Financial Data and Key Metrics Changes - Total operating revenues decreased by 3% year-over-year, with a 1% decline when excluding divestitures, driven by declines in legacy cable and copper markets, partially offset by fiber growth [31] - Adjusted EBITDA also fell by 3% year-over-year, impacted by divestitures and legacy revenue declines, but supported by disciplined cost control [31] - Capital expenditures increased compared to the previous year due to spending on the EACAM program and higher expansion address delivery, with over 80% of 2025 capital expenditures focused on fiber [31][32] Business Line Data and Key Metrics Changes - TDS Telecom achieved a milestone of 1 million fiber addresses, with 42,000 fiber addresses delivered in the quarter, contributing to a 19% growth in residential fiber connections year-over-year [15][23] - Residential fiber net additions were 11,200 in the quarter, reflecting an 8% year-over-year increase [30] - The company is behind schedule on its annual address delivery target but expects the fourth quarter to be the strongest [29] Market Data and Key Metrics Changes - The fiber business is expected to grow significantly, with a target of 1.8 million marketable fiber service addresses, up from approximately 900,000 [28][84] - The company anticipates achieving gig speeds for at least 95% of its footprint, with 76% currently at gig speeds [28] Company Strategy and Development Direction - The company is focused on capital allocation decisions, prioritizing investments in fiber, achieving inorganic growth through M&A, and returning capital to shareholders [17][20] - The EACAM program aims to replace legacy copper infrastructure, adding approximately 300,000 new fiber addresses and providing $1.2 billion in regulatory revenue support over 15 years [24][25] - The company plans to pursue edge-out opportunities in adjacent communities without fiber providers, with several hundred thousand potential service addresses identified [18][57] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the fiber business's growth potential and the successful transition to an independent tower company [14][33] - The company is focused on optimizing tower operations and monetizing spectrum, with significant progress made in spectrum monetization [36][38] - Management acknowledged the challenges of transforming the business but emphasized the strong culture and commitment of associates [16] Other Important Information - A $500 million share repurchase program was announced, reflecting the board's confidence in the company's long-term strategy [20][60] - The company expects to declare a special dividend of approximately $10 per share following the closing of the AT&T transaction [18] Q&A Session Summary Question: Update on fiber plan and cohort analysis - Management acknowledged the request for cohort analysis and plans to provide updates in February regarding fiber opportunities and market performance [54][56] Question: Stock buyback program significance - The board's authorization of the buyback program reflects confidence in the company's strategy and is seen as a balanced approach alongside business investments [60] Question: SG&A expenses and wind down costs - Management indicated that SG&A costs are expected to remain high through the first half of next year, with ongoing efforts to rationalize expenses [64][65] Question: Naked tower strategy and land leases - The strategy involves leasing up towers and rationalizing ground rents, with minimal long-term commitments on land leases [75][78] Question: Leverage target and fiber passings impact - The leverage target is set to maximize flexibility, with current leverage at 1.4 times, and future updates on fiber goals will be provided in February [82][84] Question: M&A strategy and edge-out opportunities - Current focus is on operational execution rather than M&A, with potential future opportunities being evaluated [107]

Third Quarter 2025 Results November 7, 2025 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 assumptio ...

