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TDS, Telephone and Data Systems

Telecom Operators capital-intensive Distress / turnaroundCapital build-outCyclical

Telephone and Data Systems provides high-quality communications services to customers through its wholly-owned subsidiary TDS Telecommunications LLC with 1.1 million broadband, video, voice and wireless connections at December 31, 2025.

TDS leases tower space to tenants and provides ancillary services, holds noncontrolling interests in primarily wireless operating companies and holds certain wireless spectrum licenses through its majority-owned subsidiary Array Digital Infrastructure, Inc.

Latest annual: FY2025 10-K

TDS · Telephone and Data Systems

The business

What it sells, where the money comes from, the kind of company it is.

Revenue · FY2025

$1.1B

−9.0% YoY · −27% 5-yr CAGR

Vital signs · TTM, with 5-yr average

Revenue $1.1B 5-yr avg $2.8B

Operating margin 7.5% 5-yr avg −14.7%

ROIC 2% 5-yr avg −1%

Owner-earnings margin −0% 5-yr avg 25%

Free cash flow margin −0% 5-yr avg 25%

The business in brief

read the 10-K →

What this business is and what moves its needle, from its own SEC filings.

Situation: Distress / turnaround. Thin interest coverage, or operating cash burned against real debt, across the record. The balance sheet carries this situation; the debt schedule sets the clock. Capital build-out. Capital spending has surged to 36% of sales, today's earnings are charged less depreciation than tomorrow's will be. Cyclical. Margins collapse and recover repeatedly across the record; a single year, good or bad, misstates the through-cycle earning power.
What moves the needle: Operating margin has run about 2.1% through the cycle, a thin margin, where volume, cost discipline and the price it gets all bear on the result. The margin is cyclical, swinging between −56% and 5.1% over the years, so the through-cycle figure carries more than any single year — and the balance sheet at the trough more than the peak. The cash cycle has run negative through the cycle (a median of −10 days): the operation is paid before it pays, so working capital releases cash as the business grows rather than tying it up. Read this kind of business on subscribers, revenue per user, and network capex. On its own account, the filing leans hardest on concentrated dependence, set against the numbers in what the filing emphasizes, below.
Is it a good business?: Return on capital has rarely cleared the cost of capital (median 1%, above 15% in 0 of 10 years). By owner earnings: roughly 3% of revenue reaches owners as cash, though it swings, and customers and suppliers fund the business through negative working capital. The cycle and the balance sheet decide this one; the worst year tells more than the median, and the rest is in the 10-K.

Every line is arithmetic on the company's filings, shown in full in the sections below.

The record

Ten years of arithmetic, read across the cycle.

