8-K - UNIT - Equibles

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

Current Report

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported)

May 2, 2025

Windstream Parent, Inc.

(Exact name of registrant as specified in its charter)

Delaware	333-281068	99-2892631
(State or other jurisdiction	(Commission	(I.R.S. Employer
of incorporation)	File Number)	Identification No.)
4005 Rodney Parham Road, Little Rock, Arkansas	72212
---	---
(Address of principal executive<br> offices)	(Zip Code)

(501) 748-7000

(Registrant's telephone number, including area code)

N/A

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

x Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act: None

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Item 8.01 Other Events.

As previously disclosed, on May 3, 2024, Windstream Holdings II, LLC (“Windstream”) entered into an Agreement and Plan of Merger, by and between Windstream and Uniti Group Inc. (“Uniti”), as amended by Amendment No. 1 to the Agreement and Plan of Merger, dated as of July 17, 2024 (as it may be further amended and/or restated from time to time, the “Merger Agreement”). Upon the terms and subject to the conditions set forth in the Merger Agreement and following a pre-closing reorganization of Windstream, an affiliate of Windstream identified as “Merger Sub” in the Merger Agreement will merge with and into Uniti (the “Merger”), with Uniti surviving the Merger, with the result that both of Uniti and Windstream’s successor by merger will be indirect wholly owned subsidiaries of Windstream Parent, Inc. (“Parent”). In connection with the Merger, Parent will be renamed Uniti Group Inc.

In connection with the Merger, Parent is filing this Current Report on Form 8-K to provide (i) the unaudited financial statements and related notes of Windstream as of March 31, 2025 and December 31, 2024 and for the three months ended March 31, 2025 and 2024 and (ii) the related management’s discussion and analysis of financial condition and results of operations of Windstream, attached hereto as Exhibit 99.1 and Exhibit 99.2, respectively, and incorporated herein by reference.

The information contained in Exhibits 99.1 and 99.2 to this Current Report on 8-K updates and supplements the disclosure contained in Parent’s prospectus filed pursuant to Rule 424(b)(3) relating to the Merger, as filed with the Securities and Exchange Commission (the “SEC”) on February 12, 2025 (the “Windstream Prospectus”), and in Parent’s registration statement on Form S-4 (File No. 333-281068), as amended (the “Windstream Registration Statement”), which was declared effective by the SEC on February 12, 2025. Exhibits 99.1 and 99.2 shall be deemed incorporated by reference into the Windstream Prospectus and the Windstream Registration Statement. To the extent that the information in this Form 8-K differs from or updates information contained in the Windstream Prospectus or the Windstream Registration Statement, the information in this Current Report on Form 8-K shall supersede or supplement the information in the Windstream Prospectus or the Windstream Registration Statement.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

Statements included in or incorporated by reference into this communication that are not historical facts constitute “forward-looking statements” within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and the rules, regulations and releases of the SEC. These forward-looking statements are subject to risks and uncertainties, and actual results might differ materially from those discussed in, or implied by, the forward-looking statements. Forward-looking statements are based on the current beliefs and expectations of the managements of Uniti and Windstream and are subject to significant risks and uncertainties outside of their control. Words such as “believes,” “anticipates,” “estimates,” “expects,” “plans,” “intends,” “aims,” “potential,” “will,” “would,” “could,” “considered,” “likely,” “estimate” and variations of these words and similar future or conditional expressions are intended to identify forward-looking statements but are not the exclusive means of identifying such statements. Capitalized terms used but not defined herein have the meanings ascribed to such terms in the Windstream Registration Statement.

By their nature, forward-looking statements involve risk and uncertainty because they relate to events and depend on future circumstances that may or may not occur. Actual results may differ materially from the current beliefs and expectations of the management of Uniti and Windstream depending on a number of factors affecting their businesses and risks associated with the successful execution of the Merger and the integration and performance of New Uniti following the Merger. In evaluating these forward-looking statements, you should carefully consider the risks described in other reports that New Uniti and Uniti file with the SEC. Factors which could have a material adverse effect on operations and future prospects or which could cause events or circumstances to differ from the forward-looking statements include, but are not limited to: the Exchange Ratio being based on pre-determined ownership percentages meaning that it will not be adjusted if there is a decrease in Windstream’s value prior to the Merger, and therefore Uniti stockholders cannot be sure of the value of the consideration they will receive in the Merger, if completed; the Exchange Ratio being dependent upon the amount of then outstanding Uniti Common Stock and Windstream units at the Closing, which means that the Exchange Ratio will not be determined until immediately prior to the Closing; the Merger being subject to conditions, including conditions that may not be satisfied or waived on a timely basis or at all, and which if delayed or not satisfied may prevent, delay or jeopardize the Closing, result in additional expenditures of money and resources and/or reduce the anticipated benefits of the Merger; the termination of the Merger Agreement, which could negatively impact Uniti and Windstream and, in certain circumstances, could require Uniti to pay certain termination fees or expense reimbursement to Windstream; the uncertainty that Uniti will be able to obtain sufficient cash to pay the Closing Cash Payment for the Merger in a timely manner or at all; stockholder litigation, which could prevent or delay the Closing or otherwise negatively impact each of Uniti’s and Windstream’s businesses and operations; the significant transaction costs that Uniti and Windstream will incur in connection with the Merger; the possibility that the Merger may distract Uniti’s and Windstream’s respective management teams from their other responsibilities and the Merger Agreement may limit each of Uniti’s ability and Windstream’s ability to pursue new opportunities; the possibility that the Merger, including uncertainty regarding the Merger, may cause third parties to delay or defer decisions concerning Uniti and Windstream and could adversely affect Uniti’s and Windstream’s ability to effectively manage their respective businesses; business uncertainties while the Merger is pending, which may negatively impact Uniti’s ability and Windstream’s ability to attract and retain personnel; the unaudited pro forma condensed combined financial information in the Windstream Prospectus which are presented for illustrative purposes only and may not be reflective of New Uniti’s operating results or financial condition following the Closing; our stock price, which may fluctuate significantly; insider control over New Uniti that could limit your ability to influence the outcome of key transactions, including a change of control; certain provisions of Delaware law and our certificate of incorporation and bylaws that may deter third parties from acquiring us; the fact that we do not anticipate paying any cash dividends in the foreseeable future; competition and overbuilding in consumer service areas and competition in business markets, which could reduce market share and adversely affect New Uniti’s results of operations and financial condition; risks related to pro forma consolidated indebtedness, which could materially and adversely affect New Uniti’s financial position, including reducing funds available for other business purposes and reducing our operational flexibility; the possibility that our reliance on information technology in our operations, and any material failure, inadequacy, interruption or security failure of that technology could harm our business, and further, cybersecurity incidents could have a material adverse effect on our business, our results of operations and financial condition; rapid changes in technology, which could affect our ability to compete; the possibility that continuous increases in broadband usage may cause network capacity limitations, resulting in service disruptions or reduced capacity for customers; risks related to New Uniti’s operations, which will require sufficient access to liquidity to fund cash needs; if funds are not available when needed, this could affect service to customers and growth opportunities and have a material adverse impact on the business and financial position; risks related to the potential of New Uniti being prohibited from participating in government programs, which could cause results of operations to be materially and adversely affected; risks related to New Uniti being subject to various forms of regulation from the FCC and state regulatory commissions, which limit pricing flexibility for regulated voice and high-speed Internet products, subject New Uniti to service quality, service reporting and other obligations and expose New Uniti to the reduction of revenue from changes to the USF, the inter-carrier compensation system, or access to interconnection with competitors’ facilities; risks related to the possible impact of tariffs, including trade tariffs, and trade disputes; risks related to New Uniti’s business being subject to other government regulations and changes in current or future laws, regulations, rules, federal executive orders or state or federal mandates could restrict its ability to operate in the manner currently contemplated; and additional factors discussed in the Windstream Registration Statement and in Part I, Item 1A “Risk Factors” of Uniti’s Annual Report on Form 10-K for the year ended December 31, 2024, as well as those described in Windstream’s and Uniti’s subsequent filings with the SEC. Forward-looking statements speak only as of the date of this communication. Except as required by law, Uniti, Windstream and New Uniti expressly disclaim any obligation to update or revise any forward-looking statements to reflect any change in expectations or any change in events, conditions or circumstances on which any such statement is based.

Where to Find Additional Information

This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval. This communication may be deemed to be solicitation material in respect of the proposed merger between Windstream and Uniti (the “proposed transaction”). In connection with the proposed transaction, Windstream filed a registration statement on Form S-4, containing a proxy statement/prospectus, with the SEC on February 12, 2025 and Uniti filed a proxy statement with the SEC on February 12, 2025. INVESTORS AND SECURITY HOLDERS ARE URGED TO READ ALL RELEVANT DOCUMENTS FILED WITH THE SEC, INCLUDING THE REGISTRATION STATEMENT, PROXY STATEMENT/PROSPECTUS AND ANY OTHER RELEVANT DOCUMENTS WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. Investors and security holders are able to obtain copies of the registration statement and proxy statement/prospectus (when available) as well as other filings containing information about Windstream and Uniti, without charge, at the SEC’s website, http://www.sec.gov. Copies of the registration statement and proxy statement/prospectus and each company’s other filings with the SEC may also be obtained free of charge from the respective companies. Copies of documents filed with the SEC by Windstream will be made available free of charge on Windstream’s investor relations website at https://investor.windstream.com/. Copies of documents filed with the SEC by Uniti will be made available free of charge on Uniti’s investor relations website at https://investor.uniti.com/.

Item 9.01 Financial Statements and Exhibits

Exhibits

99.1	Financial Statements of Windstream Holdings II, LLC
99.2	Management's Discussion and Analysis of Windstream Holdings II, LLC
104	Inline XBRL for the cover page of this Current Report on Form 8-K

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	WINDSTREAM PARENT, INC.
Date:  May 2, 2025	By:	/s/ Drew Smith
		Name:	Drew Smith
		Title:	Chief Financial Officer and Treasurer

Exhibit 99.1

Windstream Holdings II, LLC

Table of Contents

****	Page No.
Condensed Consolidated Financial Statements (Unaudited):
Condensed Consolidated Statements of Operations	2
Condensed Consolidated Statements of Comprehensive (Loss) Income	3
Condensed Consolidated Balance Sheets	4
Condensed Consolidated Statements of Cash Flows	5
Condensed Consolidated Statements of Equity	6
Notes to Unaudited Condensed Consolidated Financial Statements	7

WINDSTREAM HOLDINGS II, LLC

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS(UNAUDITED)

	Three Months Ended <br> March 31,
(Millions, except per unit amounts)	2025			2024
Revenues and sales:
Service revenues	$	880.0		$	976.7
Sales revenues		9.8			23.9
Total revenues and sales		889.8			1,000.6
Costs and expenses:
Cost of services (exclusive of depreciation and amortization included below)		552.9			590.1
Cost of sales		10.5			16.4
Selling, general and administrative		151.3			173.5
Depreciation and amortization		186.7			207.7
Net gain on asset retirements and dispositions		(28.6	)		(21.7	)
Gain on sale of operating assets		(25.8	)		(103.2	)
Merger expenses		3.2			4.7
Total costs and expenses		850.2			867.5
Operating income		39.6			133.1
Other income, net		4.0			0.7
Interest expense		(58.2	)		(53.6	)
(Loss) income before income taxes		(14.6	)		80.2
Income tax expense		(2.2	)		(20.5	)
Net (loss) income	$	(16.8	)	$	59.7
(Loss) earnings per unit:
Basic	$	(0.19	)	$	0.65
Diluted	$	(0.19	)	$	0.65
Weighted average units outstanding:
Basic		90.6			90.6
Diluted		90.6			90.8

The accompanying notes are an integral part of these condensed consolidated financial statements.

WINDSTREAM HOLDINGS II, LLC

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE(LOSS) INCOME (UNAUDITED)

	Three Months Ended <br> March 31,
(Millions)	2025			2024
Net (loss) income	$	(16.8	)	$	59.7
Other comprehensive (loss) income:
Designated interest rate swaps:
Change in fair value in the period		(2.8	)		6.9
Net unrealized gains included in interest expense		(1.0	)		(1.7	)
De-designated interest rate swaps:
Amortization of net unrealized gain		(1.4	)		(1.9	)
		(5.2	)		3.3
Income tax benefit (expense)		1.3			(0.8	)
Change in interest rate swaps		(3.9	)		2.5
Postretirement plan:
Amounts included in net periodic benefit cost:
Amortization of net actuarial gains		(0.2	)		(0.2	)
Amortization of prior service credits		(0.2	)		(0.2	)
		(0.4	)		(0.4	)
Income tax benefit		0.2			0.1
Change in postretirement plan		(0.2	)		(0.3	)
Other comprehensive (loss) income		(4.1	)		2.2
Comprehensive (loss) income	$	(20.9	)	$	61.9

The accompanying notes are an integral part of these condensed consolidated financial statements.

WINDSTREAM HOLDINGS II, LLC

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(Millions, except number of common units)			December 31, <br>2024
Assets
Current Assets:
Cash and cash equivalents	369.6		$	349.0
Restricted cash	5.3			5.3
Accounts receivable, net of allowance for credit losses of 21.0 and 20.7, respectively	314.0			310.1
Inventories	129.2			136.8
Prepaid expenses	147.2			130.6
Other current assets	194.6			190.1
Total current assets	1,159.9			1,121.9
Intangible assets, net	241.5			245.9
Property, plant and equipment, net	3,700.7			3,812.6
Operating lease right-of-use assets	3,205.5			3,287.9
Other assets	97.9			96.4
Total Assets	8,405.5		$	8,564.7
Liabilities and Equity
Current Liabilities:
Current portion of operating lease obligations	562.9		$	527.2
Accounts payable	148.2			183.5
Advance payments	132.7			137.6
Accrued taxes	45.6			52.3
Accrued interest	89.4			44.1
Other current liabilities	392.4			447.4
Total current liabilities	1,371.2			1,392.1
Long-term debt	2,672.7			2,672.0
Long-term operating lease obligations	2,950.8			3,053.6
Deferred income taxes	163.8			166.2
Other liabilities	358.4			371.3
Total liabilities	7,516.9			7,655.2
Commitments and Contingencies (See Note 12)
Equity:
Common units, 90,598,704 issued and outstanding	1,463.0			1,463.0
Additional paid-in-capital	6.8			6.8
Accumulated other comprehensive income	9.7			13.8
Accumulated deficit	(590.9	)		(574.1	)
Total equity	888.6			909.5
Total Liabilities and Equity	8,405.5		$	8,564.7

All values are in US Dollars.

The accompanying notes are an integral part of these condensed consolidated financial statements.

WINDSTREAM HOLDINGS II, LLC

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS(UNAUDITED)

	Three Months Ended <br> March 31,
(Millions)	2025			2024
Cash Flows from Operating Activities:
Net (loss) income	$	(16.8	)	$	59.7
Adjustments to reconcile net (loss) income to net cash provided from operations:
Depreciation and amortization		186.7			207.7
Gain on sale of operating assets		(25.8	)		(103.2	)
Net gain on asset retirements and dispositions		(28.6	)		(21.7	)
Provision for estimated credit losses		6.8			10.7
Deferred income taxes		(1.0	)		18.3
Other, net		5.9			3.5
Changes in operating assets and liabilities, net
Accounts receivable		(10.7	)		6.8
Inventories		4.4			5.9
Prepaid expenses		(16.6	)		(14.4	)
Other current assets		2.8			(82.2	)
Other assets		(2.8	)		(1.8	)
Accounts payable		(26.4	)		(27.4	)
Advance payments		(4.9	)		(16.2	)
Accrued interest		45.4			(25.9	)
Accrued taxes		(6.6	)		(0.6	)
Other current liabilities		(66.9	)		40.8
Other liabilities		(0.6	)		0.4
Operating lease assets and lease obligations		15.3			16.9
Other, net		3.3			7.1
Net cash provided from operating activities		62.9			84.4
Cash Flows from Investing Activities:
Capital expenditures		(227.7	)		(245.9	)
Uniti funding of growth capital expenditures		175.0			131.3
Capital expenditures funded by government grants		(20.1	)		(30.0	)
Grant funds received for broadband expansion		9.9			21.1
Proceeds from sale of operating assets		25.8			103.5
Proceeds from liquidation of non-marketable investment		—			9.2
Other, net		—			0.8
Net cash used in investing activities		(37.1	)		(10.0	)
Cash Flows from Financing Activities:
Proceeds of debt issuances		—			215.0
Repayments of debt		—			(216.9	)
Debt issuance costs		(2.1	)		—
Payments under finance leases		(2.9	)		(4.3	)
Other, net		(0.2	)		(0.6	)
Net cash used in financing activities		(5.2	)		(6.8	)
Net increase in cash, cash equivalents and restricted cash		20.6			67.6
Cash, Cash Equivalents and Restricted Cash:
Beginning of period		354.3			50.2
End of period	$	374.9		$	117.8
Supplemental Cash Flow Disclosures:
Interest paid, net of interest capitalized	$	12.2		$	79.2
Income taxes refunded, net	$	(0.1	)	$	(0.5	)
Right-of-use assets obtained in exchange for operating lease obligations	$	60.5		$	57.0
Change in accounts payable and other current liabilities for purchases of property and equipment	$	7.8		$	(24.1	)

The accompanying notes are an integral part of these condensed consolidated financial statements.

WINDSTREAM HOLDINGS II, LLC

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY(UNAUDITED)

(Millions)	Equity Units		Additional <br> Paid-In <br> Capital		Accumulated <br> Other <br> Comprehensive <br> Income			Accumulated<br><br> Deficit			Total
Balance at December 31, 2024	$	1,463.0	$	6.8	$	13.8		$	(574.1	)	$	909.5
Net loss		—		—		—			(16.8	)		(16.8	)
Other comprehensive loss, net of tax:
Change in postretirement plan		—		—		(0.2	)		—			(0.2	)
Change in designated interest rate swaps		—		—		(2.8	)		—			(2.8	)
Amortization of net gains on de-designated interest rate swaps		—		—		(1.1	)		—			(1.1	)
Comprehensive loss						(4.1	)		(16.8	)		(20.9	)
Balance at March 31, 2025	$	1,463.0	$	6.8	$	9.7		$	(590.9	)	$	888.6
(Millions)	Equity Units		Additional <br> Paid-In <br> Capital			Accumulated <br> Other <br> Comprehensive <br> Income			Accumulated<br><br> Deficit			Total
---	---	---	---	---	---	---	---	---	---	---	---	---	---	---
Balance at December 31, 2023	$	1,463.0	$	22.8		$	18.9		$	(362.9	)	$	1,141.8
Net income		—		—			—			59.7			59.7
Other comprehensive income, net of tax:
Change in postretirement plan		—		—			(0.3	)		—			(0.3	)
Change in designated interest rate swaps		—		—			4.0			—			4.0
Amortization of net gains on de-designated interest rate swap		—		—			(1.5	)		—			(1.5	)
Comprehensive income		—		—			2.2			59.7			61.9
Equity-based compensation		—		1.4			—			—			1.4
Taxes withheld on vested and settled restricted common units		—		(0.5	)		—			—			(0.5	)
Balance at March 31, 2024	$	1,463.0	$	23.7		$	21.1		$	(303.2	)	$	1,204.6

The accompanying notes are an integral part of these condensed consolidated financial statements.

