Slide 1: 4th Quarter 2020 Results
4th Quarter 2020 Results February 10th, 2021 Issued: © 2021 Lumen Feb. 10, 2021 Technologies. All Rights Reserved.
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, free cash flow, unlevered cash flow, and adjustments to GAAP and non-GAAP measures to exclude the effect of integration and transformation co
Slide 4: 2020: Solid Execution and Transition to Lumen
2020: Solid Execution and Transition to Lumen • Launched the Lumen Platform; providing the growth engine for the future • Continued making significant improvement in the customer experience • Drove efficiencies throughout the business with our Transformation Plan Made solid progress toward our reven
Slide 5: 2021 Accelerating Growth
2021 Accelerating Growth Grow Operationalize Transform Integrate 5 Issued: Feb. 10, 2021
Slide 6: The Platform for Amazing Things
The Platform for Amazing Things Work from SaaS CSPs Anywhere Edge Cloud Lumen Orchestrator Partners Lumen Hybrid Cloud Lumen Dynamic Connections (NaaS) Physical Infrastructure: (Fiber, Facilities, Hardw are) 6 Issued: Feb. 10, 2021
Slide 7: The Power Behind the Platform
The Power Behind the Platform 450K Fiber Route Miles 180K+ On-net Buildings 27M Technical Space (sq. ft) 2,200+ Public Data Centers On-net Edge Compute Nodes <5ms (Building to enable > 95% of U.S. Enterprises within latency of 5ms) 7 Issued: Feb. 10, 2021
Slide 8: 2021 Lumen Priorities
2021 Lumen Priorities Drive growth over • Expand the digital marketplace and partnership the Lumen Platform ecosystem • Continue to add new products and capabilities Improve • Capitalize on expanding fiber footprint penetration of • Increase wallet share with existing customers existing services Tra
Slide 9: Financial Results
Financial Results Issued: © 2021 Lumen Feb. 10, 2021 Technologies, LLC. All Rights Reserved.
Slide 10: Financial Highlights for 2020
Financial Highlights for 2020 • YoY improvement in Total Revenue performance • Achieved target for cost transformation initiatives • Delivered solid Adjusted EBITDA and Free Cash Flow • Continued progress on deleveraging and refinancing initiatives 10 Issued: Feb. 10, 2021
Slide 11: Revenue Results
Revenue Results Wholesale SMB 18% Revenue YoY% QoQ% 4Q20 ($ in millions) Change(2) Change 12% International & GAM(1) $856 (1.6%) 2.5% Enterprise $1,430 (0.3%) (0.6%) SMB $618 (7.1%) (2.7%) 25% Wholesale $922 (6.2%) (2.8%) 28% Consumer $1,299 (4.1%) (0.8%) Consumer Total Revenue $5,125 (3.4%) (0.8%)
Slide 12: 4Q20 Consumer Metrics
4Q20 Consumer Metrics Consumer Broadband 4Q20 Revenue YoY % Performance 4Q20 QoQ % Change (in thousands) ($ in millions) Change(1) Broadband $731 1.8% 0.1% Total Subscribers 4,544 Subscriber Voice $391 (11%) (2.5%) Quarterly Net (19) Change Regulatory $152 (5.6%) (0.7%) Below 20 Mbps (57) Other(2) $
Slide 13: Adjusted EBITDA | Adjusted EBITDA Margin
Adjusted EBITDA | Adjusted EBITDA Margin Year-over-Year Quarterly Performance(1)(2) ($ in Billions) Performance(3) ($ in Billions) $5.306 $5.228 $5.192 $5.167 $5.125 $9.070 $8.888 44.5% 42.9% 42.9% 42.4% 41.9% 42.9% 42.3% $2.278 $2.243 $2.174 $2.190 $2.281 4Q19 1Q20 2Q20 3Q20 4Q20 FY19 FY20 Adj. EBI
