Lumen Technologies Inc
For the period ended Sep 30, 2024. Filed Nov 5, 2024.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2024 · Filed Nov 5, 2024
LUMN$3.99+0.3%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-06-30; filed 2024-08-06.
0000018926-24-000094
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-09-30; filed 2024-11-05.
0000018926-24-000111
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 183 previous paragraphs and 187 current paragraphs.
121 unchanged; 60 reworded; 6 added; 2 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 18 previous and 18 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (6)
Current report
Impact of PCF Transactions
Current report
The Company announced on August 5, 2024 that Lumen and its subsidiaries had recently sold $5 billion in new Private Connectivity Fabric SM (“PCF”) solutions and has since closed over $3 billion in additional PCF sales.
Current report
During the quarter ended September 30, 2024, we began receiving advanced payments under these agreements, which increased our net cash provided by operating activities reflected in our consolidated statements of cash flows and our deferred revenue reflected in our consolidated balance sheets. We anticipate that our continued receipt of cash payments under these agreements will (i) cause our consolidated cash flows to vary from quarter to quarter over the next several years and (ii) enable us to accelerate our network simplification initiatives. In addition, we expect our consolidated capital expenditures to increase as we use these cash receipts to fund network expansion projects contemplated under such agreements.
Current report
We expect to enter into additional agreements in the future to sell products and services as part of our PCF solutions, but cannot provide any assurances. See "Risk Factors" under Item 1A of Part II of this report.
Current report
On September 24, 2024, (i) Lumen Technologies issued approximately $438 million aggregate principal amount of its newly-issued 10.000% Secured Notes due 2032 and paid approximately $14 million cash (excluding accrued and unpaid interest payable with respect to the exchanged notes) in exchange for approximately $491 million aggregate principal amount of its outstanding senior unsecured notes (which were concurrently cancelled), and (ii) Level 3 Financing issued approximately $350 million aggregate principal amount of its newly-issued 10.000% Second Lien Notes due 2032 in exchange for approximately $357 million aggregate principal amount of its outstanding senior unsecured notes (which were concurrently cancelled). These transactions reduced the aggregate principal amount of Lumen's consolidated indebtedness of approximately $60 million.
Current report
Future Debt Transactions
Removed paragraphs (2)
Previous report
Future Financings
Previous report
Potential Transactions Impacting Liquidity
Reworded paragraphs (60)
Previous wording
References in this report to "Lumen Technologies" or "Lumen," "we," "us" and "our" refer to Lumen Technologies, Inc. and its consolidated subsidiaries.
Current wording
References in this report to "Lumen Technologies" or "Lumen," "we," "us" and "our" refer to Lumen Technologies, Inc. and its consolidated subsidiaries, unless the context otherwise requires.
Previous wording
Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") included herein should be read in conjunction with the information included in our Annual Report on Form 10-K for the year ended December 31, 2023 and with the consolidated financial statements and related notes in Item 1 of Part I of this report. The results of operations and cash flows for the first six months of the year are not necessarily indicative of the results of operations and cash flows that might be expected for the entire year.
Current wording
Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") included herein should be read in conjunction with the information included in our Annual Report on Form 10-K for the year ended December 31, 2023 and with the consolidated financial statements and related notes in Item 1 of Part I of this report. The results of operations and cash flows for the first nine months of the year are not necessarily indicative of the results of operations and cash flows that might be expected for the entire year.
Previous wording
Over the past few years macroeconomic changes have impacted us and our customers in several ways. On a regular basis, we review and rationalize our lease footprint and may incur accelerated lease costs when we determine to cease using underutilized leased property locations. We did not incur material accelerated lease costs during the six months ended June 30, 2024.
Current wording
Over the past few years macroeconomic changes have impacted us and our customers in several ways. On a regular basis, we review and rationalize our lease footprint and may incur accelerated lease costs when we determine to cease using underutilized leased property locations. We did not incur material accelerated lease costs during the nine months ended September 30, 2024.
Previous wording
Industry developments over the past few years have increased fiber construction demand. The resulting increase in construction labor rates increased the cost of enabling units to be capable of receiving our fiber broadband services. From time to time, we believe these factors contributed to a delay in attaining our Quantum Fiber buildout targets.