WINDSTREAM HOLDINGS II, LLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(UNAUDITED)

1. Preparation of Interim Financial Statements:

Organizational Structure — Windstream Holdings II, LLC (“Holdings”), a Delaware limited liability company, together with its consolidated subsidiaries, (collectively, “Windstream,” “the Company,” “we,” or “our”), is a privately held company with no publicly registered debt or equity securities. Windstream Services, LLC (“Services” or the “Borrower”) is a wholly owned subsidiary of Holdings.

Description of Business — Windstream’s quality-first approach connects customers to new opportunities and possibilities by leveraging its nationwide network to deliver a full suite of advanced communications services. We provide fiber-based broadband to residential and business customers in eighteen states, managed cloud communications and security services for large enterprises and government entities across the United States of America (“U.S.”), and tailored waves and transport solutions for carriers, content providers and large cloud computing and storage service providers in the U.S. and Canada. Our operations are organized into three business segments: Kinetic, Managed Services and Wholesale. The Kinetic segment serves consumer and business customers in markets in which we are the incumbent local exchange carrier (“ILEC”) and provides services over network facilities operated by us. Managed Services and Wholesale segments serve business and wholesale customers in markets in which we are a competitive local exchange carrier (“CLEC”) and provide services over network facilities primarily leased from other carriers. As further discussed in Note 10, effective January 1, 2025, we completed certain changes to our previous business segment structure to improve the alignment of customers and service offerings within our ILEC and CLEC markets, and we also changed the name of our former Enterprise segment for business segment reporting purposes to Managed Services.

See Notes 5 and 10 for additional information regarding the Company’s business segments.

Basis of Presentation — The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and its subsidiaries. All intercompany transactions have been eliminated, as applicable. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the U.S. (“U.S. GAAP”) have been condensed or omitted consistent with the interim reporting requirements of a public business entity and the Company’s debt agreements. The accompanying unaudited condensed consolidated balance sheet as of December 31, 2024 was derived from audited financial statements but does not include all disclosures required by U.S. GAAP. In the opinion of management, all adjustments, consisting of normal, recurring adjustments, necessary for a fair statement of the Company’s results of operations for, and financial condition as of the end of, the interim periods have been made in the preparation of the accompanying unaudited condensed consolidated financial statements. The results for the interim periods are not necessarily indicative of results for the full year. For a more complete discussion of significant accounting policies and certain other information, this report should be read in conjunction with the Company’s 2024 annual audited financial statements issued on March 3, 2025.

The preparation of financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and disclosure of contingent assets and liabilities. The estimates and assumptions used in the accompanying unaudited condensed consolidated financial statements are based upon management’s evaluation of the relevant facts and circumstances as of the date of the condensed consolidated financial statements. Actual results may differ from the estimates and assumptions used in preparing the accompanying unaudited condensed consolidated financial statements, and such differences could be material.

Certain prior year amounts have been reclassified to conform to the current year financial statement presentation. These reclassifications did not impact previously reported net income or comprehensive income.

WINDSTREAM HOLDINGS II, LLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(UNAUDITED)

1. Preparation of Interim Financial Statements, Continued:

Lessor Arrangements — Certain service offerings to customers include equipment leases. The Company also leases its network facilities to other service providers and enters into arrangements with third parties to lease unused or underutilized portions of its network. These leases meet the criteria for operating lease classification. Operating lease income was $35.1 million and $36.6 million for the three-month periods ended March 31, 2025 and 2024, respectively, and is included in service revenues in the condensed consolidated statements of operations.

Periodically, the Company enters into indefeasible right of use (“IRU”) arrangements that grant exclusive access to and unrestricted use of specific dark fiber assets and for which the terms of the arrangements are for a major part of the assets’ remaining economic life. These IRU arrangements meet the criteria for sales-type lease classification. There were no fiber sales during the first quarter of 2025. Comparatively, during the three-month period ended March 31, 2024, the Company recognized sales revenue of $16.0 million, cost of sales of $7.6 million and gross profit of $8.4 million related to these IRU arrangements.

Government Assistance — The Company receives federal and state governmental assistance in the form of subsidies and grants for either the construction of long-lived assets used in providing broadband service or to help offset the high cost of providing service to rural markets. In absence of specific U.S. GAAP related to the accounting for government grants applicable to for-profit entities, the Company considered the application of other authoritative accounting guidance by analogy and concluded that International Accounting Standard 20 — Accounting for Government Grants and Disclosures of Government Assistance (“IAS 20”) was the most appropriate authoritative guidance for recording and classifying federal and state governmental assistance received by the Company.

Under IAS 20, the accounting for government grants should be based on the nature of the expenditures which the grant is intended to compensate and should be recognized when there is reasonable assurance that the Company has met the requirements of the applicable program and there is reasonable assurance that the funding will be received. Grants that compensate Windstream for the cost of acquiring or constructing long-lived assets are recognized as a reduction in the cost of the related asset. If Windstream receives the grant funding upfront in advance of completing the related construction project, the Company establishes a liability for the portion of the grant funds received but not yet spent. The liability is then relieved on a pro rata basis as construction occurs and capital expenditures are incurred. Included in other current liabilities were $2.7 million and $3.3 million as of March 31, 2025 and December 31, 2024, respectively, for funding received but not yet spent. Conversely, if Windstream incurs capital expenditures prior to receiving the grant funds, the Company records a receivable equal to the amount of capital expenditures incurred to be funded by the grant. Included in other current assets were $72.9 million and $63.3 million as of March 31, 2025 and December 31, 2024, respectively, for funding not yet received.

Gain on Sale of Operating Assets — In March 2024, the Company sold certain of its unused IPv4 addresses for $104.3 million and received $103.5 million in cash, net of broker fees. Including other transaction-related expenses, the Company recognized a pretax gain of $103.2 million from the sale. In February 2025, the Company completed the sale of additional unused IPv4 addresses and received $25.8 million in proceeds, net of broker fees. In connection with this sale, the Company recognized a pretax gain equal to the amount of the proceeds received.

Net Gain on Asset Retirements and Dispositions — In conjunction with the Company’s ongoing initiatives to migrate substantially all of its CLEC customers from time-division multiplexing (“TDM”) network equipment to newer technologies, replace existing ILEC copper cable with fiber optic cable, and reduce the number of leased colocation sites, the Company retired certain property, plant and equipment, primarily consisting of TDM equipment and copper cable. Upon retirement, the Company wrote-off the remaining net book value of the related assets and recorded pretax losses totaling $4.0 million and $1.8 million for the three-month periods ended March 31, 2025 and 2024, respectively. On an aggregate basis, the Company realized pretax net losses (gains) from the disposal of vehicles and other assets of $0.7 million and $(0.3) million for the three-month periods ended March 31, 2025 and 2024.

WINDSTREAM HOLDINGS II, LLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(UNAUDITED)

1. Preparation of Interim Financial Statements, Continued:

Windstream has received and expects to receive funds for capital expenditures to expand the availability and affordability of residential broadband service via direct grants or through the formation of public private partnerships. These funds are accounted for as a reduction of the gross cost of the related capital expenditures. Under the master lease agreements, Uniti Group, Inc. (“Uniti”) reimburses Windstream for growth capital improvements (“GCIs”) on a gross basis. GCIs initially funded by Windstream and for which reimbursement from Uniti has been requested, but not yet received are reflected as tenant capital improvements (“TCIs”) in property, plant and equipment, net and become the property of Uniti when placed in service. When reimbursements for GCIs are received from Uniti, the related TCIs are derecognized and become leased assets under the master lease agreements. Differences in the amount of the GCI reimbursements and the carrying value of the TCIs are recognized as gains. During the three-month periods ended March 31, 2025 and 2024, the Company recorded pretax gains related to GCI reimbursements that exceeded the carrying value of TCIs at the time of reimbursement of $33.3 million and $23.2 million, respectively.

Provision for Income Taxes — During the first quarter of 2025, the Company recognized income tax expense of $2.2 million, as compared to income tax expense of $20.5 million for the same period in 2024. The income tax expense recorded in the first quarter of 2025 reflected the loss before taxes offset by non-discrete tax expense of $4.6 million related to the increase in the valuation allowance for nondeductible interest expense, discrete tax expense of $0.8 million for nondeductible expenses associated with the Merger, and discrete tax expense of $6.4 million related to the sale of the IPv4 addresses. Comparatively, the income tax expense recorded in the three-month period ended March 31, 2024 primarily reflected discrete tax expense of $25.6 million related to the sale of the IPv4 addresses. Inclusive of the non-discrete and the discrete items, our effective tax rate was (15.1) percent for the three-month period ended March 31, 2025, as compared to 25.6 percent in the same period in 2024.

Recently Issued Authoritative Guidance

Income Taxes — In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740) - Improvements to Income Tax Disclosures (“ASU 2023-09”). The standard intends to improve transparency about income tax information primarily through changes to the tax rate reconciliation and income taxes paid disclosures. ASU 2023-09 will require entities on an annual basis to disclose a tabular rate reconciliation using both percentages and dollar amounts that includes specific categories of reconciling items and to provide additional information for reconciling items that meet a specified quantitative threshold. ASU 2023-09 also requires entities to disclose on an annual basis the amount of income taxes paid (net of refunds received) disaggregated by federal, state and foreign jurisdictions and for individual jurisdictions in which income taxes paid (net of refunds received) is equal to or greater than 5 percent of total income taxes paid (net of refunds received). ASU 2023-09 is effective for fiscal years beginning after December 15, 2024, which is January 1, 2025 for the Company, with early adoption permitted. The amendments in ASU 2023-09 are to be applied on a prospective basis, although retrospective application is permitted. The Company is currently in the process of evaluating the impacts of this guidance to the income tax disclosures included within its consolidated financial statements.

Disaggregation of Expenses — In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income (Topic 220) - Expense Disaggregation Disclosures (“ASU 2024-03”). This update requires public business entities to provide more detailed disclosure in the notes to the financial statements of certain categories of expenses, such as purchases of inventory, employee compensation, depreciation, and intangible asset amortization, that are components of existing captions presented on the face of the statement of operations. ASU 2024-03 is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027, with early adoption permitted. The amendments in ASU 2024-03 may be applied either prospectively or retrospectively. The Company is currently evaluating the impact that ASU 2024-03 will have on its financial statement presentation and disclosures.

WINDSTREAM HOLDINGS II, LLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(UNAUDITED)

2. Debt:

Debt was as follows:

(Millions)	March 31, <br>2025			December 31, <br>2024
Issued by Services:
Senior secured 2024 term loan - variable rate, due October 1, 2031	$	500.0		$	500.0
Senior first lien notes - 8.250%, due October 1, 2031		2,200.0			2,200.0
Senior secured revolving credit facility - variable rate, due January 23, 2027		—			—
Unamortized net premium on long-term debt (a)		29.2			30.1
Unamortized debt issuance costs (a)		(56.5	)		(58.1	)
		2,672.7			2,672.0
Less current portion		—			—
Total long-term debt	$	2,672.7		$	2,672.0

(a) Amounts are amortized using the interest method over the life of the related debt instrument.

Refinancing Transactions — In October and December 2024, Services and Windstream Escrow Finance Corp. (collectively, the “Co-Issuers”), each a subsidiary of Windstream, completed refinancing transactions which included the issuance of $2.2 billion of 8.250 percent senior first lien senior first lien notes due October 1, 2031 (the “2031 Notes”), as well as a new $500.0 million first lien term loan (the “2024 Term Loan”), also maturing on October 1, 2031. Net proceeds from the debt issuances were used to fully repay borrowings outstanding under the Credit Agreement consisting of a $706.0 million secured first lien term loan facility (the “Term Loan”) and a $250.0 million super senior incremental term loan (“Incremental Term Loan”), both of which were due in 2027, and to fully repay $1.4 billion aggregate principal 7.750 percent senior first lien notes due August 15, 2028 (the “2028 Notes”). The remaining net proceeds will be used for general corporate purposes to invest in the Company’s network and other capital expenditures.

The 2031 Notes are guaranteed on a senior secured basis by certain of the Co-Issuers’ direct and indirect wholly-owned domestic subsidiaries. The indenture governing the 2031 Notes contains provisions that allow for the collapse of Uniti’s and Windstream’s separate debt silos (the “Post-Closing Reorganization”) upon the closing of the anticipated merger between Uniti and Windstream (“the Merger”). The 2031 Notes will not be registered under the Securities Act of 1933, as amended (the “Securities Act”) or any state securities laws. As such, the 2031 Notes may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act and any applicable state securities laws.

The 2024 Term Loan matures on October 1, 2031, and bears interest based on a floating rate plus a margin (which at Services’ election, may be the base rate plus 3.750 percent or the adjusted term Secured Overnight Financing Rate (“SOFR”) rate plus 4.75 percent (as defined in the Credit Agreement), with a floor for the adjusted term SOFR rate of 0.0 percent). For the three months ended March 31, 2025, the variable interest rate on the 2024 Term Loan ranged from 9.16 percent to 9.21 percent, and the weighted average rate on amounts outstanding on the 2024 Term Loan was 9.18 percent.

Upon completion of the above refinancing transactions, all outstanding indebtedness of Windstream permit the Post-Closing Reorganization, and as of March 31, 2025, there are no maturities of long-term debt prior to October 1, 2031.

Credit Agreement — Pursuant to the Credit Agreement, by and between the Borrower, Holdings, JPMorgan Chase Bank, N.A., as Administrative and Collateral Agent, and Lender Parties, dated September 21, 2020 (the “Credit Agreement”), the Borrower has access to a “first out” senior secured revolving credit facility in an aggregate committed amount of up to $475.0 million, which matures on January 23, 2027. The proceeds of loans extended under the credit facilities may be used (i) for working capital and other general corporate purposes (ii) to pay transaction costs, professional fees and other obligations and expenses incurred in connection with the credit facilities, and (iii) for permitted acquisitions, capital expenditures and transaction costs.

WINDSTREAM HOLDINGS II, LLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(UNAUDITED)

2. Debt, Continued:

Loans under the amended senior secured revolving credit facility will bear interest, at the option of the Borrower, at a rate equal to SOFR plus a 0.10 percent credit spread adjustment with a floor of 1.00 percent plus a margin of 3.25 percent per annum or a base rate plus 2.25 percent subject to two step downs of 25 basis points each based on the achievement of certain first lien secured leverage ratios.

During the first quarter of 2025, there were no new borrowings under the senior secured revolving credit facility. Comparatively, during the three months ended March 31, 2024, Services borrowed $215.0 million under the senior secured revolving credit facility and repaid all of these borrowings by the end of the period. Considering letters of credit of $188.3 million, the amount available for borrowing under the senior secured revolving credit facility was $286.7 million as of March 31, 2025.

During the three-month period ended March 31, 2024, the variable interest rate on borrowings outstanding under the senior secured revolving credit facility ranged from 10.50 percent to 10.75 percent, and the weighted average rate on amounts outstanding was 10.74 percent, respectively.

Prior to their repayments during the fourth quarter of 2024 discussed above, the variable interest rate on the Incremental Term Loan ranged from 9.43 percent to 9.46 percent, and the weighted average rate on amounts outstanding was 9.44 percent for the three-month period ended March 31, 2024, while the variable interest rate on the Term Loan ranged from 11.68 percent to 11.71 percent, and the weighted average rate on amounts outstanding on the Term Loan was 11.69 percent for the three-month period ended March 31, 2024.

Debt Covenants and Compliance

The amended Credit Agreement includes usual and customary negative covenants for loan agreements of this type, including covenants limiting Borrower and its restricted subsidiaries’ (other than certain covenants therein which are limited to subsidiary guarantors) ability to, among other things, incur additional indebtedness, create liens on assets, make investments, loans or advances, engage in mergers, consolidations, sales of assets and acquisitions, pay dividends and distributions and make payments in respect of certain material payment subordinated indebtedness, in each case subject to customary exceptions for loan agreements of this type. The amended Credit Agreement also includes certain customary representations and warranties, affirmative covenants and events of default, including, but not limited to, payment defaults, breaches of representations and warranties, covenant defaults, certain events under Employee Retirement Income Security Act (“ERISA”), unstayed judgments in favor of a third party involving an aggregate liability in excess of a certain threshold, change of control, specified governmental actions having a material adverse effect or condemnation or damage to a material portion of the collateral.

The terms of the Amended Credit Agreement and indenture for the 2031 Notes include customary covenants that, among other things, require the Company to maintain certain financial ratios and restrict its ability to incur additional indebtedness. These financial ratios include a maximum leverage ratio of 3.25 to 1.0 and a maximum first lien secured leverage ratio of 2.25 to 1.0 for the Amended Credit Agreement. For the indenture for the 2031 Notes, these financial ratios include a maximum leverage ratio of 3.50 to 1.0 and a maximum first lien secured leverage ratio of 2.25 to 1.0. As of March 31, 2025, the Company was in compliance with all of its debt covenants.

As legally structured, the Merger will not trigger a change in control under the amended Credit Agreement or the 2031 Notes Indenture, and accordingly, will not affect the Company’s compliance with its debt covenants (see Note 11 for further discussion of the Merger).

Certain properties of the Company are pledged as collateral to secure long-term debt obligations of Services. The obligations under Services’ senior secured credit facility and indenture governing the 2031 Notes are secured by liens on all of the personal property assets and the related operations of the Company’s subsidiaries who are guarantors of the senior secured credit facility and 2031 Notes.

