DENVER, Aug. 6, 2024
/PRNewswire/ -- Lumen Technologies (NYSE: LUMN) reported
results for the second quarter ended June
30, 2024.
Driving Commercial Excellence, Stabilizing the Base, and
Innovating for Growth
- Continued success in North American Large and Mid-Market
Enterprise sales. Large and Mid-Market new logo sales increased and
net total contract value for all channels was up year over
year.
- Delivered improved customer satisfaction across customer
channels, which should manifest in lower churn, higher gross sales,
and improved overall revenue growth over time.
- Recently announced Microsoft partnership highlights Lumen's
unique position to further capitalize on the demand for customized,
private, and secure networks; a tailwind generated by the need for
high-bandwidth infrastructure to support AI ventures.
"The rising demand of AI is requiring greater connectivity
between data centers, and Lumen's world class fiber network and
forward-thinking digital services are positioning us to help drive
the AI growth wave," said Kate
Johnson, president and CEO of Lumen Technologies. "We feel
confident in our future growth and business transformation as we
look to enable the AI economy."
- Reported Net Loss of $(49)
million for the second quarter 2024, compared to reported
Net Loss of $(8.736) billion for the
second quarter 2023, which included a non-cash goodwill impairment
charge of $8.793 billion
- Reported diluted loss per share of $(0.05) for the second quarter 2024, compared to
diluted loss per share of $(8.88) for
the second quarter 2023. Excluding Special Items, diluted loss per
share was $(0.13) for the second
quarter 2024, compared to $0.10
diluted earnings per share for the second quarter 2023
- Generated Adjusted EBITDA of $1.011
billion1 for the second quarter 2024, compared to
$1.229 billion1 for the
second quarter 2023, excluding the effects of Special Items of
$136 million and $102 million, respectively
- Reported Net Cash Provided by Operating Activities of
$511 million for the second quarter
2024
- Generated negative Free Cash Flow of $(156) million for the second quarter 2024,
excluding cash paid for Special Items of $86
million, compared to negative Free Cash Flow of $(896) million2 with net zero cash
paid for special items for the second quarter 2023
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1 Adjusted
EBITDA and Adjusted EBITDA excluding Special Items for the second
quarter of 2023 includes $37 million from the EMEA business
(defined below), divested on Nov. 1, 2023 and $11 million from
those of our 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 post-closing financial impacts of actual amounts
received or paid by the Company under the post-closing agreements
with the purchasers of its businesses divested in 2022 and 2023
were a net reduction of $(48) million and $(51) million for the
second 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.
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2 Includes
the impact of $938 million in cash tax payments related to our
divestitures completed on Aug. 1, 2022 and Oct. 3, 2022.
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Financial
Results
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Metric, as
reported
|
Second
Quarter
|
|
($ in millions,
except per share data)
|
2024
|
2023
|
|
Large
Enterprise(1)
|
$
837
|
899
|
|
Mid-Market
Enterprise
|
478
|
514
|
|
Public
Sector
|
448
|
415
|
|
North America
Enterprise Channels
|
1,763
|
1,828
|
|
Wholesale
|
723
|
803
|
|
North America Business
Revenue
|
2,486
|
2,631
|
|
International and
Other(1)(2)
|
91
|
277
|
|
Business Segment
Revenue
|
2,577
|
2,908
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Mass Markets Segment
Revenue
|
691
|
753
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Total
Revenue(3)(4)
|
$ 3,268
|
3,661
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|
Cost of Services and
Products
|
1,653
|
1,740
|
|
Selling, General and
Administrative Expenses
|
742
|
790
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|
(Gain) Loss on Sale of
Business
|
(5)
|
13
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|
Stock-based
Compensation (Credit) Expense
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(3)
|
9
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Net Loss
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(49)
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(8,736)
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Net (Loss) Income,
Excluding Special Items(5)(6)
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(124)
|
98
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|
Adjusted
EBITDA(2)(5)(7)(8)
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875
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1,127
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|
Adjusted EBITDA,
Excluding Special Items(2)(5)(7)(8)(9)
|
1,011
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1,229
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Net Loss
Margin
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(1.5) %
|
(238.6) %
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|
Net (Loss) Income
Margin, Excluding Special Items(5)(6)
|
(3.8) %
|
2.7 %
|
|
Adjusted EBITDA
Margin(5)
|
26.8 %
|
30.8 %
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Adjusted EBITDA Margin,
Excluding Special Items(5)(9)
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30.9 %
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33.6 %
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Net Cash Provided by
(Used in) Operating Activities
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511
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(100)
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Capital
Expenditures(10)
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753
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796
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Unlevered Cash
Flow(5)
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(24)
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(701)
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Unlevered Cash Flow,
Excluding Cash Special Items(5)(11)
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62
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(701)
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Free Cash
Flow(5)
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(242)
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(896)
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Free Cash Flow,
Excluding Cash Special Items(5)(11)
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(156)
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(896)
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Net Loss per Common
Share - Diluted
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(0.05)
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(8.88)
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Net (Loss) Income per
Common Share - Diluted, Excluding Special
Items(5)(6)
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(0.13)
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0.10
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Weighted Average Shares
Outstanding (in millions) - Diluted
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987.2
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983.5
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(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 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
the 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.
