TELEPHONE & DATA SYSTEMS INC /DE/

The following discussion summarizes TDS' cash flow activities for the nine months ended September 30, 2026 and 2025. Cash flows may fluctuate from quarter to quarter and year to year due to timing and other factors. This discussion is intended to highlight the significant changes and is not intended to fully reconcile the changes.

2026 Commentary

TDS’ Cash, cash equivalents and restricted cash increased $869.5 million. Net cash provided by operating activities related to continuing operations was $44.7 million due to net income of $580.6 million adjusted for non-cash items of $497.2 million, distributions received from unconsolidated entities of $89.6 million, including $26.1 million in distributions from the Los Angeles SMSA Limited Partnership (LA Partnership), and changes in working capital items which decreased net cash by $128.2 million. The working capital changes were primarily driven by deferred revenue related to spectrum leases, the timing of rent payments and increased prepaid contracts. Cash flows used in operating activities related to discontinued operations were $29.6 million.

Cash flows provided by investing activities related to continuing operations were $1,650.3 million, due primarily to cash received from divestitures of $2,188.2 million, partially offset by payments for property, plant and equipment of $515.6 million and cash paid for acquisitions of $25.1 million. There were no cash flows provided by investing activities related to discontinued operations.

Cash flows used for financing activities related to continuing operations were $796.0 million, due primarily to the payment of $332.5 million in Array dividends, the repurchase of TDS Common Shares of $205.1 million, repayments on TDS long-term debt agreements of $153.1 million, the payment of $65.6 million in TDS dividends and tax withholdings, net of cash receipts, for TDS and Array stock-based compensation awards of $34.8 million. There were no cash flows used for financing activities related to discontinued operations.

2025 Commentary

TDS’ Cash, cash equivalents and restricted cash increased $554.0 million. Net cash provided by operating activities related to continuing operations was $224.8 million due to net income of $88.8 million adjusted for non-cash items of $124.1 million and distributions received from unconsolidated entities of $149.7 million. Distributions from noncontrolling wireless entities managed by Array included a special distribution of $42.5 million related to the proceeds received by three entities in the state of Iowa that sold their wireless operations to T-Mobile on August 1, 2025. In addition, distributions from certain equity method investments operated by Verizon included a special distribution of $25.3 million related to proceeds received by Verizon managed entities related to Verizon's tower transaction with Vertical Bridge that closed in December 2024. This was partially offset by lower current year distributions due to adjustments made by certain equity method investees for prior period activity. Thechanges in working capital items which decreased net cash by $137.8 million were primarily driven by the payment of associate bonuses, deferred revenue related to spectrum leases and the timing of tax payments, partially offset by the timing of vendor payments. Cash flows provided by operating activities related to discontinued operations were $345.5 million.

Cash flows used for investing activities related to continuing operations were $233.7 million, due primarily to payments for property, plant and equipment of $262.1 million, partially offset by cash received from divestitures of $29.4 million. Cash flows used for investing activities related to discontinued operations were $2,462.4 million.

Cash flows used for financing activities related to continuing operations were $2,224.5 million, due primarily to repayments on TDS and Array long-term debt agreements of $1,961.8 million, the payment of $358.6 million in Array dividends, the payment of$65.8 million in TDS dividends, tax withholdings, net of cash receipts for Array stock-based compensation awards of $63.5 million due to Array awards that accelerated upon change in control and associate terminations, the repurchase of TDS Common Shares of $40.7 million, the repurchase of Array Common Shares of $21.4 million, and distributions to noncontrolling interests of $21.1 million due to the sale of the wireless operations to T-Mobile. These were partially offset by $325.0 million borrowed under the Array CoBank term loan agreement. Cash flows used for financing activities related to discontinued operations were $20.5 million.