WINDSTREAM HOLDINGS II, LLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(UNAUDITED)

2. Debt,Continued:

Interest Expense

Interest expense was as follows:

	Three Months Ended<br><br> March 31,
(Millions)	2025			2024
Interest expense - long-term debt	$	60.1		$	59.9
Interest expense - finance leases and other		3.2			2.4
Effects of interest rate swaps		(2.4	)		(3.6	)
Less capitalized interest expense		(2.7	)		(5.1	)
Total interest expense	$	58.2		$	53.6

3. Derivatives:

Set forth below is information related to interest rate swap agreements:

(Millions)	March 31, <br>2025		December 31, <br>2024
Designated portion, measured at fair value:
Other current assets	$	5.4	$	7.7
Other current liabilities	$	0.5	$	0.1
Other liabilities	$	4.2	$	1.5
Accumulated other comprehensive income	$	0.1	$	3.9
De-designated portion, unamortized value
Accumulated other comprehensive income	$	1.4	$	2.8

Changes in derivative instruments were as follows for the three-month periods ended March 31:

(Millions)	2025			2024
Designated interest rate swaps:
Changes in fair value, net of tax	$	(2.1	)	$	5.2
Reclassification of unrealized gains, net of tax	$	(0.7	)	$	(1.3	)
De-designated interest rate swaps:
Reclassification of net unrealized gains, net of tax	$	(1.1	)	$	(1.4	)

As of March 31, 2025, the Company expects to recognize net gains of $2.9 million, net of taxes, in interest expense during the next twelve months for interest settlements related to its interest rate swap agreements.

Derivative instruments are accounted for in accordance with authoritative guidance for recognition, measurement and disclosures about derivative instruments and hedging activities, including when a derivative or other financial instrument can be designated as a hedge. This guidance requires recognition of all derivative instruments at fair value as either assets or liabilities, depending on the rights or obligations under the related contracts, and accounting for the changes in fair value based on whether the derivative has been designated as, qualifies as and is effective as a hedge. Changes in fair value of cash flow hedges are recorded as a component of other comprehensive (loss) income in the current period. In the event a cash flow hedge is no longer highly effective, it will be de-designated and changes in fair value will be recognized in earnings in the current period.

WINDSTREAM HOLDINGS II, LLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(UNAUDITED)

3.Derivatives, Continued:

Services enters into interest rate swap agreements to mitigate its exposure to the variability in cash flows on a portion of its floating-rate debt, consisting of the $500.0 million 2024 Term Loan and borrowings under the senior secured revolving credit facility. As of March 31, 2025 and December 31, 2024, Services was party to two pay fixed, receive variable interest rate swap agreements with the same bank counterparty. The variable rate received resets on the first day of the floating rate calculation period specified in the respective interest rate swap agreements. Services has designated both swaps as cash flow hedges of the interest rate risk inherent in borrowings outstanding under the Credit Agreement due to changes in the benchmark interest rate.

The first swap has a notional value of $300.0 million matures on October 31, 2025, and the variable rate received was the one-month U.S. Dollar Secured Overnight Financing Rate fallback rate (“USD-SOFR”) rate (not subject to a floor). In May 2023, Services amended the interest rate swap agreement which changed the fixed interest rate paid to 1.1422 percent.

The second swap was initially entered into by Services effective October 31, 2023, and had a notional value of $200.0 million and matured on October 31, 2026. The fixed rate paid was 4.7030 percent and the variable rate received was the one-month USD-SOFR rate (not subject to a floor).

In conjunction with the October 2024 debt refinancing transactions discussed in Note 2, on October 7, 2024, Services extended the maturity of the $200.0 million pay fixed, receive variable interest rate swap agreement from October 31, 2026 to October 31, 2029. In completing this blend and extend transaction, the fixed rate paid decreased from 4.7030 percent to 4.1730 percent. The variable rate received and notional value of the amended swap were the same as the original swap.

As a result of the May 2023 and October 2024 transactions, Services discontinued hedge accounting for the original swaps. Because Windstream concluded that it was probable that the original hedged transactions (future interest payments) would still occur, the risk of the variability of future cash flows was not eliminated upon discontinuation of hedge accounting. Accordingly, unrealized gains and losses deferred in accumulated other comprehensive income related to the discontinued hedging relationships were frozen and are being amortized from accumulated other comprehensive income to interest expense on a straight-line basis over the remaining contractual term of the original swaps.

All or a portion of the change in fair value of the interest rate swap agreements recorded in accumulated other comprehensive income may be recognized in earnings in certain situations. If Services extinguishes all of its variable rate debt, or a portion of its variable rate debt such that the outstanding notional amount of the swaps exceeds the outstanding notional amount of variable rate debt, all or a portion of the change in fair value of the swaps may be recognized in earnings. In addition, the change in fair value of the swaps may be recognized in earnings if the Company determines it is no longer probable that it will have future variable rate cash flows to hedge against. The Company has assessed the counterparty risk and determined that no substantial risk of default exists as of March 31, 2025, because the counterparty is a bank with a current credit rating at or above A, as determined by Moody’s Ratings, Standard & Poor’s Corporation and Fitch Ratings.

The swap agreements with the bank counterparty contain cross-default provisions whereby if Services were to default on certain indebtedness and that indebtedness were to be accelerated, it could result in the counterparty terminating the outstanding swap agreements with Services. Were such a termination to occur, the party that was in a liability position under the applicable swap at the time of such termination would be required to pay the value of the swap, as determined in accordance with the terms of the applicable swap agreement, to the other party. Services’ obligations to its swap counterparty are secured under the Credit Agreement and Services does not post any separate collateral to the bank counterparty to its interest rate swap agreements.

Balance Sheet Offsetting

Services is party to master netting arrangements, which are designed to reduce credit risk by permitting net settlement of transactions, with counterparties. For financial statement presentation purposes, the Company does not offset assets and liabilities under these arrangements.

WINDSTREAM HOLDINGS II, LLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(UNAUDITED)

3. Derivatives, Continued:

The following table presents the Company’s derivative assets subject to an enforceable master netting arrangement as of March 31, 2025 and December 31, 2024.

	Gross Amount <br> of Assets <br> Presented in		Gross Amount Not Offset <br> in the Condensed Consolidated <br> Balance Sheets
(Millions)	the Condensed <br> Consolidated <br> Balance Sheets		Financial Instruments			Cash <br> Collateral <br> Received		Net <br><br>Amount
March 31, 2025:
Interest rate swaps	$	5.4	$	(4.7	)	$	—	$	0.7
December 31, 2024:
Interest rate swaps	$	7.7	$	(1.6)		$	—	$	6.1

Information pertaining to derivative liabilities was as follows:

	Gross Amount <br> of Liabilities<br> Presented in		Gross Amount Not Offset <br> in the Condensed Consolidated <br> Balance Sheets
Millions	the Condensed <br> Consolidated <br> Balance Sheets		Financial Instruments			Cash <br> Collateral <br> Received		Net <br><br>Amount
March 31, 2025:
Interest rate swaps	$	4.7	$	(4.7	)	$	—	$	—
December 31, 2024:
Interest rate swaps	$	1.6	$	(1.6)		$	—	$	—

4. Fair Value Measurements:

Fair value of financial and non-financial assets and liabilities is defined as an exit price, representing the amount that would be received to sell an asset or transfer a liability in an orderly transaction between market participants. Authoritative guidance defines the following three tier hierarchy for assessing the inputs used in fair value measurements:

Level 1 - Quoted prices in active markets for identical assets or liabilities

Level 2 - Observable inputs other than quoted prices in active markets for identical assets or liabilities

Level 3 - Unobservable inputs

The highest priority is given to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurement) and the lowest priority is given to unobservable inputs (level 3 measurement). Assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The assessment of the significance of a particular input to the fair value measurement requires management judgment and may affect the determination of fair value of assets and liabilities and their placement within the fair value hierarchy levels.

Financial instruments consist primarily of cash, cash equivalents, restricted cash, accounts receivable, accounts payable, interest rate swaps and long-term debt. With respect to the Company’s financial instruments, the carrying amount of cash, restricted cash, accounts receivable and accounts payable has been estimated by management to approximate fair value due to the relatively short period of time to maturity for those instruments. The fair value of cash equivalents, interest rate swaps and longterm debt is measured on a recurring basis.

Non-financial assets and liabilities, including property, plant and equipment, intangible assets and asset retirement obligations, are measured at fair value on a non-recurring basis. No event occurred during the three-month period ended March 31, 2025 requiring any non-financial asset and liability to be subsequently recognized at fair value.

WINDSTREAM HOLDINGS II, LLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(UNAUDITED)

4. Fair Value Measurements, Continued:

The fair value of cash equivalents, interest rate swaps and long-term debt was as follows:

(Millions)	March 31, <br>2025		December 31, <br>2024
Recorded at Fair Value in the Financial Statements:
Cash equivalents - Level 1 (a)	$	233.0	$	272.4
Interest rate swap assets - Level 2	$	5.4	$	7.7
Interest rate swap liabilities - Level 2	$	4.7	$	1.6
Not Recorded at Fair Value in the Financial Statements:
Long-term debt - Level 2 (b)	$	2,741.0	$	2,778.5
(a)	Cash equivalents are highly liquid, actively traded money market funds with next day access.
---	---
(b)	Recognized at carrying value of $2,729.2 million and $2,730.1 million, excluding unamortized debt issuance<br>costs, at March 31, 2025 and December 31, 2024, respectively.
---	---

The fair value of interest rate swaps is determined based on the present value of expected future cash flows using the applicable observable, quoted swap rates (USD-SOFR) for the full term of the swaps and incorporating credit valuation adjustments to appropriately reflect both Services’ own non-performance risk and non-performance risk of the respective counterparties. As of March 31, 2025 and December 31, 2024, the adjustment to the fair value of the interest rate swaps to reflect non-performance risk was immaterial.

The fair value of the 2031 Notes was based on observed market prices in an inactive market, while the fair value of the 2024 Term Loan was based on current market interest rates applicable to the respective debt instrument.

During 2025, there were no assets or liabilities measured at fair value for purposes of the fair value hierarchy using significant unobservable inputs (level 3). There were no transfers within the fair value hierarchy during the three-month period ended March 31, 2025.

5. Revenues:

Revenues from contracts with customers are accounted for under Accounting Standards Codification (“ASC”) Topic 606 Revenues from Contracts with Customers (“ASC 606”) and are earned primarily through the provisioning of telecommunications and other services and through the sale of equipment to customers and contractors. Revenues are also earned from leasing arrangements, federal and state Universal Service Fund (“USF”) programs and other regulatory-related sources and activities.

Consumer service revenues are generated from the provisioning of broadband and voice services to consumers. Fiber subscriber consumer revenues consist of recurring products and services for fiber consumer broadband customers, which includes some cable customers with 1-Gigabyte per second (“Gbps”) service. All non-recurring revenues are included in digital subscriber line (“DSL”) subscriber and other revenues. Business service revenues are earned from providing managed communications services, integrated voice and data services, advanced data and traditional voice and long-distance services to large, mid-market and small business customers. Managed Services revenues consist of recurring software solutions and network connectivity products. Software solutions include Secure Access Service Edge (“SASE”), Unified Communications as a Service (“UCaaS”), OfficeSuite UC®, and associated network access products and services. SASE includes Software Defined Wide Area Network (“SD-WAN”) and Security Service Edge (“SSE”). Network connectivity products consist of dynamic Internet protocol, dedicated Internet access, multi-protocol label switching services, integrated voice and data, long distance and other managed services. Managed Services also include TDM voice and data services. Wholesale revenues include revenues from other communications services providers for special access circuits and fiber connections, voice and data transport services, and wireless backhaul services.

WINDSTREAM HOLDINGS II, LLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(UNAUDITED)

5. Revenues, Continued:

Service revenues also include switched access revenues, amounts received from the Rural Digital Opportunity Fund (“RDOF”), federal and state USF revenues, end user surcharges and revenues from providing other miscellaneous services.

Sales revenues include sales of various types of communications equipment and products to customers including selling network equipment to contractors on a wholesale basis. Managed Services product sales include high-end data and communications equipment which facilitate the delivery of advanced data and voice services to business customers. Sales revenues also include amounts recognized from sales-type leases for fiber where control of the fiber has transferred to the customer.

Accounts Receivable — Accounts receivable consist principally of amounts billed and currently due from customers and are generally unsecured and due within 30 days. The amounts due are stated at their net estimated realizable value. An allowance for credit losses is maintained to provide for the estimated amount of receivables that will not be collected. Concentration of credit risk with respect to accounts receivable is limited because a large number of geographically diverse customers make up our customer base. Due to varying customer billing cycle cut-offs, management must estimate service revenues earned but not yet billed at the end of each reporting period. Included in accounts receivable are unbilled revenues related to communication services and product sales of $20.6 million and $20.3 million at March 31, 2025 and December 31, 2024, respectively.

Accounts receivable consists of the following as of:

(Millions)	March 31, <br>2025			December 31, <br>2024
Accounts receivable	$	335.0		$	330.8
Less: Allowance for credit losses		(21.0	)		(20.7	)
Accounts receivable, net	$	314.0		$	310.1

Activity in the allowance for credit losses consisted of the following:

(Millions)
Balance as of December 31, 2024	$	20.7
Provision for estimated credit losses		6.8
Write-offs, net of recovered accounts		(6.5	)
Balance as of March 31, 2025	$	21.0

Contract Balances — Contract assets include unbilled amounts, which result when revenue recognized exceeds the amount billed to the customer and the right to payment is not just subject to the passage of time. Contract assets principally consist of discounts and promotional credits given to customers. The current and noncurrent portions of contract assets are included in other current assets and other assets, respectively, in the accompanying condensed consolidated balance sheets.

Contract liabilities consist of services billed in excess of revenue recognized. The changes in contract liabilities are primarily related to customer activity associated with services billed in advance, the receipt of cash payments and the satisfaction of performance obligations. Amounts are classified as current or noncurrent based on the timing of when the Company expects to recognize revenue. The current portion of contract liabilities is included in advance payments while the noncurrent portion is included in other liabilities.

WINDSTREAM HOLDINGS II, LLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(UNAUDITED)

5. Revenues, Continued:

Contract assets and liabilities from contracts with customers were as follows at:

(Millions)	March 31, <br>2025		December 31, <br>2024
Contract assets (a)	$	54.4	$	57.9
Contract liabilities (b)	$	186.3	$	192.4
(a)	Included $30.2 million and $32.0 million in other current assets and $24.2 million and $25.9 million in<br>other assets as of March 31, 2025 and December 31, 2024, respectively.
---	---
(b)	Included $116.9 million and $120.5 million in advance payments and $69.4 million and $71.9 million in<br>other liabilities as of March 31, 2025 and December 31, 2024, respectively.
---	---
	Three Months Ended<br><br> March 31,
---	---	---	---	---
(Millions)	2025		2024
Revenues recognized included in the opening contract liability balance	$	94.6	$	101.7

Remaining Performance Obligations — Remaining performance obligations represent services the Company is required to provide to customers under bundled or discounted arrangements, which are satisfied as services are provided over the contract term. Certain contracts provide customers the option to purchase additional services or usage-based services. The fees related to the additional services or usage-based services are recognized when the customer exercises the option, typically on a month-to-month basis. In determining the transaction price allocated, the Company does not include these non-recurring fees and estimates for usage, nor does it consider arrangements with an original expected duration of less than one year.

Remaining performance obligations reflect recurring charges billed, adjusted for discounts and promotional credits and revenue adjustments. At March 31, 2025, the aggregate amount of the transaction price allocated to remaining performance obligations was approximately $1.8 billion for contracts with original expected durations of more than one year remaining. The Company expects to recognize approximately 32 percent, 33 percent, and 20 percent of our remaining performance obligations as revenue during the remainder of 2024, 2025 and 2026, respectively, with the remaining balance thereafter.

Revenue by Category — Windstream disaggregates its revenues from contracts with customers based on the business segment and class of customer to which products and services are provided because management believes that doing so best depicts the nature, amount and timing of the Company’s revenue recognition. As further discussed in Note 10, effective January 1, 2025, we completed certain changes to our previous business segment structure to improve the alignment of customers and service offerings within our ILEC and CLEC markets. Prior period revenue by category information has been recast to conform with the current year presentation.

WINDSTREAM HOLDINGS II, LLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(UNAUDITED)

5. Revenues, Continued:

Revenues disaggregated by category were as follows:

	Three Months<br> Ended March 31, 2025
(Millions)	Kinetic		Managed Services		Wholesale		Total
Category:
Consumer:
Fiber subscriber	$	102.9	$	—	$	—	$	102.9
DSL subscriber and other		174.8		—		—		174.8
Managed Services:
Managed Services		—		209.8		—		209.8
TDM		—		20.6		—		20.6
Business services		106.6		—		—		106.6
Switched access		3.2		—		—		3.2
Wholesale		—		—		174.4		174.4
Total service revenues accounted for under ASC 606		387.5		230.4		174.4		792.3
Sales revenues		9.6		0.2		—		9.8
Total revenues and sales accounted for under ASC 606		397.1		230.6		174.4		802.1
Other revenues (a)		68.2		9.1		10.4		87.7
Total revenues and sales	$	465.3	$	239.7	$	184.8	$	889.8
	Three Months<br> Ended March 31, 2024
---	---	---	---	---	---	---	---	---
(Millions)	Kinetic		Managed Services		Wholesale		Total
Category:
Consumer:
Fiber subscriber	$	85.6	$	—	$	—	$	85.6
DSL subscriber and other		208.6		—		—		208.6
Managed Services:
Managed Services		—		238.4		—		238.4
TDM		—		32.6		—		32.6
Business services		120.6		—		—		120.6
Switched access		4.3		—		—		4.3
Wholesale		—		—		188.7		188.7
Total service revenues accounted for under ASC 606		419.1		271.0		188.7		878.8
Sales revenues		7.6		0.3		16.0		23.9
Total revenues<br> and sales accounted for under ASC 606		426.7		271.3		204.7		902.7
Other revenues (a)		72.0		12.3		13.6		97.9
Total revenues and sales	$	498.7	$	283.6	$	218.3	$	1,000.6
(a)	Other service revenues primarily consist of operating lease<br>income (excluded from Consumer, Managed Services and Wholesale), end user surcharges, funding from the RDOF and state USF.
---	---

WINDSTREAM HOLDINGS II, LLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(UNAUDITED)

5. Revenues, Continued:

Deferred Contract Acquisition and Fulfillment Costs — Direct incremental costs to acquire a contract, consisting of sales commissions and direct incremental costs to fulfill a contract consisting of labor and materials consumed for activities associated with the provision, installation and activation of services, including costs to implement customized solutions, are deferred and recognized in operating expenses using a portfolio approach over the estimated life of the customer, which ranges from 36 to 48 months. Determining the amount of costs to fulfill a contract requires management judgment. In determining costs to fulfill, consideration is given to periodic time studies, management estimates and statistics from internal information systems.

