What changed in this filing

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Item 1. Business

2022-02-24 compared with 2021-02-25 · 192 added, 200 removed, 205 unchanged (66% of the section changed)

Changes from Prior Periodic Reports

In this report we have complied with the disclosures required by the Securities and Exchange Commission ("SEC") release No.

33-10825 "Modernization of Regulation S-K Items 101, 103, and 105", and we have early adopted the changes in disclosure standards included in SEC release No.

33-10890 "Management's Discussion and Analysis, Selected Financial Data, Supplementary Financial Information."

Modernization of Regulation S-K Items 101, 103 and 105

Effective as of November 9, 2020, the SEC issued Release No.

33-10825, “Modernization of Regulation S-K Items 101, 103, and 105.” This release was adopted to modernize the description of business, legal proceedings, and risk factor disclosures that registrants are required to make pursuant to Regulation S-K.

Specifically, this release requires registrants to provide disclosures relating to their human capital resources and to restructure their risk factor disclosures.

Additionally, the release increases the threshold for disclosure of environmental proceedings to which the government is a party.

These changes are required for any annual period subsequent to the effective date of November 9, 2020.

As such, we have adopted these changes in this report.

Management’s Discussion and Analysis, Selected Financial Data, and Supplementary Financial Information

In November 2020, the SEC issued Release No.

33-10890, “Management’s Discussion and Analysis, Selected Financial Data, and Supplementary Financial Information” which will become fully effective on August 9, 2021, with voluntary compliance permitted on or after February 10, 2021.

This release was adopted to modernize, simplify, and enhance certain financial disclosure requirements in Regulation S-K.

Specifically, the SEC eliminated the requirement for selected financial data, only requiring quarterly disclosure when there are retrospective changes affecting comprehensive income, and amending the matters required to be presented under Management’s Discussion and Analysis (“MD&A”) to, among other things, eliminate the requirement of the contractual obligations table.

With our early adoption of this release, we have eliminated from this document the items discussed above that are no longer required.

Information on our contractual obligations is still disclosed in a narrative within the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Item 7 of Part II of this report.

Business Overview and Purpose

We are an international facilities-based technology and communications company focused on providing our business and residential customers with a broad array of integrated services and solutions necessary to fully participate in our rapidly evolving digital world, which we believe is undergoing the “Fourth Industrial Revolution” or simply the “4IR”.

We believe we are the world’s most inter-connected network and our platform empowers our customers to rapidly adjust digital programs to meet immediate demands, create efficiencies, accelerate market access, and reduce costs – allowing customers to rapidly evolve their information, communications and technology ("ICT") programs to address dynamic changes without distraction from their core competencies.

By empowering our customers to rapidly acquire, analyze and act on data, we are furthering human progress through technology and enabling our customers to thrive in the 4IR.

We are an international facilities-based technology and communications company focused on providing our business and residential customers with a broad array of integrated products and services necessary to fully participate in our rapidly evolving digital world, which we believe is undergoing the “Fourth Industrial Revolution” or simply the “4IR.” We operate one of the world’s most interconnected networks.

Our platform empowers our customers to rapidly adjust digital programs to meet immediate demands, create efficiencies, accelerate market access, and reduce costs – allowing customers to rapidly evolve their information, communications and technology programs to address dynamic changes.

By empowering our customers to rapidly acquire, analyze and act on data, we are enabling our customers to thrive in the 4IR.

Our specific products and services are detailed below under the heading “Segments and Products & Services.”

As part of the recent Lumen rebranding, we refined our marketing approach to better align with our customer base.

Lumen is the name of our company and our flagship brand for serving the enterprise and wholesale markets.

We also launched our Quantum Fiber brand and reconfirmed the importance of our expansive CenturyLink platform name.

Quantum Fiber is our brand for providing fiber-based services to small business and residential customers.

Our CenturyLink brand covers our mass-marketed legacy copper-based services, managed for optimal cost and efficiency.

With approximately 450,000 route miles of fiber optic cable globally, we are among the largest providers of communications services to domestic and global enterprise customers.

We conduct our operations under the following three brands:

• "Lumen," which is our flagship brand for serving the enterprise and wholesale markets

• "Quantum Fiber," which is our brand for providing fiber-based services to residential and small business customers

• "CenturyLink," which is our long-standing brand for providing mass-marketed legacy copper-based services, managed for optimal cost and efficiency.

With approximately 190,000 on-net buildings and 500,000 route miles of fiber optic cable globally, we are among the largest providers of communications services to domestic and global enterprise customers.

Our terrestrial and subsea fiber optic long-haul network throughout North America, Europe, Latin America and Asia Pacific connects to metropolitan fiber networks that we operate.

We provide services in over 60 countries, with most of our revenue being derived in the United States ("U.S.").

We believe our secure global platform plays a central role in facilitating communications worldwide.

In the last year, the COVID-19 pandemic forced a seismic shift in how the world communicates with colleagues, family and friends, how children learn and how we conduct business.

From multi-national global enterprises to small businesses, our integrated solutions portfolio enables our customers to accelerate digital transformation, improve operational performance and manage risk.

As further discussed immediately below under the heading “Acquisitions and Divestitures,” during 2022 we plan to sell our Latin American business and a portion of our incumbent local exchange business.

For a discussion of certain risks applicable to our business, see “Risk Factors” in Item 1A of Part I of this report.

Acquisitions and Divestitures

Since being incorporated in 1968, we have grown principally through acquisitions.

By 2008, we had become one of the largest providers of rural telephone services in the United States.

Since then, we acquired Embarq Corporation in mid-2009, Qwest Communications International Inc.

in early 2011 and Level 3 Communications, Inc.

in late 2017.

These acquisitions have substantially changed our customer base, geographic footprint, business strategies and mix of products and services.

We regularly evaluate the possibility of acquiring additional assets or divesting assets in exchange for cash, securities or other properties, and at any given time may be engaged in discussions or negotiations regarding additional acquisitions or divestitures.

We generally do not announce our acquisitions or divestitures until we have entered into a preliminary or definitive agreement.

Planned Divestitures of the Latin American Business and Incumbent Local Exchange Business

On July 25, 2021, affiliates of Level 3 Parent, LLC, an indirect wholly-owned subsidiary of Lumen Technologies, Inc., entered into a definitive agreement to divest our Latin American business in exchange for $2.7 billion cash, subject to certain working capital, other purchase price adjustments and related transaction expenses.