Current wording
Industry developments over the past few years have increased fiber construction demand from customers. The resulting increase in construction labor rates increased the cost of enabling units to be capable of receiving our Quantum Fiber broadband services. From time to time, we believe these factors contributed to a delay in attaining our Quantum Fiber buildout targets.
Previous wording
Continued inflationary pressures, supply constraints or business uncertainty could materially impact our financial results in a variety of ways, including by increasing our expenses, decreasing our revenues, further delaying our network expansion plans or otherwise interfering with our ability to deliver products and services.
Current wording
Continued business uncertainty, supply constraints or inflationary pressures could materially impact our financial results in a variety of ways, including by increasing our expenses, decreasing our revenues, further delaying our network expansion plans or otherwise interfering with our ability to deliver products and services.
Previous wording
•Mass Markets Segment: Under our Mass Markets segment, we provide products and services to domestic residential and small business customers. At June 30, 2024, we served 2.7 million broadband subscribers under our Mass Markets segment.
Current wording
•Mass Markets Segment: Under our Mass Markets segment, we provide products and services to domestic residential and small business customers. At September 30, 2024, we served 2.6 million broadband subscribers under our Mass Markets segment.
Previous wording
•Grow, which includes existing and emerging products and services in which we are significantly investing, including our dark fiber, Edge Cloud services, IP, managed security, software-defined wide area networks ("SD WAN"), Unified Communications and Collaboration ("UC&C") and wavelengths services;
Current wording
•Grow, which includes existing and emerging products and services in which we are significantly investing, including our conduit, dark fiber, Edge Cloud, IP, managed security, software-defined wide area networks ("SD WAN"), Unified Communications and Collaboration ("UC&C") and wavelengths services;
Previous wording
•The increased use of digital applications, online video, gaming and artificial intelligence has substantially increased demand for robust, scalable network services. We are continuing to enhance our product capabilities and taking other steps to enable customers to have access to greater bandwidth.
Current wording
•The increased use of digital applications, online video, gaming and artificial intelligence has substantially increased demand for robust, scalable network services. We are continuing to enhance our product and service offerings and taking other steps to enable customers to have access to greater bandwidth.
Previous wording
•We have historically generated revenue by entering into transactions that utilize excess conduit, fiber or other assets on our network to create custom networks for our customers. We expect the demand for and size of these transactions to grow. We routinely assess revenue-generating opportunities with respect to these assets through right-of-use agreements, leases or other agreements. We may or may not consummate such transactions from time to time, and the revenue from and obligations associated with any such opportunities may be significant, either individually or in the aggregate. The completion of any future transactions may be subject to customary conditions, and may not be executed in a timely manner, or at all.
Current wording
•We have historically generated revenue by entering into transactions that utilize excess conduit, fiber or other assets on our network to create custom networks for our customers, including through our Private Connectivity Fabric SMsolutions. We plan to continue to actively pursue additional revenue-generating opportunities with respect to these assets through right-of-use agreements, leases or other agreements. We may or may not consummate such transactions from time to time, and the revenue from and obligations associated with any such opportunities may be significant, either individually or in the aggregate. The completion of any future transactions may be subject to customary conditions, and may not be executed in a timely manner, or at all.
Previous wording
Inflation has placed downward pressure on our margins and macroeconomic uncertainties have likely contributed to delayed decision-making by certain of our customers, which are trends that will likely continue to impact us as long as elevated inflation and macroeconomic uncertainties persist. These and other developments and trends impacting our operations are discussed elsewhere in this Item 2.
Current wording
Inflation over the past few years has placed downward pressure on our margins and macroeconomic uncertainties have likely contributed to delayed decision-making by certain of our customers, which are trends that will likely continue to impact us as long as these factors persist. These and other developments and trends impacting our operations are discussed elsewhere in this Item 2.
