Employee Benefit Plan

12 Months Ended

Dec. 31, 2025

Retirement Benefits [Abstract]

Employee Benefit Plans

Employee Benefit Plans:

In connection with the Merger, the Company assumed a non-contributory qualified defined benefit pension plan. Future benefit accruals for all eligible non-bargaining unit employees covered by the pension plan have ceased.

As previously discussed in Note 4, the net pension benefit obligation as of August 1, 2025 was calculated based upon a number of actuarial assumptions, including an expected long-term rate of return on pension plan assets of 7.75% and a discount rate of 5.64%. Factoring in these actuarial assumptions, the net pension benefit obligation was estimated to be $103.6 million as of August 1, 2025, consisting of projected benefit obligations of $545.2 million reduced by the fair value of plan assets of $441.6 million.

The components of pension income were as follows:

(Millions)	August 1- December 31, 2025
Benefits earned during the period (a)	$	1.0
Interest cost on benefit obligation (b)	12.1
Net actuarial gain (b)	(9.1)
Expected return on plan assets (b)	(13.5)
Net periodic pension income	$	(9.5)

(a)Included in cost of services and selling, general and administrative expense.

(b)Included in other income, net.

A summary of plan assets, projected benefit obligation and funded status of the pension plan was as follows as of December 31:

(Millions)	2025
Fair value of plan assets as of August 1, 2025	$	441.6
Actual return on plan assets	28.3
Employer contributions (a)	4.5
Benefits paid	(19.3)
Fair value of plan assets as of December 31, 2025	$	455.1
Projected benefit obligation as of August 1, 2025	$	545.2
Interest cost on projected benefit obligations	12.1
Service cost	1.0
Actuarial loss	5.6
Benefits paid	(19.3)
Projected benefit obligation as of December 31, 2025	$	544.6
Plan assets less than projected benefit obligation recorded in the balance sheet:
Current liabilities	$	—
Noncurrent liabilities	(89.5)
Funded status recognized in the consolidated balance sheet	$	(89.5)

(a)The remaining minimum required employer contributions to the pension plan for the 2025 plan year totaled $7.4 million, of which $4.5 million was contributed in January 2026 and the remaining $2.9 million will be contributed in September 2026, using cash.

The accumulated benefit obligation of the pension plan was $537.1 million as of December 31, 2025.

Assumptions – Actuarial assumptions used to calculate pension income for the period August 1, 2025 to December 31, 2025 were as follows:

Discount rate	5.60	%
Expected return on plan assets	7.75	%
Rate of compensation increase	3.30	%

Actuarial assumptions used to calculate the projected benefit obligations as of December 31, 2025 were as follows:

Discount rate	5.47	%
Expected return on plan assets	7.75	%
Rate of compensation increase:
2026	4.00	%
Thereafter	3.00	%

In developing the expected long-term rate of return assumption, management considered the plan’s historical rate of return, as well as input from the Company’s investment advisors. Projected returns on qualified pension plan assets were based on broad equity and bond indices and include a targeted asset allocation of 51% to equities, 37% to fixed income securities, and 12% to alternative investments, with an aggregate expected long-term rate of return of approximately 7.75%.

Plan Assets – Pension plan assets are allocated to asset categories based on the specific strategy employed by the asset’s investment manager. The asset allocation by asset category was as follows for the year ended December 31, 2025:

Asset Category	Target Allocation	Percentage of Plan Assets
Equity securities	43.5% - 58.1%	51.1	%
Fixed income securities	18.0% - 52.6%	34.6	%
Alternative investments	5.2% - 19.8%	12.6	%
Money market and other short-term interest bearing securities	0.0% - 5.0%	1.7	%
		100.0	%

The Company utilizes a third party to assist in evaluating the allocation of the total assets in the pension plan, taking into consideration the benefit obligations and funded status of the pension plan. Assets are managed utilizing a liability driven investment approach, meaning that assets are managed within a risk management framework which addresses the need to generate incremental returns in the context of an appropriate level of risk, based on plan liability profiles and changes in funded status. The return objectives are to satisfy funding obligations when and as prescribed by law and to keep pace with the growth of the pension plan liabilities. Given the long-time horizon for paying out benefits and the Company’s current financial condition, the pension plan can accept an average level of risk relative to other similar plans. The liquidity needs of the pension plan are manageable given that lump sum payments are not available to most participants.

Equity securities include stocks of both large and small capitalization domestic and international companies. Equity securities are expected to provide both diversification and long-term real asset growth. Domestic equities may include modest holdings of non-U.S. equities, purchased by domestic equity managers as long as they are traded in the U.S. and denominated in U.S. dollars and both active and passive (index) investment strategies. International equities provide a broad exposure to return opportunities and investment characteristics associated with the world equity markets outside the U.S. The pension plan’s equity holdings are diversified by investment style, market capitalization, market or region, and economic sector.

