UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 001-14157 TELEPHONE AND DATA SYSTEMS, INC. (Exact name of Registrant as specified in its charter) (State or other jurisdiction of incorpo ...

Financial Data and Key Metrics Changes - Total operating revenues for the third quarter decreased by 11% due to lower equipment sales and service revenue, which declined by 2% [31][3][19] - Adjusted operating income increased by 35%, while adjusted EBITDA rose by 28% [7][19] - Free cash flow was reported at $237 million for the nine months ended September 30, 2023, with expectations for positive free cash flow for the full year [8][19] Business Line Data and Key Metrics Changes - Postpaid ARPU increased by 2%, with 46% of postpaid handset customers now on higher-tier plans, up from 38% a year ago [1][17] - Fixed wireless revenues grew by 35%, with a customer base of 106,000, primarily utilizing low-band spectrum [24] - Tower business revenue grew by 8%, with a tenancy ratio of 1.54, up from 1.46 two years ago [2][23] Market Data and Key Metrics Changes - Inbound roaming revenue declined by 53%, largely offset by a corresponding decrease in outbound roaming expenses [31][32] - The competitive landscape has intensified, with cable companies now competing in 60% of the company's footprint, impacting ARPU and margins [20][21][81] Company Strategy and Development Direction - The company aims to balance subscriber growth with financial discipline, focusing on cost efficiencies and targeted promotional spending [58][19] - A multi-year strategy is in place for fiber expansion, with a goal of reaching 1.2 million marketable fiber service addresses by 2026 [138] - The company plans to slow capital expenditures in 2024 while prioritizing spending to enhance broadband penetration and revenues [15][102] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the long-term growth potential in the tower business, despite near-term slowdowns due to reduced capital expenditures in the wireless industry [23][111] - The competitive environment is described as fiercely competitive, with significant pressure from cable companies affecting pricing and promotional strategies [20][21] - Management remains focused on improving customer trajectory and addressing churn dynamics as a key opportunity for growth [58][86] Other Important Information - The company expects to realize annual run-rate savings of approximately $30 million related to the shutdown of the CDMA network starting in 2025 [4][27] - The E-ACAM program is anticipated to provide $1.3 billion in revenue support over the next 15 years, aiding in the delivery of higher-speed broadband [137] Q&A Session Summary Question: What is the impact of T-Mobile and Sprint churn on tower leasing revenue? - Management believes they are through most of the churn related to the T-Mobile and Sprint merger, with minimal additional terminations expected [46] Question: Can you provide insights on the fixed wireless addressable market? - Management indicated that the addressable market for fixed wireless is significant, with ongoing efforts to expand coverage and improve service offerings [69] Question: What is the strategy for the tower business moving forward? - The company plans to support increased demand through a denser grid, which is expected to benefit the tower business in the long run [110] Question: How is the company addressing competitive pressures in the ILEC markets? - The company is focusing on fiber builds and leveraging the E-ACAM program to defend against competition in ILEC markets [144] Question: What are the expectations for capital expenditures in the coming year? - Management expects capital expenditures to be lower in 2024 compared to 2022 and 2023, prioritizing spending based on market dynamics [102][124]

UScellular Key Highlights - UScellular is deploying 5G mid-band spectrum[4] - Postpaid ARPU grew 2%[6] - UScellular announced a strategic alternatives review on August 4, 2023[14] - UScellular's Q3 2023 service revenues were $762 million, a decrease of 2% year-over-year compared to $781 million in Q3 2022[48] - UScellular's equipment sales for Q3 2023 were $201 million, a decrease of 33% year-over-year compared to $302 million in Q3 2022[48] - UScellular's total operating revenues for Q3 2023 were $963 million, an 11% decrease year-over-year compared to $1083 million in Q3 2022[48] - UScellular's adjusted OIBDA for Q3 2023 was $220 million, a 35% increase compared to $163 million in Q3 2022[48] - UScellular's adjusted EBITDA for Q3 2023 was $263 million, a 28% increase compared to $205 million in Q3 2022[48] TDS Telecom Key Highlights - TDS Telecom is growing its fiber footprint[93] - TDS Telecom's total operating revenues remained flat at $256 million in Q3 2023 compared to Q3 2022[77] - TDS Telecom's adjusted EBITDA increased by 3% to $68 million in Q3 2023 from $66 million in Q3 2022[77]