Financial Performance - Total operating revenues decreased by 6% to $308,521,000 for the three months ended September 30, 2025, compared to $327,497,000 in 2024[24]. - Adjusted EBITDA increased by 53% to $168,681,000 for the three months ended September 30, 2025, compared to $110,218,000 in 2024[25]. - Net income from continuing operations attributable to TDS shareholders was $57,545,000 for the three months ended September 30, 2025, compared to a loss of $83,142,000 in 2024[24]. - Total operating revenues decreased by 3% to $255.1 million for the three months ended September 30, 2025, compared to $262.7 million in the same period of 2024[51]. - Residential revenues decreased by 2% to $181.8 million for the three months ended September 30, 2025, primarily due to divestitures and declines in legacy markets[55]. - Net income for the three months ended September 30, 2025, was a loss of $282,000, a significant decline from net income of $9.4 million in the same period of 2024[51]. - Adjusted EBITDA decreased by 3% to $80.5 million for the three months ended September 30, 2025, compared to $82.8 million in the same period of 2024[51]. - Array's net income from continuing operations was $109.92 million in Q3 2025, a substantial recovery from a net loss of $95.70 million in Q3 2024[140]. - Free cash flow for TDS was negative $38.66 million for the nine months ended September 30, 2025, an improvement from negative $124.03 million in the same period of 2024[142]. - Cash flows from operating activities for TDS increased to $224.84 million in the nine months ended September 30, 2025, compared to $145.90 million in 2024[142]. Strategic Initiatives - TDS Telecom aims to enhance broadband services and is focusing on fiber deployment to drive growth, with plans to create market clusters and potentially acquire or divest assets[17]. - The strategic alternatives review process is ongoing, with TDS exploring opportunities to transform its business operations following the divestiture of wireless operations[18]. - TDS plans to reinvest operating capital to strengthen competitive positions while returning value to shareholders[15]. - TDS expects to fund its fiber plans and E-ACAM builds through capital allocation and potential future divestitures[199]. Capital Expenditures and Investments - Capital expenditures increased by 31% to $109,998,000 for the three months ended September 30, 2025, compared to $83,684,000 in 2024[25]. - Capital expenditures for TDS were $251.5 million for the nine months ended September 30, 2025, compared to $242.1 million in 2024[99]. - TDS repurchased 1,077,564 Common Shares for $40.7 million at an average cost per share of $37.77 during the nine months ended September 30, 2025[104]. Regulatory and Compliance Issues - TDS reported that the timing of regulatory approvals for spectrum sales may be affected by the ongoing U.S. federal government shutdown[19]. - Array has entered into License Purchase Agreements with Verizon, AT&T, and T-Mobile for the sale of certain wireless spectrum licenses, but the completion of these transactions is uncertain due to regulatory approvals and other conditions[161][164]. - Uncertainty regarding regulatory support and the ability to pass through certain fees to customers could adversely affect TDS' financial condition[156]. - Regulatory compliance failures could lead to civil penalties or liabilities, adversely affecting TDS' business and financial condition[204]. Market and Competitive Landscape - TDS faces risks related to increased competition in the tower and wireline industries, which could adversely affect revenues and future growth[152]. - Increasing competition in the wireline and tower industries may negatively impact TDS' revenues and future growth, as competitors have greater resources and advantageous positions[173][175]. - TDS's business could be impacted by extreme weather events and natural disasters, which may disrupt services and lead to financial liabilities despite existing insurance coverage[184]. - TDS faces challenges due to its lack of scale compared to larger competitors, which may hinder its ability to compete effectively and adversely affect its revenues and costs[181]. Debt and Financial Obligations - TDS expects a cash income tax liability of between $75.0 million and $125.0 million related to the T-Mobile transaction[84]. - A portion of TDS' debt is subject to variable interest rates, making it vulnerable to unfavorable changes in market interest rates[198]. - TDS' liquidity may be adversely affected by significant declines in cash flows from operations, inability to implement cost reduction initiatives, or failure to obtain financing on acceptable terms[199]. - TDS' credit ratings from recognized agencies could limit financing availability, impacting business operations[201]. Operational Challenges - TDS's ability to attract and retain qualified personnel is critical; competition for talent may affect its operational effectiveness and strategic execution[185]. - TDS's supply chain management is crucial; disruptions could lead to inadequate network maintenance and excess inventory, impacting financial performance[193]. - Integration challenges from acquisitions or divestitures may pose risks to TDS's business operations and financial condition, with no assurance of success in future strategies[189]. - TDS's reliance on third-party vendors for essential services introduces risks; operational failures or supply chain disruptions could adversely affect its business[194]. Spectrum and Asset Management - Array is targeting increased tower revenue through colocations and is actively seeking to monetize its remaining wireless spectrum assets[17]. - The book value of retained spectrum not subject to pending sale agreements was $1,591.2 million as of September 30, 2025[67]. - Array has recognized significant impairments on its spectrum assets during 2024 and 2025, with further impairments possible if spectrum sales do not close as expected[165][166]. - A significant portion of Array's revenues is derived from a small number of tenants in the wireless industry, with T-Mobile being particularly crucial; any financial difficulties faced by these tenants could adversely impact Array's business and future growth[180].

