¹ Adjusted EBITDA and Adjusted EBITDA excluding Special Items for the third quarter of 2023 includes $31 million from the EMEA business (defined below), divested on Nov. 1, 2023 and $17 million from those of our Content Delivery Network ("CDN") customer contracts sold Oct. 10, 2023, which will not recur in subsequent periods. The Company believes that these figures will allow analysts and investors to understand the amounts associated with these transactions to understand the impact they had on the Company's past, but not current or future, financial performance. Therefore, these amounts will impact the Company's ability to match its past performance in current and future periods. The net post-closing financial impact of actual amounts received or paid by the Company under its post-closing agreements with the purchasers of its businesses divested in 2022 and 2023 were a reduction of $(38) million and $(40) million for the third quarter 2024 and 2023, respectively. The Company believes that this provides useful information to investors to understand the impact that the post-closing agreements have had on the Company's activities and its current financial performance.

² Includes the impact of $170 million voluntary pension contribution in third quarter 2024.

Financial Results

Metric, as reported

Third Quarter

($ in millions, except per share data)

2024

2023

Large Enterprise⁽¹⁾

$        839

914

Mid-Market Enterprise

471

506

Public Sector

427

445

North America Enterprise Channels

1,737

1,865

Wholesale

706

776

North America Business Revenue

2,443

2,641

International and Other⁽¹⁾⁽²⁾

93

264

Business Segment Revenue

2,536

2,905

Mass Markets Segment Revenue

685

736

Total Revenue⁽³⁾⁽⁴⁾

$      3,221

3,641

Cost of Services and Products

1,692

1,850

Selling, General and Administrative Expenses

696

791

Net Loss on Sale of Business

—

22

Stock-based Compensation Expense

10

16

Net Loss

(148)

(78)

Net Loss, Excluding Special Items⁽⁵⁾⁽⁶⁾

(133)

(85)

Adjusted EBITDA^(2)(5)(7)(8)

843

994

Adjusted EBITDA, Excluding Special Items^{(2)(5)(7)(8)(9)}

899

1,049

Net Loss Margin

(4.6) %

(2.1) %

Net Loss Margin, Excluding Special Items⁽⁵⁾⁽⁶⁾

(4.1) %

(2.3) %

Adjusted EBITDA Margin⁽⁵⁾

26.2 %

27.3 %

Adjusted EBITDA Margin, Excluding Special Items⁽⁵⁾⁽⁹⁾

27.9 %

28.8 %

Net Cash Provided by Operating Activities

2,032

881

Capital Expenditures⁽¹⁰⁾

850

843

Unlevered Cash Flow⁽⁵⁾

1,470

358

Unlevered Cash Flow, Excluding Cash Special Items^(5)(11)

1,486

363

Free Cash Flow⁽⁵⁾

1,182

38

Free Cash Flow, Excluding Cash Special Items^(5)(11)

1,198

43

Net Loss per Common Share - Diluted

(0.15)

(0.08)

Net Loss per Common Share - Diluted, Excluding Special Items⁽⁵⁾⁽⁶⁾

(0.13)

(0.09)

Weighted Average Shares Outstanding (in millions) - Diluted

988.8

983.6

⁽¹⁾ International revenue amounts previously reported in Large Enterprise represent revenue related to our non-domestic regions including (i) Europe, Middle East and Africa ("EMEA") through the sale of our EMEA business on Nov. 1, 2023 and (ii) Asia Pacific ("APAC") and any other remaining international operations, which we do not expect to be significant or material in future periods. As such, prior period amounts related to our historical international operations have been reclassified within our Business Segment Revenue to the "International and Other" sales channel. These reporting changes had no impact on total operating revenue, total operating expenses or net income for any period.

⁽²⁾ Subsequent to the sale of select Content Delivery Network ("CDN") customer contracts announced on Oct. 10, 2023, certain prior period amounts related to our historical CDN revenue have been reclassified from "Harvest" to "International and Other" sales channel within the "Other" product in the Business Segment Revenue products to conform to our 2024 reporting presentation. These reporting changes had no impact on total operating revenue, total operating expenses or net income for any period. Revenue and Adjusted EBITDA excluding Special Items for the third quarter of 2023 includes $24 million and $17 million, respectively, from our divested CDN customer contracts. The Company believes that these figures will allow analysts and investors to understand the amounts associated with recent transactions and to understand the impacts they had on the Company's past, but not current or future, financial performance. Therefore, these amounts will impact the Company's ability to match its past performance in current and future periods.

