QWEST CORP

Previous wording

Unless the context requires otherwise, references in this report to "QC" refer to Qwest Corporation, references to "Qwest," "we," "us" and "our" refer to Qwest Corporation and its consolidated subsidiaries, and references to "QSC" refer to Qwest Services Corporation.

Current wording

References in this report to "QC," "Qwest," "we," "us" and "our" refer to Qwest Corporation and its consolidated subsidiaries.

Previous wording

Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") included herein should be read in conjunction with MD&A and the other 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 for the first three months of the year are not necessarily indicative of the results of operations 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 for the first six months of the year are not necessarily indicative of the results of operations that might be expected for the entire year.

Previous wording

Our ultimate parent company, Lumen Technologies, Inc., has cash management arrangements or loan arrangements with a majority of its subsidiaries that include lines of credit, affiliate obligations, capital contributions and dividends. As part of these cash management or loan arrangements, affiliates provide lines of credit to certain other affiliates. Amounts outstanding under these lines of credit and intercompany obligations vary from time to time. Under these arrangements, the majority of our cash balance is advanced on a daily basis for centralized management by Lumen's service company affiliate. From time to time we may declare and pay dividends to QSC, our direct parent, using cash owed to us under these advances, which has the net effect of reducing the amount of these advances. We report the balance of these transfers on our consolidated balance sheet as advances to affiliates.

Current wording

Our ultimate parent company, Lumen Technologies, Inc., has cash management arrangements or loan arrangements with a majority of its subsidiaries that include lines of credit, affiliate obligations, capital contributions and dividends. As part of these cash management or loan arrangements, affiliates provide lines of credit to certain other affiliates. Amounts outstanding under these lines of credit and intercompany obligations vary from time to time. Under these arrangements, the majority of our cash balance is advanced on a daily basis for centralized management by Lumen's service company affiliate. From time to time we may declare and pay dividends to Qwest Services Corporation ("QSC"), our direct parent, using cash owed to us under these advances, which has the net effect of reducing the amount of these advances. We report the balance of these transfers on our consolidated balance sheet as advances to affiliates.

Previous wording

At March 31, 2024, we served approximately 2.0 million broadband subscribers. Our methodology for counting broadband subscribers may not be comparable to those of other companies.

Current wording

At June 30, 2024, we served approximately 1.9 million broadband subscribers. Our methodology for counting broadband subscribers may be different than the methodologies used by other companies.

Previous wording

Over the past few years, societal, governmental and macroeconomic changes have impacted us, our customers and our business 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 three months ended March 31, 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 six months ended June 30, 2024.

Previous wording

Additionally, as discussed further elsewhere herein, macroeconomic changes over the past few years have resulted in (i) increases in certain revenue streams and decreases in others, (ii) operational challenges resulting from inflation and, to a lesser extent, shortages of certain components and other supplies that we use in our business, (iii) delays in our cost transformation initiatives and (iv) delayed decision-making by certain of our customers. None of these effects, individually or in the aggregate, have to date materially impacted our financial performance or financial position.

Current wording

Additionally, we believe macroeconomic changes over the past few years have resulted in (i) increases in certain revenue streams and decreases in others, (ii) operational challenges resulting from inflation and shortages of certain components and other supplies that we use in our business, (iii) delays in our cost transformation initiatives and (iv) delayed decision-making by certain of our customers. None of these effects, individually or in the aggregate, have to date materially impacted our financial performance or financial position.

Previous wording

Industry developments over the past couple 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. In recent years, 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. 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.

Previous wording

These above-mentioned macroeconomic factors, coupled with dis-synergies resulting from our affiliates' 2022 and 2023 divestitures, changes in customer preferences and negotiations with our creditors through the end of the first quarter of 2024, placed additional pressures on our financial performance. These developments contributed to us recognizing $2.4 billion in goodwill impairment charges in 2023. Some, but not all, of these pressures continue to impact us. To the extent these pressures continue, we could experience additional deterioration in our projected cash flows, or make significant changes to the assumed discount rates or market multiples that we use to determine the fair value of our reporting unit. Any of these could result in additional impairments on our approximately $7.0 billion of remaining goodwill in the future periods.

