Exhibit 99.1

NEW WINDSTREAM, LLC

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

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

NEW WINDSTREAM, LLC

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

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

NEW WINDSTREAM, LLC

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

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

NEW WINDSTREAM, LLC

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

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

NEW WINDSTREAM, LLC

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY (UNAUDITED)

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

NEW WINDSTREAM, LLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

1. Preparation of Interim Financial Statements:

Organizational Structure Following Internal Reorganization – Prior to an internal reorganization completed on April 23, 2025, as further discussed below, Windstream Holdings II, LLC (“Holdings”), a Delaware limited liability company, was the parent company, and together with its consolidated subsidiaries, was the reporting entity. On April 23, 2025, an internal reorganization was completed with Holdings merging with and into New Windstream Holdings II, LLC (“New Windstream Holdings II,”), a Delaware limited liability company, with New Windstream Holdings II as the surviving entity of the merger and an indirect subsidiary of New Windstream, LLC (“New Windstream,” “the Company,” “we,” or “our”). New Windstream is a privately held Delaware limited liability company with no publicly registered debt or equity securities. Prior to the internal reorganization, New Windstream was a wholly owned subsidiary of Holdings.

In connection with this internal reorganization, Holdings’ existing equityholders received on a one-for-one basis common units of New Windstream and warrants exchangeable for common units of New Windstream. In addition, New Windstream assumed any outstanding awards under the 2020 Management Incentive Plan (“MIP”). New Windstream has elected to be treated as a corporation for United States of America (“U.S.”) federal income tax purposes.

As successor to Holdings, New Windstream Holdings II succeeded to Holdings’ obligation as guarantor and as “Holdings” under the Windstream Credit Agreement. Windstream Services, LLC (“Services” or the “Borrower”) is a wholly owned subsidiary of New Windstream Holdings II.

The internal reorganization did not result in a change in the reporting entity, other than New Windstream becoming the parent company and legal issuer of the Company’s outstanding common units and warrants. Accordingly, New Windstream, together with its consolidated subsidiaries, including New Windstream Holdings II, (collectively, “Windstream”), is the reporting entity for all periods presented in the accompanying unaudited consolidated financial statements and notes thereto. The change in equity has been retrospectively reflected in the computation of loss per unit for all periods presented.

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 at a subscription price of $13 per warrant (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). Each Rights Offering Warrant entitles the holder to purchase one common unit of Windstream for less than $.01 per common unit. 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 at a purchase price of $13 per common unit.

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 a non-cash exchange for common units on a one-for-one basis to our largest equityholder concurrent with the completion of the Windstream Rights Offering.

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 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 April 1, 2025, we completed certain changes to our previous business segment structure to better reflect the individual financial performance of our business segments. See Notes 5 and 10 for additional information regarding the Company’s business segments.

NEW WINDSTREAM, LLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

1. Preparation of Interim Financial Statements, Continued:

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.

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 $38.6 million and $73.7 million for the three and six-month periods ended June 30, 2025, respectively, as compared to $36.3 million and $72.9 million for the three and six-month periods ended June 30, 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 first quarter of 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. While the Company entered into IRU arrangements in the second quarter of 2025 and 2024, the effects of these sales-type lease transactions were immaterial to the Company’s reported results of operations for those periods.

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 $0.8 million and $3.3 million as of June 30, 2025 and December 31, 2024, respectively, for funding received but not yet spent.

NEW WINDSTREAM, LLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

1. Preparation of Interim Financial Statements, Continued:

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 $93.4 million and $63.3 million as of June 30, 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 sales of additional unused IPv4 addresses and received $25.8 million in proceeds, net of broker fees. During the second quarter of 2025, the Company sold additional unused IPv4 addresses and received $1.2 million in aggregate cash proceeds, net of broker fees. For the transactions completed in the first half of 2025, the Company recognized pretax gains equal to the amount of the proceeds received.

Net Loss (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 $2.5 million and $6.5 million for the three and six-month periods ended June 30, 2025, respectively, as compared to $4.5 million and $6.3 million for the three and six-month periods ended June 30, 2024, respectively. The Company also realized aggregate pretax net losses from the disposal of vehicles and other assets of $1.0 million and $1.7 million for the three and six-month periods ended June 30, 2025, respectively. Comparatively, the Company realized pretax net gains from the disposal of vehicles and other assets of $0.3 million for the three-month period ended June 30, 2024, while on an aggregate basis, gains from the disposal of vehicles and other assets netted to zero during the six-month period ended June 30, 2024.

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 2025, 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, all of which were recognized in the first quarter. Comparatively, during the three and six-month periods ended June 30, 2024, the Company recorded pretax gains of $14.5 million and $37.7 million, respectively, related to GCI reimbursements that exceeded the carrying value of TCIs at the time of reimbursement.