⁽³⁾ Revenue for the third quarter of 2023 includes $134 million from the EMEA business divested Nov. 1, 2023, which will not recur in periods following the divestiture. The Company believes that this figure will allow analysts and investors to understand the amounts associated with these transactions and to understand the impact they had on the Company's past, but not current or future, financial performance. Therefore, these amounts will impact the Company's ability to match its past performance in current and future periods.

⁽⁴⁾ The post-closing revenue received by the Company under its post-closing agreements with purchasers of our businesses divested in 2022 and 2023 was (i) $46 million for the third quarter of 2024 and (ii) $23 million for the third quarter of 2023. The Company believes that this provides useful information to investors to understand the impact that the post-closing agreements have had on the Company's current financial performance.

⁽⁵⁾ See the attached schedules for definitions of non-GAAP metrics and reconciliations to GAAP figures.

⁽⁶⁾ Excludes Special Items (net of the income tax effect thereof) which (i) positively impacted this metric by $15 million for the third quarter of 2024 and (ii) negatively impacted this metric by $(7) million for the third quarter of 2023.

⁽⁷⁾ Adjusted EBITDA and Adjusted EBITDA excluding Special Items for the third quarter of 2023 includes $31 million from the EMEA business, divested in Nov. 1, 2023, which will not recur in periods following the divestiture. The Company believes that these figures will allow analysts and investors to understand the amounts associated with these transactions to understand the impact they had on the Company's past, but not current or future, financial performance. Therefore, these amounts will impact the Company's ability to match its past performance in current and future periods.

⁽⁸⁾ The post-closing net financial impacts to adjusted EBITDA of actual amounts received or paid by the Company under its post-closing agreements with the purchasers of our businesses divested in 2022 and 2023 were (i) a net reduction of $(38) million for the third quarter of 2024 and (ii) a net reduction of $(40) million for the third quarter 2023. The Company believes that this figure provides useful information to investors to understand the impact that the post-closing agreements have had on the Company's financial performance following the completion of these divestitures.

⁽⁹⁾ Excludes Special Items in the amounts of (i) $56 million for the third quarter of 2024 and (ii) $55 million for the third quarter of 2023.

⁽¹⁰⁾ Capital expenditures for the third quarter of 2023 includes $21 million of capital expenditures relating to EMEA business divested on Nov. 1, 2023, which will not recur in periods following the divestiture. The Company believes that this figure will allow analysts and investors to understand the amounts associated with these transactions and programs to understand the impact they had on the Company's past, but not current or future, capital expenditures. Therefore, these amounts will impact the Company's ability to match its past capital expenditure activities in current and future periods.

⁽¹¹⁾ Excludes cash paid for Special Items in the net amounts of (i) $16 million for the third quarter of 2024 and (ii) $5 million for the third quarter of 2023.

Metrics⁽¹⁾

Third
Quarter

Second
Quarter

QoQ
Percent

Third
Quarter

YoY
Percent

2024

2024

Change

2023

Change

Revenue By Sales Channel

Large Enterprise

$    839

837

— %

914

(8) %

Mid-Market Enterprise

471

478

(1) %

506

(7) %

Public Sector

427

448

(5) %

445

(4) %

North America Enterprise Channels

1,737

1,763

(1) %

1,865

(7) %

Wholesale

706

723

(2) %

776

(9) %

North America Business Revenue

2,443

2,486

(2) %

2,641

(7) %

International and Other

93

91

2 %

264

(65) %

Business Segment Revenue

2,536

2,577

(2) %

2,905

(13) %

Mass Markets Segment Revenue

685

691

(1) %

736

(7) %

Total Revenue⁽²⁾

$  3,221

3,268

(1) %

3,641

(12) %

Business Segment Revenue by Product Category

Grow

$  1,076

1,063

1 %

1,131

(5) %

Nurture

729

751

(3) %

874

(17) %

Harvest

549

566

(3) %

662

(17) %

Subtotal

2,354

2,380

(1) %

2,667

(12) %

Other

182

197

(8) %

238

(24) %

Business Segment Revenue

$  2,536

2,577

(2) %

2,905

(13) %

Net Loss

$   (148)