Current wording

These above-mentioned macroeconomic factors, coupled with dis-synergies resulting from our affiliates' 2022 and 2023 divestitures, changes in customer preferences and negotiations with our creditors through the end of the first quarter of 2024, placed additional pressures on our financial performance. These developments contributed to us recognizing $2.4 billion in goodwill impairment charges in 2023. Some of these pressures continue to impact us. To the extent these pressures continue, we could experience additional deterioration in our projected cash flows, or make significant changes to the assumed discount rates or market multiples that we use to determine the fair value of our reporting unit. Any of these could result in additional future impairments of our approximately $7.0 billion of remaining goodwill.

Previous wording

•Harvest, which includes our legacy services managed for cash flow, including Time Division Multiplexing ("TDM") voice, private line and other legacy services;

Current wording

•Harvest, which includes our legacy services managed for cash flow, including Time Division Multiplexing ("TDM") voice and private line services;

Previous wording

•Grow, which includes products and services that we anticipate will grow, including dark fiber and wavelengths services; and

Current wording

•Grow, which includes existing and emerging products and services in which we are significantly investing, including dark fiber and wavelengths services; and

Previous wording

•Affiliate Services, which are (i) communications services that we provide to our affiliates and also provide to external customers and (ii) application development and support services and other support services that we provide to our affiliates, as described further in Note 7—Affiliate Transactions.

Current wording

•Affiliate Services, which are (i) communications services that we provide to our affiliates and also provide to external customers and (ii) application development and support services that we provide to our affiliates, as described further in Note 8—Affiliate Transactions.

Previous wording

The following table summarizes the results of our consolidated operations for the three months ended March 31, 2024 and 2023:

Current wording

The following table summarizes the results of our consolidated operations for the three and six months ended June 30, 2024 and 2023:

Previous wording

The following table summarizes our consolidated operating revenue recorded under our revenue categories described in Note 3—Revenue Recognition:

Current wording

The following tables summarize our consolidated operating revenue recorded under our revenue categories described in Note 3—Revenue Recognition:

Previous wording

Total operating revenue decreased by $149 million for the three months ended March 31, 2024 as compared to the three months ended March 31, 2023. Within each product category, this decrease was primarily due to:

Current wording

Total operating revenue decreased by $78 million and $227 million, respectively, for the three and six months ended June 30, 2024 as compared to the three and six months ended June 30, 2023. Within each product category, these decreases were primarily due to the following factors:

Previous wording

•Decreases in Other Broadband by $41 million for the three months ended March 31, 2024 as compared to the three months ended March 31, 2023 primarily due to fewer customers for our lower speed copper-based broadband services;

Current wording

•Decreases in Other Broadband by $46 million and $87 million, respectively, 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 fewer customers for our lower speed copper-based broadband services;

Previous wording

•Decreases in Voice and Other by $23 million for the three months ended March 31, 2024 as compared to the three months ended March 31, 2023 primarily due to a decrease of $22 million from the continued loss of copper-based voice customers;

Current wording

•Decreases in Voice and Other by $18 million and $41 million, respectively, 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 $18 million and $40 million from the continued loss of copper-based voice customers;

Previous wording

•Decreases in Fiber Broadband by $23 million for the three months ended March 31, 2024 as compared to the three months ended March 31, 2023 driven by fewer fiber subscribers, primarily as a result of migrations to Lumen's Quantum Fiber services;

Current wording

•Decreases in Fiber Broadband by $25 million and $48 million, respectively, for the three and six months ended June 30, 2024 as compared to the three and six months ended June 30, 2023 driven by fewer fiber subscribers, primarily as a result of migrations to the Quantum Fiber services offered by Lumen (which bills customers for such services and pays us for use of our network in providing such services, as further described below);