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(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 second quarter of
2023 includes $22 million and $11 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.
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(3) Revenue for the second quarter of
2023 includes $142 million from the EMEA business divested 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 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.
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(4) The
post-closing revenue impact of amounts received by the Company
under its post-closing agreements with purchasers of our businesses
divested in 2022 and 2023 was (i) $51 million for the second
quarter of 2024 and (ii) $27 million for the second 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.
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(5) See the
attached schedules for definitions of non-GAAP metrics and
reconciliations to GAAP figures.
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(6) Excludes Special Items (net of
the income tax effect thereof) which (i) negatively impacted this
metric by $75 million for the second quarter of 2024 and (ii)
positively impacted this metric by $8.8 billion for the second
quarter of 2023.
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(7) Adjusted EBITDA and Adjusted
EBITDA excluding Special Items for the second quarter of 2023
includes $37 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.
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(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 $(48) million for the second
quarter of 2024 and (ii) a net reduction of $(51) million for the
second quarter 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 financial
performance following the completion of these
divestitures.
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(9) Excludes
Special Items in the amounts of (i) $136 million for the second
quarter of 2024 and (ii) $102 million for the first quarter of
2023.
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(10) Capital expenditures for the
second quarter of 2023 includes $34 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 these figures 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.
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(11)
Excludes cash paid (received) for Special Items in the amounts of
(i) $86 million for the second quarter of 2024 and (ii) net zero
for the second quarter of 2023.
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Metrics(1)
|
Second
Quarter
|
First
Quarter
|
QoQ
Percent
|
Second
Quarter
|
YoY
Percent
|
|
($ in
millions)
|
2024
|
2024
|
Change
|
2023
|
Change
|
|
Revenue By Sales
Channel
|
|
|
|
|
|
|
Large
Enterprise
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$
837
|
858
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(2) %
|
899
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(7) %
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Mid-Market
Enterprise
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478
|
486
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(2) %
|
514
|
(7) %
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Public
Sector
|
448
|
420
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7 %
|
415
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8 %
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North America
Enterprise Channels
|
1,763
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1,764
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— %
|
1,828
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(4) %
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Wholesale
|
723
|
730
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(1) %
|
803
|
(10) %
|
|
North America Business
Revenue
|
2,486
|
2,494
|
— %
|
2,631
|
(6) %
|
|
International and
Other
|
91
|
97
|
(6) %
|
277
|
(67) %
|
|
Business Segment
Revenue
|
2,577
|
2,591
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(1) %
|
2,908
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(11) %
|
|
Mass Markets Segment
Revenue
|
691
|
699
|
(1) %
|
753
|
(8) %
|
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Total
Revenue(2)
|
$
3,268
|
3,290
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(1) %
|
3,661
