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Item 1. Business

2025-02-20 compared with 2024-02-22 · 128 added, 132 removed, 266 unchanged (49% of the section changed)

Business Overview and Purpose

We are a facilities-based technology and communications company that provides a broad array of integrated products and services to our domestic and global business customers and our domestic mass markets customers.

We operate one of the world’s most interconnected networks.

We are a networking company with the goal of connecting people, data, and applications quickly, securely and effortlessly.

We are unleashing the world's digital potential by providing a broad array of integrated products and services to our domestic and global Business customers and our domestic Mass Markets customers.

We operate one of the world’s most interconnected communications networks.

Our platform empowers our customers to swiftly adjust digital programs to meet immediate demands, create efficiencies, accelerate market access and reduce costs, which allows our customers to rapidly evolve their IT programs to address dynamic changes.

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

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 copper-based services, managed for cash flow and optimal efficiency.

With approximately 170,000 on-net buildings and 350,000 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 four brands:

• "Lumen," which is our flagship brand for serving the enterprise and wholesale markets, including our Private Connectivity Fabric SM ("PCF") network architecture, Lumen Digital products, and our priority services including Edge, Network-as-a-Service and cybersecurity;

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

• "CenturyLink," which is our long-standing brand for providing primarily mass-marketed copper-based communications services, which we manage for cash flow;

• "Black Lotus Labs," which is our cyberthreat research and intelligence arm.

With approximately 163,000 fiber on-net buildings and 340,000 route miles of fiber optic cable globally, we are among the largest providers of communications services to domestic and global enterprise customers.

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

As further discussed immediately below under the heading “Acquisitions and Divestitures,” we sold (i) our Latin American business and a portion of our incumbent local exchange business ("ILEC") during 2022 and (ii) our business conducted in Europe, the Middle East and Africa ("EMEA") during 2023.

As further discussed immediately below under the heading “Acquisitions and Divestitures,” we sold (i) both our Latin American business and a portion of our incumbent local exchange carrier ("ILEC") business during 2022 and (ii) our business conducted in Europe, the Middle East and Africa ("EMEA") during 2023.

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

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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.

We subsequently acquired Embarq Corporation in mid-2009, Qwest Communications International Inc.

in early 2011 and Level 3 Communications, Inc.

in late 2017.

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

These acquisitions substantially expanded our geographic footprint, reduced our focus on providing legacy telecommunications services to retail customers, and increased our focus on providing more modern technology and communications services to Business customers.

We continue to 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.

Divestitures of the Latin American, ILEC and EMEA Businesses

Divestitures of Businesses

On August 1, 2022, affiliates of Level 3 Parent, LLC, an indirect wholly-owned subsidiary of Lumen Technologies, Inc., sold Lumen’s Latin American business.

On October 3, 2022, we and certain of our affiliates sold the portion of our facilities-based ILEC business primarily conducted within 20 Midwestern and Southeastern states.

On November 1, 2023, affiliates of Level 3 Parent, LLC sold Lumen's operations in Europe, the Middle East and Africa (the "EMEA business").

On October 3, 2022, we and certain of our affiliates sold the portion of our facilities-based ILEC business primarily conducted within 20 Midwestern and Southeastern states (and retained the remainder of this business, which is conducted in 17 states, primarily in the Western United States).

On November 1, 2023, affiliates of Level 3 Parent, LLC sold Lumen's operations in EMEA.

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

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Operating expenses 12,648 24,141 17,383

Operating (loss) income $ (9,584) 95 4,285

Net (loss) income $ (10,298) (1,548) 2,033

Operating income (loss) $ 460 (9,584) 95

Net loss $ (55) (10,298) (1,548)

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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;

• monetize our non-core assets and deliver cost-effective operations;

• manage our non-fiber business for cash flow;

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

• deliver best in class infrastructure to meet network, transport, data, and computing needs;

• optimize and innovate the way locations, data centers, and clouds connect;

• limit, detect, and mitigate network and data security vulnerabilities;

• expand our product offerings and strengthen our digital self-service ordering platforms;

• create a more adaptive and integrated network;

• continue to monetize our network-related assets, principally through the sale of PCF solutions;

• expand our network capacity through our AI backbone initiative;

• execute on our Quantum Fiber buildout plan;

• manage our non-core business for cash flow;

• strengthen our financial position and performance through our modernization and simplification initiatives, resulting in lower costs and debt reduction.