Previous wording

•Decreases in Harvest by $28 million for the three months ended March 31, 2024 as compared to the three months ended March 31, 2023 primary attributable to declines in legacy voice services for business customers of $14 million and $5 million decrease in private line services;

Current wording

•Decreases in Harvest by $35 million and $63 million, respectively, for the three and six months ended June 30, 2024 as compared to the three and six months ended June 30, 2023 primary attributable to decrease in private line services of $17 million and $22 million, respectively, as well as declines in legacy voice services for business customers of $8 million and $22 million, respectively;

Previous wording

•Decreases in Nurture by $16 million for the three months ended March 31, 2024 as compared to the three months ended March 31, 2023 primarily due to declines in Ethernet services;

Current wording

•Decreases in Nurture by $5 million and $21 million, respectively, 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 declines in Ethernet services; and

Previous wording

•Decreases in Grow by $4 million for the three months ended March 31, 2024 as compared to the three months ended March 31, 2023 primarily due to declines in wavelengths services;

Current wording

•Decreases in Grow by $6 million and $10 million, respectively, 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 declines in wavelengths services;

Previous wording

Affiliate services revenue also decreased $14 million for the three months ended March 31, 2024 as compared to the three months ended March 31, 2023 primarily due to $39 million lower private line and other direct telecommunication services provided to our affiliates, which was partially offset by increases of $13 million due to the migration of customers from our fiber broadband services to Lumen's Quantum Fiber services on our network and $12 million allocated employee services allocated to our affiliates.

Current wording

Affiliate services revenue also increased $57 million and $43 million, respectively, 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 $50 million and $24 million increase in fiber broadband and other direct telecommunication services provided to our affiliates, and $7 million and $19 million allocated employee services allocated to our affiliates.

Previous wording

The following table summarizes our consolidated operating expenses:

Current wording

The following tables summarize our consolidated operating expenses:

Previous wording

Cost of services and products (exclusive of depreciation and amortization) decreased by $17 million for the three months ended March 31, 2024 as compared to the three months ended March 31, 2023. The decrease was primarily due to lower employee-related expenses of $21 million and reductions in insurance and facilities costs. These decreases were partially offset by higher allocated employee related cost of $13 million.

Current wording

Cost of services and products (exclusive of depreciation and amortization) decreased by $31 million and $48 million, respectively, for the three and six months ended June 30, 2024 as compared to the three and six months ended June 30, 2023. The decrease was primarily due to lower employee-related expenses of $26 million and $47 million.

Previous wording

Selling, general and administrative expenses was flat for the three months ended March 31, 2024 as compared to the three months ended March 31, 2023 primarily due to $10 million increase in employee related expenses and $6 million increase in bad debt expenses, offset by a $7 million decline in marketing and advertising expense and a $9 million decrease in external commissions, insurance and fees and other expenses.

Current wording

Selling, general and administrative expenses increased by $2 million for both 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 $29 million and $39 million increase in employee related expenses inclusive of severance costs, partially offset by (i) a $7 million and $14 million decline in marketing and advertising expense, (ii) a $8 million and $9 million decrease in property and other taxes, and (iii) a $4 million and $8 million decrease in external commissions, respectively.

Previous wording

Operating expenses - affiliates increased by $21 million for the three months ended March 31, 2024 as compared to the three months ended March 31, 2023. The increase was primarily due to $25 million higher allocated employee and professional services provided to us by our affiliates, partially offset by a decrease of $4 million in legacy direct telecommunication services charged by affiliates.

Current wording

Operating expenses - affiliates decreased by $3 million and increased by $18 million, respectively, for the three and six months ended June 30, 2024 as compared to the three and six months ended June 30, 2023. The increase for the six months ended June 30, 2024 was primarily due to $30 million of higher allocated employee and professional services provided to us by our affiliates, partially offset by a decrease of $12 million in direct telecommunication services charged to us by affiliates.

