DENVER, Nov. 5, 2024
/PRNewswire/ -- Lumen Technologies, Inc. (NYSE: LUMN) reported
results for the third quarter ended September 30, 2024.
Big Tech is Choosing Lumen to Build the Backbone for the AI
Economy
- Continued operational progress and sales momentum across our
growth portfolio. Record quarter for net subscription adds in
Quantum Fiber business.
- Delivered new Lumen Private Connectivity Fabric (or PCF) sales
since our last earnings report, which provides additional liquidity
and flexibility to continue reducing our overall debt profile.
- Growing adoption of Lumen Digital's unique capabilities.
Promising network-as-a-service adoption metrics helping to grow
future enterprise revenue in digital services.
"The largest technology companies in the world are choosing
Lumen to help build the backbone for the AI economy. What's more,
enterprises are recognizing that every AI strategy needs a network
strategy, and they're coming to Lumen for help," said Kate Johnson, president and CEO of Lumen
Technologies. "We continue to transform Lumen's business while also
leading a once in a generation expansion of the internet."
- Reported Net Loss of $(148)
million for the third quarter 2024, compared to reported Net
Loss of $(78) million for the third
quarter 2023
- Reported diluted loss per share of $(0.15) for the third quarter 2024, compared to
diluted loss per share of $(0.08) for
the third quarter 2023. Excluding Special Items, diluted loss per
share was $(0.13) for the third
quarter 2024, compared to $(0.09)
diluted loss per share for the third quarter 2023
- Generated Adjusted EBITDA of $899
million1 for the third quarter 2024, compared to
$1.049 billion1 for the
third quarter 2023, excluding the effects of Special Items of
$56 million and $55 million, respectively
- Reported Net Cash Provided by Operating Activities of
$2.0 billion2 for the
third quarter 2024
- Generated Free Cash Flow of $1.2
billion2 for the third quarter 2024, excluding
cash paid for Special Items of $16
million, compared to Free Cash Flow of $43 million, excluding cash paid for specials
items of $5 million, for the third
quarter 2023
|
1 Adjusted
EBITDA and Adjusted EBITDA excluding Special Items for the third
quarter of 2023 includes $31 million from the EMEA business
(defined below), divested on Nov. 1, 2023 and $17 million from
those of our Content Delivery Network ("CDN") customer contracts
sold Oct. 10, 2023, which will not recur in subsequent periods. The
Company believes that these figures will allow analysts and
investors to understand the amounts associated with these
transactions to understand the impact they had on the Company's
past, but not current or future, financial performance. Therefore,
these amounts will impact the Company's ability to match its past
performance in current and future periods. The net post-closing
financial impact of actual amounts received or paid by the Company
under its post-closing agreements with the purchasers of its
businesses divested in 2022 and 2023 were a reduction of $(38)
million and $(40) million for the third quarter 2024 and 2023,
respectively. The Company believes that this provides useful
information to investors to understand the impact that the
post-closing agreements have had on the Company's activities and
its current financial performance.
|
|
2 Includes
the impact of $170 million voluntary pension contribution in third
quarter 2024.
|
|
Financial
Results
|
|
|
Metric, as
reported
|
Third
Quarter
|
|
($ in millions,
except per share data)
|
2024
|
2023
|
|
Large
Enterprise(1)
|
$
839
|
914
|
|
Mid-Market
Enterprise
|
471
|
506
|
|
Public
Sector
|
427
|
445
|
|
North America
Enterprise Channels
|
1,737
|
1,865
|
|
Wholesale
|
706
|
776
|
|
North America Business
Revenue
|
2,443
|
2,641
|
|
International and
Other(1)(2)
|
93
|
264
|
|
Business Segment
Revenue
|
2,536
|
2,905
|
|
Mass Markets Segment
Revenue
|
685
|
736
|
|
Total
Revenue(3)(4)
|
$ 3,221
|
3,641
|
|
Cost of Services and
Products
|
1,692
|
1,850
|
|
Selling, General and
Administrative Expenses
|
696
|
791
|
|
Net Loss on Sale of
Business
|
—
|
22
|
|
Stock-based
Compensation Expense
|
10
|
16
|
|
Net Loss
|
(148)
|
(78)
|
|
Net Loss, Excluding
Special Items(5)(6)
|
(133)
|
(85)
|
|
Adjusted
EBITDA(2)(5)(7)(8)
|
843
|
994
|
|
Adjusted EBITDA,
Excluding Special Items(2)(5)(7)(8)(9)
|
899
|
1,049
|
|
Net Loss
Margin
|
(4.6) %
|
(2.1) %
|
|
Net Loss Margin,
Excluding Special Items(5)(6)
|
(4.1) %
|
(2.3) %
|
|
Adjusted EBITDA
Margin(5)
|
26.2 %
|
27.3 %
|
|
Adjusted EBITDA Margin,
Excluding Special Items(5)(9)
|
27.9 %
|
28.8 %
|
|
Net Cash Provided by
Operating Activities
|
2,032
|
881
|
|
Capital
Expenditures(10)
|
850
|
843
|
|
Unlevered Cash
Flow(5)
|
1,470
|
358
|
|
Unlevered Cash Flow,
Excluding Cash Special Items(5)(11)
|
1,486
|
363
|
|
Free Cash
Flow(5)
|
1,182
|
38
|
|
Free Cash Flow,
Excluding Cash Special Items(5)(11)
|
1,198
|
43
|
|
Net Loss per Common
Share - Diluted
|
(0.15)
|
(0.08)
|
|
Net Loss per Common
Share - Diluted, Excluding Special
Items(5)(6)
|
(0.13)
|
(0.09)
|
|
Weighted Average Shares
Outstanding (in millions) - Diluted
|
988.8
|
983.6
|
|
|
(1) International revenue amounts
previously reported in Large Enterprise represent revenue related
to our non-domestic regions including (i) Europe, Middle East and
Africa ("EMEA") through the sale of our EMEA business on Nov. 1,
2023 and (ii) Asia Pacific ("APAC") and any other remaining
international operations, which we do not expect to be significant
or material in future periods. As such, prior period amounts
related to our historical international operations have been
reclassified within our Business Segment Revenue to the
"International and Other" sales channel. These reporting changes
had no impact on total operating revenue, total operating expenses
or net income for any period.
|
|
(2)
Subsequent to the sale of select Content Delivery Network ("CDN")
customer contracts announced on Oct. 10, 2023, certain prior period
amounts related to our historical CDN revenue have been
reclassified from "Harvest" to "International and Other" sales
channel within the "Other" product in the Business Segment Revenue
products to conform to our 2024 reporting presentation. These
reporting changes had no impact on total operating revenue, total
operating expenses or net income for any period. Revenue and
Adjusted EBITDA excluding Special Items for the third quarter of
2023 includes $24 million and $17 million, respectively, from our
divested CDN customer contracts. The Company believes that these
figures will allow analysts and investors to understand the amounts
associated with recent transactions and to understand the impacts
they had on the Company's past, but not current or future,
financial performance. Therefore, these amounts will impact the
Company's ability to match its past performance in current and
future periods.
|
|
(3) Revenue for the third quarter of
2023 includes $134 million from the EMEA business divested Nov. 1,
2023, which will not recur in periods following the divestiture.
