Fourth Quarter 2022 Highlights
- Appointed Kate Johnson as
president, chief executive officer, and a member of the company's
Board of Directors
- Completed the $7.5 billion
divestiture of its 20-state ILEC business to Apollo on Oct. 3
- Announced an exclusive arrangement for the proposed sale of its
EMEA business to Colt Technology Services for $1.8 billion
- Repurchased 33 million shares of common stock for a total
purchase price of $200 million
- Reported Net Loss of $(3.069)
billion for the fourth quarter 2022, which included a
non-cash goodwill impairment charge of $3.271 billion, compared to reported Net Income
of $508 million for the fourth
quarter 2021
- Reported diluted loss per share of ($3.08) for the fourth quarter 2022, compared to
diluted earnings per share of $0.50
for the fourth quarter 2021. Excluding Special Items, Diluted EPS
of $0.43 per share for the fourth
quarter 2022, compared to $0.51 per
share for the fourth quarter 2021
- Generated Adjusted EBITDA of $1.393
billion for the fourth quarter 2022, compared to
$2.088 billion for the fourth quarter
2021, excluding the effects of Special Items of $583 million and $19
million, respectively
- Generated Modified1 Adjusted EBITDA of $1.393 billion for the fourth quarter 2022,
compared to $1.496 billion for the
fourth quarter 2021, excluding the effects of Special Items of
$583 million and $19 million, respectively
- Reported Net Cash Provided by Operating Activities of
$841 million for the fourth quarter
2022
- Generated Free Cash Flow of $126
million for the fourth quarter 2022, compared to
$776 million for the fourth quarter
2021, excluding cash paid for Special Items of $118 million and $17
million, respectively
_____________________________________________
|
1 Modified
amounts include adjustments to reflect (i) removal of the financial
impacts related to the Latin American business divestiture
completed Aug. 1, 2022 and the 20-state ILEC business divestiture
completed Oct. 3, 2022, (ii) estimates of revenue that Lumen would
have received under the post-closing agreements with the purchasers
of the divested businesses, and (iii) removal of the financial
impacts of the Federal Communications Commission's Connect America
Fund ("CAF") Phase II program, which lapsed on Dec. 31, 2021, each
excluding the effects of special items. Reconciliation of these
non-GAAP financial measures to the most directly comparable GAAP
measures are provided in the Financial Trending Schedule available
on Lumen's website at ir.lumen.com, along with additional modified
information reported on this basis.
|
|
Full Year 2022 Financial Highlights
- Generated $10.2 billion of gross
proceeds from business divestitures2
- Reduced Estimated Net Debt3 by $9.9 billion
- Reported Net Loss of $(1.548)
billion for the full year 2022, which included a non-cash
goodwill impairment charge of $3.271
billion, compared to reported Net Income of $2.033 billion for the full year 2021
- Reported diluted loss per share of ($1.54) for the full year 2022, compared to
diluted earnings per share of $1.91
for the full year 2021. Excluding Special Items, Diluted EPS of
$1.55 per share for the full year
2022, compared to $1.91 per share for
the full year 2021
- Generated Adjusted EBITDA of $6.858
billion for the full year 2022, compared to $8.440 billion for the full year 2021, excluding
the effects of Special Items of $155
million and $16 million,
respectively
- Generated Modified1 Adjusted EBITDA of $5.540 billion for the full year 2022, compared
to $6.092 billion for the full year
2021, excluding the effects of Special Items of $155 million and $16
million, respectively
- Reported Net Cash Provided by Operating Activities of
$4.735 billion for the full year
2022
- Delivered Free Cash Flow of $2.260
billion for the full year 2022, compared to $3.742 billion for the full year 2021, excluding
cash paid for Special Items of $541
million and $141 million,
respectively
DENVER, Feb. 7, 2023
/PRNewswire/ -- Lumen Technologies, Inc. (NYSE: LUMN) reported
results for the fourth quarter ended December 31, 2022.
"This year brings significant change for Lumen as we pivot to
growth with a new leadership team and an energized group of
highly skilled employees to execute on our plan," said Kate Johnson, president and CEO of Lumen. "In
2023 we will be investing in and optimizing Lumen as we drive our
five core priorities: develop customer obsession, innovate and
invest for growth, build a reliable execution engine, radically
simplify Lumen, and further develop our culture."
Total Revenue was $3.800 billion
for the fourth quarter 2022, compared to $4.847 billion for the fourth quarter 2021 and
compared to Modified1 Revenue of $4.022 billion for the fourth quarter 2021.
