Slide 1: Fourth Quarter 2022 Results
Fourth Quarter 2022 Results February 7, 2023 Issued: February 7, 2023
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,” “will,” and similar expressions are forw
Slide 3: Non-GAAP Measures
Non-GAAP Measures This presentation includes certain historical and forward-looking non-GAAP financial measures, including but not limited to adjusted EBITDA, adjusted EBITDA margin, net-debt-to-adjusted- EBITDA and free cash flow, each excluding the effects of special items, and adjustments to GAAP
Slide 4: Lumen's Executive Leadership Team
Lumen’s Executive Kate Johnson President & CEO New Leadership As of April 2022 Existing Leadership Leadership Team Chris Stansbury Ashley Haynes-Gaspar Sham Chotai Stacey W. Goff EVP & CFO EVP, CX EVP, Product & IT EVP & General Counsel Scott A. Trezise Maxine L. Moreau Andrew Dugan Jay Barrows EVP,
Slide 5: Our North Star
Our North Star Purpose Furthering human progress through technology Mission To digitally connect people, data & applications – quickly, securely, & effortlessly Customer Challenges Reliable, flexible & More productive, Secure data Enable business process Participate in the digital cost-effective cor
Slide 6: 2023 Core Priorities
2023 Core Priorities 1 2 3 4 5 Build a Radically Further Develop Innovate Reliable Simplify Develop Customer & Invest Execution Our Our Obsession for Growth Engine Company Culture 6 Issued: February 7, 2023
Slide 7: 2022 Financial Highlights
2022 Financial Highlights Setting the Stage for Growth $10.2 $9.9 17% Y/Y $1.8 2022 Fiber Broadband billion billion revenue billion 2022 gross proceeds from 2022 Reduction in growth; continued announced proposed business divestitures Estimated Net Debt(1) improvement in Mass EMEA divestiture Markets
Slide 8: 4Q22 Year-Over-Year Total Revenue Bridge
4Q22 Year-Over-Year Total Revenue Bridge Modified Adjusted Revenue Performance(1): -5.5% Y/Y -5.0% Y/Y(1) • Total: -5.0% $4,022 -$3 -$20 -$65 $3,800 • Business: -4.2% $860 -$134 $795 • Mass Markets: -7.6% $3,162 $3,005 (1) Excludes impacts from Corrections Facilities Business and FX, $3M and $20M, r
Slide 9: 4Q22 Revenue - Sales Channels
4Q22 Revenue - Sales Channels New Sales Channel Structure for 2023 Total 4Q Modified Revenue ($ in millions) 4Q22 Y/Y% Change Q/Q% Change Adj. Y/Y% Revenue by Channel Change(1) Enterprise Channels $2,170 (6.9%) (0.4%) (5.9%) Large Enterprise $1,217 (4.3%) 0.5% (2.5%) 58.0% 57.1% Mid-Market Enterpris
Slide 10: 4Q22 Revenue - Business Product Groups
4Q22 Revenue - Business Product Groups Continued Improvement in Revenue Mix Business Product Group 4Q Revenue Mix Direct Margin(3) Modified Revenue ($ in Y/Y% Q/Q% 4Q22 Adj. Y/Y% millions) Change Change Change(1) 34.0% 36.3% ~84% Grow $1,091 1.4% 1.5% 2.5% Nurture $934 (7.8%) (1.2%) (7.5%) 32.0% 31.
Slide 11: 4Q22 Mass Markets Revenue
4Q22 Mass Markets Revenue Significant Revenue Mix Mass Markets Fiber Contribution Improvement 18% 19% 15% 16% 16% 13% 14% 12% Revenue ($ in Y/Y% Q/Q% % 4Q22 millions) Change Change Total 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 Fiber Broadband $148 18.4% 2.1% 19% Other Broadband(1) $377 (9.2%) (4.6%)
Slide 12: 4Q22 Mass Markets Broadband Metrics
4Q22 Mass Markets Broadband Metrics Y/Y Q/Q Fiber 4Q22 Change Change Enabled Locations 3.1M 605K 95K ~$60 >+50 Subscribers 832K 97K 19K Y/Y Q/Q Other 4Q22 Change Change Fiber Fiber Enabled Locations 18.7M (60K) (62K) ARPU 8-10 NPS million Subscribers 2.2M (350K) (89K) Updated Fiber Addressable Locat
Slide 13: Adjusted EBITDA & Margin
Adjusted EBITDA & Margin $4.022 $3.924 $3.928 $3.836 $3.800 37.2% 37.0% 36.7% 35.0% 34.5% $1.496 $1.452 $1.373 $1.322 $1.393 4Q21 1Q22 2Q22 3Q22 4Q22 Adj. EBITDA Total Revenue Adj. EBITDA Margin ($ in billions) 13 Issued: February 7, 2023
Slide 14: Consolidated Cash Flow Summary
Consolidated Cash Flow Summary Key Metrics ($ in millions) 4Q22 Cash Flow from Operations $841 Capital Expenditures $833 Free Cash Flow(1) $126 Net Cash Interest $256 Estimated Net Debt(2) to LTM Adj. EBITDA 3.7x (1) Excludes the effects of cash special items of $118 million. (2) During the first ha
Slide 15: 2023 Adjusted EBITDA Outlook
2023 Adjusted EBITDA Outlook -$150 to -$200 $60 to $80 -$200 to -$250 $4,600 to $4,800 -$470 to -$550 ($ in millions) 15 Issued: February 7, 2023
Slide 16: 2023 Capital Expenditures Outlook
2023 Capital Expenditures Outlook $200 to $250 $35 to $65 $2,900 to $250 to $350 $3,100 -$250 to -$275 ($ in millions) 16 Issued: February 7, 2023
Slide 17: 2023 Financial Outlook
2023 Financial Outlook 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 & Amortization $2.9 to $3.1 billion Stock-bas
Slide 18: Q&A
Q&A 18 Issued: February 7, 2023