Our Stakeholders

We believe that regular communications with our stakeholders is a vital component of Lumen's success.

Our "North Star" guides us to operate with transparency and infuses clarity into the communications we have with all of our stakeholders including our investors, employees, customers, vendors, partners and our global community.

Our "North Star" strategy focuses on the operating principles of teamwork, trust, and transparency and infuses clarity into the communications we have with all of our stakeholders, including our investors, employees, customers, vendors, partners and our local communities.

Employees and Human Capital Resources

To position Lumen for growth and success, we have made changes to our executive leadership team that have played a critical role in modernizing our business, attracting new talent and invigorating our culture.

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.

To position Lumen for growth and success, we have made changes to our senior leadership team that have played a critical role in modernizing our business, attracting new talent and invigorating our culture.

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

We aim to bring together the best mix of diverse talent to develop the brightest ideas to transform industries across the globe.

We aim to bring together the best mix of talent to develop the brightest ideas to transform industries across the globe.

At December 31, 2024, we had approximately 25,000 employees world-wide, including approximately 3,400 outside the U.S.

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We strive to hire and retain the best talent available to provide outstanding opportunities for career advancement and to champion fair selections and best hiring practices.

We have implemented diverse interview panels, which include at least one woman or person of color, to minimize the potential for unconscious bias in our recruitment process.

We have also developed a non-biased pre-hire assessment process.

We have established a framework of competency-based success profiles and regular career development and training programs, which we believe empower our employees to pursue their professional goals and improve employee engagement and retention.

We have implemented a rigorous hiring process and established a framework of competency-based success profiles and regular career development and training programs, which we believe empower our employees to pursue their professional goals and improve employee engagement and retention.

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

In an effort to create more development opportunities for all employees, we are expanding our 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 fostering internal mobility and providing more visibility and career advancement opportunities to our workforce through our internal communications platforms.

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

We support this culture of growth through a robust learning ecosystem, offering approximately 8,900 courses within our learning management system, the majority of which are Lumen-specific content, and a vast library of over 150,000 resources on our learning platform.

Developing strong leaders who can move our company forward is a priority for Lumen.

We gauge the efficacy of our programs, identify opportunities for improvement, and pursue solutions through tracking and analyzing data in a variety of ways, including conducting annual talent reviews and measuring our progress toward goals specified in our development, diversity and inclusion plans.

Diversity, Inclusion & Belonging

We believe that diversity stimulates creativity, spurs innovation and helps drive profitability, which is why we strive to create inclusive, welcoming workplaces where everyone can feel at home, be their authentic selves and thrive.

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

Our Diversity & Inclusion Steering Committee, comprised of a cross-functional team of senior executives, including our Chief Diversity & Inclusion Officer, oversees and champions our diversity, inclusion and belonging strategy.

We aim for the highest standards of fairness and equal opportunity in recruitment, hiring, promotions, job assignments and compensation (including undertaking periodic gender and race/ethnicity pay equity studies of our U.S., non-represented employees and making pay adjustments when warranted).

Inclusive recruiting and outreach programs for diverse candidates, supportive and engaging employee resource groups, and management-led listening circles are among some of Lumen’s initiatives to create greater diversity and belonging among our employees.

Positive Corporate Culture

Our employees are critical to Lumen's success and we believe creating a positive, inclusive culture is essential to attracting and retaining engaged employees.

We want our employees to be proud to work with us and fully engaged to share in our purpose maximize the world's digital potential.

At Lumen, we are focused on transforming our business and delivering results for our colleagues, customers, partners, and shareholders.

