Telephone & Data Systems (TDS) Risk Analysis

34902 58 267 1,227 Reconciliation of revenue:All Other revenues145 Elimination of intersegment revenues(34)Total operating revenues$1,238 Less2:Cost of services (excluding Depreciation, amortization and accretion reported below)194 19 98 Cost of equipment and products211 — — Selling, general and administrative313 9 80 Expenses related to strategic alternatives review (included in Selling, general and administrative)(12)(1)— Other segment items— — (2)Segment Adjusted EBITDA (Non-GAAP)$196 $31 $91 $318 Reconciliation of Segment Adjusted EBITDA to Income before income taxes:All Other income (loss) before income taxes1(40)Depreciation, amortization and accretion(232)Expenses related to strategic alternatives review (included in Selling, general and administrative)(13)Loss on asset disposals, net(9)Loss on license sales and exchanges, net(8)Equity earnings of unconsolidated entities38 Interest and dividend income3 Interest expense(45)Income before income taxes$13 Other segment disclosures Six Months Ended June 30, 2025 Array Wireless Array Towers TDS Telecom Total(Dollars in millions) Revenues from external customers$1,751 $56 $520 $2,327 Intersegment revenues— 67 2 69 1,751 123 522 2,396 Reconciliation of revenue:All Other revenues114 Elimination of intersegment revenues(69)Total operating revenues$2,341 Less2:Cost of services (excluding Depreciation, amortization and accretion reported below)387 39 198 Cost of equipment and products387 — — Selling, general and administrative643 18 166 Expenses related to strategic alternatives review (included in Selling, general and administrative)(21)(1)— Other segment items— — (7)Segment Adjusted EBITDA (Non-GAAP)$355 $67 $165 $587 Reconciliation of Segment Adjusted EBITDA to Income before income taxes:All Other income (loss) before income taxes1(57)Depreciation, amortization and accretion(470)Expenses related to strategic alternatives review (included in Selling, general and administrative)(22)Loss on asset disposals, net(12)Gain on sale of business and other exit costs, net8 Gain on license sales and exchanges, net5 Equity earnings of unconsolidated entities78 Interest and dividend income6 Interest expense(82)Income before income taxes$42 Other segment disclosures Six Months Ended June 30, 2025 Array Wireless Array Towers TDS Telecom Segment Total All Other 1TDS Consolidated Total Depreciation, amortization and accretion$(302)$(23)$(145)$(470)$(2)$(472) Loss on asset disposals, net(3)(1)(8)(12)— (12) Gain on sale of business and other exit costs, net— — 8 8 1 9 Gain on license sales and exchanges, net5 — — 5 — 5 Capital expenditures$127 $5 $149 $281 $1 $282 68 Six Months Ended June 30, 2024 Array Wireless Array Towers TDS Telecom Total(Dollars in millions) Revenues from external customers$1,826 $51 $532 $2,409 Intersegment revenues— 65 2 67 1,826 116 534 2,476 Reconciliation of revenue:All Other revenues191 Elimination of intersegment revenues(67)Total operating revenues$2,500 Less2:Cost of services (excluding Depreciation, amortization and accretion reported below)390 37 196 Cost of equipment and products427 — — Selling, general and administrative637 16 155 Expenses related to strategic alternatives review (included in Selling, general and administrative)(20)(1)— Other segment items— — (4)Segment Adjusted EBITDA (Non-GAAP)$392 $64 $187 $643 Reconciliation of Segment Adjusted EBITDA to Income before income taxes:All Other income (loss) before income taxes1(64)Depreciation, amortization and accretion(460)Expenses related to strategic alternatives review (included in Selling, general and administrative)(21)Loss on asset disposals, net(17)Loss on license sales and exchanges, net(7)Equity earnings of unconsolidated entities80 Interest and dividend income6 Interest expense(88)Income before income taxes$71 Other segment disclosures Six Months Ended June 30, 2024 Array Wireless Array Towers TDS Telecom Segment Total All Other 1TDS Consolidated Total Depreciation, amortization and accretion$(308)$(21)$(131)$(460)$(7)$(467) Gain (loss) on asset disposals, net(10)(1)(6)(17)1 (16) Loss on license sales and exchanges, net(7)— — (7)— (7) Capital expenditures$286 $9 $164 $459 $5 $464 Numbers may not foot due to rounding.1"All Other" represents TDS' non-reportable other business activities that do not meet the quantitative thresholds for being a reportable segment. 