Financial Performance - TDS reported total operating revenues of $308.5 million for Q3 2025, a decrease of 5.5% from $327.5 million in Q3 2024[2][4] - Net income attributable to TDS common shareholders was $40.2 million, with diluted earnings per share of $0.33, compared to a net loss of $100.4 million and a loss per share of $0.88 in the same period last year[2][4] - Operating revenues for TDS Telecom were $255,111, down 3% from $262,662 year-over-year[28] - Total operating revenues for TDS Telecom decreased by 3% to $255,111 for the three months ended September 30, 2025, compared to $262,662 in 2024[42] - Array's operating revenues surged by 83% to $47,119 from $25,739 year-over-year[28] - Operating revenues for the three months ended September 30, 2025, increased by 83% to $47,119,000 compared to $25,739,000 in 2024[44] - Site rental revenue rose by 79% to $45,838,000 for the three months ended September 30, 2025, compared to $25,669,000 in 2024[44] - The company reported a 30% increase in site rental revenue for the nine months ended September 30, 2025, totaling $99,663,000 compared to $76,591,000 in 2024[44] Operational Highlights - TDS Telecom experienced a 3% decline in revenues, impacted by $6 million due to divestitures of non-strategic assets[8] - The company crossed the milestone of 1 million fiber passings and delivered 42,000 marketable fiber services addresses in Q3 2025[5][8] - TDS Telecom reported 11,200 residential fiber net additions in Q3 2025, reflecting ongoing growth in fiber connections[8] - Total residential connections decreased to 921,100 from 924,500, a decline of 0.5% quarter-over-quarter[24] - Total broadband connections increased to 562,400, up from 557,700, representing a growth of 0.3%[24] - Residential fiber net adds for the quarter were 11,200, compared to 10,300 in the previous quarter, an increase of 8.7%[24] - TDS Telecom's residential expansion revenues increased by 37% to $39,610 for the three months ended September 30, 2025, compared to $28,878 in 2024[42] Shareholder Actions - TDS repurchased 1,077,564 common shares for $40.7 million during the third quarter and announced a new $500 million share repurchase program[14] - The company paid a special dividend of $23 per share on August 19, 2025, as part of its capital allocation strategy[8] Debt and Cash Management - The total assets as of September 30, 2025, were $8,532,378, a decrease from $13,682,232 as of December 31, 2024[38] - The total current liabilities decreased to $571,358 as of September 30, 2025, from $1,089,694 at the end of 2024[38] - The long-term debt, net, decreased to $825,312 as of September 30, 2025, from $2,415,686 at the end of 2024[38] - Cash and cash equivalents increased to $932,994 as of September 30, 2025, from $363,612 at the end of 2024[36] - The total equity decreased to $5,284,975 as of September 30, 2025, from $5,868,012 at the end of 2024[38] Earnings and Cash Flow - Net income from continuing operations attributable to TDS shareholders was $57,545, a significant recovery from a loss of $83,142 in the previous year[28] - Basic earnings per share from continuing operations attributable to TDS common shareholders improved to $0.35 from a loss of $0.88 year-over-year[30] - For the nine months ended September 30, 2025, the net income from continuing operations was $88,782, compared to a loss of $101,795 in the same period of 2024[33] - Cash provided by operating activities for continuing operations was $224,840 for the nine months ended September 30, 2025, up from $145,896 in 2024[33] - Free cash flow from continuing operations for the nine months ended September 30, 2025, was $(38,655,000), an improvement from $(124,027,000) in 2024[46] Impairment and Losses - Loss on impairment of licenses decreased by 65% to $47,679,000 for the three months ended September 30, 2025, compared to $136,234,000 in 2024[44] - The operating loss improved by 67% to $(53,313,000) for the three months ended September 30, 2025, compared to $(160,167,000) in 2024[44] - Adjusted EBITDA for the three months ended September 30, 2025, was $80,491,000, slightly down from $82,796,000 in 2024[48] - Array's net income from continuing operations for the three months ended September 30, 2025, was $109,920,000, a significant recovery from a loss of $(95,701,000) in 2024[49] - Adjusted Free Cash Flow from continuing operations for Array was $45,925,000 for the three months ended September 30, 2025[52] Leadership Changes - The appointment of Anthony Carlson as President and CEO of Array is effective November 16, 2025, to lead the growing tower business[6][8]