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(11) %
|
|
Business Segment
Revenue by Product Category
|
|
|
|
|
|
|
Grow
|
$
1,063
|
1,059
|
— %
|
1,144
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(7) %
|
|
Nurture
|
751
|
777
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(3) %
|
874
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(14) %
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Harvest
|
566
|
582
|
(3) %
|
691
|
(18) %
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Subtotal
|
2,380
|
2,418
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(2) %
|
2,709
|
(12) %
|
|
Other
|
197
|
173
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14 %
|
199
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(1) %
|
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Business Segment
Revenue
|
$
2,577
|
2,591
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(1) %
|
2,908
|
(11) %
|
|
Net (Loss)
Income
|
$
(49)
|
57
|
nm
|
(8,736)
|
(99) %
|
|
Net (Loss) Income
Margin
|
(1.5) %
|
1.7 %
|
nm
|
(238.6) %
|
(99) %
|
|
Net (Loss) Income,
Excluding Special Items
|
$
(124)
|
(41)
|
nm
|
98
|
nm
|
|
Net (Loss) Income
Margin, Excluding Special Items
|
(3.8) %
|
(1.2) %
|
nm
|
2.7 %
|
nm
|
|
Adjusted EBITDA,
Excluding Special Items(3)
|
$
1,011
|
977
|
3 %
|
1,229
|
(18) %
|
|
Adjusted EBITDA Margin,
Excluding Special Items
|
30.9 %
|
29.7 %
|
4 %
|
33.6 %
|
(8) %
|
|
Capital
Expenditures(4)
|
$
753
|
713
|
6 %
|
796
|
(5) %
|
|
|
(1) See the
notes to our immediately preceding chart for information about our
use of non-GAAP metrics, Special Items, and reconciliations to
GAAP.
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(2) Revenue
for the second quarter of 2023 includes amounts from the 2023
divestiture and sale of CDN contracts. Revenue for the first and
second quarter of 2024 and second 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.
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(3) Adjusted
EBITDA excluding Special Items for the fourth quarter of 2023
includes the financial impacts from the 2023 divestiture and sale
of CDN contracts. Adjusted EBITDA excluding Special Items for the
first and second quarter of 2024 and the first 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.
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(4) Capital
expenditures for the second 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.
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nm - Percentages
greater than 200% and comparisons between positive and negative
values are considered not meaningful.
|
Revenue
Total Revenue was $3.268 billion for the second quarter 2024,
compared to $3.661 billion for the
second quarter 2023.
Cash Flow
Free Cash Flow, excluding Special Items, was
negative $(156) million in the second
quarter 2024, compared to negative $(896)
million1 in the second quarter 2023.
As of June 30, 2024, Lumen had
cash and cash equivalents of $1.495
billion.
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1 See
footnote 2 on page 1 of this release.
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2024 Financial Outlook
The Company updated its full-year 2024 financial outlook which
is detailed below:
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Metric (1)(2)
|
Current
Outlook
|
Previous
Outlook
|
|
Adjusted
EBITDA
|
$3.9 to $4.0
billion
|
$4.1 to $4.3
billion
|
|
Free Cash
Flow(3)(4)
|
$1.0 to $1.2
billion
|
$100 to $300
million
|
|
Net Cash
Interest
|
$1.15 to $1.25
billion
|
$1.25 to $1.35
billion
|
|
Capital
Expenditures
|
$3.1 to $3.3
billion
|
$2.7 to $2.9
billion
|
|
Cash Income
Taxes/(Refund)(4)
|
($200) to ($300)
million
|
($200) to ($300)
million
|
|
|
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(1)
For definitions of non-GAAP metrics and reconciliations to GAAP
figures, see the attached schedules and our Investor Relations
website.
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(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 Aug. 6, 2024. See "Forward-Looking
Statements."
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(3)
Assumes no discretionary pension plan contributions during
2024.
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(4)
Includes an approximately $700 million tax refund received during
the first quarter 2024.
