Uniti Group Inc.

Note 2. Preparation of Condensed Consolidated Financial Statements:

Basis of Presentation – The accompanying condensed consolidated financial statements include all accounts of the Company and its wholly owned and/or controlled subsidiaries. All material intercompany balances and transactions have been eliminated. The Company also consolidates variable interest entities (“VIEs”) in instances in which it is deemed to be the primary beneficiary. For periods prior to the Merger, the Operating Partnership was considered a VIE, because Old Uniti was deemed to be the primary beneficiary as it had both the power to direct the activities that, when taken together, most significantly impacted the Operating Partnership’s performance; and had the obligation to absorb losses and right to receive the returns from the Operating Partnership that would be significant to the Operating Partnership. After the Merger, the Company does not hold interests in any VIEs.

The accompanying condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information set forth in the Accounting Standards Codification (“ASC”), as published by the Financial Accounting Standards Board (“FASB”), and with the applicable rules and regulations of the U.S. Securities and Exchange Commission (“SEC”). Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted. The accompanying unaudited consolidated balance sheet as of December 31, 2025 was derived from audited financial statements but does not include all disclosures required by GAAP. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair statement of results for the interim period have been included. Operating results from any interim period are not necessarily indicative of the results that may be expected for the full fiscal year. The accompanying consolidated financial statements and related notes should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s 2025 Annual Report on Form 10-K filed with the SEC on March 2, 2026.

Because Old Uniti was treated as the accounting acquirer, financial information for periods prior to the Merger reflect the historical activity of Old Uniti. For periods after the Merger, the consolidated financial statements reflect the combined results of Old Uniti and Windstream.

Reclassifications – To conform to the current year presentation, the prior period condensed consolidated statements of operations of Old Uniti were reclassified to (1) present sales revenues separate and apart from service revenues, (2) disaggregate operating expenses into cost of services and cost of sales, (3) present an operating income subtotal and (4) present loss on extinguishment of debt separate and apart from interest expense, net. These reclassifications did not impact previously reported net (loss) income or comprehensive (loss) income for the three and six months ended June 30, 2025.

In addition, the prior period condensed consolidated statement of cash flows of Old Uniti was reclassified to combine or further disaggregate certain financial statement line items. These reclassifications did not impact previously reported net cash provided from operating activities, net cash used in investing activities, net cash provided from financing activities or net increase in cash, restricted cash and cash equivalents for the six months ended June 30, 2025. Finally, the prior period condensed consolidated statements of shareholders’ deficit of Old Uniti were reclassified to combine amounts attributable to noncontrolling interests and to rename “Distributions in Excess of Accumulated Earnings” to “Accumulated Deficit”. These changes did not impact previously reported total shareholders’ deficit for the three and six months ended June 30, 2025.

Restricted Cash – Restricted cash represents funds that are restricted for obligations under the Fiber Infrastructure ABS and Kinetic ABS facilities (see Note 5) to maintain six months of interest on the Class A and Class Bnotes and three months of interest on the Class C notes and for other expenses. In addition, deposits held as security for indebtedness under Windstream’s corporate purchase card program are not available for use and have been presented as restricted cash as of June 30, 2026 and December 31, 2025.

Settlement Obligation – Prior to the Merger, in accordance with the terms of the settlement agreement with Windstream, Old Uniti was obligated to make up to $490.1 million of cash payments to Windstream in equal installments over 20 consecutive quarters beginning in October 2020. Old Uniti had the option to prepay any installments due on or after the first anniversary of the settlement agreement (discounted at a 9% rate). During January, April and July of 2025, Old Uniti made the final three quarterly cash installment payments due to Windstream under the settlement agreement of$24.5 million per quarter, or a total of$73.5 million. As of July 31, 2025, Old Uniti had made cumulative payments to Windstream totaling$484.9 million over the duration of the settlement agreement.

Lessor Arrangements –Certain service offerings to customers include equipment leases. The Company also leases its network facilities, including communications towers, ground space, and colocation space 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$72.6 million and$151.5 millionfor thethree and six months ended June 30, 2026, respectively, as compared to$238.0 millionand$472.4 million for thethree and six months ended June 30, 2025. Operating lease income 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 and/or the present value of the future minimum lease payments equals substantially all of the fair value of the underlying leased assets. These IRU arrangements meet the criteria for sales-type lease classification. During the three and six months ended June 30, 2026, the Company recognized sales revenue of $16.8 million and $88.2 million, cost of sales of $1.2 million and $3.1 million and gross profit of $15.6 million and $85.1 million, respectively, related to IRU arrangements. Comparatively, for the six months ended June 30, 2025, the Company recognized sales revenue of $2.7 million, cost of sales of $0.6 million and gross profit of $2.1 million, respectively, related to IRU arrangements.

Income Taxes – 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, permanent book/tax differences, valuation allowance analysis and tax planning opportunities. Significant or unusual items are separately recognized in the quarter in which they occur.