Core Insights - Anthony Carlson will become the President and CEO of Array Digital Infrastructure, Inc. on November 16, 2025, and will also join the Board of Directors [1][2] - Array Digital Infrastructure operates a portfolio of 4,400 owned towers and has noncontrolling investment interests in wireless partnerships and retained wireless spectrum [2] Leadership Transition - Doug Chambers, the Interim President and CEO of Array, will step down from the Board on November 16, 2025, but will remain as a Senior Advisor until December 9, 2025, to ensure a smooth transition [4] - Doug Chambers has been with TDS since 2007 and played a key role in the transformational sale of UScellular's wireless operations to T-Mobile US, Inc. [4][5] Company Background - Array Digital Infrastructure, Inc. is a leading owner and operator of shared wireless communications infrastructure in the United States, with over 4,400 cell towers supporting the deployment of 5G and other wireless technologies [5] - As of September 30, 2025, Telephone and Data Systems, Inc. owned approximately 82% of Array [5]

Core Insights - TDS announced a new $500 million share repurchase authorization, reflecting the Board's confidence in the company's long-term strategy and capital allocation approach [6][11] - TDS reported total operating revenues of $308.5 million for Q3 2025, a decrease of 6% from $327.5 million in Q3 2024 [19] - The company achieved a net income of $40.2 million for Q3 2025, a significant improvement compared to a net loss of $100.4 million in the same quarter last year [19] Financial Performance - TDS Telecom's operating revenues decreased by 3% year-over-year, impacted by $6 million due to divestitures of non-strategic assets [8] - Array, the standalone tower company, reported an 83% increase in operating revenues to $47.1 million in Q3 2025 compared to $25.7 million in Q3 2024 [19] - Total operating expenses for TDS decreased by 21% to $376.5 million in Q3 2025 from $477.2 million in Q3 2024 [19] Operational Highlights - TDS Telecom crossed the milestone of 1 million fiber passings and continued to execute its fiber expansion strategy, delivering 42,000 marketable fiber service addresses in Q3 2025 [3][8] - The company reported 11,200 residential fiber net additions in Q3 2025, indicating growth in fiber connections [8][17] - TDS completed the sale of wireless operations and select spectrum assets to T-Mobile, which is expected to enhance its financial flexibility [8] Leadership Changes - Anthony Carlson was appointed as President and CEO of Array, effective November 16, 2025, succeeding Doug Chambers [4][8] - Doug Chambers was recognized for his contributions in establishing Array as a standalone tower business [5] Future Outlook - TDS maintains its full-year 2025 revenue estimates for TDS Telecom at $1,030-$1,050 million, with adjusted OIBDA and EBITDA estimates unchanged at $310-$340 million and $320-$350 million, respectively [7][19] - The company is expected to continue its capital expenditures in the range of $375-$425 million for 2025 [7]

Core Viewpoint - Telephone and Data Systems, Inc. (TDS) and Array Digital Infrastructure (Array) will announce their third quarter operating results on November 7, 2025, with a conference call scheduled for 9:00 a.m. Central Time [1]. Group 1 - The financial results will be released on November 7, 2025 [1]. - The conference call will be available via webcast, both live and on-demand [1]. - Participants are advised to register at least 15 minutes prior to the presentation to ensure proper setup of multimedia streaming software [1]. Group 2 - TDS was founded in 1969 and provides broadband services and wireless infrastructure through its subsidiaries, TDS Telecom and Array Digital Infrastructure, Inc. [1].

