant and equipment (129) (235) Cash paid for software license agreements (10) (9) Free cash flow (Non-GAAP)1 $ 47 $ (20) Three Months Ended March 31, UScellular 2025 2024 (Dollars in millions) Cash flows from operating activities (GAAP) $ 160 $ 203 Cash paid for additions to property, plant and equipment (72) (133) Cash paid for software license agreements (9) (9) Free cash flow (Non-GAAP)1 $ 79 $ 61 1 Free cash flow is a non-GAAP financial measure which TDS believes may be useful to investors and other users of its financial information in evaluating liquidity, specifically, the amount of net cash generated by 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 and Adjusted OIBDA(Unaudited) The following table reconciles EBITDA, Adjusted EBITDA and Adjusted OIBDA to the corresponding GAAP measures, Net income and Income before income taxes. Income and expense items below Operating income are not provided at the individual segment level for UScellular Wireless and UScellular 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. Three Months Ended March 31, UScellular 2025 2024 (Dollars in millions) Net income (GAAP) $ 20 $ 24 Add back or deduct: Income tax expense 20 28 Income before income taxes (GAAP) 40 52 Add back: Interest expense 40 43 Depreciation, amortization and accretion expense 163 165 EBITDA (Non-GAAP) 243 260 Add back or deduct: Expenses related to strategic alternatives review 10 7 (Gain) loss on asset disposals, net 2 6 (Gain) loss on license sales and exchanges, net (1) (1) Adjusted EBITDA (Non-GAAP) 254 272 Deduct: Equity in earnings of unconsolidated entities 36 42 Interest and dividend income 3 2 Adjusted OIBDA (Non-GAAP) $ 215 $ 228 Three Months Ended March 31, UScellular Wireless 2025 2024 (Dollars in millions) EBITDA (Non-GAAP) $ 172 $ 183 Add back or deduct: Expenses related to strategic alternatives review 9 7 (Gain) loss on asset disposals, net 2 6 (Gain) loss on license sales and exchanges, net (1) (1) Adjusted EBITDA and Adjusted OIBDA (Non-GAAP) 182 195 Deduct: Depreciation, amortization and accretion 152 154 Expenses related to strategic alternatives review 9 7 (Gain) loss on asset disposals, net 2 6 (Gain) loss on license sales and exchanges, net (1) (1) Operating income (GAAP) $ 20 $ 29 Three Months Ended March 31, UScellular Towers 2025 2024 (Dollars in millions) EBITDA (Non-GAAP) $ 32 $ 33 Add back or deduct: Expenses related to strategic alternatives review 1 — Adjusted EBITDA and Adjusted OIBDA (Non-GAAP) 33 33 Deduct: Depreciation, amortization and accretion 11 11 Expenses related to strategic alternatives review 1 — Operating income (GAAP) $ 21 $ 22 Three Months Ended March 31, TDS Telecom 2025 2024 (Dollars in millions) Net income (GAAP) $ 4 $ 24 Add back or deduct: Income tax expense 1 7 Income before income taxes (GAAP) 5 31 Add back: Interest expense (1) (2) Depreciation, amortization and accretion expense 71 65 EBITDA (Non-GAAP) 75 93 Add back or deduct: (Gain) loss on asset disposals, net 2 2 Adjusted EBITDA (Non-GAAP) 76 95 Deduct: Interest and dividend income 1 1 Other, net 2 1 Adjusted OIBDA (Non-GAAP) $ 73 $ 93 Numbers may not foot due to rounding. 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TDS reports first quarter 2025 results

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