[Management's Discussion and Analysis of Financial Condition and Results of Operations](index=3&type=section&id=Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section analyzes TDS's financial performance, liquidity, and non-GAAP measures, including segment-level results [Executive Overview](index=3&type=section&id=Executive%20Overview) TDS, a diversified telecom company, is exploring strategic alternatives for UScellular while reinvesting in its core businesses - TDS is a diversified telecommunications company providing wireless services through its **83%-owned subsidiary, UScellular**, and broadband, video, and voice services through its wholly-owned subsidiary, TDS Telecom[10](index=10&type=chunk) - On August 4, 2023, TDS and UScellular announced the initiation of a process to explore strategic alternatives for UScellular, incurring **$4 million** in third-party expenses during Q3 2023[14](index=14&type=chunk) - TDS's strategy involves reinvesting the majority of its operating capital to strengthen its businesses, focusing on enhancing UScellular's 5G network and expanding TDS Telecom's fiber deployment[13](index=13&type=chunk)[15](index=15&type=chunk) [Results of Operations – TDS Consolidated](index=6&type=section&id=Results%20of%20Operations%20%E2%80%93%20TDS%20Consolidated) TDS consolidated revenue decreased in Q3 and YTD 2023, with improved Q3 operating income but a YTD net loss TDS Consolidated Financial Highlights (in millions) | Indicator | Q3 2023 | Q3 2022 | % Change | YTD 2023 | YTD 2022 | % Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | **Total operating revenues** | $1,278 | $1,392 | (8)% | $3,848 | $4,056 | (5)% | | **Total operating expenses** | $1,230 | $1,403 | (12)% | $3,738 | $3,909 | (4)% | | **Operating income (loss)** | $48 | $(11) | N/M | $110 | $147 | (26)% | | **Net income (loss)** | $4 | $(10) | N/M | $16 | $101 | (84)% | | **Net income (loss) attributable to TDS common shareholders** | $(17) | $(25) | 30% | $(46) | $35 | N/M | | **Adjusted EBITDA (Non-GAAP)** | $328 | $271 | 21% | $956 | $987 | (3)% | - Interest expense increased for both the three and nine-month periods ended September 30, 2023, primarily due to interest rate increases on variable rate debt[22](index=22&type=chunk) - The increase in Q3 2023 net income was primarily due to lower operating expenses, which offset lower revenues and higher interest and tax expenses[28](index=28&type=chunk) - The decrease in YTD 2023 net income was driven by lower operating revenues and higher interest expense[29](index=29&type=chunk) [UScellular Operations](index=9&type=section&id=UScellular%20Operations) UScellular's Q3 2023 revenue declined, but operating income improved significantly due to expense reductions [Operational Overview](index=10&type=section&id=UScellular%20Operational%20Overview) UScellular experienced postpaid handset losses but gained connected devices, with slight ARPU growth UScellular Postpaid Activity | Metric | Q3 2023 | Q3 2022 | YTD 2023 | YTD 2022 | | :--- | :--- | :--- | :--- | :--- | | **Total Gross Additions** | 128,000 | 151,000 | 389,000 | 405,000 | | **Handset Net Losses** | (38,000) | (22,000) | (92,000) | (89,000) | | **Connected Device Net Additions** | 3,000 | (9,000) | 4,000 | (26,000) | | **Total Net Losses** | (35,000) | (31,000) | (88,000) | (115,000) | | **Total Churn** | 1.30% | 1.42% | 1.26% | 1.34% | - Postpaid handset net losses increased due to aggressive industry-wide competition, while connected device net additions grew, driven by higher demand for fixed wireless home internet[37](index=37&type=chunk)[38](index=38&type=chunk) UScellular Postpaid Revenue Metrics | Metric | Q3 2023 | Q3 2022 | % Change | | :--- | :--- | :--- | :--- | | **ARPU** | $51.11 | $50.21 | 2% | | **ARPA** | $130.91 | $130.27 | — | [Financial Overview](index=11&type=section&id=UScellular%20Financial%20Overview) UScellular's revenue declined due to lower equipment sales and service revenue, but operating expenses decreased significantly UScellular Financial Summary (in millions) | Indicator | Q3 2023 | Q3 2022 | % Change | YTD 2023 | YTD 2022 | % Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | **Total operating revenues** | $963 | $1,083 | (11)% | $2,906 | $3,120 | (7)% | | **Service revenues** | $762 | $781 | (2)% | $2,289 | $2,351 | (3)% | | **Equipment