Previous wording
The following table summarizes the results of our consolidated operations for the three and six months ended June 30, 2024 and June 30, 2023:
Current wording
The following table summarizes the results of our consolidated operations for the three and nine months ended September 30, 2024 and September 30, 2023:
Previous wording
We have experienced revenue declines, excluding the impact of acquisitions, primarily due to declines in voice and private line customers, switched access rates and minutes of use. More recently, we have experienced declines in revenue derived from the sale of certain of our other products and services. To partially mitigate these revenue declines, we remain focused on efforts to, among other things:
Current wording
We have experienced revenue declines primarily due to declines in voice and other legacy products. More recently, we have experienced declines in revenues derived from a wide range of our other products and services. To partially mitigate these revenue declines, we remain focused on efforts to, among other things:
Previous wording
•increase the size, capacity, speed and usage of our networks;
Current wording
•increase the size, capacity, speed and usage of our networks, and utilize excess conduit, fiber or other network assets in the manner described elsewhere herein;
Previous wording
Our consolidated operating revenue decreased by $393 million and $841 million for the three and six months ended June 30, 2024 as compared to the three and six months ended June 30, 2023, $164 million and $332 million of which was due to the sale of the EMEA business and select CDN contracts in the fourth quarter of 2023. See our segment results below for additional information on the drivers of the remaining decrease in revenue.
Current wording
Our consolidated operating revenue decreased by $420 million and $1.3 billion for the three and nine months ended September 30, 2024 as compared to the three and nine months ended September 30, 2023, $158 million and $490 million of which was due to the sale of the EMEA business and select CDN contracts in the fourth quarter of 2023. See our segment results below for additional information on the drivers of the remaining decrease in revenue.
Previous wording
The following tables summarize our operating expenses for the three and six months ended June 30, 2024 and 2023:
Current wording
The following tables summarize our operating expenses for the three and nine months ended September 30, 2024 and 2023:
Previous wording
Cost of services and products (exclusive of depreciation and amortization) decreased by $87 million and $252 million for the three and six months ended June 30, 2024 as compared to the three and six months ended June 30, 2023. These decreases were primarily due to (i) a decrease of approximately $121 million and $247 million due to the sale of the EMEA business in the fourth quarter of 2023, (ii) reductions of approximately $51 million and $65 million in employee-related expense from lower headcount in our retained business and (iii) decreased network expenses of $17 million and $14 million, respectively. These decreases were partially offset by increases of approximately $68 million and $52 million from higher facilities costs, as well as increases of approximately $26 million and $30 million from higher equipment and maintenance costs.
Current wording
Cost of services and products (exclusive of depreciation and amortization) decreased by $158 million and $410 million for the three and nine months ended September 30, 2024 as compared to the three and nine months ended September 30, 2023. These decreases were primarily due to (i) a decrease of approximately $151 million and $398 million, respectively, due to the sale of the EMEA business in the fourth quarter of 2023, (ii) reductions of approximately $64 million and $129 million, respectively, in employee-related expense from lower headcount in our retained business and (iii) decreased network expenses of $13 million for the nine months ended September 30, 2024 as compared to the nine months ended September 30, 2023. These decreases were partially offset by increases of approximately $40 million and $92 million, respectively, from higher facilities costs, as well as increases of approximately $22 million from higher equipment and maintenance costs for the nine months ended September 30, 2024 as compared to the nine months ended September 30, 2023.
Previous wording
Selling, general and administrative expenses decreased by $48 million and increased by $54 million, respectively, for the three and six months ended June 30, 2024 as compared to the three and six months ended June 30, 2023. For the three months ended June 30, 2024 as compared to the three months ended June 30, 2023, the decrease was due to a $67 million loss as a result of our donation of our Monroe, Louisiana campus in 2023, as well as a decrease of approximately $30 million due to the sale of the EMEA business, partially offset by an increase of $57 million in employee related costs, mostly severance costs incurred in the three months ended June 30, 2024. For the six months ended June 30, 2024 as compared to the six months ended June 30, 2023, the increase was primarily due to an increase of $143 million in legal and other professional fees, mainly driven by our first quarter 2024 debt transactions, and an increase of $75 million in employee related expenses, primarily due to severance costs incurred in the second quarter of 2024, partially offset by (i) a decrease of approximately $67 million loss incurred as a result of our donation of our Monroe, Louisiana campus in 2023, (ii) a decrease of $55 million due to the sale of the EMEA business, (iii) recognition of a deferred gain of $22 million on the sale of select CDN contracts in the fourth quarter of 2023, and (iv) a decrease of $12 million in property and other taxes.