Our employees are critical to Lumen's success and we believe creating a winning culture and teams with different skills, perspectives, experiences, and backgrounds is essential to attracting and retaining engaged employees.

Lumen is transforming from the bottom up, by building a culture of teamwork, trust, and transparency.

Lumen's cultural transformation strategy incorporates a wide variety of communication and training activities encouraging collaboration among our colleagues around the world.

We measure the program’s efficacy and identify opportunities for improvements through an engagement survey distributed approximately every six months.

We will continue to recruit and retain the best talent based on individual merit and to create a respectful and engaged workplace.

We want our employees to be proud to work with us and fully engaged to share in our purpose to unleash the world's digital potential.

Lumen adheres to the principles set forth in its Code of Conduct, and will always endeavor to fully comply with local, state, and federal laws and regulations.

Health & Wellness

We are committed to promoting the health, safety and well-being of our employees, business partners and global communities.

Lumen strives for an above-average safety performance as we continue our investments in programs and training to support health and safety.

We want all of our employees to thrive, and we regularly re-evaluate how to best support our employees’ well-being through benefits and resources.

We design our current benefit and wellness programs to drive engagement that positively impacts our culture, job satisfaction, recruiting and retention programs.

We offer progressive employee benefits and enhancements that recognize the diverse needs of our people and their families.

We are committed to promoting the health, safety and well-being of our people, partners, and the communities we serve.

Lumen strives to outperform the industry average safety performance as we continue our investments in programs and training to support health and safety.

Our aim is to help all of our employees to thrive, and we regularly re-evaluate how to best support our employees’ well-being through benefits and resources.

We invest in the physical, mental, and emotional well-being of our people through a comprehensive suite of benefits.

Our benefit and wellness programs are designed to drive engagement that positively impacts our culture, job satisfaction, recruiting and retention programs.

We offer progressive employee benefits and enhancements that recognize the unique needs of our people and their families.

Labor Relations

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Understanding how each customer accesses and uses our products and services informs the type of customer engagement to best meet their expectations.

Lumen's Customer Experience ("CX") team takes the lead in driving customer obsession and guiding the company toward our North Star by listening and learning from our customers, then acting to meet their needs.

This assists us in accomplishing our mission of igniting business growth by connecting people, data and applications - quickly, securely, and effortlessly.

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

Our commitment to staying abreast of our customers’ needs is evident in our Customer Advisory Board, a forum where some of our largest customers gather twice a year to discuss emerging technology trends.

In addition, the Lumen Customer Community is an interactive online platform designed exclusively for Lumen customers which serves as a central hub where customers can connect with each other and access valuable resources.

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

We highly value both customer and employee suggestions.

We offer our customers several channels for communicating with us, including voice, text, email, chat and social media, among others.

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.

Since 2019, we have hosted an annual 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.

We offer our customers several channels for communicating with us, including voice, text, email, chat and social media.

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

Since 2019, we have hosted an annual customer experience 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 incorporating employee feedback is the most effective way to collect comprehensive data to continuously improve.

We regularly invite our front-line employees to provide feedback on opportunities to improve our capabilities.

Partners and Vendors

We leverage a digital ecosystem of trusted partners to help us innovate and grow.

We seek to engage with those partners and vendors who best contribute to our customers’ success.

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

Lumen seeks to co-innovate with a comprehensive group of strategic partners to create solutions focused on our customers' business and IT requirements.

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

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We believe that co-innovating with other companies enables us to more rapidly improve our customer offerings.

In addition, we provide services to our customers in Latin America and EMEA through contractual relationships with third-party carriers.

Under these arrangements, the third-party carriers invoice us for their services, and we pass along those charges to our customers through our invoices.

Environmental Stewardship and Sustainability

We believe our commitment to environmental sustainability promotes the financial health of our business and strengthens our relations with our employees, communities, customers and investors.

In early 2022, we formed the Sustainability Management Committee (“SMC”) comprised of employees from across the business.