The record, 2016–2025

realized figures from each filing · older years to the left

2016’16	2017’17	2018’18	2019’19	2020’20	2021’21	2022’22	2023’23	2024’24	2025’25	TTMTTMMar 2026
											Income statement
$5.2B	$5.0B	$5.0B	$5.1B	$5.1B	$5.2B	$5.3B	$1.2B	$1.2B	$1.1B	$1.1B	RevenueRevenue
34%	33%	34%	34%	33%	32%	33%	40%	41%	41%	40%	SG&A / revenueSG&A/rev
$108M	($108M)	$205M	$179M	$259M	$261M	$122M	($683M)	($191M)	($97M)	$80M	Operating incomeOp. inc.
2.1%	−2.1%	4.1%	3.5%	5.1%	5.0%	2.3%	−55.6%	−16.3%	−9.1%	7.5%	Operating marginOp. mgn
$43M	$153M	$135M	$121M	$226M	$156M	$62M	($500M)	($28M)	($6M)	$131M	Net incomeNet inc.
48%	—	25%	35%	8%	17%	46%	—	—	—	0%	Effective tax rateTax rate
											Cash flow & returns
$782M	$776M	$1.0B	$1.0B	$1.5B	$1.1B	$1.2B	$1.1B	$1.1B	$590M	$472M	Operating cash flowOp. cash
$820M	$817M	$839M	$890M	$862M	$851M	$882M	$271M	$285M	$303M	$305M	DepreciationDeprec.
($123M)	($240M)	($11M)	($54M)	$391M	$47M	$169M	$1.4B	$870M	$266M	$17M	Working capital & otherWC & other
$636M	$685M	$776M	$957M	$1.3B	$1.1B	$1.2B	$643M	$365M	$391M	$475M	CapexCapex
12.3%	13.6%	15.5%	18.9%	26.1%	21.7%	21.9%	52.4%	31.1%	36.5%	44.6%	Capex / revenueCapex/rev
$146M	$91M	$241M	$59M	$194M	($28M)	($6M)	$498M	$780M	$199M	($3M)	Owner earningsOwner earn.
2.8%	1.8%	4.8%	1.2%	3.8%	−0.5%	−0.1%	40.6%	66.3%	18.6%	−0.3%	Owner earnings marginOE mgn
$146M	$91M	$241M	$59M	$194M	($28M)	($6M)	$498M	$780M	$199M	($3M)	Free cash flowFCF
2.8%	1.8%	4.8%	1.2%	3.8%	−0.5%	−0.1%	40.6%	66.3%	18.6%	−0.3%	Free cash flow marginFCF mgn
$3M	$0	$0	$0	$14M	$8M	$40M	$6M	$0	$108M	—	BuybacksBuybacks
1%	-1%	3%	2%	4%	3%	1%	-6%	-2%	-2%	2%	ROICROIC
1%	4%	3%	3%	5%	3%	1%	-10%	-1%	-0%	3%	Return on equityROE
											Balance sheet
$900M	$719M	$938M	$465M	$1.4B	$367M	$360M	$236M	$364M	$766M	$1.4B	Cash & investmentsCash+inv
$753M	$861M	$992M	$1.0B	$1.0B	$1.1B	$1.1B	$992M	$57M	$69M	$63M	ReceivablesReceiv.
$151M	$145M	$150M	$169M	$154M	$178M	$268M	$208M	$4M	$4M	$4M	InventoryInvent.
$365M	$368M	$365M	$374M	$508M	$481M	$506M	$360M	$75M	$116M	$97M	Accounts payablePayables
$539M	$638M	$777M	$800M	$650M	$755M	$831M	$840M	($14M)	($43M)	($30M)	Operating working capitalOper. WC
$2.1B	$2.0B	$2.3B	$1.9B	$3.0B	$2.0B	$2.0B	$1.7B	$1.7B	$923M	$1.5B	Current assetsCur. assets
$887M	$918M	$879M	$962M	$1.2B	$1.2B	$1.5B	$1.2B	$1.1B	$440M	$444M	Current liabilitiesCur. liab.
2.3×	2.1×	2.7×	2.0×	2.6×	1.7×	1.3×	1.4×	1.6×	2.1×	3.4×	Current ratioCurr. ratio
$766M	$509M	$509M	$547M	$547M	$547M	$547M	$0	—	—	$0	GoodwillGoodwill
$9.4B	$9.3B	$9.8B	$10.8B	$12.5B	$13.5B	$14.6B	$8.1B	$13.7B	$8.4B	$8.2B	Total assetsAssets
$2.4B	$2.5B	$2.4B	$2.3B	$3.4B	$2.9B	$3.8B	$4.1B	$2.4B	$829M	$829M	Total debtDebt
$1.5B	$1.7B	$1.5B	$1.9B	$2.0B	$2.6B	$3.4B	$3.9B	$2.1B	$63M	($538M)	Net debt / (cash)Net debt
0.6×	-0.6×	1.2×	1.1×	1.5×	1.1×	0.7×	-11.0×	-1.8×	-0.9×	0.9×	Interest coverageInt. cov.
$4.1B	$4.3B	$4.6B	$4.7B	$4.8B	$5.9B	$5.8B	$5.2B	$5.1B	$4.8B	$4.9B	Shareholders’ equityEquity
0.8%	0.9%	1.1%	1.2%	1.0%	0.9%	0.8%	1.6%	1.6%	2.5%	1.7%	Stock comp / revenueSBC/rev
—	$262M	—	—	—	—	$3M	$547M	$137M	$49M	$49M	Goodwill written downGW imp.
											Per share
111M	112M	114M	116M	115M	116M	114M	113M	114M	119M	117M	Shares out (diluted)Shares
$46.44	$45.04	$44.03	$43.76	$44.52	$45.00	$46.43	$10.89	$10.35	$9.03	$9.13	Revenue / shareRev/sh
$0.39	$1.37	$1.18	$1.04	$1.97	$1.34	$0.54	$-4.43	$-0.24	$-0.05	$1.12	EPS (diluted)EPS
$1.32	$0.81	$2.11	$0.51	$1.69	$-0.24	$-0.05	$4.42	$6.86	$1.68	$-0.03	Owner earnings / shareOE/sh
$1.32	$0.81	$2.11	$0.51	$1.69	$-0.24	$-0.05	$4.42	$6.86	$1.68	$-0.03	Free cash flow / shareFCF/sh
$5.73	$6.12	$6.81	$8.25	$11.63	$9.75	$10.18	$5.70	$3.21	$3.29	$4.07	Cap. spending / shareCapex/sh
$37.33	$38.12	$40.00	$40.11	$41.77	$51.09	$51.31	$46.14	$44.77	$40.50	$42.21	Book value / shareBVPS