Current wording
Selling, general and administrative expenses decreased by $95 million and $41 million, respectively, for the three and nine months ended September 30, 2024 as compared to the three and nine months ended September 30, 2023. For the three and nine months ended September 30, 2024 as compared to the three and nine months ended September 30, 2023, the decrease was due to (i) a decrease of approximately $14 million and $69 million, respectively, due to the sale of the EMEA business, (ii) a decrease of $82 million in employee related expenses for the three months ended September 30, 2024 as compared to the three months ended September 30, 2023 as a result of our workforce reductions implemented in the second quarter of 2024, (iii) a decrease of approximately $67 million for the nine months ended September 30, 2024 as compared to the comparable period in 2023 attributable to us recognizing a non-recurring loss in connection with our donation of our Monroe, Louisiana campus in 2023 and (iv) a decrease of $22 million for the nine months ended September 30, 2024 as compared to the comparable period in 2023 due to the recognition in the first quarter of 2024 of a deferred gain on the fourth quarter 2023 sale of select CDN contracts. These decreases were offset by (i) an increase of $14 million and $157 million, respectively, in legal and other professional fees, mainly driven by our first and third quarter 2024 debt transactions and (ii) an increase of $12 million and $20 million, respectively, in insurance and other fees for the three and nine months ended September 30, 2024 as compared to the three and nine months ended September 30, 2023.
Previous wording
(Gain) Loss on Sale of Business
Current wording
Net Loss on Sale of Business
Previous wording
For a discussion of the (gain) loss on sale of business that we recognized for the three and six months ended June 30, 2023, see Note 2—Divestitures of the Latin American, ILEC and EMEA Businesses to our consolidated financial statements in Item 8 of Part II of our Annual Report Form 10-K for the year ended December 31, 2023.
Current wording
For a discussion of the net loss on sale of business that we recognized for the three and nine months ended September 30, 2023, see Note 2—Divestitures of the Latin American, ILEC and EMEA Businesses to our consolidated financial statements in Item 8 of Part II of our Annual Report Form 10-K for the year ended December 31, 2023.
Previous wording
Depreciation expense decreased by $17 million and $14 million for the three and six months ended June 30, 2024, as compared to the three and six months ended June 30, 2023 primarily due to a decrease of $16 million and $32 million, respectively, relating to changes in the depreciation lives of fiber network assets and a decrease of $16 million and $20 million, respectively, relating to a net decline in depreciable assets. These decreases were partially offset by (i) a $6 million and $18 million increase, respectively, from accelerated depreciation of CDN assets, (ii) a $6 million and $12 million increase, respectively, relating to changes made at the beginning of 2024 in the method of depreciation from the group method of depreciation to straight line by individual asset method, and (iii) an increase of $8 million for the six months ended June 30, 2024, as compared to the six months ended June 30, 2023 due to decommissioned assets.
Current wording
Depreciation expense decreased by $30 million and $44 million for the three and nine months ended September 30, 2024, as compared to the three and nine months ended September 30, 2023 primarily due to a decrease of $16 million and $48 million, respectively, relating to changes in the depreciation lives of fiber network assets and a decrease of $19 million and $39 million, respectively, relating to a net decline in depreciable assets. These decreases were partially offset by (i) a $2 million and $14 million increase, respectively, relating to changes made at the beginning of 2024 in the method of depreciation from the group method of depreciation to the straight line by individual asset method, (ii) an increase of $18 million for the nine months ended September 30, 2024, as compared to the nine months ended September 30, 2023 from accelerated depreciation of CDN assets, and (iii) an increase of $8 million for the nine months ended September 30, 2024, as compared to the nine months ended September 30, 2023 due to decommissioned assets.
Previous wording
Amortization expense increased by $14 million and $26 million for the three and six months ended June 30, 2024, as compared to the three and six months ended June 30, 2023. These increases were primarily due to an increase of $18 million and $32 million, respectively, associated with the accelerated amortization of software assets, mostly related to CDN, as well as an increase of $4 million and $17 million, respectively, associated with net increases in amortizable assets. These increases were partially offset by (i) a $4 million and $8 million decrease, respectively, due to a changed method of amortization as discussed in Note 1— Background "— Change in Accounting Estimates", (ii) a $4 million and $8 million decrease, respectively, related to changes in our CDN customer relationships, and (iii) a $7 million decrease for the six months ended June 30, 2024, as compared to the six months ended June 30, 2023 due to certain customer relationship intangible assets becoming fully amortized in the second quarter of 2023.