Deferred contract acquisition and fulfillment costs are classified as current or noncurrent based on the timing of when the Company expects to recognize the expense. The current and noncurrent portions of deferred contract acquisition and fulfillment costs are included in prepaid expenses and other assets, respectively, in the accompanying condensed consolidated balance sheets. Amortization of deferred contract acquisition costs and amortization of deferred fulfillment costs are included in selling, general and administrative expenses and costs of services, respectively, in the accompanying condensed consolidated statements of operations.

The following table presents the deferred contract acquisition and fulfillment costs included on our condensed consolidated balance sheets:

(Millions)	March 31, <br>2025		December 31, <br>2024
Deferred Contract Acquisition Costs:
Prepaid expenses	$	38.9	$	41.6
Other assets		33.4		33.3
Total deferred contract acquisition costs	$	72.3	$	74.9
Deferred Contract Fulfillment Costs:
Prepaid expenses	$	14.7	$	13.9
Other assets		13.0		13.2
Total deferred contract fulfillment costs	$	27.7	$	27.1

Amortization of deferred contract acquisition costs was $13.4 million and $16.9 million for the three-month periods ended March 31, 2025 and 2024, respectively. Amortization of deferred contract fulfillment costs was $4.4 million and $4.8 million for the three-month periods ended March 31, 2025 and 2024, respectively.

6. Employee Benefit Plans:

The Company maintains a non-contributory qualified defined benefit pension plan. Future benefit accruals for all eligible non-bargaining employees covered by the pension plan have ceased. The components of pension income were as follows:

	Three Months Ended<br><br> March 31,
(Millions)	2025			2024
Benefits earned during the period (a)	$	0.4		$	0.4
Interest cost on benefit obligation (b)		7.5			7.3
Expected return on plan assets (b)		(7.9	)		(7.8	)
Net periodic pension income	$	—		$	(0.1	)
(a)	Included in cost of services and selling, general and administrative<br>expense.
---	---
(b)	Included in other income, net.
---	---

WINDSTREAM HOLDINGS II, LLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(UNAUDITED)

6. Employee Benefit Plans, Continued:

On March 24, 2025, the Company made in cash a voluntary contribution to the qualified pension plan of $21.0 million that was allocated to the 2024 plan year. The Company’s annual minimum funding requirements to the qualified pension plan for the 2025 plan year total $18.0 million, of which $13.5 million will be contributed in 2025 and the remaining $4.5 million will be contributed in January 2026. On April 15, 2025, the Company made in cash its required quarterly employer contribution for the 2025 plan year of $4.5 million. The amount and timing of future contributions to the pension plan are dependent upon a myriad of factors including future investment performance, changes in future discount rates and changes in the demographics of the population participating in the plan.

The Company also sponsors an employee savings plan under section 401(k) of the Internal Revenue Code. The plan covers substantially all salaried employees and certain bargaining unit employees. Participating employees receive employer matching contributions up to a maximum of 4.0 percent of employee pre-tax contributions to the plan for employees contributing up to 5.0 percent of their eligible pre-tax compensation. The employer matching contribution is calculated and funded in cash to the plan each pay period with an annual true-up to be made as soon as administratively possible after the end of the year. Contributions to the plan during the first quarter of 2025 were $7.2 million and included the annual 2024 true-up contribution. Comparatively, contributions to the plan during the first quarter of 2024 were $8.2 million and included the annual 2023 true-up contribution.

Excluding amounts capitalized, expense attributable to the employer matching contribution under the plan recorded for the three-month periods ended March 31, 2025 and 2024, were $7.0 million and $7.5 million, respectively. Expense related to the employee savings plan is included in cost of services and selling, general and administrative expenses in the condensed consolidated statements of operations.

7. Equity-Based Compensation Plan:

Under the 2020 Management Incentive Plan (“MIP”), the Company was authorized to issue up to a maximum of 10.0 million of equity-based awards in the form of restricted common units or options to certain directors, officers, executives and other key management employees. Awards granted under the MIP included time-based restricted common units, performance-based options and performance-based restricted common units. No new awards were granted under the MIP in 2024. On May 2, 2024, the Board of Managers (the “Board”) terminated the MIP with respect to the granting of any new equity awards. In conjunction with this action, participants in the MIP currently employed by the Company and current members of the Board agreed to settle all issued and outstanding time-based restricted units for cash consideration of $13 per unit payable on or about May 2, 2025, or upon consummation of the merger with Uniti, whichever is earlier (see Note 11 for further discussion of our pending merger with Uniti and Note 13 for discussion of the cash settlement on May 2, 2025 of the vested time-based restricted common units). As of May 2, 2024, there were 1,500,306 time-based restricted units outstanding held by current management employees and Board members. Participants in the MIP currently employed by the Company also agreed to forfeit all performance-based restricted units and performance-based options previously granted to them in exchange for other cash consideration payable upon consummation of the merger with Uniti. As a result, 345,469 performance-based units and 1,151,572 performance-based options were cancelled. Additionally, the termination of the MIP also accelerated the vesting by shortening the remaining service period for 87,500 time-based restricted units to May 2, 2025.

The changes to the issued and outstanding time-based restricted units due to the termination of the MIP were accounted for as a modification of the original awards and a change in their classification from equity to liability awards because the awards will now be settled in cash in lieu of common units. As of the modification date, the fair value for all unvested and vested unsettled time-based restricted units was remeasured based on the $13 cash consideration per unit. No incremental compensation expense resulted from the remeasurement of the modified awards, nor did the modifications change the expectation that the unvested time-based restricted units would ultimately vest. Due to the change in classification of the awards, $15.6 million was reclassified from additional paid in capital to other current liabilities, representing the modified fair value of the pro rata portion of the requisite service period completed by former participants in the MIP currently employed by the Company and current members of the Board. Amounts remaining in additional paid in capital as of March 31, 2025, represent compensation expense previously recognized for time-based restricted units that had vested and were settled in common units.

WINDSTREAM HOLDINGS II, LLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(UNAUDITED)

7.Equity-Based Compensation Plan, Continued:

Time-based restricted unit activity was as follows for the period from January 1, 2025 through March 31, 2025:

			Weighted<br><br> Average Fair<br><br> Value Per <br><br>Unit
Non-vested as of December 31, 2024	175.0		$	13.15
Vested	(43.7	)	$	13.15
Non-vested as of March 31, 2025	131.3		$	13.15

As of March 31, 2025, unrecognized compensation expense for the non-vested time-based restricted units totaled $0.3 million and will be recognized as an increase to the liability on a straight-line basis over a weighted average period of 0.1 years. Compensation expense recognized for the time-based restricted units was $0.7 million and $1.4 million for the three-month periods ended March 31, 2025 and 2024, respectively.

As of March 31, 2025, there were 1,200,246 vested time-based restricted common units settled and 1,369,056 vested time-based restricted common units not yet settled. As noted above, vested units for employees will be settled for cash consideration of $13 per unit payable on or about May 2, 2025, or upon consummation of the merger with Uniti, whichever is earlier.

Options and Performance Units — As of March 31, 2025, there were 2.5 million unvested performance-based options and 0.7 million unvested performance-based restricted common units held by former management employees of the Company that had been granted under the MIP. Under the terms of the grant awards, the options and restricted common units are subject to both time and performance vesting conditions. The awards time vested ratably from the date of grant through September 21, 2024. The percentage of the award vested is dependent upon the increase in equity value subsequent to emergence measured upon a change in control or liquidity event. The options include an exercise price of $12.50 and the maximum term for each option granted is 10 years.

A summary of non-vested performance-based options and performance-based restricted common units held by former management employees of the Company was as follows:

	Stock Options					Performance Units
	(Thousands)<br><br> Number of <br><br>Units			Weighted<br><br> Average Fair<br><br> Value Per<br><br> Unit		(Thousands)<br><br> Number of<br><br> Units			Weighted<br><br> Average Fair<br><br> Value Per <br><br>Unit
Non-vested as of December 31, 2024		2,538.6		$	4.37		761.6		$	6.13
Forfeited		(70.5	)	$	4.41		(21.2	)	$	6.15
Non-vested as of March 31, 2025		2,468.1		$	4.37		740.4		$	6.13

Because the vesting of the options and performance units are subject to both a service and performance condition, no compensation expense is recognized related to these awards until it is probable that a change in control or liquidity event will occur. At such time, the cost of the options and performance units based on the grant-date fair value will be recognized immediately as compensation expense. As of March 31, 2025, total unrecognized compensation expense for non-vested options and performance units was $10.8 million and $4.5 million, respectively, and was equal to the aggregate grant date fair value of the unvested awards.

For participants in the MIP formerly employed by the Company, the performance conditions of the options and performance units will be measured as of the closing date of the Merger. As of March 31, 2025, there were 601,838 common units held by former management employees of the Company.

WINDSTREAM HOLDINGS II, LLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(UNAUDITED)

8. Accumulated Other Comprehensive Income:

Accumulated other comprehensive income balances, net of tax, were as follows:

(Millions)	March 31, <br>2025		December 31, <br>2024
Postretirement plan	$	8.6	$	8.8
Unrealized net holding gains on interest rate swaps:
Designated portion		0.1		2.9
De-designated portion		1.0		2.1
Accumulated other comprehensive income	$	9.7	$	13.8

Changes in accumulated other comprehensive income balances, net of tax, were as follows:

(Millions)	Unrealized<br><br> Net Holding Gains<br><br>on Interest <br><br>Rate Swaps			Postretirement <br><br>Plan			Total
Balance as of December 31, 2024	$	5.0		$	8.8		$	13.8
Other comprehensive loss before reclassifications		(2.1	)		—			(2.1	)
Amounts reclassified from accumulated other comprehensive income (see table below)		(1.8	)		(0.2	)		(2.0	)
Balance as of March 31, 2025	$	1.1		$	8.6		$	9.7

Reclassifications out of accumulated other comprehensive income were as follows:

	(Millions) <br><br>Amount Reclassified from <br><br>Accumulated <br><br>Other Comprehensive Income
Details about Accumulated <br><br>Other Comprehensive Income	Three Months Ended<br><br> March 31,						Affected Line Item in the <br><br>Condensed Consolidated
Components	2025			2024			Statements of Operations
Designated interest rate swaps:
Recognition of net unrealized gains	$	(1.0	)	$	(1.7	)	Interest expense
De-designated interest rate swaps:
Amortization of net unrealized gains		(1.4	)		(1.9	)	Interest expense
		(2.4	)		(3.6	)	(Loss) income before income taxes
		0.6			0.9		Income tax expense
		(1.8	)		(2.7	)	Net (loss) income
Postretirement plan:
Amortization of net actuarial gains		(0.2	)		(0.2	)	Other income, net
Amortization of prior service credits		(0.2	)		(0.2	)	Other income, net
		(0.4	)		(0.4	)	(Loss) income before income taxes
		0.2			0.1		Income tax expense
		(0.2	)		(0.3	)	Net (loss) income
Total reclassifications for the period, net of tax	$	(2.0	)	$	(3.0	)	Net (loss) income

WINDSTREAM HOLDINGS II, LLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(UNAUDITED)

9. (Loss) Earnings Per Unit:

The Company computes basic (loss) earnings per unit by dividing net (loss) income applicable to common units by the weighted average number of common units outstanding during each period. Prior to the termination of the MIP on May 2, 2024, previously discussed in Note 7, vested unsettled time-based restricted units included a non-forfeitable right to receive dividend equivalent distributions on a one-to-one per unit ratio to common units and therefore were considered participating securities and were included in the computation of (loss) earnings per unit pursuant to the two-class method. Calculations of (loss) earnings per unit under the two-class method exclude from the numerator any dividends paid or owed to participating securities and any undistributed earnings considered to be attributable to participating securities. The related participating securities are similarly excluded from the denominator.

Diluted (loss) earnings per unit is computed by dividing net (loss) income applicable to common units by the weighted average number of common units and include the effect of potentially dilutive securities. Prior to the termination of the MIP, potentially dilutive securities included incremental shares issuable upon vesting of time-based restricted common units. Unvested time-based restricted common units were included in the computation of dilutive (loss) earnings per unit using the treasury stock method. Dilutive (loss) earnings per unit excludes all potentially dilutive securities if their effect is anti-dilutive.

The Company has also issued performance-based options and performance-based restricted common units as part of its equity-based compensation plan. For these performance-based awards, the right to receive dividend equivalent distributions is forfeited if the awards do not vest and therefore are considered non-participating securities under the two-class method until the performance conditions have been satisfied. Because vesting of these performance-based awards is conditioned upon the occurrence of a change in control or liquidity event, they are excluded in the computation of diluted (loss) earnings per unit until it is probable that a change in control or liquidity event will occur.

A reconciliation of net (loss) income and number of units used in computing basic and diluted (loss) earnings per unit was as follows:

	Three Months Ended <br><br>March 31,
(Millions, except per unit amounts)	2025			2024
Basic and diluted (loss) earnings per unit:
Numerator:
Net (loss) income	$	(16.8	)	$	59.7
Income applicable to participating securities		—			(0.7	)
Net (loss) income attributable to common units	$	(16.8	)	$	59.0
Denominator:
Basic and diluted units outstanding
Weighted average common units outstanding		90.6			90.6
Weighted average basic units outstanding		90.6			90.6
Effect of unvested time-based restricted common units		—			0.2
Weighted average diluted units outstanding		90.6			90.8
Basic and diluted (loss) earnings per unit:
Net (loss) income	$	(0.19	)	$	0.65

The effect of unvested time-based restricted common units for the three-month period ended March 31, 2025 has been excluded from the computation of diluted shares because their inclusion would have an anti-dilutive effect due to the reported net loss in that period. There were 0.1 million unvested time-based restricted common units outstanding as of March 31, 2025.

WINDSTREAM HOLDINGS II, LLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(UNAUDITED)

10. Business Segments:

The Company’s segments are determined based on the current organizational and management structure in place and the internal financial information regularly reviewed and used by the chief operating decision maker (“CODM”) for making operating decisions and assessing performance. Our Chief Executive Officer, as CODM, uses direct margin, which is computed as segment revenues and sales less segment expenses, to evaluate performance and allocate operating and capital resources, primarily in the annual budgeting and forecasting process and to establish performance targets for purposes of management incentive compensation. For each segment, our CODM reviews monthly sequential changes in direct margin and compares actual monthly direct margin to forecasted monthly and year-to-date financial information.

Effective January 1, 2025, we completed certain changes to our previous business segment structure to improve the alignment of customers and service offerings within our ILEC markets in which we provide services over network facilities operated by us and our CLEC markets in which we provide services over network facilities primarily leased from other carriers. The significant changes to our previous segment structure included: (1) shifting certain business customers and related revenues and expenses to the Kinetic segment from the former Enterprise segment, which we renamed for segment reporting purposes, to Managed Services; (2) shifting switched access and certain software revenues from Wholesale to Kinetic and Managed Services, respectively; and (3) allocating certain shared expenses, primarily customer operations costs, to Managed Services. Prior period segment information has been recast to reflect these changes for all periods presented.

For financial reporting purposes, our operating and reportable segments consist of:

Kinetic — We manage as one business our residential and business operations in ILEC markets due to the similarities with respect to service offerings and marketing strategies. Residential customers can bundle voice, high-speed Internet and video services, to provide one convenient billing solution and receive bundle discounts. We offer a wide range of advanced Internet services, local and long-distance voice services, integrated voice and data services, and web conferencing products to our business customers. These services are equipped to deliver high-speed Internet with competitive speeds, value added services to enhance business productivity and options to bundle services to meet our business customer needs. Products and services offered to business customers also include managed cloud communications and security services.

Kinetic service revenues also include revenue from federal and state USF programs, amounts received from RDOF, and certain surcharges assessed to our customers, including billings for our required contributions to federal and state USF programs. Sales revenues include sales of various types of communications equipment and products to customers, including selling network equipment to contractors on a wholesale basis.

Managed Services — We manage as one business our mid-market and large business customers located within our CLEC markets. Products and services consist of software solutions and network connectivity offerings. Software solutions include SASE, UCaaS, OfficeSuite UC®, SD-WAN and associated network access products and services. Network connectivity offerings consist of dynamic Internet protocol, dedicated Internet access, multi-protocol label switching services, integrated voice and data, long distance and other managed services, and certain surcharges assessed to customers. Managed Services also include TDM voice and data services. Product sales include high-end data and communications equipment which facilitate the delivery of advanced data and voice services to business customers.

WINDSTREAM HOLDINGS II, LLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(UNAUDITED)

10. Business Segments, Continued:

Wholesale — Our wholesale operations are focused on providing network bandwidth to other telecommunications carriers, network operators, governmental entities, content providers, and large cloud computing and storage service providers. These services include network transport services to end users, Ethernet and Wave transport of up to 400 Gbps, and dark fiber and colocation services. Wholesale services also include fiber-to-the-tower connections to support the wireless backhaul market. In addition, we offer voice and data carrier services to other communications providers and to larger-scale purchasers of network capacity. Wholesale fiber sales revenues represent amounts recognized from sales-type leases for fiber where control of the fiber has transferred to the customer.

Segment revenues are based upon each customer’s classification to an individual segment and include all services provided to that customer. There are no differences between total segment revenues and sales and total consolidated revenues and sales. Segment expenses include certain direct expenses incurred in providing services and products to segment customers and selling, general and administrative expenses that are directly associated with specific segment customers or activities. These direct expenses include customer specific access costs, cost of sales, field operations, service delivery, sales and marketing, product development, licensing fees, provision for estimated credit losses, and compensation and benefit costs for employees directly assigned to the segments.

Our network operations and operational support functions are managed centrally and are not monitored by or reported to the CODM at a segment level. Accordingly, these shared operating expenses are not assigned to the segments and primarily consist of costs incurred related to network access and facilities, network operations, engineering, and customer support. Costs related to centrally-managed administrative functions, including information technology, accounting and finance, legal, human resources and other corporate management activities are not monitored by or reported to the CODM by segment. We also do not assign to the segments depreciation and amortization expense, straight-line expense under the master lease agreements with Uniti, net gain on asset retirements and dispositions, gain on sale of operating assets or merger expenses, because these items are not monitored by or reported to the CODM at a segment level.

Interest expense has also been excluded from segment operating results because we manage our financing activities on a total company basis and have not assigned any debt or finance lease obligations to the segments. Other income, net, and income tax expense are not monitored as a part of our segment operations and, therefore, these items also have been excluded from our segment operating results.

Capital expenditures for network enhancements and information technology-related projects benefiting Windstream as a whole are not assigned to the segments and are presented as corporate/shared capital expenditures. Asset information by segment is not monitored or reported to the CODM and therefore has not been presented. Substantially all of our customers, operations and assets are located in the U.S., and we do not have any single customer that provides more than 10 percent of our total consolidated revenues and sales.