2The significant segment expense categories and amounts align with the segment-level information that is regularly provided to the chief operating decision maker. Intersegment expenses are included within the amounts shown. 3This item is not included in the evaluation of operating performance of the Wireless and Towers segments, and therefore is reported for "Array". 4Assets are not provided at the individual segment level for Wireless and Towers, and therefore are reported for "Array". The Array segments operate under a common capital structure, and management has historically considered its assets collectively as part of a combined wireless network. 69Note 12 Subsequent Events The following events occurred subsequent to June 30, 2025 and are not reflected in the financial results, statements, or footnotes (unless otherwise explicitly stated) for the three and six months ended June 30, 2025. ?On July 11, 2025, TDS Telecom entered into an agreement with a third-party to sell incumbent markets in Oklahoma for a purchase price of $43 million. The transaction is expected to close in 2025, subject to customary regulatory approvals and closing conditions. ?On July 14, 2025, Array completed the acquisition of King Street Wireless, Inc. and Sunshine Spectrum, Inc. for a total purchase price of $17 million, of which $10 million was paid in prior periods and $7 million was paid at time of closing. Following the acquisitions, King Street Wireless, King Street Wireless, Inc., Advantage Spectrum and Sunshine Spectrum, Inc., are no longer classified as variable interest entities (VIEs). The acquisitions result in the expected realization of certain deferred tax assets, and therefore TDS expects to record a reduction to valuation allowance on deferred tax assets and associated discrete income tax benefit of approximately $50 million during the three months ending September 30, 2025. ?On July 31, 2025, Array terminated the receivables securitization agreement. In addition, the USCC Master Note Trust, a special purpose entity used to facilitate securitized borrowings using equipment installment plan receivables, was dissolved and, therefore, the entity will no longer be classified as a VIE. ?On August 1, 2025, the sale of the wireless operations to T-Mobile closed and Array received cash proceeds of $2,629 million. TDS expects a cash income tax liability on the T-Mobile transaction of between $125 million and $175 million. The transaction included a debt exchange offer whereby debt issued by Array could be exchanged for debt issued by T-Mobile, which reduced the cash portion of the purchase price. The cash portion of the purchase price was also reduced by unearned contingent consideration of $89 million as well as other purchase price adjustments outlined in the Securities Purchase Agreement. The final cash proceeds are subject to adjustment according to the terms and conditions of the Securities Purchase Agreement. Array expects to record exit and disposal costs and recognize a loss on the transaction that will be based on the carrying value of net assets sold as of the close date. As of June 30, 2025, the carrying value of the net assets sold to T-Mobile was approximately $2,400 million. ?The debt exchange offering period concluded on August 1, 2025 and resulted in the exchange of $1,680 million of long-term debt comprised of the following Array notes: $489 million of 6.7% Senior Notes, $394 million of 6.25% Senior Notes, $402 million of 5.5% March 2070 Senior Notes and $395 million of 5.5% June 2070 Senior Notes. As a result, on August 1, 2025, after the debt exchange, Array retained $364 million of senior notes, consisting of $55 million 6.7% Senior Notes, $106 million 6.25% Senior Notes, $98 million 5.5% March 2070 Senior Notes, and $105 million 5.5% June 2070 Senior Notes. The unamortized discount and debt issuance costs related to the exchanged debt was $48 million and will be recorded as interest expense during the three months ending September 30, 2025. ?On August 1, 2025, Array and T-Mobile entered into a Master License Agreement (MLA), pursuant to which, among other things, T-Mobile has agreed to license from Array, for a minimum of 15 years, space on a minimum of 2,015 existing or to-be-constructed towers owned by Array. The MLA also provided that T-Mobile extend the license term for approximately 600 towers owned by Array for a new 15-year term commencing on August 1, 2025. In addition, the MLA provides