_______________________________________________
|
1 Modified
amounts include adjustments to reflect (i) removal of the financial
impacts related to the Latin American business divestiture
completed Aug. 1, 2022 and the 20-state ILEC business divestiture
completed Oct. 3, 2022, (ii) estimates of revenue that Lumen would
have received under the post-closing agreements with the purchasers
of the divested businesses, and (iii) removal of the financial
impacts of the Federal Communications Commission's Connect America
Fund ("CAF") Phase II program, which lapsed on Dec. 31, 2021, each
excluding the effects of special items. Reconciliation of these
non-GAAP financial measures to the most directly comparable GAAP
measures are provided in the Financial Trending Schedule available
on Lumen's website at ir.lumen.com, along with additional modified
information reported on this basis.
|
|
2 For
the 20-state ILEC business divestiture, we received $7.5 billion of
consideration, which was reduced by approximately $0.4 billion of
closing adjustments and partially paid through purchaser's
assumption of approximately $1.5 billion of our long-term
consolidated indebtedness, resulting in pre-tax cash proceeds of
approximately $5.6 billion. For the Latin American business
divestiture, we received pre-tax cash proceeds of approximately
$2.7 billion.
|
|
3 During the first half of 2023, we
expect to pay approximately $900 million to $1 billion of cash
taxes related to the 2022 divestitures of our Latin American and
20-state ILEC businesses. To provide comparability to prior
periods, Estimated Net Debt reflects the payment of those cash
taxes as though it had occurred on or prior to Dec. 31,
2022.
|
|
Financial Results
Metric, as
reported
|
Fourth
Quarter
|
Full
Year
|
($ in millions,
except per share data)
|
2022
|
2021
|
2022
|
2021
|
International and
Global Accounts
|
$
797
|
1,025
|
$
3,645
|
4,083
|
Large
Enterprise
|
804
|
931
|
3,409
|
3,771
|
Mid-Market
Enterprise
|
585
|
647
|
2,465
|
2,649
|
Enterprise
Channels
|
2,186
|
2,603
|
9,519
|
10,503
|
Wholesale
|
819
|
891
|
3,520
|
3,616
|
Business Segment
Revenue
|
3,005
|
3,494
|
13,039
|
14,119
|
Mass Markets Segment
Revenue
|
795
|
1,353
|
4,439
|
5,568
|
Total
Revenue
|
$
3,800
|
4,847
|
$ 17,478
|
19,687
|
Cost of Services and
Products
|
1,826
|
2,086
|
7,868
|
8,488
|
Selling, General and
Administrative Expenses
|
671
|
723
|
3,078
|
2,895
|
Gain on Sale of
Businesses(1)
|
(180)
|
—
|
(773)
|
—
|
Loss on disposal groups
held for sale
|
700
|
—
|
700
|
—
|
Stock-based
Compensation Expense
|
27
|
31
|
98
|
120
|
Adjusted
EBITDA(2)
|
810
|
2,069
|
6,703
|
8,424
|
Adjusted EBITDA,
Excluding Special Items(2)(3)
|
1,393
|
2,088
|
6,858
|
8,440
|
Adjusted EBITDA
Margin(2)
|
21.3 %
|
42.7 %
|
38.4 %
|
42.8 %
|
Adjusted EBITDA Margin,
Excluding Special Items(2)(3)
|
36.7 %
|
43.1 %
|
39.2 %
|
42.9 %
|
Net Cash Provided by
Operating Activities
|
841
|
1,607
|
4,735
|
6,501
|
Capital
Expenditures
|
833
|
848
|
3,016
|
2,900
|
Unlevered Cash
Flow(2)
|
264
|
1,100
|
3,059
|
5,086
|
Unlevered Cash Flow,
Excluding Cash Special Items(2)(4)
|
382
|
1,117
|
3,600
|
5,227
|
Free Cash
Flow(2)
|
8
|
759
|
1,719
|
3,601
|
Free Cash Flow,
Excluding Cash Special Items(2)(4)
|
126
|
776
|
2,260
|
3,742
|
Net (Loss)
Income
|
(3,069)
|
508
|
(1,548)
|
2,033
|
Net Income, Excluding
Special Items(2)(5)
|
425
|
522
|
1,564
|
2,039
|
Net Income per Common
Share - Diluted
|
(3.08)
|
0.50
|
(1.54)
|
1.91
|
Net Income per Common
Share - Diluted, Excluding Special
Items(2)(5)
|
0.43
|
0.51
|
1.55
|
1.91
|
Weighted Average Shares
Outstanding (in millions) - Diluted
|
995.6
|
1,015.5
|
1,007.5
|
1,066.8
|
|
|
|
|
|
(1) Reflects
(i) the pre-tax gain of $597 million recorded in operating income
as a result of our Latin American business divestiture completed
Aug. 1, 2022 and (ii) the pre-tax gain of $176 million recorded in
operating income as a result of our 20-state ILEC business
divestiture completed Oct. 3, 2022, subject to certain post-closing
adjustments.
|
(2) See the
attached schedules for definitions of non-GAAP metrics and
reconciliations to GAAP figures.
|
(3) Excludes
Special Items in the amounts of (i) $583 million for the fourth
quarter of 2022, (ii) $19 million for the fourth quarter of 2021,
(iii) $155 million for the full year 2022 and (iv) $16 million for
the full year 2021.
|
(4) Excludes
cash paid for Special Items of (i) $118 million for the fourth
quarter of 2022, (ii) $17 million for the fourth quarter of 2021,
(iii) $541 million for the full year 2022 and (iv) $141 million for
the full year 2021.
|
(5) Excludes
Special Items (net of the income tax effect thereof) in the amounts
of (i) $3.5 billion for the fourth quarter of 2022, (ii) $14
million for the fourth quarter of 2021, (iii) $3.1 billion for the
full year 2022 and (iv) $6 million for the full year
2021.