For the three and six months ended June 30, 2026, we recorded income tax expense of $0.3 million and $0.9 million, respectively, resulting in an effective tax rate of (0.2)% and (0.4)%, respectively. The effective tax rates differed from the statutory rates for the three and six months ended June 30, 2026 primarily due to the change in valuation allowance recorded against current year income and current state income tax.

For the three and six months ended June 30, 2025, we recorded income tax benefit of $6.2 million and $10.7 million, respectively, resulting in an effective tax rate of 36.7% and 116.3%, respectively. The provision for income taxes differed from the statutory rate for the three and six months ended June 30, 2025 primarily due to the benefit of Old Uniti’s REIT status and the reversal of unrecognized tax benefit related to the expiration of a statute of limitations in a foreign jurisdiction.

Supplemental Cash Flow Information – Supplemental cash flow information for the periods presented was as follows:

Recently Issued Accounting Pronouncements Effective in 2026

Credit Losses – In July 2025, the FASB issued ASU 2025-05, Financial Instruments - Credit Losses (Topic ASC 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets (“ASU 2025-05”). The amendments in this ASU provide entities with a practical expedient they may elect to use when developing an estimate of expected credit losses on current accounts receivable and current contract asset balances arising from transactions accounted for under Topic ASC 606 - Revenue from Contracts with Customers. Under this practical expedient, entities may elect to assume that current conditions as of the balance sheet date do not change for the remaining life of the asset. ASU 2025-05 was effective for fiscal years and for interim periods beginning after December 15, 2025. The Company elected not to adopt the practical expedient and, accordingly, this standard had no impact to the Company’s condensed consolidated financial statements.

Recently Issued Accounting Pronouncements Not Yet Adopted

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.

Internal Use Software – In September 2025, the FASB issued ASU No. 2025-06, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software (“ASU 2025-06”) that updates the accounting guidance for internal-use software costs by removing references to prescriptive and sequential development stages of a project and replacing them with new criteria used in determining when to start capitalizing software costs. Under the new guidance, capitalization begins when management authorizes and commits to funding the software project and it is probable the project will be completed, and the software will be used to perform the intended function. The new guidance also clarifies that capitalized internal-use software costs are subject to the property, plant, and equipment disclosure requirements. The amendments in ASU 2025-06 are effective for fiscal years beginning after December 15, 2027, and for interim reporting periods within those annual fiscal years, with early adoption permitted. The guidance may be applied on a prospective basis, a modified basis for in-process projects, or a retrospective basis. The Company is currently assessing the effect of this update on our consolidated financial statements and related disclosures.

Government Assistance – In December 2025, the FASB issued ASU 2025-10, Government Grants (Topic ASC 832): Accounting for Government Grants Received by Business Entities (“ASU 2025-10”). ASU 2025-10 provides guidance on how business entities should recognize, measure, and present government grants received by prescribing an accounting model based on the main principles in IAS 20, defining a government grant as a transfer of a monetary or tangible nonmonetary asset, other than an exchange transaction, from a government to a business entity, providing a recognition threshold under which a grant is recognized when both (1) it is probable that the entity will comply with the grant’s conditions and that the grant will be received, and (2) the entity meets the specific recognition guidance for a grant related to an asset or a grant related to income. Additionally, ASU 2025-10 leverages existing disclosure requirements in ASC 832 for annual periods. The amendments in ASU 2025-10 are effective for fiscal years and for interim periods beginning after December 15, 2028, and early adoption is permitted. We are currently assessing the effect of this update on our consolidated financial statements and related disclosures.

Interim Reporting – In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements (“ASU 2025-11”). This ASU clarifies that the interim reporting requirements in Topic 270 apply to all entities that issue interim financial statements prepared in accordance with U.S. GAAP and consolidates such requirements within Topic 270. The amendments provide a comprehensive list within Topic 270 of required interim disclosures, establish a principle requiring disclosure of events or changes occurring after the end of the most recent annual reporting period that have a material impact on interim results and clarifies the form and content requirements applicable to interim financial statements. The amendments in ASU 2025-11 are effective for the interim reporting periods within annual reporting periods beginning after December 15, 2027, with early adoption permitted. This ASU can be applied either prospectively or retrospectively to any or all prior periods presented in the financial statements. The Company is currently evaluating ASU 2025-11 to determine the impact it may have on our consolidated financial statements.

Preferred Stock Dividends – In April 2026, the FASB issued ASU 2026-01, Equity (Topic 505): Initial Measurement of Paid-in-Kind (“PIK”) Dividends on Equity-Classified Preferred Stock (“ASU 2026-01”). This update requires that PIK dividends be initially measured based on the PIK dividend rate stated in the preferred stock agreement, such as multiplying a stated rate by the liquidation value of the preferred stock, rather than at fair value. ASU 2026-01 is effective for annual reporting periods beginning after December 15, 2026, and interim periods within those annual reporting periods, with early adoption permitted. The amendments in ASU 2026-01 may be applied either on a prospective basis or on a modified retrospective basis for equity-classified preferred stock instruments that are outstanding as of the initial application date. The Company is currently evaluating this update to determine the impact it may have on our consolidated financial statements.