Lumen(US:LUMN)2024-11-05 21:03Financial Performance - Operating revenue for Q3 2024 was $3.221 billion, a decrease of 12% compared to $3.641 billion in Q3 2023[210] - The net loss for Q3 2024 was $148 million, compared to a net loss of $78 million in Q3 2023[210] - The Business Segment revenue decreased by 13% to $2.536 billion in Q3 2024 from $2.905 billion in Q3 2023[214] - The Mass Markets Segment revenue decreased by 7% to $685 million in Q3 2024 from $736 million in Q3 2023[214] - Revenue from the International and Other sales channel decreased by 65% to $93 million in Q3 2024 from $264 million in Q3 2023[214] - Total operating revenue for the three months ended September 30, 2024, was $3.221 billion, a decrease of 11.5% compared to $3.641 billion for the same period in 2023[240] - Business segment revenue decreased by $369 million (13%) for the three months ended September 30, 2024, compared to the same period in 2023, primarily due to the sale of the EMEA business[244] - Adjusted EBITDA for the three months ended September 30, 2024, was $843 million, down 15% from $994 million in the same period in 2023[242] - Mass Markets segment revenue decreased by $51 million (7%) for the three months ended September 30, 2024, compared to the same period in 2023[249] Expenses and Cost Management - Total operating expenses decreased by 9% to $3,095 million for the three months ended September 30, 2024, compared to $3,418 million in 2023[218] - Cost of services and products decreased by $158 million (9%) for the three months ended September 30, 2024, primarily due to the sale of the EMEA business[220] - Selling, general and administrative expenses decreased by $95 million (12%) for the three months ended September 30, 2024, attributed to workforce reductions and the sale of the EMEA business[222] - Depreciation and amortization expenses decreased by 6% to $707 million for the three months ended September 30, 2024, compared to $755 million in 2023[224] - Total operating expenses for the nine months ended September 30, 2024, decreased by 50% to $9,473 million from $18,848 million in 2023[219] Goodwill and Impairment - The company recognized nearly $14.0 billion in goodwill impairment charges in 2022 and 2023 due to various pressures on financial performance[195] - Goodwill impairment charge of $8.8 billion was recorded in the second quarter of 2023 due to a decline in share price[229] Cash Flow and Capital Expenditures - Cash and cash equivalents as of September 30, 2024, were $2.6 billion, with $738 million of borrowing capacity available under revolving credit facilities[257] - Capital expenditures for the full year 2024 are projected to be between $3.1 billion and $3.3 billion[259] - Net cash provided by operating activities increased by $2.3 billion to $3.645 billion for the nine months ended September 30, 2024, compared to $1.376 billion in the same period of 2023[295] - Net cash used in investing activities decreased by $233 million, totaling $1.999 billion for the nine months ended September 30, 2024, compared to $2.232 billion in 2023[297] - Net cash used in financing activities increased by $1.1 billion, reaching $1.241 billion for the nine months ended September 30, 2024, compared to $101 million in 2023[298] Debt and Financing - As of September 30, 2024, Lumen had $13.7 billion in outstanding consolidated secured indebtedness and $5.2 billion in unsecured indebtedness[271] - The company issued approximately $438 million in new 10.000% Secured Notes due 2032, reducing consolidated indebtedness by approximately $60 million[269] - Lumen received $729 million in federal income tax cash refund in January 2024, which will influence future tax payments[279] - The company expects to pay $193 million in post-retirement benefits for the full year 2024[284] Market and Competitive Landscape - The company anticipates increased competition for broadband customers in newly-served areas due to $65 billion in federal funding aimed at improving broadband access and affordability[290] - The FCC adopted "net neutrality" rules on April 25, 2024, which may impact operational, legal, and compliance costs if upheld against legal challenges[291] Operational Strategies - The company plans to continue investing in new technologies and automated processes to improve customer experience and reduce operating expenses[202] - The company aims to optimize pricing and rationalize products across its portfolio to mitigate revenue declines[212] - The company experienced a decline in revenues from voice and other legacy products, necessitating a focus on increasing network capacity and promoting integrated services[212] Other Considerations - The company has a stock repurchase program authorized for up to $1.3 billion, which expires on November 2, 2024[281] - Lumen's expected annual long-term rate of return on pension plan assets for 2024 is 6.5%[286] - The company continues to evaluate strategies to mitigate risks from fluctuations in currency exchange rates, which could impact operating results[308] - There have been no changes in internal control over financial reporting that materially affected the company's financial reporting during the third quarter of 2024[313]