Per-share growththe realized rate an owner's share compounded

	9-yr	5-yr
Revenue / share	−16.6%/yr	−27.3%/yr
Owner earnings / share	+2.8%/yr	−0.1%/yr
Capital spending / share	−6.0%/yr	−22.3%/yr
Book value / share	+0.9%/yr	−0.6%/yr

The record, charted

FY2016–2025

Each measure over its full record; the current point and the worst year marked.

Share count

119Mpeak FY2025

ROIC

−2%low FY2023

Owner earnings vs. net income

Owner earningsNet income

The accountant's number, and the cash an owner can take; the gap is the tell.

$199Mowner earningsvs.($6M)net incomelow FY2021

Where the cash went

ReinvestBuybacksDividendsAcquisitionsRetained

Each year's operating cash, by what management did with it: the mix, and how it drifts.

FY2016FY2025

Owner-earnings bridge

FY2021–FY2025cash-flow statement, SEC EDGAR →

Net income is the accountant's number; owner earnings is the cash an owner could take out. The walk between them, off the cash-flow statement, and whether the gap is widening or holding.

In fiscal 2025 the business turned a $6M loss into $199M of owner earnings: more cash than the profit line showed, after the non-cash charges and the capital it put back in.

	FY2025	FY2024	FY2023	FY2022	FY2021
Reported net income	($6M)	($28M)	($500M)	$62M	$156M
Depreciation & amortizationnon-cash charge added back	+$303M	+$285M	+$271M	+$882M	+$851M
Stock-based compensationreal costnon-cash, but a real cost	+$27M	+$18M	+$20M	+$42M	+$49M
Working capital & othertiming of cash in and out, other non-cash items	+$266M	+$870M	+$1.4B	+$169M	+$47M
Cash from operations	$590M	$1.1B	$1.1B	$1.2B	$1.1B
Capital expenditurecash put back in to keep running and to grow	−$391M	−$365M	−$643M	−$1.2B	−$1.1B
Owner earnings	$199M	$780M	$498M	($6M)	($28M)
Owner-earnings marginowner earnings ÷ revenue	19%	66%	41%	0%	-1%

Owner earnings is the cash an owner could pull out without starving the business: operating cash less the capital it must spend to hold its position . The cash-flow statement also adds stock comp back as non-cash, but it is a real cost paid in shares; counted as the expense it is (less $27M), owner earnings is nearer $172M.