Current wording
Amortization expense decreased by $18 million for the three months ended September 30, 2024, as compared to the three months ended September 30, 2023. This decrease was due to (i) a $3 million decrease associated with the accelerated amortization of software assets, (ii) an $11 million decrease due to a changed method of amortization as discussed in Note 1— Background "— Change in Accounting Estimates", and (iii) a $4 million decrease related to changes in our CDN customer relationships. Amortization expense increased by $8 million for the nine months ended September 30, 2024, as compared to the nine months ended September 30, 2023. This increase was due to a $29 million increase associated with the accelerated amortization of software assets, mostly related to CDN contracts, as well as an increase of $21 million associated with net increases in amortizable assets. These increases were partially offset by (i) a $19 million decrease due to a changed method of amortization as discussed in Note 1— Background "— Change in Accounting Estimates", (ii) a $12 million decrease related to changes in our CDN customer relationships, and (iii) an $11 million decrease due to certain customer relationship intangible assets becoming fully amortized in the second quarter of 2023.
Previous wording
We report under two segments: Business and Mass Markets. As of June 30, 2023, we had three reporting units for goodwill impairment testing, which were (i) Mass Markets, (ii) North America Business ("NA Business") and (iii) Asia Pacific region ("APAC").
Current wording
We report under two segments: Business and Mass Markets. As of June 30, 2023, we had three reporting units for goodwill impairment testing, which were (i) Mass Markets, (ii) North America Business and (iii) Asia Pacific region.
Previous wording
Interest expense increased by $79 million and $91 million for the three and six months ended June 30, 2024 as compared to the three and six months ended June 30, 2023. These increases were due to the increase in the average interest rate from (i) 6.01% to 7.74% for the three months ended June 30, 2023 compared to the three months ended June 30, 2024 and (ii) 5.85% to 6.99%, for the six months ended June 30, 2023 compared to the six months ended June 30, 2024. These increases were partially offset by a decrease of approximately $1 billion, in average outstanding long-term debt for both the three and six months ended June 30, 2024 as compared to the three and six months ended June 30, 2023.
Current wording
Interest expense increased by $56 million and $147 million for the three and nine months ended September 30, 2024 as compared to the three and nine months ended September 30, 2023. These increases were due to the increase in the average interest rate from (i) 6.17% to 7.85% for the three months ended September 30, 2023 compared to the three months ended September 30, 2024 and (ii) 5.89% to 7.09%, for the nine months ended September 30, 2023 compared to the nine months ended September 30, 2024. These increases were partially offset by a decrease of approximately $1 billion in average outstanding long-term debt for both the three and nine months ended September 30, 2024 as compared to the three and nine months ended September 30, 2023.
Previous wording
For a discussion of certain transactions that resulted in the net gain on debt we recognized for the three and six months ended June 30, 2024, see Note 5—Long-Term Debt and Credit Facilities. See Note 7—Long-Term Debt and Credit Facilities to our consolidated financial statements in Item 8 of Part II of our Annual Report Form 10-K for the year ended December 31, 2023 for discussion of the 2023 exchange offers that resulted in the net gain on debt recognized for the three months and six months ended June 30, 2023.
Current wording
For a discussion of certain transactions that resulted in the net gain on debt we recognized for the three and nine months ended September 30, 2024, see Note 5—Long-Term Debt and Credit Facilities. See Note 7—Long-Term Debt and Credit Facilities to our consolidated financial statements in Item 8 of Part II of our Annual Report Form 10-K for the year ended December 31, 2023 for discussion of the 2023 exchange offers that resulted in the net gain on debt recognized for the nine months ended September 30, 2023.
Previous wording
For the three and six months ended June 30, 2024, our effective income tax rate was (19.5)% and 86.9%, respectively, including an unfavorable impact of interest on our uncertain tax position reserves. For the three and six months ended June 30, 2023, our effective income tax rate was (0.5)% and (2.7)%, respectively, which included a $1.8 billion unfavorable impact of a non-deductible goodwill impairment and a $11 million unfavorable impact as a result of our donating our Monroe, Louisiana campus.