The Company believes that this figure will allow analysts and
investors to understand the amounts associated with these
transactions and to understand the impact they had on the Company's
past, but not current or future, financial performance. Therefore,
these amounts will impact the Company's ability to match its past
performance in current and future periods.
|
|
(4) The
post-closing revenue received by the Company under its post-closing
agreements with purchasers of our businesses divested in 2022 and
2023 was (i) $46 million for the third quarter of 2024 and (ii) $23
million for the third quarter of 2023. The Company believes that
this provides useful information to investors to understand the
impact that the post-closing agreements have had on the Company's
current financial performance.
|
|
(5) See the
attached schedules for definitions of non-GAAP metrics and
reconciliations to GAAP figures.
|
|
(6) Excludes Special Items (net of
the income tax effect thereof) which (i) positively impacted this
metric by $15 million for the third quarter of 2024 and (ii)
negatively impacted this metric by $(7) million for the third
quarter of 2023.
|
|
(7) Adjusted EBITDA and Adjusted
EBITDA excluding Special Items for the third quarter of 2023
includes $31 million from the EMEA business, divested in Nov. 1,
2023, which will not recur in periods following the divestiture.
The Company believes that these figures will allow analysts and
investors to understand the amounts associated with these
transactions to understand the impact they had on the Company's
past, but not current or future, financial performance. Therefore,
these amounts will impact the Company's ability to match its past
performance in current and future periods.
|
|
(8) The
post-closing net financial impacts to adjusted EBITDA of actual
amounts received or paid by the Company under its post-closing
agreements with the purchasers of our businesses divested in 2022
and 2023 were (i) a net reduction of $(38) million for the third
quarter of 2024 and (ii) a net reduction of $(40) million for the
third quarter 2023. The Company believes that this figure provides
useful information to investors to understand the impact that the
post-closing agreements have had on the Company's financial
performance following the completion of these
divestitures.
|
|
(9) Excludes
Special Items in the amounts of (i) $56 million for the third
quarter of 2024 and (ii) $55 million for the third quarter of
2023.
|
|
(10) Capital expenditures for the
third quarter of 2023 includes $21 million of capital expenditures
relating to EMEA business divested on Nov. 1, 2023, which will not
recur in periods following the divestiture. The Company believes
that this figure will allow analysts and investors to understand
the amounts associated with these transactions and programs to
understand the impact they had on the Company's past, but not
current or future, capital expenditures. Therefore, these amounts
will impact the Company's ability to match its past capital
expenditure activities in current and future periods.
|
|
(11)
Excludes cash paid for Special Items in the net amounts of (i) $16
million for the third quarter of 2024 and (ii) $5 million for the
third quarter of 2023.
|
|
Metrics(1)
|
Third
Quarter
|
Second
Quarter
|
QoQ
Percent
|
Third
Quarter
|
YoY
Percent
|
|
($ in
millions)
|
2024
|
2024
|
Change
|
2023
|
Change
|
|
Revenue By Sales
Channel
|
|
|
|
|
|
|
Large
Enterprise
|
$
839
|
837
|
— %
|
914
|
(8) %
|
|
Mid-Market
Enterprise
|
471
|
478
|
(1) %
|
506
|
(7) %
|
|
Public
Sector
|
427
|
448
|
(5) %
|
445
|
(4) %
|
|
North America
Enterprise Channels
|
1,737
|
1,763
|
(1) %
|
1,865
|
(7) %
|
|
Wholesale
|
706
|
723
|
(2) %
|
776
|
(9) %
|
|
North America Business
Revenue
|
2,443
|
2,486
|
(2) %
|
2,641
|
(7) %
|
|
International and
Other
|
93
|
91
|
2 %
|
264
|
(65) %
|
|
Business Segment
Revenue
|
2,536
|
2,577
|
(2) %
|
2,905
|
(13) %
|
|
Mass Markets Segment
Revenue
|
685
|
691
|
(1) %
|
736
|
(7) %
|
|
Total
Revenue(2)
|
$
3,221
|
3,268
|
(1) %
|
3,641
|
(12) %
|
|
Business Segment
Revenue by Product Category
|
|
|
|
|
|
|
Grow
|
$
1,076
|
1,063
|
1 %
|
1,131
|
(5) %
|
|
Nurture
|
729
|
751
|
(3) %
|
874
|
(17) %
|
|
Harvest
|
549
|
566
|
(3) %
|
662
|
(17) %
|
|
Subtotal
|
2,354
|
2,380
|
(1) %
|
2,667
|
(12) %
|
|
Other
|
182
|
197
|
(8) %
|
238
|
(24) %
|
|
Business Segment
Revenue
|
$
2,536
|
2,577
|
(2) %
|
2,905
|
(13) %
|
|
Net
Loss
|
$
(148)
|
(49)
|
nm
|
(78)
|
90 %
|
|
Net Loss
Margin
|
(4.6) %
|
(1.5) %
|
nm
|
(2.1) %
|
114 %
|
|
Net Loss, Excluding
Special Items
|
$
(133)
|
(124)
|
7 %
|
(85)
|
56 %
|
|
Net Loss Income Margin,
Excluding Special Items
|
(4.1) %
|
(3.8) %
|
9 %
|
(2.3) %
|
77 %
|
|
Adjusted EBITDA,
Excluding Special Items(3)
|
$
899
|
1,011
|
(11) %
|
1,049
|
(14) %
|
|
Adjusted EBITDA Margin,
Excluding Special Items
|
27.9 %
|
30.9 %
|
(10) %
|
28.8 %
|
(3) %
|
|
Capital
Expenditures(4)
|
$
850
|
753
|
13 %
|
843
|
1 %
|
|
|
(1) See the
notes to our immediately preceding chart for information about our
use of non-GAAP metrics, Special Items, and reconciliations to
GAAP.
|
|
(2) Revenue
for the third quarter of 2023 includes amounts from the 2023
divestiture and sale of CDN contracts. Revenue for the second and
third quarter of 2024 and third quarter of 2023 includes amounts
from the post-closing commercial agreements with the purchasers of
our businesses divested in 2022 and 2023. Refer to footnotes 1
through 4 on the preceding table for details.
|
|
(3) Adjusted
EBITDA excluding Special Items for the third quarter of 2023
includes the financial impacts from the 2023 divestiture and sale
of CDN contracts. Adjusted EBITDA excluding Special Items for the
second and third quarter of 2024 and the third quarter of 2023
includes the financial impacts from the post-closing commercial
agreements with the purchasers of our businesses divested in 2022
and 2023. Refer to footnotes 2, 7 and 8 on the preceding table for
details.
|
|
(4) Capital
expenditures for the third quarter 2023 includes the impacts of
capital expenditures related to our divested businesses, which will
not recur in periods following the completion of these
divestitures. Refer to footnote 10 on the preceding table for
details.
|
|
nm - Percentages
greater than 200% and comparisons between positive and negative
values are considered not meaningful.
|
Revenue
Total Revenue was $3.221 billion for the third quarter 2024,
compared to $3.641 billion for the
third quarter 2023.