The SMC designs and oversees our company-wide sustainability program, including the monitoring of climate-related issues, and is responsible for driving our sustainability agenda with the Board and senior leadership.

Additionally, our Environment, Health and Safety ("EHS") team is responsible for overseeing and implementing our EHS and environmental sustainability initiatives.

The EHS program framework focuses on the following key areas:

Lumen's Sustainability Management Committee (“SMC”) is the driving force behind our comprehensive sustainability program, including the monitoring of climate-related issues.

This cross-functional committee, composed of senior and seasoned leaders from diverse areas of our business, is responsible for driving our sustainability agenda with our Board of Directors and senior leadership.

The SMC often works closely with Lumen's Environment, Health and Safety ("EHS") team, a management-level group responsible for overseeing and implementing our EHS and environmental sustainability initiatives.

Our EHS program focuses on the following 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.

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

• Energy and emissions :

In an effort to reduce our carbon footprint, we continue to identify and implement energy efficiency and greenhouse gas ("GHG") emissions reduction initiatives.

In November 2023, we announced early achievement of our 2018-2025 science-based GHG emissions-reduction targets.

We recently announced early achievement of our 2018-2025 science-based GHG emissions-reduction targets and we are proud to have exceeded our targets ahead of schedule.

We remain committed to exploring ways to reduce GHG emissions through our operational, customer and employee initiatives.

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We strive to reduce our water consumption, especially in the water-stressed communities where we operate.

We track our usage and closely monitor abnormalities to improve water efficiencies and reduce site discharge.

We are committed to reusing and recycling products, minimizing material use and carefully managing our waste.

Each year, we divert millions of pounds of electronic and communications equipment from landfills.

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.

We track our usage, monitor trends, and implement measures to enhance efficiency and reduce discharge.

We are committed to reusing and recycling products, carefully managing our waste and minimizing material use throughout our operations.

We encourage customers to return to us their equipment, which is then either reused or sent to a certified recycler.

This and other programs enable us to divert electronic and communications equipment from landfills.

• Supplier environmental assessment :

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• Climate preparedness :

We evaluate various climate change risks to our ongoing operations when we consider expanding our network or facilities.

We evaluate various climate-related risks to our ongoing operations when we consider expanding our network or facilities.

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

Weather events such as severe flooding and hurricanes can impact our ability to deliver services, so business resiliency and adaptability is key to the long-term viability of our business.

Weather events such as severe flooding, wildfires and hurricanes can impact our ability to deliver services, so business resiliency and adaptability is key to the long-term viability of our business.

• Occupational health and safety :

The EHS team conducts risk assessments, reviews safety incident data and monitors health and safety legislation to develop policies and procedures designed to minimize safety hazards and support compliance with applicable laws and regulations.

We conduct risk assessments, review safety incident data and monitor health and safety legislation to develop policies and procedures designed to minimize safety hazards and support compliance with applicable laws and regulations.

We continuously monitor safety performance to identify trends and evaluate opportunities to eliminate or reduce the risks of workplace hazards.

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

At December 31, 2023, our network (owned and leased) included (i) approximately 350,000 route miles of fiber optic plant and (ii) multiple gateway and transmission facilities used in connection with operating our network throughout North America.

At December 31, 2023, our domestic network connected to (i) approximately 170,000 buildings, which we refer to as “Fiber On-net” buildings, serving our enterprise customer base and (ii) approximately 21.8 million broadband-enabled units capable of serving our Mass Markets customer base.

At December 31, 2023, approximately 3.7 million of our Mass Markets broadband-enabled units were capable of receiving services from our fiber-based infrastructure, with the remainder connected with copper-based infrastructure.

At December 31, 2024, our network (owned and leased) included approximately 340,000 route miles of fiber optic plant, most of which consists of "long-haul" fiber connecting major metropolitan centers and the remainder of which is "metro" fiber that connects buildings within the metropolitan markets we serve.