Current wording
For the three and nine months ended September 30, 2024, our effective income tax rate was 14.0% and (26.1)%, respectively, including an unfavorable impact of interest on our uncertain tax position reserves. For the three and nine months ended September 30, 2023, our effective income tax rate was 8.2% and (2.6)%, respectively, which included a $1.8 billion unfavorable impact of a non-deductible goodwill impairment and a $11 million unfavorable impact as a result of our donating our Monroe, Louisiana campus.
Previous wording
Three and six months ended June 30, 2024 compared to the same periods ended June 30, 2023
Current wording
Three and nine months ended September 30, 2024 compared to the same periods ended September 30, 2023
Previous wording
Business segment revenue decreased $331 million and $708 million for the three and six months ended June 30, 2024 as compared to June 30, 2023. Approximately $164 million and $332 million, for the three and six months ended June 30, 2024, respectively, of these decreases was due to the sale of the EMEA business and select CDN contracts in the fourth quarter of 2023. More specifically, within each product category for the three and six months ended June 30, 2024 as compared to the comparable period ended June 30, 2023:
Current wording
Business segment revenue decreased $369 million and $1.1 billion for the three and nine months ended September 30, 2024 as compared to September 30, 2023. Approximately $158 million and $490 million, for the three and nine months ended September 30, 2024, respectively, of these decreases was due to the sale of the EMEA business and select CDN contracts in the fourth quarter of 2023. More specifically, within each product category for the three and nine months ended September 30, 2024 as compared to the comparable period ended September 30, 2023:
Previous wording
•Grow decreased by $81 million and $156 million, due to a decrease of approximately $81 million and $162 million associated with the sale of the EMEA business. Additionally, for the three and six months ended June 30, 2024, wavelength products declined by $19 million and $35 million. These declines for the three and six months ended June 30, 2024 were partially offset by growth in IP services of $26 million and $61 million;
Current wording
•Grow decreased by $55 million and $211 million, due to a decrease of approximately $83 million and $245 million associated with the sale of the EMEA business. Excluding the impact of this divestiture, we saw growth in IP services of $27 million and $88 million for such respective periods and an $11 million increase of revenue from dark fiber and conduit for such periods, partially offset by declines in other products, including declines in wavelength products revenue by $6 million and $41 million;
Previous wording
•Nurture decreased by $123 million and $259 million, approximately $27 million and $54 million of which was attributable to the sale of the EMEA business. The remainder of the declines are principally attributable to declines in traditional VPN services of $64 million and $142 million and declines in Ethernet services of $29 million and $64 million, for the three and six months June 30, 2024 as compared to the comparable periods ended June 30, 2023, respectively;
Current wording
•Nurture decreased by $145 million and $404 million, approximately $26 million and $80 million of which was attributable to the sale of the EMEA business. The remainder of the declines are principally attributable to declines in traditional VPN services of $80 million and $222 million and declines in Ethernet services of $34 million and $98 million, for the three and nine months September 30, 2024, as compared to the comparable periods ended September 30, 2023, respectively;
Previous wording
•Harvest decreased by $125 million and $249 million, approximately $26 million and $50 million of which was attributable to the above-mentioned sale of the EMEA business. The remainder of the decline is principally attributable to a $79 million and $159 million decline in legacy voice and private line services; and
Current wording
•Harvest decreased by $113 million and $362 million, approximately $17 million and $67 million of which was attributable to the above-mentioned sale of the EMEA business. The remainder of the decline is principally attributable to a $75 million and $234 million decline in legacy voice and private line services; and
Previous wording
•Other decreased by $2 million and $44 million, approximately $22 million and $51 million of which was attributable to the above-mentioned sale of select CDN contracts, which was partially offset by a $20 million and $32 million increase in managed and professional services.
Current wording
•Other decreased by $56 million and $100 million, approximately $24 million and $75 million of which was attributable to the above-mentioned sale of select CDN contracts and decreases in equipment sales revenue of approximately $33 million and $37 million, which was partially offset by a $13 million and $45 million increase in managed and professional services.