Level 3 Parent, LLC anticipates closing the transaction mid-year 2022, upon receipt of all requisite regulatory approvals in the U.S.

and certain countries where the Latin American business operates, as well as the satisfaction of other customary conditions.

On August 3, 2021, we and certain of our affiliates entered into a definitive agreement to divest our incumbent local exchange ("ILEC") business conducted within 20 Midwestern and Southern states.

In exchange, we would receive $7.5 billion, subject to offsets for (i) assumed indebtedness and (ii) our transaction expenses, certain of purchaser’s transaction expenses, taxes and certain working capital and other customary purchase price adjustments.

We anticipate closing the transaction mid-year 2022 upon receipt of all regulatory approvals and the satisfaction of other customary closing conditions.

See Note 2—Planned Divestiture of the Latin American and ILEC Businesses to our consolidated financial statements in Item 8 of Part II of this report for additional information on these transactions.

Financial Highlights

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Years Ended December 31,

2018 (1)(2)(3)

(Dollars in millions)

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Operating income (loss) $ 4,285 962 (2,726)

Net loss $ (1,232) (5,269) (1,733)

Net income (loss) $ 2,033 (1,232) (5,269)

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(1) During 2020, 2019 and 2018, we incurred Level 3 integration and transformation expenses of $375 million, $234 million and $393 million, respectively.

(2) During 2020, 2019 and 2018, we recorded non-cash, non-tax-deductible goodwill impairment charges of $2.6 billion, $6.5 billion and $2.7 billion, respectively.

(1) During 2020 and 2019, we recorded non-cash, non-tax-deductible goodwill impairment charges of $2.6 billion and $6.5 billion, respectively.

For additional information, see Note 3—Goodwill, Customer Relationships and Other Intangible Assets to our consolidated financial statements in Item 8 of Part II of this report.

(3) The enactment of the Tax Cuts and Jobs Act in December 2017 resulted in a remeasurement of our deferred tax assets and liabilities at the new federal corporate tax rate of 21%.

The remeasurement resulted in tax expense of $92 million for 2018.

We estimate that during 2021, 2020 and 2019, approximately 9.4%, 8.7% and 8.5%, respectively, of our consolidated revenue was derived from providing telecommunications, colocation and hosting services outside the U.S.

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The summary financial information appearing above should be read in conjunction with, and is qualified by reference to, our consolidated financial statements and notes thereto in Item 8 of Part II of this report and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Item 7 of Part II of this report.

Our business combination with Level 3 was driven in part by a vision to provide enhanced services to our business and residential customers by transforming our infrastructure into an adaptive fiber network delivering high bandwidth and low latency on a secure platform.

Over the last three years, we have diligently pursued that vision through a deliberative strategy to attain our goals.

• 2018 – Integration – focused on efficiently combining the two companies into one;

• 2019 – Transformation – focused on improving the customer experience by strengthening our suite of products and services;

• 2020 – Operation – centered on the “Lumen” brand launch, highlighting the Company’s vision for future services;

• 2021 – Platform Expansion and Innovation – build and enhance the capabilities of our platform and use those enhancements to drive profitable growth.

Platform Expansion and Innovation

In September 2020, we launched our “Lumen” brand signaling our heightened focus on delivering digital experiences to our customers designed to drive their success.

We believe the 4IR will usher in unprecedented opportunity to leverage digital interactions to enhance business outcomes.

The demands brought on by the COVID-19 pandemic underscored the urgency for digital transformation across our customer base, and further highlighted the need for reliable, secure digital services.

Our new brand communicates our commitment to support our customers' needs and reflects a fiber platform that is secure, reliable and fast.

Although our Lumen, Quantum and CenturyLink brands are focused on specific customers and related services, our collective Lumen strategy remains driven by our fundamental objectives of:

• Portfolio Progression – meeting the dynamic needs of our broad range of customers for enhancing productivity

◦ Serving the business market at light speed to deliver applications globally, where and how they are needed to meet business outcomes

◦ Serving mass market customers with the reliable, secure and high-performance connectivity and the related services they require

◦ Enabling all customers – businesses and consumers – access to secure, fast and reliable connectivity required to thrive in the 4IR

• Stakeholder Success and Value Creation – understanding the value and perspective each stakeholder contributes to our overall success;

• Cost Transformation – diligently pursuing our deleveraging and capital allocation strategies to enhance our return on capital and reward our investors.

We plan to continue to pursue our long-term Lumen vision through disciplined focus on these objectives, which are discussed further below.

Portfolio Progression

Our portfolio progression plans focus on continuing to integrate our global network, cloud, edge, security, voice and collaboration assets and technologies into an advanced, all-in-one delivery architecture.

Capability enhancements such as edge computing and software-defined wide area networks ("SD WAN") are critical to meeting our customers’ needs and drive our growth strategy.

Our capabilities are grounded in our extensive global fiber infrastructure and our innovation efforts are centered around accelerating our platform’s capabilities to anticipate and address those needs.

We believe our Lumen platform provides the flexibility to create compelling, bespoke network services to enhance the efficiency and utility of our core network services.

Our design has the potential to create value for our customers by simplifying application delivery on a high-performance, secure, worldwide digital platform.

The Lumen platform is designed to address each layer of a digital business model through (i) high performance dynamic connections that are interoperable with a range of on-net enterprise locations, multi-tenant data centers and public cloud on-ramps;

(ii) hybrid cloud infrastructure integrated with computing and storage options across public cloud, network edge and customer premises, and compatible with a wide range of data centers using different software;

and (iii) service orchestration and automation which supports software-defined managed services frameworks capable of deploying workloads to a range of infrastructure venues and network connections.

We believe this platform design can help customers, and our Lumen team, control costs by increasing operational efficiencies and driving forward the next generation of our product and services portfolio.

Stakeholder Success and Value Creation

Employees, Customers, Partners and Vendors

Our over-arching strategic goal is to continue integrating and upgrading our global network and other assets and technologies into an advanced high-bandwidth, low latency platform that is secure, reliable and fast.

To attain this goal, we strive to, among other things:

• strengthen our digital self-service product ordering platforms;

• expand our offering of secure edge computing services;

• create a more adaptive network;

• expand our network capacity through our Quantum Fiber buildout plan and other initiatives;

• return a substantial amount of cash to our shareholders in the form of dividends and periodic stock repurchases;

• monetize our non-core assets and manage our non-fiber business for cash;

• strengthen our financial position and performance through debt paydown and cost reduction efforts.