terms and conditions for T-Mobile, at its option, to revert certain equipment back to Array and would make Array responsible for any decommissioning, remediation, restoration, or disposal costs of such assets. ?The closing of the T-Mobile transaction triggered the recognition of certain cash and non-cash obligations. Such obligations include contingent advisory fees, employee compensation and severance, employee stock award costs, debt extinguishment, income tax expense, administrative costs, restructuring expenses and other wind down costs. In future periods, Array also may incur significant decommissioning costs for certain towers and equipment, and such decommissioning costs may also include remaining obligations under related ground leases. These costs may have a significant impact on Array's financial statements in future periods. ?On August 1, 2025, the Array Board of Directors declared a special dividend per Common and Series A outstanding share of $23.00 for shareholders of record on August 11, 2025, which will be payable on August 19, 2025. TDS, which owns 82.5% of the equity of Array as of June 30, 2025, will receive its pro-rata share of the special dividend. ?On August 1, 2025, certain wireless service companies in Iowa that are not consolidated into the Array financial statements but are accounted for as equity method investments sold specific wireless assets and wireless customers to T-Mobile under separate asset purchase agreements. Array expects to receive a distribution from these transactions in August 2025. ?On August 1, 2025, TDS terminated the commitment for the $75 million unused borrowing capacity under its unsecured term loan agreements. ?On August 4, 2025, Array repaid the entire outstanding borrowings under all of its term loan agreements and export credit financing agreement of $863 million. Array expects to draw $325 million from its term loan agreement in August 2025. 70Telephone and Data Systems, Inc. Additional Required Information Controls and Procedures Evaluation of Disclosure Controls and Procedures TDS maintains disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the Exchange Act)) that are designed to ensure that information required to be disclosed in its reports filed or submitted under the Exchange Act is processed, recorded, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to TDS’ management, including its principal executive officer and principal financial officer, as appropriate, to allow for timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. As required by SEC Rules 13a-15(b), TDS carried out an evaluation, under the supervision and with the participation of management, including its principal executive officer and principal financial officer, of the effectiveness of the design and operation of TDS’ disclosure controls and procedures as of the end of the period covered by this Quarterly Report. Based on this evaluation, TDS’ principal executive officer and principal financial officer concluded that TDS' disclosure controls and procedures were effective as of June 30, 2025, at the reasonable assurance level. Changes in Internal Control Over Financial Reporting There have been no changes in internal controls over financial reporting that have occurred during the three months ended June 30, 2025, that have materially affected, or are reasonably likely to materially affect, TDS’ internal control over financial reporting. 71Legal Proceedings In April 2018, the United States Department of Justice (DOJ) notified TDS that it was conducting inquiries of Array and TDS under the federal False Claims Act relating to Array’s participation in wireless spectrum license auctions 58, 66, 73 and 97 conducted by the FCC. Array is or was a limited partner in several limited partnerships which qualified for the 25% bid credit in each auction. The investigation arose from two civil actions under the Federal False Claims Act brought by private parties in the U.S. District Court for the Western District of Oklahoma. In November and December 2019, following the DOJ’s investigation, the DOJ informed TDS and Array that it would not intervene in the above-referenced actions. Subsequently, the private party plaintiffs decided to continue the actions on their own. In July 2020, these actions were transferred to the U.S. District Court for the District of Columbia. In March 2023, the District Court for the District of Columbia granted