Previous wording
Business segment expense decreased by $125 million and $262 million for the three and six months ended June 30, 2024, respectively, as compared to the three and six months ended June 30, 2023 primarily driven by (i) a decrease of $67 million and $120 million due to the above-mentioned sale of the EMEA business and select CDN contracts, (ii) a $93 million reduction in overall network expense for the six months ended June 30, 2024 as compared to the six months ended June 30, 2023, and (iii) a decrease of $39 million in employee-related costs for the three months ended June 30, 2024 as compared to the three months ended June 30, 2023.
Current wording
Business segment expense decreased by $216 million and $478 million for the three and nine months ended September 30, 2024, respectively, as compared to the three and nine months ended September 30, 2023 primarily driven by (i) a decrease of $68 million and $188 million due to the above-mentioned sale of the EMEA business and select CDN contracts, (ii) a $54 million and $147 million reduction in overall network expense and (iii) a decrease of $54 million and $97 million in employee-related costs.
Previous wording
Business segment adjusted EBITDA as a percentage of segment revenue was 53% for each of the three and six months ended June 30, 2024, and 54% for each of the three and six months ended June 30, 2023.
Current wording
Business segment adjusted EBITDA as a percentage of segment revenue was 52% for each of the three and nine months ended September 30, 2024, and 51% and 53% for of the three and nine months ended September 30, 2023, respectively.
Previous wording
Three and six months ended June 30, 2024 compared to the same periods ended June 30, 2023
Current wording
Three and nine months ended September 30, 2024 compared to the same periods ended September 30, 2023
Previous wording
Mass Markets segment revenue decreased $62 million and $133 million for the three and six months ended June 30, 2024, respectively, as compared to the three and six months ended June 30, 2023. More specifically, within each product category:
Current wording
Mass Markets segment revenue decreased $51 million and $184 million for the three and nine months ended September 30, 2024, respectively, as compared to the three and nine months ended September 30, 2023. More specifically, within each product category:
Previous wording
•Fiber Broadband revenue increased $23 million and $41 million, primarily driven by growth in the number of fiber customers associated with our continued increase in enabled locations from our Quantum Fiber buildout;
Current wording
•Fiber Broadband revenue increased $27 million and $68 million, primarily driven by growth in the number of fiber customers associated with our continued increase in enabled locations from our Quantum Fiber buildout;
Previous wording
•Other Broadband revenue decreased $57 million and $111 million, primarily due to fewer customers for our lower speed copper-based broadband services;
Current wording
•Other Broadband revenue decreased $59 million and $170 million, primarily due to fewer customers for our lower speed copper-based broadband services; and
Previous wording
•Voice and Other decreased $28 million and $63 million, principally due to the continued loss of copper-based voice customers.
Current wording
•Voice and Other decreased $19 million and $82 million, principally due to the continued loss of copper-based voice customers.
Previous wording
Mass Markets segment expense decreased $32 million and $65 million for the three and six months ended June 30, 2024, respectively, as compared to the three and six months ended June 30, 2023 primarily driven by a decrease of $16 million and $29 million in professional fees, a decrease of $20 million and $27 million in employee costs, and an increase of $6 million and $20 million in capitalized expenses related to our Quantum Fiber buildout. These drivers were partially offset by an increase of $10 million and $21 million in marketing and advertising expense.
Current wording
Mass Markets segment expense decreased $44 million and $109 million for the three and nine months ended September 30, 2024, respectively, as compared to the three and nine months ended September 30, 2023, primarily driven by a decrease of $31 million and $58 million in employee costs, $16 million and $45 million in professional fees and $12 million and $25 million in other network related costs. These drivers were partially offset by an increase of $9 million and $30 million in marketing and advertising expense and $10 million and $25 million in hardware and software related costs.
Previous wording
Mass Markets segment adjusted EBITDA as a percentage of segment revenue was 53% for both the three and six months ended June 30, 2024, respectively, and 52% and 53% for the three and six months ended June 30, 2023, respectively.
Current wording
Mass Markets segment adjusted EBITDA as a percentage of segment revenue was 51% and 52% for the three and nine months ended September 30, 2024, respectively, and 48% and 51% for the three and nine months ended September 30, 2023, respectively.
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