Slide 1: Second Quarter 2022 Results
Second Quarter 2022 Results August 3, 2022 © 2022 Lumen Technologies. All Rights Reserved. Issued: August 3, 2022
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: Key Milestones
Key Milestones Announced Closed the agreements to sell sale of our our LATAM and 20- LATAM state ILEC business businesses worth over $10 billion Launched 8-Gig Announced Quantum Fiber Offering Quantum Fiber Expect to close enablement plan the sale of our 20-state ILEC Enabled 97% of business U.S. En
Slide 5: Enabling Low-latency Use Cases
Enabling Low-latency Use Cases RETAIL MANUFACTURING Contactless Checkout Inventory Management Optical inspections AR Workflows and Fraud Prevention Real-time Promotions AR/VR Customer Experiences Predictive Maintenance Real-time Process Control 5 Issued: August 3, 2022
Slide 6: Launched Our Quantum Fiber Multi-Gig Offer
DRAFT Launched Our Quantum Fiber Multi-Gig Offer 6 Issued: August 3, 2022
Slide 7: Financial Highlights for 2Q22
Financial Highlights for 2Q22 Completed the LATAM business divestiture on August 1 for approximately $2.7 billion Improved Business revenue performance across all Enterprise channels Continued improvement in Mass Markets revenue mix with Fiber Broadband revenue up over 16% year over year Reduced Net
Slide 8: 2Q22 Year-Over-Year Total Revenue Bridge
2Q22 Year-Over-Year Total Revenue Bridge - 6.3% YoY(1) Reported - 3.4% YoY Adjusted $4,924 - $84 $4,612 - $122 - $25 $1,402 - $81 $1,196 Adjusted Revenue Performance: • Business: -2.3% • Mass Markets: -6.6% • Total: -3.4% $3,522 $3,416 2Q21 Revenue 2Q21 CAF II Corrections Other 2Q22 Revenue Support
Slide 9: 2Q22 Revenue – Sales Channels
2Q22 Revenue – Sales Channels Total 2Q Revenue Mix 53.1% 53.1% 54.4% 28.5% 28.5% 25.9% Investing for Future 18.4% 18.4% 19.7% 2Q20 2Q21 2Q22 Growth in Enterprise Wholesale Mass Markets Enterprise Channels Channels and Mass Revenue ($ in millions) 2Q22 YoY% QoQ% Markets Change Change Enterprise Chann
Slide 10: 2Q22 Enterprise Channel Revenue
2Q22 Enterprise Channel Revenue Enterprise Channel 2Q Revenue Mix 75.4% 77.8% 79.5% Improved year-over- 24.6% 22.2% 20.5% 2Q20 2Q21 2Q22 year performance Voice & Other (1) Core products across all Enterprise Revenue ($ in millions) 2Q22 YoY% QoQ% Channels in 2Q22 Change Change International and GAM
Slide 11: New Business Product Revenue Reporting
New Business Product Revenue Reporting Cash to fuel our growth engines Managing mature, declining products for cash and supporting customers through technology Invest for growth to develop and migration Harvest expand new revenue streams Legacy Voice, Private Line, UNEs, etc. Grow SD-WAN, SASE, IP,
Slide 12: New Business Product Revenue Reporting
New Business Product Revenue Reporting Grow Nurture $1,204 $1,206 $1,138 $1,194 $1,118 $1,189 $1,093 $1,087 $1,167 $1,054 2Q21 3Q21 4Q21 1Q22 2Q22 2Q21 3Q21 4Q21 1Q22 2Q22 Harvest Other $1,038 $1,006 $993 $965 $953 $204 $203 $179 $190 $160 2Q21 3Q21 4Q21 1Q22 2Q22 2Q21 3Q21 4Q21 1Q22 2Q22 12 Issued:
Slide 13: 2Q22 Mass Markets Revenue
Significant Revenue Mix Improvement 2Q22 Mass Markets Revenue Expected Within RemainCo RemainCo Total Mass Markets Product Categories Mass Markets Fiber Contribution YoY% QoQ% Revenue ($ in millions) 2Q22 % Total 16% Change Change 15% 13% 14% Fiber Broadband $151 16.2% 4.1% 13% 13% 11% 12% 10% Other
Slide 14: Quantum Fiber Enabled Locations Ramping
Quantum Fiber Enabled Locations Ramping Total Lumen Quarterly Enabled Location Adds 2Q22 Broadband Metrics Fiber Total Lumen RemainCo ~205K 2Q22 Enabled Locations 3.1M 2.9M Enabled Location Adds ~205K ~185K Subscribers 858K 788K Penetration 27% 28% ~160K 1Q22 Other Total Lumen RemainCo Enabled Locat
Slide 15: 2Q22 RemainCo Quantum Fiber Subscriber Growth and KPIs
2Q22 RemainCo Quantum Fiber Subscriber Growth and KPIs RemainCo Quantum Fiber 8Gbps Subscriber Trends Launched Multi-gig Offerings 788 ~$59 762 ARPU 737 > 22% Penetration of the 2020 Enablement Vintage 711 (at(in12-month thousands)mark) 685 > +50 2Q21 3Q21 4Q21 1Q22 2Q22 NPS Quantum Fiber Subscriber
Slide 16: Adjusted EBITDA | Adjusted EBITDA Margin
Adjusted EBITDA | Adjusted EBITDA Margin Excluding CAF II(1) $4.802 $4.764 $4.725 $4.617 $4.612 41.4% 41.6% 41.3% 41.0% 39.3% $1.987 $1.955 $1.966 $1.907 $1.811 2Q21 3Q21 4Q21 1Q22 2Q22 Adj. EBITDA Total Revenue Adj. EBITDA Margin ($ in billions) (1) 2Q21, 3Q21, 4Q21, and 1Q22 exclude CAF II impacts
Slide 17: Consolidated Cash Flow Summary
Consolidated Cash Flow Summary Key Metrics ($ in millions) 2Q22 Continued Strong Cash Flow From Operations $1,396 Free Cash Generation Capital Expenditures $761 Free Cash Flow $668 Net Cash Interest $312 Net Debt $29,411 17 Issued: August 3, 2022
Slide 18: Reiterated 2022 Financial Outlook
Reiterated 2022 Financial Outlook Metric(1)(2) Outlook(3) Adjusted EBITDA $6.9 to $7.1 billion Free Cash Flow(4) $2.0 to $2.2 billion Net Cash Interest $1.3 to $1.4 billion GAAP Interest Expense $1.350 billion Dividends(5) $1.00 per share Capital Expenditures $3.2 to $3.4 billion Depreciation & Amor
Slide 19: Q&A
Q&A 19 Issued: August 3, 2022