Array’s motions to dismiss both actions. The private party plaintiffs appealed the district court’s orders granting the motions to dismiss. On February 11, 2025, the U.S. Court of Appeals for the D.C. Circuit affirmed the dismissal of one matter. In that matter, the private party plaintiffs petitioned the D.C. Circuit to rehear the appeal, but on April 8, 2025, the appellate court denied the petitions. The private party plaintiffs asked the Supreme Court of the United States for an extension of time to file a petition for a writ of certiorari, which the Court granted by extending the time for filing the petition until September 5, 2025. The second matter remains pending before the appellate court. TDS and Array believe that Array’s arrangements with the limited partnerships and the limited partnerships’ participation in the FCC auctions complied with applicable law and FCC rules. At this time, TDS cannot predict the outcome of the matter remaining before the appellate court. On May 2, 2023, a putative stockholder class action was filed against TDS and Array and certain current and former officers and directors in the United States District Court for the Northern District of Illinois. An Amended Complaint was filed on September 1, 2023, which names TDS, Array, and certain current Array officers and directors as defendants, and alleges that certain public statements made between May 6, 2022 and November 3, 2022 (the potential class period) regarding, among other things, Array’s business strategies to address subscriber demand, violated Section 10(b) and 20(a) of the Securities Exchange Act of 1934. The plaintiff seeks to represent a class of stockholders who purchased TDS equity securities during the potential class period and demands unspecified money damages. On November 1, 2024, the court issued a Memorandum Opinion and Order granting in part and denying in part the defendants' motion to dismiss the lawsuit. On February 28, 2025, the parties reached a settlement in principle. On April 25, 2025, the plaintiff filed a motion for preliminary approval of the settlement. A final approval hearing date is set for September 2025. On June 18, 2024, a stockholder derivative lawsuit was filed in the Circuit Court of Cook County, Illinois, Chancery Division against Array, certain TDS and Array directors and officers, and nominal defendant TDS. The derivative lawsuit took issue with the same public statements made between May 6, 2022 and November 3, 2022, alleging that the fact that the statements were made was a breach of fiduciary duty on the part of the officer and director defendants, and brought claims for indemnification and contribution against the officer and director defendants and Array. In addition to indemnification and contribution, the plaintiff sought money damages and the implementation of certain governance proposals. On May 20, 2025, the parties filed an agreed order dismissing the case with prejudice as to the named plaintiff and otherwise without prejudice, and the order was granted by the court on May 22, 2025. On January 31, 2025, a second stockholder derivative lawsuit was filed in the Circuit Court of Cook County, Illinois, Chancery Division against certain TDS and Array directors and officers, and nominal defendant TDS. The derivative lawsuit makes similar claims as in the derivative lawsuit filed in 2024, and seeks similar relief. On April 1, 2025, the parties in both Cook County derivative suits jointly filed a motion seeking to consolidate the two lawsuits. The court denied the motion for consolidation on May 6, 2025. On July 21, 2025, a motion to intervene in the lawsuit was filed by the stockholder plaintiff who filed a stockholder derivative lawsuit in the United States District Court for the Northern District of Illinois and subsequently dismissed that lawsuit. The defendants filed a motion to dismiss the lawsuit on July 23, 2025. On March 4, 2025, a third stockholder derivative lawsuit was filed in the United States District Court for the Northern District of Illinois against certain TDS and Array directors and officers, and nominal defendant TDS. The derivative lawsuit made similar claims as those in the Cook County derivative lawsuits, and in addition alleged claims against the director and officer defendants for violations of Section 10(b) of the Securities Exchange Act of 1934, and sought similar relief to the Cook County derivative lawsuits. On June 4, 2025, the plaintiff filed a notice of voluntary dismissal of the lawsuit without prejudice and on June 6, 2025, the court dismissed the case without prejudice. TDS is unable at this time to determine whether the outcome of these actions would have a material impact on its results of operations, financial condition, or cash flows. TDS intends to contest plaintiffs' claims vigorously on the merits. 