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Investor Call
Lumen's management team will host a conference call at
5:00 p.m. ET today, Aug. 6, 2024. The conference call will be
streamed live over the Lumen website at ir.lumen.com. Additional
information regarding second 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 connects the world. We are igniting business growth by
connecting people, data, and applications – quickly, securely, and
effortlessly. Everything we do at Lumen takes advantage of our
network strength. From metro connectivity to long-haul data
transport to our edge cloud, security, and managed service
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, monetizing our excess network-related assets
through leases, commercial service arrangements or similar
transactions, replacing aging or obsolete plant and equipment,
strengthening our relationships with customers and attaining
projected cost savings; 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 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 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 or renew intellectual property used to
conduct our operations; any adverse developments in legal or
regulatory proceedings involving us; changes in tax, 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, 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
|
|
SIX MONTHS ENDED JUNE
30, 2024 AND 2023
|
|
(UNAUDITED)
|
|
($ in millions,
except per share amounts; shares in thousands)
|
|
|
Three months ended
June 30,
|
(Decrease) /
Increase
|
Six months ended
June 30,
|
(Decrease) /
Increase
|
|
2024
|
|
2023
|
2024
|
|
2023
|
|
OPERATING
REVENUE
|
$
3,268
|
|
3,661
|
(11) %
|
6,558
|
|
7,399
|
(11) %
|
|
OPERATING
EXPENSES
|
|
|
|
|
|
|
|
|
|
Cost of services and
products
(exclusive of depreciation and
amortization)
|
1,653
|
|
1,740
|
(5) %
|
3,305
|
|
3,557
|
(7) %
|
|
Selling, general and
administrative
|
742
|
|
790
|
(6) %
|
1,565
|
|
1,511
|
4 %
|
|
(Gain) loss on sale of
business
|
(5)
|
|
13
|
nm
|
17
|
|
90
|
(81) %
|
|
Depreciation and
amortization
|
743
|
|
746
|
— %
|
1,491
|
|
1,479
|
1 %
|
|
Goodwill
impairment
|
|
—
|
|
8,793
|
nm
|
—
|
|
8,793
|
nm
|
|
Total operating
expenses
|
3,133
|
|
12,082
|
(74) %
|
6,378
|
|
15,430
|
(59) %
|
|
OPERATING INCOME
(LOSS)
|
135
|
|
(8,421)
|
nm
|
180
|
|
(8,031)
|
nm
|
|
OTHER (EXPENSE)
INCOME
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
(373)
|
|
(294)
|
27 %
|
(664)
|
|
(573)
|
16 %
|
|
Net gain on early
retirement of debt
|
3
|
|
9
|
(67) %
|
278
|
|
618
|
(55) %
|
|
Other income (expense),
net
|
194
|
|
16
|
nm
|
267
|
|
(24)
|
nm
|
|
Total other
(expense) income, net
|
(176)
|
|
(269)
|
(35) %
|
(119)
|
|
21
|
nm
|
|
Income tax
expense
|
(8)
|
|
(46)
|
(83) %
|
(53)
|
|
(215)
|
(75) %
|
|
NET (LOSS)
INCOME
|
$
(49)
|
|
(8,736)
|
(99) %
|
8
|
|
(8,225)
|
nm
|
|
|
|
|
|
|
|
|
|
|
BASIC (LOSS) EARNINGS
PER
SHARE
|
$
(0.05)
|
|
(8.88)
|
(99) %
|
0.01
|
|
(8.37)
|
nm
|
|
DILUTED (LOSS) EARNINGS
PER
SHARE
|
$
(0.05)
|
|
(8.88)
|
(99) %
|
0.01
|
|
(8.37)
|
nm
|
|
|
|
|
|
|
|
|
|
|
WEIGHTED AVERAGE
SHARES
OUTSTANDING
|
|
|
|
|
|
|
|
|
|
Basic
|
987,239
|
|
983,453
|
— %
|
986,047
|
|
982,505
|
— %
|
|
Diluted
|
987,239
|
|
983,453
|