WINDSTREAM HOLDINGS II, LLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(UNAUDITED)

10. Business Segments, Continued:

The following table summarizes our segment results:

	Three Months Ended <br> March 31,
(Millions)	2025			2024
Kinetic:
Service revenues	$	455.7		$	491.1
Sales revenues		9.6			7.6
Total revenues and sales		465.3			498.7
Compensation expenses		(87.8	)		(93.2	)
Non-compensation managed expenses (a)		(51.4	)		(50.0	)
Revenue-driven costs (b)		(38.8	)		(40.0	)
Other segment expenses		(4.1	)		(5.7	)
Direct margin	$	283.2		$	309.8
Managed Services:
Service revenues	$	239.5		$	283.3
Sales revenues		0.2			0.3
Total revenues and sales		239.7			283.6
Compensation expenses		(15.6	)		(25.2	)
Non-compensation managed expenses (c)		(1.8	)		(1.4	)
Revenue-driven costs (d)		(33.8	)		(40.9	)
Customer access (e)		(50.4	)		(62.5	)
Direct margin	$	138.1		$	153.6
Wholesale:
Service revenues	$	184.8		$	202.3
Sales revenues		—			16.0
Total revenues and sales		184.8			218.3
Segment expenses (f)		(15.3	)		(29.6	)
Direct margin	$	169.5		$	188.7
Total segment service revenues	$	880.0		$	976.7
Total segment sales revenues		9.8			23.9
Total segment revenues and sales		889.8			1,000.6
Total segment expenses		(299.0	)		(348.5	)
Total segment direct margin	$	590.8		$	652.1
(a)	Includes advertising, contract services and fees, fleet-related expenses (e.g., leasing costs, fuel, maintenance and repair costs),<br>and employee-related travel costs.
---	---
(b)	Includes federal and state USF fees, provision for credit losses, equipment-related shipping and refurbishment costs, and cost of<br>sales.
---	---
(c)	Includes advertising, contract services and fees, and employee-related travel costs.
---	---
(d)	Includes federal and state USF fees, provision for credit losses, third-party commissions, staff augmentation for professional services,<br>product licensing fees, and cost of sales.
---	---

WINDSTREAM HOLDINGS II, LLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(UNAUDITED)

10. Business Segments, Continued:

(e)	Customer access expense represents the portion of interconnect costs directly assigned to the segment.
(f)	No disaggregated expense information is regularly provided or reviewed by the CODM for this segment. These expenses primarily consist<br>of salaries and wages, commissions, benefits and taxes, advertising, contract services and fees, travel, cost of fiber sales, federal<br>USF fees, and customer access expense.
---	---

Capital expenditures by segment were as follows:

	Three Months Ended<br><br> March 31,
(Millions)	2025		2024
Kinetic	$	148.0	$	130.2
Managed Services		8.1		16.2
Wholesale		20.9		32.5
Corporate/Shared (a)		50.7		67.0
Total	$	227.7	$	245.9
(a)	Represents capital expenditures not directly assigned to the<br>segments and primarily consist of capital outlays for network enhancements and information technology-related projects benefiting Windstream<br>as a whole.
---	---

The following table reconciles segment direct margin to consolidated net (loss) income:

	Three Months Ended<br><br> March 31,
(Millions)	2025			2024
Total segment direct margin	$	590.8		$	652.1
Depreciation and amortization		(186.7	)		(207.7	)
Straight-line expense under contractual arrangement with Uniti		(177.0	)		(172.3	)
Net gain on asset retirements and dispositions		28.6			21.7
Gain on sale of operating assets		25.8			103.2
Merger expenses		(3.2	)		(4.7	)
Unassigned shared operating expenses (a)		(238.7	)		(259.2	)
Other income, net		4.0			0.7
Interest expense		(58.2	)		(53.6	)
Income tax expense		(2.2	)		(20.5	)
Net (loss) income	$	(16.8	)	$	59.7
(a)	Represents operating expenses not assigned to the segments primarily<br>consisting of expenses related to network access and facilities, network operations, engineering, and customer support, as well as expenses<br>related to centrally-managed administrative functions, including information technology, accounting and finance, legal, human resources,<br>and other corporate management activities.
---	---

WINDSTREAM HOLDINGS II, LLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(UNAUDITED)

11. Pending Merger:

Upon consummation of the Merger, New Uniti will become an integrated telecommunications company. The common stock of New Uniti (“New Uniti Common Stock”) is expected to be listed on the Nasdaq. If New Uniti elects to complete the Post-Closing Reorganization (as defined in Note 2), each of Windstream’s and Uniti’s debt will be combined into a single silo capital structure with a common parent entity. If New Uniti does not complete the Post-Closing Reorganization, the legacy Uniti and Windstream organizational structures and existing indebtedness of each company will remain separate with no cross-guarantees, and we anticipate that the existing agreements and arrangements presently in effect between Uniti and Windstream will remain in place, such as our master lease agreements with Uniti and the settlement agreement with Uniti, which requires Uniti to fund periodic settlement payments and reimburse Windstream for certain GCIs.

At the closing of the Merger, Uniti and Windstream equityholders are expected to hold approximately 62 percent and 38 percent, respectively, of New Uniti before giving effect to the conversion of any outstanding convertible securities or the issuance of warrants to purchase New Uniti Common Stock referenced below. In addition, at the closing of the Merger, Uniti will fund an aggregate cash payment of $425 million (less certain transaction expenses) that will be distributed to Windstream equityholders on a pro-rata basis. Windstream equityholders will also be entitled to pro rata distributions of (i) new shares of non-voting preferred stock of New Uniti with a dividend rate of 11 percent per year for the first six years, subject to an additional 0.5 percent per year during each of the seventh and eighth year after the initial issuance and further increased by an additional 1 percent per year during each subsequent year, subject to a cap of 16 percent per year and with an aggregate liquidation preference of $575 million, and (ii) warrants to purchase New Uniti Common Stock, with an exercise price of $0.01 per share, subject to customary adjustments, representing in the aggregate approximately 6.9 percent of the pro forma share total of New Uniti.

Uniti and Windstream have each made customary representations and warranties and covenants in the Merger Agreement, including covenants, subject to certain exceptions, to use reasonable best efforts to conduct their respective businesses in the ordinary course during the interim period between the execution of the Merger Agreement and the consummation of the Merger (the “Interim Period”). Uniti and Windstream have each agreed to use its respective reasonable best efforts to cause the transactions contemplated by the Merger Agreement to be consummated as soon as practicable, including in connection with obtaining all approvals required to be obtained from any governmental authority or third party that are necessary, proper or advisable to consummate such transactions.

The Merger is subject to customary closing conditions, including, among others, approval by Uniti’s stockholders which occurred at a shareholder meeting on April 2, 2025, and receipt of required regulatory approvals, all of which have been received except receipt of approval from the Federal Communications Commission (“FCC”) and receipt of approvals from two state public utility commissions. Windstream currently expects the Merger to close in mid-2025.

WINDSTREAM HOLDINGS II, LLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(UNAUDITED)

11. PendingMerger, Continued:

The Merger Agreement contains certain customary termination rights for each of Uniti and Windstream, including if the Merger has not been consummated on or before November 3, 2025, subject to certain extensions through no later than May 3, 2026. If the Merger Agreement is terminated, Uniti will be obligated to pay Windstream (i) out-of-pocket third-party expenses incurred in connection with the Merger, not to exceed $25 million, if the Merger Agreement was terminated because Uniti Stockholder Approval was not obtained, (ii) a termination fee of $55 million under specified circumstances, including termination following Uniti accepting a Superior Proposal or Windstream receiving an Adverse Recommendation Change (each as defined in the Merger Agreement) and (iii) a termination fee of $75 million under specified circumstances, including if the Merger Agreement is terminated by Windstream due to Uniti’s failure to obtain sufficient financing or Uniti’s uncured breach of certain related representations and covenants, in circumstances where the termination fee in (ii) is not due.

12. Commitments and Contingencies:

Bankruptcy-Related Litigation

Windstream Holdings, LLC (“Old Holdings”), its directors, and certain of its executive officers are the subject of two shareholder-related lawsuits arising out of the merger with EarthLink Holdings Corp. in February 2017. Both complaints allege securities law violations and breaches of fiduciary duties related to the disclosures in the joint proxy statement/prospectus soliciting shareholder approval of the merger, which the plaintiffs allege were inadequate and misleading. The federal plaintiffs’ proof of claim was resolved on the bankruptcy docket in September 2021. Pursuant to the Company’s Plan of Reorganization, plaintiffs are limited to a recovery to the extent of any available insurance proceeds. The state plaintiff failed to submit a proof of claim and in light of the Company’s emergence from bankruptcy, Windstream believes the state case should be discharged, but the plaintiff is challenging the discharge. To the extent the state court case proceeds, applicable law provides that the plaintiff’s recovery is limited to available insurance proceeds.

In the first lawsuit, (the “Federal Case”), the federal plaintiffs’ proof of claim was resolved on the bankruptcy docket in September 2021. Pursuant to the Company’s Plan of Reorganization, the plaintiffs’ recovery is limited to the extent of any available insurance proceeds.

On May 6, 2024, the parties in the Federal Case agreed to a settlement that was approved by the presiding judge on February 6, 2025, at the scheduled fairness hearing, after no objections being filed. The deadline to appeal this final order expired April 9, 2025. Windstream’s directors’ and officers’ insurance carriers are providing full coverage for the settlement, if approved, as the Company has paid all applicable deductibles.

Key elements of the settlement include:

·	The lead plaintiff concedes that none of the defendants are making any concession of liability or wrongdoing,<br>and the defendants concede that lead plaintiff makes no concession regarding lack of merit.
·	The parties agree that the settlement releases any and all shareholder claims related to the subject matter<br>of the lawsuit against the Company and the defendants, and the claims are fully discharged.
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·	Upon approval by the court, the Company’s insurance carriers, on behalf of the defendants, will place<br>in escrow the settlement amount of $85 million for distribution to class members.
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·	A Claims Administrator will be appointed by the court and, under supervision of the Court, shall provide<br>notice of the settlement to class members and oversee the distribution of the settlement fund.
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The second lawsuit, pending in state court in Georgia (the “State Case”), was stayed in 2019. The state plaintiff failed to submit a proof of claim and in light of the Company’s emergence from bankruptcy. Final approval of the settlement of the Federal Case now bars class members, including plaintiffs in the State Case, from commencing or prosecuting any of the released claims against the defendants, including the claims asserted in the State Case. Thus, Windstream filed a motion to dismiss the State Case which was granted on April 17, 2025, after no response from the plaintiff was submitted. The deadline to file an appeal is May 17, 2025.

WINDSTREAM HOLDINGS II, LLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(UNAUDITED)

12. Commitmentsand Contingencies, Continued:

As of March 31, 2025, the Company recorded a liability for the agreed upon settlement amount of $85 million and a loss recovery insurance receivable of $85 million for insurance proceeds deemed probable of recovery, which are included in other current liabilities and other current assets, respectively, in the consolidated balance sheet.

Other Matters

The Company is currently involved in certain legal proceedings arising in the ordinary course of business and, as required, have accrued an estimate of the probable costs for the resolution of those claims for which the occurrence of loss is probable and the amount can be reasonably estimated. These estimates have been developed in consultation with counsel and are based upon an analysis of potential results, assuming a combination of litigation and settlement strategies. It is possible, however, that future results of operations for any specific period could be materially affected by changes in its assumptions or the effectiveness of its strategies related to these proceedings. Additionally, due to the inherent uncertainty of litigation, there can be no assurance that the resolution of any specific claim or proceeding would not have a material adverse effect on the Company’s financial condition, results of operations or cash flows. Legal expenses associated with loss contingencies are expensed as incurred.

13. Subsequent Events:

The Company evaluated subsequent events and transactions for possible recognition or disclosure in these financial statements through May 2, 2025, the date these financial statements were available to be issued. No additional disclosures are required other than those matters that have been reflected within these consolidated financial statements.

Settlement Payment from Uniti — On April 7, 2025, the Company received from Uniti the second quarterly cash installment payment of $24.5 million payable to Windstream in 2025, pursuant to the amended master lease agreements.

Pension Plan Contribution — On April 15, 2025, the Company made in cash its first required quarterly employer contribution to the qualified pension plan for the 2025 plan year of $4.5 million.

Completion of Pre-Closing Windstream Reorganization — In furtherance of the Pre-Closing Windstream Reorganization, New Windstream Holdings II was formed on April 7, 2025. On April 23, 2025, in anticipation of Closing, Windstream completed the Pre-Closing Windstream Reorganization, with Holdings merging with and into New Windstream Holdings II, with New Windstream Holdings II as the surviving entity of the merger and an indirect subsidiary of New Windstream. In connection with this merger, Windstream equityholders received common units of New Windstream (“New Windstream Units”) and warrants exchangeable for common units of New Windstream (“New Windstream Warrants”), and New Windstream Holdings II (as successor to Holdings) was automatically released from, and New Windstream was joined to, the Merger Agreement. Additionally, New Windstream Holdings II succeeded to Holdings’ obligation as guarantor and as “Holdings” under the Windstream Revolver, and New Windstream assumed any outstanding awards under the MIP. New Windstream will elect to be treated as a corporation for U.S. federal income tax purposes within the required 75-day timeframe post-New Windstream Holdings II formation.

Completion of Rights Offering and Tender Offer — On September 26, 2024, Windstream commenced a rights offering (the “Windstream Rights Offering”) pursuant to which all Windstream equityholders were offered the right to purchase pre-funded warrants of Windstream (the “Rights Offering Warrants”). The Rights Offering Warrants have substantially the same terms as the outstanding units of Windstream (including a right of first refusal and transfer restrictions).

WINDSTREAM HOLDINGS II, LLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(UNAUDITED)

13. Subsequent Events, Continued:

Concurrently with the commencement of the Windstream Rights Offering, Windstream launched a tender offer (the “Windstream Tender Offer”) pursuant to which Windstream offered to purchase all outstanding units of Windstream from Windstream equityholders.

On April 8, 2025, Windstream completed the Windstream Rights Offering and Windstream Tender Offer. The proceeds from the Windstream Rights Offering were used to fund the Windstream Tender Offer. Immediately following the completion of the Windstream Rights Offering and Windstream Tender Offer, there were 65,733,236 common units and 24,971,924 Rights Offering Warrants outstanding, including 12,328,956 Rights Offering Warrants issued in exchange for common units to our largest holder concurrent with the completion of the Windstream Rights Offering.

Settlement of Vested Time-Based Restricted Common Units — As previously discussed in Note 7, on May 2, 2025, the Company settled for cash consideration of $13 per unit all vested time-based restricted common units held by current management employees and Board members. As a result, the Company settled 1,500,306 vested time-based restricted common units for total consideration of $19.5 million, using available cash on hand.

Exhibit 99.2

WINDSTREAM HOLDINGS II, LLC

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIALCONDITIONAND RESULTS OF OPERATIONS

Within this Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”), the terms “Windstream,” “the Company,” “we,” or “our” refer to Windstream Holdings II, LLC (“Holdings”) and its subsidiaries, including Windstream Services, LLC.

The following section provides an overview of our results of operations and highlights key trends and uncertainties in our business and should be read in conjunction with our unaudited condensed consolidated financial statements and notes thereto. This discussion contains and refers to statements that constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 and other federal securities laws. Such statements relate to our intent, belief or current expectations primarily with respect to our future operating, financial and strategic performance. Any such forward-looking statements are not guarantees of future performance and may involve risks and uncertainties. Actual results may differ from those contained in or implied by the forward-looking statements as a result of various factors. For more information, see “Forward-Looking Statements” at the end of this discussion for additional factors relating to such statements.

ORGANIZATIONAL STRUCTURE AND OVERVIEW

Windstream’s quality-first approach connects customers to new opportunities and possibilities by leveraging its nationwide network to deliver a full suite of advanced communications services. We provide fiber-based broadband to residential and business customers in eighteen states, managed cloud communications and security services for large enterprises and government entities across the United States of America (“U.S.”), and tailored waves and transport solutions for carriers, content providers and large cloud computing and storage service providers in the U.S. and Canada. Our operations are organized into three business segments: Kinetic, Managed Services and Wholesale. Effective January 1, 2025, we completed certain changes to our previous business segment structure to improve the alignment of customers and service offerings within markets in which we are the incumbent local exchange carrier (“ILEC”) and provide services over network facilities operated by us and markets in which we are a competitive local exchange carrier (“CLEC”) and provide services over network facilities primarily leased from other carriers. The significant changes to our previous segment structure included: (1) shifting certain business customers and related revenues and expenses to the Kinetic segment from the former Enterprise segment, which we renamed for segment reporting purposes, to Managed Services; (2) shifting switched access and certain software revenues from Wholesale to Kinetic and Managed Services, respectively; and (3) allocating certain shared expenses, primarily customer operations costs, to Managed Services. Prior period business segment information presented within MD&A has been recast to reflect these changes. The Kinetic segment serves consumer and business customers in markets in which we are the ILEC and provides services over network facilities operated by us. Managed Services and Wholesale segments serve business and wholesale customers in markets in which we are a CLEC and provide services over network facilities primarily leased from other carriers.

We evaluate performance of the segments based on direct margin, which is computed as segment revenues and sales less segment expenses. Segment revenues are based upon each customer’s classification to an individual segment and include all services provided to that customer. There are no differences between total segment revenues and sales and total consolidated revenues and sales. Segment expenses include certain direct expenses incurred in providing services and products to segment customers and selling, general and administrative expenses that are directly associated with specific segment customers or activities. These direct expenses include customer specific access costs, cost of sales, field operations, sales and marketing, product development, licensing fees, provision for estimated credit losses, and compensation and benefit costs for employees directly assigned to the segments.

Costs incurred related to our network operations and operational support functions including network access and facilities, network operations, engineering, and customer support are managed centrally and not monitored by or reported to the chief operating decision maker (“CODM”) at a segment level. In addition, centrally-managed administrative functions, including information technology, accounting and finance, legal, human resources, and other corporate management activities are not monitored by or reported to the CODM by segment. Accordingly, these shared operating expenses are not assigned to the segments. We also do not assign to the segments depreciation and amortization expense, straight-line expense under the master leases with Uniti Group Inc. (“Uniti”), net gain on asset retirements and dispositions, gain on sale of operating assets, merger expenses, other income, net, interest expense, and income tax expense because these items are not monitored by or reported to the CODM at a segment level.

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For additional information related to our segments, see “Business Segment Operating Results” section below and Note 10 to the condensed consolidated financial statements.