Provision for Income Taxes – During the three and six-month periods ended June 30, 2025, the Company recognized income tax benefits of $5.8 million and $3.6 million, respectively, as compared to an income tax benefit of $13.7 million and income tax expense of $6.8 million for the same periods in 2024. The income tax benefit recorded in the three and six-month periods of 2025 reflected the loss before taxes in each period. The income tax benefit recorded in the three-month period of 2025 attributable to the pretax loss was partially offset by non-discrete tax expense of $7.7 million related to the increase in the valuation allowance for nondeductible interest expense and discrete tax expense of $1.3 million for nondeductible expenses associated with the Merger. The income tax benefit recorded in the six-month period of 2025 attributable to the pretax loss was partially offset by non-discrete tax expense of $12.2 million related to the increase in the valuation allowance for nondeductible interest expense, discrete tax expense of $2.1 million for nondeductible expenses associated with the Merger, and discrete tax expense of $6.6 million related to the sale of the IPv4 addresses. Comparatively, the income tax benefit recorded in the three-month period ended June 30, 2024 attributable to the pretax loss was partially offset by discrete tax expense of $3.7 million for nondeductible transaction costs associated with the Merger. The income tax expense recorded in the six-month period ended June 30, 2024 included 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 9.3 percent and 4.7 percent for the three and six-month periods ended June 30, 2025, as compared to 18.6 percent and 103.0 percent in the same periods in 2024.

NEW WINDSTREAM, LLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

1. Preparation of Interim Financial Statements, Continued:

On July 4, 2025, the U.S. enacted new tax legislation formally titled “An Act to Provide for Reconciliation Pursuant to Title II of H. Con. Res. 14” (“the Act”), commonly referred to as the One Big Beautiful Bill Act (“OBBBA”). Changes in tax laws may affect recorded deferred tax assets and deferred tax liabilities and our effective tax rate in the future. We continue to evaluate the impacts the new legislation will have on the Company’s consolidated financial statements. At this time, we cannot quantify the effects the Act will have on our consolidated results of operations, financial position and cash flows.

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.

2. Debt:

Debt was as follows:

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

NEW WINDSTREAM, LLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

2. Debt, Continued:

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 U.S. 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 and six-month periods ended June 30, 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 9.17 percent and 9.18 percent, respectively.

Upon completion of the above refinancing transactions, all outstanding indebtedness of Windstream permit the Post-Closing Reorganization, and as of June 30, 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.

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 six-month period ended June 30, 2025, there were no new borrowings under the senior secured revolving credit facility. Comparatively, during the six months ended June 30, 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 $147.1 million, the amount available for borrowing under the senior secured revolving credit facility was $327.9 million as of June 30, 2025.

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 for both the three and six-month periods ended June 30, 2024.

Prior to their repayments during the fourth quarter of 2024 discussed above, the variable interest rate on the Incremental Term Loan ranged from 9.42 percent to 9.46 percent, and the weighted average rate on amounts outstanding was 9.43 percent for both the three and six-month periods ended June 30, 2024, while the variable interest rate on the Term Loan ranged from 11.67 percent to 11.71 percent, and the weighted average rate on amounts outstanding on the Term Loan was 11.68 percent for both the three and six-month periods ended June 30, 2024.

NEW WINDSTREAM, LLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

2. Debt, Continued:

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 June 30, 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.

Interest Expense

Interest expense was as follows:

NEW WINDSTREAM, LLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

3. Derivatives:

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

Changes in derivative instruments were as follows for the six-month periods ended June 30:

As of June 30, 2025, the Company expects to recognize net gains of $1.1 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.

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 June 30, 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.

NEW WINDSTREAM, LLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

3. Derivatives, Continued:

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 June 30, 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.

The following table presents the Company’s derivative assets subject to an enforceable master netting arrangement as of June 30, 2025 and December 31, 2024.

NEW WINDSTREAM, LLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

3. Derivatives, Continued:

Information pertaining to derivative liabilities was as follows:

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 long-term 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 six-month period ended June 30, 2025 requiring any non-financial asset and liability to be subsequently recognized at fair value.

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

(a)       Cash equivalents are highly liquid, actively traded money market funds with next day access.

NEW WINDSTREAM, LLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

4. Fair Value Measurements, Continued:

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 June 30, 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 six-month period ended June 30, 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.

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 $18.5 million and $20.3 million at June 30, 2025 and December 31, 2024, respectively.

NEW WINDSTREAM, LLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

5. Revenues, Continued:

Accounts receivable consists of the following as of:

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

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.

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

NEW WINDSTREAM, LLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

5. Revenues, Continued:

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 June 30, 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 22 percent, 36 percent, and 23 percent of our remaining performance obligations as revenue during the remainder of 2025, 2026 and 2027, 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 April 1, 2025, we completed certain changes to our previous business segment structure which included shifting governmental customers and all reseller and wholesale broadband revenues, as well as shifting wholesale customers with the majority of their service locations residing in ILEC markets from Wholesale to Kinetic. Prior period revenue by category information has been recast to conform with the current year presentation.

