Lumen Technologies, Inc. · NYSE:LUMN
Lumen Technologies — CenturyLink — FY2017 Earnings Presentation
18 slides from Lumen Technologies's earnings presentation, Feb 14, 2018
Slide 1: 4th Quarter and Full Year 2017 Results
4th Quarter and Full Year 2017 Results February 14, 2018 © 2015 CenturyLink. 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,” 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, adjusted free cash flow, unlevered cash flow, core revenues, adjusted net income, adjusted diluted EPS and adjustments to GAA
Slide 4: Participants
Participants Glen Post Chief Executive Officer Sunit Patel Executive Vice President & Chief Financial Officer Jeff Storey President & Chief Operating Officer 4 © 2015 CenturyLink. All Rights Reserved.
Slide 5: Overview
Overview Glen Post Chief Executive Officer © 2015 CenturyLink. All Rights Reserved.
Slide 6: Financial Review
Financial Review Sunit Patel Executive Vice President & Chief Financial Officer © 2015 CenturyLink. All Rights Reserved.
Slide 7: Financial Highlights
Financial Highlights • Expect 2018 Adjusted EBITDA1 to be higher compared to 2017 Adjusted EBITDA1,2 on a pro forma basis • Expect to generate positive Free Cash Flow1 after dividends in 2018 • Achieved ~$75 million of annualized run-rate Adjusted EBITDA synergies in fourth quarter 2017; highly conf
Slide 8: CenturyLink Standalone 4Q17 Financial Summary
CenturyLink Standalone 4Q17 Financial Summary Core Revenue(1), (2), (4) $ in millions • $3.964 billion in Total operating revenue ◦ $3.538 billion Core revenue1, 8.4% Y/Y decrease from 4Q16; Adjusting for the Colo $3,712 $3,538 Sale effective May 1, 2017, core revenue declined 4.7% Y/Y ◦ $1.905 bill
Slide 9: CenturyLink Standalone Enterprise Revenues
CenturyLink Standalone Enterprise Revenues Enterprise - Operating Revenue(1) $ in millions $2,236 Enterprise Strategic Revenue 4Q17 4Q16 Y/Y % $2,111 ($ in millions) Data $130 Integration $109 High-bandwidth Data $773 $755 2.4% Services Legacy $1,170 $1,048 Other Strategic Services $181 $331 (45.3)%
Slide 10: CenturyLink Standalone Consumer Revenues
CenturyLink Standalone Consumer Revenues Consumer - Operating Revenue $ in millions Other legacy services: 5% $1,448 $1,367 Legacy $664 $585 Legacy voice Broadband services: 38% services: 50% Strategic $784 $782 Other strategic services: 7% 4Q16 4Q17 • Ended year with ~5 million consumer broadband c
Slide 11: Level 3 Standalone CNS Revenue
Level 3 Standalone CNS Revenue 4Q17 CNS Revenue Performance CNS Revenue Constant As Reported $ in millions Revenue Currency Y/Y % Y/Y % $2,017 Total CNS 3.8% 4.3% $1,933 Enterprise 5.7% 6.2% Wholesale (1.8)% (1.0)% North America 3.8% 3.8% Enterprise 5.6% 5.6% Wholesale (1.5)% (1.5)% EMEA 0.6% 5.0% E
Slide 12: Level 3 Standalone Adjusted EBITDA & Free Cash Flow
Level 3 Standalone Adjusted EBITDA & Free Cash Flow Adjusted EBITDA(1) (2) Free Cash Flow(1) (3) $ in millions $ in millions $758 $353 $724 35.6% 35.9% $266 4Q16 4Q17 4Q16 4Q17 Adjusted EBITDA Adjusted EBITDA Margin (1) See schedule of non-GAAP metrics for definitions and reconciliation to GAAP meas
Slide 13: CenturyLink Pro forma Revenue
CenturyLink Pro forma Revenue Revenue Mix Pro forma Revenue Y/Y % Regulatory:3% 4Q17 ($ in millions) Change By Business Unit Consumer:23% Medium & Small Business $874 (4.8)% Enterprise 1,324 4.8% International & Global Accounts 941 4.0% Wholesale & Indirect 1,276 (6.5)% Business:74% Consumer 1,401 (
Slide 14: CenturyLink Pro forma Results
CenturyLink Pro forma Results Metric 4Q17 FY 2017 ($ in millions) Total Revenue $6,005 $24,127 Adjusted EBITDA(1), (2) $2,211 $8,698 Adjusted EBITDA Margin 36.8% 36.1% Debt Outstanding 38,053 (1) Adjusted EBITDA is defined as operating income (loss) plus depreciation and amortization expense, non-ca
Slide 15: Adjusted EBITDA Synergies
Adjusted EBITDA Synergies Metric 4Q17 ($ in millions) Total annualized run-rate synergies $75 Integration-related expenses $62 $850 million of expected annualized run-rate Adjusted EBITDA savings © 2015 CenturyLink. All Rights Reserved. 15
Slide 16: 2018 Business Outlook
2018 Business Outlook Metric (1) Outlook Adjusted EBITDA (2) $8.75 to $8.95 billion Free Cash Flow (3) $3.15 to $3.35 billion Dividends(4) $2.30 billion Free Cash Flow after Dividends $850 million to $1.05 billion GAAP Interest Expense $2.25 billion Cash Interest $2.10 billion Capital Expenditures ~
Slide 17: Operations Review
Operations Review Jeff Storey President & Chief Operating Officer © 2015 CenturyLink. All Rights Reserved.
Slide 18: Q&A
Q&A © 2015 CenturyLink. All Rights Reserved.