Lumen Technologies, Inc. · NYSE:LUMN
Lumen Technologies — Q4 2019 Earnings Presentation
13 slides from Lumen Technologies's earnings presentation, Feb 12, 2020
Slide 1: 4th Quarter 2019 Results
4th Quarter 2019 Results February 12, 2020 Issued: Nov 6, 2019
Slide 2: Forward-Looking Statements
Forward-Looking Statements Except for historical and factual information, the matters set forth in this presentation and other of our oral or written statements identified by words such as “estimates,” “expects,” “anticipates,” “believes,” “plans,” “intends,” and similar expressions are forward-look
Slide 3: Non-GAAP Measures
Non-GAAP Measures This presentation includes certain non-GAAP historical and forward-looking financial measures, including but not limited to adjusted EBITDA, free cash flow, unlevered cash flow, and adjustments to GAAP and non- GAAP measures to exclude the effect of integration and transformation c
Slide 4: 2019 Accomplishments
2019 Accomplishments IMPROVED REVENUE PERFORMANCE PROGRESSED ON SAVINGS TARGETS GREW ADJUSTED EBITDA ENHANCED CUSTOMER EXPERIENCE EXPANDED ADJUSTED EBITDA MARGINS MAINTAINED FOCUS ON PROFITABLE GROWTH INVESTED IN TRANSFORMATION INITIATIVES EXECUTED ON CAPITAL ALLOCATION PLAN 4 Issued: Feb. Nov 6, 12
Slide 5: Capital Allocation Plan
Capital Allocation Plan Return Increase Capital Reduce Capital through a Leverage Investment Dividend • Drive growth in the business • Target leverage of 2.75x to 3.25x • Maintain current dividend policy • Expand on-net fiber footprint • Reduce total debt outstanding • Return more than $1 billion •
Slide 6: Priorities for 2020
Priorities for 2020 Grow • Improve quote-to-cash platforms Invest in • Expand network footprint Adjusted • Drive operational efficiency Growth • Enhance product portfolio EBITDA • Financial discipline Transform our • Improve customer experience Reduce • Continue progress toward leverage Operations •
Slide 7: Financial Highlights for 2019
Financial Highlights for 2019 • Generated Adjusted EBITDA(1) of $9.070 billion for FY2019 • Expanded FY2019 Adjusted EBITDA(1) Margin to 40.5% from 38.6% in 2018 • Generated $3.276 billion in Free Cash Flow • Achieved $430 million of Annualized Run-Rate Adjusted EBITDA cost savings from transformati
Slide 8: 4Q19 Revenue
4Q19 Revenue Wholesale SMB 18% Revenue YoY % QoQ % 4Q19 ($ in millions) Change Change 13% International & GAM $904 (2.1%) 0.6% 25% Consumer Enterprise $1,555 (0.2%) 0.3% SMB $731 (3.3%) (0.4%) 28% Wholesale $994 (7.4%) (3.0%) Enterprise Consumer $1,386 (5.5%) (0.9%) 16% Total Revenue $5,570 (3.6%) (
Slide 9: 4Q19 Consumer Metrics
4Q19 Consumer Metrics Consumer Broadband Revenue YoY % QoQ % 4Q19 Performance 4Q19 ($ in millions) Change Change (in thousands) Broadband $718 2.1% 0% Total Subscribers 4,678 Voice $453 (10%) (1.9%) Subscriber Quarterly Net Change (36) Regulatory $160 (11%) 1.9% Below 20 Mbps (73) Other(1) $55 (30%)
Slide 10: Adjusted EBITDA | Adjusted EBITDA Margin
Adjusted EBITDA | Adjusted EBITDA Margin Quarterly Performance(1) Adjusted EBITDA(2) ($ in Billions) ($ in millions) $5.778 $5.647 $5.578 $5.606 $5.570 $9,040 $9,070 40.7% 40.9% 40.1% 40.3% 39.8% 40.5% 38.6% $2.301 $2.262 $2.269 $2.261 $2.278 4Q18 1Q19 2Q19 3Q19 4Q19 FY18 FY19 Adjusted EBITDA Adjust
Slide 11: Leverage - Net Debt to Adjusted EBITDA | Net Debt
Leverage - Net Debt to Adjusted EBITDA | Net Debt Leverage Net Debt Net Debt to Adj. EBITDA ($ in billions) 4.3x $37.50 4.0x 3.7x $35.86 $33.35 4Q17 4Q18 4Q19 4Q17 4Q18 4Q19 11 Issued: Feb. 12, 2020
Slide 12: Debt Maturity Profile
Debt Maturity Profile As of 4Q18 ($ in millions) $7,634 $7,872 $1,618 $6,571 $5,031 $3,101 $2,084 $1,164 $775 $754 Debt 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030+ maturities As of 4Q18 Revolver Capacity 2020-2025 reduced by As of 4Q19PF (1) ($ in millions) more than $10,699 $12 billion
Slide 13: 2020 Business Outlook
2020 Business Outlook Metric(1)(2) Outlook Adjusted EBITDA $9.0 billion to $9.2 billion Free Cash Flow $3.1 billion to $3.4 billion Dividends(3) $1.1 billion GAAP Interest Expense $1.8 billion Net Cash Interest $1.75 billion to $1.80 billion Capital Expenditures $3.6 billion to $3.9 billion Deprecia