sales** | $201 | $302 | (33)% | $617 | $769 | (20)% | | **Total operating expenses** | $906 | $1,098 | (17)% | $2,789 | $3,024 | (8)% | | **Operating income (loss)** | $57 | $(15) | N/M | $117 | $96 | 22% | | **Adjusted OIBDA (Non-GAAP)** | $220 | $163 | 35% | $624 | $627 | (1)% | - Retail service revenues decreased due to a decline in average postpaid and prepaid connections[47](index=47&type=chunk) - Inbound roaming revenues fell due to lower rates, and equipment sales revenues dropped because of fewer smartphone upgrades and gross additions[48](index=48&type=chunk) - Operating expenses decreased, primarily driven by a **36% reduction** in the cost of equipment sold and a **10% decrease** in SG&A expenses, which benefited from lower bad debts, commissions, and advertising[53](index=53&type=chunk)[54](index=54&type=chunk) [TDS Telecom Operations](index=14&type=section&id=TDS%20Telecom%20Operations) TDS Telecom's Q3 2023 revenue was flat, with residential growth offset by commercial declines, and operating income fell [Operational Overview](index=15&type=section&id=TDS%20Telecom%20Operational%20Overview) TDS Telecom expanded its fiber footprint and increased residential broadband connections, with customers opting for higher speeds TDS Telecom Residential Connections (as of Sept 30) | Connection Type | 2023 | 2022 | % Change | | :--- | :--- | :--- | :--- | | **Total Broadband** | 532,600 | 506,500 | 5% | | *Wireline, Expansion* | *79,400* | *49,400* | *61%* | | **Video** | 132,400 | 136,600 | (3)% | | **Voice** | 284,000 | 295,500 | (4)% | | **Total Residential** | 949,000 | 938,600 | 1% | - TDS Telecom increased its total service addresses by **11% year-over-year** to **1.6 million**, with **69%** of its footprint now offering 1Gig+ service[63](index=63&type=chunk) - Residential broadband customers continue to select higher speeds, with **75%** choosing 100 Mbps or greater[70](index=70&type=chunk) - Total residential revenue per connection increased **3%** in Q3 2023[70](index=70&type=chunk) [Financial Overview](index=17&type=section&id=TDS%20Telecom%20Financial%20Overview) TDS Telecom's revenue remained flat, with residential growth offsetting commercial declines, while depreciation expenses increased TDS Telecom Financial Summary (in millions) | Indicator | Q3 2023 | Q3 2022 | % Change | YTD 2023 | YTD 2022 | % Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | **Total operating revenues** | $256 | $256 | — | $767 | $763 | — | | *Residential revenue* | *$177* | *$170* | *4%* | *$521* | *$500* | *4%* | | *Commercial revenue* | *$38* | *$43* | *(12)%* | *$118* | *$130* | *(10)%* | | **Total operating expenses** | $256 | $246 | 4% | $752 | $702 | 7% | | **Operating income** | $— | $10 | (98)% | $15 | $61 | (76)% | | **Adjusted OIBDA (Non-GAAP)** | $67 | $66 | 2% | $203 | $224 | (9)% | - Residential revenues grew due to price increases and growth in broadband connections, while commercial revenues declined due to falling connections in CLEC markets[77](index=77&type=chunk)[78](index=78&type=chunk) - Depreciation, amortization, and accretion expenses increased **16%** in Q3 and **14%** YTD due to increased capital expenditures on new fiber assets[82](index=82&type=chunk) [Liquidity and Capital Resources](index=20&type=section&id=Liquidity%20and%20Capital%20Resources) TDS expects negative free cash flow, managing liquidity through financing and slowing fiber deployment, with **$906 million** in YTD capital expenditures - TDS expects to continue incurring negative free cash flow and has elected to slow the pace of TDS Telecom's fiber deployment to reduce funding needs[84](index=84&type=chunk)[87](index=87&type=chunk) Available Undrawn Borrowing Capacity (as of Sept 30, 2023, in millions) | (Dollars in millions) | TDS | UScellular | | :--- | :--- | :--- | | Revolving Credit Agreement | $399 | $300 | | Receivables Securitization | — | $445 | | Repurchase Agreement (Restricted) | — | $200 | | **Total available capacity** | **$399** | **$745** | - In September 2023, TDS entered into a new **$300 million** senior secured term loan credit agreement and borrowed the full amount[95](index=95&type=chunk) - YTD 2023 capital expenditures totaled **$906 million**, with **$462 million** for UScellular and **$434 million** for TDS Telecom[106](index=106&type=chunk)[108](index=108&type=chunk) [Consolidated Cash Flow Analysis](index=25&type=section&id=Consolidated%20Cash%20Flow%20Analysis) TDS's cash decreased by **$106 million** YTD 2023, with operating cash flow largely offset by investing activities and net financing outflows Consolidated Cash Flow Summary (YTD, in