Fixed income securities include securities issued by the U.S. Government and other governmental agencies, debt securities issued by domestic and international entities, and derivative instruments comprised of swaps, futures, forwards, and options. These securities are expected to provide diversification benefits and are expected to reduce asset volatility and pension funding volatility, and a stable source of income.

Alternative investments may include hedge funds, commodities, both private and public real estate, and private equity investments. In addition to attractive diversification benefits, the alternative investments are expected to provide both income and capital appreciation.

Investments in money market and other short-term interest bearing securities are maintained to provide liquidity for benefit payments with protection of principal being the primary investment objective.

The fair values of pension plan assets were determined using the following inputs as of December 31, 2025:

			Quoted Price in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
(Millions)	Fair Value		Level 1		Level 2		Level 3
Money market fund (a)	$	28.3	$	—	$	28.3	$	—
Collective and other trust funds (b)	220.3		—		220.3		—
Government and agency securities (c)	91.9		—		91.9		—
Other investments (d)	3.4		3.4		—		—
Investments included in fair value hierarchy	343.9		$	3.4	$	340.5	$	—
Other investments measured at NAV:
Pooled funds (e)	33.7
Private equity funds (f)	54.2
Total investments	431.8
Cash	21.0
Dividends and interest receivable	4.9
Derivatives and other liabilities	(2.6)
Total plan assets	$	455.1

(a)The money market fund is valued based on the fair value of the underlying assets held as determined by the fund manager on the last business day of the year. The underlying assets are mostly comprised of certificates of deposit, time deposits, and commercial paper valued at amortized cost. The carrying amount of interest bearing cash is estimated to approximate fair value due to the short-term nature of this investment.

(b)Units in collective and other trust funds are valued by reference to the funds’ underlying assets and are based on the net asset value as reported by the fund manager on the last business day of the year. The underlying assets are mostly comprised of publicly traded equity securities and fixed income securities. These securities are valued at the official closing price of, or the last reported sale prices as of the close of business or, in the absence of any sales, at the latest available bid price.

(c)Government and agency securities and corporate bonds are valued using pricing models maximizing the use of observable inputs for similar securities. Corporate bonds include values based on yields currently available on comparable securities of issuers with similar credit ratings.

(d)Other investments consist of derivative financial instruments and investments in foreign currency. Derivative financial instruments are valued based on models that reflect the contractual terms of the instruments. Inputs include observable market information, such as swap curves, benchmark yields, rating updates, and interdealer broker quotes at the end of the year. Investments in foreign currency are valued at their quoted market price on the last day of the year.

(e)The pooled funds are valued based on the net asset value of the fund as a practical expedient as determined by the fund manager on the last business day of the year and is derived from the fair value of each underlying investment held by the pooled fund. These investments have not been classified within the fair value hierarchy.

(f)Private equity funds consist of investments in limited partnerships and are valued based on the pension plan's capital account balance at year end, resulting in valuation at net asset value as a practical expedient, as reported in the audited financial statements of the partnership. These investments have not been classified within the fair value hierarchy.

There were no transfers within the fair value hierarchy during the period August 1, 2025 to December 31, 2025.

There have been no significant changes in the methodology used to value investments during the period August 1, 2025 to December 31, 2025. The valuation methods used may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Furthermore, although the valuation methods are consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date.

Expected Future Employer Contributions and Benefit Payments – Expected future employer contributions and benefit payments are as follows as of December 31, 2025:

(Millions)
Expected employer contributions in 2026	$	20.6
Expected benefit payments:
2026	$	48.8
2027	47.8
2028	47.2
2029	46.6
2030	45.7
2031-2035	213.4

During 2026, the expected employer contributions of $20.6 million will be made using cash, consisting of $7.4 million for the 2025 plan year and $13.2 million for the 2026 plan year. The total amount of the 2026 employer contributions, and amount and timing of future contributions including any voluntary 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.

In connection with the Merger, the Company also assumed an employee savings plan under section 401(k) of the Internal Revenue Code, which covers substantially all salaried employees and certain bargaining unit employees of Windstream. Participating employees receive employer matching contributions up to a maximum of 4.0% of employee pre-tax contributions to the plan for employees contributing up to 5.0% 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. Inclusive of the Company's existing 401(k) defined contribution plan, expense attributable to the employer matching contribution under the plans, excluding amounts capitalized, was $11.0 million, $2.2 million and $2.3 million, for the years ended December 31, 2025, 2024 and 2023, respectively. Expense related to the employee savings plans is included in cost of services and selling, general and administrative expenses in the consolidated statements of income.