Lumen Technologies, Inc.

RESULTS OF OPERATIONS

The following table summarizes the results of our consolidated operations:

Operating Revenue

The following table summarizes our consolidated operating revenue recorded under our revenue categories described in Note 4—Revenue Recognition:

Operating revenue decreased $283 million. The following were primary drivers within each revenue category:

•Strategic revenue increased $107 million. This was primarily as a result of:

◦an increase of $71 million in revenue from dark fiber and conduit; and

◦an increase of $19 million from growth in IP services.

•Legacy revenue decreased $187 million. This was primarily as a result of:

◦a decrease of $80 million in VPN services; and

◦a decrease of $71 million in voice services and private line services.

•Fiber Broadband revenue decreased $117 million. This was primarily as a result of:

◦fewer Mass Market subscribers as a result of our divestiture of the Mass Markets Fiber-to-the-Home business, as further described above.

•Other Broadband revenue decreased $52 million. This was primarily as a result of:

◦fewer Mass Market customers for our low speed copper-based broadband services.

•Voice and Other revenue decreased $34 million. This was primarily as a result of:

◦the continued loss of copper-based Mass Market voice customers.

Operating Expenses

The following table summarizes our operating expenses:

nm Percentages greater than 200% and comparisons between positive and negative values or to/from zero values are considered not meaningful.

Cost of Services and Products (exclusive of depreciation and amortization)

Cost of services and products (exclusive of depreciation and amortization) decreased $252 million. This was primarily as a result of:

•a decrease of $182 million in network expense;

•a decrease of $91 million in employee-related expenses; and

•an offsetting increase of $24 million in professional fees.

Selling, General and Administrative

Selling, general and administrative expenses increased $119 million. This was primarily as a result of:

•an increase of $93 million in employee-related expenses; and

•an increase of $26 million in hardware and software expenses.

Net Gain on Sale of Business

For a discussion of the net gain on sale of business that we recognized during the three months ended March 31, 2026, see Note 2—Divestiture.

Depreciation and Amortization

The following table details our depreciation and amortization expense:

Depreciation decreased $48 million. This was primarily as a result of:

•a decrease of $43 million due to the discontinuation of the depreciation of the tangible assets of our Mass Markets Fiber-to-the-Home business held for sale during the second quarter of 2025.

Amortization decreased $1 million. This was primarily as a result of:

•an increase of $8 million associated with a net increase in amortizable assets; and

•an offsetting decrease of $5 million from accelerated amortization of software assets in 2025.

Other Consolidated Results

The following table summarizes our total other expense, net and income tax expense (benefit):

nm Percentages greater than 200% and comparisons between positive and negative values or to/from zero values are considered not meaningful.

Interest Expense

Interest expense decreased $122 million. This was primarily as a result of:

•a decrease in average outstanding long-term debt of $3 billion; and

•a decrease in average interest rate from 7.67% to 6.77%.

Net Loss on Early Retirement of Debt

For a discussion of certain transactions that resulted in the net loss on debt we recognized for the three months ended March 31, 2026, 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 on Form 10-K for the year ended December 31, 2025 for discussion of the 2025 transactions that resulted in the net gain on debt recognized for the three months ended March 31, 2025.

Other Income, Net

Other income, net reflects certain items not directly related to our core operations, including:

Income Tax Expense

Our effective tax rate was as follows:

Our effective tax rate for the three months ended March 31, 2026 was driven primarily by tax attributable to nondeductible goodwill from the Mass Markets Fiber-to-the-Home divestiture. Our effective tax rate for the three months ended March 31, 2025 includes an unfavorable impact of interest on our uncertain tax position reserves.