Cash Flow
Free Cash Flow, excluding Special Items, was
$1.198 billion in the third
quarter 2024, compared to $43
million in the third quarter 2023.
As of September 30, 2024, Lumen
had cash and cash equivalents of $2.640
billion.
2024 Financial Outlook
The Company updated its full-year 2024 financial outlook, which
is detailed below:
|
Metric (1)(2)
|
Current
Outlook
|
Previous
Outlook
|
|
Adjusted
EBITDA
|
$3.9 to $4.0
billion
|
$3.9 to $4.0
billion
|
|
Free Cash
Flow(3)(4)
|
$1.2 to $1.4
billion
|
$1.0 to $1.2
billion
|
|
Net Cash
Interest
|
$1.15 to $1.25
billion
|
$1.15 to $1.25
billion
|
|
Capital
Expenditures
|
$3.1 to $3.3
billion
|
$3.1 to $3.3
billion
|
|
Cash Income
Taxes/(Refund)(4)
|
($200) to ($300)
million
|
($200) to ($300)
million
|
|
|
|
|
(1)
For definitions of non-GAAP metrics and reconciliations to GAAP
figures, see the attached schedules and our Investor Relations
website.
|
|
(2)
Outlook measures in this chart and the accompanying schedules (i)
exclude the effects of Special Items, goodwill impairments, future
changes in our operating or capital allocation plans, unforeseen
changes in regulation, laws or litigation, and other unforeseen
events or circumstances impacting our financial performance and
(ii) speak only as of Nov. 5, 2024. See "Forward-Looking
Statements."
|
|
(3)
Current Outlook includes the voluntary pension contribution of $170
million during the third quarter 2024.
|
|
(4)
Includes an approximately $700 million tax refund received during
the first quarter 2024.
|
Investor Call
Lumen's management team will host a conference call at
5:00 p.m. ET today, Nov. 5, 2024. The conference call will be
streamed live over the Lumen website at ir.Lumen.com . Additional
information regarding third quarter 2024 results, including the
presentation materials, will be available on the Investor Relations
website prior to the call. A webcast replay of the call will also
be available on our website for one year.
About Lumen Technologies:
Lumen is unleashing the world's digital potential. We ignite
business growth by connecting people, data, and applications –
quickly, securely, and effortlessly. As the trusted network for AI,
Lumen uses the scale of our network to help companies realize AI's
full potential. From metro connectivity to long-haul data transport
to our edge cloud, security, managed service, and digital platform
capabilities, we meet our customers' needs today and as they build
for tomorrow.
For news and insights visit news.lumen.com, LinkedIn:
/lumentechnologies, X:@lumentechco, Facebook: /lumentechnologies,
Instagram:@lumentechnologies and YouTube: /lumentechnologies. Lumen
and Lumen Technologies are registered trademarks of Lumen
Technologies LLC in the United
States. Lumen Technologies LLC is a wholly-owned affiliate
of Lumen Technologies, Inc.
Forward-Looking Statements
Except for historical and factual information, the matters set
forth in this release and other of our oral or written statements
identified by words such as "estimates," "expects," "anticipates,"
"believes," "plans," "intends," "will," and similar expressions are
forward-looking statements as defined by the federal securities
laws, and are subject to the "safe harbor" protections thereunder.
These forward-looking statements are not guarantees of future
results and are based on current expectations only, are inherently
speculative, and are subject to a number of assumptions, risks and
uncertainties, many of which are beyond our control. Actual events
and results may differ materially from those anticipated,
estimated, projected or implied by us in those statements if one or
more of these risks or uncertainties materialize, or if underlying
assumptions prove incorrect. Factors that could affect actual
results include but are not limited to: the effects of intense
competition from a wide variety of competitive providers, including
decreased demand for our more mature service offerings and
increased pricing pressures; the effects of new, emerging or
competing technologies, including those that could make our
products less desirable or obsolete; our ability to successfully
and timely attain our key operating imperatives, including
simplifying and consolidating our network, simplifying and
automating our service support systems, attaining our Quantum Fiber
buildout schedule, replacing aging or obsolete plant and equipment,
strengthening our relationships with customers and attaining
projected cost savings; our ability to successfully and timely
monetize our network related assets through leases, commercial
service arrangements or similar transactions (including as part of
our Private Connectivity FabricSM solutions), including
the possibility that the benefits of these initiatives may be less
than anticipated, that the costs thereof may be more than
anticipated, or that we may be unable to satisfy any conditions of
any such transactions in a timely manner, or at all; our ability to
safeguard our network, and to avoid the adverse impact of
cyber-attacks, security breaches, service outages, system failures,
or similar events impacting our network or the availability and
quality of our services; the effects of ongoing changes in the
regulation of the communications industry, including the outcome of
legislative, regulatory or judicial proceedings relating to content
liability standards, intercarrier compensation, universal service,
service standards, broadband deployment, data protection, privacy
and net neutrality; our ability to generate cash flows sufficient
to fund our financial commitments and objectives, including our
capital expenditures, operating costs, debt obligations, taxes,
pension contributions and other benefits payments; our ability to
effectively retain and hire key personnel and to successfully
negotiate collective bargaining agreements on reasonable terms
without work stoppages; our ability to successfully adjust to
changes in customer demand for our products and services, including
increased demand for high-speed data transmission services and
artificial intelligence services; our ability to successfully
maintain the quality and profitability of our existing product and
service offerings, to introduce profitable new offerings on a
timely and cost-effective basis and to transition customers from
our legacy products to our newer offerings; our ability to
successfully and timely implement our corporate strategies,
including our transformation, buildout and deleveraging strategies;
our ability to successfully and timely realize the anticipated
benefits from our 2022 and 2023 divestitures, and to successfully
operate and transform our remaining business; changes in our
operating plans, corporate strategies, or capital allocation plans,
whether based upon changes in our cash flows, cash requirements,
financial performance, financial position, market or regulatory
conditions, or otherwise; the impact of any future material
acquisitions or divestitures that we may transact; the negative
impact of increases in the costs of our pension, healthcare,
post-employment or other benefits, including those caused by
changes in capital markets, interest rates, mortality rates,