Our Stakeholders

We believe realizing the Lumen promise depends on regular, informed communications with our stakeholders, including shareholders, employees, customers, vendors, lenders, partners and our global community.

Understanding stakeholder goals and priorities enables strategic decisions focused on building long-term value.

Employees and Human Capital Resources

Lumen’s highly competitive business requires attracting, developing and retaining a motivated team inspired by leadership, engaged in meaningful work, motivated by growth opportunities and thriving in a culture that embraces diversity, inclusion and belonging.

Understanding and anticipating the priorities of our current and future employees is important to realizing our purpose to “further human progress through technology.” At December 31, 2020, we had approximately 39,000 employees world-wide, including approximately 7,000 outside the U.S.

Lumen’s highly competitive business requires attracting, developing and retaining a motivated team inspired by leadership, engaged in meaningful work, motivated by career growth opportunities and thriving in a culture that embraces diversity, inclusion and belonging.

Understanding and anticipating the priorities of our current and future employees is important to our future success.

At December 31, 2021, we had approximately 36,000 employees world-wide, including approximately 7,000 outside the U.S.

Attracting, Developing and Retaining Talent

Our recruiting, development and retention objectives focus on attracting skilled, engaged employees who contribute the talent and diverse perspectives critical to our innovative, forward-looking and inclusive workforce.

Our recruiting process actively sources diverse talent and is designed to eliminate bias, supporting our ability to hire candidates with professional qualifications, personal potential and differing perspectives.

Fostering career progression by encouraging regular professional education empowers our employees to pursue their professional goals, which is critical to developing and retaining our employees.

Our recruiting, development and retention objectives focus on treating talent as a differentiator and a leading indicator of business performance.

We strive to hire and retain the best talent available, to be transparent with regards to new career and promotional opportunities, to mitigate bias and to champion fair selection and best hiring practices.

Establishing a framework of competency-based success profiles and fostering career progression through regular career development and training empowers our employees to pursue their professional goals and helps to improve employee engagement and retention.

We invest in broad-based development for all of our employees in various ways such as skills-building programs, on-demand learning options, tuition reimbursement, tailored mentoring programs and a suite of leadership development courses.

In an effort to create more development opportunities for all employees, we are currently expanding our intern, mentoring and leadership development programs, with added focus on development for diverse employees.

We gauge progress and efficacy, identify opportunities for change, and pursue solutions through tracking and analyzing data from various sources such as annual talent reviews and our progress toward hiring/promotion goals in our development, diversity and inclusion plans.

In an effort to create more development opportunities for all employees, we are currently enhancing our intern, mentoring and leadership development programs, with added focus on development for diverse employees.

We believe we have made significant strides in attracting, engaging, and hiring a diverse group of early career employees through our internship program, our numerous sales and operations academies, and our "pathways in technology" program.

We have also increased our focus on internal mobility and providing more visibility and career opportunities to our workforce through our internal communications platforms.

We gauge progress and efficacy, identify opportunities for change, and pursue solutions through tracking and analyzing data from various sources, such as annual talent reviews and measuring our progress toward goals specified in our development, diversity and inclusion plans.

Diversity, Inclusion & Belonging

We believe that understanding and respecting another's perspective, experience, background and beliefs provide an opportunity to expand horizons, challenge complacency and foster empathy.

For Lumen, diversity of perspective, experience, background and beliefs fuel our innovative, collaborative, and engaged workplace.

For Lumen, we believe diversity of perspective, experience, background and beliefs fuels our innovative, collaborative, and engaged workplace.

Realizing greater ethnic, racial and gender diversity across all levels of an organization is, and will continue to be, an ongoing journey.

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We believe a strong experience leads to satisfied customers and engaged employees who are encouraged to recommend creative solutions.

We have a dedicated team responsible for evaluating the best approach to the customer experience from our largest enterprise customers to our residential customers, coupled with frequent, transparent and informative communication processes.

We have a dedicated team responsible for evaluating the best approach to improving the experiences of customers, coupled with frequent, transparent and informative communication processes.

We value both customer and employee suggestions.

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We are driving a digital-first culture that allows our customers to configure, order, and rapidly deploy our services through an all-digital, self-service set of tools.

In 2019, we launched Lumen’s inaugural customer experience (CX) event, during which we invited customers to collaborate directly with us.

Since 2019, we have hosted an annual customer experience (CX) event, during which we invite customers to collaborate directly with us.

While careful listening to customers is the best source of customer experience feedback, we believe overlaying it with employee feedback is the most effective way to continuously improve.

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Understanding how our customers access and use our products and services is an important element of evaluating which partners and vendors may best contribute to our customers’ success.

Consequently, understanding the opportunities any future or existing partners or vendors may bring is also an element of customer success.

Lumen leverages our relationships and by co-innovating with a comprehensive group of strategic partners to create solutions focused exclusively on our customers' business and IT requirements.

Through our open and interoperable approach, we seek to implement the best execution venue available for all our solutions – whether ours or a third party’s.

Through our open and interoperable approach, we seek to identify the optimal platform for serving our customers – whether ours or a third party’s.

When necessary, Lumen incorporates market-leading technologies to optimize application performance and streamline integration throughout the IT stack to ensure seamless integration and interoperability.

Lumen has collaborated with a host of technology partners, giving us the capability to tailor and fully manage scalable solutions that customers control, so they can maximize applications.

Lumen, by working with our network of technology partners, can integrate different partners and technologies, shifting the IT burden from our customers.

Lumen has collaborated with a host of technology partners, giving us the capability to tailor and fully manage scalable solutions that customers control.

Lumen, by working with our network of technology partners, can integrate different partners and technologies, to improve our products and services.

In light of these efforts to better serve our customers, we are materially reliant on a wide range of vendors to support our organization and partners to support our strategy.

We work with, and rely on, other communications companies that lease us transmission capacity or sell us various services necessary for our current operations, as well as a wide range of software, hardware and equipment suppliers.

We believe that co-innovating with other companies provides the flexibility to rapidly evolve our strategy to effectively support our customers.

Cost Transformation

We believe that diligently pursuing our deleveraging strategy, responsible capital allocation and our ongoing commitment to reinvest the savings in growing our Lumen platform contributes to our long-term goal to create value.

Our investments in infrastructure, expanding fiber, and deploying in-building technology are part of our foundation for future growth.

We believe that co-innovating with other companies provides the flexibility to rapidly evolve our customer offerings.

Environmental Stewardship and Sustainability

Environmental stewardship is inherent in our identity.

We review the impact of our operations and make choices to reduce our environmental footprint.