millions) | Cash Flow Activity | 2023 | 2022 | | :--- | :--- | :--- | | **Net cash provided by operating activities** | $923 | $901 | | **Net cash used in investing activities** | $(922) | $(1,408) | | **Net cash provided by (used in) financing activities** | $(107) | $574 | | **Net (decrease) increase in cash** | **$(106)** | **$67** | - Key drivers for 2023 cash flows include **$906 million** in capital expenditures, a **$57 million** federal tax refund, and net financing activities that included **$781 million** in new debt issuance and **$724 million** in debt repayments[116](index=116&type=chunk)[117](index=117&type=chunk)[118](index=118&type=chunk) [Supplemental Information Relating to Non-GAAP Financial Measures](index=27&type=section&id=Supplemental%20Information%20Relating%20to%20Non-GAAP%20Financial%20Measures) This section defines and reconciles non-GAAP measures, showing increased Q3 Adjusted EBITDA but negative YTD free cash flow Reconciliation of Net Income (Loss) to Adjusted EBITDA (Consolidated, in millions) | Line Item | Q3 2023 | Q3 2022 | YTD 2023 | YTD 2022 | | :--- | :--- | :--- | :--- | :--- | | **Net income (loss) (GAAP)** | $4 | $(10) | $16 | $101 | | Add back adjustments... | | | | | | **Adjusted EBITDA (Non-GAAP)** | $328 | $271 | $956 | $987 | Free Cash Flow (Non-GAAP, YTD, in millions) | Line Item | 2023 | 2022 | | :--- | :--- | :--- | | Cash flows from operating activities (GAAP) | $923 | $901 | | Cash paid for additions to property, plant and equipment | $(906) | $(794) | | Cash paid for software license agreements | $(29) | $(5) | | **Free cash flow (Non-GAAP)** | **$(12)** | **$102** | [Regulatory Matters](index=30&type=section&id=Regulatory%20Matters) UScellular incurred spectrum relocation costs, while TDS Telecom secured **$90 million** in annual E-ACAM support for fiber deployment - For its Auction 107 spectrum, UScellular paid **$17 million** in relocation costs in the first nine months of 2023 and an additional **$105 million** in October 2023[137](index=137&type=chunk) - TDS Telecom accepted E-ACAM support for 24 states, which will provide approximately **$90 million per year** for 15 years starting in 2024[141](index=141&type=chunk) - In return, TDS Telecom must deploy 100/20 Mbps internet service to approximately **270,000 locations**[141](index=141&type=chunk) [Risk Factors](index=33&type=section&id=Risk%20Factors) New risk factors include uncertainties from UScellular's strategic review and default risks from the new **$300 million** secured credit agreement - A new risk factor highlights that the process to explore strategic alternatives for UScellular could divert management attention, incur significant expenses, and result in business disruption or stock price volatility, with no assurance of a successful outcome[151](index=151&type=chunk)[152](index=152&type=chunk) - The new Senior Secured Credit Agreement entered in September 2023 introduces a risk factor related to its restrictive covenants[154](index=154&type=chunk) - A failure to comply could result in default, acceleration of the **$300 million** loan, and potential foreclosure on collateral, which includes **26.4 million** UScellular shares[155](index=155&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=34&type=section&id=Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) TDS faces interest rate risk as **50%** of its **$3.9 billion** long-term debt is variable-rate, with a significant portion maturing in 2026 - Approximately **50%** of TDS's long-term debt is variable-rate, creating exposure to volatility in interest expense due to fluctuations in market interest rates[156](index=156&type=chunk) Principal Payments Due on Long-Term Debt (as of Sept 30, 2023, in millions) | (Dollars in millions) | Principal Payments | Weighted-Avg. Interest Rate | | :--- | :--- | :--- | | Remainder of 2023 | $5 | 7.3% | | 2024 | $26 | 7.2% | | 2025 | $26 | 7.2% | | 2026 | $576 | 7.2% | | 2027 | $319 | 7.0% | | Thereafter | $2,982 | 6.5% | | **Total** | **$3,934** | **6.7%** | [Financial Statements (Unaudited)](index=35&type=section&id=Financial%20Statements%20%28Unaudited%29) This section presents the unaudited consolidated financial statements, including statements of operations and balance sheets [Consolidated Financial Statements](index=35&type=section&id=Consolidated%20Financial%20Statements) The unaudited consolidated financial statements show YTD 2023 revenues of **$3.85 billion** and a net loss attributable to common shareholders Consolidated Statement of Operations (in millions, except per share) | Indicator | Q3 2023 | YTD 2023 | | :--- | :--- | :--- | | **Total