demographics or regulations; the potential negative impact of
customer or shareholder complaints, government investigations,
security breaches or service outages impacting us or our industry;
adverse changes in our access to credit markets on acceptable
terms, whether caused by changes in our financial position, lower
credit ratings, unstable markets, debt covenant restrictions or
otherwise; our ability to meet the terms and conditions of our debt
obligations and covenants, including our ability to make transfers
of cash in compliance therewith; our ability to attain the
anticipated benefits of our March 22,
2024 and September 24, 2024
debt transactions; our ability to maintain favorable relations with
our security holders, key business partners, suppliers, vendors,
landlords and lenders; our ability to timely obtain necessary
hardware, software, equipment, services, governmental permits and
other items on favorable terms; our ability to meet evolving
environmental, social and governance ("ESG") expectations and
benchmarks, and effectively communicate and implement our ESG
strategies; the potential adverse effects arising out of
allegations regarding the release of hazardous materials into the
environment from network assets owned or operated by us or our
predecessors, including any resulting governmental actions, removal
costs, litigation, compliance costs or penalties; our ability to
collect our receivables from, or continue to do business with,
financially-troubled customers; our ability to continue to use
intellectual property used to conduct our operations; any adverse
developments in legal or regulatory proceedings involving us;
changes in tax, trade, pension, healthcare or other laws or
regulations, in governmental support programs, or in general
government funding levels, including those arising from
governmental programs promoting broadband development; our ability
to use our net operating loss carryforwards in the amounts
projected; the effects of changes in accounting policies, practices
or assumptions, including changes that could potentially require
additional future impairment charges; the effects of adverse
weather, terrorism, epidemics, pandemics, rioting, vandalism,
societal unrest, political discord or other natural or man-made
disasters or disturbances; the potential adverse effects if our
internal controls over financial reporting have weaknesses or
deficiencies, or otherwise fail to operate as intended; the effects
of changes in interest rates or inflation; the effects of more
general factors such as changes in exchange rates, in operating
costs, in public policy, in the views of financial analysts, or in
general market, labor, economic, public health or geopolitical
conditions; and other risks referenced from time to time in our
filings with the U.S. Securities and Exchange Commission. You are
cautioned not to unduly rely upon our forward-looking statements,
which speak only as of the date made. We undertake no obligation to
publicly update or revise any forward-looking statements for any
reason, whether as a result of new information, future events or
developments, changed circumstances, or otherwise. Furthermore, any
information about our intentions contained in any of our
forward-looking statements reflects our intentions as of the date
of such forward-looking statement, and is based upon, among other
things, our assessment of regulatory, technological, industry,
competitive, economic and market conditions as of such date. We may
change our intentions, strategies or plans (including our capital
allocation plans) at any time and without notice, based upon any
changes in such factors or otherwise.
Reconciliation to GAAP
This release includes certain historical and forward-looking
non-GAAP financial measures, including but not limited to Adjusted
EBITDA and Adjusted EBITDA Margin, Free Cash Flow, Unlevered Cash
Flow and adjustments to GAAP and non-GAAP measures to exclude the
effect of Special Items.
In addition to providing key metrics for management to evaluate
the Company's performance, we believe these above-described
measurements assist investors in their understanding of
period-to-period operating performance and in identifying
historical and prospective trends.
Reconciliations of non-GAAP financial measures to the most
comparable GAAP measures are included in the attached financial
schedules. Non-GAAP measures are not presented to be replacements
or alternatives to the GAAP measures, and investors are urged to
consider these non-GAAP measures in addition to, and not in
substitution for, measures prepared in accordance with GAAP. Lumen
may present or calculate its non-GAAP measures differently from
other companies.
|
Lumen Technologies,
Inc.
|
|
CONSOLIDATED STATEMENTS
OF OPERATIONS
|
|
THREE AND NINE MONTHS
ENDED SEPTEMBER 30, 2024 AND 2023
|
|
(UNAUDITED)
|
|
($ in millions,
except per share amounts; shares in thousands)
|
|
|
Three months
ended
September 30,
|
(Decrease) /
Increase
|
Nine months
ended
September 30,
|
(Decrease) /
Increase
|
|
2024
|
|
2023
|
2024
|
|
2023
|
|
OPERATING
REVENUE
|
$
3,221
|
|
3,641
|
(12) %
|
9,779
|
|
11,040
|
(11) %
|
|
OPERATING
EXPENSES
|
|
|
|
|
|
|
|
|
|
Cost of services and
products (exclusive of depreciation and amortization)
|
1,692
|
|
1,850
|
(9) %
|
4,997
|
|
5,407
|
(8) %
|
|
Selling, general and
administrative
|
696
|
|
791
|
(12) %
|
2,261
|
|
2,302
|
(2) %
|
|
Net loss on sale of
business
|
—
|
|
22
|
nm
|
17
|
|
112
|
(85) %
|
|
Depreciation and
amortization
|
707
|
|
755
|
(6) %
|
2,198
|
|
2,234
|
(2) %
|
|
Goodwill
impairment
|
|
—
|
|
—
|
nm
|
—
|
|
8,793
|
nm
|
|
Total operating
expenses
|
3,095
|
|
3,418
|
(9) %
|
9,473
|
|
18,848
|
(50) %
|
|
OPERATING INCOME
(LOSS)
|
126
|
|
223
|
(43) %
|
306
|
|
(7,808)
|
nm
|
|
OTHER (EXPENSE)
INCOME
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
(351)
|
|
(295)
|
19 %
|
(1,015)
|
|
(868)
|
17 %
|
|
Net (loss) gain on
early retirement of debt
|
(1)
|
|
—
|
nm
|
277
|
|
618
|
(55) %
|
|
Other income (expense),
net
|
54
|
|
(13)
|
nm
|
321
|
|
(37)
|
nm
|
|
Total other
expense, net
|
(298)
|
|
(308)
|
(3) %
|
(417)
|
|
(287)
|
45 %
|
|
Income tax benefit
(expense)
|
24
|
|
7
|
nm
|
(29)
|
|
(208)
|
(86) %
|
|
NET LOSS
|
$
(148)
|
|
(78)
|
90 %
|
(140)
|
|
(8,303)
|
nm
|
|
|
|
|
|
|
|
|
|
|
BASIC LOSS PER
SHARE
|
$
(0.15)
|
|
(0.08)
|
88 %
|
(0.14)
|
|
(8.45)
|
nm
|
|
DILUTED LOSS PER
SHARE
|
$
(0.15)
|
|
(0.08)
|
88 %
|
(0.14)
|
|
(8.45)
|
nm
|
|
|
|
|
|
|
|
|
|
|
WEIGHTED AVERAGE SHARES
OUTSTANDING
|
|
|
|
|
|
|
|
|
|
Basic
|
988,794
|
|
983,550
|
1 %
|
986,963
|
|
982,853
|
— %
|
|
Diluted
|
988,794
|
|
983,550
|
1 %
|
986,963
|
|
982,853
|
— %
|
|
|
|
|
|
|
|
|
|
|
Exclude: Special
Items(1)
|
$
15
|
|
(7)
|
nm
|
(158)
|
|
8,413
|
nm
|
|
NET (LOSS) INCOME
EXCLUDING SPECIAL ITEMS
|
$
(133)
|
|
(85)
|
56 %
|
(298)
|
|
110
|
nm
|
|
DILUTED (LOSS) EARNINGS
PER SHARE EXCLUDING SPECIAL ITEMS
|
$
(0.13)
|
|
(0.09)
|
44 %
|
(0.30)
|
|
0.11
|
nm
|
|
|
|
|
|
|
|
|
|
|
(1) Excludes
the Special Items described in the accompanying Non-GAAP Special
Items table, net of the income tax effect thereof.
