Uniti Group Inc.

Note 3. Merger and Purchase Price Allocation:

Merger Consideration

As previously discussed in Note 1, the Merger was completed on August 1, 2025. The total merger consideration of $2,376.6 million was calculated based on the fair value of the consideration transferred, which included the fair value of Common Stock, Preferred Stock and Warrants issued, the Merger Cash Consideration, and the effective settlement of preexisting relationships. The calculation of merger consideration was as follows:

(a)The fair value of 90,133,152 shares of Common Stock issued to Windstream equityholders was based on Old Uniti’s closing stock price on August 1, 2025 of $8.14.

(b)The fair value of 575,000 shares of Preferred Stock issued to Windstream equityholders was determined using a Black-Derman-Toy lattice model incorporating the contractual terms of the Preferred Stock, as well as the risk associated with the Preferred Stock, which was accounted for through the risk free rate term structure and a credit risk adjusted spread of 4.5%.

(c)The fair value of 17,558,406 Warrants issued to Windstream equityholders was based on the intrinsic value of each warrant of $8.13 computed as the difference between the accounting acquirer’s closing stock price on August 1, 2025 and the exercise price of the warrant, which was deemed to be a reasonable proxy for the fair value of the Warrants.

(d)Represents the amount of total merger consideration attributable to the effective settlement of preexisting relationships as of August 1, 2025 between Old Uniti and Windstream, as further discussed below.

Settlement of Preexisting Relationships

Prior to completion of the Merger, Old Uniti and Windstream had several preexisting relationships primarily comprised of (i)two structurally similar long-term exclusive triple-net lease agreements (collectively, the “Windstream Leases”), which consisted of a master lease (the “ILEC MLA”) that governed assets owned by Old Uniti which were leased and used by Windstream's incumbent local exchange carrier (“ILEC”) operations and a master lease (the “CLEC MLA”) that governed assets owned by Old Uniti which were leased and used by Windstream's consumer competitive local exchange carrier (“CLEC”) operations, (ii) the asset purchase agreement, pursuant to which Old Uniti paid Windstream in exchange for exclusive rights to use certain fiber strand miles leased by Windstream, certain fiber assets (and underlying rights) owned by Windstream, dark fiber IRU arrangements relating to the fiber strand miles and fiber assets, and a 20-year IRU for certain strands included in the transferred fiber assets that Uniti granted to Windstream (the “Asset Purchase Agreement”), and (iii) various other leasing and supplier arrangements between Old Uniti and Windstream.

Upon consummation of the Merger, all historical preexisting relationships between Old Uniti and Windstream were considered effectively settled for accounting purposes and the related transactions and balances became intercompany transactions eliminated in the preparation of the Company’s post-Merger consolidated financial statements. To the extent the settled preexisting contractual arrangement was deemed favorable or unfavorable from the perspective of Old Uniti, the fair value of the off-market component was included in total merger consideration. As of the Merger date, the Windstream Leases were deemed to be above market from the perspective of Old Uniti and the fair value of the off-market component was estimated to be $559.0 million based on the remaining contractual lease payments and current market rates. Conversely, the Asset Purchase Agreement was deemed to be unfavorable from the perspective of Old Uniti and the fair value of the off-market component was estimated to be $(60.0) million based on the estimated remaining value of the upfront payment of the IRU contract. The other leasing and supplier agreements were determined to be at market and, therefore, were effectively settled at the historical carrying value, which had a $0.1 million impact on total merger consideration.

In connection with the settlement of the preexisting relationships, the Company recognized a pretax nonrecurring gain of $1,685.4 million during the third quarter of 2025. The gain reflected the derecognition of the associated assets and liabilities recorded by Old Uniti related to the Windstream Leases and Asset Purchase Agreement as of the Merger date plus the portion of the total merger consideration assigned to the settlement of preexisting relationships discussed above. The derecognized liabilities consisted of deferred revenue of $1,166.8 million, intangible liabilities of $133.5 million, operating lease obligations of $11.4 million, and accounts payable and other current liabilities totaling $3.6 million, and the derecognized assets consisted of accounts receivable and other current assets totaling $15.3 million, other assets, including the straight-line revenue receivable, of $88.2 million and operating lease right-of-use assets of $25.5 million.

Purchase Price Allocation

The Merger was accounted for using the acquisition method of accounting, and accordingly, the total purchase price was allocated to the identifiable tangible and intangible assets acquired and liabilities assumed of Windstream based on their estimated fair values as of the Merger date, with the excess amount recorded as goodwill. During the second quarter of 2026, the Company finalized the purchase price allocation for the Merger. The effects of the immaterial measurement period adjustments recorded in 2026 to the initial purchase price allocation resulted in a net increase in goodwill of $0.2 million.

The following table summarizes the final allocation of the Merger consideration to the identifiable tangible and intangible assets acquired and liabilities assumed of Windstream:

Goodwill associated with this acquisition was largely due to synergies expected from combining operations as previously discussed in Note 1. Goodwill recognized in the Merger will not be deductible for tax purposes. The Company allocated the goodwill recognized in the Merger to its reportable operating segments based on the relative fair value of the operating segments. See Note 4.

Transaction Related and Other Costs

Transaction related and other costs include acquisition pursuit, transaction and integration costs. Transaction related and other costs were as follows:

(a)Consists of investment banking, legal, regulatory, accounting and other consulting and advisory services directly associated with the Merger.

(b)Includes direct costs incurred in integrating the acquired operations of Windstream, including consulting services, systems and data conversion, network optimization, contract termination fees, write-off of Right-of-use assets for abandoned leased facilities, rebranding and marketing costs, transaction and retention bonuses, and severance and related employee benefit costs.

(c)Consists primarily of expenses incurred in connection with the offering of our asset-backed securities discussed in Note 5.

Transaction related and other costs recorded within other current liabilities were $2.6 million and $9.8 million in the Company’s condensed consolidated balance sheets at September 30, 2026 and December 31, 2025, respectively.

Actual and Pro Forma Results of Operations

The results of Windstream’s operations are included in our consolidated results of operations beginning on August 1, 2025. For the three and nine months ended September 30, 2026, our consolidated results of operations included revenues and sales of $764.9 million and $2,370.1 million, respectively, and operating income of $37.6 million and $210.6 million, respectively, attributable to Windstream. Comparatively, for the three and nine months ended September 30, 2025, our consolidated results of operations included revenues and sales of $550.9 million and operating income of $104.4 million attributable to Windstream.

The following unaudited pro forma financial information presents the combined results of operations of Uniti as if the Merger occurred as of January 1, 2024:

The unaudited pro forma information includes adjustments for the settlement of preexisting relationships, amortization for intangible assets acquired, stock-based compensation expense, interest expense for acquisition financing, income tax expense for transaction structuring, and depreciation for property and equipment acquired. The unaudited pro forma information presented is for informational purposes only and is not necessarily indicative of our consolidated results of operations of the combined business had the acquisition actually occurred at the beginning of fiscal year 2024 or of the results of our future operations of the combined business.