|
Modified(1) Metrics
|
Fourth
Quarter
|
YoY
Percent
|
Full
Year
|
YoY
Percent
|
($ in
millions)
|
2022
|
2021
|
Change
|
2022
|
2021
|
Change
|
Revenue By Sales
Channel
|
|
|
|
|
|
|
Large
Enterprise
|
$
1,217
|
1,272
|
(4) %
|
$
4,894
|
5,106
|
(4) %
|
Mid-Market
Enterprise
|
522
|
559
|
(7) %
|
2,144
|
2,297
|
(7) %
|
Public
Sector
|
431
|
500
|
(14) %
|
1,788
|
1,997
|
(10) %
|
Enterprise
Channels
|
2,170
|
2,331
|
(7) %
|
8,826
|
9,400
|
(6) %
|
Wholesale
|
835
|
831
|
— %
|
3,360
|
3,385
|
(1) %
|
Business Segment
Revenue
|
3,005
|
3,162
|
(5) %
|
12,186
|
12,785
|
(5) %
|
Mass Markets Segment
Revenue
|
795
|
860
|
(8) %
|
3,302
|
3,554
|
(7) %
|
Total
Revenue
|
$
3,800
|
4,022
|
(6) %
|
$
15,488
|
16,339
|
(5) %
|
Adjusted EBITDA,
Excluding Special Items
|
$
1,393
|
1,496
|
(7) %
|
$
5,540
|
6,092
|
(9) %
|
Adjusted EBITDA Margin,
Excluding Special Items
|
36.7 %
|
37.2 %
|
(1) %
|
35.8 %
|
37.3 %
|
(4) %
|
Capital
Expenditures
|
$
833
|
681
|
22 %
|
$
2,691
|
2,325
|
16 %
|
|
(1) Modified
amounts include adjustments to reflect (i) removal of the financial
impacts related to the Latin American business divestiture
completed Aug. 1, 2022 and the 20-state ILEC business divestiture
completed Oct. 3, 2022, (ii) estimates of revenue that Lumen would
have received under the post-closing agreements with the purchasers
of the divested businesses, and (iii) removal of the financial
impacts of the Federal Communications Commission's Connect America
Fund ("CAF") Phase II program, which lapsed on Dec. 31, 2021, each
excluding the effects of special items. Reconciliation of these
non-GAAP financial measures to the most directly comparable GAAP
measures are provided in the Financial Trending Schedule available
on Lumen's website at ir.lumen.com, along with additional modified
information reported on this basis.
|
|
Cash Flow
Free Cash Flow, excluding Special Items, was
$126 million in the fourth
quarter 2022, compared to $776
million in the fourth quarter 2021.
As of Dec. 31, 2022, Lumen had
cash and cash equivalents of $1.251
billion.
Goodwill Impairment
Each year, the company is required
under GAAP to undertake a goodwill impairment analysis of all
its reporting units. The analysis compares the fair value of
the equity for each of the reporting units to the carrying
value of equity for each reporting unit. The analysis takes into
account weighted average cost of capital and market multiples,
along with the company's forecasts. Based on this analysis, in the
fourth quarter of 2022 the company recorded an aggregate
$3.271 billion non-cash goodwill
impairment, primarily in our North
America business reporting unit.
Update on the Divestiture of EMEA Business to
Colt
Since we announced this transaction on Nov. 2, 2022, Colt has exercised its option to
acquire our EMEA business following the completion of a French
consultative process. The parties expect to enter into a definitive
purchase agreement in the next couple of days. We expect to close
this transaction on the terms previously announced as early as late
2023, following receipt of all requisite regulatory approvals in
the U.S. and certain other countries where the EMEA business
operates, as well as the satisfaction of other customary
conditions.
2023 Financial Outlook
The company announced its full-year 2023 financial outlook which
is detailed below:
Metric
(1)(2)
|
Outlook(3)
|
Adjusted
EBITDA
|
$4.6 to $4.8
billion
|
Free Cash
Flow(4)(5)
|
$0 to $200
million
|
Net Cash
Interest
|
$1.1 to $1.2
billion
|
GAAP Interest
Expense
|
$1.200
billion
|
Capital
Expenditures
|
$2.9 to $3.1
billion
|
Depreciation and
Amortization
|
$2.9 to $3.1
billion
|
Stock-based
Compensation Expense
|
~$125
million
|
Cash Income
Taxes(5)
|
~$200 to $300
million
|
Full Year Effective
Income Tax Rate
|
~26%
|
|
|
(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, 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 Feb. 7, 2023. See "Forward-Looking
Statements."
|
(3)
Includes accounting impacts of assets and liabilities held for sale
and assumes the proposed sale of Lumen's EMEA business is not
completed during 2023.
|
(4)
Assumes no discretionary pension plan contributions during
2023.
|
(5)
Excludes the estimated $900 million to $1 billion impact of taxes
related to our divestitures completed on Aug. 1, 2022 and Oct. 3,
2022.
|
|
Investor Call
Lumen's management team will host a conference call at
5:00 p.m. ET today, Feb. 7, 2023. The conference call will be
streamed live over the Lumen website at ir.lumen.com. Additional
information regarding fourth quarter 2022 results, including the
presentation materials management will review during the conference
call, will be available on the Investor Relations website prior to
the call. If you are unable to join the call via the web, the call
can be accessed live at +1 877-283-5145 (U.S. Domestic) or +1
312-281-1201 (International).