72Unregistered Sales of Equity Securities and Use of Proceeds On August 2, 2013, the Board of Directors of TDS authorized, and TDS announced by Form 8-K, a $250 million stock repurchase program for TDS Common Shares. Depending on market conditions, such shares may be repurchased in compliance with Rule 10b-18 of the Exchange Act, pursuant to Rule 10b5-1 under the Exchange Act, or pursuant to accelerated share repurchase arrangements, prepaid share repurchases, private transactions or as otherwise authorized. This authorization does not have an expiration date. TDS did not determine to terminate the foregoing Common Share repurchase program, or cease making further purchases thereunder, during the second quarter of 2025. The maximum dollar value of shares that may yet be purchased under this program was $132 million as of June 30, 2025. There were no purchases made by or on behalf of TDS, or any open market purchases made by any "affiliated purchaser" (as defined by the SEC) of TDS, of TDS Common Shares during the quarter covered by this Form 10-Q. 73Other Information Rule 10b5-1 Trading Arrangements During the three months ended June 30, 2025, none of TDS’ directors or officers (as defined in Rule 16a-1(f) under the Exchange Act) has adopted or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5–1 trading arrangement (each as defined in Item 408 of Regulation S-K under the 1934 Act). 74Exhibits Exhibit NumberDescription of DocumentsExhibit 4.1Twelfth Supplemental Indenture, dated as of June 17, 2025, between the Registrant and The Bank of New York Mellon Trust Company, N.A., related to the Registrant’s 6.700% Senior Notes due 2033, is hereby incorporated by reference from Exhibit 4.1 to Array's Current Report on Form 8-K dated June 17, 2025. Exhibit 4.2Thirteenth Supplemental Indenture, dated as of June 17, 2025, between the Registrant and The Bank of New York Mellon Trust Company, N.A., related to the Registrant’s 6.250% Senior Notes due 2069, is hereby incorporated by reference from Exhibit 4.2 to Array's Current Report on Form 8-K dated June 17, 2025. Exhibit 4.3Fourteenth Supplemental Indenture, dated as of June 17, 2025, between the Registrant and The Bank of New York Mellon Trust Company, N.A., related to the Registrant’s 5.500% Senior Notes due 2070 (March), is hereby incorporated by reference from Exhibit 4.3 to Array's Current Report on Form 8-K dated June 17, 2025. Exhibit 4.4Fifteenth Supplemental Indenture, dated as of June 17, 2025, between the Registrant and The Bank of New York Mellon Trust Company, N.A., related to the Registrant’s 5.500% Senior Notes due 2070 (June), is hereby incorporated by reference from Exhibit 4.4 to Array's Current Report on Form 8-K dated June 17, 2025. Exhibit 4.5Third Amendment to Credit Agreement, between TDS as Borrower and Export Development Canada as Lender, dated as of June 20, 2025. Exhibit 4.6Fourth Amended and Restated Credit Agreement among the Registrant, CoBank, ACB, as Administrative Agent, and the other lenders party thereto, dated June 25, 2025, is hereby incorporated by reference Exhibit 4.1 to Array's Current Report on Form 8-K dated June 25, 2025. Exhibit 10.1Form of TDS 2022 Long-Term Incentive Plan 2025 Performance Share Award Agreement. Exhibit 10.2Form of TDS 2022 Long-Term Incentive Plan 2025 Restricted Stock Unit Award Agreement. Exhibit 10.3Transition Agreement between TDS Telecom Service LLC and James Butman, is hereby incorporated by reference from Exhibit 10.1 to TDS' Current Report on Form 8-K dated July 3, 2025. Exhibit 10.4*Master License Agreement, dated as of August 1, 2025, between ADI Leasing Company, LLC and T-Mobile USA, Inc., is hereby incorporated by reference from Exhibit 10.1 to TDS' Current Report on Form 8-K dated July 31, 2025. Exhibit 31.1Principal executive officer certification pursuant to Rule 13a-14 of the Securities Exchange Act of 1934. Exhibit 31.2Principal financial officer certification pursuant to Rule 13a-14 of the Securities Exchange Act of 1934. Exhibit 32.1Principal