Core Insights - The article discusses the economic momentum projected for Q2 2026, highlighting various factors influencing fiscal policies and geopolitical stability [1][2]. Economic Momentum - The anticipated economic momentum for Q2 2026 is projected at $4,400 billion, indicating a significant growth potential in the upcoming fiscal period [1][2]. Fiscal Policies - The article emphasizes the importance of fiscal policies in shaping economic outcomes, particularly in the context of ongoing geopolitical tensions and market volatility [1][2]. Geopolitical Factors - Geopolitical factors are identified as critical elements that could impact economic stability and growth, necessitating close monitoring by investors and policymakers [1][2]. Market Volatility - The discussion includes the potential for market volatility, which could arise from both domestic and international events, affecting investor confidence and economic forecasts [1][2]. Deficits - The article also touches on the implications of fiscal deficits, suggesting that managing these deficits will be crucial for maintaining economic momentum and stability in the future [1][2].

Summary of Telephone and Data Systems Conference Call Company Overview - **Company**: Array Digital Infrastructure, a tower company that emerged from UScellular after selling its wireless operations to T-Mobile on August 1, 2025. The company retained 4,400 towers and approximately 30% of its spectrum, along with minority stakes in wireless operating companies, generating annual income of about $150 million to $160 million [4][18]. Core Strategies and Financial Performance - **Revenue Growth**: Array reported a 12% revenue growth in Q2 2025, with a 7% growth when excluding application fees. Colocation applications increased over 100% in the first half of 2025 compared to the same period in 2024 [8][15][30]. - **Colocation Focus**: The company is focusing on colocation growth, particularly with T-Mobile committing to colocate on 2,015 sites, which is expected to increase cash revenue by 50% starting August 1, 2025 [9][11]. - **Operational Efficiency**: Array has brought its sales team in-house, which has contributed to improved performance. The company operates with a lean organizational structure, relying on TDS for back-office functions [12][13]. Market Position and Competitive Advantage - **Rural Focus**: Array's towers are primarily located in rural areas, with one-third of them lacking competing towers within a two-mile radius. This positioning is advantageous as carriers expand their mid-band footprint [14][15]. - **Spectrum Value**: The company retains valuable C-band spectrum, which is immediately deployable and attractive to carriers. The first build-out deadline for this spectrum is in 2029, with a second in 2031 [18]. Future Outlook and Industry Trends - **Colocation Demand**: The demand for colocation is expected to remain robust, driven by carrier investments and mid-band rollouts. The company anticipates continued growth in colocations and amendment activities [15][16]. - **Spectrum Transactions**: Array has pending spectrum transactions with AT&T and Verizon, expected to close by the end of 2025 and in Q3 2026, respectively. The company plans to declare special dividends upon closing these transactions [19][22]. Financial Strategy and Leverage - **Leverage Ratio**: Array is comfortable with a leverage ratio of three times, which allows for future flexibility in investments. The company has been upgraded to investment grade by S&P and has received positive news from Moody's regarding credit ratings [24][25]. Additional Considerations - **REIT Status**: Array is not a REIT due to asset and income tests that it does not meet. The company is exploring structural changes to potentially become a REIT in the future, which is seen as desirable for shareholders [22][23]. - **Long-term Investments**: In the short to medium term, Array is not planning significant capital investments but may consider opportunities in established rural clusters in the long term [20]. This summary encapsulates the key points discussed during the conference call, highlighting Array Digital Infrastructure's strategic focus, financial performance, market positioning, and future outlook.

Group 1 - The presentation is part of Citi's Global TMT Conference, focusing on TDS Telecom and Array Digital Infrastructure [1] - Kris Bothfeld, CFO of TDS Telecom, and Doug Chambers, Interim President and CEO of Array Digital Infrastructure, are the key speakers [1] - The discussion includes an update on the T-Mobile U.S. mobile deal that closed on August 1, with insights from the month following the deal [2]