TELEPHONE & DATA SYSTEMS INC /DE/

1 Consists of corporate and other operations and intercompany eliminations.

2 Refer to Supplemental Information Relating to Non-GAAP Financial Measures within this MD&A for a reconciliation of this measure.

3 Refer to Liquidity and Capital Resources within this MD&A for additional information on Capital expenditures.

Refer to individual segment discussions in this MD&A for additional details on operating revenues and expenses at the segment level.

Equity in earnings of unconsolidated entities

Equity in earnings of unconsolidated entities represents TDS' share of net income from entities in which it has a noncontrolling interest and that are accounted for using the equity method or the net asset value practical expedient. See Note 7 — Investments in Unconsolidated Entities in the Notes to Consolidated Financial Statements for additional information.

Interest expense

Interest expense decreased for thethree and six months ended June 30, 2026 due primarily to the repayment of TDS debt facilities in August 2025 and January 2026, partially offset by the new term loan that Array entered into in August 2025 and a decrease in capitalized interest. Interest expense from continuing operations excludes interest costs in all periods associated with Array term loans repaid, and Array debt exchanged, in conjunction with the sale of Array's wireless operations to T-Mobile. See Market Risk for additional information regarding maturities of long-term debt and weighted average interest rates.

Income tax expense (benefit)

Income tax expense on continuing operations increased for the three and six months ended June 30, 2026, due primarily to the increase in Income before income taxes that resulted from the gains on license sales in the current period.

Net income from continuing operations attributable to noncontrolling interests, net of tax

Net income from continuing operations attributable to noncontrolling interests, net of tax includes the noncontrolling public shareholders’ share of Array’s net income from continuing operations, the noncontrolling shareholders’ or partners’ share of certain Array subsidiaries’ net income from continuing operations and other TDS noncontrolling interests.

Net income from discontinued operations attributable to TDS shareholders

See Note 2 —Discontinued Operationsin the Notes to Consolidated Financial Statements for additional information related to the components of Net income from discontinued operations.

Earnings

Three Months Ended

Net income increased due primarily to gains on the sale of wireless spectrum licenses, short-term imputed spectrum lease income, lower interest expense and higher interest and dividend income, partially offset by higher income tax expense.

Adjusted EBITDA increased due primarily to higher interest and dividend income and higher operating revenues, partially offset by lower equity in earnings of unconsolidated entities.

Six Months Ended

Net income increased due primarily to gains on the sale of wireless spectrum licenses, short-term imputed spectrum lease income, lower interest expense, higher operating revenues and higher interest and dividend income, partially offset by higher income tax expense.

Adjusted EBITDA increased due primarily to higher operating revenues, higher interest and dividend income and lower operating expenses.

*Represents a non-GAAP financial measure. Refer to Supplemental Information Relating to Non-GAAP Financial Measures within this MD&A for a reconciliation of this measure.