Slide 14: 2021 External Reporting
2021 External Reporting Issued: © 2021 Lumen Feb. 10, 2021 Technologies, LLC. All Rights Reserved.
Slide 15: 2021 Financial Reporting | Business vs. Mass Markets
2021 Financial Reporting | Business vs. Mass Markets 2020 Reporting Format 2021 Reporting Format 4Q20 Revenue 4Q20 Proforma Revenue Mass Markets • Combining Consumer and Small Consumer Business (SBG) into a new segment, Mass Markets 28% 25% • New Business segment includes mid-sized to largest enterp
Slide 16: 2021 Financial Reporting | Business
2021 Financial Reporting | Business New Reporting Format 4Q20 Proforma Revenue 2021 Lumen Business Sales Channels: • iGAM iGAM $1.03B 28% • Includes international, multinational and Mass enterprise customers. Gains high potential Markets customers from Enterprise channel Large Enterprise $986M 27% 2
Slide 17: 2021 Financial Reporting | Business Product Categories
2021 Financial Reporting | Business Product Categories New Reporting Format 4Q20 Proforma Revenue ($ in millions) 12% Compute & 2021 Lumen Business Product Categories: Application Services $454 • Compute & Application Services • Includes Edge Cloud Services, Datacenter, CDN & 43% Security Services I
Slide 18: 2021 Financial Reporting | Mass Markets Product Categories
2021 Financial Reporting | Mass Markets Product Categories New Reporting Format 4Q20 Proforma Revenue ($ in millions) 50% Consumer Broadband $731 3% Mass Markets SBG Broadband 4Q20PF Broadband $37 Performance Fiber Subscribers 675K 39% Fiber Enabled 2.4M Voice & Other $569 Fiber Penetration ~28% Fib
Slide 19: Adjusted EBITDA and Free Cash Flow Reporting Changes
Adjusted EBITDA and Free Cash Flow Reporting Changes Proforma Adj. EBITDA Reporting Proforma Free Cash Flow Reporting ($ in Millions) ($ in Millions) 2020 2020 2020 2020 Metric Metric Reported Proforma Reported Proforma Adjusted EBITDA(1) $8,489 $8,489 Free Cash Flow(1) $2,795 $2,795 Add Backs: Add
Slide 20: 2021 Financial Outlook
2021 Financial Outlook 2021 Metric(1)(2) 2020 Proforma(3) 2021 Outlook Adjusted EBITDA (excluding Special Items) $8.664 billion $8.4 to $8.6 billion Free Cash Flow (excluding Special Items)(4) $2.979 billion $2.8 to $3.0 billion 2021 Metric(1)(2) 2020 Actual 2021 Outlook Net Cash Interest $1.627 bil
Slide 21: Appendix
Appendix Issued: © 2021 Lumen Feb. 10, 2021 Technologies, LLC. All Rights Reserved.
Slide 22: Improved Debt Maturity Profile
Improved Debt Maturity Profile (1) As of 4Q20PF ($ in millions) $10,976 $2,050 $4,305 $3,038 $3,490 $2,403 $1,525 $2,075 $1,737 $949 $1,125 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030+ As of 4Q20PF Revolver Capacity As of 4Q18 $7,634 $7,872 $1,618 $6,571 $5,031 $3,101 $2,084 $1,164 $775 $754 2
Slide 23: New Reporting Summary | Sales Channel Revenue Moves
New Reporting Summary | Sales Channel Revenue Moves 4Q20 4Q20PF Revenue Revenue • Changes better reflect company’s go ($ in Millions) ($ in Millions) to market strategy and investments iGAM $856 $1,033 iGAM for growth • Changes made based on customer Enterprise $1,430 $986 Large Enterprise buying be
Slide 24: New Reporting Summary | Business Product Revenue Moves
New Reporting Summary | Business Product Revenue Moves 4Q20 4Q20PF Lumen Business Product Categories: Product Product Category Revenue Category Revenue • Compute & Application Services ($ in Millions) ($ in Millions) • Includes Edge Cloud Services, Datacenter, CDN & IP & Data $1,580 Compute & Securi