executive officer certification pursuant to Section 1350 of Chapter 63 of Title 18 of the United States Code. Exhibit 32.2Principal financial officer certification pursuant to Section 1350 of Chapter 63 of Title 18 of the United States Code. Exhibit 101.INSXBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. Exhibit 101.SCHInline XBRL Taxonomy Extension Schema Document Exhibit 101.PREInline XBRL Taxonomy Presentation Linkbase Document Exhibit 101.CALInline XBRL Taxonomy Calculation Linkbase Document Exhibit 101.LABInline XBRL Taxonomy Label Linkbase Document Exhibit 101.DEFInline XBRL Taxonomy Extension Definition Linkbase Document Exhibit 104Cover Page Interactive Data File - the cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the inline document. *Portions of this Exhibit have been omitted pursuant to Item 601(b) of Regulation S-K promulgated under the Exchange Act. 75Form 10-Q Cross Reference Index Item NumberPage No.Part I.Financial Information      Item 1.Financial Statements (Unaudited)46-50  Notes to Consolidated Financial Statements54-65

TDS is regularly involved in a number of legal and policy proceedings before the FCC and various state and federal courts. Such legal and policy proceedings can be complex, costly, protracted and highly disruptive to business operations by diverting the attention and energies of management and other key personnel. The assessment of legal and policy proceedings is a highly subjective process that requires judgments about future events. Additionally, amounts ultimately received or paid upon settlement or resolution of litigation and other contingencies may differ materially from amounts accrued in the financial statements. Depending on a range of factors, these or similar proceedings could impose restraints on TDS' current or future manner of doing business. See Note 15 - Commitments and Contingencies in the Notes to Consolidated Financial Statements for additional information related to legal proceedings.

Competition in the wireless industry is intense and is expected to increase in intensity into the foreseeable future due to multiple factors such as increasing market penetration, introduction of new products, new competitors, increasing promotional aggressiveness and changing prices. There is competition in service plan pricing; handsets and other devices; promotional discounts; network quality, coverage, speed and technologies, including 5G technology; distribution; new entrants; bundled services, such as home internet and wireless; and other categories. In particular, wireless competition includes aggressive service plan and device pricing, including pricing for unlimited plans, which could result in switching activity and churn and limit TDS' ability to monetize future growth in data usage. In addition, competition based on network speed may increase as customer demand for higher speeds increases. These competitive factors have and are expected to continue to result in losses of retail connections, may cause the prices for certain services and products to decline and the costs to compete to increase. TDS' wireless competitors include national or global telecommunications and cable wireless companies that are larger than TDS, possess greater financial and other resources, possess more extensive coverage areas and more spectrum within their coverage areas, and market other services with their communications services that TDS does not offer. TDS and its competitors are actively marketing their deployment of 5G and, as a result, continue to raise consumer awareness of the technology. If TDS continues to not keep pace with its competitors in deploying 5G or other comparable offerings, or if TDS' deployment of 5G technology does not result in significant incremental revenues, TDS' financial condition, results of operations and ability to do business could continue to be adversely affected. In addition, new technologies, services and products that are more commercially effective than the technologies, services and products offered by TDS may be developed and create new sources of competition. Further, new technologies may be proprietary such that TDS is not able to adopt such technologies. There can be no assurance that TDS will be able to compete successfully in this environment. Sources of competition to TDS' wireless business typically include at least four competing wireless telecommunications service providers