Maintenance capex is estimated as depreciation where a growing business invests above it; free cash flow is the figure the scorecard's free-cash margin reads.

III

Quality & stewardship

Returns, the balance sheet, capital allocation, and pay.

Owner’s Scorecard

FY2025 10-K · source on SEC EDGAR →

Will it survive?

Can it pay its interest? -0.9×

Does not cover its interest

Operating income ($97M) ÷ interest expense $113M

What this means
A full year of operating profit didn't cover the interest bill. This is the zombie zone: the business depends on refinancing, asset sales, or forbearance to service its debt.
How heavy is the debt, net of cash? $63M

Net debt against an operating loss

Cash $766M − debt $829M

What this means
Netting $766M of cash and short-term investments against $829M of debt leaves $63M owed, with no operating profit this year to measure it against — understand that combination before anything else about the company. Net debt is the leverage figure that matters: the cash is already set against the debt. Strategic or illiquid investments aren't counted here.
How long is cash tied up? -11d

Negative, funded by others

DSO 23 + DIO 1 − DPO 35 days

What this means
Days cash is tied up between paying suppliers and collecting from customers. A negative cycle is a quiet moat: suppliers and customers fund the operation (Buffett's “float”), the company grows on other people's money.

Is it a good business?

Return on invested capital 1%

Below average through the cycle

10-yr median, range -6%–4%; -2% latest = NOPAT ($77M) ÷ invested capital $4.9B

Industry peers: median 2%

What this means
The rate the business earns on the money tied up in it, Buffett's north star, because over time a stock tracks the ROIC beneath it. Above ~15% sustained hints at a moat; a return below the cost of capital (~8%) erodes value as a business grows rather than building it — the test Buffett weighs most. The headline is the median of the last 10 years (it ran -2% most recently), so one peak or trough year doesn't set the verdict. Asset-light businesses (R&D expensed, little capital) read artificially high, pair this with Owner Earnings.
Owner-earnings margin 19%

High, recently turned positive

latest $199M = operating cash $590M − maintenance capex $391M; positive each of the last 3 years, after an earlier loss stretch (10-yr median 3%)

Industry peers: median 3%

What this means
What an owner could take out without starving the business: operating cash less the maintenance capital it must spend to hold its position — Buffett's owner earnings. That's 19% of revenue this year, a 3% median across 10 years. Treating stock comp as the real expense it is (less $27M of SBC) leaves $172M.
Are earnings backed by cash? $590M

Loss, but cash-generative

Net income ($6M) · cash from operations $590M

What this means
The company reported a net loss, so a conversion ratio isn't meaningful. What matters then is whether operations still threw off cash, here, they did.

How is the cash used?

Where do the earnings go? 82%

Returns about half

Dividends + buybacks $163M ÷ Owner Earnings $199M

What this means
Of $199M Owner Earnings, $163M (82%) went back to shareholders, $55M dividends, $108M buybacks. Net of $27M stock comp, the real buyback was about $81M. Returning most of it is the mark of a mature business with little left to reinvest at a high return; reinvesting most could mean a long runway, or empire-building. The split doesn't say which; the return earned on it (see ROIC) does.
Investing or harvesting? 1.29×

Expanding

Capex $391M ÷ depreciation $303M

What this means
Descriptive, not a grade. Above ~1× means investing faster than assets wear out (growth, or, sustained for years, today's earnings carrying less depreciation than tomorrow's will). Below means spending less than it's wearing out (efficiency, or a melting asset base). The ratio won't tell you which; the filings will.

Graham’s defensive tests · 1 of 6 met

Graham’s numerical criteria for the defensive investor (The Intelligent Investor, ch. 14), run on the filings. A floor of safety, not a buy signal; many fine modern businesses fail his strictest liquidity rules by design.

