For the quarter ended March 2024, Lumen (LUMN) reported revenue of $3.29 billion, down 12% over the same period last year. EPS came in at -$0.04, compared to $0.10 in the year-ago quarter.The reported revenue compares to the Zacks Consensus Estimate of $3.39 billion, representing a surprise of -3.00%. The company delivered an EPS surprise of -33.33%, with the consensus EPS estimate being -$0.03.While investors closely watch year-over-year changes in headline numbers -- revenue and earnings -- and how they c ...

LUMEN® Except for historical and factual information, the matters set forth in this presentation 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 expectatio ...

Part I. Financial Information [Financial Statements](index=7&type=section&id=Item%201.%20Financial%20Statements) Lumen Technologies reported Q1 2024 operating revenue of $3.29 billion, net income of $57 million, and $1.1 billion in operating cash flow, reflecting a decline in revenue but improved cash generation [Note 1: Background and Accounting Policies](index=12&type=section&id=%281%29%20Background) Lumen, a technology and communications company, updated its depreciation method and extended the economic life of fiber assets, decreasing Q1 2024 depreciation expense by $16 million - Effective January 1, 2024, the company changed its depreciation method for ILEC and certain CLEC fixed assets to a straight-line method for individual assets, which had an **immaterial impact** for the quarter[43](index=43&type=chunk) - The estimated economic life of owned fiber network assets was extended from 25 to 30 years, resulting in a **$16 million decrease** in depreciation expense for Q1 2024[44](index=44&type=chunk) [Note 3: Revenue Recognition](index=17&type=section&id=%283%29%20Revenue%20Recognition) Total Q1 2024 revenue was $3.29 billion, a decrease from prior year, with $6.9 billion in future revenue expected from existing performance obligations Total Revenue by Segment (Q1 2024 vs Q1 2023) | Segment | Q1 2024 Revenue (Millions) | Q1 2023 Revenue (Millions) | | :--- | :--- | :--- | | **Business Segment** | | | | Grow | $1,059 | $1,134 | | Nurture | $777 | $913 | | Harvest | $582 | $706 | | Other | $173 | $215 | | *Total Business* | *$2,591* | *$2,968* | | **Mass Markets Segment** | | | | Fiber Broadband | $170 | $152 | | Other Broadband | $315 | $369 | | Voice and Other | $214 | $249 | | *Total Mass Markets* | *$699* | *$770* | | **Total Revenue** | **$3,290** | **$3,738** | - As of March 31, 2024, the company expects to recognize **$6.9 billion** in future revenue from unsatisfied performance obligations associated with existing customer contracts[64](index=64&type=chunk) [Note 5: Long-Term Debt and Credit Facilities](index=22&type=section&id=%285%29%20Long-Term%20Debt%20and%20Credit%20Facilities) Lumen completed a debt restructuring under a TSA, extending maturities by $10.2 billion and raising $1.325 billion in new capital, but increasing the average interest rate to 7.73% and yielding a $275 million gain on debt extinguishment - On March 22, 2024, the company completed transactions under a **Transaction Support Agreement (TSA)** with creditors, which included establishing new credit facilities, exchanging a substantial portion of existing notes, and raising new capital[75](index=75&type=chunk)[76](index=76&type=chunk) - The TSA transactions reduced total debt maturities due on or before December 31, 2027, by approximately **$10.2 billion**, but increased the weighted average interest rate on consolidated long-term debt from **6.23% to 7.73%**[82](index=82&type=chunk) - The company recognized a net gain on early retirement of debt of **$275 million** in Q1 2024, related to the TSA transactions[85](index=85&type=chunk) [Note 10: Segment Information](index=35&type=section&id=%2810%29%20Segment%20Information) Lumen reports two segments, Business and Mass Markets, with Q1 2024 Business segment revenue at $2.59 billion and Mass Markets at $699 million, contributing to total segment adjusted EBITDA of $1.73 billion Segment Adjusted EBITDA (Q1 2024 vs Q1 2023) | Segment | Q1 2024 Adj. EBITDA (Millions) | Q1 2023 Adj. EBITDA (Millions) | | :--- | :--- | :--- | | Business | $1,355 | $1,595 | | Mass Markets | $376 | $414 | | **Total Segment Adj. EBITDA** | **$1,731** | **$2,009** | [Note 