We also own copper-based network infrastructure and multiple gateway and transmission facilities used in connection with operating our network throughout North America.

At December 31, 2024, our domestic network connected to (i) approximately 163,000 buildings, which we refer to as “fiber on-net” buildings, located in 226 metropolitan markets serving our enterprise customer base and (ii) approximately 22.0 million broadband-enabled units capable of receiving our Mass Markets broadband services across 17 states.

At December 31, 2024, approximately 4.2 million of our 22.0 million Mass Markets broadband-enabled units were capable of receiving services from our fiber-based infrastructure, with the remainder connected with copper-based infrastructure.

Our domestic network also included at such date central office and other equipment that enables us to provide telephone service as an ILEC.

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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 remaining 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.

As a critical infrastructure provider, we are a constant target of cyber-attacks from a wide range of intruders, including advanced persistent threat actors.

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

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

As a critical infrastructure provider, we and our customers are a constant target of cyber-attacks from a wide range of intruders, including advanced persistent threat actors.

From time to time in the ordinary course of our business, we experience security incidents and disruption in our services.

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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.

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

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

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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 technological and industry changes.

Depending on the applicable market and services, competition can be intense, especially if competitors in the market have network assets better suited to customer needs, faster transmission speeds or lower prices, or, in certain overseas markets, are national or regional incumbent communications providers that have a longer history of providing service in the market.

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.

Competition from large communications providers, systems integrators, hyperscalers and others have increased pricing pressures with respect to several key products and services that we offer to our enterprise and wholesale business customers.

In particular, several hyperscalers have recently built their own data transmission facilities, which has reduced demand for our network services.

Depending on the applicable market and services, competition can be intense, especially if competitors in the market have network assets better suited to customer needs, faster transmission speeds, lower prices, or a longer history of providing service in the market.

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, digital ordering capabilities, ease of access and use, billing simplicity and customer service.

We continue to experience pricing pressure for several of our products and services due to a wide array of large communications companies and systems integrators providing high-speed fiber services to enterprise and wholesale business customers and other companies that market slower-speed non-fiber services typically at lower prices to more price-sensitive customers.

Competition to provide broadband services to our Mass Markets customers remains high.

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

To meet these demands and remain competitive, we are continuing to invest in network capacity, security, reliability, flexibility and design innovations, including through our Quantum Fiber buildout initiative.

For our traditional voice services, providers of wireless voice, social networking, videoconferencing and electronic messaging services are significant competitors as many customers are increasingly using these services to communicate, resulting in the long-term systemic decline in our traditional voice services.

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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 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.

We anticipate that all these trends will continue to decrease use of our voice network.

We continue to operate various ILECs, which are obligated under federal law 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.

Consequently, our ILECs face competition from competitive local exchange carriers ("CLECs"), which typically 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.

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

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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.

To meet the needs of different customers, our offerings include both stand-alone services and bundled services designed to provide a complete offering of integrated services.

To meet the needs of different customers, our offerings include both stand-alone services and bundled services, such as our PCF solutions, designed to provide a complete offering of integrated services.

Our Business customers range from small business offices to the world’s largest global enterprise customers.

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• 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;

Under our Business segment, we provide our products and services under five 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 residential and small business customers.

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

The following table shows the composition of our operating revenue by segment for the years ended December 31, 2024, 2023 and 2022:

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• Grow, which includes products and services that we anticipate will grow, including:

◦ Dark Fiber.

◦ Dark Fiber and Conduit.

We control 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.

We provide access to this unlit optical fiber to customers who are interested in building their networks with this high-bandwidth, highly secure optical technology.

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

We also provide access to conduit, which are ducts installed underground to house and protect fiber optic cables.

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

◦ Edge Cloud Services.

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Our fiber network spans approximately 340,000 route miles globally with extensive off-net access solutions across North America and Asia Pacific;

◦ Communications (Voice over IP, "VoIP").

We offer a VoIP portfolio, including session initiation protocol ("SIP") trunking, and our Cloud Voice Solution, which combines hosted voice, SIP trunking, and branded collaboration.