operating revenues** | $1,278 | $3,848 | | **Operating income (loss)** | $48 | $110 | | **Net income (loss)** | $4 | $16 | | **Net income (loss) attributable to TDS common shareholders** | $(17) | $(46) | | **Diluted EPS attributable to TDS common shareholders** | $(0.16) | $(0.41) | Consolidated Balance Sheet (in millions) | Account | Sept 30, 2023 | Dec 31, 2022 | | :--- | :--- | :--- | | **Total current assets** | $1,680 | $2,028 | | **Total assets** | $14,414 | $14,550 | | **Total current liabilities** | $1,327 | $1,514 | | **Long-term debt, net** | $3,840 | $3,731 | | **Total liabilities** | $7,797 | $7,947 | | **Total equity** | $6,517 | $6,603 | [Notes to Consolidated Financial Statements](index=45&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) These notes detail accounting policies, revenue disaggregation, debt facilities, and segment financial data, including strategic review expenses [Note 2: Revenue Recognition](index=46&type=section&id=Note%202%3A%20Revenue%20Recognition) This note disaggregates revenue by segment and details contract liabilities and remaining performance obligations Disaggregation of Revenue - Q3 2023 (in millions) | Segment | Service Revenues | Equipment Sales | Total Revenues | | :--- | :--- | :--- | :--- | | **UScellular** | $737 | $201 | $938 | | **TDS Telecom** | $255 | $— | $256 | | **Other/Elim.** | $19 | $34 | $53 | | **Total (from contracts)** | **$1,012** | **$235** | **$1,247** | - As of September 30, 2023, the company had contract liabilities of **$373 million** and estimated future service revenues from remaining performance obligations of **$603 million**[194](index=194&type=chunk)[196](index=196&type=chunk) [Note 9: Debt](index=54&type=section&id=Note%209%3A%20Debt) This note details TDS's new **$300 million** term loan, UScellular's amended securitization, and key debt covenants - In September 2023, TDS entered into a new **$300 million** senior secured term loan credit agreement, maturing in September 2026, and borrowed the full amount[219](index=219&type=chunk) - UScellular amended its receivables securitization agreement to extend the maturity to September 2025[221](index=221&type=chunk) - YTD, UScellular borrowed **$115 million** and repaid **$385 million** under this facility, with an additional **$150 million** borrowed subsequent to Q3[222](index=222&type=chunk) - Debt agreements require TDS and UScellular to maintain a Consolidated Leverage Ratio not to exceed **4.25 to 1.00** through March 31, 2024, and an Interest Coverage Ratio not lower than **3.00 to 1.00**[224](index=224&type=chunk) [Note 12: Business Segment Information](index=58&type=section&id=Note%2012%3A%20Business%20Segment%20Information) This note provides detailed operating revenues, income, and Adjusted EBITDA for UScellular, TDS Telecom, and Corporate segments Segment Financial Data - Q3 2023 (in millions) | Segment | Operating Revenues | Operating Income (Loss) | Adjusted EBITDA (Non-GAAP) | | :--- | :--- | :--- | :--- | | **UScellular** | $963 | $57 | $263 | | **TDS Telecom** | $256 | $— | $68 | | **Corporate & Other** | $59 | $(9) | $(3) | Segment Financial Data - YTD 2023 (in millions) | Segment | Operating Revenues | Operating Income (Loss) | Adjusted EBITDA (Non-GAAP) | | :--- | :--- | :--- | :--- | | **UScellular** | $2,906 | $117 | $753 | | **TDS Telecom** | $767 | $15 | $207 | | **Corporate & Other** | $175 | $(22) | $(4) | [Other Information](index=59&type=section&id=Part%20II.%20Other%20Information) This section covers controls, legal proceedings, and equity security sales [Controls and Procedures](index=59&type=section&id=Controls%20and%20Procedures) Management concluded that disclosure controls were effective as of September 30, 2023, with no material changes to internal controls - The principal executive officer and principal financial officer concluded that the company's disclosure controls and procedures were effective as of September 30, 2023[246](index=246&type=chunk) - No changes in internal controls over financial reporting occurred during Q3 2023 that materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[247](index=247&type=chunk) [Legal Proceedings](index=59&type=section&id=Legal%20Proceedings) TDS is involved in an appeal of a False Claims Act case and a new stockholder class action lawsuit alleging securities violations - Private party plaintiffs are appealing the dismissal of a False Claims Act case concerning UScellular's participation in past FCC auctions[248](index=248&type=chunk) - The Department of Justice had previously investigated and declined to intervene in the False Claims