— %
|
987,224
|
|
982,505
|
— %
|
|
|
|
|
|
|
|
|
|
|
Exclude: Special
Items(1)
|
$
(75)
|
|
8,834
|
nm
|
(173)
|
|
8,420
|
nm
|
|
NET (LOSS) INCOME
EXCLUDING
SPECIAL ITEMS
|
$
(124)
|
|
98
|
nm
|
(165)
|
|
195
|
nm
|
|
DILUTED (LOSS) EARNINGS
PER
SHARE EXCLUDING SPECIAL
ITEMS
|
$
(0.13)
|
|
0.10
|
nm
|
(0.17)
|
|
0.20
|
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 JUNE 30, 2024 AND
DECEMBER 31, 2023
|
|
(UNAUDITED)
|
|
($ in
millions)
|
|
June 30,
2024
|
|
December 31,
2023
|
|
ASSETS
|
|
|
|
|
CURRENT
ASSETS
|
|
|
|
|
Cash and cash
equivalents
|
$
1,495
|
|
2,234
|
|
Accounts receivable,
less allowance of $62 and $67
|
1,294
|
|
1,318
|
|
Other
|
971
|
|
1,223
|
|
Total
current assets
|
3,760
|
|
4,775
|
|
Property, plant and
equipment, net of accumulated depreciation of $22,073
and $21,318
|
20,089
|
|
19,758
|
|
GOODWILL AND OTHER
ASSETS
|
|
|
|
|
Goodwill
|
1,964
|
|
1,964
|
|
Other intangible
assets, net
|
5,127
|
|
5,470
|
|
Other, net
|
2,003
|
|
2,051
|
|
Total goodwill and other assets
|
9,094
|
|
9,485
|
|
TOTAL ASSETS
|
$
32,943
|
|
34,018
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
CURRENT
LIABILITIES
|
|
|
|
|
Current maturities of
long-term debt
|
$
192
|
|
157
|
|
Accounts
payable
|
995
|
|
1,134
|
|
Accrued expenses and
other liabilities
|
|
|
|
|
Salaries and
benefits
|
605
|
|
696
|
|
Income and other
taxes
|
597
|
|
251
|
|
Current operating
lease liabilities
|
281
|
|
268
|
|
Interest
|
219
|
|
168
|
|
Other
|
179
|
|
213
|
|
Current portion of
deferred revenue
|
670
|
|
647
|
|
Total current liabilities
|
3,738
|
|
3,534
|
|
LONG-TERM
DEBT
|
18,411
|
|
19,831
|
|
DEFERRED CREDITS AND
OTHER LIABILITIES
|
|
|
|
|
Deferred income taxes,
net
|
3,142
|
|
3,127
|
|
Benefit plan
obligations, net
|
2,437
|
|
2,490
|
|
Deferred
revenue
|
2,112
|
|
1,969
|
|
Other
|
2,637
|
|
2,650
|
|
Total deferred credits
and other liabilities
|
10,328
|
|
10,236
|
|
STOCKHOLDERS'
EQUITY
|
|
|
|
|
Common stock
|
1,016
|
|
1,008
|
|
Additional paid-in
capital
|
18,135
|
|
18,126
|
|
Accumulated other
comprehensive loss
|
(786)
|
|
(810)
|
|
Accumulated
deficit
|
(17,899)
|
|
(17,907)
|
|
Total stockholders'
equity
|
466
|
|
417
|
|
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY
|
$
32,943
|
|
34,018
|
|
Lumen Technologies,
Inc.
|
|
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
|
SIX MONTHS ENDED JUNE
30, 2024 AND 2023
|
|
(UNAUDITED)
|
|
($ in
millions)
|
|
Six months ended
June 30,
|
|
2024
|
|
2023
|
|
OPERATING
ACTIVITIES
|
|
|
|
|
Net income
(loss)
|
$
8
|
|
(8,225)
|
|
Adjustments to
reconcile net income (loss) to net cash provided by
operating activities:
|
|
|
|
|
Depreciation and
amortization
|
1,491
|
|
1,479
|
|
Loss on sale of
business
|
17
|
|
90
|
|
Goodwill
impairment
|
—
|
|
8,793
|
|
Deferred income
taxes
|
2
|
|
46
|
|
Provision for
uncollectible accounts
|
39
|
|
47
|
|
Net gain on early
retirement of debt
|
(278)
|
|
(618)
|
|
Debt modification
costs and related fees
|
(75)
|
|
—
|
|
Gain on sale of
investment
|
(205)
|
|
—
|
|
Unrealized loss on
investments
|
2
|
|
81
|
|
Stock-based
compensation
|
11
|
|
23
|
|
Changes in current
assets and liabilities, net
|
341
|
|
(1,388)
|
|
Retirement
benefits
|
(16)
|
|
(16)
|
|
