TELEPHONE & DATA SYSTEMS INC /DE/

The following discussion summarizes Array's cash flow activities for the six months ended June 30, 2025 and 2024. Cash flows may fluctuate from quarter to quarter and year to year due to seasonality, timing and other factors. This discussion is intended to highlight the significant changes and is not intended to fully reconcile the changes.

2025 Commentary

TDS’ Cash, cash equivalents and restricted cash increased $175 million. Net cash provided by operating activities was $607 million due to net income of $30 million adjusted for non-cash items of $488 million and distributions received from unconsolidated entities of $88 million, including $34 million in distributions from the LA Partnership. Distributions from certain equity method investments operated by Verizon included a special distribution of $25 million related to proceeds received by Verizon managed entities related to Verizon's tower transaction with Vertical Bridge that closed in December 2024. The changes in working capital items increased net cash by $1 million. The working capital changes were primarily driven by reduced inventory and receivable balances, partially offset by payment of associate bonuses.

Cash flows used for investing activities were $264 million, due primarily to payments for property, plant and equipment of $286 million, partially offset by cash received from divestitures of $24 million.

Cash flows used for financing activities were $168 million, due primarily to tax withholdings, net of cash receipts, for TDS and Array stock-based compensation awards of $61 million, the payment of $44 million in dividends, the repurchase of Array Common Shares of $21 million, cash paid for software license agreements of $20 million and repayments on long-term debt agreements of $17 million.

2024 Commentary

TDS’ Cash, cash equivalents and restricted cash increased $76 million. Net cash provided by operating activities was $626 million due to net income of $45 million adjusted for non-cash items of $509 million, distributions received from unconsolidated entities of $80 million, including $37 million in distributions from the LA Partnership, and changes in working capital items which decreased net cash by $8 million. The working capital changes were primarily driven by payment of associate bonuses and timing of vendor payments, partially offset by reduced inventory balances.

Cash flows used for investing activities were $465 million, due primarily to payments for property, plant and equipment of $451 million.

Cash flows provided by financing activities were $85 million, due primarily to $300 million borrowed under the TDS term loan agreements, $100 million borrowed under the TDS revolving credit agreement and a $40 million borrowing under the Array receivables securitization agreement. These were partially offset by $200 million in repayments on the TDS revolving credit agreement, $188 million in repayments on the Array receivables securitization agreement, the payment of $61 million in dividends and cash paid for software license agreements of $21 million.