Adequate size Near

Revenue ≥ $2B · $1.1B

What this means
Big enough to weather a storm. Graham's 1972 floor was ~$100M of sales (≈ $700M today); we use a $2B revenue line as a conservative modern stand-in.
Strong liquidity Pass

Current ratio ≥ 2× · 2.10×

What this means
Current assets at least twice current liabilities, near-term bills covered without touching the business. Strict by design: many cash-rich modern firms run leaner and miss it, holding their cushion in longer-dated securities.
Conservative debt Miss

Debt ≤ working capital · $829M vs $483M WC

What this means
Graham's rule that borrowings not exceed net current assets. Capital-heavy and buyback-heavy firms routinely fail it, read it next to interest coverage, not alone.
Earnings stability Miss

A profit every year (10-yr record) · 3 loss years

What this means
Graham wanted earnings in each of the past ten years, the stability a defensive owner leans on.
Dividend record Miss

Uninterrupted dividends · none paid

What this means
An unbroken dividend was Graham's mark of durability. He wanted twenty years; the filings show about ten, and a single suspension breaks the streak. Non-payers, many fine modern compounders, fall outside his defensive net by design.
Earnings growth Miss

Earnings +33% over the record · −261%

What this means
At least a third more earnings than a decade ago, averaging three years at each end. Net income (not per-share), so stock splits don't distort it, buybacks and dilution show up in the share-count line instead.
Moderate price —

P/E ≤ 15 and P/E × P/B ≤ 22.5 · decided by the price

What this means
Graham's valuation gate, the wall he kept between a sound business and a sound investment. Three-year average earnings are $-1.56/share (latest year $-0.05), the averaged base the calculator's gate runs on, and book value is $42.17/share. Enter a price in “What the price implies” just below for the P/E, P/B, and whether it clears. But this is the rule Buffett outgrew: there's no hard P/E law, and a wonderful business can deserve a far richer multiple if the thesis holds, treat it as the bargain-hunter's floor, not a verdict on the price.

Durability & moat, 2016–2025

Whether the record’s returns held, and what the capital reinvested earned.

Profitable years 7 of 10

What this means
Lost money in 3 year(s), look at what happened there before trusting the average.
Return on capital ≥ 15% 0 of 10 yrs

What this means
A moat shows up as a high return on invested capital that holds year after year, not one good vintage.
Operating margin 1% → −27% (3-yr avg ends)

In the filing’s words Input costs rose and the filing says it could not fully pass them on — which is where this margin compressed.

What this means
Through the cycle the operating margin slipped — about 1% early to −27% lately, median 2% — competition or costs are biting in.
Reinvestment, incremental ROIC returns capital

What this means
The capital base barely grew: this business returns cash through dividends and buybacks rather than reinvesting. Judge it on the cash returned, not on compounding.
Owner earnings growth +17%/yr

What this means
Owner earnings grew about 17% a year over the record.
Worst year 2023 · −55.6% op. margin

What this means
Operations went underwater in 2023, understand why before trusting the good years.
Share count +0.7%/yr

What this means
Roughly flat share count, little dilution, little buyback.
How management talks about it Owner’s terms

What this means
The record and the register agree: capital is compounding and the filing reasons in an owner’s terms — per-share value, return on capital, the long term — not a promoter’s.

Does AI threaten the moat?

Low contestability

The moat is physical, regulated or balance-sheet-funded, the kind AI cuts costs within but does not contest.

In its own filing A competitive risk, new this year

Its FY2025 10-K names artificial intelligence as a competitive threat, in language that was not in the prior year's filing.

“Artificial intelligence advancements may put TDS at a competitive disadvantage, in particular if TDS is not able to keep pace with its competitors, which could have an adverse effect on TDS' business, financial condition or results of operations.”