We believe our commitment to environmental sustainability promotes the financial health of our business, the quality of service we provide and value creation for our employees, communities, customers and investors.

Our Environment, Health and Safety ("EHS") team oversees and executes the company’s EHS and environmental sustainability visions.

The EHS program framework focuses on seven key areas:

• Environmental compliance and management:

The Lumen EHS team assesses and reviews our company programs, operational facilities and waste management vendors.

We monitor environmental legislative activity and collaborate with other internal groups to develop documented practices and procedures that support compliance with applicable laws and regulations.

• Energy and emissions:

To reduce our carbon footprint, we are identifying and implementing energy efficiency and greenhouse gas ("GHG") emissions reduction initiatives.

In January 2021, we were among the very first U.S.

companies to issue sustainability-linked bonds.

Lumen uses the World Resource Institute’s water quality index to assess our operations in drought-stricken areas or areas that have the potential to be in the future.

We are working to reduce our consumption of water overall and especially in countries or regions identified as high-risk.

We aim to reduce our waste through minimization, re-use and recycling.

We divert millions of pounds of electronic and communications equipment from landfills each year.

We recycle telecommunications equipment, and our modem/router takeback program allows customers to return their equipment, which are then either reused or sent to an R2-certified recycler.

• Supplier environmental assessment:

We expect our suppliers to demonstrate the same commitment as us to compliance and sustainability efforts.

We expect our suppliers to use reasonable efforts to employ environmentally preferred and energy-efficient services, and to work with their own suppliers to assess and address environmental and sustainability issues within their supply chains.

• Climate preparedness:

We prepare for potential impacts by evaluating various climate change risks to our ongoing operations when we consider opening new facilities and/or expanding our network.

Our comprehensive business continuity program focuses on prevention, collaboration, communication, response and recovery to assist us in quickly resolving disruptive events.

• Occupational Health and Safety:

The EHS team conducts risk assessments and monitors health and safety legislation to develop policies and procedures designed to eliminate or control safety hazards and support compliance with applicable laws and regulations.

Our network, through which we provide most of our products and services, consists of fiber-optic and copper cables, high-speed transport equipment, electronics, voice switches, data switches and routers, and various other equipment.

We operate part of our network with leased assets, and a substantial portion of our equipment with licensed software.

At December 31, 2020, our network (both owned and leased) included:

• Approximately 450,000 route miles of fiber optic plant globally;

• Approximately 916,000 miles of copper plant;

• Approximately 310 colocation facilities and data centers globally;

• Approximately 37,500 route miles of subsea fiber optic cable systems;

• Approximately 180,000 buildings directly connected to our network, which we refer to as "Fiber On-net" buildings;

• Multiple gateway and transmission facilities used in connection with operating our network throughout North America, Europe and Latin America;

• Central office and other equipment that enables us to provide telephone service as an incumbent local telephone company ("ILEC") in 37 states.

At December 31, 2021, our global network (owned and leased) included (i) approximately 500,000 route miles of fiber optic plant, including approximately 42,000 route miles of subsea fiber optic cable systems and (ii) multiple gateway and transmission facilities used in connection with operating our network throughout North America, Europe and Latin America.

At December 31, 2021, our domestic network connected approximately 190,000 on-net buildings, which we refer to as “Fiber On-net” buildings, serving our enterprise customer base and approximately 28.6 million broadband-enabled locations serving our Mass Markets customer base.

At December 31, 2021, our Mass Markets broadband-enabled locations consisted of 25.8 million copper-based passings and 2.8 million fiber-based passings.

It also included at such date central office and other equipment that enables us to provide telephone service as an incumbent local exchange carrier ("ILEC") in 37 states.

As discussed in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Item 7 of Part II of this report and Note 2—Planned Divestiture of the Latin American and ILEC Businesses to our consolidated financial statements in Item 8 of Part II of this report, we have agreed to sell portions of our above-described network during 2022.

As noted elsewhere in this report, we view our network as one of our most critical assets.

We have devoted, and plan to continue to devote, substantial resources to (i) simplify and modernize our network and legacy systems and (ii) expand our network to address demand for enhanced or new products.

A key element of our network expansion plan is our Quantum Fiber buildout project.

Under this project, we propose over the next several years to construct additional fiber optic infrastructure to enable us to provide Quantum Fiber broadband services to several million additional urban and suburban locations in our ILEC markets.

Although we own most of our network, we lease a substantial portion of our core fiber network from several other communication companies under arrangements that will periodically need to be renewed or replaced to support our current network operations.

Like other large communications companies, we are a constant target of cyber-attacks of various degrees, and, from time to time in the ordinary course of our business, we experience disruption in our services.

We develop and maintain systems and programs designed to protect against cyber-attacks and network outages.

The development, maintenance and operation of these systems and programs is costly and requires ongoing monitoring and updating as technologies change and efforts to bypass security measures become more sophisticated and evolve rapidly.

For additional information regarding our systems, network assets, network risks, capital expenditure requirements and reliance upon third parties, see “Risk Factors” in Item 1A of Part I of this report.

Competition and Market Overview

Organizations across the globe are competing to capitalize on opportunities created by emerging technologies.

The need for data-intensive and latency-sensitive emerging technologies continues to grow.

Helping businesses address these needs requires a platform that integrates essential technology services such as hybrid networking, connected security services that monitor, prevent and remediate threats, and edge computing services ranging from compute and storage to hosting and collocation services on the cloud edge.

We compete in a dynamic and highly competitive market, and we expect continued intense competition from a wide variety of sources under these evolving market conditions.

In addition to competition from large international communications providers, we are increasingly facing competition from systems integrators, cloud service providers, software companies, infrastructure companies, cable companies, device providers, resellers and smaller niche providers, among others.

We compete in a dynamic and highly competitive market in which demand for high-speed, secure data services continues to grow.

We expect continued intense competition from a wide variety of sources under these evolving market conditions.

In addition to competition from large international communications providers, we are facing competition from a growing number of sources, including systems integrators, cloud service providers, software networking companies, infrastructure companies, cable companies, device providers, resellers and smaller niche providers.

Our ability to compete hinges upon effectively enhancing and better integrating our existing products, introducing new products on a timely and cost-effective basis, meeting changing customer needs, providing high-quality information security to build customer confidence and combat cyber-attacks, extending our core technology into new applications and anticipating emerging standards, business models, software delivery methods and other technological changes.

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Developments in software have permitted new competitors to offer affordable networking products that historically required more expensive hardware investment.