11: Commitments, Contingencies and Other Items](index=37&type=section&id=%2811%29%20Commitments%2C%20Contingencies%20and%20Other%20Items) Lumen faces various legal proceedings, including shareholder lawsuits, tax disputes, and litigation related to the Marshall Fire, with $81 million accrued for contingencies - As of March 31, 2024, the company has accrued **$81 million** for litigation and non-income tax contingencies[141](index=141&type=chunk) - The company is defending against multiple putative **shareholder class action lawsuits** alleging misstatements related to its Quantum Fiber business and environmental issues from lead-sheathed cables[144](index=144&type=chunk)[145](index=145&type=chunk) - Lumen is involved in litigation related to the **Marshall Fire** in Colorado, with preliminary damage claims exceeding **$2 billion**, and is also subject to federal investigations regarding the use of **Huawei equipment** in its networks[154](index=154&type=chunk)[156](index=156&type=chunk) Consolidated Statements of Operations (Unaudited) | | Three Months Ended March 31, | | :--- | :--- | :--- | | | **2024** | **2023** | | | (Millions USD) | | | **Operating Revenue** | **$3,290** | **$3,738** | | Total operating expenses | 3,245 | 3,348 | | **Operating Income** | **45** | **390** | | Total other income, net | 57 | 290 | | **Net Income** | **$57** | **$511** | | **Diluted EPS** | **$0.06** | **$0.52** | Consolidated Balance Sheet Highlights (Unaudited) | | **March 31, 2024** | **December 31, 2023** | | :--- | :--- | :--- | | | (Millions USD) | | | Cash and cash equivalents | $1,580 | $2,234 | | Total Assets | $33,173 | $34,018 | | Long-Term Debt | $18,591 | $19,831 | | Total Stockholders' Equity | $504 | $417 | Consolidated Statements of Cash Flows (Unaudited) | | Three Months Ended March 31, | | :--- | :--- | :--- | | | **2024** | **2023** | | | (Millions USD) | | | Net cash provided by operating activities | $1,102 | $595 | | Net cash used in investing activities | ($698) | ($616) | | Net cash used in financing activities | ($1,060) | ($86) | | Net decrease in cash | ($656) | ($107) | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=45&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes the 12% YoY revenue decline to the EMEA divestiture and legacy service declines, while highlighting the March 2024 debt restructuring and projected 2024 capital expenditures of $2.7 billion to $2.9 billion [Results of Operations](index=48&type=section&id=Results%20of%20Operations) Consolidated operating revenue decreased 12% to $3.29 billion, partly due to the EMEA sale, while SG&A expenses rose $102 million from debt restructuring fees, leading to a significant drop in net income to $57 million Revenue by Segment (Q1 2024 vs Q1 2023) | Segment | Q1 2024 Revenue (Millions) | Q1 2023 Revenue (Millions) | % Change | | :--- | :--- | :--- | :--- | | Business Segment | $2,591 | $2,968 | (13)% | | Mass Markets Segment | $699 | $770 | (9)% | | **Total** | **$3,290** | **$3,738** | **(12)%** | - SG&A expenses increased by **$102 million** YoY, mainly due to a **$143 million** increase in legal and professional fees associated with the company's debt restructuring transactions[192](index=192&type=chunk) - The company recognized a net gain on early retirement of debt of **$275 million** in Q1 2024, compared to a **$609 million** gain in Q1 2023[196](index=196&type=chunk)[198](index=198&type=chunk) [Segment Results](index=52&type=section&id=Segment%20Results) Business segment revenue declined 13% to $2.59 billion, impacted by the EMEA divestiture and broad product category declines, while Mass Markets revenue fell 9% despite Fiber Broadband growth Business Segment Revenue by Product (Q1 2024 vs Q1 2023) | Product Category | Q1 2024 Revenue (Millions) | Q1 2023 Revenue (Millions) | % Change | | :--- | :--- | :--- | :--- | | Grow | $1,059 | $1,134 | (7)% | | Nurture | $777 | $913 | (15)% | | Harvest | $582 | $706 | (18)% | | Other | $173 | $215 | (20)% | | **Total** | **$2,591** | **$2,968** | **(13)%** | Mass Markets Segment Revenue by Product (Q1 2024 vs Q1 2023) | Product Category | Q1 2024 Revenue (Millions) | Q1 2023 Revenue (Millions) | % Change | | :--- | :--- | :--- | :--- | | Fiber Broadband | $170 | $152 | 12% | | Other Broadband | $315 | $369 | (15)% | | Voice and Other | $214 | $249 | (14)% | | **Total** | **$699** | **$770** | **(9)%** | [Liquidity and Capital Resources](index=55&type=section&id=Liquidity%20and%20Capital%20Resources) As of March 31, 2024, Lumen held $1.6 billion in cash and projects $2.7 billion to $2.9 billion in 2024 capital expenditures, benefiting from a $729 million tax refund and recent debt restructuring - As of March 31, 2024, the company had **$1.6 billion** in cash and cash equivalents and **$715 million** of available borrowing capacity under its revolving credit facilities[211](index=211&type=chunk) - Projected capital expenditures for the full year 2024 are between **$2.7 billion and $2.9 billion**[213](index=213&type=chunk) - In January 2024, the company received a federal income tax cash refund of **$729 million**, including interest[228](index=228&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=63&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Lumen faces market risk from interest rate changes on its $6.1 billion unhedged floating-rate debt, where a 100 basis point SOFR increase would reduce annual pre-tax earnings by $61 million - The company has approximately **$6.1 billion** of unhedged floating-rate debt. A hypothetical **100 basis point increase** in SOFR would decrease annual pre-tax earnings by about **$61 million**[254](index=254&type=chunk) [Controls and Procedures](index=64&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were effective as of March 31, 2024, with no material changes to internal control over financial reporting during Q1 2024 - Based on an evaluation as of March 31, 2024, the Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were **effective**[260](index=260&type=chunk) - **No material changes** to the company's internal control over financial reporting occurred during the first quarter of 2024[261](index=261&type=chunk) Part II. Other Information [Legal Proceedings](index=65&type=section&id=Item%201.%20Legal%20Proceedings) This section incorporates by reference detailed legal proceedings from Note 11, emphasizing that ultimate outcomes may materially differ from current expectations - Information regarding legal proceedings is **incorporated by reference** from Note 11—Commitments, Contingencies and Other Items[264](index=264&type=chunk) [Risk Factors](index=65&type=section&id=Item%201A.%20Risk%20Factors) New risks include the potential failure to realize full benefits from the March 2024 debt restructuring due to higher costs and restrictive covenants, and risks associated with a pending reverse stock split proposal - The company may **not realize all anticipated benefits** from its March 22, 2024 debt transactions due to substantial expenses, **higher interest rates**, and **more restrictive covenants**, which could limit future financing and dedicate cash flow to debt payments[266](index=266&type=chunk)[267](index=267&type=chunk) - A pending proposal to implement a **reverse stock split** carries risks, including potentially **decreased liquidity** of the common stock and higher trading costs[268](index=268&type=chunk)[269](index=269&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=66&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) Lumen did not repurchase common stock in Q1 2024 but withheld 1,444,352 shares from employees to cover tax obligations related to stock-based awards - The company **did not repurchase any shares** of its outstanding common stock during the three months ended March 31, 2024[270](index=270&type=chunk) Shares Withheld for Taxes (Q1 2024) | Period | Total Number of Shares Withheld | Average Price Paid Per Share ($) | | :--- | :--- | :--- | | Jan-24 | 61,117 | $1.65 | | Feb-24 | 19,176 | $1.52 | | Mar-24 | 1,364,059 | $1.62 | | **Total** | **1,444,352** | | [Exhibits](index=67&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including supplemental indentures, new credit agreements from the March 2024 debt restructuring, and CEO/CFO certifications - Filed exhibits include numerous **supplemental indentures** and **credit agreements** related to the March 22, 2024 debt transactions, **CEO/CFO certifications**, and financial statements in Inline XBRL format[274](index=274&type=chunk)[276](index=276&type=chunk)[279](index=279&type=chunk)