|
|
nm - Percentages
greater than 200% and comparisons between positive and negative
values are considered not meaningful.
|
|
|
|
|
|
|
|
|
|
|
|
Lumen Technologies,
Inc.
|
|
CONSOLIDATED BALANCE
SHEETS
|
|
AS OF SEPTEMBER 30,
2024 AND DECEMBER 31, 2023
|
|
(UNAUDITED)
|
|
($ in
millions)
|
|
September 30,
2024
|
|
December 31,
2023
|
|
ASSETS
|
|
|
|
|
CURRENT
ASSETS
|
|
|
|
|
Cash and cash
equivalents
|
$
2,640
|
|
2,234
|
|
Accounts receivable,
less allowance of $60 and $67
|
1,225
|
|
1,318
|
|
Other
|
871
|
|
1,223
|
|
Total
current assets
|
4,736
|
|
4,775
|
|
Property, plant and
equipment, net of accumulated depreciation of $22,525 and
$21,318
|
20,344
|
|
19,758
|
|
GOODWILL AND OTHER
ASSETS
|
|
|
|
|
Goodwill
|
1,964
|
|
1,964
|
|
Other intangible
assets, net
|
4,967
|
|
5,470
|
|
Other, net
|
1,978
|
|
2,051
|
|
Total goodwill and other assets
|
8,909
|
|
9,485
|
|
TOTAL ASSETS
|
$
33,989
|
|
34,018
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
CURRENT
LIABILITIES
|
|
|
|
|
Current maturities of
long-term debt
|
$
415
|
|
157
|
|
Accounts
payable
|
905
|
|
1,134
|
|
Accrued expenses and
other liabilities
|
|
|
|
|
Salaries and
benefits
|
700
|
|
696
|
|
Income and other
taxes
|
434
|
|
251
|
|
Current operating
lease liabilities
|
263
|
|
268
|
|
Interest
|
236
|
|
168
|
|
Other
|
179
|
|
213
|
|
Current portion of
deferred revenue
|
808
|
|
647
|
|
Total current liabilities
|
3,940
|
|
3,534
|
|
LONG-TERM
DEBT
|
18,142
|
|
19,831
|
|
DEFERRED CREDITS AND
OTHER LIABILITIES
|
|
|
|
|
Deferred income taxes,
net
|
3,138
|
|
3,127
|
|
Benefit plan
obligations, net
|
2,249
|
|
2,490
|
|
Deferred
revenue
|
3,541
|
|
1,969
|
|
Other
|
2,637
|
|
2,650
|
|
Total deferred credits
and other liabilities
|
11,565
|
|
10,236
|
|
STOCKHOLDERS'
EQUITY
|
|
|
|
|
Common stock
|
1,015
|
|
1,008
|
|
Additional paid-in
capital
|
18,140
|
|
18,126
|
|
Accumulated other
comprehensive loss
|
(766)
|
|
(810)
|
|
Accumulated
deficit
|
(18,047)
|
|
(17,907)
|
|
Total stockholders'
equity
|
342
|
|
417
|
|
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY
|
$
33,989
|
|
34,018
|
|
Lumen Technologies,
Inc.
|
|
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
|
NINE MONTHS ENDED
SEPTEMBER 30, 2024 AND 2023
|
|
(UNAUDITED)
|
|
($ in
millions)
|
|
Nine months ended
September 30,
|
|
2024
|
|
2023
|
|
OPERATING
ACTIVITIES
|
|
|
|
|
Net loss
|
$
(140)
|
|
(8,303)
|
|
Adjustments to
reconcile net loss to net cash provided by operating
activities:
|
|
|
|
|
Depreciation and
amortization
|
2,198
|
|
2,234
|
|
Net loss on sale of
business
|
17
|
|
112
|
|
Goodwill
impairment
|
—
|
|
8,793
|
|
Deferred income
taxes
|
(6)
|
|
38
|
|
Provision for
uncollectible accounts
|
54
|
|
77
|
|
Net gain on early
retirement of debt
|
(277)
|
|
(618)
|
|
Debt modification
costs and related fees
|
(80)
|
|
—
|
|
Gain on sale of
investment
|
(205)
|
|
—
|
|
Unrealized loss on
investments
|
10
|
|
96
|
|
Stock-based
compensation
|
21
|
|
39
|
|
Changes in current
assets and liabilities, net
|
531
|
|
(1,336)
|
|
Retirement
benefits
|
(185)
|
|
(9)
|
|
Change in deferred
revenue
|
1,572
|
|
161
|
|
Changes in other
noncurrent assets and liabilities, net
|
185
|
|
33
|
|
Other, net
|
(50)
|
|
59
|
|
Net cash provided by
operating activities
|
3,645
|
|
1,376
|
|
INVESTING
ACTIVITIES
|
|
|
|
|
Capital
expenditures
|
(2,316)
|
|
(2,279)
|
|
Proceeds from sale of
business
|
15
|
|
3
|
|
Proceeds from sale of
property, plant and equipment, and other assets
|
283
|
|
35
|
|
Other, net
|
19
|
|
9
|
|
Net cash used in
investing activities
|
(1,999)
|
|
(2,232)
|
|
FINANCING
ACTIVITIES
|
|
|
|
|
Net proceeds from
issuance of long-term debt
|
1,325
|
|
—
|
|
Payments of long-term
debt
|
(2,069)
|
|
(145)
|
|
Net (payments)
proceeds on revolving line of credit
|
(200)
|
|
75
|
|
Dividends
paid
|
(3)
|
|
(10)
|
|
Debt issuance and
extinguishment costs and related fees
|
(282)
|
|
(14)
|
|
Other, net
|
(12)
|
|
(7)
|
|
Net cash used in by
financing activities
|
(1,241)
|
|
(101)
|
|
Net increase (decrease)
in cash, cash equivalents and restricted cash
|
405
|
|
(957)
|
|
Cash, cash equivalents
and restricted cash at beginning of period
|
2,248
|
|
1,307
|
|
Cash, cash equivalents
and restricted cash at end of period
|
$
2,653
|
|
350
|
|
|
|
|
|
Cash, cash equivalents
and restricted cash:
|
|
|
|
|
Cash and cash
equivalents
|
$
2,640
|
|
311
|
|
Cash and cash
equivalents and restricted cash included in assets held for
sale
|
—
|
|
28
|
|
Restricted
cash
|
13
|
|
11
|
|
Total
|
$
2,653
|
|
350
|
|
Lumen Technologies,
Inc.