(49)

nm

(78)

90 %

Net Loss Margin

(4.6) %

(1.5) %

nm

(2.1) %

114 %

Net Loss, Excluding Special Items

$   (133)

(124)

7 %

(85)

56 %

Net Loss Income Margin, Excluding Special Items

(4.1) %

(3.8) %

9 %

(2.3) %

77 %

Adjusted EBITDA, Excluding Special Items⁽³⁾

$    899

1,011

(11) %

1,049

(14) %

Adjusted EBITDA Margin, Excluding Special Items

27.9 %

30.9 %

(10) %

28.8 %

(3) %

Capital Expenditures⁽⁴⁾

$    850

753

13 %

843

1 %

⁽¹⁾ See the notes to our immediately preceding chart for information about our use of non-GAAP metrics, Special Items, and reconciliations to GAAP.

⁽²⁾ Revenue for the third quarter of 2023 includes amounts from the 2023 divestiture and sale of CDN contracts. Revenue for the second and third quarter of 2024 and third quarter of 2023 includes amounts from the post-closing commercial agreements with the purchasers of our businesses divested in 2022 and 2023. Refer to footnotes 1 through 4 on the preceding table for details.

⁽³⁾ Adjusted EBITDA excluding Special Items for the third quarter of 2023 includes the financial impacts from the 2023 divestiture and sale of CDN contracts. Adjusted EBITDA excluding Special Items for the second and third quarter of 2024 and the third quarter of 2023 includes the financial impacts from the post-closing commercial agreements with the purchasers of our businesses divested in 2022 and 2023. Refer to footnotes 2, 7 and 8 on the preceding table for details.

⁽⁴⁾ Capital expenditures for the third quarter 2023 includes the impacts of capital expenditures related to our divested businesses, which will not recur in periods following the completion of these divestitures. Refer to footnote 10 on the preceding table for details.

nm - Percentages greater than 200% and comparisons between positive and negative values are considered not meaningful.

Metric ⁽¹⁾⁽²⁾

Current Outlook

Previous Outlook

Adjusted EBITDA

$3.9 to $4.0 billion

$3.9 to $4.0 billion

Free Cash Flow⁽³⁾⁽⁴⁾

$1.2 to $1.4 billion

$1.0 to $1.2 billion

Net Cash Interest

$1.15 to $1.25 billion

$1.15 to $1.25 billion

Capital Expenditures

$3.1 to $3.3 billion

$3.1 to $3.3 billion

Cash Income Taxes/(Refund)⁽⁴⁾

($200) to ($300) million

($200) to ($300) million

⁽¹⁾  For definitions of non-GAAP metrics and reconciliations to GAAP figures, see the attached schedules and our Investor Relations website.

⁽²⁾  Outlook measures in this chart and the accompanying schedules (i) exclude the effects of Special Items, goodwill impairments, future changes in our operating or capital allocation plans, unforeseen changes in regulation, laws or litigation, and other unforeseen events or circumstances impacting our financial performance and (ii) speak only as of Nov. 5, 2024. See "Forward-Looking Statements."

⁽³⁾  Current Outlook includes the voluntary pension contribution of $170 million during the third quarter 2024.

⁽⁴⁾  Includes an approximately $700 million tax refund received during the first quarter 2024.

Lumen Technologies, Inc.

CONSOLIDATED STATEMENTS OF OPERATIONS

THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2024 AND 2023

(UNAUDITED)

($ in millions, except per share amounts; shares in thousands)

Three months ended
September 30,

(Decrease) /
Increase

Nine months ended
September 30,

(Decrease) /
Increase

2024

2023

2024

2023

OPERATING REVENUE

$            3,221

3,641

(12) %

9,779

11,040

(11) %

OPERATING EXPENSES

Cost of services and products (exclusive of depreciation and amortization)

1,692

1,850

(9) %

4,997

5,407

(8) %

Selling, general and administrative

696

791

(12) %

2,261

2,302

(2) %

Net loss on sale of business

—

22

nm

17

112

(85) %

Depreciation and amortization

707

755

(6) %

2,198

2,234

(2) %

Goodwill impairment

—

—

nm

—

8,793

nm

  Total operating expenses

3,095

3,418

(9) %

9,473

18,848

(50) %

OPERATING INCOME (LOSS)

126

223

(43) %

306

(7,808)

nm

OTHER (EXPENSE) INCOME

Interest expense

(351)

(295)

19 %

(1,015)

(868)

17 %

Net (loss) gain on early retirement of debt

(1)

—

nm

277

618

(55) %

Other income (expense), net

54

(13)

nm

321

(37)

nm

  Total other expense, net

(298)

(308)

(3) %

(417)

(287)

45 %

Income tax benefit (expense)

24

7

nm

(29)

(208)

(86) %

NET LOSS

$             (148)

(78)

90 %

(140)

(8,303)

nm

BASIC LOSS PER SHARE

$            (0.15)

(0.08)

88 %

(0.14)

(8.45)

nm

DILUTED LOSS PER SHARE

$            (0.15)

(0.08)

88 %

(0.14)

(8.45)

nm

WEIGHTED AVERAGE SHARES OUTSTANDING

Basic

988,794

983,550

1 %

986,963

982,853

— %

Diluted

988,794

983,550

1 %

986,963

982,853

— %

Exclude: Special Items⁽¹⁾

$                 15

(7)

nm

(158)

8,413

nm

NET (LOSS) INCOME EXCLUDING SPECIAL ITEMS

$              (133)

(85)

56 %

(298)

110

nm

DILUTED (LOSS) EARNINGS PER SHARE EXCLUDING SPECIAL ITEMS

$             (0.13)

(0.09)

44 %

(0.30)

0.11

nm

⁽¹⁾ Excludes the Special Items described in the accompanying Non-GAAP Special Items table, net of the income tax effect thereof.

nm - Percentages greater than 200% and comparisons between positive and negative values are considered not meaningful.

Lumen Technologies, Inc.

CONSOLIDATED BALANCE SHEETS

AS OF SEPTEMBER 30, 2024 AND DECEMBER 31, 2023

(UNAUDITED)

($ in millions)

September 30, 2024

December 31, 2023

ASSETS

CURRENT ASSETS

Cash and cash equivalents

$                     2,640

2,234

Accounts receivable, less allowance of $60 and $67

1,225

1,318

Other

871

1,223

   Total current assets

4,736

4,775

Property, plant and equipment, net of accumulated depreciation of $22,525 and $21,318

20,344

19,758

GOODWILL AND OTHER ASSETS

Goodwill

1,964

1,964

Other intangible assets, net

4,967

5,470

Other, net

1,978

2,051

    Total goodwill and other assets

8,909

9,485

TOTAL ASSETS

$                   33,989

34,018

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES

Current maturities of long-term debt

$                        415

157

Accounts payable

905

1,134

Accrued expenses and other liabilities

Salaries and benefits

700

696

Income and other taxes

434

251

Current operating lease liabilities

263

268

Interest

236

168

Other

179

213

Current portion of deferred revenue

808

647

    Total current liabilities

3,940

3,534

LONG-TERM DEBT

18,142

19,831

DEFERRED CREDITS AND OTHER LIABILITIES

Deferred income taxes, net

3,138

3,127

Benefit plan obligations, net

2,249

2,490

Deferred revenue

3,541

1,969

Other

2,637

2,650

Total deferred credits and other liabilities

11,565

10,236

STOCKHOLDERS' EQUITY

Common stock

1,015

1,008

Additional paid-in capital

18,140

18,126

Accumulated other comprehensive loss

(766)

(810)

Accumulated deficit

(18,047)

(17,907)

Total stockholders' equity

342

417

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

$                   33,989

34,018

Lumen Technologies, Inc.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

NINE MONTHS ENDED SEPTEMBER 30, 2024 AND 2023

(UNAUDITED)

($ in millions)

Nine months ended September 30,

OPERATING ACTIVITIES

Net loss

$                                (140)

(8,303)

Adjustments to reconcile net loss to net cash provided by operating activities:

Depreciation and amortization

2,198

2,234

Net loss on sale of business

17

112

Goodwill impairment

—

8,793

Deferred income taxes

(6)

38

Provision for uncollectible accounts

54

77

Net gain on early retirement of debt

(277)

(618)

Debt modification costs and related fees

(80)

—

Gain on sale of investment

(205)

—

Unrealized loss on investments

10

96

Stock-based compensation

21

39

Changes in current assets and liabilities, net

531

(1,336)

Retirement benefits

(185)

(9)

Change in deferred revenue

1,572

161

Changes in other noncurrent assets and liabilities, net

185

33

Other, net

(50)

59

Net cash provided by operating activities

3,645

1,376

INVESTING ACTIVITIES

Capital expenditures

(2,316)

(2,279)

Proceeds from sale of business

15

3

Proceeds from sale of property, plant and equipment, and other assets

283

35

Other, net

19

9

Net cash used in investing activities

(1,999)

(2,232)

FINANCING ACTIVITIES

Net proceeds from issuance of long-term debt

1,325

—

Payments of long-term debt

(2,069)

(145)

Net (payments) proceeds on revolving line of credit

(200)

75

Dividends paid

(3)

(10)

Debt issuance and extinguishment costs and related fees

(282)

(14)

Other, net

(12)

(7)

Net cash used in by financing activities

(1,241)

(101)

Net increase (decrease) in cash, cash equivalents and restricted cash

405

(957)

Cash, cash equivalents and restricted cash at beginning of period

2,248

1,307

Cash, cash equivalents and restricted cash at end of period

$                               2,653

350

Cash, cash equivalents and restricted cash:

Cash and cash equivalents

$                               2,640

311

Cash and cash equivalents and restricted cash included in assets held for sale

—

28

Restricted cash

13

11

Total

$                               2,653

350

Lumen Technologies, Inc.

OPERATING METRICS

(UNAUDITED)

Operating Metrics

3Q24

2Q24

3Q23

Mass Markets broadband subscribers

     (in thousands)

     Fiber broadband subscribers

1,035

992

896

     Other broadband subscribers⁽¹⁾

1,566

1,666

1,940

Mass Markets total broadband subscribers⁽²⁾

2,601

2,658

2,836

Mass Markets broadband enabled units⁽³⁾

     (in millions)

     Fiber broadband enabled units

4.1

3.9

3.5

     Other broadband enabled units

17.9

18.0

18.2

Mass Markets total broadband enabled units

22.0

21.9

21.7

⁽¹⁾ Other broadband subscribers are customers that primarily subscribe to lower speed copper-based broadband services marketed under the CenturyLink brand.

⁽²⁾ Mass Markets broadband subscribers are customers that purchase broadband connection service through their existing telephone lines, stand-alone telephone lines, or fiber-optic cables. Our methodology for counting our Mass Markets broadband subscribers includes only those lines that we use to provide services to external customers and excludes lines used solely by us and our affiliates. It also excludes unbundled loops and includes stand-alone Mass Markets broadband subscribers. We count lines when we install the service. Other companies may use different methodologies.

⁽³⁾ Represents the total number of units capable of receiving our broadband services at period end. Other companies may use different methodologies to count their broadband enabled units.

Lumen Technologies, Inc.

Non-GAAP Special Items

(UNAUDITED)

($ in millions)

Actual QTD

Actual YTD

Special Items Impacting Adjusted EBITDA

3Q24

3Q23

3Q24

3Q23

Severance

$                   12

8

119

21

Consumer and other litigation

—

(3)

(1)

(4)

Net loss on sale of business

—

22

17

112

Transaction and separation costs⁽¹⁾

41

28

232

67

Net gain on sale of select CDN contracts and other⁽²⁾

(1)

—

(9)

—

Real estate transactions⁽³⁾

4

—

4

75

Total Special Items impacting Adjusted EBITDA

$                   56

55

362

271

Actual QTD

Actual YTD

Special Items Impacting Net Income

3Q24

3Q23

3Q24

3Q23

Severance

$                   12

8

119

21

Consumer and other litigation

—

(3)

(1)

(4)

Net loss on sale of business

—

22

17

112

Transaction and separation costs⁽¹⁾

41

28

232

67

Net gain on sale of select CDN contracts and other⁽²⁾

(1)