A telephone replay of the call will be available beginning at
8:00 p.m. ET on Feb. 7, 2023, and ending May 8, 2023, at 8:00 p.m.
ET. The replay can be accessed by dialing +1 800-633-8284
(U.S. Domestic) or +1 402-977-9140 (International), reservation
code 22024860. A webcast replay of the call will also be available
on our website beginning at 8:00 p.m.
ET on Feb. 7, 2023, and ending
May 8, 2023, at 8:00 p.m.
ET.
About Lumen Technologies and the People of Lumen:
Lumen Technologies Inc. (NYSE: LUMN) is guided by our belief
that humanity is at its best when technology advances the way we
live and work. With approximately 400,000 route fiber miles and
serving customers in more than 60 countries, we deliver the
fastest, most secure platform for applications and data to help
businesses, government and communities deliver amazing
experiences.
Learn more about the Lumen network, edge cloud, security,
communication and collaboration solutions and our purpose to
further human progress through technology at news.lumen.com,
LinkedIn: /lumentechnologies, Twitter: @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 plans, strengthening our relationships with customers and
attaining projected cost savings; our ability to safeguard our
network, and to avoid the adverse impact of possible 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 repayments, 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; changes in customer demand for our products
and services, including increased demand for high-speed data
transmission services; our ability to successfully maintain the
quality and profitability of our existing product and service
offerings and to introduce profitable new offerings on a timely and
cost-effective basis; our ability to successfully and timely
implement our corporate strategies, including our deleveraging and
buildout strategies; our ability to successfully and timely
consummate the pending divestiture of our European, Middle Eastern
and African business, to successfully and timely realize the
anticipated benefits from that divestiture and our divestitures
completed in 2022, and to successfully operate and transform our
retained business after such divestitures; 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 complaints, government investigations,
security breaches or service outages impacting us or our industry;
adverse changes in our access to credit markets on favorable terms,
whether caused by changes in our financial position, lower credit
ratings, unstable markets 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 maintain favorable relations with our
security holders, key business partners, suppliers, vendors,
landlords and financial institutions; 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; 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 recently enacted legislation 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; continuing uncertainties regarding the impact that
COVID-19 and its aftermath could have on our business, operations,
cash flows and corporate initiatives; the effects of adverse
weather, terrorism, epidemics, pandemics, rioting, vandalism,
societal unrest, 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 and 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 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, regulatory,
technological, industry, competitive, economic and market
conditions, and our related assumptions, as of such date. We may
change our intentions, strategies or plans without notice at any
time and for any reason.
Reconciliation to GAAP
This release includes certain historical and forward-looking
non-GAAP financial measures, including but not limited to Modified
Revenue, Modified Adjusted Revenue, Adjusted EBITDA, Modified
Adjusted EBITDA, Free Cash Flow, Unlevered Cash Flow, and
adjustments to GAAP and non-GAAP measures to exclude the effect of
Special Items. This release also includes certain modified
historical information, none of which has been prepared in
accordance with Regulation S-X promulgated by the U.S. Securities
and Exchange Commission.
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. Reconciliation of modified historical information
appearing herein and additional non-GAAP historical financial
measures that may be discussed during the call described above,
along with further descriptions of non-GAAP financial measures,
will be available in the Investor Relations portion of the