|
|
OPERATING
METRICS
|
|
(UNAUDITED)
|
|
|
|
|
|
|
|
Operating
Metrics
|
3Q24
|
|
2Q24
|
|
3Q23
|
|
|
|
|
|
|
|
Mass Markets
broadband subscribers
|
|
|
|
|
|
|
(in thousands)
|
|
|
|
|
|
|
Fiber broadband subscribers
|
1,035
|
|
992
|
|
896
|
|
Other broadband subscribers(1)
|
1,566
|
|
1,666
|
|
1,940
|
|
Mass Markets total
broadband subscribers(2)
|
2,601
|
|
2,658
|
|
2,836
|
|
|
|
|
|
|
|
Mass Markets
broadband enabled units(3)
|
|
|
|
|
|
|
(in millions)
|
|
|
|
|
|
|
Fiber broadband enabled units
|
4.1
|
|
3.9
|
|
3.5
|
|
Other broadband enabled units
|
17.9
|
|
18.0
|
|
18.2
|
|
Mass Markets total
broadband enabled units
|
22.0
|
|
21.9
|
|
21.7
|
|
|
|
|
|
|
|
|
(1) Other
broadband subscribers are customers that primarily subscribe to
lower speed copper-based broadband services marketed under the
CenturyLink brand.
|
|
(2) Mass
Markets broadband subscribers are customers that purchase broadband
connection service through their existing telephone lines,
stand-alone telephone lines, or fiber-optic cables. Our methodology
for counting our Mass Markets broadband subscribers includes only
those lines that we use to provide services to external customers
and excludes lines used solely by us and our affiliates. It also
excludes unbundled loops and includes stand-alone Mass Markets
broadband subscribers. We count lines when we install the service.
Other companies may use different methodologies.
|
|
(3)
Represents the total number of units capable of receiving our
broadband services at period end. Other companies may use different
methodologies to count their broadband enabled units.
|
Description of Non-GAAP Metrics
Pursuant to Regulation G, the Company is hereby providing
definitions of non-GAAP financial metrics and reconciliations to
the most directly comparable GAAP measures.
The following describes and reconciles those financial measures
as reported under accounting principles generally accepted in
the United States (GAAP) with
those financial measures as adjusted by the items detailed below
and presented in the accompanying news release. These calculations
are not prepared in accordance with GAAP and should not be viewed
as alternatives to GAAP. In keeping with its historical financial
reporting practices, the Company believes that the supplemental
presentation of these calculations provides meaningful non-GAAP
financial measures to help investors understand and compare
business trends among different reporting periods on a consistent
basis.
We use the term Special Items as a non-GAAP measure to
describe items that impacted a period's statement of operations for
which investors may want to give special consideration due to their
magnitude, nature or both. We do not call these items
non-recurring because, while some are infrequent, others may
recur in future periods.
Adjusted EBITDA ($) is defined as net income (loss) from
the Statements of Operations before income tax (expense) benefit,
total other income (expense), depreciation and amortization,
stock-based compensation expense and impairments.
Adjusted EBITDA Margin (%) is defined as Adjusted EBITDA
divided by total revenue.
Management believes that Adjusted EBITDA and Adjusted EBITDA
Margin are relevant and useful metrics to provide to investors, as
they are an important part of our internal reporting and are key
measures used by management to evaluate profitability and operating
performance of Lumen and to make resource allocation decisions.
Management believes such measures are especially important in a
capital-intensive industry such as telecommunications. Management
also uses Adjusted EBITDA and Adjusted EBITDA Margin (and similarly
uses these terms excluding Special Items) to compare our
performance to that of our competitors and to eliminate certain
non-cash and non-operating items in order to consistently measure
from period to period our ability to fund capital expenditures,
fund growth, service debt and determine bonuses. Adjusted EBITDA
excludes non-cash stock compensation expense and impairments
because of the non-cash nature of these items. Adjusted EBITDA also
excludes interest income, interest expense and income taxes, and in
our view constitutes an accrual-based measure that has the effect
of excluding period-to-period changes in working capital and shows
profitability without regard to the effects of capital or tax
structure. Adjusted EBITDA also excludes depreciation and
amortization expense because these non-cash expenses primarily
reflect the impact of historical capital investments, as opposed to
the cash impacts of capital expenditures made in recent periods,
which may be evaluated through cash flow measures. Adjusted EBITDA
further excludes the gain (or loss) on extinguishment and
modification of debt and other income (expense), net, because these
items are not related to the primary business operations of
Lumen.
There are material limitations to using Adjusted EBITDA as a
financial measure, including the difficulty associated with
comparing companies that use similar performance measures whose
calculations may differ from our calculations. Additionally, by
excluding the above-listed items, Adjusted EBITDA may exclude items
that investors believe are important components of our performance.
Adjusted EBITDA and Adjusted EBITDA Margin (either with or without
Special Items) should not be considered a substitute for other
measures of financial performance reported in accordance with
GAAP.
Unlevered Cash Flow is defined as net cash provided
by (used in) operating activities less capital expenditures, plus
cash interest paid and less interest income, all as disclosed in
the Statements of Cash Flows or the Statements of Operations.
Management believes that Unlevered Cash Flow is a relevant metric
to provide to investors, because it reflects the operational
performance of Lumen and, measured over time, enables management
and investors to monitor the underlying business' growth pattern
and ability to generate cash. Unlevered Cash Flow (either with or
without Special Items) excludes cash used for acquisitions and debt
service and the impact of exchange rate changes on cash and cash
equivalents balances.
There are material limitations to using Unlevered Cash Flow to
measure our cash performance as it excludes certain material items
that investors may believe are important components of our cash
flows. Comparisons of our Unlevered Cash Flow to that of some of
our competitors may be of limited usefulness. Additionally, this
financial measure is subject to variability quarter over quarter as
a result of the timing of payments related to accounts receivable,
accounts payable, payroll and capital expenditures. Unlevered Cash
Flow should not be used as a substitute for net change in cash,
cash equivalents and restricted cash in the Consolidated Statements
of Cash Flows.
Free Cash Flow is defined as net cash provided by
(used in) operating activities less capital expenditures as
disclosed in the Statements of Cash Flows. Management believes that
Free Cash Flow is a relevant metric to provide to investors, as it
is an indicator of our ability to generate cash to service our
debt. Free Cash Flow excludes cash used for acquisitions, principal
repayments and the impact of exchange rate changes on cash and cash
equivalents balances.
There are material limitations to using Free Cash Flow to
measure our performance as it excludes certain material items that
investors may believe are important components of our cash flows.
Comparisons of our Free Cash Flow to that of some of our
competitors may be of limited usefulness since until recently we
did not pay a significant amount of income taxes due to net
operating loss carryforwards, and therefore generated higher cash
flow than a comparable business that does pay income taxes.