NEWS RELEASE Lumen Technologies reports first quarter 2024 results First Quarter 2024 Highlights DENVER, April 30, 2024 — Lumen Technologies, Inc. (NYSE: LUMN) reported results for the first quarter ended March 31, 2024. Kate Johnson, president and CEO of Lumen, commented "Lumen continued to make material progress in our turnaround with our strategy intently focused on empowering digital enterprises with next generation connectivity solutions powered by our best-in-class nationwide fiber network. "While we ...

Wall Street analysts forecast that Lumen (LUMN) will report quarterly loss of $0.04 per share in its upcoming release, pointing to a year-over-year decline of 140%. It is anticipated that revenues will amount to $3.39 billion, exhibiting a decline of 9.3% compared to the year-ago quarter.Over the past 30 days, the consensus EPS estimate for the quarter has been adjusted upward by 11.1% to its current level. This demonstrates the covering analysts' collective reassessment of their initial projections during ...

Lumen Technologies, Inc (LUMN) is scheduled to report first-quarter 2024 results on Apr 30, after the closing bell.The Zacks Consensus Estimate for total revenues is pegged at $3.39 billion, suggesting a fall of 9.3% from a year ago. The consensus estimate is currently pegged at a loss of 4 cents per share. In the year-ago quarter, LUMN reported earnings of 10 cents.The company missed the Zacks Consensus Estimate in two of the last four quarters and beat in the remaining quarters. It has a trailing four-qua ...

Summary of Lumen Technologies, Inc. Conference Call Company Overview - **Company**: Lumen Technologies, Inc. (NYSE:LUMN) - **Date**: March 22, 2024 - **Participants**: Chris Stansbury (CFO), Jonathan Chaplin (New Street Research) Key Points Industry Context - The telecommunications industry is experiencing a shift from legacy services to more innovative offerings, particularly in the enterprise sector, driven by the demand for digital transformation and increased networking capacity due to AI and cloud services [3][20][22]. Financial Structure and Strategy - Lumen successfully executed a Transaction Support Agreement (TSA), which is seen as a major milestone that allows the company to focus on business growth with a clear runway until 2029 [4][5]. - The company previously had a $1.1 billion annual dividend and $20 billion in outstanding debt, with significant portions due by 2027 [4]. - The TSA has improved market confidence and provided necessary financing to support the company's turnaround efforts [4][5]. Revenue and EBITDA Projections - Lumen anticipates a return to revenue and EBITDA growth in 2025, with EBITDA expected to accelerate to approximately 9% growth by 2027 [6][8]. - The company acknowledges challenges in 2024 guidance due to customer concerns about liquidity prior to the TSA execution [6][8]. Customer Dynamics - Smaller customers expressed concerns about Lumen's longevity, while larger customers were more focused on the company's operational focus [7][8]. - The company is working on improving customer experience and operational efficiency, which is expected to enhance sales rates and overall performance [10][16]. Capital Expenditure (CapEx) Insights - The CapEx guidance for 2024 remains largely unchanged, with a focus on improving internal processes and customer experience rather than significant new capacity [11][12][16]. - There is a notable demand for increased networking capacity driven by hyperscalers and large enterprises, particularly in the context of AI [12][13]. Competitive Landscape - Lumen is positioned to capture market share as competitors focus on consumer segments rather than enterprise [19][20]. - The company is shifting away from legacy telecom services, which are declining, and investing in future growth areas [19][20]. Market Opportunities - The growth of Network-as-a-Service (NaaS) is highlighted as a significant opportunity, with Lumen's ability to deliver NaaS at a deeper network layer providing a competitive advantage [21][22]. - The company is exploring potential partnerships and joint ventures to enhance its mass market fiber opportunities [39][42]. Long-term Outlook - Lumen's capital structure is not dependent on the mass markets business, and the company believes it can improve EBITDA and leverage before any refinancing needs arise [45][46]. - The focus remains on driving innovation and operational improvements to ensure long-term success and sustainability [45][46]. Additional Insights - The company is considering various strategies for its mass market business, including potential joint ventures and wholesale opportunities [39][40]. - There is a growing concern among cloud providers about future infrastructure capacity, which could stabilize or increase pricing for long-haul networks [25][26]. This summary encapsulates the key discussions and insights from the conference call, highlighting Lumen Technologies' strategic direction, financial outlook, and market positioning within the telecommunications industry.

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2023 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File No. 001-7784 Lumen Technologies, Inc. (Address of principal executive offices) (Zip Code) (318) 388-9000 (Registrant's telephone number, including area cod ...