company's website at http://ir.lumen.com. 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 TWELVE MONTHS
ENDED DECEMBER 31, 2022 AND 2021
|
(UNAUDITED)
|
($ in millions,
except per share amounts; shares in thousands)
|
|
|
Three months
ended
December 31,
|
|
(Decrease)
/ Increase
|
|
Twelve months
ended
December 31,
|
|
(Decrease)
/ Increase
|
|
|
2022
|
|
2021
|
|
|
2022
|
|
2021
|
|
OPERATING
REVENUE
|
|
$
3,800
|
|
4,847
|
|
(22) %
|
|
17,478
|
|
19,687
|
|
(11) %
|
OPERATING
EXPENSES
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of services and
products (exclusive of depreciation and amortization)
|
|
1,826
|
|
2,086
|
|
(12) %
|
|
7,868
|
|
8,488
|
|
(7) %
|
Selling, general and
administrative
|
|
671
|
|
723
|
|
(7) %
|
|
3,078
|
|
2,895
|
|
6 %
|
Gain on sale of
businesses
|
|
(180)
|
|
—
|
|
nm
|
|
(773)
|
|
—
|
|
nm
|
Loss on disposal groups
held for sale
|
|
700
|
|
—
|
|
nm
|
|
700
|
|
—
|
|
nm
|
Depreciation and
amortization
|
|
796
|
|
877
|
|
(9) %
|
|
3,239
|
|
4,019
|
|
(19) %
|
Goodwill
impairment
|
|
3,271
|
|
—
|
|
nm
|
|
3,271
|
|
—
|
|
nm
|
Total operating
expenses
|
|
7,084
|
|
3,686
|
|
92 %
|
|
17,383
|
|
15,402
|
|
13 %
|
OPERATING (LOSS)
INCOME
|
|
(3,284)
|
|
1,161
|
|
nm
|
|
95
|
|
4,285
|
|
(98) %
|
OTHER (EXPENSE)
INCOME
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
(280)
|
|
(372)
|
|
(25) %
|
|
(1,332)
|
|
(1,522)
|
|
(12) %
|
Other income (expense),
net
|
|
382
|
|
(110)
|
|
nm
|
|
246
|
|
(62)
|
|
nm
|
Income tax benefit
(expense)
|
|
113
|
|
(171)
|
|
(166) %
|
|
(557)
|
|
(668)
|
|
(17) %
|
NET (LOSS)
INCOME
|
|
$ (3,069)
|
|
508
|
|
nm
|
|
$
(1,548)
|
|
2,033
|
|
(176) %
|
|
|
|
|
|
|
|
BASIC (LOSS) EARNINGS
PER SHARE
|
|
$
(3.08)
|
|
0.50
|
|
nm
|
|
(1.54)
|
|
1.92
|
|
(180) %
|
DILUTED (LOSS) EARNINGS
PER SHARE
|
|
$
(3.08)
|
|
0.50
|
|
nm
|
|
(1.54)
|
|
1.91
|
|
(181) %
|
|
|
|
|
|
|
|
WEIGHTED AVERAGE SHARES
OUTSTANDING
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
995,573
|
|
1,006,846
|
|
(1) %
|
|
1,007,517
|
|
1,059,541
|
|
(5) %
|
Diluted
|
|
995,573
|
|
1,015,472
|
|
(2) %
|
|
1,007,517
|
|
1,066,778
|
|
(6) %
|
DIVIDENDS PER COMMON
SHARE
|
|
$
—
|
|
0.25
|
|
(100) %
|
|
0.75
|
|
1.00
|
|
(25) %
|
|
|
|
|
|
|
|
Exclude: Special
Items(1)
|
|
$
3,494
|
|
14
|
|
nm
|
|
3,112
|
|
6
|
|
nm
|
NET INCOME EXCLUDING
SPECIAL ITEMS
|
|
$
425
|
|
522
|
|
(19) %
|
|
1,564
|
|
2,039
|
|
(23) %
|
DILUTED EARNINGS PER
SHARE EXCLUDING SPECIAL ITEMS
|
|
$
0.43
|
|
0.51
|
|
(16) %
|
|
1.55
|
|
1.91
|
|
(19) %
|
|
|
|
|
|
|
|
(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 DECEMBER 31, 2022
AND DECEMBER 31, 2021
|
(UNAUDITED)
|
($ in
millions)
|
|
December 31,
2022
|
|
December 31,
2021
|
ASSETS
|
|
|
|
CURRENT
ASSETS
|
|
|
|
Cash and cash
equivalents
|
$
1,251
|
|
354
|
Accounts receivable,
less allowance of $85 and $114
|
1,477
|
|
1,544
|
Assets held for
sale
|
1,889
|
|
8,809
|
Other
|
803
|
|
829
|
Total
current assets
|
5,420
|
|
11,536
|
Property, plant and
equipment, net of accumulated depreciation of $19,886 and
$19,271
|
19,166
|
|
20,895
|
GOODWILL AND OTHER
ASSETS
|
|
|
|
Goodwill
|
12,657
|
|
15,986
|
Other intangible
assets, net
|
6,166
|
|
6,970
|
Other, net
|
2,172
|
|
2,606
|
Total goodwill and other assets
|
20,995
|
|
25,562
|
TOTAL ASSETS
|
$
45,581
|
|
57,993
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
CURRENT
LIABILITIES
|
|
|
|
Current maturities of
long-term debt
|
$
154
|
|
1,554
|
Accounts
payable
|
950
|
|
758
|
Accrued expenses and
other liabilities
|
|
|
|
Salaries and
benefits
|
692
|
|
860
|
Income and other
taxes
|
1,158
|
|
228
|
Current operating
lease liabilities
|
344
|
|
385
|
Interest
|
181
|
|
278
|
Other
|
277
|
|
232
|
Liabilities held for
sale
|
451
|
|
2,257
|
Current portion of
deferred revenue
|
596
|
|
617
|
Total current liabilities
|
4,803
|
|
7,169
|
LONG-TERM
DEBT
|
20,418
|
|
27,428
|
DEFERRED CREDITS AND
OTHER LIABILITIES
|
|
|
|
Deferred income taxes,
net
|
3,163
|
|
4,049
|
Benefit plan
obligations, net
|
2,391
|
|
3,710
|
Other
|
4,369
|
|
3,797
|
Total deferred credits
and other liabilities
|
9,923
|
|
11,556
|
STOCKHOLDERS'
EQUITY
|
|
|
|
Common stock
|
1,002
|
|
1,024
|
Additional paid-in
capital
|
18,080
|
|
18,972
|
Accumulated other
comprehensive loss
|
(1,099)
|
|
(2,158)
|
Accumulated
deficit
|
(7,546)
|
|
(5,998)
|
Total stockholders'
equity
|
10,437
|
|
11,840
|
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY
|
$
45,581
|
|
57,993
|
Lumen Technologies,
Inc.
