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 $287 million and $570 million. The following were primary drivers within each revenue category:

•Strategic revenue increased $159 million and $266 million. This was primarily as a result of:

◦an increase of $109 million and $180 million in revenue from dark fiber and conduit; and

◦an increase of $17 million and $36 million from growth in IP services.

•Legacy revenue decreased $205 million and $392 million. This was primarily as a result of:

◦a decrease of $70 million and $150 million in VPN services; and

◦a decrease of $83 million and $154 million in voice services and private line services.

•Fiber Broadband revenue decreased $200 million and $317 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 $53 million and $105 million. This was primarily as a result of:

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

•Voice and Other revenue increased $12 million and decreased $22 million. This was primarily as a result of:

◦an increase due to the withdrawal from the Federal Communications Commission's ("FCC's") Rural Digital Opportunity Fund ("RDOF") program in the prior year, and an offsetting decrease in voice revenue; and

◦a decrease due to a decline in voice revenue, and an offsetting increase due to the withdrawal from the RDOF program.

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 $209 million and $461 million. This was primarily as a result of:

•a decrease of $104 million and $290 million in network expense;

•a decrease of $141 million and $232 million in employee-related expenses; and

•an offsetting increase of $28 million and $52 million in professional fees.

Selling, General and Administrative

Selling, general and administrative expenses increased $24 million and $143 million. This was primarily as a result of:

•an increase of $38 million and $131 million in employee-related expenses; and

•an increase of $30 million and $56 million in hardware and software expenses; and

•an offsetting decrease of $49 million, for each period, due to fees related to the relinquishment of our funding received under the Federal Communications Commission's RDOF in the second quarter of 2025.

Net Loss (Gain) on Sale of Business

For a discussion of the net loss (gain) on sale of business that we recognized during the six months ended June 30, 2026, see Note 2—Divestiture and Acquisition.

Depreciation and Amortization

The following table details our depreciation and amortization expense:

Depreciation decreased $20 million and $68 million. This was primarily as a result of:

•a decrease of $21 million and $64 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 was flat for the periods presented.

Other Consolidated Results

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

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 $137 million and $259 million. This was primarily as a result of:

•a decrease in average outstanding long-term debt of $5 billion and $2 billion; and

•a decrease in average interest rate from 7.31% to 6.92% and 7.49% to 6.83%.

Net Gain (Loss) on Early Retirement of Debt

For a discussion of certain transactions that resulted in the net gain (loss) on debt we recognized for the three and six months ended June 30, 2026, see Note 5—Long-Term Debt and Credit Facilities. See Note 7—Long-Term Debt and Credit Facilities to the 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 loss on debt recognized for the three and six months ended June 30, 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 six months ended June 30, 2026 was driven primarily by tax attributable to nondeductible goodwill from the Mass Markets Fiber-to-the-Home divestiture. Our effective tax rate for both the three and six months ended June 30, 2025 include a $42 million unfavorable impact from our goodwill impairment.