Additionally, this financial measure is subject to variability
quarter over quarter as a result of the timing of payments related
to interest expense, accounts receivable, accounts payable, payroll
and capital expenditures. Free Cash Flow (either with or without
Special Items) should not be used as a substitute for net change in
cash, cash equivalents and restricted cash on the Consolidated
Statements of Cash Flows.
|
Lumen Technologies,
Inc.
|
|
Non-GAAP Special
Items
|
|
(UNAUDITED)
|
|
($ in
millions)
|
|
Actual
QTD
|
|
Actual
YTD
|
|
Special Items
Impacting Adjusted EBITDA
|
3Q24
|
3Q23
|
|
3Q24
|
3Q23
|
|
Severance
|
$
12
|
8
|
|
119
|
21
|
|
Consumer and other
litigation
|
—
|
(3)
|
|
(1)
|
(4)
|
|
Net loss on sale of
business
|
—
|
22
|
|
17
|
112
|
|
Transaction and
separation costs(1)
|
41
|
28
|
|
232
|
67
|
|
Net gain on sale of
select CDN contracts and other(2)
|
(1)
|
—
|
|
(9)
|
—
|
|
Real estate
transactions(3)
|
4
|
—
|
|
4
|
75
|
|
Total Special Items
impacting Adjusted EBITDA
|
$
56
|
55
|
|
362
|
271
|
|
Actual
QTD
|
|
Actual
YTD
|
|
Special Items
Impacting Net Income
|
3Q24
|
3Q23
|
|
3Q24
|
3Q23
|
|
Severance
|
$
12
|
8
|
|
119
|
21
|
|
Consumer and other
litigation
|
—
|
(3)
|
|
(1)
|
(4)
|
|
Net loss on sale of
business
|
—
|
22
|
|
17
|
112
|
|
Transaction and
separation costs(1)
|
41
|
28
|
|
232
|
67
|
|
Net gain on sale of
select CDN contracts and other(2)
|
(1)
|
—
|
|
(9)
|
—
|
|
Real estate
transactions(3)
|
4
|
—
|
|
4
|
75
|
|
Goodwill
impairment
|
—
|
—
|
|
—
|
8,793
|
|
Net loss (gain) on
early retirement of debt(4)
|
1
|
—
|
|
(277)
|
(618)
|
|
Income from transition
and separation services(5)
|
(37)
|
(64)
|
|
(107)
|
(150)
|
|
Gain on sale of
investment
|
—
|
—
|
|
(205)
|
—
|
|
Total Special Items
impacting Net Income
|
20
|
(9)
|
|
(227)
|
8,296
|
|
Income tax effect of
Special Items(6)
|
(5)
|
2
|
|
69
|
117
|
|
Total Special Items
impacting Net Income, net of tax
|
$
15
|
(7)
|
|
(158)
|
8,413
|
|
Actual
QTD
|
|
Actual
YTD
|
|
Special Items
Impacting Cash Flows
|
3Q24
|
3Q23
|
|
3Q24
|
3Q23
|
|
Severance
|
$
14
|
7
|
|
115
|
19
|
|
Consumer and other
litigation
|
1
|
(3)
|
|
—
|
(3)
|
|
Transaction and
separation costs(1)
|
31
|
28
|
|
198
|
77
|
|
Income from transition
and separation services(5)
|
(30)
|
(27)
|
|
(82)
|
(118)
|
|
Total Special Items
impacting Cash Flows
|
$
16
|
5
|
|
231
|
(25)
|
|
|
(1)
Transaction and separation costs associated with (i) the sale of
our Latin American business on Aug. 1, 2022, (ii) the sale of our
20-state ILEC business on Oct. 3, 2022, (iii) the sale of our EMEA
business on Nov. 1, 2023, (iv) our March 22, 2024 debt transaction
support agreement and our September 24, 2024 exchange offer and (v)
our evaluation of other potential transactions.
|
|
(2) Includes
primarily the recognition of (i) Q1 2024 previously deferred gain
on sale of select CDN contracts in October 2023, based on the
transfer of remaining customer contracts as of March 31,
2024.
|
|
(3) Real
estate transactions primarily include the Q2 2023 loss on donation
of real
estate.
|
|
(4) Reflects
primarily net gains as a result of (i) repurchase of $75 million
aggregate principal in Q2 2024, (ii) debt transaction support
agreement and resulting debt extinguishment in Q1 2024, (iii) $1.5
billion of debt exchanges in Q1 2023 and (iv) $19 million of debt
exchanges in Q2
2023.
|
|
(5) Income
from transition and separation services includes charges we billed
for transition services and IT professional services provided to
the purchasers in connection with our 2022 and 2023
divestitures.
|
|
(6) Tax effect calculated using
the annualized effective statutory tax rate, excluding any
non-recurring discrete items, which was 30.0% for Q1 and Q2 of
2024, 26.0% for Q3 of 2024 and 23.5% for Q1, Q2 and Q3 of
2023.
|
|
Lumen Technologies,
Inc.
|
|
Non-GAAP Cash Flow
Reconciliation
|
|
(UNAUDITED)
|
|
($ in
millions)
|
|
Actual
QTD
|
|
Actual
YTD
|
|
3Q24
|
3Q23
|
|
3Q24
|
3Q23
|
|
Net cash provided by
operating activities(1)
|
$
2,032
|
881
|
|
3,645
|
1,376
|
|
Capital
expenditures
|
(850)
|
(843)
|
|
(2,316)
|
(2,279)
|
|
Free Cash
Flow(1)
|
1,182
|
38
|
|
1,329
|
(903)
|
|
Cash interest
paid
|
306
|
325
|
|
877
|
886
|
|
Interest
income
|
(18)
|
(5)
|
|
(90)
|
(21)
|
|
Unlevered Cash
Flow(1)
|
$
1,470
|
358
|
|
2,116
|
(38)
|
|
|
|
|
|
|
|
Free Cash
Flow(1)
|
$
1,182
|
38
|
|
1,329
|
(903)
|
|
Add back:
Severance(2)
|
14
|
7
|
|
115
|
19
|
|
Remove: Consumer and
other litigation(2)
|
1
|
(3)
|
|
—
|
(3)
|
|
Add back: Transaction
and separation costs(2)
|
31
|
28
|
|
198
|
77
|
|
Remove: Income from
transition and separation services(2)
|
(30)
|
(27)
|
|
(82)
|
(118)
|
|
Free Cash Flow
excluding cash Special Items(1)
|
$
1,198
|
43
|
|
1,560
|
(928)
|
|
|
|
|
|
|
|
Unlevered Cash
Flow(1)
|
$
1,470
|
358
|
|
2,116
|
(38)
|
|
Add back:
Severance(2)
|
14
|
7
|
|
115
|
19
|
|
Remove: Consumer and
other litigation(2)
|
1
|
(3)
|
|
—
|
(3)
|
|
Add back: Transaction
and separation costs(2)
|
31
|
28
|
|
198
|
77
|
|
Remove: Income from
transition and separation services(2)
|
(30)
|
(27)
|
|
(82)
|
(118)
|
|
Unlevered Cash Flow
excluding cash Special Items(1)
|
$
1,486
|
363
|
|
2,347
|
(63)
|
|
|
|
|
|
|
|
(1) Includes
the impact of (i) $170 million voluntary pension contribution in Q3
2024, (ii) $700 million in cash tax refund received in Q1 2024,
(iii) $938 million in cash tax payments in Q2 2023 and (iv) $90
million in cash tax payments in Q1 2023 related to our 2022
divestitures.