|
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
TWELVE MONTHS ENDED
DECEMBER 31, 2022 AND 2021
|
(UNAUDITED)
|
($ in
millions)
|
|
Twelve months
ended
|
|
December 31,
2022
|
|
December 31,
2021
|
OPERATING
ACTIVITIES
|
|
|
|
Net (Loss)
Income
|
$
(1,548)
|
|
2,033
|
Adjustments to
reconcile net (loss) income to net cash provided by operating
activities:
|
|
|
|
Depreciation and
amortization
|
3,239
|
|
4,019
|
Goodwill
impairment
|
3,271
|
|
—
|
Gain on sale of
businesses
|
(773)
|
|
—
|
Loss on disposal
groups held for sale
|
700
|
|
—
|
Deferred income
taxes
|
(1,230)
|
|
598
|
Provision for
uncollectible accounts
|
133
|
|
105
|
Net gain on early
retirement of debt
|
(214)
|
|
(8)
|
Unrealized loss on
investments
|
191
|
|
(138)
|
Stock-based
compensation
|
98
|
|
120
|
Changes in current
assets and liabilities, net
|
540
|
|
(691)
|
Retirement
benefits
|
46
|
|
163
|
Changes in other
noncurrent assets and liabilities, net
|
258
|
|
283
|
Other, net
|
24
|
|
17
|
Net cash provided by
operating activities
|
4,735
|
|
6,501
|
INVESTING
ACTIVITIES
|
|
|
|
Capital
expenditures
|
(3,016)
|
|
(2,900)
|
Proceeds from sale of
businesses
|
8,369
|
|
—
|
Proceeds from sale of
property, plant and equipment and other assets
|
120
|
|
135
|
Other, net
|
3
|
|
53
|
Net cash used in
investing activities
|
5,476
|
|
(2,712)
|
FINANCING
ACTIVITIES
|
|
|
|
Net proceeds from
issuance of long-term debt
|
—
|
|
1,881
|
Payments of long-term
debt
|
(8,093)
|
|
(3,598)
|
Net (payments on)
proceeds from revolving line of credit
|
(200)
|
|
50
|
Dividends
paid
|
(780)
|
|
(1,087)
|
Repurchases of common
stock
|
(200)
|
|
(1,000)
|
Other, net
|
(40)
|
|
(53)
|
Net cash used in
financing activities
|
(9,313)
|
|
(3,807)
|
Net increase in cash,
cash equivalents and restricted cash
|
898
|
|
(18)
|
Cash, cash equivalents
and restricted cash at beginning of period
|
409
|
|
427
|
Cash, cash equivalents
and restricted cash at end of period
|
$
1,307
|
|
409
|
|
|
|
|
Cash, cash equivalents
and restricted cash:
|
|
|
|
Cash and cash
equivalents
|
$
1,251
|
|
354
|
Cash and cash
equivalents and restricted cash included in assets held for
sale
|
44
|
|
40
|
Restricted
cash
|
12
|
|
15
|
Total
|
$
1,307
|
|
409
|
Lumen Technologies,
Inc.
|
MODIFIED(1)
OPERATING METRICS
|
(UNAUDITED)
|
|
|
|
|
|
|
Operating
Metrics
|
4Q22
|
|
3Q22
|
|
4Q21
|
|
|
|
|
|
|
Mass Markets
broadband subscribers
|
|
|
|
|
|
(in
thousands)
|
|
|
|
|
|
Fiber broadband
subscribers
|
832
|
|
813
|
|
735
|
Other broadband
subscribers(2)
|
2,205
|
|
2,294
|
|
2,555
|
Mass Markets total
broadband subscribers(3)
|
3,037
|
|
3,107
|
|
3,290
|
|
|
|
|
|
|
Mass Markets
broadband enabled units(4)
|
|
|
|
|
|
(in
millions)
|
|
|
|
|
|
Fiber broadband
enabled units
|
3.1
|
|
3.0
|
|
2.5
|
Other broadband
enabled units
|
18.7
|
|
18.8
|
|
18.8
|
Mass Markets total
broadband enabled units
|
21.8
|
|
21.8
|
|
21.3
|
|
|
|
|
|
|
(1) Modified
to remove the impacts of the 20-state ILEC business divestiture
completed Oct. 3, 2022.
|
(2) Other
broadband subscribers are customers that primarily subscribe to
lower speed copper-based broadband services marketed under the
CenturyLink brand.
|
(3) 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.
|
(4)
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.
We use the term "Modified" basis on certain metrics herein,
which reflect amounts modified to assume the Latin American
business and 20-state ILEC business divestitures took place on
January 1, 2021 and excluding
financial impacts related to the Federal Communications
Commission's Connect America Fund ("CAF") Phase II program, which
lapsed on December 31, 2021, each
excluding the effects of special items. The modified historical
financial information has not been prepared in conformity with
Article XI of Regulation S-X and does not constitute pro forma
financial information.
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 since Lumen does not
currently pay a significant amount of income taxes due to net
operating loss carryforwards, and therefore, currently generates
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 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 its
competitors may be of limited usefulness since Lumen does not
currently pay a significant amount of income taxes due to net
operating loss carryforwards, and therefore, generates 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.