across TDS' service area, wireline telecommunications service providers, cable wireless companies, resellers (including MVNOs), and providers of alternative telecommunications services. In particular, competition from cable wireless companies has increased in recent periods and is expected to increase into the foreseeable future, as they have continued to expand their presence in the wireless industry and have offered more competitive pricing. Many of TDS' wireless and other competitors have substantially greater financial, technical, marketing, sales, purchasing and distribution resources than TDS. Competition in the tower industry is also challenging, as TDS competes with public and private tower companies, private equity sponsored tower companies, and owners of non-communications sites such as utility towers, rooftop structures, water towers, and other alternative structures. Many of these competitors are larger than TDS, have greater financial and other resources, have more advantageous tower locations than TDS, have greater capacity on their towers, and have more scale and coverage nationwide than TDS – such factors could result in an inability to acquire or build additional towers, difficulty in leasing tower space or renewing leases, or cause lease revenue to decline in the future. Competition in the wireline industry is intensified with the increasing deployment of broadband technologies, MVNO plans offering wireless services, and enhanced video services. Incumbent carriers are upgrading existing networks with higher speed broadband services and overbuilders are deploying broadband to compete with legacy incumbent carriers. Overbuilding activity is increasing with investments by venture capital and private equity and with additional access to state and federal funding. Sources of competition to TDS' wireline and cable businesses include, but are not limited to, other cable companies, fiber overbuilders, incumbent carriers, wireless communications providers, resellers of local exchange services, interexchange carriers, satellite broadband providers, access providers, VoIP providers and providers using other emerging technologies. Customers may choose to substitute their wireline services using satellite, wireless and other technologies, which may be preferred to technologies offered by TDS. If TDS cannot keep pace with its competition in deploying higher speed technologies, offering competitive products and services at competitive prices and providing attractive video content options, TDS' financial condition, results of operations or ability to do business could be adversely affected. TDS' wireline business introduced MVNO plans offering wireless services to customers in its service areas. TDS' MVNO offerings are reliant on third parties to deliver adequate wireless service to these customers and may not be able to successfully compete with wireless options provided by other industry competitors who have access to greater scale and financial resources than TDS. There is no guarantee that these MVNO plans will attract or retain broadband customers.

Changes in any of several factors could have an adverse effect on TDS' business, financial condition or results of operations. These factors include, but are not limited to: ?Demand for or usage of services, particularly data services;?Demand for leasing space on a tower;?Consumer preferences, including internet speed and type of wireless devices;?Consumer perceptions of network quality and performance;?Consumer expectations for self-service options through digital means;?Competitive pressure to deliver higher speed;?Competitive pressure from promotional activity;?The pricing of services, including an increase in price-based competition;?The pricing of tower leases that can be charged to third parties;?Increases in ground lease rates for owned towers;?Inflationary pressures on costs without corresponding price increases for TDS' services;?Access to and cost of programming;?The overall size and growth rate of TDS' customer base;?Penetration rates;?Churn rates;?Selling expenses;?Net customer acquisition and retention costs;?Customers' ability to pay for services and the potential impact on bad debts expense;?Roaming agreements and rates;?Third-party vendor support;?Capacity constraints;?The mix of services and products offered by TDS and purchased by customers; and ?The costs of providing services and products.