PENDING MERGER TRANSACTION

On May 3, 2024, Windstream entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Uniti, providing for a combination of the Company and Uniti. In anticipation of the merger, Windstream formed new wholly owned subsidiaries of Holdings: New Windstream, LLC (“New Windstream”) and New Windstream Holdings II, LLC (“New Windstream Holdings II”), each a Delaware limited liability company, and Windstream Parent, Inc., a Delaware corporation. As further discussed in Note 13, on April 23, 2025, in anticipation of Closing, Windstream completed an internal reorganization (the “Pre-Closing Windstream Reorganization”), with Holdings merging with and into New Windstream Holdings II, with New Windstream Holdings II as the surviving entity of the merger and an indirect subsidiary of New Windstream. At Closing, Windstream Parent, Inc. (“New Uniti”), currently a direct subsidiary of New Windstream, will become the ultimate parent of New Windstream Holdings II (as successor to Holdings). Also on the date of Closing, an entity to be formed prior to the Closing date and an indirect wholly owned subsidiary of New Uniti identified as “Merger Sub” in the Merger Agreement will merge with and into Uniti (the “Merger”), with Uniti surviving the Merger as an indirect wholly owned subsidiary of New Uniti, such that both New Windstream Holdings II (as successor to Holdings) and Uniti will be indirect wholly owned subsidiaries of New Uniti. Upon consummation of the Merger, New Uniti will become an integrated telecommunications company. The common stock of New Uniti (“New Uniti Common Stock”) is expected to be listed on the Nasdaq. If New Uniti elects to complete the Post-Closing Reorganization (as defined in Note 2 to the condensed consolidated financial statements), each of Windstream’s and Uniti’s debt will be combined into a single silo capital structure with a common parent entity. However, if New Uniti does not complete the Post-Closing Reorganization, the legacy Uniti and Windstream organizational structures and existing indebtedness of each company will remain separate with no cross-guarantees, and we anticipate that the existing agreements and arrangements presently in effect between Uniti and Windstream will remain in place, such as our master lease agreements with Uniti and the settlement agreement with Uniti, which requires Uniti to fund periodic settlement payments and reimburse Windstream for certain growth capital improvements (“GCIs”).

EXECUTIVE SUMMARY

Key financial and operational highlights for the three-month period ended March 31, 2025, consisted of the following:

·	We generated revenues and sales of $889.8 million, operating income of $39.6 million and incurred a net<br>loss of $(16.8) million.
·	Within the Kinetic segment, consumer revenues declined 4 percent during the first quarter of 2025 on a<br>year-over-year basis. The decrease in 2025 was driven primarily by a reduction in funding due to the discontinuance of the Affordable<br>Connectivity Program (“ACP”) during May 2024. Apart from the impacts of the ACP, Kinetic service revenues are benefiting from<br>positive results in fiber additions, as we continue to build our strategic fiber markets and demonstrate strong early penetration through<br>our fiber fast start program. We extended our fiber coverage by passing an additional 38,000 consumer premises constructed during the<br>first quarter of 2025 bringing our total to approximately 1.7 million consumer premises passed or 38 percent<br>of our Kinetic footprint. Our fiber consumer subscribers grew 16 percent year-over-year and fiber consumer subscriber revenues grew 20<br>percent for the same period, demonstrating strong adoption of our fiber product offerings. We ended the first quarter with 464,000 consumer<br>subscribers on our fiber network, representing a 28 percent fiber consumer subscriber penetration rate (calculated as the total number<br>of fiber consumer subscribers divided by the total number of consumer premises passed), an improvement of 50 basis points year-over-year.

We generated revenues and sales of $889.8 million, operating income of $39.6 million and incurred a net loss of $(16.8) million.

Within the Kinetic segment, consumer revenues declined 4 percent during the first quarter of 2025 on a year-over-year basis. The decrease in 2025 was driven primarily by a reduction in funding due to the discontinuance of the Affordable Connectivity Program (“ACP”) during May 2024. Apart from the impacts of the ACP, Kinetic service revenues are benefiting from positive results in fiber additions, as we continue to build our strategic fiber markets and demonstrate strong early penetration through our fiber fast start program. We extended our fiber coverage by passing an additional 38,000 consumer premises constructed during the first quarter of 2025 bringing our total to approximately 1.7 million consumer premises passed or 38 percent of our Kinetic footprint. Our fiber consumer subscribers grew 16 percent year-over-year and fiber consumer subscriber revenues grew 20 percent for the same period, demonstrating strong adoption of our fiber product offerings. We ended the first quarter with 464,000 consumer subscribers on our fiber network, representing a 28 percent fiber consumer subscriber penetration rate (calculated as the total number of fiber consumer subscribers divided by the total number of consumer premises passed), an improvement of 50 basis points year-over-year.

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| --- | | · | Within the Managed Services segment, we continued the execution of our transformation strategy, which is optimizing the relationships within our valuable base of managed services customers as we shift away from the legacy time-division multiplexing (“TDM”) business. Total Managed Services service revenues decreased 15 percent in the three-month period ended March 31, 2025 primarily due to higher customer churn for legacy services, as we continued to transition customers off of TDM services. | | --- | --- | | · | Our Wholesale business delivered solid results in the first quarter of 2025 as service revenues were down 15 percent year-over-year driven by higher customer churn for legacy TDM and transport services. Wholesale’s core fiber wave service had solid performance during the quarter highlighted by high demand from carriers, content providers and larger-scale purchasers of network capacity. |

As further discussed in Note 2 to the consolidated financial statements, in October and December 2024, the Company completed refinancing transactions which included the issuance of $2.2 billion of senior first lien notes due October 1, 2031 (the “2031 Notes”), as well as a new $500.0 million first lien term loan (the “2024 Term Loan”), also maturing on October 1, 2031. Net proceeds from the debt issuances were used to fully repay borrowings outstanding under the Credit Agreement consisting of a $706.0 million secured first lien term loan facility (the “Term Loan”) and a $250.0 million super senior incremental term loan (“Incremental Term Loan”), both of which were due in 2027, and to fully repay $1.4 billion aggregate principal 7.750 percent senior first lien notes due August 15, 2028 (the “2028 Notes”), thus improving our debt maturity profile, as well as adding additional liquidity of over $300.0 million.

The Company reported operating income of $39.6 million and a net loss of $(16.8) million for the three-month period ended March 31, 2025. Operating income in the three-month period of 2025 was favorable impacted by a pretax gain of $25.8 million from the sale of certain unused IPv4 addresses completed in February 2025, the net gain on asset retirements and dispositions of $28.6 million, lower interconnection costs attributable to rate reductions and cost improvements from the continuation of network efficiency projects, and lower salary costs due to workforce reductions completed in 2025, offset by the overall declines in service revenues further discussed below.

OPERATING ENVIRONMENT AND TRENDS

The telecommunications industry is highly competitive. The rapid development of new technologies, services and products has eliminated many of the distinctions among wireless, cable, Internet and traditional telephone services and brought new competitors to our markets. We expect competition to remain intense as traditional and non-traditional participants seek increased market share.

In our Kinetic business, we are committed to providing our customers with exceptional service and offering faster broadband speeds and the convenience of bundling Internet, voice and video services. In 2025, we expect continued growth in our Kinetic fiber broadband customer base while experiencing declines in digital subscriber line (“DSL”) customers, primarily in lower speed areas, from the effects of competition and our existing DSL customers transitioning to our fiber-based broadband services. Our ability to deliver faster Internet speeds across our footprint should drive gains in market share and corresponding growth in consumer and business revenues. For 2025, our plan is to accelerate fiber deployment in our Kinetic footprint as we expect to nearly double the rate of our fiber builds in 2025, as compared to 2024, resulting in approximately 2 million consumer premises passed by the end of 2025. We believe that the ramp up in our internal construction hiring and training combined with the additional liquidity from our recent refinancing activities will help facilitate our accelerated fiber deployment.

For our Managed Services business, our focus remains on converting customers to our software solutions and network connectivity offerings as part of our TDM exit program to migrate our existing CLEC customers off of the TDM network. As we complete this program in 2025, we expect to experience continued declines in TDM and other revenues, as well as reductions in interconnection, network facility and fiber expenses.

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Our Wholesale business leverages our nationwide network to provide high-capacity bandwidth and transport services to wholesale customers, including other telecommunications carriers, network operators, governmental entities, content providers, and large cloud computing and storage service providers. Our priorities for our Wholesale business include continuing to grow Wave and Ethernet sales and revenues, building and selling fiber on route expansions, and adding new customers. To improve our consolidated operating results, we are focused on growing fiber consumer subscriber revenues and managing our operating expenses.

CONSOLIDATED RESULTS OF OPERATIONS

The following table reflects the consolidated operating results for Windstream:

	Three Months Ended <br> March 31,						Increase (Decrease)
(Millions)	2025			2024			Amount			%
Revenues and sales:
Service revenues	$	880.0		$	976.7		$	(96.7	)		(10	)
Sales revenues		9.8			23.9			(14.1	)		(59	)
Total revenues and sales		889.8			1,000.6			(110.8	)		(11	)
Costs and expenses:
Cost of services		552.9			590.1			(37.2	)		(6	)
Cost of sales		10.5			16.4			(5.9	)		(36	)
Selling, general and administrative		151.3			173.5			(22.2	)		(13	)
Depreciation and amortization		186.7			207.7			(21.0	)		(10	)
Net gain on asset retirements and dispositions (a)		(28.6	)		(21.7	)		6.9			32
Gain on sale of operating assets (a)		(25.8	)		(103.2	)		(77.4	)		75
Merger expenses (b)		3.2			4.7			(1.5	)		(32	)
Total costs and expenses		850.2			867.5			(17.3	)		(2	)
Operating income		39.6			133.1			(93.5	)		(70	)
Other income, net (c)		4.0			0.7			3.3			*
Interest expense		(58.2	)		(53.6	)		4.6			9
(Loss) income before income taxes		(14.6	)		80.2			(94.8	)		(118	)
Income tax expense		(2.2	)		(20.5	)		(18.3	)		(89	)
Net (loss) income	$	(16.8	)	$	59.7		$	(76.5	)		(128	)

* Not meaningful

(a)	See corresponding sections of Note 1 to the condensed consolidated financial statements for information<br>related to the net gain on asset retirements and dispositions and gain on sale of operating assets recorded in each period.
(b)	Merger expenses include legal, accounting, and other miscellaneous costs incurred related to the Merger.<br>See Note 11 to the consolidated financial statements for additional information related to the Merger.
(c)	Increase reflects $3.0 million of incremental interest income on short-term investments attributable to<br>the Company’s additional liquidity following the completion of the fourth quarter 2024 debt refinancing transactions.

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Service Revenues

The following table reflects the primary drivers of the changes in service revenues compared to the same period a year ago:

	Three Months Ended<br> March 31, 2025
(Millions)	Increase (Decrease)<br> Amount
Decrease in Kinetic switched access and end user surcharges (a)	$	(3.8	)
Decrease in Kinetic business services revenues (b)		(14.0	)
Decrease in Wholesale service revenues (c)		(17.5	)
Decrease in Kinetic consumer service revenues (d)		(17.6	)
Decrease in Managed Services revenues (e)		(43.8	)
Decrease in service revenues	$	(96.7	)
(a)	Decrease was consistent with the overall decline in Kinetic service revenues primarily due to the continued<br>declines in DSL and business customers.
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(b)	Decrease was primarily attributable to customer churn and a decline in new sales to customers.
(c)	Decrease was primarily due to higher customer churn for legacy TDM and transport services, partially offset<br>by continued demand from carriers, content providers and larger-scale purchasers of network capacity.
(d)	Decrease reflects a decline in DSL subscriber and other revenues of $36.7 million due to the effects of<br>continued declines in DSL customers, discontinuation of subsidies funded by the ACP, which ended as of May 2024, and lower demand for<br>consumer voice-only services. Windstream had received approximately $3.0 million in monthly subsidies attributable to its ACP customer<br>base. These decreases were partially offset by growth in fiber subscriber revenues, which increased $19.1 million, consistent with the<br>growth in fiber consumer broadband customers.
(e)	Decrease was primarily due to higher customer churn for legacy services as we continue to transition customers<br>off of TDM services. As a result, service revenues reflect reductions in traditional voice, long-distance and data and integrated services,<br>as well as declines in long-distance usage.

Sales Revenues

Sales revenues include sales of various types of communications equipment and products to customers including selling network equipment to contractors on a wholesale basis. Consumer product sales include home networking equipment, computers and phones. Managed Services product sales include high-end data and communications equipment which facilitate the delivery of advanced data and voice services to business customers. Sales revenues also include amounts recognized from sales-type leases for fiber where control of the fiber has transferred to the customer. There were no fiber sales in the first quarter of 2025 compared to fiber sales of $16.0 million for the three-month period ended March 31, 2024.

The following table reflects the primary drivers of the changes in sales revenues compared to the same period a year ago:

	Three Months Ended<br> March 31, 2025
(Millions)	Increase (Decrease)<br> Amount
Decrease in Wholesale fiber sales	$	(16.0	)
Decrease in Managed Services product sales		(0.1	)
Increase in Kinetic consumer and contractor product sales		2.0
Net decrease in sales revenues	$	(14.1	)

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Cost of Services

Cost of services expense primarily consists of charges incurred for network operations, interconnection, and business taxes. Network operations charges include salaries and wages, materials, contractor costs, IT support and costs to lease certain network facilities. Interconnection expense consists of charges incurred to access the public switched network and transport traffic to the Internet, including charges paid to other carriers for access points where we do not own the primary network infrastructure. Other expenses consist of third-party costs for ancillary voice and data services, business taxes, business and financial services.

The following table reflects the primary drivers of the changes in cost of services compared to the same period a year ago:

	Three Months Ended<br> March 31, 2025
(Millions)	Increase (Decrease)<br> Amount
Increase in straight-line rent expense under master leases with Uniti (a)	$	4.7
Decrease in federal USF expense (b)		(7.7	)
Decrease in network and other operations (c)		(10.9	)
Decrease in interconnection expense (d)		(23.3	)
Net decrease in cost of services	$	(37.2	)
(a)	Increase reflects additional rent related to GCIs funded by Uniti. Under provisions of the master lease<br>agreements, on the one-year anniversary of any GCIs funded by Uniti, the annual base rent payable by Windstream increases by an amount<br>equal to 8.0 percent of the funding amount, subject to an annual escalator of 0.5 percent.
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(b)	Decrease reflects the overall decline in service revenues in both periods, as well as annual reductions<br>in the federal Universal Service Fund (“USF”) rate effective in the third quarter of each year.
(c)	Decrease was attributable to lower facility costs and decreases in salary expense resulting from workforce<br>reductions completed in both 2025 and 2024.
(d)	Decrease in interconnection expense was attributable to cost improvements from the continuation of network<br>efficiency projects, increased legacy customer churn, and lower long-distance usage.

Cost of Sales

Cost of sales represents the associated cost of equipment. The following table reflects the primary drivers of the changes in cost of sales compared to the same period a year ago:

	Three Months Ended<br> March 31, 2025
(Millions)	Increase (Decrease)<br> Amount
Decrease in cost of fiber sales	$	(7.6	)
Decrease in cost of sales to Managed Services customers		(0.5	)
Increase in cost of sales to consumers and contractors		2.2
Net decrease in cost of sales	$	(5.9	)

The net change in cost of sales was consistent with the net change in sales revenues.

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Selling, General and Administrative (“SG&A”)

SG&A expenses result from sales and marketing efforts, advertising, IT support, provision for estimated credit losses, costs associated with corporate and other support functions and professional fees. These expenses include salaries, wages and employee benefits not directly associated with the provisioning of services to our customers.

The following table reflects the primary drivers of the changes in SG&A expenses compared to the same period a year ago:

	Three Months Ended<br> March 31, 2025
(Millions)	Increase (Decrease)<br> Amount
Decrease in other costs	$	(1.0	)
Decrease in provision for estimated credit losses (a)		(3.9	)
Decrease in sales and marketing (b)		(6.6	)
Decrease in compensation and benefits (c)		(10.7	)
Decrease in SG&A	$	(22.2	)
(a)	Decrease primarily reflected improvement in non-pay customer churn.
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(b)	Decrease was primarily attributable to lower advertising costs consistent with the overall year-over-year decline in service revenues.
(c)	Decrease was primarily attributable to lower salary costs due to workforce reductions completed in both 2025 and 2024.

Depreciation and Amortization

Depreciation and amortization expense includes the depreciation of property, plant and equipment and the amortization of intangible assets. Set forth below is a summary of depreciation and amortization expense compared to the same period a year ago:

	Three Months Ended<br> March 31, 2025
(Millions)	Increase (Decrease)<br> Amount
Decrease in depreciation expense (a)	$	(12.7	)
Decrease in amortization expense (b)		(8.3	)
Decrease in depreciation and amortization expense	$	(21.0	)
(a)	Decrease primarily reflects beneficial impact from no longer recording depreciation expense on assets<br>still in service which became fully depreciated or were retired from service by the end of 2024, partially offset by incremental depreciation<br>related to new additions of property, plant and equipment, and the effects of depreciating tenant capital improvements over the shorter<br>of the estimated useful life of the asset or the remaining initial contractual term of the Uniti master leases.
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(b)	Decrease reflects the use of an accelerated amortization method (sum-of-the-years-digits method) to amortize<br>the customer relationship intangible assets. The effect of using an accelerated amortization method results in a decline in expense each<br>period as the intangible assets amortize.

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Operating Income

The Company reported operating income of $39.6 million and $133.1 million for the three-month periods ended March 31, 2025 and 2024, respectively. Operating income for the three-month period of 2025 primarily reflected the pretax gain of $25.8 million from the sale of certain unused IPv4 addresses completed in February 2025, the net gain on asset retirements and dispositions of $28.6 million, lower interconnection costs attributable to rate reductions and cost improvements from the continuation of network efficiency projects, the decrease in depreciation and amortization expense noted above, and lower salary costs due to workforce reductions completed in both 2025 and 2024. The beneficial effects of these items on operating income in the three-month period of 2025 were partially offset by the overall decline in revenues and sales previously discussed. Comparatively, operating income for the three-month period of 2024 primarily reflected the pretax gain of $103.2 million from the sale of certain unused IPv4 addresses completed in March 2024, the net gain on asset retirements and dispositions of $21.7 million, an increase in fiber sales, lower interconnection costs attributable to rate reductions and cost improvements from the continuation of network efficiency projects, and lower salary costs due to workforce reductions completed in both 2024 and 2023. The beneficial effects of these items on operating income in the three-month period of 2024 were partially offset by an overall decline in service revenues compared to the same period of 2023.