We anticipate that all these trends will continue to place downward pressures on the use of our network.

Additionally, the Telecommunications Act of 1996 obligates the ILECs to permit competitors to interconnect their facilities to the ILEC’s network and to take various other steps that are designed to promote competition, including obligations to (i) negotiate interconnection agreements in good faith, (ii) provide nondiscriminatory “unbundled” access to specific portions of the ILEC’s network and (iii) permit competitors to physically or virtually colocate their plant on the ILEC’s property.

As a result of these regulatory, consumer and technological developments, we also face competition from competitive local exchange carriers ("CLECs"), particularly in densely populated areas.

We anticipate that all these trends will continue to place downward pressures on the use of our voice network.

Additionally, the Telecommunications Act of 1996 obligates ILECs, including those operated by us, to permit competitors to interconnect their facilities to the ILEC’s network and to take various other steps that are designed to promote competition, including obligations to (i) negotiate interconnection agreements in good faith, (ii) provide nondiscriminatory “unbundled” access to specific portions of the ILEC’s network and (iii) permit competitors to physically or virtually collocate their plant on the ILEC’s property.

As a result of the above-described regulatory and technological developments, we also face competition from competitive local exchange carriers ("CLECs"), particularly in densely populated areas.

CLECs provide competing services through (i) reselling an ILEC’s local services, (ii) using an ILEC’s unbundled network elements, (iii) operating their own facilities or (iv) a combination thereof.

Competition for higher margin, legacy services remains high.

However, our platform expansion and innovation strategy is focused largely on addressing these competitive pressures.

Competition to provide broadband and other data services remains high.

Market demand for our broadband services could be adversely affected by advanced wireless data transmission technologies and other systems delivering generally faster average broadband transmission speeds than our legacy copper-based infrastructure.

Our network expansion and innovation strategy is focused largely on addressing these competitive pressures.

As both residential and business customers increasingly demand high-speed connections for entertainment, communications and productivity, we expect the demands on our network will continue to increase over the next several years.

To remain competitive and successful, we are continuing to invest in network security, reliability and flexibility and design innovations to deliver competitive services to meet increasing customer bandwidth and speed requirements.

To meet these demands and remain competitive, we are continuing to invest in network capacity, security, reliability, flexibility and design innovations, such as through our Quantum Fiber buildout, to deliver competitive high-speed services.

We compete to provide services to business customers based on a variety of factors, including the comprehensiveness and reliability of our network, our data transmission speeds, price, the latency of our available network services, the scope of our integrated offerings, the reach and peering capacity of our IP network, and customer service.

Additional information about competitive pressures is located under the heading “Risk Factors—Business Risks” in Item 1A of Part I of this report.

Sales and Marketing

Market Overview

Understanding and anticipating market trends drives our investment in developing the products and services we believe will be well received by our customers.

We expect edge computing services demand to significantly increase over the next several years, serving multiple verticals, including finance, healthcare, retail, manufacturing and other industries.

As these use cases continue to emerge, we expect secure network services will increase in importance as consumers require holistic solutions with the flexibility necessary to help accelerate the convergence of computing and communications capabilities with digital content.

We believe we have a world-class set of global fiber assets that positions us to deliver a highly-competitive suite of cloud connectivity, low latency edge computing, and integrated network services.

Anticipating market trends drives our investment in developing new product and service offerings.

We expect edge computing services demand to significantly increase over the next several years in several industries, including finance, healthcare, retail and manufacturing.

We also expect secure network services will increase in importance to consumers.

We believe we have a comprehensive set of global fiber assets that positions us to deliver a highly-competitive suite of cloud connectivity, low latency edge computing, and integrated network services.

We generally market our business services to members of in-house IT departments or other highly-sophisticated customers with deep technological experience.

These individuals typically satisfy their IT requirements by contracting with us or a rapidly evolving group of competitors, or by deploying in-house solutions.

We expect our market competition to continue to increase as technology evolves and enables our customers to seek solutions from multiple sources.

We compete to provide services to business customers based on a variety of factors, including the comprehensiveness and reliability of our network, our data transmission speeds, price, the latency of our available intercity and metro routes, the scope of our integrated offerings, the reach and peering capacity of our IP network, and customer service.

As noted above, technological and competitive factors have led to new products and services that have reduced the demand for certain of our traditional network services, especially our traditional ILEC services.

Also, market demand for our broadband services could be adversely affected by advanced wireless data transmission technologies and other systems delivering generally faster average broadband transmission speeds than ours.

Sales and Marketing

Our enterprise sales and marketing approach revolves around solving complex customer problems with advanced technology and network solutions - striving to make core networks services compatible with digital tools.

Sales Channels

Our enterprise sales and marketing approach focuses on solving complex customer problems with advanced technology and network solutions - striving to make core networks services compatible with digital tools.

We also rely on our call center personnel and a variety of channel partners to promote sales of services that meet the needs of our customers.

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Segments and Products & Services

On February 10, 2021, we announced plans to adjust our reporting segments and customer-facing sales channels in 2021 to better align with operational changes designed to better support our customers.

We believe the changes will provide greater transparency into how we are performing against our strategy, including focusing on growth opportunities and managing declining legacy services.

For fiscal year 2020, our products and services were reported by segments as described below.

In 2020, we reported our financial performance using five segments, as described below:

• International and Global Accounts Management ("IGAM") Segment - provided products and services to approximately 200 global enterprise customers and three operating regions:

Europe Middle East and Africa, Latin America and Asia Pacific;

• Enterprise Segment - provided products and services to large and regional domestic and global enterprises, as well as the public sector, which includes the U.S.

federal government, state and local governments and research and education institutions;

• Small and Medium Business ("SMB") Segment - provided products and services to small and medium businesses directly and indirectly through our channel partners;

• Wholesale Segment - provided products and services to a wide range of other communication providers across the wireline, wireless, cable, voice and data center sectors.

Our wholesale customers range from large global telecom providers to small regional providers;

• Consumer Segment - provided products and services to residential customers.

Additionally, certain state support payments, Connect America Fund (“CAF”) federal support revenue, and other revenue from leasing and subleasing, including 2018 rental income associated with the 2017 failed-sale-leaseback, are reported in our consumer segment as regulatory revenue.

We completed an internal reorganization in January 2021 to adjust our reporting segments and customer-facing sales channels to better align with operational changes designed to better support our customers.

We believe the changes provide greater transparency into how we are performing against our strategy, including focusing on growth opportunities and managing declining legacy services.