Act case[248](index=248&type=chunk) - A putative stockholder class action was filed against TDS and UScellular in May 2023, alleging violations of securities law related to public statements made between May and November 2022 regarding business strategies[249](index=249&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=60&type=section&id=Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No TDS Common Shares were repurchased in Q3 2023, with **$132 million** remaining authorized under the repurchase program - No repurchases of TDS Common Shares were made during the third quarter of 2023[252](index=252&type=chunk) - As of September 30, 2023, **$132 million** remained authorized for future repurchases under the company's stock repurchase program[252](index=252&type=chunk)

Financial Data and Key Metrics Changes - Total operating revenues for Q2 2023 decreased by 7% year-over-year, with service revenues declining by 3% primarily due to a decrease in the subscriber base and roaming revenue [101] - Adjusted operating income declined by 10%, while adjusted EBITDA decreased by 8% [102] - Capital expenditures decreased by 47% compared to the previous year, reflecting prudent management of free cash flow [102] Business Line Data and Key Metrics Changes - Postpaid handset gross additions decreased by 11,000, with net losses improving year-over-year by 2,000 due to better voluntary churn [76] - Prepaid gross additions declined by 6,000, and net prepaid additions decreased by 4,000, attributed to competitive postpaid offerings [8] - Fixed wireless customers increased by 66% year-over-year, reaching 96,000 by the end of the quarter [91] Market Data and Key Metrics Changes - Expansion market residential revenues increased to $18 million, aligning with expectations of steady revenue growth [20] - Commercial revenues decreased by 10% primarily due to lower CLEC connections [20] - Wholesale revenues decreased by 4% due to lower special access revenue [20] Company Strategy and Development Direction - The company is focused on improving subscriber trajectory and managing costs amid an inflationary environment [64][66] - A multiyear strategy is in place for fiber service address delivery, targeting 1.2 million marketable addresses by 2026 [11] - The company is exploring strategic alternatives for UScellular, with no definitive timetable set for completion [60][57] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the early results of their brand campaign, which is expected to drive future customer growth [6] - The company is navigating challenges in completing fiber builds and is focused on cost efficiencies [19] - Management noted that despite competitive pressures, they are pleased with the balance between subscriber results and financial results [49] Other Important Information - The federal A-CAM program has been extended, providing additional revenue support through 2038 [10] - The company is tightening its guidance for service revenues while increasing the midpoint for adjusted EBITDA [77][88] - The company has a significant backlog of applications for new tenancies and amendments in its tower business, indicating potential future growth [99] Q&A Session Summary Question: What are the expectations for the business and enterprise side? - Management highlighted significant momentum in the utilities sector and expects continued growth in enterprise use cases, particularly in 5G applications [33] Question: Can you provide an update on the fixed wireless business? - Fixed wireless customers reached 100,000 in July, with plans to deploy mid-band spectrum to enhance service [91] Question: How is the company addressing capacity in fixed wireless? - The company is working on increasing capacity through new spectrum and equipment, expecting to double capacity with upcoming deployments [116] Question: What is the outlook for the tower business? - The company sees long-term growth potential in its tower business, with a current tenancy ratio of 1.55 and room for further growth [98] Question: How does the company plan to balance subscriber growth with financial results? - Management emphasized a disciplined approach to promotions and pricing, focusing on maintaining a balance between subscriber growth and financial health [153]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q For the quarterly period ended June 30, 2023 TELEPHONE AND DATA SYSTEMS, INC. (Exact name of Registrant as specified in its charter) OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 001-14157 (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 (State or other jurisdiction of inc ...