Changes in other
noncurrent assets and liabilities, net
|
301
|
|
132
|
|
Other, net
|
(25)
|
|
51
|
|
Net cash provided by
operating activities
|
1,613
|
|
495
|
|
INVESTING
ACTIVITIES
|
|
|
|
|
Capital
expenditures
|
(1,466)
|
|
(1,436)
|
|
(Payments) proceeds
from sale of business
|
(5)
|
|
3
|
|
Proceeds from sale of
property, plant and equipment and other assets
|
264
|
|
26
|
|
Other, net
|
13
|
|
2
|
|
Net cash used in
investing activities
|
(1,194)
|
|
(1,405)
|
|
FINANCING
ACTIVITIES
|
|
|
|
|
Net proceeds from
issuance of long-term debt
|
1,325
|
|
—
|
|
Payments of long-term
debt
|
(1,997)
|
|
(100)
|
|
Net (payments)
proceeds on revolving line of credit
|
(200)
|
|
200
|
|
Dividends
paid
|
(3)
|
|
(9)
|
|
Debt issuance and
extinguishment costs and related fees
|
(282)
|
|
(13)
|
|
Other, net
|
(3)
|
|
(6)
|
|
Net cash (used in)
provided by financing activities
|
(1,160)
|
|
72
|
|
Net decrease in cash,
cash equivalents and restricted cash
|
(741)
|
|
(838)
|
|
Cash, cash equivalents
and restricted cash at beginning of period
|
2,248
|
|
1,307
|
|
Cash, cash equivalents
and restricted cash at end of period
|
$
1,507
|
|
469
|
|
|
|
|
|
Cash, cash equivalents
and restricted cash:
|
|
|
|
|
Cash and cash
equivalents
|
$
1,495
|
|
411
|
|
Cash and cash
equivalents and restricted cash included in assets held
for sale
|
—
|
|
47
|
|
Restricted
cash
|
12
|
|
11
|
|
Total
|
$
1,507
|
|
469
|
|
Lumen Technologies,
Inc.
|
|
OPERATING
METRICS
|
|
(UNAUDITED)
|
|
|
|
|
|
|
|
Operating
Metrics
|
2Q24
|
|
1Q24
|
|
2Q23
|
|
|
|
|
|
|
|
Mass Markets
broadband subscribers
|
|
|
|
|
|
|
(in
thousands)
|
|
|
|
|
|
|
Fiber broadband
subscribers
|
992
|
|
952
|
|
877
|
|
Other broadband
subscribers(1)
|
1,666
|
|
1,758
|
|
2,032
|
|
Mass Markets total
broadband subscribers(2)
|
2,658
|
|
2,710
|
|
2,909
|
|
|
|
|
|
|
|
Mass Markets
broadband enabled units(3)
|
|
|
|
|
|
|
(in
millions)
|
|
|
|
|
|
|
Fiber broadband
enabled units
|
3.9
|
|
3.8
|
|
3.4
|
|
Other broadband
enabled units
|
18.0
|
|
18.0
|
|
18.4
|
|
Mass Markets total
broadband enabled units
|
21.9
|
|
21.8
|
|
21.8
|
|
|
|
|
|
|
|
(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 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 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
|
2Q24
|
2Q23
|
|
2Q24
|
2Q23
|
|
Severance
|
$
103
|
5
|
|
107
|
13
|
|
Consumer and other
litigation
|
1
|
(1)
|
|
(1)
|
(1)
|
|
Net (gain) loss on sale
of business
|
(5)
|
13
|
|
17
|
90
|
|
Transaction and
separation costs(1)
|
23
|
10
|
|
191
|
39
|
|
Net loss (gain) on sale
of select CDN contracts and other
|
14
|
—
|
|
(8)
|
—
|
|
Real estate
transactions(2)
|
—
|
75
|
|
—
|
75
|
|
Total Special Items
impacting Adjusted EBITDA
|
$
136
|
102
|
|
306
|
216
|
|
Actual
QTD
|
|
Actual
YTD
|
|
Special Items
Impacting Net Income
|
2Q24
|
2Q23
|
|
2Q24
|
2Q23
|
|
Severance
|
$
103
|
5
|
|
107
|
13
|
|
Consumer and other
litigation
|
1
|
(1)
|
|
(1)
|
(1)
|
|
Net (gain) loss on sale
of business
|
(5)
|
13
|
|
17
|
90
|
|
Transaction and
separation costs(1)
|
23
|
10
|
|
191
|
39
|
|
Net loss (gain) on sale
of select CDN contracts and other
|
14
|
—
|
|
(8)
|
—
|
|
Real estate
transactions(2)
|
—
|
75
|
|
—
|
75
|
|
Goodwill
impairment
|
—
|
8,793