We report our financial performance using two segments, as described below:

• Business Segment:

Under our Business segment, we provide our products and services under four sales channels to meet the needs of our enterprise and commercial customers;

• Mass Markets Segment:

Under our Mass Markets segment, we provide products and services to consumer and small business customers.

The following table shows the composition of our operating revenue by segment for the years ended December 31, 2021, 2020 and 2019:

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Percentage of revenue:

International and Global Accounts 16 % 16 % 16 % — % — %

Enterprise 29 % 26 % 25 % 3 % 1 %

Small and Medium Business 12 % 13 % 13 % (1) % — %

Wholesale 18 % 19 % 19 % (1) % — %

Consumer 25 % 26 % 27 % (1) % (1) %

Business 72 % 72 % 71 % — % 1 %

Mass Markets 28 % 28 % 29 % — % (1) %

Total operating revenue 100 % 100 % 100 %

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Products & Services

At December 31, 2020, we reported our products and services revenue among four categories for our International and Global Accounts Management, Enterprise, Small and Medium Business and Wholesale segments.

Since the first quarter of 2021, we have categorized our products and services revenue among the following product categories for the Business segment:

• Compute and Application Services

◦ Edge Cloud Services.

We provide both public and private cloud solutions that allow our customers to optimize cost and performance by offloading workloads.

Lumen’s cloud products leverage our network edge to provide low-latency secure services for our customers.

Additionally, we provide cloud orchestration tools that allow customers to shift work between cloud environments dynamically;

◦ IT Solutions.

We craft technology solutions for our customers and often manage these solutions on an ongoing basis.

These services frequently enhance equipment or networks owned, acquired, or controlled by the customer and often include our consulting or software development;

◦ Unified Communications and Collaboration ("UC&C").

We provide access to various unified communications platforms.

This offering includes both individual, license-based UC&C models and more robust options that transform a customer’s inbound and outbound calling platform;

◦ Colocation and Data Center Services .

We provide different options for organizations’ data center needs.

Our data center services range from dedicated hosting and cloud services to more complex managed solutions, including disaster recovery, business continuity, applications management support and security services to manage mission critical applications;

◦ Content Delivery .

Our content delivery services provide our customers with the ability to meet their streaming video and far-reaching digital content distribution needs through our Content Delivery Network ("CDN") services and our Vyvx Broadcast Solutions;

◦ Managed Security Services.

We provide enterprise security solutions that help our customers secure networks, mitigate malicious attacks and identify potential security threats.

These services include DDoS mitigation, remote and premise-based firewalls, professional consulting and management services, and threat intelligence services.

• IP and Data Services

• VPN Data Network.

Built on our extensive fiber-optic network, we create private networks tailored to our customers’ needs.

These technologies enable service providers, enterprises and government entities to streamline multiple networks into a single, cost-effective solution that simplifies the transmission of voice, video, and data over a single secure network;

We deliver a robust array of networking services built on ethernet technology.

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Our IP services provide global internet access over a high performance, diverse network with connectivity in more than 60 countries.

Our network spans approximately 450,000 route miles globally with extensive off-net access solutions across North America, Europe, Latin America and Asia Pacific;

• Content Delivery .

Transport and Infrastructure

• Wavelength.

We deliver high bandwidth optical networks to firms requiring an end-to-end transport solution with Ethernet technology by contracting for a scalable amount of bandwidth connecting sites or providing high-speed access to cloud computing resources;

Our fiber network spans approximately 500,000 route miles globally with extensive off-net access solutions across North America, Europe, Latin America and Asia Pacific;

◦ VPN Data Networks.

Built on our extensive fiber-optic network, we create private networks tailored to our customers’ needs.

◦ Voice Over Internet Protocol (“VoIP”).

We deliver a broad range of local and enterprise voice and data services built on VoIP technology, including VoIP enhanced local service, national and multinational SIP trunking, hosted VoIP service, Primary Rate Interface ("PRI") service support, long distance service and toll-free service.

• Fiber Infrastructure Services

◦ Dark Fiber.

We possess an extensive array of unlit optical fiber, known as “dark fiber.” Many large enterprises are interested in building their networks with this high-bandwidth, highly secure optical technology.

Lumen Technologies provides professional services to engineer these networks, and in some cases, manage them for customers;

We possess an extensive array of unlit optical fiber known as “dark fiber,” which has been laid but not yet been equipped with the equipment necessary for it to transmit data.

Many large enterprises are interested in building their networks with this high-bandwidth, highly secure optical technology.

We provide professional services to engineer these networks, and in some cases, manage them for customers;

◦ Optical Services.

We deliver high bandwidth optical wavelength networks to customers requiring an end-to-end solution with ethernet technology for a scalable amount of bandwidth connecting sites or providing high-speed access to cloud computing resources.

• Voice and Other

◦ Voice Services.

We offer our customers a complete portfolio of traditional Time Division Multiplexing ("TDM") voice services including PRI service, local inbound service, switched one-plus, toll free, long distance and international services;

◦ Private Line.

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Private line service offers a high-speed, secure solution for frequent transmission of large amounts of data between sites, including wireless backhaul transmissions;

• Colocation and Data Center Services .

We provide different options for organizations’ data center needs.

• Professional Services.

Our experts deliver a robust array of consulting services to organizations either as part of a larger engagement or as stand-alone services.

This category includes network management, installation and maintenance of data equipment and the building of proprietary fiber-optic broadband networks for government and business customers.

Voice and Collaboration

We offer our customers a complete portfolio of traditional Time Division Multiplexing ("TDM") voice services including Primary Rate Interface service, local inbound service, switched one-plus, toll free, long distance and international services;

• Voice Over Internet Protocol ("VoIP").

We deliver a broad range of local and enterprise voice and data services built on VoIP (Voice over Internet Protocol) technology, including VoIP enhanced local service, national and multinational SIP Trunking, Hosted VoIP, support of Primary Rate Interface service, long distance service and toll-free service.

IT and Managed Services

• We craft technology solutions for our customers and often manage those solutions on an ongoing basis.

Managed services represent a blend of network, hosting, cloud (public and private), and IT services that typically require ongoing support such as managing applications, operating systems and hardware.

This product line includes intuitive management tools that optimize efficiencies in companies’ technology infrastructure.

These services frequently enhance equipment or networks owned, acquired or controlled by the customer and often include our consulting or software development.