For further information on our use of Modified Revenue and
Modified Adjusted EBITDA, see page 1 and 2 of this release, our
current Report on Form 8-K filed with the U.S. Securities and
Exchange Commission on Jan. 27, 2023
and the Financial Trending Schedule available at ir.lumen.com.
Lumen Technologies,
Inc.
|
Non-GAAP Special
Items
|
(UNAUDITED)
|
($ in
millions)
|
|
|
|
|
|
Actual
QTD
|
|
Actual
YTD
|
Special Items
Impacting Adjusted EBITDA
|
4Q22
|
4Q21
|
|
4Q22
|
4Q21
|
Consumer and other
litigation
|
$
—
|
(3)
|
|
$
(3)
|
16
|
Severance
|
10
|
3
|
|
12
|
3
|
Gain on sale of
businesses(1)
|
(180)
|
—
|
|
(773)
|
—
|
Loss on disposal groups
held for sale
|
700
|
—
|
|
700
|
—
|
Transaction and
separation costs(2)
|
53
|
19
|
|
219
|
37
|
Real estate
transactions(3)
|
—
|
—
|
|
—
|
(40)
|
Total Special Items
impacting Adjusted EBITDA
|
$ 583
|
19
|
|
$ 155
|
16
|
|
|
|
|
|
|
|
Actual
QTD
|
|
Actual
YTD
|
Special Items
Impacting Net (Loss) Income
|
4Q22
|
4Q21
|
|
4Q22
|
4Q21
|
Consumer and other
litigation
|
$
—
|
(3)
|
|
$
(3)
|
16
|
Impairment of
goodwill
|
3,271
|
—
|
|
3,271
|
—
|
Gain on sale of
businesses(1)
|
(180)
|
—
|
|
(773)
|
—
|
Loss on disposal groups
held for sale
|
700
|
—
|
|
700
|
—
|
Gain on early
retirement of debt(4)
|
(205)
|
—
|
|
(214)
|
(8)
|
Severance
|
10
|
3
|
|
12
|
3
|
Transaction and
separation costs(2)
|
53
|
19
|
|
219
|
37
|
Real estate
transactions(3)
|
—
|
—
|
|
—
|
(40)
|
Income from transition
and separation services(5)
|
(82)
|
—
|
|
(152)
|
—
|
Total Special Items
impacting Net (Loss) Income
|
3,567
|
19
|
|
3,060
|
8
|
Income tax effect of
Special Items(6)
|
(73)
|
(5)
|
|
52
|
(2)
|
Total Special Items
impacting Net (Loss) Income, net of tax
|
$
3,494
|
14
|
|
$
3,112
|
6
|
|
|
|
|
(1) Reflects
(i) the pre-tax gain of $597 million recorded in operating income
as a result of our Latin American business divestiture completed
August 1, 2022 and (ii) the pre-tax gain of $176 million recorded
in operating income as a result of our 20-state ILEC business
divestiture completed October 3, 2022, subject to certain
post-closing adjustments.
|
(2)
Transaction and separation costs associated with (i) the sale of
our Latin American business on August 1, 2022, (ii) the sale of our
20-state ILEC business on October 3, 2022, (iii) the exclusive
arrangement to divest Lumen's operations in Europe, the Middle East
and Africa (the "EMEA business") announced on November 2, 2022 and
(iv) our evaluation of other potential transactions.
|
(3) Real
estate transactions include the Q3 2021 (gain) on sale of real
estate, net of impairment charges or acceleration of costs
associated with our real estate rationalization program.
|
(4) Reflects
a gain as a result of (i) $4.4 billion in early debt retirement in
Q4 2022, (ii) $2.3 billion in early debt retirement in Q3 2022 and
(iii) $1.1 billion in early debt retirement in Q1 2021. There were
no comparable gains or losses during Q2 2022, Q1 2022, Q4 2021, Q3
2021, or Q2 2021.
|
(5) Income
from transition and separation services includes charges we billed
for transition services and IT professional services provided to
the purchasers in connection with our divestitures.
|
(6) Tax
effect calculated using the annualized effective statutory tax
rate, excluding any non-recurring discrete items, which was 24.6%
for all quarters of 2022 and 24.5% for all quarters of
2021.
|
Lumen Technologies,
Inc.