|
|
(2) Refer to
Non-GAAP Special Items table for details of the Special
Items impacting cash included above.
|
|
Lumen Technologies,
Inc.
|
|
Adjusted EBITDA
Non-GAAP Reconciliation
|
|
(UNAUDITED)
|
|
($ in
millions)
|
|
Actual
QTD
|
|
Actual
YTD
|
|
3Q24
|
3Q23
|
|
3Q24
|
3Q23
|
|
Net
loss
|
$
(148)
|
(78)
|
|
(140)
|
(8,303)
|
|
Income tax (benefit)
expense
|
(24)
|
(7)
|
|
29
|
208
|
|
Total other expense,
net
|
298
|
308
|
|
417
|
287
|
|
Depreciation and
amortization expense
|
707
|
755
|
|
2,198
|
2,234
|
|
Stock-based
compensation expense
|
10
|
16
|
|
21
|
39
|
|
Goodwill
impairment
|
—
|
—
|
|
—
|
8,793
|
|
Adjusted
EBITDA(1)
|
$
843
|
994
|
|
2,525
|
3,258
|
|
|
|
|
|
|
|
Add back:
Severance(2)
|
12
|
8
|
|
119
|
21
|
|
Add back: Consumer and
other litigation(2)
|
—
|
(3)
|
|
(1)
|
(4)
|
|
Add back: Net loss on
sale of business(2)
|
—
|
22
|
|
17
|
112
|
|
Add back: Transaction
and separation costs(2)
|
41
|
28
|
|
232
|
67
|
|
Add back: Net gain on
sale of select CDN contracts and other(2)
|
(1)
|
—
|
|
(9)
|
—
|
|
Add back: Real estate
transaction costs(2)
|
4
|
—
|
|
4
|
75
|
|
Adjusted EBITDA
excluding Special Items(1)
|
$
899
|
1,049
|
|
2,887
|
3,529
|
|
|
|
|
|
|
|
Net (loss) income
excluding Special Items(2)
|
$
(133)
|
(85)
|
|
(298)
|
110
|
|
|
|
|
|
|
|
Total
revenue
|
$
3,221
|
3,641
|
|
9,779
|
11,040
|
|
|
|
|
|
|
|
Net Loss
Margin
|
(4.6) %
|
(2.1) %
|
|
(1.4) %
|
(75.2) %
|
|
Net (Loss) Income
Margin, excluding Special Items
|
(4.1) %
|
(2.3) %
|
|
(3.0) %
|
1.0 %
|
|
Adjusted EBITDA
Margin
|
26.2 %
|
27.3 %
|
|
25.8 %
|
29.5 %
|
|
Adjusted EBITDA
Margin excluding Special Items
|
27.9 %
|
28.8 %
|
|
29.5 %
|
32.0 %
|
|
|
|
|
|
|
|
(1) Adjusted
EBITDA and Adjusted EBITDA excluding Special Items for the first
and second quarter of 2023 includes the financial impacts of (i)
the EMEA business divested on Nov. 1, 2023 and (ii) the Company's
select CDN contracts sold Oct. 10, 2023 and both the first and
second quarter of 2023 and 2024 include the financial impact of the
post-closing commercial agreements with the purchasers of our
recently divested businesses. Refer to footnote 1 on the first page
of this release for details.
|
|
(2) Refer to
Non-GAAP Special Items table for details of the Special
Items included above.
|
Outlook
To enhance the information in our outlook with respect to
non-GAAP metrics, we are providing a range for certain GAAP
measures that are components of the reconciliation of the non-GAAP
metrics. The provision of these ranges is in no way meant to
indicate that Lumen is explicitly or implicitly providing an
outlook on those GAAP components of the reconciliation. In order to
reconcile the non-GAAP financial metric to GAAP, Lumen has to use
ranges for the GAAP components that arithmetically add up to the
non-GAAP financial metric. While Lumen believes that it has used
reasonable assumptions in connection with developing the outlook
for its non-GAAP financial metrics, it fully expects that the
ranges used for the GAAP components will vary from actual results.
We will consider our outlook of non-GAAP financial metrics to be
accurate if the specific non-GAAP metric is met or exceeded, even
if the GAAP components of the reconciliation are different from
those provided in an earlier reconciliation.
|
Lumen Technologies,
Inc.
|
|
2024 OUTLOOK (1)
(2) (3) (4)
|
|
(UNAUDITED)
|
|
($ in
millions)
|
|
|
|
|
|
Adjusted EBITDA
Outlook
|
|
|
|
|
Twelve Months Ended
December 31, 2024
|
|
|
|
|
Range
|
|
Low
|
|
High
|
|
Net (loss)
income
|
$
(300)
|
|
100
|
|
Income tax
expense
|
50
|
|
250
|
|
Total other expense,
net
|
1,190
|
|
920
|
|
Depreciation and
amortization expense
|
2,900
|
|
2,700
|
|
Stock-based
compensation expense
|
60
|
|
30
|
|
Adjusted
EBITDA
|
$
3,900
|
|
4,000
|
|
|
|
|
|
Free Cash Flow
Outlook
|
|
|
|
|
Twelve Months Ended
December 31, 2024
|
|
|
|
|
Range
|
|
Low
|
|
High
|
|
Net cash provided by
operating activities
|
$
4,300
|
|
4,700
|
|
Capital
expenditures
|
(3,100)
|
|
(3,300)
|
|
Free Cash
Flow
|
$
1,200
|
|
1,400
|
|
|
(1) For
definitions of non-GAAP metrics and reconciliation to GAAP figures,
see the above schedules and our Investor Relations
website.
|
|
(2) Outlook
measures in this chart (i) exclude the effects of Special Items,
goodwill impairments, future changes in our operating or capital
allocation plans, unforeseen changes in regulation, laws or
litigation, and other unforeseen events or circumstances impacting
our financial performance and (ii) speak only as of Nov. 5, 2024.
See "Forward-Looking Statements."
|
|
(3) Outlook
includes the voluntary pension contribution of $170 million during
the third quarter 2024.
|
|
(4) Includes
an approximately $700 million tax refund received during the first
quarter 2024.
|
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SOURCE Lumen Technologies