Revenues disaggregated by category were as follows:

NEW WINDSTREAM, LLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

5. Revenues, Continued:

NEW WINDSTREAM, 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.

NEW WINDSTREAM, LLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

5. Revenues, Continued:

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

Amortization of deferred contract acquisition costs was $12.7 million and $26.1 million for the three and six-month periods ended June 30, 2025, respectively, as compared to $15.9 million and $32.8 million for the three and six-month periods ended June 30, 2024, respectively. Amortization of deferred contract fulfillment costs was $4.3 million and $8.7 million for the three and six-month periods ended June 30, 2025, respectively, as compared to $4.8 million and $9.6 million for the three and six-month periods ended June 30, 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:

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 first required quarterly employer contribution for the 2025 plan year of $4.5 million. As discussed in Note 13, on July 15, 2025, the Company made in cash its second 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.

NEW WINDSTREAM, LLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

6. Employee Benefit Plans, Continued:

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 half of 2025 were $12.8 million and included the annual 2024 true-up contribution. Comparatively, contributions to the plan during the same period of 2024 were $13.2 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 and six-month periods ended June 30, 2025 was $5.1 million and $12.1 million, respectively, as compared to $5.6 million and $13.1 million for the three and six-month periods ended June 30, 2024, 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 MIP, the Company was authorized to issue up to a maximum of 10.0 million of equity-based awards 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. 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. 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. In addition, 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.

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 would 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 June 30, 2025, represent compensation expense previously recognized for time-based restricted units that had vested and were settled in common units.

Time-based restricted unit activity was as follows for the period from January 1, 2025 through May 2, 2025:

Compensation expense recognized for the time-based restricted units was $0.3 million and $1.0 million for the three and six-month periods ended June 30, 2025, respectively, as compared to $1.5 million and $3.0 million for the three and six-month periods ended June 30, 2024, respectively.

NEW WINDSTREAM, LLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

7. Equity-Based Compensation Plan, Continued:

The Company settled all vested time-based restricted common units held by Board members and current management employees on April 25, 2025 and May 2, 2025, respectively. In aggregate, the Company settled 1,500,306 vested time-based restricted common units for total cash consideration of $19.5 million, using available cash on hand.

Options and Performance Units – As of June 30, 2025, there were 2.5 million unvested performance-based options and 0.7 million unvested performance-based restricted common units held by former 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:

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 June 30, 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 June 30, 2025, there were 593,346 common units held by former employees of the Company. As further discussed in Note 13, on July 15, 2025, the Company settled substantially all of the common units, options and performance units held by former employees of Windstream.

8. Accumulated Other Comprehensive Income:

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

NEW WINDSTREAM, LLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

8. Accumulated Other Comprehensive Income, Continued:

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

Reclassifications out of accumulated other comprehensive income were as follows:

NEW WINDSTREAM, LLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

9. Loss Per Unit:

The Company computes basic loss per unit by dividing net loss applicable to common units by the weighted average number of common units and warrants outstanding during each period. Diluted loss per unit is computed by dividing net loss applicable to common units by the weighted average number of common units and warrants and includes the effect of potentially dilutive securities, if their effect is not anti-dilutive. Because the warrants are convertible into common units for nominal additional consideration, the warrants are included in the number of outstanding units for both basic and diluted loss per unit.

Prior to the termination of the MIP previously discussed in Note 7, 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 per unit amounts using the treasury stock method.

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 and number of units used in computing basic and diluted loss per unit was as follows:

NEW WINDSTREAM, 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 April 1, 2025, we completed certain changes to our previous business segment structure to better reflect the individual financial performance of our segments, primarily consisting of establishing intercompany billing agreements for network sharing arrangements between our business units. These intercompany transactions have no impact on our consolidated results of operations as the intercompany revenues and expenses are eliminated in consolidation. In addition, we made other changes to our previous segment structure, which included: (1) shifting governmental customers and all reseller and wholesale broadband revenues, as well as shifting wholesale customers with the majority of their service locations residing in ILEC markets from Wholesale to Kinetic and (2) allocating certain shared expenses primarily to Kinetic and Wholesale, consisting of network access and facilities costs, network operations, engineering and customer operations expenses. 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, business and wholesale 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. Our Kinetic wholesale operations provide 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.

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.

NEW WINDSTREAM, 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, 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. 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 network access and facilities, network operations and engineering, 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.

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 loss (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 benefit (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.

NEW WINDSTREAM, LLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

10. Business Segments, Continued:

The following table summarizes our segment results:

NEW WINDSTREAM, LLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

10. Business Segments, Continued:

Capital expenditures by segment were as follows: