Monday, February 6, 2023
HomeScience & TechnologyLumen Applied sciences reviews third quarter 2022 outcomes

Lumen Applied sciences reviews third quarter 2022 outcomes

Third Quarter 2022 Highlights

  • Accomplished the $2.7 billion divestiture of its Latin American enterprise to Stonepeak on Aug. 1
  • Up to date steering for the complete yr 2022 without cost money stream and capital expenditures
  • Reported Internet Revenue of $578 million for the third quarter 2022, in comparison with reported Internet Revenue of $544 million for the third quarter 2021
  • Diluted EPS of $0.57 for the third quarter 2022, in comparison with $0.51 per share for the third quarter 2021. Excluding Particular Objects, Diluted EPS of $0.14 per share for the third quarter 2022, in comparison with $0.49 per share for the third quarter 2021
  • Generated Adjusted EBITDA of $1.688 billion for the third quarter 2022, in comparison with $2.078 billion for the third quarter 2021, excluding the results of Particular Objects of $(527) million and $(31) million, respectively
  • Generated Professional Forma1 Adjusted EBITDA of $1.659 billion for the third quarter 2022, in comparison with $1.872 billion for the third quarter 2021, excluding the results of Particular Objects of $(527) million and $(31) million, respectively
  • Reported Internet Money Supplied by Working Actions of $1.123 billion for the third quarter 2022
  • Generated Free Money Stream of $620 million for the third quarter 2022, in comparison with $1.072 billion for the third quarter 2021, excluding money paid for Particular Objects of $342 million and $32 million, respectively

Subsequent Occasions

  • Capital Allocation Replace
    • Eradicated inventory dividend, there will probably be no dividend paid within the fourth quarter of 2022
    • Approved an as much as $1.5 billion, two-year share repurchase program
    • Investing in progress initiatives whereas remaining comparatively web leverage impartial
  • Introduced in the present day that it had entered into an unique association for the proposed sale of its EMEA enterprise to Colt Expertise Providers for $1.8 billion
  • Accomplished the $7.5 billion divestiture of its 20-state ILEC enterprise to Apollo on Oct. 3

DENVER, Nov. 2, 2022 /PRNewswire/ — Lumen Applied sciences, Inc. (NYSE: LUMN) reported outcomes for the third quarter ended Sept. 30, 2022.

“As I stay up for my retirement subsequent week, I replicate on the numerous progress in remodeling Lumen during the last 5 years and I’m very happy with the Lumen group and all of their accomplishments.” stated Jeff Storey, president and CEO of Lumen. “At present’s introduced capital allocation change follows a really considerate course of by our Board of Administrators that we imagine will present a transparent path to put money into progress, repurchase shares at enticing valuations, and keep a powerful steadiness sheet. It has been a privilege to function CEO to this very proficient group, and I’m assured that my successor, Kate Johnson, will proceed constructing on our momentum to drive worthwhile progress at Lumen.”

“The chance for Lumen is critical, and I’m desperate to leverage in the present day’s bulletins and the adjusted capital allocation priorities to drive worthwhile progress and shareholder worth. Jeff, the Lumen Board, and I are totally aligned on these selections. I stay up for hitting the bottom operating on November 7,” stated Kate Johnson, incoming president and CEO of Lumen.

Whole Income was $4.390 billion for the third quarter 2022, in comparison with $4.887 billion for the third quarter 2021.

Professional Forma1 Whole Income was $4.328 billion for the third quarter 2022, in comparison with $4.582 billion for the third quarter 2021.

_________________________________

1  Professional Forma quantities embrace changes to take away the monetary impacts associated to (i) the Latin American enterprise divestiture accomplished Aug. 1, 2022, together with income anticipated to be obtained underneath the post-closing agreements, and (ii) the Federal Communications Fee’s Join America Fund (“CAF”) Section II program, which lapsed on Dec. 31, 2021, every excluding the results of particular gadgets. Reconciliation of those non-GAAP monetary measures to essentially the most straight comparable GAAP measures are supplied within the Monetary Trending Schedule obtainable on Lumen’s web site at ir.lumen.com, together with further Professional Forma info reported on this foundation.

Monetary Outcomes

Metric, as reported

Third Quarter

Third Quarter

($ in hundreds of thousands, besides per share information)

2022

2021

Worldwide and International Accounts

$    853

1,027

Giant Enterprise

844

942

Mid-Market Enterprise

618

648

Enterprise Channels

2,315

2,617

Wholesale

902

891

Enterprise Phase Income

3,217

3,508

Mass Markets Phase Income

1,173

1,379

Whole Income

$  4,390

4,887

Value of Providers and Merchandise

1,999

2,151

Promoting, Basic and Administrative Bills(1)

199

654

Inventory-based Compensation Expense

23

27

Adjusted EBITDA(2)

2,215

2,109

Adjusted EBITDA, Excluding Particular Objects(2)(3)

1,688

2,078

Adjusted EBITDA Margin(2)

50.5 %

43.2 %

Adjusted EBITDA Margin, Excluding Particular Objects(2)(3)

38.5 %

42.5 %

Internet Money Supplied by Working Actions

1,123

1,730

Capital Expenditures

845

690

Unlevered Money Stream(2)

665

1,440

Unlevered Money Stream, Excluding Money Particular Objects(2)(4)

1,007

1,472

Free Money Stream(2)

278

1,040

Free Money Stream, Excluding Money Particular Objects(2)(4)

620

1,072

Internet Revenue

578

544

Internet Revenue, Excluding Particular Objects(2)(5)

146

521

Internet Revenue per Frequent Share – Diluted

0.57

0.51

Internet Revenue per Frequent Share – Diluted, Excluding Particular Objects(2)(5)

0.14

0.49

Weighted Common Shares Excellent (in hundreds of thousands) – Diluted

1,017.0

1,069.2




(1)  Inclusive of $593 million achieve on sale of Latin American enterprise for the third quarter of 2022.



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

(3)  Excludes Particular Objects within the quantities of (i) $(527) million for the third quarter of 2022 and (ii) $(31) million for the third quarter of 2021.

(4)  Excludes money paid for Particular Objects of (i) $342 million for the third quarter of 2022 and (ii) $32 million for the third quarter of 2021.

(5)  Excludes Particular Objects (web of the earnings tax impact thereof) within the quantities of (i) $(432) million for the third quarter of 2022 and (ii) $(23) million for the third quarter of 2021.

Professional Forma(1) Metrics

Third Quarter

Third Quarter

YoY P.c

($ in hundreds of thousands)

2022

2021

Change

Income By Gross sales Channel




Worldwide and International Accounts

$    789

841

(6) %

Giant Enterprise

844

942

(10) %

Mid-Market Enterprise

618

648

(5) %

Enterprise Channels

2,251

2,431

(7) %

Wholesale

904

895

1 %

Enterprise Phase Income

3,155

3,326

(5) %

Mass Markets Phase Income

1,173

1,256

(7) %

Whole Income

$  4,328

4,582

(6) %

Adjusted EBITDA, Excluding Particular Objects

$  1,659

1,872

(11) %

Adjusted EBITDA Margin, Excluding Particular Objects

38.3 %

40.9 %

(6) %

Capital Expenditures

$     831

614

35 %


(1) Professional Forma quantities embrace changes to take away the monetary impacts associated to (i) the Latin American enterprise divestiture accomplished Aug. 1, 2022, together with income anticipated to be obtained underneath the post-closing agreements, and (ii) the Federal Communications Fee’s Join America Fund (“CAF”) Section II program, which lapsed on Dec. 31, 2021, every excluding the results of particular gadgets. Reconciliation of those non-GAAP monetary measures to essentially the most straight comparable GAAP measures are supplied within the Monetary Trending Schedule obtainable on Lumen’s web site at ir.lumen.com, together with further Professional Forma info reported on this foundation.

Money Stream

Free Money Stream, excluding Particular Objects, was $620 million within the third quarter 2022, in comparison with $1.072 billion within the third quarter 2021.

As of Sept. 30, 2022, Lumen had money and money equivalents of $252 million. On Oct. 3, 2022, we obtained roughly $5.6 billion of pre-tax money proceeds upon promoting our 20-state ILEC enterprise. Moreover, since Sept. 30, 2022, we repaid roughly $3.2 billion combination principal quantity of our consolidated indebtedness and we’ll moreover redeem $112 million of senior notes on Nov. 4, 2022, in accordance with our redemption discover dated Sept. 26, 2022.

Divestiture Transactions

After the shut of the third quarter 2022:

  • On Nov. 2, 2022, Lumen issued a separate press launch saying that it had entered into an unique association for the proposed sale of its EMEA enterprise to Colt Expertise Providers for $1.8 billion.
  • On Oct. 3, 2022, we accomplished the divestiture of a portion of our incumbent native change service (“ILEC”) enterprise.

Capital Allocation Replace

After intensive evaluate, the Board of Administrators has eradicated the corporate’s annual dividend of $1.00 going ahead and has approved an as much as $1.5 billion, two-year share repurchase program. Underneath this revised capital allocation coverage, the corporate plans to proceed to put money into progress initiatives whereas remaining comparatively web leverage impartial.

2022 Monetary Outlook

The corporate up to date its full-year 2022 monetary outlook which is detailed under:

Metric (1)(2)

Present Outlook

Earlier Outlook(3)

Adjusted EBITDA

$6.9 to $7.1 billion

$6.9 to $7.1 billion

Free Money Stream(4)

$2.2 to $2.4 billion

$2.0 to $2.2 billion

Internet Money Curiosity

$1.3 to $1.4 billion

$1.3 to $1.4 billion

GAAP Curiosity Expense

$1.350 billion

$1.350 billion

Dividends(5)

$1.00 per share

Capital Expenditures

$3.0 to $3.2 billion

$3.2 to $3.4 billion

Depreciation and Amortization

$3.2 to $3.4 billion

$3.2 to $3.4 billion

Inventory-based Compensation Expense

~$100 million

~$150 million

Money Revenue Taxes

~$100 million

~$100 million

Full Yr Efficient Revenue Tax Charge(6)

~26%

~26%




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

(2)  Outlook measures on this chart and the accompanying schedules (i) exclude the results of Particular Objects, future adjustments in our working or capital allocation plans, unexpected adjustments in regulation, legal guidelines or litigation, and different unexpected occasions or circumstances impacting our monetary efficiency and (ii) communicate solely as of Nov. 2, 2022. See “Ahead-Trying Statements.”

(3)  Outlook measures embrace accounting impacts of the not too long ago accomplished divestiture of the Latin American enterprise on Aug. 1, 2022, in addition to the Oct. 3, 2022 divestiture of Lumen’s 20-state ILEC enterprise, leading to 2022 monetary contributions of three quarters for that enterprise.

(4)  Assumes no discretionary pension plan contributions throughout 2022 and excludes $319 million of pension plan contributions made in Sept. 2022 associated to the 20-state ILEC enterprise divestiture.

(5)  Third quarter 2022 year-to-date dividends paid had been $0.75 per share. Dividend steering has been withdrawn as of Nov. 2, 2022 associated to our up to date capital allocation coverage, and there is not going to be a dividend cost within the fourth quarter 2022.

(6)  Excludes the influence of taxes associated to our divestitures accomplished on Aug. 1, 2022 and Oct. 3, 2022.

Investor Name

Lumen’s administration group will host a convention name at 5:00 p.m. ET in the present day, Nov. 2, 2022. The convention name will probably be streamed stay over the Lumen web site at ir.lumen.com. Extra info relating to third quarter 2022 outcomes, together with the presentation supplies administration will evaluate throughout the convention name, will probably be obtainable on the Investor Relations web site previous to the decision. In case you are unable to hitch the decision by way of the net, the decision might be accessed stay at +1 877-283-5145 (U.S. Home) or +1 312-281-1201 (Worldwide).

A phone replay of the decision will probably be obtainable starting at 8:00 p.m. ET on Nov. 2, 2022, and ending Jan. 31, 2023, at 8:00 p.m. ET. The replay might be accessed by dialing +1 800-633-8284 (U.S. Home) or +1 402-977-9140 (Worldwide), reservation code 22020905. A webcast replay of the decision may even be obtainable on our web site starting at 7:00 p.m. ET on November 2, 2022, and ending February 1, 2023, at 6:00 p.m. ET.

About Lumen Applied sciences and the Individuals of Lumen:

Lumen Applied sciences Inc. (NYSE: LUMN) is guided by our perception that humanity is at its greatest when expertise advances the best way we stay and work. With roughly 400,000 route fiber miles and serving prospects in additional than 60 international locations, we ship the quickest, most safe platform for purposes and information to assist companies, authorities and communities ship wonderful experiences.

Study extra concerning the Lumen community, edge cloud, safety, communication and collaboration options and our function to additional human progress via expertise at information.lumen.com, LinkedIn: /lumentechnologies, Twitter: @lumentechco, Fb: /lumentechnologies, Instagram: @lumentechnologies and YouTube: /lumentechnologies. Lumen and Lumen Applied sciences are registered logos of Lumen Applied sciences LLC in the US. Lumen Applied sciences LLC is a wholly-owned affiliate of Lumen Applied sciences, Inc. 

Ahead-Trying Statements

Aside from historic and factual info, the issues set forth on this launch and different of our oral or written statements recognized by phrases equivalent to “estimates,” “expects,” “anticipates,” “believes,” “plans,” “intends,” “will,” and comparable expressions are forward-looking statements as outlined by the federal securities legal guidelines, and are topic to the “secure harbor” protections thereunder. These forward-looking statements should not ensures of future outcomes and are primarily based on present expectations solely, are inherently speculative, and are topic to quite a lot of assumptions, dangers and uncertainties, lots of that are past our management. Precise occasions and outcomes could differ materially from these anticipated, estimated, projected or implied by us in these statements if a number of of those dangers or uncertainties materialize, or if underlying assumptions show incorrect. Elements that would have an effect on precise outcomes embrace however should not restricted to: the results of competitors from all kinds of aggressive suppliers, together with decreased demand for our extra mature service choices and elevated pricing pressures; the results of recent, rising or competing applied sciences, together with those who may make our merchandise much less fascinating or out of date; our skill to efficiently and well timed attain our key working imperatives, together with simplifying and consolidating our community, simplifying and automating our service help programs, attaining our Quantum Fiber buildout plans, strengthening {our relationships} with prospects and attaining projected value financial savings; our skill to safeguard our community, and to keep away from the hostile influence of potential cyber-attacks, safety breaches, service outages, system failures, or comparable occasions impacting our community or the provision and high quality of our companies; the results of ongoing adjustments within the regulation of the communications business, together with the result of legislative, regulatory or judicial proceedings referring to content material legal responsibility requirements, intercarrier compensation, common service, service requirements, broadband deployment, information safety, privateness and web neutrality; our skill to successfully retain and rent key personnel and to efficiently negotiate collective bargaining agreements on cheap phrases with out work stoppages; adjustments in buyer demand for our services, together with elevated demand for high-speed information transmission companies; our skill to efficiently keep the standard and profitability of our present product and repair choices and to introduce worthwhile new choices on a well timed and cost-effective foundation; our skill to generate money flows adequate to fund our monetary commitments and aims, together with our capital expenditures, working prices, debt repayments, pension contributions and different advantages funds; our skill to efficiently and well timed implement our company methods, together with our deleveraging technique; our skill to efficiently and well timed consummate the pending divestiture of our European, Center Japanese and African operations, to efficiently and well timed understand the anticipated advantages from that divestiture and our divestitures accomplished in 2022, and to efficiently function our retained enterprise efficiently after such divestitures; adjustments in our working plans, company methods, or capital allocation plans, whether or not primarily based upon adjustments in our money flows, money necessities, monetary efficiency, monetary place, market or regulatory circumstances, or in any other case; the influence of any future materials acquisitions or divestitures that we could transact; the adverse influence of will increase within the prices of our pension, healthcare, post-employment or different advantages, together with these attributable to adjustments in markets, rates of interest, mortality charges, demographics or rules; the potential adverse influence of buyer complaints, authorities investigations, safety breaches or service outages impacting us or our business; hostile adjustments in our entry to credit score markets on favorable phrases, whether or not attributable to adjustments in our monetary place, decrease credit score rankings, unstable markets or in any other case; our skill to fulfill the phrases and circumstances of our debt obligations and covenants, together with our skill to make transfers of money in compliance therewith; our skill to keep up favorable relations with our securityholders, key enterprise companions, suppliers, distributors, landlords and monetary establishments; our skill to fulfill evolving environmental, social and governance (“ESG”) expectations and benchmarks, and successfully talk and implement our ESG methods; our skill to gather our receivables from, or proceed to do enterprise with, financially-troubled prospects; our skill to make use of our web working loss carryforwards within the quantities projected; our skill to proceed to make use of or renew mental property used to conduct our operations; any hostile developments in authorized or regulatory proceedings involving us; adjustments in tax, pension, healthcare or different legal guidelines or rules, in governmental help packages, or on the whole authorities funding ranges, together with these arising from recently-enacted laws selling broadband growth; the results of adjustments in accounting insurance policies, practices or assumptions, together with adjustments that would probably require further future impairment expenses; persevering with uncertainties relating to the influence that COVID-19 disruptions may have on our enterprise, operations, money flows and company initiatives; the results of hostile climate, terrorism, epidemics, pandemics, rioting, vandalism, societal unrest, or different pure or man-made disasters or disturbances; the potential hostile results if our inside controls over monetary reporting have weaknesses or deficiencies, or in any other case fail to function as meant; the results of adjustments in rates of interest and inflation; the results of extra normal components equivalent to adjustments in change charges, in working prices, in public coverage, within the views of economic analysts, or on the whole market, labor, financial or geo-political circumstances; and different dangers referenced every now and then in our filings with the U.S. Securities and Alternate Fee. You might be cautioned to not unduly depend on our forward-looking statements, which communicate solely as of the date made. We undertake no obligation to publicly replace or revise any forward-looking statements for any motive, whether or not on account of new info, future occasions or developments, modified circumstances, or in any other case. Moreover, any details about our intentions contained in any of our forward-looking statements displays our intentions as of the date of such forward-looking assertion, and relies upon, amongst different issues, regulatory, technological, business, aggressive, financial and market circumstances, and our associated assumptions, as of such date. We could change our intentions, methods or plans with out discover at any time and for any motive.

Reconciliation to GAAP

This launch contains sure historic and forward-looking non-GAAP monetary measures, together with however not restricted to Adjusted EBITDA, Free Money Stream, Unlevered Money Stream, and changes to GAAP and non-GAAP measures to exclude the impact of Particular Objects. This launch additionally contains sure professional forma info, none of which has been ready in accordance with Regulation S-X promulgated by the U.S. Securities and Alternate Fee.

Along with offering key metrics for administration to guage the corporate’s efficiency, we imagine these above-described measurements help traders of their understanding of period-to-period working efficiency and in figuring out historic and potential traits.

Reconciliations of non-GAAP monetary measures to essentially the most comparable GAAP measures are included within the connected monetary schedules. Reconciliation of professional forma info showing herein and extra non-GAAP historic monetary measures which may be mentioned throughout the name described above, together with additional descriptions of non-GAAP monetary measures, will probably be obtainable within the Investor Relations portion of the corporate’s web site at http://ir.lumen.com. Non-GAAP measures should not introduced to be replacements or alternate options to the GAAP measures, and traders are urged to contemplate these non-GAAP measures along with, and never in substitution for, measures ready in accordance with GAAP. Lumen could current or calculate its non-GAAP measures in another way from different firms.

Lumen Applied sciences, Inc.

CONSOLIDATED STATEMENTS OF OPERATIONS

THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2022 AND 2021

(UNAUDITED)

($ in hundreds of thousands, besides per share quantities; shares in 1000’s)



Three months ended
September 30,


(Lower)
/ Enhance


9 months ended
September 30,


(Lower)
/ Enhance



2022


2021



2022


2021


OPERATING REVENUE


$        4,390


4,887


(10) %


13,678


14,840


(8) %

OPERATING EXPENSES













Value of companies and merchandise (unique of depreciation and amortization)


1,999


2,151


(7) %


6,042


6,402


(6) %

Promoting, normal and administrative


792


654


21 %


2,407


2,172


11 %

Achieve on sale of enterprise


(593)



nm


(593)



nm

Depreciation and amortization


808


951


(15) %


2,443


3,142


(22) %

Whole working bills


3,006


3,756


(20) %


10,299


11,716


(12) %

OPERATING INCOME


1,384


1,131


22 %


3,379


3,124


8 %

OTHER (EXPENSE) INCOME













Curiosity expense


(363)


(377)


(4) %


(1,052)


(1,150)


(9) %

Different (expense) earnings, web


(84)


(38)


121 %


(136)


48


nm

Revenue tax expense


(359)


(172)


109 %


(670)


(497)


35 %

NET INCOME


$           578


544


6 %


$        1,521


1,525


— %








BASIC EARNINGS PER SHARE


$          0.57


0.51


12 %


1.50


1.42


6 %

DILUTED EARNINGS PER SHARE


$          0.57


0.51


12 %


1.50


1.41


6 %








WEIGHTED AVERAGE SHARES OUTSTANDING













Primary


1,013,124


1,062,084


(5) %


1,011,498


1,077,106


(6) %

Diluted


1,017,013


1,069,157


(5) %


1,016,281


1,083,879


(6) %

DIVIDENDS PER COMMON SHARE


$          0.25


0.25


— %


0.75


0.75


— %








Exclude: Particular Objects(1)


$          (432)


(23)


nm


(382)


(8)


nm

NET INCOME EXCLUDING SPECIAL ITEMS


$           146


521


(72) %


1,139


1,517


(25) %

DILUTED EARNINGS PER SHARE EXCLUDING SPECIAL ITEMS


$          0.14


0.49


(71) %


1.12


1.40


(20) %








(1) Excludes the Particular Objects described within the accompanying Non-GAAP Particular Objects desk, web of the earnings tax impact thereof.

nm – Percentages better than 200% and comparisons between optimistic and adverse values are thought-about not significant.

Lumen Applied sciences, Inc.

CONSOLIDATED BALANCE SHEETS

AS OF SEPTEMBER 30, 2022 AND DECEMBER 31, 2021

(UNAUDITED)

($ in hundreds of thousands)


September 30, 2022


December 31, 2021

ASSETS




CURRENT ASSETS




Money and money equivalents

$                        252


354

Accounts receivable, much less allowance of $95 and $114

1,457


1,544

Belongings held on the market

6,779


8,809

Different

894


829

   Whole present belongings

9,382


11,536

Property, plant and tools, web of amassed depreciation of $20,391 and $19,271

20,713


20,895

GOODWILL AND OTHER ASSETS




Goodwill

15,918


15,986

Different intangible belongings, web

6,436


6,970

Different, web

2,368


2,606

    Whole goodwill and different belongings

24,722


25,562

TOTAL ASSETS

$                   54,817


57,993

LIABILITIES AND STOCKHOLDERS’ EQUITY




CURRENT LIABILITIES




Present maturities of long-term debt

$                     3,474


1,554

Accounts payable

1,009


758

Accrued bills and different liabilities




Salaries and advantages

788


860

Revenue and different taxes

275


228

Present working lease liabilities

396


385

Curiosity

184


278

Different

173


232

Liabilities held on the market

1,792


2,257

Present portion of deferred income

624


617

    Whole present liabilities

8,715


7,169

LONG-TERM DEBT

21,764


27,428

DEFERRED CREDITS AND OTHER LIABILITIES




Deferred earnings taxes, web

4,595


4,049

Profit plan obligations, web

3,192


3,710

Different

3,974


3,797

Whole deferred credit and different liabilities

11,761


11,556

STOCKHOLDERS’ EQUITY




Frequent inventory

1,035


1,024

Extra paid-in capital

18,221


18,972

Gathered different complete loss

(2,202)


(2,158)

Gathered deficit

(4,477)


(5,998)

Whole stockholders’ fairness

12,577


11,840

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

$                   54,817


57,993

Lumen Applied sciences, Inc.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

NINE MONTHS ENDED SEPTEMBER 30, 2022 AND 2021

(UNAUDITED)

($ in hundreds of thousands)






9 months ended


September 30, 2022


September 30, 2021

OPERATING ACTIVITIES




Internet Revenue

$                               1,521


1,525

Changes to reconcile web earnings to web money supplied by working actions:




Depreciation and amortization

2,443


3,142

Achieve on sale of enterprise

(593)


Deferred earnings taxes

618


431

Provision for uncollectible accounts

99


80

Internet achieve on early retirement of debt

(9)


(8)

Unrealized loss on investments

197


9

Inventory-based compensation

71


89

Modifications in present belongings and liabilities, web

(280)


(476)

Retirement advantages

(440)


(126)

Modifications in different noncurrent belongings and liabilities, web

141


207

Different, web

126


21

Internet money supplied by working actions

3,894


4,894

INVESTING ACTIVITIES




Capital expenditures

(2,183)


(2,052)

Proceeds from sale of enterprise

2,707


Proceeds from sale of property, plant and tools and different belongings

67


90

Different, web

3


13

Internet money utilized in investing actions

594


(1,949)

FINANCING ACTIVITIES




Internet proceeds from issuance of long-term debt


1,881

Funds of long-term debt

(3,899)


(2,604)

Internet proceeds from (funds on) revolving line of credit score

80


(150)

Dividends paid

(780)


(834)

Repurchases of widespread inventory


(909)

Different, web

(33)


(52)

Internet money utilized in financing actions

(4,632)


(2,668)

Internet enhance in money, money equivalents and restricted money

(144)


277

Money, money equivalents and restricted money at starting of interval

409


427

Money, money equivalents and restricted money at finish of interval

$                                  265


704





Money, money equivalents and restricted money:




Money and money equivalents

$                                  252


635

Money and money equivalents included in belongings held on the market


39

Restricted money

13


30

Whole

$                                  265


704

Lumen Applied sciences, Inc.

OPERATING METRICS

(UNAUDITED)










September 30, 2022


June 30, 2022


September 30, 2021








Working Metrics







Mass Markets broadband subscribers







(in 1000’s)







Fiber broadband subscribers


889


858


774

Different broadband subscribers(1)


3,367


3,519


3,815

Mass Markets whole broadband subscribers(2)


4,256


4,377


4,589








Mass Markets broadband enabled







(in hundreds of thousands)







Fiber broadband enabled


3.3


3.1


2.7

Different broadband enabled


26.0


26.1


25.8

Mass Markets whole broadband enabled


29.3


29.2


28.5

_________________________________________

(1) Different broadband subscribers are prospects that primarily subscribe to decrease pace copper-based broadband companies marketed underneath the CenturyLink model.

(2) Mass Markets broadband subscribers are prospects that buy broadband connection service via their present phone strains, stand-alone phone strains, or fiber-optic cables. Our methodology for counting our Mass Markets broadband subscribers contains solely these strains that we use to offer companies to exterior prospects and excludes strains used solely by us and our associates. It additionally excludes unbundled loops and contains stand-alone Mass Markets broadband subscribers. We rely strains once we set up the service. Different firms could use totally different methodologies.    

Description of Non-GAAP Metrics

Pursuant to Regulation G, the corporate is hereby offering definitions of non-GAAP monetary metrics and reconciliations to essentially the most straight comparable GAAP measures.

The next describes and reconciles these monetary measures as reported underneath accounting ideas typically accepted in the US (GAAP) with these monetary measures as adjusted by the gadgets detailed under and introduced within the accompanying information launch. These calculations should not ready in accordance with GAAP and shouldn’t be seen as alternate options to GAAP. In line with its historic monetary reporting practices, the corporate believes that the supplemental presentation of those calculations offers significant non-GAAP monetary measures to assist traders perceive and examine enterprise traits amongst totally different reporting intervals on a constant foundation.

We use the time period Particular Objects as a non-GAAP measure to explain gadgets that impacted a interval’s assertion of operations for which traders could need to give particular consideration on account of their magnitude, nature or each. We don’t name this stuff non-recurring as a result of, whereas some are rare, others could recur in future intervals.

Adjusted EBITDA ($) is outlined as web earnings (loss) from the Statements of Operations earlier than earnings tax (expense) profit, whole different earnings (expense), depreciation and amortization, stock-based compensation expense and impairments.

Adjusted EBITDA Margin (%) is outlined as Adjusted EBITDA divided by whole income.

Administration believes that Adjusted EBITDA and Adjusted EBITDA Margin are related and helpful metrics to offer to traders, as they’re an necessary a part of our inside reporting and are key measures utilized by administration to guage profitability and working efficiency of Lumen and to make useful resource allocation selections. Administration believes such measures are particularly necessary in a capital-intensive business equivalent to telecommunications. Administration additionally makes use of Adjusted EBITDA and Adjusted EBITDA Margin (and equally makes use of these phrases excluding Particular Objects) to match our efficiency to that of our rivals and to eradicate sure non-cash and non-operating gadgets so as to constantly measure from interval to interval our skill to fund capital expenditures, fund progress, service debt and decide bonuses. Adjusted EBITDA excludes non-cash inventory compensation expense and impairments due to the non-cash nature of this stuff. Adjusted EBITDA additionally excludes curiosity earnings, curiosity expense and earnings taxes, and in our view constitutes an accrual-based measure that has the impact of excluding period-to-period adjustments in working capital and reveals profitability with out regard to the results of capital or tax construction. Adjusted EBITDA additionally excludes depreciation and amortization expense as a result of these non-cash bills primarily replicate the influence of historic capital investments, versus the money impacts of capital expenditures made in latest intervals, which can be evaluated via money stream measures. Adjusted EBITDA additional excludes the achieve (or loss) on extinguishment and modification of debt and different earnings (expense), web, as a result of this stuff should not associated to the first enterprise operations of Lumen.

There are materials limitations to utilizing Adjusted EBITDA as a monetary measure, together with the problem related to evaluating firms that use comparable efficiency measures whose calculations could differ from our calculations. Moreover, by excluding the above-listed gadgets, Adjusted EBITDA could exclude gadgets that traders imagine are necessary parts of our efficiency. Adjusted EBITDA and Adjusted EBITDA Margin (both with or with out Particular Objects) shouldn’t be thought-about an alternative choice to different measures of economic efficiency reported in accordance with GAAP.

Unlevered Money Stream is outlined as web money supplied by (utilized in) working actions much less capital expenditures, plus money curiosity paid and fewer curiosity earnings, all as disclosed within the Statements of Money Flows or the Statements of Operations. Administration believes that Unlevered Money Stream is a related metric to offer to traders, as a result of it displays the operational efficiency of Lumen and, measured over time, permits administration and traders to watch the underlying enterprise’ progress sample and skill to generate money. Unlevered Money Stream excludes money used for acquisitions and debt service and the influence of change fee adjustments on money and money equivalents balances.

There are materials limitations to utilizing Unlevered Money Stream to measure our money efficiency because it excludes sure materials gadgets that traders could imagine are necessary parts of our money flows. Comparisons of our Unlevered Money Stream to that of a few of our rivals could also be of restricted usefulness since Lumen doesn’t at present pay a major quantity of earnings taxes on account of web working loss carryforwards, and due to this fact, at present generates increased money stream than a comparable enterprise that does pay earnings taxes. Moreover, this monetary measure is topic to variability quarter over quarter on account of the timing of funds associated to accounts receivable, accounts payable, payroll and capital expenditures. Unlevered Money Stream shouldn’t be used as an alternative choice to web change in money, money equivalents and restricted money within the Consolidated Statements of Money Flows.

Free Money Stream is outlined as web money supplied by (utilized in) working actions much less capital expenditures as disclosed within the Statements of Money Flows. Administration believes that Free Money Stream is a related metric to offer to traders, as it’s an indicator of our skill to generate money to service our debt. Free Money Stream excludes money used for acquisitions, principal repayments and the influence of change fee adjustments on money and money equivalents balances.

There are materials limitations to utilizing Free Money Stream to measure our efficiency because it excludes sure materials gadgets that traders could imagine are necessary parts of our money flows. Comparisons of our Free Money Stream to that of a few of its rivals could also be of restricted usefulness since Lumen doesn’t at present pay a major quantity of earnings taxes on account of web working loss carryforwards, and due to this fact, generates increased money stream than a comparable enterprise that does pay earnings taxes. Moreover, this monetary measure is topic to variability quarter over quarter on account of the timing of funds associated to curiosity expense, accounts receivable, accounts payable, payroll and capital expenditures. Free Money Stream shouldn’t be used as an alternative choice to web change in money, money equivalents and restricted money on the Consolidated Statements of Money Flows.

Lumen Applied sciences, Inc.

Non-GAAP Particular Objects

(UNAUDITED)

($ in hundreds of thousands)







Precise QTD


Precise YTD

Particular Objects Impacting Adjusted EBITDA


3Q22

3Q21


3Q22

3Q21

Client and different litigation


$         —


$         (3)

19

Severance



2

Achieve on sale of enterprise(1)


(593)


(593)

Transaction and separation prices(2)


66

9


166

18

Actual property transactions(3)


(40)


(40)

Whole Particular Objects impacting Adjusted EBITDA


$    (527)

(31)


$    (428)

(3)










Precise QTD


Precise YTD

Particular Objects Impacting Internet Revenue


3Q22

3Q21


3Q22

3Q21

Client and different litigation


$         —


$         (3)

19

Achieve on sale of enterprise(1)


(593)


(593)

Achieve on early retirement of debt(4)


(9)


(9)

(8)

Severance



2

Transaction and separation prices(2)


66

9


166

18

Actual property transactions(3)


(40)


(40)

Revenue from transition and separation companies(5)


(37)


(70)

Whole Particular Objects impacting Internet Revenue


(573)

(31)


(507)

(11)

Revenue tax impact of Particular Objects(6)


141

8


125

3

Whole Particular Objects impacting Internet Revenue, web of tax


$     (432)

(23)


$     (382)

(8)





(1) Displays the pre-tax achieve recorded in working earnings on account of finishing the sale of our Latin American enterprise for web money proceeds of $2.7 billion, topic to sure post-closing changes, on August 1, 2022.

(2) Transaction and separation prices related to (i) the not too long ago accomplished sale of our Latin American enterprise on August 1, 2022 to Stonepeak for $2.7 billion, (ii) the not too long ago accomplished sale of our ILEC (incumbent native change service) enterprise in 20 states on October 3, 2022 for $7.5 billion, and (iii) our analysis of different potential transactions.

(3) Actual property transactions embrace the third quarter 2021 (achieve) on sale of actual property, web of impairment expenses or acceleration of prices related to our actual property rationalization program.

(4) Displays a achieve on account of $2.3 billion in early debt retirement in Q3 2022 and $1.1 billion in early debt retirement in Q1 2021. There have been no comparable positive aspects or losses throughout Q2 2022, Q1 2022, Q3 2021, or Q2 2021.

(5) Revenue from transition and separation companies contains expenses we billed for transition companies and IT skilled companies supplied to the purchasers in reference to our divestitures.

(6) Tax impact calculated utilizing the annualized efficient statutory tax fee, excluding any non-recurring discrete gadgets, which was 24.6% for 2022 and 24.5% for 2021.

Lumen Applied sciences, Inc.

Non-GAAP Money Stream Reconciliation

(UNAUDITED)

($ in hundreds of thousands)


Precise QTD


3Q22

3Q21

Internet money supplied by working actions

$       1,123

1,730

Capital expenditures

(845)

(690)

Free Money Stream

278

1,040

Money curiosity paid

393

400

Curiosity earnings

(6)

Unlevered Money Stream

$           665

$       1,440




Free Money Stream

$           278

$       1,040

Add again: Severance(1)

7

13

Add again: Client and different litigation(1)

11

Add again: Pension contributions(1)

319

Add again: Transaction and separation prices(1)

60

7

Add again: Actual property transactions(1)

1

Take away: Revenue from transition and separation companies(1)

(44)

Free Money Stream excluding money Particular Objects

$           620

$       1,072




Unlevered Money Stream

$           665

$       1,440

Add again: Severance(1)

7

13

Add again: Client and different litigation(1)

11

Add again: Pension contributions(1)

319

Add again: Transaction and separation prices(1)

60

7

Add again: Actual property transactions(1)

1

Take away: Revenue from transition and separation companies(1)

(44)

Unlevered Money Stream excluding money Particular Objects

$       1,007

$       1,472




(1) Discuss with Non-GAAP Particular Objects desk for particulars of the Particular Objects impacting money included above.

Lumen Applied sciences, Inc.

Adjusted EBITDA Non-GAAP Reconciliation

(UNAUDITED)

($ in hundreds of thousands)


Precise QTD


3Q22

3Q21

Internet earnings

$       578

544

Revenue tax expense

359

172

Whole different expense, web

447

415

Depreciation and amortization expense

808

951

Inventory-based compensation expense

23

27

Adjusted EBITDA

$    2,215

2,109




Take away: Achieve on sale of enterprise(1)

$      (593)

Add again: Transaction and separation prices(1)

66

9

Add again: Actual property transactions(1)

(40)

Adjusted EBITDA excluding Particular Objects

$   1,688

2,078




Whole income

$    4,390

4,887




Adjusted EBITDA margin

50.5 %

43.2 %

Adjusted EBITDA margin excluding Particular Objects

38.5 %

42.5 %




(1) Discuss with Non-GAAP Particular Objects desk for particulars of the Particular Objects included above.

Outlook

To boost the data in our outlook with respect to non-GAAP metrics, we’re offering a variety for sure GAAP measures which can be parts of the reconciliation of the non-GAAP metrics. The supply of those ranges is under no circumstances meant to point that Lumen is explicitly or implicitly offering an outlook on these GAAP parts of the reconciliation. As a way to reconcile the non-GAAP monetary metric to GAAP, Lumen has to make use of ranges for the GAAP parts that arithmetically add as much as the non-GAAP monetary metric. Whereas Lumen believes that it has used cheap assumptions in reference to growing the outlook for its non-GAAP monetary metrics, it totally expects that the ranges used for the GAAP parts will range from precise outcomes. We are going to take into account our outlook of non-GAAP monetary metrics to be correct if the precise non-GAAP metric is met or exceeded, even when the GAAP parts of the reconciliation are totally different from these supplied in an earlier reconciliation.

Lumen Applied sciences, Inc.

2022 OUTLOOK (1) (2) (3) (4) (5) (6)

(UNAUDITED)

($ in hundreds of thousands)





Adjusted EBITDA Outlook




Twelve Months Ended December 31, 2022





Vary


Low


Excessive

Internet earnings

$                  1,385


1,875

Revenue tax expense

490


650

Whole different expense

1,500


1,300

Depreciation and amortization expense

3,400


3,200

Inventory-based compensation expense

125


75

Adjusted EBITDA

$                  6,900


$                  7,100





Free Money Stream Outlook




Twelve Months Ended December 31, 2022





Vary


Low


Excessive

Internet money supplied by working actions

$                  5,200


5,600

Capital expenditures

(3,000)


(3,200)

Free Money Stream

$                  2,200


2,400


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

(2) Outlook measures on this chart (i) exclude the results of Particular Objects, future adjustments in our working or capital allocation plans, unexpected adjustments in regulation, legal guidelines or litigation, and different unexpected occasions or circumstances impacting our monetary efficiency and (ii) communicate solely as of Nov. 2, 2022. See “Ahead-Trying Statements.”

(3) Outlook measures embrace accounting impacts of the not too long ago accomplished divestiture of the Latin American enterprise on Aug. 1, 2022, in addition to the Oct. 3, 2022 divestiture of Lumen’s 20-state ILEC enterprise, leading to 2022 monetary contributions of three quarters for that enterprise.

(4) Assumes no discretionary pension plan contributions throughout 2022 and excludes $319 million of pension plan contributions made in September 2022 associated to the 20-state ILEC enterprise divestiture.

(5) Third quarter 2022 year-to-date dividends paid had been $0.75 per share. Dividend steering has been withdrawn as of Nov. 2, 2022 associated to our up to date capital allocation coverage, and there is not going to be a dividend cost within the fourth quarter 2022.

(6) Excludes the influence of taxes associated to our divestitures accomplished on Aug. 1, 2022 and Oct. 3, 2022.


SOURCE Lumen Applied sciences, Inc.

Source link

RELATED ARTICLES

LEAVE A REPLY

Please enter your comment!
Please enter your name here

Most Popular