|
|
—
|
8,793
|
|
Net gain on early
retirement of debt(3)
|
(3)
|
(9)
|
|
(278)
|
(618)
|
|
Income from transition
and separation services(4)
|
(35)
|
(40)
|
|
(70)
|
(86)
|
|
Gain on sale of
investment
|
(205)
|
—
|
|
(205)
|
—
|
|
Total Special Items
impacting Net Income
|
(107)
|
8,846
|
|
(247)
|
8,305
|
|
Income tax effect of
Special Items(5)
|
32
|
(12)
|
|
74
|
115
|
|
Total Special Items
impacting Net Income, net of tax
|
$
(75)
|
8,834
|
|
(173)
|
8,420
|
|
Actual
QTD
|
|
Actual
YTD
|
|
Special Items
Impacting Cash Flows
|
2Q24
|
2Q23
|
|
2Q24
|
2Q23
|
|
Severance
|
$
83
|
7
|
|
101
|
12
|
|
Consumer and other
litigation
|
1
|
—
|
|
(1)
|
—
|
|
Transaction and
separation costs(1)
|
29
|
25
|
|
167
|
49
|
|
Income from transition
and separation services(4)
|
(27)
|
(32)
|
|
(52)
|
(91)
|
|
Total Special Items
impacting Cash Flows
|
$
86
|
—
|
|
215
|
(30)
|
|
|
(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 (v) our evaluation of other potential
transactions.
|
|
(2) Real
estate transactions include the Q2 2023 loss on donation of real
estate.
|
|
(3) Reflects
a gain 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) $19 million of debt exchanges in
Q2
2023.
|
|
(4) Income
from transition and separation services includes charges we billed
for transition services and IT professional services provided to
the purchasers in connection with our 2022 and 2023
divestitures.
|
|
(5) Tax effect calculated using
the annualized effective statutory tax rate, excluding any
non-recurring discrete items, which was 30.0% for Q1 and Q2 of 2024
and 23.5% for Q1 and Q2 of 2023.
|
|
Lumen Technologies,
Inc.
|
|
Non-GAAP Cash Flow
Reconciliation
|
|
(UNAUDITED)
|
|
($ in
millions)
|
|
Actual
QTD
|
|
Actual
YTD
|
|
2Q24
|
2Q23
|
|
2Q24
|
2Q23
|
|
Net cash provided by
operating activities(1)
|
$
511
|
(100)
|
|
1,613
|
495
|
|
Capital
expenditures
|
(753)
|
(796)
|
|
(1,466)
|
(1,436)
|
|
Free Cash
Flow(1)
|
(242)
|
(896)
|
|
147
|
(941)
|
|
Cash interest
paid
|
232
|
198
|
|
571
|
561
|
|
Interest
income
|
(14)
|
(3)
|
|
(72)
|
(16)
|
|
Unlevered Cash
Flow(1)
|
$
(24)
|
(701)
|
|
646
|
(396)
|
|
|
|
|
|
|
|
Free Cash
Flow(1)
|
$
(242)
|
(896)
|
|
147
|
(941)
|
|
Add back:
Severance(2)
|
83
|
7
|
|
101
|
12
|
|
Remove: Consumer and
other litigation(2)
|
1
|
—
|
|
(1)
|
—
|
|
Add back: Transaction
and separation costs(2)
|
29
|
25
|
|
167
|
49
|
|
Remove: Income from
transition and separation services(2)
|
(27)
|
(32)
|
|
(52)
|
(91)
|
|
Free Cash Flow
excluding cash Special Items(1)
|
$
(156)
|
(896)
|
|
362
|
(971)
|
|
|
|
|
|
|
|
Unlevered Cash
Flow(1)
|
$
(24)
|
(701)
|
|
646
|
(396)
|
|
Add back:
Severance(2)
|
83
|
7
|
|
101
|
12
|
|
Remove: Consumer and
other litigation(2)
|
1
|
—
|
|
(1)
|
—
|
|
Add back: Transaction
and separation costs(2)
|
29
|
25
|
|
167
|
49
|
|
Remove: Income from
transition and separation services(2)
|
(27)
|
(32)
|
|
(52)
|
(91)
|
|
Unlevered Cash Flow
excluding cash Special Items(1)
|
$
62
|
(701)
|
|
861
|
(426)
|
|
|
|
|
|
|
|
(1) Includes
the impact of (i) $700 million in cash tax refund received in Q1
2024, (ii) $938 million in cash tax payments in Q2 2023 and (iii)
$90 million in cash tax payments in Q1 2023 related to our 2022
divestitures.