AI is unlikely to contest a moat that is physical, regulated or balance-sheet-funded; here it reads more as a cost tool than a threat, and the company is using it that way.

Read from the filing's own risk factors, paired with the industry's structure under its SIC code; the durability is read above, the price below.

All figures as filed; the source filing is linked above.

Current Position

as of the latest quarter, Mar 31, 2026

Can the business pay what it owes this year, off the freshest balance sheet: the quality of the assets, the debt actually coming due, and what a low ratio means here.

Current assets$1.5B

Cash & short-term investments$1.4B
Receivables$63M
Inventory$4M
Other current assets$86M

Current liabilities$444M

Accounts payable$97M
Other current liabilities$347M

Current ratio3.43×all current assets ÷ what's due · Graham looked for 2×

Quick ratio3.42×stricter: inventory excluded

Cash ratio3.08×strictest: cash alone against what's due

Working capital$1.1Bthe cushion left after near-term bills

Revenue, latest quarter vs. a year ago+6.5%the freshest read on whether the business is still growing

Current ratio, recent quarters1.5× → 3.4×

Deeper floors

Tangible book value$4.8Bequity stripped of goodwill & intangibles

Debt incl. operating leases$575M$575M of it operating leases; with finance leases, “total fixed claims” below reaches $1.4B (annual-report basis)

Deferred revenue$84Mcustomer cash collected before delivery; operating float

From the company's latest filing.

Lease obligations

the lease note, SEC EDGAR →

Debt by another name. What the business owes on the property, aircraft, stores and equipment it rents rather than owns is a fixed claim due on a schedule; added back to the debt, it is the true leverage. That ladder, operating and finance leases together, and what it adds to the debt on the page above.

Operating leasesFinance leases

'26$55M

'27$58M

'28$56M

'29$54M

'30$47M

later$808M

Lease payments by year, scaled to the largest; “later” is everything beyond year five, shown apart. These are the contractual cash payments, before the interest the filing imputes back out to the balance-sheet liability.

Due in the next 12 months$55Ma fixed cash payment, owed whether or not the business has a good year

Total lease payments$1.1Bevery year plus the tail, undiscounted: the full cash the leases will take

On the balance sheet$583Mthe present value of those payments, the recognised lease liability

True leverage: debt plus leases

On-balance-sheet debt$829M

Lease obligations (present value)$583M

Total fixed claims on the business$1.4B

Counting the leases the way Buffett does, the fixed claims on this business come to $1.4B, of which the leases are 41%. The lease wall above and the debt schedule together are the calendar of what must be paid, and when.

Lease ladder read from the ASC 842 tags in the company’s Dec 31, 2025 annual report and reconciled: the yearly buckets sum to the undiscounted total, which less the imputed interest equals the balance-sheet liability; a ladder that doesn’t tie out is withheld.

How the cash was used, 2016–2025

Over the record, the business generated $10.3B of operating cash; how management split it reads as a reinvestor, most operating cash is plowed back into the business.

Reinvested$8.1B · 79%
Buybacks$179M · 2%
Retained (debt / cash)$2.0B · 19%

Returned to owners$179M
8% of the owner earnings the business produced over the span, $0 as dividends and $179M as buybacks.
Source of fundingOperating cash
Operating cash covered reinvestment and returns; over the span debt fell $1.6B and cash and short-term investments rose $467M.
Average price paid for buybacks—
Buybacks ran $179M over the span, but the filings don't tag the share count needed to deduce the average price paid.
Net change in share count5.1%
The diluted count rose from 111M to 117M: issuance (stock pay, deals) outran any buybacks, so owners were diluted on net.
Dividend record—
No dividend line was reported in the filing data over the span; the record here neither confirms nor rules out a payout.
Return on what it retained182%
Of the earnings it kept rather than paid out ($183M over the span), annual owner earnings (first three years vs last three) grew $333M, so each retained $1 added about 1.82 of yearly owner earnings. Buffett's test, run on owner earnings instead of market value.