Interest Expense

Set forth below is a summary of interest expense compared to the same period a year ago:

	Three Months Ended<br> March 31, 2025
(Millions)	Increase (Decrease)<br> Amount
Increase in interest expense - long-term debt	$	0.2
Increase in interest expense - finance leases and other		0.8
Increase attributable to the effect of interest rate swaps		1.2
Increase in capitalized interest expense		2.4
Increase in interest expense	$	4.6

As presented in the table above, interest expense increased $4.6 million, or 9 percent in 2025 as compared to the same period in 2024. The increase reflects the incremental net increase in aggregate long-term debt outstanding following the completion of the fourth quarter 2024 debt refinancing transactions previously discussed.

See Notes 2 and 3 to the condensed consolidated financial statements for additional information related to our long-term debt obligations and interest rate swaps.

Income Taxes

During the first quarter of 2025, the Company recognized income tax expense of $2.2 million, as compared to income tax expense of $20.5 million for the same period in 2024. The income tax expense recorded in the first quarter of 2025 reflected the loss before taxes offset by non-discrete tax expense of $4.6 million related to an increase in the valuation allowance for nondeductible interest expense, discrete tax expense of $0.8 million for nondeductible expenses associated with the Merger, and discrete tax expense of $6.4 million related to the sale of the IPv4 addresses. Comparatively, the income tax expense recorded in the three-month period ended March 31, 2024 primarily reflected discrete tax expense of $25.6 million related to the sale of the IPv4 addresses. Inclusive of the non-discrete and the discrete items, our effective tax rate was (15.1) percent for the three-month period ended March 31, 2025, as compared to 25.6 percent in the same period in 2024.

In determining our quarterly provision for income taxes, the Company uses an estimated annual effective tax rate, which is based on our expected annual income, statutory rates and tax planning opportunities. Significant or unusual items are separately recognized in the quarter in which they occur.

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BUSINESS SEGMENT OPERATING RESULTS

KINETIC

Overview

We manage as one business our residential and business operations in ILEC markets due to the similarities with respect to service offerings and marketing strategies. Residential customers can bundle voice, high-speed Internet and video services, to provide one convenient billing solution and receive bundle discounts. We offer a wide range of advanced Internet services, local and long-distance voice services, integrated voice and data services, and web conferencing products to our business customers. These services are equipped to deliver high-speed Internet with competitive speeds, value added services to enhance business productivity and options to bundle services to meet our business customer needs. Products and services offered to business customers also include managed cloud communications and security services.

Kinetic service revenues also include revenue from federal and state USF, amounts received from Rural Digital Opportunity Fund (“RDOF”), and certain surcharges assessed to our customers, including billings for our required contributions to federal and state USF programs. Sales revenues include sales of various types of communications equipment and products to customers including selling network equipment to contractors on a wholesale basis.

Results of Operations

The following table reflects the Kinetic segment results of operations:

	Three Months Ended <br> March 31,						Increase (Decrease)
(Millions)	2025			2024			Amount			%
Revenues and sales:
Service revenues:
Fiber subscriber	$	114.9		$	95.8		$	19.1			20
DSL subscriber and other		188.2			224.9			(36.7	)		(16	)
Total consumer (a)		303.1			320.7			(17.6	)		(5	)
Business services (b)		106.6			120.6			(14.0	)		(12	)
RDOF funding		13.1			13.1			—			—
State USF		14.5			14.9			(0.4	)		(3	)
Switched access (c)		3.2			4.3			(1.1	)		(26	)
End user surcharges (c)		15.2			17.5			(2.3	)		(13	)
Total service revenues		455.7			491.1			(35.4	)		(7	)
Product sales		9.6			7.6			2.0			26
Total revenues and sales		465.3			498.7			(33.4	)		(7	)
Compensation expense (d)		(87.8	)		(93.2	)		(5.4	)		(6	)
Non-compensation managed expenses		(51.4	)		(50.0	)		1.4			3
Revenue-driven costs		(38.8	)		(40.0	)		(1.2	)		(3	)
Other segment expenses		(4.1	)		(5.7	)		(1.6	)		(28	)
Direct margin	$	283.2		$	309.8		$	(26.6	)		(9	)
(a)	Decrease reflects a decline in DSL subscriber and other revenues of $36.7 million due to the effects of<br>continued declines in DSL customers, discontinuation of subsidies funded by the ACP, which ended as of May 2024, and lower demand for<br>consumer voice-only services. Windstream had received approximately $3.0 million in monthly subsidies attributable to its ACP customer<br>base. These decreases were partially offset by growth in fiber subscriber revenues, which increased $19.1 million, consistent with the<br>growth in fiber consumer broadband customers.
---	---
(b)	Decrease was primarily attributable to customer churn and a decline in new sales to customers.
(c)	Decrease was consistent with the overall decline in Kinetic service revenues primarily due to the continued<br>declines in DSL customers.

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| --- | | (d) | Decrease primarily reflects the beneficial effects of an increase in capitalized internal labor costs compared to the prior year period consistent with the Company’s accelerated deployment of fiber in our Kinetic footprint and the expansion of our workforce to augment our internal fiber construction operations. | | --- | --- |

A summary of Kinetic broadband customers was as follows as of March 31:

			Increase (Decrease)
(Thousands)	2025	2024	Amount		%
Fiber consumer broadband customers	463.9	401.1	62.8		16
DSL consumer broadband customers	595.6	722.9	(127.3	)	(18	)
Total consumer broadband customers	1,059.5	1,124.0	(64.5	)	(6	)

We expect continued growth in our fiber broadband customer base while experiencing declines in DSL customers, primarily in lower speed areas, from the effects of competition and our existing customers transitioning to our fiber-based broadband services. Our ability to deliver faster Internet speeds across our footprint should drive gains in market share and corresponding growth in consumer and business revenues.

MANAGED SERVICES

Overview

We manage as one business our mid-market and large business customers located within our CLEC markets. Products and services consist of software solutions and network connectivity offerings. Software solutions include Secure Access Service Edge (“SASE”), Unified Communications as a Service (“UCaaS”), OfficeSuite UC®, Software Defined Wide Area Network (“SD-WAN”) and associated network access products and services. Network connectivity offerings consist of dynamic Internet protocol, dedicated Internet access, multi-protocol label switching services, integrated voice and data, long distance and other managed services, and certain surcharges assessed to customers. Managed Services also include TDM voice and data services. Product sales include high-end data and communications equipment which facilitate the delivery of advanced data and voice services to business customers.

For our Managed Services business, our focus remains on converting customers to our software solutions and network connectivity offerings as part of our TDM exit strategy to migrate the majority of our CLEC customers off of the TDM network. Accordingly, we expect to see continued declines in TDM and other revenues, including end user surcharges, while maintaining stability in revenues derived from our software solutions and network connectivity offerings.

Results of Operations

The following table reflects the Managed Services segment results of operations:

	Three Months Ended <br> March 31,						Increase (Decrease)
(Millions)	2025			2024			Amount			%
Revenues and sales:
Service revenues:
Managed Services (a)	$	210.1		$	239.0		$	(28.9	)		(12	)
TDM (a)		20.6			32.6			(12.0	)		(37	)
End user surcharges		8.8			11.7			(2.9	)		(25	)
Total service revenues		239.5			283.3			(43.8	)		(15	)
Product sales		0.2			0.3			(0.1	)		(33	)
Total revenues and sales		239.7			283.6			(43.9	)		(15	)
Compensation expense (b)		(15.6	)		(25.2	)		(9.6	)		(38	)
Non-compensation managed expenses		(1.8	)		(1.4	)		0.4			29
Revenue-driven costs (c)		(33.8	)		(40.9	)		(7.1	)		(17	)
Customer access (d)		(50.4	)		(62.5	)		(12.1	)		(19	)
Direct margin	$	138.1		$	153.6		$	(15.5	)		(10	)

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| --- | | (a) | Decrease was primarily due to higher customer churn for legacy services as we continue to transition customers off of TDM services. As a result, service revenues reflect reductions in traditional voice, long-distance and data and integrated services, as well as declines in long-distance usage. | | --- | --- | | (b) | Decrease was primarily attributable to reduced internal labor costs due to workforce reductions. | | (c) | Decrease was consistent with the overall reduction in service revenues primarily attributable to customer churn and the corresponding reductions in third-party commissions, bad debt expense and federal and state USF fees. | | (d) | Decrease was consistent with the overall decline in interconnect costs attributable to cost improvements from the continuation of network efficiency projects, increased legacy customer churn, and lower long-distance usage. |

WHOLESALE

Overview

Our wholesale operations are focused on providing network bandwidth to other telecommunications carriers, network operators, governmental entities, content providers, and large cloud computing and storage service providers. These services include network transport services to end users, Ethernet and Wave transport up to 400 Gigabyte per second (“Gbps”), and dark fiber and colocation services. Wholesale services also include fiber-to-the-tower connections to support the wireless backhaul market. In addition, we offer voice and data carrier services to other communications providers and to larger-scale purchasers of network capacity. Wholesale fiber sales revenues represent amounts recognized from sales-type leases for fiber where control of the fiber has transferred to the customer.

Our wholesale priorities include growing Wave and Ethernet sales and revenues, building and selling fiber on route expansions, and adding new customers.

Results of Operations

The following table reflects the Wholesale segment results of operations:

	Three Months Ended <br> March 31,						Increase (Decrease)
(Millions)	2025			2024			Amount			%
Revenues and sales:
Service revenues (a)	$	184.8		$	202.3		$	(17.5	)		(9	)
Fiber sales (b)		—			16.0			(16.0	)		(100	)
Total revenues and sales		184.8			218.3			(33.5	)		(15	)
Segment expenses (c)		(15.3	)		(29.6	)		(14.3	)		(48	)
Direct margin	$	169.5		$	188.7		$	(19.2	)		(10	)
(a)	Decrease was primarily due to higher customer churn for legacy TDM and transport services, partially offset<br>by continued demand from carriers, content providers and larger-scale purchasers of network capacity.
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(b)	During the first quarter of 2025, there were no fiber sales. Comparatively, during the three-month period<br>ended March 31, 2024, the Company entered into indefeasible right of use (“IRU”) arrangements that met the criteria for sales-type<br>lease classification. As a result, the Company recognized sales revenue of $16.0 million, cost of sales of $7.6 million and gross profit<br>of $8.4 million related to these IRU arrangements, respectively.
(c)	Decrease primarily reflects the absence of any incremental cost of sales related to the IRU agreements,<br>as well as the overall decline in interconnect costs attributable to cost improvements from the continuation of network efficiency projects,<br>increased legacy customer churn, and lower long-distance usage.

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Regulatory Matters

Windstream is subject to regulatory oversight in the U.S. by the FCC and state public utility commissions, and we are also subject to regulatory oversight in Canada under the Canadian Radio-television and Telecommunications Commission. We are also subject in the U.S. to various federal and state statutes that govern the provision of telecommunications and broadband services. Windstream actively monitors and participates in regulatory proceedings and engages with federal and state lawmakers on matters that may impact its business. We cannot predict with certainty the outcome of pending federal and state proceedings relating to our operations.

Infrastructure Investment and Jobs Act Broadband Funding

In 2021, Congress passed a bipartisan infrastructure framework (the Infrastructure Investment and Jobs Act or “IIJA”), which includes $65 billion in broadband funding to be allocated by the National Telecommunications and Information Administration (“NTIA”), with $42.45 billion to be distributed through formula-based grants to states for broadband deployment projects in unserved and underserved areas over a five-year time frame pursuant to the Broadband Equity, Access and Deployment (“BEAD”) program. The framework also includes $14.2 billion to address affordability challenges, as well as additional funding for middle-mile projects and digital equity programs. As part of the program, states submitted their initial proposals to NTIA, which outlined the process to challenge the classification of locations eligible for BEAD funding (in Volume I) and the competitive process to select providers for BEAD projects (in Volume II). All initial proposals in the eighteen states in Windstream’s footprint have been approved by NTIA. Several states in Windstream’s footprint have opened their application windows for applications to be submitted. However, updated guidance is anticipated to be issued by NTIA, likely in the second quarter of 2025, and some states have decided to pause their programs until the guidance is issued. On April 23, 2025, NTIA waived the BEAD program requirement that states must submit their final proposals no later than 365 days after approval of Volume I initial proposals.

Windstream expects to participate to help close the digital divide in its rural and high-cost service territories. However, because such funding will be distributed on a competitive basis, Windstream may face increased competition in its footprint as a result of program awards, especially if the states allow overbuilding of Windstream’s network in areas where Windstream believes locations are “served” as defined by BEAD. Furthermore, currently, the BEAD program requires participating service providers to offer a “low-cost” service option, and the terms of that offering are set out in each state’s Volume II, pursuant to guidance from NTIA.

RDOF Funding

In 2019, the FCC announced a $20 billion RDOF program to support rural broadband deployments. In January 2020, the FCC established two reverse-auction funding phases, with Phase I funding of $16.0 billion and Phase II of $4.4 billion. Phase I targeted areas that were wholly unserved by broadband speeds of at least 25-Megabytes per second (“Mbps”) download and 3-Mbps upload. After conducting an auction, $9.2 billion was awarded in December 2020. At the time, the FCC indicated that the $6.8 billion not awarded would be added to Phase II, but Phase II will not likely proceed, in light of the BEAD Program being administered by the Department of Commerce. Windstream was awarded $522.8 million in support over ten years ($52.3 million per year) for approximately 192,000 locations in eighteen states. Windstream intends to meet its service obligations through the deployment of fiber and offering 1-Gbps speed capabilities. The first program milestone requires 40 percent completion on or before December 31, 2025.

State USF Funding

In the first quarter of 2024, Windstream recognized revenue from state USF programs in Texas, Pennsylvania, New Mexico, Oklahoma, South Carolina, Nebraska, Alabama, and Arkansas. These payments are intended to provide subsidies, in addition to federal USF receipts, for the high cost of operating telecommunications networks in certain areas. For the three-month period ended March 31, 2025, we recognized $14.5 million in state USF support. Windstream participates in two USF programs in Texas, and for the three-month period ended March 31, 2025, we received $6.9 million from the large company program and $0.7 million from the small company program. In June 2023, the Texas Legislature passed legislation requiring companies receiving Texas USF support to complete a financial needs-based test review with the Texas Public Utilities Commission (“PUC”). Windstream completed the needs-based test review and received a final decision June 6, 2024, pursuant to which the Texas PUC approved Windstream’s continued support through December 2028 with no changes to the rates or service areas.

Windstream receives approximately $13.2 million in annual state USF support in Pennsylvania. In August 2023, the Pennsylvania Public Service Commission (“PSC”) issued an order opening a rulemaking proceeding regarding the program. Windstream, along with the industry trade group, are actively participating in the proceeding and awaiting PSC action.

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FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES

Liquidityand Capital Resources

Windstream relies largely on operating cash flows and long-term debt to provide for its liquidity requirements. As of March 31, 2025, the Company had a working capital deficit primarily due to timing differences in the recognition of its annual operating lease obligations and required monthly payments under the master leases with Uniti. The working capital deficit is measured at a point in time and is not indicative of the Company’s ability to manage cash and meet its current obligations as they become due. The Company generated positive operating cash flows in the first quarter of 2025 and utilized available cash to meet its short-term liquidity needs. During the first quarter of 2025, there were no new borrowings under the senior secured revolving credit facility, and there were no borrowings outstanding under the revolving credit facility as of March 31, 2025. Accordingly, when considering letters of credit of $188.3 million, the Company had access to and available borrowing capacity under its senior secured revolving credit facility of $286.7 million as of March 31, 2025. Management has assessed the current and expected business climate, the Company’s current and expected needs for funds and its current and expected sources of funds, and has determined, based on Windstream’s forecasted financial results and financial condition as of March 31, 2025, that cash and cash equivalents on hand combined with cash expected to be generated from operating activities, will be sufficient to fund the Company’s ongoing working capital requirements, planned capital expenditures, scheduled debt principal and interest payments, and lease payments due under the master lease agreements with Uniti for at least the next twelve months from the issuance of the condensed consolidated financial statements. The Company intends to utilize its available cash as well as the available capacity under its revolving credit facility to fund its short-term liquidity needs as they arise.

Under the master lease agreements, the Company will receive from Uniti up to $1.75 billion in cash to fund GCIs to its network and Uniti also will pay Windstream $400 million in quarterly cash installments over a five-year period ending in 2025, at an annual interest rate of 9.0 percent, which amount may be fully paid after one year, resulting in total cash payments to be received from Uniti ranging from $438 - $485 million over the five-year period. During the first quarter of 2025, the Company received from Uniti quarterly cash installment payments totaling $24.5 million. Through March 31, 2025, the Company has received $1.2 billion in cash from Uniti to fund GCIs and $435.9 million in cash settlement payments. As discussed in Note 13 to the condensed consolidated financial statements, in April 2025, the Company received from Uniti the second of three quarterly cash installment payments of $24.5 million payable in 2025. Windstream expects total capital expenditures to be approximately $1.1 billion in 2025, excluding any GCI reimbursements received from Uniti.

In October and December 2024, we completed refinancing transactions which included the issuance of $2.2 billion of senior first lien notes, as well as a new $500.0 million first lien incremental term loan, both of which mature in 2031. Net proceeds from the debt issuance were used to fully repay borrowings outstanding under the Credit Agreement consisting of the Term Loan and Incremental Term Loan both due in 2027 and the 2028 Notes, thus improving our debt maturity profile, as well as adding additional liquidity of over $300.0 million.

From time to time, including in the near term, Windstream may seek to opportunistically refinance or extend maturity dates of existing indebtedness through, but not limited to, tender offers, exchange offers, redemptions, open market purchases, privately negotiated purchases and new issuances.

Historical Cash Flows

The following table summarizes our cash flow activities:

		Three Months Ended <br><br>March 31,
(Millions)		2025			2024
Cash flows provided from (used in):
Operating activities	$	62.9		$	84.4
Investing activities		(37.1	)		(10.0	)
Financing activities		(5.2	)		(6.8	)
Net increase in cash, cash equivalents and restricted cash	$	20.6		$	67.6

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Our cash position increased $20.6 million and $67.6 million in the three-month periods ended March 31, 2025 and 2024, respectively. Cash inflows in 2025 were primarily from operating activities, funding received from Uniti under the master lease agreements and proceeds from the sale of operating assets. These cash inflows were partially offset by cash outflows for capital expenditures, payment of debt issuance costs and amounts due under our finance lease obligations.