Our Cloud Communications platform moves voice communications to the cloud for seamless communication, operational efficiency, and reliable, cost-effective support for critical safety systems;

◦ Managed Security Services.

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Our tools, technology and hands-on expertise provide the ability to design, deploy and evolve with business needs while maintaining complete visibility, security and control;

◦ Secure Access Service Edge ("SASE").

We offer Lumen Secure Access Service Edge (SASE) as a comprehensive network and security solution using a cloud-first architecture, centered around zero-trust security principles.

The service is delivered from a choice of multiple SASE software partners, offers flexible service management options, and is available on our IP backbone with several access options to connect and protect customer networks;

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

We provide access to various unified communications platforms.

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

This offering includes both individual, license-based service models and more robust enterprise-wide options that transform a customer’s various communication tools into a single platform;

◦ Optical Services .

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Leveraging 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.

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

• Harvest, which includes our legacy services managed for cash flow, including:

◦ Voice Services.

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;

We offer our customers a complete portfolio of traditional Time Division Multiplexing voice services including primary rate interface service, local inbound service, switched one-plus, toll free, long distance and international services;

◦ Private Line.

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We sell and install certain communications equipment.

◦ IT Solutions.

◦ Managed and Professional Service Solutions.

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

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and other countries.

We have also received licenses to use patents held by others, which give us the freedom to operate our business without the risk of interruption from the holder of the patented technology.

We have also received licenses to use patents held by others.

We plan to continue to file new patent applications as we enhance and develop products and services, and we plan to continue to seek opportunities to expand our patent portfolio through strategic acquisitions and licensing.

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Universal Service

Between 2015 and 2021, we received approximately $500 million annually through Phase II of the FCC's Connect America Fund ("CAF II"), a program that ended on December 31, 2021.

For several years, the federal government has instituted various funding programs to facilitate greater access to broadband services, including those noted below.

Between 2015 and 2021, we received approximately $500 million annually through Phase II of the FCC's Connect America Fund ("CAF II"), a broadband support program that ended on December 31, 2021.

In connection with the CAF II funding, we were required to meet certain specified infrastructure buildout requirements in 33 states by the end of 2021, which required substantial capital expenditures.

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The government has the right to audit our compliance with the CAF II program.

The ultimate outcome of any remaining examinations is unknown, but could result in a liability to us in excess of our reserve accruals established for these matters.

The ultimate outcome of any remaining examinations is unknown, but could result in a liability to us in excess of our accruals established for these matters.

In January 2020, the FCC created the Rural Digital Opportunity Fund (“RDOF”) program, a federal support program designed to fund broadband deployment in rural America.

For the first phase of this program, RDOF Phase I, the FCC ultimately awarded $6.4 billion in support payments to be paid in equal monthly installments over 10 years.

For the first phase of this program, RDOF Phase I, the FCC awarded $6.4 billion in support payments to be paid in equal monthly installments over 10 years.

We were awarded RDOF funding in several of the states in which we operate and began receiving monthly support payments during the second quarter of 2022.

We received approximately $17 million in annual RDOF Phase I support payments for each of the years ended December 31, 2023 and 2022 and expect to receive this same amount each year thereafter during the program period.

Federal officials have proposed changes to current programs and laws that could impact us, including proposals designed to increase broadband access, increase competition among broadband providers, lower broadband costs and re-adopt "net neutrality" rules similar to those adopted under a prior administration.

We received approximately $17 million in annual RDOF Phase I support payments for each of the years ended December 31, 2023 and 2022.

In the third quarter of 2024, we relinquished rights to develop certain RDOF census blocks in four states, which resulted in (i) a reduction of our anticipated RDOF Phase I support payments to approximately $16 million for the year ending December 31, 2024 and $15 million each remaining year thereafter and (ii) an expectation of payment to the federal government, which we anticipate will be approximately $10 million.

In late 2021, the U.S.