Buybacks are gross of stock issued to staff; the share-count line above is the net of that, the figure that decides whether owners gained. The average price paid blends a year of purchases (and any accelerated repurchase), so it is close, not exact. The record of where the cash went and on what terms.

Acquisitions & goodwill

from the balance sheet & the 10-year cash-flow record

Goodwill grows only when a company acquires and falls only when it concedes it overpaid. The size of that bet, the cash put into buying rather than building, and how much has already been written off.

Goodwill & intangibles$132M2% of all assets; the premium carried on the balance sheet for businesses acquired

Against book equity0%goodwill is this share of book equity; the rest is the company’s own retained and paid-in capital

Cash spent acquiring$0over 10 years buying other businesses, against $8.1B of capital spent building

$998M written down across 5 years (2017, 2022, 2023, 2024, 2025): goodwill the company has already conceded it overpaid for, charged against earnings. A write-down costs no cash (the cash went out when the deal was signed), but it is management marking its own past judgment to market.

Goodwill, acquired intangibles and equity from the latest balance sheet; acquisition spend and write-downs summed across the 10-year record, from the company's own filings.

Management, ownership & pay

read the proxy →

From the proxy: how much of the business the people running it own, and how they are paid, beside what the business earned for its owners in the same years.

Fiscal year	Chief executive	Pay, as filed	“Actually paid”	Owner earnings
2021	LeRoy T. Carlson, Jr.	$9.6M	$7.0M	($28M)
2022	LeRoy T. Carlson, Jr.	$8.9M	$237k	($6M)
2023	LeRoy T. Carlson, Jr.	$9.7M	$24.4M	$498M
2024	LeRoy T. Carlson, Jr	$9.6M	$38.9M	$780M
2025	LeRoy T. Carlson, Jr.	$7.0M	$15.1M	$199M
2025	Walter C. D. Carlson	$4.8M	$5.2M	$199M

Both pay figures are the company’s own, from the pay-versus-performance table its proxy statement files. “As filed” is the Summary Compensation Table total: salary, bonus, and equity awards at their value on the day of grant. “Actually paid” is the SEC’s prescribed recalculation, which re-marks those equity awards to what they became as they vested; it can swing far above or below the filed figure in either direction, and negative years occur. Owner earnings are the whole business's, from the record above, for the same fiscal years.

Insider ownership8.1%
The stake all directors and executive officers hold together, per the 2026 proxy: skin in the game, the first thing Munger reads.
Stock-based compensation$27M
The slice of the business handed to employees in shares this year, 3% of revenue. Buffett's oldest accounting fight: this is compensation, compensation is an expense, real whether or not the headline earnings admit it. One trap: the cash-flow statement adds SBC back, so the operating cash, and the owner earnings drawn from it, are flattered by exactly this amount; counted as the cost it is, what an owner keeps is lower.

Inverting the record

Invert: instead of why Telephone and Data Systems is a good business, the question is what would make owning it a mistake, and whether those marks are in the record. Disconfirming tests across 2016–2025.

2 of the 6 tests turned up something to look into; the other 4 came back clean.

Look hereDid the share count rise anyway?5.1%
Diluted shares grew 5.1% over 2016–2025, even as the company spent $179M on buybacks. The repurchases were outrun by issuance — to staff, in a raise, or in a deal — and the filing says which; owners' slice still shrank. Read the buyback line beside this one, not on its own.
Look hereAre "one-time" charges a yearly habit?5 of 10 years
Management took an impairment or write-down in 5 of the last 10 years, $998M in all. Taken across the majority of the record, the "one-time" label is wearing thin — ask whether these are past deals coming due rather than genuinely isolated events. Read it beside the goodwill the company still carries.

And these came back clean

Is it less profitable than it was?
Did debt outgrow the business?
Did reported profit become cash?
Did receivables and inventory outpace sales?