TDS' revenues include roaming revenues related to the use of TDS' network by other wireless carriers' customers who travel within TDS' coverage areas. Changes in FCC rules or actions, industry practices or the network footprints of carriers could have an adverse effect on TDS' roaming revenues. For example, the expansion of other carriers' network coverage in TDS' footprint and/or lower roaming rates with other carriers has decreased and is expected to continue to decrease roaming revenues for TDS. Similarly, TDS' wireless customers can access another carrier's network automatically only if the other carrier allows TDS' customers to roam on its network. TDS relies on roaming agreements with other carriers to provide roaming capability to its customers and expand its product offerings in areas of the U.S. and internationally outside of its service areas and to improve coverage within selected areas of TDS' network footprint. Although TDS has entered into roaming agreements with national carriers, there is no assurance that TDS will be able to maintain these agreements and/or enter into new agreements with other carriers to provide roaming services or that it will be able to do so on reasonable or cost-effective terms. Some competitors may be able to obtain lower roaming rates than TDS is able to obtain because they have larger data usage or call volumes or may be able to reduce roaming charges by providing service principally over their own networks. In addition, the quality and availability of services that a wireless carrier delivers to a TDS customer while roaming may be inferior or limited in comparison to the service TDS provides. TDS' rate of adoption of new technologies, such as those enabling high-speed data and voice services, could affect its ability to enter into or maintain roaming agreements with other carriers. In addition, TDS' wireless technology may not be compatible with technologies used by other carriers, which may limit the ability of TDS to enter into voice or data roaming agreements with such other carriers. Carriers whose customers roam on TDS' network could switch their business to new operators, limit their high-speed usage or move traffic to their own networks. Changes in roaming usage patterns, rates for roaming usage, or roaming relationships with other carriers could continue to have an adverse effect on TDS' roaming revenues and/or expenses. To the extent that other carriers expand their networks in TDS' service areas, the roaming arrangements between TDS and these other carriers could become less strategic for them. That is, these other carriers will have fewer or less extensive geographic areas where roaming services are required by their customers and, as a result, the roaming arrangements could become less critical to serving their customer base. This presents a risk to TDS in that, to the extent TDS is not able to enter into economically viable roaming arrangements with these other carriers, this could impact TDS' ability to service its customers in geographic areas where TDS does not have its own network.

TDS has a significant amount of indebtedness and may need to incur additional indebtedness. TDS' level of indebtedness could have important consequences. For example, it (i) may limit TDS' ability to obtain additional financing for working capital, capital expenditures or general corporate purposes, particularly if the ratings assigned to its debt securities by rating organizations are revised downward; (ii) will require TDS to dedicate a substantial portion of its cash flow from operations to the payment of interest and principal on its debt, thereby reducing the funds available to TDS for other purposes including expansion through acquisitions, capital expenditures, acquisition of wireless spectrum licenses, payment of dividends, marketing spending and expansion of its business; and (iii) may limit TDS' flexibility to adjust to changing business and market conditions and make TDS more vulnerable to a downturn in general economic conditions as compared to TDS' competitors. TDS' ability to make scheduled payments on its indebtedness or to refinance it will depend on its financial and operating performance which, in turn, is subject to prevailing economic and competitive conditions and other factors beyond its control. A substantial portion of TDS' debt is subject to variable interest rates, which causes TDS to be vulnerable to unfavorable changes in market interest rates. The TDS and UScellular revolving credit agreements, the TDS and UScellular term loan agreements, the TDS and UScellular export credit financing agreements and the UScellular receivables securitization agreement require TDS or UScellular, as applicable, to comply with certain affirmative and negative covenants, including certain financial covenants. Depending on the actual financial performance of TDS and UScellular, there is a risk that TDS and/or UScellular could fail to satisfy the required financial covenants. This risk has increased with TDS' recent financial and operating performance. If TDS or UScellular breach a financial or other covenant of any of these agreements, it would result in a default under that agreement, and could involve a cross-default under other debt instruments. This could in turn cause the affected lenders to accelerate the repayment of principal and accrued interest on any outstanding debt under such agreements and, if they choose, terminate the agreement. If appropriate, TDS and UScellular may request an amendment to one or more credit agreements to adjust financial covenants to provide additional financial flexibility to TDS and UScellular, and may also seek other changes to such agreements. There is no assurance that the lenders will agree to any amendments. If the lenders agree to amendments, this may result in additional payments or higher interest rates payable to the lenders and/or additional restrictions. Restrictions with such debt instruments may limit TDS' operating and financial flexibility. As a result, TDS' level of indebtedness, restrictions contained in debt instruments and/or possible breaches of covenants, defaults, and acceleration of indebtedness could have an adverse effect on TDS' business, financial condition, revenues, results of operations and cash flows.