|
Non-GAAP Cash Flow
Reconciliation
|
(UNAUDITED)
|
($ in
millions)
|
|
Actual
QTD
|
|
Actual
YTD
|
|
4Q22
|
4Q21
|
|
4Q22
|
4Q21
|
Net cash provided by
operating activities
|
$
841
|
1,607
|
|
$
4,735
|
6,501
|
Capital
expenditures
|
(833)
|
(848)
|
|
(3,016)
|
(2,900)
|
Free Cash
Flow
|
8
|
759
|
|
1,719
|
3,601
|
Cash interest
paid
|
273
|
343
|
|
1,365
|
1,487
|
Interest
income
|
(17)
|
(2)
|
|
(25)
|
(2)
|
Unlevered Cash
Flow
|
$
264
|
$
1,100
|
|
$
3,059
|
$
5,086
|
|
|
|
|
|
|
Free Cash
Flow
|
$
8
|
$
759
|
|
$
1,719
|
$
3,601
|
Add back:
Severance(1)
|
7
|
6
|
|
37
|
70
|
Add back: Consumer and
other litigation(1)
|
—
|
(3)
|
|
—
|
47
|
Add back: Pension
contributions(1)
|
—
|
—
|
|
319
|
—
|
Add back: Transaction
and separation costs(1)
|
142
|
11
|
|
282
|
20
|
Add back: Real estate
transactions(1)
|
—
|
3
|
|
—
|
4
|
Remove: Income from
transition and separation services(1)
|
(31)
|
—
|
|
(97)
|
—
|
Free Cash Flow
excluding cash Special Items
|
$
126
|
$
776
|
|
$
2,260
|
$
3,742
|
|
|
|
|
|
|
Unlevered Cash
Flow
|
$
264
|
$
1,100
|
|
$
3,059
|
$
5,086
|
Add back:
Severance(1)
|
7
|
6
|
|
37
|
70
|
Add back: Consumer and
other litigation(1)
|
—
|
(3)
|
|
—
|
47
|
Add back: Pension
contributions(1)
|
—
|
—
|
|
319
|
—
|
Add back: Transaction
and separation costs(1)
|
142
|
11
|
|
282
|
20
|
Add back: Real estate
transactions(1)
|
—
|
3
|
|
—
|
4
|
Remove: Income from
transition and separation services(1)
|
(31)
|
—
|
|
(97)
|
—
|
Unlevered Cash Flow
excluding cash Special Items
|
$
382
|
$
1,117
|
|
$
3,600
|
$
5,227
|
|
|
|
|
|
|
(1) 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
|
|
4Q22
|
4Q21
|
|
4Q22
|
4Q21
|
Net (loss)
income
|
$
(3,069)
|
508
|
|
$
(1,548)
|
2,033
|
Income tax (benefit)
expense
|
(113)
|
171
|
|
557
|
668
|
Total other expense,
net
|
(102)
|
482
|
|
1,086
|
1,584
|
Depreciation and
amortization expense
|
796
|
877
|
|
3,239
|
4,019
|
Stock-based
compensation expense
|
27
|
31
|
|
98
|
120
|
Goodwill
impairment
|
3,271
|
—
|
|
3,271
|
—
|
Adjusted
EBITDA
|
$
810
|
2,069
|
|
$
6,703
|
8,424
|
|
|
|
|
|
|
Add back:
Severance(1)
|
$
10
|
3
|
|
$
12
|
3
|
Add back: Consumer and
other litigation(1)
|
—
|
(3)
|
|
(3)
|
16
|
Remove: Gain on sale of
businesses(1)
|
(180)
|
—
|
|
(773)
|
—
|
Add back: Loss on
disposal groups held for sale
|
700
|
—
|
|
700
|
—
|
Add back: Transaction
and separation costs(1)
|
53
|
19
|
|
219
|
37
|
Add back: Real estate
transactions(1)
|
—
|
—
|
|
—
|
(40)
|
Adjusted EBITDA
excluding Special Items
|
$
1,393
|
2,088
|
|
$
6,858
|
8,440
|
|
|
|
|
|
|
Total
revenue
|
$
3,800
|
4,847
|
|
$
17,478
|
19,687
|
|
|
|
|
|
|
Adjusted EBITDA
margin
|
21.3 %
|
42.7 %
|
|
38.4 %
|
42.8 %
|
Adjusted EBITDA
margin excluding Special Items
|
36.7 %
|
43.1 %
|
|
39.2 %
|
42.9 %
|
|
|
|
|
|
|
(1) 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.
|
2023
OUTLOOK (1) (2) (3) (4)
(5)
|
(UNAUDITED)
|
($ in
millions)
|
|
|
|
|
Adjusted EBITDA
Outlook
|
|
|
|
Twelve Months Ended
December 31, 2023
|
|
|
|
|
Range
|
|
Low
|
|
High
|
Net
income
|
$
185
|
|
670
|
Income tax
expense
|
65
|
|
235
|
Total other
expense
|
1,100
|
|
900
|
Depreciation and
amortization expense
|
3,100
|
|
2,900
|
Stock-based
compensation expense
|
150
|
|
95
|
Adjusted
EBITDA
|
$
4,600
|
|
$
4,800
|
|
|
|
|
Free Cash Flow
Outlook
|
|
|
|
Twelve Months Ended
December 31, 2023
|
|
|
|
|
Range
|
|
Low
|
|
High
|
Net cash provided by
operating activities
|
$
2,900
|
|
3,300
|
Capital
expenditures
|
(2,900)
|
|
(3,100)
|
Free Cash
Flow
|
$
—
|
|
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,
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 Feb. 7, 2023. See
"Forward-Looking Statements."
|
|
(3) Includes accounting impacts of
assets and liabilities held for sale and assumes the proposed sale
of Lumen's EMEA business is not completed during 2023.
|
|
(4) Assumes no discretionary pension
plan contributions during 2023.
|
|
(5) Excludes
the estimated $900 million to $1 billion impact of taxes related to
our divestitures completed on Aug. 1, 2022 and Oct. 3,
2022.
|
View original content to download
multimedia:https://www.prnewswire.com/news-releases/lumen-technologies-reports-fourth-quarter-2022-results-301741177.html
SOURCE Lumen Technologies