Cash Flows - Operating Activities

Cash provided from operations is our primary source of funds. Cash flows provided from operating activities decreased $21.5 million in the three-month period ended of 2025, as compared to the same period in 2024, primarily due to a March 2025 voluntary cash contribution to the qualified pension plan of $21.0 million, as further discussed below. Comparatively, there were no cash contributions to the pension plan in the first quarter of 2024.

Cash Flows - Investing Activities

Cash used in investing activities primarily consisted of capital expenditures to upgrade and expand the speed capabilities of network facilities used to service customers. Cash flows used in investing activities decreased $27.1 million in the three-month period ended March 31, 2025, as compared to the same period in 2024. Cash outlays for capital expenditures for the three-month period ended March 31, 2025 totaled $227.7 million and were partially offset by funding received from Uniti of $175.0 million to pay for certain growth capital improvements under the master lease agreements. Cash inflows also included $9.9 million in grant funds received from various state programs to fund capital expenditures to expand the availability and affordability of residential broadband service. Cash outlays for capital expenditures funded by government grants totaled $20.1 million in 2025. Cash flows from investing activities also included the receipt of $25.8 million in cash from the sale of certain unused IPv4 addresses completed in February 2025.

Comparatively, cash outlays for capital expenditures were $245.9 million for the three-month period ended March 31, 2024, and were partially offset by funding received from Uniti of $131.3 million to pay for certain growth capital improvements under the master lease agreements. Cash inflows also included $21.1 million in grant funds received from various state programs to fund capital expenditures to expand the availability and affordability of residential broadband service. Cash outlays for capital expenditures funded by government grants totaled $30.0 million in 2024. Cash flows from investing activities included the receipt of $103.5 million in cash from the sale of certain unused IPv4 addresses completed in March 2024. The Company also received $9.2 million in cash from the liquidation of a non-marketable investment in January 2024.

Cash Flows - Financing Activities

Cash used in financing activities totaled $5.2 million in the three-month period ended March 31, 2025. As previously discussed, there were no new borrowings under the senior secured revolving credit facility during the first quarter of 2025. Debt issuance costs accrued in connection with the December 2024 refinancing transactions of $2.1 million were paid in the first quarter of 2025. Principal payments related to finance leases totaled $2.9 million in the three-month period ended March 31, 2025. Comparatively, cash provided from financing activities totaled $6.8 million in the three-month period ended March 31, 2024. During the first quarter of 2024, proceeds from the issuance of debt consisted of new borrowings of $215.0 million under the senior secured revolving credit facility, all of which were repaid through March 31, 2024. In addition, repayments of debt in the three-month period ended March 31, 2024 also included $1.9 million in scheduled principal payments on the Term Loan. Principal payments related to finance leases totaled $4.3 million in the first quarter of 2024.

Pension and Employee Savings Plan Contributions

The Company maintains a non-contributory qualified defined benefit pension plan. Future benefit accruals for all eligible non-bargaining employees covered by the plan have ceased. On March 24, 2025, the Company made in cash a voluntary contribution to the qualified pension plan of $21.0 million that was allocated to the 2024 plan year. The Company’s annual minimum funding requirements to the qualified pension plan for the 2025 plan year total $18.0 million, of which $13.5 million will be contributed in 2025 and the remaining $4.5 million will be contributed in January 2026. On April 15, 2025, the Company made in cash its required quarterly employer contribution for the 2025 plan year of $4.5 million. The amount and timing of future contributions to the pension plan are dependent upon a myriad of factors including future investment performance, changes in future discount rates and changes in the demographics of the population participating in the plan.

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The Company also sponsors an employee savings plan under section 401(k) of the Internal Revenue Code. The plan covers substantially all salaried employees and certain bargaining unit employees. Participating employees receive employer matching contributions up to a maximum of 4 percent of employee pre-tax contributions to the plan for employees contributing up to 5 percent of their eligible pre-tax compensation. The employer matching contribution is calculated and funded in cash to the plan each pay period with an annual true-up to be made as soon as administratively possible after the end of the year. Contributions to the plan during the first quarter of 2025 were $7.2 million and included the annual 2024 true-up contribution. Comparatively, contributions to the plan during the same period of 2024 were $8.2 million and included the annual 2023 true-up contribution.

Broadband Grant Awards and Programs

The Company receives federal and state governmental assistance in the form of grants for the construction of long-lived assets to expand the availability and affordability of residential broadband service via direct grants or through the formation of public private partnerships. As of March 31, 2025, Windstream has secured $376.0 million in funding commitments from governmental agencies in Arkansas, Georgia, Iowa, Nebraska, New Mexico, North Carolina, Pennsylvania, Texas, and five other states, that will help us deliver fiber to over 159,000 locations. In completing these broadband expansion projects, Windstream expects to incur approximately $156.0 million of incremental capital expenditures. The Company will continue to seek out additional opportunities to obtain external funding for the expansion of 1-Gbps Internet service across its service areas either from direct grants from governmental programs or through the formation of public private partnerships.

Debt Agreements and Covenants

As further discussed in Note 2 to the condensed consolidated financial statements, the Company’s long-term debt obligations as of March 31, 2025 consisted of $2.2 billion aggregate principal amount of the 2031 Notes and $500.0 million of borrowings under the 2024 Term Loan. The terms of the amended credit agreement and indentures for the 2031 Notes include customary covenants that, among other things, require the Company to maintain certain financial ratios and restrict its ability to incur additional indebtedness. As of March 31, 2025, the Company was in compliance with all of its debt covenants.

Contractual Obligations and Commitments

Set forth below is a summary of our material contractual obligations and commitments as of March 31, 2025:

	Obligations by Period
(Millions)	Less than <br> 1 Year		1 - 3 <br> Years		3 - 5 <br> Years		More than <br> 5 years		Total
Long-term debt including current maturities (a)	$	—	$	—	$	—	$	2,700.0	$	2,700.0
Interest payments on long-term debt obligations (b)		227.0		456.1		456.0		433.0		1,572.1
Leaseback of real estate contributed to pension plan (c)		5.8		12.1		12.7		24.7		55.3
Finance leases (d)		1.8		7.4		7.4		41.0		57.6
Uniti operating leases		715.5		1,563.5		1,579.1		66.4		3,924.5
Other operating leases (e)		96.3		143.5		64.6		36.9		341.3
Purchase obligations (f)		339.2		208.1		72.1		131.1		750.5
Other long-term liabilities and commitments (g)(h)(i)(j)		31.5		168.6		52.9		213.2		466.2
Total contractual obligations and commitments	$	1,417.1	$	2,559.3	$	2,244.8	$	3,646.3	$	9,867.5
(a)	Excludes unamortized net premium of $29.2 million and unamortized debt issuance costs of $56.5 million<br>included in long-term debt as of March 31, 2025.
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(b)	Variable rates on the 2024 Term Loan were calculated based on Secured Overnight Financing Rate (“SOFR”),<br>which was 4.325 percent as of March 31, 2025.
(c)	Represents undiscounted future minimum lease payments related to the leaseback of real estate contributed<br>to the Windstream Pension Plan, which exclude the residual value of the obligations at the end of the initial lease terms.
(d)	Finance leases include non-cancellable leases, consisting principally of leases for facilities and equipment.

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| --- | | (e) | Other operating leases include non-cancellable leases, consisting principally of leases for network facilities, real estate, office space and office equipment. | | --- | --- | | (f) | Purchase obligations include open purchase orders and amounts payable under non-cancellable contracts. The portion attributable to non-cancellable contracts primarily represents agreements for network capacity and software licensing. | | (g) | Other long-term liabilities and commitments primarily consist of deferred income tax, pension and other postretirement benefit obligations, long-term deferred revenue, right of way and asset retirement obligations. | | (h) | Excludes $17.6 million in long-term finance lease obligations included above in finance leases. Also excludes $57.4 million included above in leaseback of real estate contributed to pension plan. | | (i) | Excludes estimated capital expenditures of approximately $156.0 million that Windstream expects to incur in excess of funding commitments received from governmental agencies to fund the cost of fiber broadband expansion to over 159,000 locations, as previously discussed under “Broadband Grant Awards and Projects”. | | (j) | Includes $18.5 million and $0.5 million in pension and postretirement benefit obligations and current portion of interest rate swaps, respectively, that was included in other current liabilities at March 31, 2025. |

See Notes 2 and 3 to the condensed consolidated financial statements and Notes 4, 5, 9 and 10 to our 2024 audited consolidated financial statements for additional information regarding certain of the obligations and commitments listed above.

Off-Balance Sheet Arrangements

The Company does not use securitization of trade receivables, affiliation with special purpose entities, variable interest entities or synthetic leases to finance its operations. Additionally, the Company has not entered into any arrangement requiring it to guarantee payment of third-party debt or to fund losses of an unconsolidated special purpose entity.

Market Risk

Market risk is comprised of three elements: interest rate risk, equity risk and foreign currency risk. Windstream has exposure to market risk from changes in interest rates, as further discussed below. Currently, the Company does not have any significant exposure to equity or foreign currency risk, and as further discussed below, the Company has effectively hedged its exposure to interest rate risk.

Interest Rate Risk

The Company is exposed to market risk through changes in variable interest rates incurred on borrowings under the amended credit agreement, consisting of the $500.0 million 2024 Term Loan, and any borrowings outstanding under the senior secured revolving credit facility. Because there were no borrowings outstanding under the revolving credit agreement, the total variable rate debt outstanding as of March 31, 2025 was $500.0 million.

The Company enters into interest rate swap agreements to mitigate its exposure to the variability in cash flows on a portion of its floating-rate debt obligations. The Company has established policies and procedures for risk assessment and the approval, reporting and monitoring of interest rate swap activity. The Company does not enter into interest rate swap agreements, or other derivative financial instruments, for trading or speculative purposes. Management periodically reviews the Company’s exposure to interest rate fluctuations and implements strategies to manage the exposure.

As of March 31, 2025, Windstream Services, LLC is party to two pay fixed, receive variable interest rate swap agreements with an aggregate notional value of $500.0 million and mature on October 31, 2025 and October 31, 2029. As of March 31, 2025, the weighted average fixed rate paid on the interest rate swaps was 2.355 percent and the weighted average variable rate received was 4.409 percent. The interest rate swaps have been designated as cash flow hedges of the interest rate risk inherent in borrowings outstanding under its amended credit agreement due to changes in the benchmark interest rate, and accordingly, the hedging relationships are expected to be highly effective in mitigating cash flow risks resulting from changes in interest rates. When considering the interest rate swaps agreements, all of the Company’s outstanding variable rate debt obligations have effectively been converted to fixed rate debt as of March 31, 2025.

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Critical Accounting Policies and Estimates

The accompanying condensed consolidated financial statements are prepared in accordance with accounting principles generally accepted in the U.S. Management has assessed the critical accounting policies applicable and determined the most critical accounting estimates consist of evaluating the useful lives of property, plant and equipment, accounting for pension benefits, and accounting for deferred income taxes and related tax contingencies. There were no material changes to these critical accounting policies during the first quarter of 2025.

Recently Adopted Authoritative Guidance

See Note 1 to the condensed consolidated financial statements for a discussion of recently issued authoritative guidance related to Income Taxes and Disaggregation of Expenses and our evaluation of the related impacts to the condensed consolidated financial statements and related disclosures.

Forward-Looking Statements

This Management’s Discussion and Analysis of Financial Condition and Results of Operations includes, and future oral and written statements by us and our management may include certain forward-looking statements. We claim the protection of the safe-harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. This report contains various forward-looking statements which represent our expectations or beliefs concerning future events, including, without limitation, our future performance, our ability to comply with the covenant in the agreements governing our indebtedness and the availability of capital and terms thereof. Statements expressing expectations and projections with respect to future matters are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. We caution that these forward-looking statements involve a number of risks and uncertainties and are subject to many variables which could impact our future performance. These statements are made on the basis of management’s views, estimates, projections, beliefs and assumptions, as of the time the statements are made, regarding future events and results. There can be no assurance, however, that management’s expectations will necessarily come to pass. Actual future events and our results may differ materially from those expressed in these forward-looking statements as a result of a number of important factors.

A wide range of factors could cause actual results to differ materially from those contemplated in our forward-looking statements, including, but not limited to:

·	our ability to consummate the Merger with Uniti on the expected terms and according to the anticipated timeline;
·	the Merger being subject to conditions, including ones that may not be satisfied or waived on a timely<br>basis or at all, and which if delayed or not satisfied, may prevent, delay, or jeopardize the Closing of the Merger or result in material<br>additional expenditures of money and resources;
·	the risk of modification or termination of the Merger Agreement with Uniti, which could negatively impact<br>our operations;
·	the uncertainty that Uniti will be able to obtain sufficient cash to pay the Closing Cash Payment for<br>the Merger in a timely manner or at all;
·	stockholder litigation or other legal proceedings that may be instituted related to the Merger, which<br>could prevent or delay the Closing of the Merger or otherwise negatively impact Windstream’s operations;
·	the significant transaction costs that Windstream will incur in connection with the Merger;
·	the possibility that the Merger may distract the management team from their other responsibilities and<br>the Merger Agreement may limit Windstream’s ability to pursue new opportunities;
·	the possibility that the Merger, including business uncertainties while the Merger is pending, may cause<br>customers, suppliers, vendors, or other stakeholders to delay or defer decisions concerning Windstream, or negatively impact Windstream’s<br>ability to attract and retain personnel, both of which could adversely impact our business operations and operating results;

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| --- | | · | the extent, timing, and overall effects of competition and overbuilding in our markets, and increased competition in the communications business in general, including new, emerging competitors receiving, or that may receive, awards pursuant to local, state or federal broadband funding programs to expand in our footprint which could reduce our market share and adversely affect our results of operations and financial condition; | | --- | --- | | · | the possibility that reliance on information technology in our operations, and any material failure, inadequacy, interruption or security failure of that technology could harm our business and that cybersecurity incidents impacting our network or systems, or the network or systems of our key suppliers, could have a material adverse effect on our business operations, financial condition and reputation; | | · | uncertainties regarding our eligibility or receipt of funding under any current or future local, state, and federal broadband programs, including any remaining state and federal COVID-19 related relief programs and the federal BEAD program, and the participation requirements of any said program, along with uncertainties concerning the availability of funding under, continuation of, or possible changes to the federal BEAD Program; | | · | the possible impact of federal and state legislation, rules and regulations, tariffs, federal executive orders, federal or state mandates, or federal or state agency directives, or changes thereto, on our ability to operate in the manner currently contemplated, on the communications industry generally, or on the operations of our customers or vendors; | | · | unfavorable rulings by the FCC, state public service commissions or state or federal courts in current and future proceedings regarding universal service funds, intercarrier compensation, or other matters that could reduce revenues or increase expenses, including uncertainties associated with current or future federal or state broadband funding programs that are in lieu of universal service funding, and uncertainty regarding the outcome of the pending legal case at the U.S. Supreme Court involving the federal universal service fund; | | · | risks and uncertainties associated with our ability to comply with construction obligations under RDOF administered by the FCC, pursuant to which we receive $52.3 million annually for 10 years (starting in 2022), and further, uncertainty regarding future RDOF funding in light of the pending legal case at the U.S. Supreme Court involving the federal universal service fund; | | · | the effects of the federal “Buy America” regulations that require use of domestic manufacturers for certain projects that could lead to issues with availability of supplies, goods and equipment for projects and impact our participation in certain broadband programs, including timing for completion of projects; | | · | our ability to make payments under the current arrangements with Uniti, which may be affected by results of our operations, changes in our cash requirements, cash tax payment obligations, or overall financial position; | | · | Uniti’s ability to fund, and its compliance with contractual provisions requiring funding of, payments to us under the master leases and the settlement entered into by the parties in March 2020, including annual reimbursement of growth capital improvements under the master leases through 2030 and cash settlement payments through 2025; | | · | risks surrounding our ability to obtain increased customer penetration levels from our network investments and accelerated network construction and the amount of capital investment necessary for these network enhancements and expansions to meet current and prospective customers’ broadband usage demand; | | · | new, emerging and/or competing strategic products, technologies and/or software advancements, and our ability to adopt and utilize these technologies, which could affect our ability to compete, and our customers’ willingness to adopt new, emerging products and services; | | · | unanticipated increases or other changes in future cash requirements, whether caused by unanticipated increases in capital expenditures, increases in pension funding requirements, or otherwise; | | · | earnings on pension plan investments significantly below our expected long-term rate of return for plan assets, resulting in possible cash contributions into the plan, or a significant change in the discount rate or other actuarial assumptions which could have an adverse impact on our financial position; | | · | that our current debt structure, or any consolidated indebtedness after any closing of the Merger with Uniti, could adversely affect our cash flow, impair our ability to raise additional capital on more favorable terms, reduce funds available for other business purposes, and reduce operational flexibility; |

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| --- | | · | for operations where we utilize facilities owned by other carriers, risks and uncertainties surrounding the availability, quality of service, pricing, and services provided by other carriers on which our services to customers depend; | | --- | --- | | · | risks associated with noncompliance by us, our partners, or our subcontractors with executive orders, federal mandates, federal directives, regulations, statutes or other requirements applicable to government contracting and programs under which we receive material amounts of end-user revenue and government subsidies, which could disrupt our ability to participate in government contracting or the government programs and materially and adversely impact our operational results; | | · | the effects of work stoppages by our employees or employees of other communications companies or key suppliers on whom we rely for service; | | · | our ability to achieve the expected benefits of certain cost reduction and expense management activities, including efforts to reduce TDM interconnection expenses; | | · | potential risks pertaining to allegations regarding the presence of lead in telecommunication copper assets, including those allegations made in pending litigation against us in New York federal district court or future litigation, any related regulatory developments, governmental inquiries or actions, operational impacts or costs, compliance costs, or reputational damage; | | · | unfavorable results of litigation, claims, and intellectual property matters asserted against us; | | · | possible adverse impacts to our business, to our customers’ communications decisions, and to the business of our vendors, including the ability of our customers and vendors to perform under agreements with us, from cost pressures, tariffs, trade disputes, inflationary pressures, epidemics, pandemics outbreaks of contagious diseases or other public health developments, supply chain challenges or disruptions, natural disasters, terrorist acts, or armed conflicts or wars, and any adverse changes in the general economic, political or market conditions in the areas that we serve, the U.S. and globally; and | | · | those additional risk factors under the section titled “Risk Factors” included elsewhere in this report or in other filings by us or our related entities with the SEC, in any subsequent consolidated financial statement reports or subsequent filing with the SEC. |

In addition to these factors, actual future performance, outcomes, and results may differ materially because of more general factors including, among others, general industry and market conditions and growth rates, economic conditions, and governmental and public policy changes. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

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