At December 31, 2020, we reported our products and services revenue among the following four categories for the Consumer segment:

• Broadband , which includes high speed, fiber-based and lower speed DSL broadband services;

• Voice , which include local and long-distance services;

• Regulatory Revenue, which consist of (i) CAF and other support payments designed to reimburse us for various costs related to certain telecommunications services and (ii) other operating revenue from the leasing and subleasing of space;

• Other, which include retail video services (including our linear TV services), professional services and other ancillary services.

◦ Other Legacy Services.

We continue to provide certain services based on older platforms to support our customers as they transition to newer technology.

These services include Synchronous Optical Network ("SONET") based ethernet, legacy data hosting services, and conferencing services.

At December 31, 2021, we reported our products and services revenue among the following categories for the Mass Markets segment:

• Consumer Broadband.

Includes high speed fiber-based and lower speed DSL-based broadband services to residential customers;

• Small Business Group ("SBG") .

Includes high speed fiber-based and lower speed DSL-based broadband services to small businesses;

• Voice and Other.

Includes primarily local and long-distance services, professional services and other ancillary services;

• Connect America Fund ("CAF") II.

C onsists of CAF Phase II payments through the end of 2021 to support voice and broadband in Federal Communications Commission ("FCC") designated high-cost areas.

Research, Development & Intellectual Property

Due to the dynamic nature of our industry, we prioritize investing in developing new products, improving existing products and licensing third party intellectual property rights to anticipate and meet our customers’ evolving needs.

As of December 31, 2021, we had approximately 2,800 patents and patent applications in the U.S.

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For information on various litigation risks associated with owning and using intellectual property rights, see “Risk Factors—Business Risks” in Item 1A of Part I of this report, and Note 18—Commitments, Contingencies and Other Items to our consolidated financial statements in Item 8 of Part II of this report.

Our domestic operations are regulated by the Federal Communications Commission (the “FCC”), by various state utility commissions and occasionally by local agencies.

Regulation of Our Business

Our domestic operations are regulated by the FCC, by various state regulatory commissions and occasionally by local agencies.

Our non-domestic operations are regulated by supranational groups (such as the European Union, or EU), national agencies and frequently state, provincial or local bodies.

Generally, we must obtain and maintain operating licenses from these bodies in most areas where we offer regulated services.

For information on the risks associated with the regulations discussed below, see “Risk Factors—Risks Relating to Legal and Regulatory Matters” in Item 1A of Part I of this report.

Changes in the composition and leadership of the FCC, state commissions and other agencies that regulate our business could have significant impacts on our revenue, expenses, competitive position and prospects.

For information on the risks associated with the regulations discussed below, see “Risk Factors—Legal and Regulatory Risks” in Item 1A of Part I of this report.

Changes in the composition and leadership of the FCC, state regulatory commissions and other agencies that regulate our business could have significant impacts on our revenue, expenses, competitive position and prospects.

Changes in the composition and leadership of these agencies are often difficult to predict, which makes future planning more difficult.

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The FCC regulates the interstate services we provide, including the business data service charges we bill for wholesale network transmission and intercarrier compensation, including the interstate access charges that we bill other communications companies in connection with the origination and termination of interstate phone calls.

Additionally, the FCC regulates several aspects of our business related to international communications services, privacy, public safety and network infrastructure, including (i) our access to and use of local telephone numbers, (ii) our provision of emergency 911 services and (iii) our use or removal (potentially on a reimbursable basis) of equipment produced by certain vendors deemed to cause potential national security risks.

We could incur substantial penalties if we fail to comply with the FCC’s applicable regulations.

Many of the FCC’s regulations adopted in recent years remain subject to judicial review and additional rulemakings, thus increasing the difficulty of determining the ultimate impact of these changes on us and our competitors.

Universal Service

In 2015, we accepted Connect America Fund or "CAF" funding from the FCC of approximately $500 million per year for six years to fund the deployment of voice and broadband capable infrastructure for approximately 1.2 million rural households and businesses in 33 of the 37 states in which we are an ILEC under the CAF Phase II high-cost support program.

As a result of accepting CAF Phase II support payments for 33 states, as well as existing merger-related commitments, we are obligated to make substantial capital expenditures to build infrastructure by certain specified milestone deadlines.

In accordance with the FCC’s January 2020 order, we elected to receive an additional year of CAF Phase II funding in 2021.

In 2015, we accepted CAF funding from the FCC of approximately $500 million per year for six years to fund the deployment of voice and broadband capable infrastructure for approximately 1.2 million rural households and businesses in 33 of the 37 states in which we then operated as an ILEC under the CAF Phase II high-cost support program.

As a result of accepting CAF Phase II support payments for 33 states, as well as existing merger-related commitments, we were obligated to make substantial capital expenditures to build infrastructure by certain specified milestone deadlines.

In accordance with the FCC’s January 2020 order, we elected to receive an additional year of CAF Phase II funding in the end of 2021.

In early 2020, the FCC created the Rural Digital Opportunity Fund (the “RDOF”), which is a new federal support program designed to replace the CAF Phase II program.

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We won bids for RDOF Phase I support payments of $26 million, annually.

These RDOF Phase I support payments are expected to begin January 1, 2022.

We expect our support payments under the RDOF Phase I program will begin soon after our anticipated receipt of the FCC's approval of our pending application.

Assuming we timely complete our pending divestiture of the ILEC business on the terms described herein, we expect a portion of these payments will accrue to the purchaser of that business.

See Note 2—Planned Divestiture of the Latin American and ILEC Businesses to our consolidated financial statements in Item 8 of Part II of this report for additional information.

For additional information about the potential financial impact of the CAF Phase II program, see "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Item 7 of Part II of this report.

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In February 2015, the FCC adopted an order classifying broadband internet access services (“BIAS”) under Title II of the Communications Act of 1934 and applying new regulations.

In December 2017, the FCC voted to repeal most of those regulations and the classification of BIAS as a Title II service to preempt states from imposing substantial regulations on broadband.

In December 2017, the FCC voted to repeal the classification of BIAS as a Title II service and to preempt states from imposing substantial regulations on broadband.

Opponents of this change appealed this action in federal court.

Several states have also opposed the change and have initiated state executive orders or introduced legislation focused on state-specific Internet service regulation.

Several states have also opposed the change and have proposed, implemented or enacted laws or orders focused on state-specific Internet service regulation.

In October 2019, the federal court upheld the FCC’s classification decision but vacated a part of its preemption ruling.

The court also requested the FCC to make further findings relating to its classification decision.

Numerous parties have appealed this decision, which remain pending.