Summary of Lumen Technologies, Inc. Conference Call Company Overview - **Company**: Lumen Technologies, Inc. (NYSE:LUMN) - **Date**: December 5, 2023 - **Participants**: Chris Stansbury (EVP and CFO), Batya Levi (UBS) Key Points Company Transformation and Focus for 2024 - Lumen is in the midst of a transformation, likened to renovating a house, focusing on internal improvements such as customer retention and innovation [2][18] - The company aims to show results from its transformation efforts in 2024, aligning organizational objectives to support this [2] TSA Update - Lumen is working on a Transaction Support Agreement (TSA) to address its capital structure and refinance debt, particularly due in 2027 [5][6] - The TSA is expected to close by December 31, 2023, and is crucial for stabilizing customer confidence [10][12] Financial Strategy and Debt Management - The company anticipates a higher interest expense due to the refinancing, estimating a $200 million to $300 million gap to be addressed without expanding consumer builds [7][8] - Lumen is focused on maintaining a healthy capital structure while investing in its turnaround [5][6] Innovation and Market Position - Lumen is introducing proprietary technologies such as NaaS (Network as a Service), ExaSwitch, and edge fabric to enhance its service offerings beyond traditional fiber connectivity [12][28] - The company aims to shift the narrative from being seen as a "dumb pipe" provider to a technology-focused service provider [13][14] Enterprise Segment Insights - The enterprise segment is crucial for Lumen, with a focus on migrating customers from legacy products to innovative solutions [15][16] - The company plans to provide better metrics around its enterprise performance and customer migration strategies in the future [16] Market Trends and Competition - The macro environment is showing signs of improvement, with expectations for better investment in the coming year as inflation moderates [22][23] - Lumen is observing an explosion in data demand driven by GenAI and hybrid cloud environments, positioning itself to meet these needs [24][25] Cost Management and Efficiency - Lumen has identified a $300 million cost-cutting opportunity, which will impact the financials in 2024 [58][60] - The company is focused on improving operational efficiency and customer experience through internal investments and technology upgrades [21][66] Future Outlook - Lumen expects to see a reduction in the rate of revenue decline and aims for a point of inflection towards growth in 2025 [40][66] - The company is cautious about external funding opportunities and is prioritizing internal returns on investment [57][61] Fiber-to-the-Home Strategy - Lumen views its fiber-to-the-home business as important but distinct from its enterprise operations, indicating a preference for enterprise investments over consumer fiber builds [45][46] - The company is exploring strategic options for its fiber segment, including potential partnerships or market sales [54][55] Conclusion - Lumen Technologies is navigating a complex transformation while addressing debt concerns and focusing on innovation in its service offerings. The company is optimistic about future growth driven by improved operational efficiency and a shift in market dynamics.

Summary of Lumen Technologies, Inc. Conference Call Company Overview - **Company**: Lumen Technologies, Inc. (NYSE:LUMN) - **Date**: December 4, 2023 - **Participants**: Chris Stansbury (CFO), Frank Louthan (Analyst) Key Points Industry and Company Context - The telecom industry is experiencing legacy declines, prompting Lumen to focus on internal improvements and innovation to adapt to market changes [3][4] - Lumen is undergoing a significant turnaround, with expectations of improved seller productivity and onboarding of new clients in mid-markets [3] Financial Performance and Cost Management - The second half of 2023 is expected to be the peak for operational expenses (OpEx), with significant cost-saving opportunities anticipated moving forward [10] - A $300 million cost action has been implemented to streamline operations, with benefits expected in the following year [11] - The company has eliminated its dividend to focus on investments for turnaround and innovation [13] Debt Structure and Refinancing - Approximately half of Lumen's debt is due in 2027, posing a challenge for the company [14] - Ongoing discussions with banks regarding revolving debt are critical for the refinancing plan [14][16] - The company is working on a plan to push out debt maturities and improve its balance sheet [16] Strategic Initiatives - Lumen is focusing on its Quantum Fiber initiative, which involves upgrading copper networks to fiber, although the pace of investment has slowed due to rising capital costs [17][19] - The company is prioritizing enterprise business over consumer segments, which is expected to yield higher returns [19][27] Innovation and Market Position - Lumen is investing in network-as-a-service (NaaS) and ExaSwitch technologies to enhance data movement and connectivity [32][33] - The company aims to leverage generative AI and edge computing to meet the growing demand for data and speed in hybrid cloud environments [30][49] - Lumen's proprietary technologies and innovations position it favorably against competitors, who are primarily focused on legacy telecom services [37][49] Regulatory Environment - Lumen does not foresee significant risks from current FCC initiatives regarding digital discrimination and Title II regulations [46] Partnerships and Projects - Lumen has engaged in a project with California to enhance internet access, utilizing its existing conduit network for efficient fiber deployment [43] Competitive Landscape - The company views fixed wireless as a minor competitor in major metropolitan areas, with a focus on capturing market share in enterprise segments [25][27] - Concerns about potential overbuilding by competitors are mitigated by the current high cost of capital affecting the industry [52] Additional Insights - Lumen has received recognition for employee opportunity and movement, ranking 12th overall among 396 companies and first in communications and telecoms [8] - The company is optimistic about its turnaround strategy and expects to see improvements by mid-2024 [51]