Each test is read from the filings and is noisy alone; a flag can mark a cyclical trough or a year of heavy investment as easily as a problem. The filing says which.

What an owner would ask, FY2025

read the 10-K →

Which reported numbers are a judgment call?
Management names Income taxes as critical estimates
each rests partly on management's judgment; the filing's note sets out the assumptionsverify →

The questions the record and the charts do not answer on their own; each carries the figure and the place to look.

Peers, Telecom Operators

The same industry, side by side on owner economics. Each figure is a through-cycle median, so a peak or trough year can’t distort it; the group median at the foot is the line to read each against.

Company	Revenue	Gross margin	Op. margin	ROIC	Owner earn. margin
UNITUniti Group Inc.	$2.2B	—	32.9%	3%	1%
IDTIDT Corporation	$1.2B	24%	2.8%	75%	2%
TDSTelephone and Data Systems	$1.1B	—	2.2%	1%	3%
GLIBAGCI Liberty, Inc.	$1.0B	—	-33.2%	-12%	12%
LBRDALiberty Broadband	$1.0B	100%	-54.0%	-0%	-40%
CCOICogent Communications Holdings Inc.	$976M	57%	16.1%	17%	14%
IRDMIridium Communications Inc	$872M	95%	10.5%	2%	35%
ATNIATN International Inc.	$667M	—	2.5%	1%	3%
Group median	—	—	2.7%	2%	3%

The price

What a price has to assume.

What the price implies

reverse-DCF

Type today's close and see the owner-earnings growth you'd have to believe to justify it, beside what Telephone and Data Systems has delivered.

Telephone and Data Systems’s latest year shows negative owner earnings, the mark of a build-out: total capital spending outruns the cash the business throws off today. So the tool opens on the steady-state base (maintenance capex in place of the build-out spend), the cash it would earn at rest; clear the toggle below to read the latest year exactly as reported.

Today’s price $

Base Normalize · through-cycle ($493M) Net of stock comp (−$19M) Steady-state · maintenance capex ($81M)

—

The assumptions Required return 9% Years of high growth 10 Terminal growth 2.5%

9.0% = the 4.55% 10-year Treasury (Jul 15, 2026) + 4.45 points of equity premium. The rate you require is yours to set.

Enter a price above to run it.

Implied by the price—

Owner-earnings growth · ’16→’25+17%/yr

Owner-earnings yield—

P/E (3-yr earnings ’23–’25)—

P/B—

Graham’s price gate—

Graham capped the multiple at 15×; Buffett and Munger let that rule go: a wonderful business can deserve 50× if the thesis holds. The gate marks the bargain-hunter's floor.

Against a high-grade bond: Graham’s yardstick bond yield%

Prefilled with the 10-year Treasury (4.55%, as of Jul 15, 2026). Edit it for today’s exact figure, or a AAA corporate yield.

Graham measured a stock against the bond you could own instead, the heart of his margin of safety. Enter a price above to weigh the owner-earnings yield against this bond.

Free cash flow ($3M) on 114M shares outstanding, the balance-sheet count at 2026-03-31; net cash $538M. The base opens on the steady-state figure (the latest year is negative on total capex mid-build-out); clear Steady-state to use the year as filed. Net of stock comp treats option pay as the expense it is. Capex ($475M) runs well above depreciation ($305M), so this is a build-out; Steady-state swaps total capex for maintenance (≈ depreciation), lifting the base to about $81M, the cash it would throw off if it stopped expanding. The dials set the multiple a growth belief justifies; the price, and every dollar on this page, is yours.

Weigh TDS against another business →

The owners of TDS: the meeting and the votes →

Cite: Owner Scorecard, "Telephone and Data Systems (TDS), the owner's record," https://ownerscorecard.com/c/TDS, data as of 2026-07-09.

Manual order: ← TDOC its page in the Manual TDUP →

Industry order: ← TBB the Telecom Operators chapter TEO →