Financial Data and Key Metrics Changes - Total operating revenues for Q1 2023 decreased by 2% year-over-year, with service revenue declining by 3% primarily due to a decrease in the average postpaid subscriber base and roaming revenue [16][19][73] - Equipment revenues also decreased by 2%, driven by a decline in volume, although there was an increase in average revenue per device [17] - Cash expenses increased by 10% in the quarter, mainly due to the growing fiber program, leading to a 17% decline in adjusted EBITDA [74] Business Line Data and Key Metrics Changes - U.S. Cellular saw improved postpaid gross adds year-over-year and a 2% increase in postpaid ARPU for the quarter [10][11] - The tower business produced strong results with revenues growing by 11% year-over-year [12] - Fixed wireless customer growth was significant, with a 63% increase in the customer base from the prior year [15] Market Data and Key Metrics Changes - Residential revenues across all markets increased by 4% for the quarter, driven by price increases and growth in broadband connections [49] - Commercial revenues decreased by 7%, primarily due to lower CLEC connections, while wholesale revenues decreased by 4% due to lower special access revenue [25] Company Strategy and Development Direction - The company is focused on advancing its network and executing its strategy to deploy fiber in approximately 100 new markets [33] - There is a strong commitment to maintaining a balance sheet strength to support necessary investments while managing leverage levels for 2023 [33][54] - The company is exploring partnerships to enhance capital efficiency and address the capital intensity challenges in the industry [58][59] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the improvements in customer results and the positive impact of pricing and promotional efforts on churn [10][35] - The company is monitoring macroeconomic pressures, including inflation and potential recession impacts, but feels confident in managing bad debt and customer payments [94][113] - Future growth is expected as the company continues to deploy mid-band spectrum and expand its fixed wireless offerings [98][119] Other Important Information - The company reaffirmed its 2023 financial guidance, forecasting total telecom revenues between $1.03 billion and $1.06 billion [26] - Capital expenditures are expected to be between $500 million and $550 million in 2023, with a focus on broadband growth [27][50] Q&A Session Summary Question: What is the current status of the company's capital allocation strategy? - The company is in a heavy investment cycle for both 5G modernization and fiber expansion, balancing these needs with leverage and dividends [82] Question: How is the company addressing churn and customer retention? - Management noted a 10% year-over-year improvement in voluntary churn and emphasized the importance of maintaining a high in-contract rate to continue this trend [35][104] Question: What are the company's plans regarding partnerships and asset management? - The company is exploring partnerships to address capital intensity challenges and is open to financial engineering options for noncore assets if needed [58][110]

First Quarter 2023 Results May 5, 2023 All information set forth in this presentation about Telephone and Data Systems, Inc., including its subsidiaries UScellular 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 result ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 001-14157 TELEPHONE AND DATA SYSTEMS, INC. (Exact name of Registrant as specified in its charter) (State or other jurisdiction of in ...

| --- | --- | |-------|-------| | | | | | TDS' mission is to provide outstanding communications | | services to our customers and meet the needs of our | | | shareholders, our people, and our communities | | | Raymond James 44th Annual Institutional Investors Conference | | | March 8, 2023 | | Reform Act of 1995 2 2022 Operating Revenues by Segment Other communications NYSE:TDS 3 Maintain a balance sheet with ample liquidity allowing optionality and flexibility $0.70 Annual Dividends per TDS Share* $0.60 49 ...