Congress enacted legislation that appropriated $65 billion to improve broadband affordability and access, primarily through federally funded state grants.

As of the date of this report, various state and federal agencies are continuing to take steps to make this funding available to eligible applicants, including us.

Although it remains premature to speculate on the ultimate impact of this legislation on us, we anticipate that the release of this funding would increase competition for broadband customers in newly-served areas.

As of the date of this report, various state and federal agencies are continuing to take steps to make this funding available to eligible applicants.

We believe that the release of this funding could increase competition for broadband customers.

In mid-2024, a federal appellate court ruled that the FCC's universal service funding system, which levied fees against us and other telecommunication companies, was unlawful.

Due to pending judicial and legislative proceedings, it is unclear how this development may ultimately impact us.

For additional information about these programs, see (i) Note 4—Revenue Recognition to our consolidated financial statements in Item 8 of Part II of this report and (ii) "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Item 7 of Part II of this report.

Broadband Regulation

In February 2015, the FCC adopted an order regulating broadband internet access services (“BIAS”) as a Title II utility service under the Communications Act of 1934.

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

Opponents of this change appealed this action in federal court.

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.

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 current administration and various consumer interest groups have advocated in favor of reclassifying BIAS as a Title II utility service.

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.

In February 2015, the FCC adopted an order regulating broadband internet access services (“BIAS”) as a common carrier service under Title II of the Communications Act of 1934.

In December 2017, the FCC voted to repeal this order.

In May 2024, the FCC adopted a new order regulating BIAS as a Title II utility service, but a federal appeals court vacated this order in January 2025.

Several states have proposed, implemented or enacted laws or orders focused on state-specific Internet service regulation.

In addition, certain members of Congress and various consumer interest groups have advocated in favor of classifying BIAS as a Title II utility service.

These developments make it difficult to predict the future degree of regulation of BIAS.

Any 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

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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.

State regulatory commissions generally continue to (i) set the rates that telecommunications companies charge each other for exchanging traffic, (ii) exercise some control over the rates telecommunications companies charge their customers for regulated services, (iii) require ILECs to provide voice service throughout their territories, particularly in areas where alternative voice service is not available, (iv) administer support programs designed to subsidize the provision of services to high-cost rural areas, (v) regulate the purchase and sale of ILECs, (vi) require ILECs to provide service under publicly-filed tariffs setting forth the terms, conditions and prices of regulated services, (vii) limit ILECs’ ability to borrow and pledge their assets, (viii) regulate transactions between ILECs and their affiliates and (ix) 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, Voice-Over-Internet Protocol services are regulated by state regulators, but more lightly than ILEC services.

State agencies also regulate certain aspects of non-ILEC communications businesses, including administering the payment of federal subsidies to support broadband infrastructure construction.

State agencies also regulate certain aspects of non-ILEC communications businesses, including determining carriers’ eligibility to receive federal universal service fund support.

Data Privacy Laws and Regulations

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The scope of regulation varies from country to country.

The communications regulatory regimes in certain of our non-domestic markets are in the process of development.

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

Our overseas operations are also subject to various other domestic or non-domestic laws or regulations, including various laws or regulations governing exports and imports of various goods or technologies and certain sanctioned business activities.

In 2020, the United Kingdom (“UK”) 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.

Following the sale of our EMEA operations on November 1, 2023, we conduct only limited operations within the UK and EU.

Consequently, we do not anticipate Brexit will have a substantial impact on our business.

The communications regulatory regimes in certain of our non-domestic markets are in the process of development and do not fully address many issues, including the pricing of services.

Our overseas operations are also subject to various other domestic or non-domestic laws or regulations, including various laws or regulations governing (i) exports and imports of various goods or technologies, (ii) certain sanctioned business activities, and (iii) competition.

Other Regulations

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Such regulations are enacted by municipalities, counties, state, federal or other regional governmental bodies, and can vary widely from jurisdiction to jurisdiction as a result.

Such regulations may also require us to pay substantial fees.