|
|
(2) Refer to
Non-GAAP Special Items table for details of the Special
Items impacting cash included above.
|
|
Lumen Technologies,
Inc.
|
|
Adjusted EBITDA
Non-GAAP Reconciliation
|
|
(UNAUDITED)
|
|
($ in
millions)
|
|
Actual
QTD
|
|
Actual
YTD
|
|
2Q24
|
2Q23
|
|
2Q24
|
2Q23
|
|
Net (loss)
income
|
$
(49)
|
(8,736)
|
|
8
|
(8,225)
|
|
Income tax
expense
|
8
|
46
|
|
53
|
215
|
|
Total other expense
(income), net
|
176
|
269
|
|
119
|
(21)
|
|
Depreciation and
amortization expense
|
743
|
746
|
|
1,491
|
1,479
|
|
Stock-based
compensation (credit) expense
|
(3)
|
9
|
|
11
|
23
|
|
Goodwill
impairment
|
—
|
8,793
|
|
—
|
8,793
|
|
Adjusted
EBITDA(1)
|
$
875
|
1,127
|
|
1,682
|
2,264
|
|
|
|
|
|
|
|
Add back:
Severance(2)
|
103
|
5
|
|
107
|
13
|
|
Add back: Consumer and
other litigation(2)
|
1
|
(1)
|
|
(1)
|
(1)
|
|
Add back: Net (gain)
loss on sale of business(2)
|
(5)
|
13
|
|
17
|
90
|
|
Add back: Transaction
and separation costs(2)
|
23
|
10
|
|
191
|
39
|
|
Add back: Net loss
(gain) on sale of select CDN
contracts and other(2)
|
14
|
—
|
|
(8)
|
—
|
|
Add back: Real estate
transaction costs(2)
|
—
|
75
|
|
—
|
75
|
|
Adjusted EBITDA
excluding Special Items(1)
|
$
1,011
|
1,229
|
|
1,988
|
2,480
|
|
|
|
|
|
|
|
Net (loss) income
excluding Special Items(2)
|
$
(124)
|
98
|
|
(165)
|
195
|
|
|
|
|
|
|
|
Total
revenue
|
$
3,268
|
3,661
|
|
6,558
|
7,399
|
|
|
|
|
|
|
|
Net (Loss) Income
Margin
|
(1.5) %
|
(238.6) %
|
|
0.1 %
|
(111.2) %
|
|
Net (Loss) Income
Margin, excluding Special Items
|
(3.8) %
|
2.7 %
|
|
(2.5) %
|
2.6 %
|
|
Adjusted EBITDA
Margin
|
26.8 %
|
30.8 %
|
|
25.6 %
|
30.6 %
|
|
Adjusted EBITDA
Margin excluding Special Items
|
30.9 %
|
33.6 %
|
|
30.3 %
|
33.5 %
|
|
|
|
|
|
|
|
(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 the 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
|
$
4,100
|
|
4,500
|
|
Capital
expenditures
|
(3,100)
|
|
(3,300)
|
|
Free Cash
Flow
|
$
1,000
|
|
1,200
|
|
|
(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 Aug. 6, 2024.
See "Forward-Looking Statements."
|
|
(3) Assumes
no discretionary pension plan contributions during 2024.
|
|
(4) Includes
an approximately $700 million tax refund received during the first
quarter 2024.
|
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SOURCE Lumen Technologies