—

(9)

—

Real estate transactions⁽³⁾

4

—

4

75

Goodwill impairment

—

—

—

8,793

Net loss (gain) on early retirement of debt⁽⁴⁾

1

—

(277)

(618)

Income from transition and separation services⁽⁵⁾

(37)

(64)

(107)

(150)

Gain on sale of investment

—

—

(205)

—

Total Special Items impacting Net Income

20

(9)

(227)

8,296

Income tax effect of Special Items⁽⁶⁾

(5)

2

69

117

Total Special Items impacting Net Income, net of tax

$                   15

(7)

(158)

8,413

Actual QTD

Actual YTD

Special Items Impacting Cash Flows

3Q24

3Q23

3Q24

3Q23

Severance

$                   14

7

115

19

Consumer and other litigation

1

(3)

—

(3)

Transaction and separation costs⁽¹⁾

31

28

198

77

Income from transition and separation services⁽⁵⁾

(30)

(27)

(82)

(118)

Total Special Items impacting Cash Flows

$                   16

5

231

(25)

⁽¹⁾ Transaction and separation costs associated with (i) the sale of our Latin American business on Aug. 1, 2022, (ii) the sale of our 20-state ILEC business on Oct. 3, 2022, (iii) the sale of our EMEA business on Nov. 1, 2023, (iv) our March 22, 2024 debt transaction support agreement and our September 24, 2024 exchange offer and (v) our evaluation of other potential transactions.

⁽²⁾ Includes primarily the recognition of (i) Q1 2024 previously deferred gain on sale of select CDN contracts in October 2023, based on the transfer of remaining customer contracts as of March 31, 2024.

⁽³⁾ Real estate transactions primarily include the Q2 2023 loss on donation of real estate.                                                

⁽⁴⁾ Reflects primarily net gains as a result of (i) repurchase of $75 million aggregate principal in Q2 2024, (ii) debt transaction support agreement and resulting debt extinguishment in Q1 2024, (iii) $1.5 billion of debt exchanges in Q1 2023 and (iv) $19 million of debt exchanges in Q2 2023.                                                                                          

⁽⁵⁾ Income from transition and separation services includes charges we billed for transition services and IT professional services provided to the purchasers in connection with our 2022 and 2023 divestitures.

⁽⁶⁾ Tax effect calculated using the annualized effective statutory tax rate, excluding any non-recurring discrete items, which was 30.0% for Q1 and Q2 of 2024, 26.0% for Q3 of 2024 and 23.5% for Q1, Q2 and Q3 of 2023.

Lumen Technologies, Inc.

Non-GAAP Cash Flow Reconciliation

(UNAUDITED)

($ in millions)

Actual QTD

Actual YTD

3Q24

3Q23

3Q24

3Q23

Net cash provided by operating activities⁽¹⁾

$              2,032

881

3,645

1,376

Capital expenditures

(850)

(843)

(2,316)

(2,279)

Free Cash Flow⁽¹⁾

1,182

38

1,329

(903)

Cash interest paid

306

325

877

886

Interest income

(18)

(5)

(90)

(21)

Unlevered Cash Flow⁽¹⁾

$              1,470

358

2,116

(38)

Free Cash Flow⁽¹⁾

$              1,182

38

1,329

(903)

Add back: Severance⁽²⁾

14

7

115

19

Remove: Consumer and other litigation⁽²⁾

1

(3)

—

(3)

Add back: Transaction and separation costs⁽²⁾

31

28

198

77

Remove: Income from transition and separation services⁽²⁾

(30)

(27)

(82)

(118)

Free Cash Flow excluding cash Special Items⁽¹⁾

$              1,198

43

1,560

(928)

Unlevered Cash Flow⁽¹⁾

$              1,470

358

2,116

(38)

Add back: Severance⁽²⁾

14

7

115

19

Remove: Consumer and other litigation⁽²⁾

1

(3)

—

(3)

Add back: Transaction and separation costs⁽²⁾

31

28

198

77

Remove: Income from transition and separation services⁽²⁾

(30)

(27)

(82)

(118)

Unlevered Cash Flow excluding cash Special Items⁽¹⁾

$              1,486

363

2,347

(63)

⁽¹⁾ Includes the impact of (i) $170 million voluntary pension contribution in Q3 2024, (ii) $700 million in cash tax refund received in Q1 2024, (iii) $938 million in cash tax payments in Q2 2023 and (iv) $90 million in cash tax payments in Q1 2023 related to our 2022 divestitures.

⁽²⁾ Refer to Non-GAAP Special Items table for details of the Special Items impacting cash included above.

Lumen Technologies, Inc.

Adjusted EBITDA Non-GAAP Reconciliation

(UNAUDITED)

($ in millions)

Actual QTD

Actual YTD

3Q24

3Q23

3Q24

3Q23

Net loss

$            (148)

(78)

(140)

(8,303)

Income tax (benefit) expense

(24)

(7)

29

208

Total other expense, net

298

308

417

287

Depreciation and amortization expense

707

755

2,198

2,234

Stock-based compensation expense

10

16

21

39

Goodwill impairment

—

—

—

8,793

Adjusted EBITDA⁽¹⁾

$              843

994

2,525

3,258

Add back: Severance⁽²⁾

12

8

119

21

Add back: Consumer and other litigation⁽²⁾

—

(3)

(1)

(4)

Add back: Net loss on sale of business⁽²⁾

—

22

17

112

Add back: Transaction and separation costs⁽²⁾

41

28

232

67

Add back: Net gain on sale of select CDN contracts and other⁽²⁾

(1)

—

(9)

—

Add back: Real estate transaction costs⁽²⁾

4

—

4

75

Adjusted EBITDA excluding Special Items⁽¹⁾

$              899

1,049

2,887

3,529

Net (loss) income excluding Special Items⁽²⁾

$            (133)

(85)

(298)

110

Total revenue

$          3,221

3,641

9,779

11,040

Net Loss Margin

(4.6) %

(2.1) %

(1.4) %

(75.2) %

Net (Loss) Income Margin, excluding Special Items

(4.1) %

(2.3) %

(3.0) %

1.0 %

Adjusted EBITDA Margin

26.2 %

27.3 %

25.8 %

29.5 %

Adjusted EBITDA Margin excluding Special Items

27.9 %

28.8 %

29.5 %

32.0 %

⁽¹⁾ Adjusted EBITDA and Adjusted EBITDA excluding Special Items for the first and second quarter of 2023 includes the financial impacts of (i) the EMEA business divested on Nov. 1, 2023 and (ii) the Company's select CDN contracts sold Oct. 10, 2023 and both the first and second quarter of 2023 and 2024 include the financial impact of the post-closing commercial agreements with the purchasers of our recently divested businesses. Refer to footnote 1 on the first page of this release for details.

⁽²⁾ Refer to Non-GAAP Special Items table for details of the Special Items included above.

Lumen Technologies, Inc.

2024 OUTLOOK ^{(1) (2) (3) (4)}

(UNAUDITED)

($ in millions)

Adjusted EBITDA Outlook

Twelve Months Ended December 31, 2024

Range

Low

High

Net (loss) income

$                   (300)

100

Income tax expense

50

250

Total other expense, net

1,190

920

Depreciation and amortization expense

2,900

2,700

Stock-based compensation expense

60

30

Adjusted EBITDA

$                  3,900

4,000

Free Cash Flow Outlook

Twelve Months Ended December 31, 2024

Range

Low

High

Net cash provided by operating activities

$                  4,300

4,700

Capital expenditures

(3,100)

(3,300)

Free Cash Flow

$                  1,200

1,400

⁽¹⁾ For definitions of non-GAAP metrics and reconciliation to GAAP figures, see the above schedules and our Investor Relations website.

⁽²⁾ Outlook measures in this chart (i) exclude the effects of Special Items, goodwill impairments, future changes in our operating or capital allocation plans, unforeseen changes in regulation, laws or litigation, and other unforeseen events or circumstances impacting our financial performance and (ii) speak only as of Nov. 5, 2024. See "Forward-Looking Statements."

⁽³⁾ Outlook includes the voluntary pension contribution of $170 million during the third quarter 2024.

⁽⁴⁾ Includes an approximately $700 million tax refund received during the first quarter 2024.