Such regulations may also require us to pay substantial fees or impact our network buildout initiatives.

Overall, our business is not materially impacted by seasonality.

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From time to time, weather-related problems have resulted in increased costs to repair our network and respond to service calls in some of our markets.

The amount and timing of these costs are subject to the weather patterns of any given year but have generally been highest during the third quarter and have been related to damage from severe storms, including hurricanes, tropical storms and tornadoes in our markets along the Atlantic and Gulf of Mexico coastlines.

Additional Information

From time to time, we may make investments in other communications or technology companies.

For further information on regulatory, technological and competitive factors that could impact our revenue, see "Regulation" and "Competition" above under this Item 1 and "Risk Factors" below under Item 1A.

For further information on regulatory, technological and competitive factors that could impact our revenue, see "Risk Factors" below under Item 1A.

For more information on the financial contributions of our various services, 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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Any references to our website in this report or any other periodic reports that we file with the SEC are provided for convenience only, and are not intended to make any of our website information a part of this or such other reports.

You may obtain free electronic copies of annual reports on Form 10-K, quarterly reports on Form 10-Q, and current reports on Form 8-K of us and two of our principal subsidiaries, and amendments to those reports, in the “Investor Relations” section of our website ( ir.lumen.com ) under the heading “FINANCIALS” and subheading “SEC Filings.” These reports are also available on the SEC’s website at www.sec.gov .

You may obtain free electronic copies of our annual reports on Form 10-K, quarterly reports on Form 10-Q, and current reports on Form 8-K (i) in the “Investor Relations” section of our website ( ir.lumen.com ) under the heading “FINANCIALS” and subheading “SEC Filings" or (ii) on the SEC’s website at www.sec.gov .

In like manner, you may obtain free electronic copies of reports filed by two of our principal subsidiaries, which contain supplemental information about us that you may find useful.

From time to time, we also use our website to webcast our earnings calls and certain of our meetings with investors or other members of the investment community.

We have adopted a written Code of Conduct that serves as the code of ethics applicable to our directors, officers and employees, in accordance with applicable laws and rules promulgated by the SEC and the New York Stock Exchange.

In the event that we make any changes (other than by a technical, administrative or non-substantive amendment) to, or provide any waivers from, the provisions of our code of conduct applicable to our directors or executive officers, we intend to disclose these events on our website or in a report on Form 8-K filed with the SEC.

The code of conduct, as well as copies of our guidelines on significant governance issues and the charters of our key board committees, are also available in the “Governance” section of our website at www.lumen.com/en-us/about/governance or in print to any shareholder who requests them by sending a written request to our Corporate Secretary at Lumen Technologies, Inc., 100 CenturyLink Drive, Monroe, Louisiana, 71203.

In the event that we make any changes (other than by a technical, administrative or non-substantive amendment) to, or provide any waivers from, the provisions of our Code of Conduct applicable to our directors or executive officers, we intend to disclose these events on our website.

The Code of Conduct, as well as various other governance documents, are also available in the “Governance” section of our website at www.lumen.com/en-us/about/governance or in print to any shareholder who requests them by sending a written request to our Corporate Secretary at Lumen Technologies, Inc., 100 CenturyLink Drive, Monroe, Louisiana, 71203.

In connection with filing this report, our chief executive officer and chief financial officer made the certifications regarding our financial disclosures required under the Sarbanes-Oxley Act of 2002, and its related regulations.

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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 making assumptions based on our industry knowledge and experience.

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 industry conditions 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.

We have developed methodologies for calculating certain of our statistical data, including route miles, broadband subscribers, broadband-enabled units, on-net buildings and similar metrics.

We have developed methodologies for calculating certain of our statistical data, including route miles, fiber miles (determined by multiplying the route miles of fiber cables by the cable's fiber strands), broadband subscribers, broadband-enabled units, fiber on-net buildings (which are buildings in metropolitan markets connected to our network) and similar metrics.

We may calculate these amounts differently from other industry participants.

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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