Various courts are considering or have ruled upon the issue of the enforceability of state broadband regulation, and additional litigation and appeals are expected with respect to this issue.

In addition, members of the Biden Administration and various consumer interest groups have advocated in favor of reclassifying BIAS under Title II.

The ultimate impact of these pending judicial appeals and calls for additional regulation are currently unknown to us, although the imposition of heightened regulation of our Internet operations could potentially hamper our ability to operate our data networks efficiently, restrict our ability to implement network management practices necessary to ensure quality service, increase the cost of operating, maintaining and upgrading our network and otherwise negatively impact our current operations.

The ultimate impact of these pending judicial matters and calls for additional regulation are currently unknown to us, although the imposition of heightened regulation of our Internet operations could potentially hamper our ability to operate our data networks efficiently, restrict our ability to implement network management practices necessary to ensure quality service, increase the cost of operating, maintaining and upgrading our network and otherwise negatively impact our current operations.

State Regulation of Domestic Operations

In recent years, most states have reduced their regulation of ILECs, including ours.

Nonetheless, state regulatory commissions generally continue to (i) set the rates that telecommunication companies charge each other for exchanging traffic, (ii) administer support programs designed to subsidize the provision of services to high-cost rural areas, (iii) regulate the purchase and sale of ILECs, (iv) require ILECs to provide service under publicly-filed tariffs setting forth the terms, conditions and prices of regulated services, (v) limit ILECs’ ability to borrow and pledge their assets, (vi) regulate transactions between ILECs and their affiliates and (vii) impose various other service standards.

Historically ILECs, including ours, have been regulated as “common carriers,” and state regulatory commissions have generally exercised jurisdiction over intrastate voice telecommunications services and their associated facilities.

In recent years, most states have reduced their regulation of ILECs.

State regulatory commissions generally continue to (i) set the rates that telecommunications companies charge each other for exchanging traffic, (ii) administer support programs designed to subsidize the provision of services to high-cost rural areas, (iii) regulate the purchase and sale of ILECs, (iv) require ILECs to provide service under publicly-filed tariffs setting forth the terms, conditions and prices of regulated services, (v) limit ILECs’ ability to borrow and pledge their assets, (vi) regulate transactions between ILECs and their affiliates and (vii) impose various other service standards.

In most states, switched and business data services and interconnection services are subject to price regulation, although the extent of regulation varies by type of service and geographic region.

In addition, our Voice-Over-Internet Protocol services are regulated more lightly than legacy telephone services.

Data Privacy Regulations

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Data privacy regulations are complex and vary across jurisdictions.

As a global company, we must comply with various jurisdictional data privacy regulations, including the General Data Protection Regulation (“GDPR”) in the EU and

similar laws adopted by various other jurisdictions in certain of our domestic and overseas markets.

As a global company, we must comply with various jurisdictional data privacy regulations, including the General Data Protection Regulation (“GDPR”) in the EU and similar laws adopted by various other jurisdictions in certain of our domestic and overseas markets.

The application, interpretation and enforcement of these laws are often uncertain, and may be interpreted and applied inconsistently from jurisdiction to jurisdiction.

These regulations require careful handling of personal and customer data.

We have data handling policies and practices to comply with global data privacy requirements, including GDPR and similar regulations, and have resources dedicated to complying with changing data privacy regulations.

These regulations require careful handling of personal and customer data and could have a significant impact on our business.

We have adopted data handling policies and practices to comply with global data privacy requirements, including GDPR and similar regulations.

Anti-Bribery and Corruption Regulations

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and other jurisdictions.

We monitor pending and proposed legislation and regulatory changes that may impact our business and develop strategies to address the changes and incorporate them into existing compliance programs.

International Regulations

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Many issues, including the pricing of services, have not been addressed fully, or even at all.

The United Kingdom (“UK”) recently terminated its membership in the EU (“Brexit”), subject to the negotiation of additional separation agreements with the EU regarding data sharing, financial services and other matters.

The United Kingdom (“UK”) recently terminated its membership in the EU (“Brexit”) and has entered into related separation agreements with the EU regarding data sharing, financial services and other matters.

Several factors which are currently unknown will influence Brexit’s ultimate impact on our business.

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Other Regulations

Our networks and properties are subject to numerous federal, state and local regulations, including environmental compliance and remediation expenses.

Our networks and properties are subject to numerous federal, state and local laws and regulations, including laws and regulations governing the use, storage and disposal of hazardous materials, the release of pollutants into the environment and the remediation of contamination.

Our contingent liabilities under these laws are further described in Note 18—Commitments, Contingencies and Other Items.

Certain federal and state agencies, including attorneys general, monitor and exercise oversight related to consumer protection issues.

We are also subject to codes that regulate our trenching and construction operations or that require us to obtain permits, licenses or franchises to operate.

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Such regulations may also require us to pay substantial fees.

Acquisitions and Dispositions

Since being incorporated in 1968, we have grown principally through acquisitions.

By 2008, we had become one of the largest providers of rural telephone services in the United States.

Since then, we acquired Embarq Corporation in mid-2009, Qwest Communications International Inc.

in early 2011 and Level 3 Communications, Inc.

in late 2017.

These acquisitions have substantially changed our customer base, geographic footprint, business strategies and mix of products and services.

We regularly evaluate the possibility of acquiring additional assets or disposing of assets in exchange for cash, securities or other properties, and at any given time may be engaged in discussions or negotiations regarding additional acquisitions or dispositions.

We generally do not announce our acquisitions or dispositions until we have entered into a preliminary or definitive agreement.

See Note 2—Goodwill, Customer Relationships and Other Intangible Assets to our consolidated financial statements in Item 8 of Part II of this report for additional information on these acquisitions.

Overall, our business is not materially impacted by seasonality.

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To the extent that reports issued by securities analysts contain any projections, forecasts or opinions, such reports are not our responsibility.

Unless otherwise indicated, information contained in this report and other documents filed by us under the federal securities laws concerning our views and expectations regarding the technology or communications industries are based on estimates made by us using data from industry sources, and on assumptions made by us based on our management’s knowledge and experience in the markets in which we operate and our industry generally.

Unless otherwise indicated, information contained in this report and other documents filed by us under the federal securities laws concerning our views and expectations regarding the technology or communications industries are based on estimates made by us using data from industry sources and making assumptions based on our industry knowledge and experience.

You should be aware that we have not independently verified data from industry or other third-party sources and cannot guarantee its accuracy or completeness.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business