Previous wording

Depreciation expense decreased by $6 million for the three months ended March 31, 2024 as compared to the three months ended March 31, 2023 primarily due to a decrease of $19 million resulting from changes in the method of depreciation from the group method of depreciation to straight line by individual asset method and a decrease of $6 million due to changes in depreciation lives of fiber assets as discussed in Note 1—Background and Summary of Significant Accounting Policies. These decreases were partially offset by an increase of $20 million due to net growth in depreciable assets.

Current wording

Depreciation expense decreased by $12 million and $18 million, respectively, 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 $20 million and $39 million, respectively, resulting from changes in the method of depreciation from the group method of depreciation to straight line by individual asset method and a decrease of $6 million and $12 million, respectively, due to changes in depreciation lives of fiber assets as discussed in Note 1—Background and Summary of Significant Accounting Policies. These decreases were partially offset by an increase of $14 million and $34 million, respectively, due to net growth in depreciable assets.

Previous wording

Amortization expense decreased by $4 million for the three months ended March 31, 2024 as compared to the three months ended March 31, 2023 due primarily to a decrease of $5 million associated with changes in the method of amortization from the group method to straight line by individual asset method.

Current wording

Amortization expense decreased by $4 million and $8 million, respectively, 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 $4 million and $9 million, respectively, associated with changes in the method of amortization from the group method to straight line by individual asset method.

Previous wording

Interest income - affiliate, net increased by $1 million for the three months ended March 31, 2024 as compared to the three months ended March 31, 2023. The increase in interest income - affiliate, net was primarily due to higher average receivable from affiliates during the quarter. See Note 5—Long-Term Debt and Note Payable - Affiliate.

Current wording

Interest income - affiliate, net increased by $3 million and $4 million, respectively, for the three and six months ended June 30, 2024 as compared to the three and six months ended June 30, 2023. The increase in interest income - affiliate, net was primarily due to a higher average receivable from affiliates during the quarter.

Previous wording

For the three months ended March 31, 2024 and March 31, 2023 our effective tax rates were 26.3% and 25.9%, respectively.

Current wording

For the three and six months ended June 30, 2024, our effective tax rates were 27.0% and 26.7%, respectively. For the three and six months ended June 30, 2023, our effective tax rates were 26.2% and 26.0%, respectively.

Previous wording

In August 2022, the Inflation Reduction Act was signed into law, which, among other things, implemented a corporate alternative minimum tax (“CAMT”) on adjusted financial statement income effective for tax periods occurring after December 31, 2022. The CAMT had no material impact on our financial results as of December 31, 2023. In addition, the Organization for Economic Co-operation and Development has issued Pillar Two model rules introducing a new global minimum tax of 15% intended to be effective on January 1, 2024. While the U.S. has not yet adopted the Pillar Two rules, various other governments around the world are enacting legislation, some of which are effective for tax periods after December 31, 2023. While the global minimum tax will increase our administrative and compliance burdens, we expect that it will have an immaterial impact on our financial statements for tax period ending December 31, 2024.

Current wording

In August 2022, the Inflation Reduction Act was signed into law, which, among other things, implemented a corporate alternative minimum tax (“CAMT”) on adjusted financial statement income effective for tax periods occurring after December 31, 2022. The CAMT had no material impact on our financial results as of December 31, 2023. In addition, the Organization for Economic Co-operation and Development has issued Pillar Two model rules introducing a new global minimum tax of 15% intended to be effective on January 1, 2024. While the U.S. has not yet adopted the Pillar Two rules, various other governments around the world are enacting legislation, some of which are effective for tax periods after December 31, 2023. While the global minimum tax will increase our administrative and compliance burdens, we expect that it will have an immaterial impact on our financial statements for the tax period ending December 31, 2024.

Previous wording

On March 22, 2024, Lumen completed the TSA Transactions with a group of Consenting Debtholders representing over $15 billion of Lumen's outstanding consolidated long-term debt to, among other things, (i) extend maturities of the debt instruments of Lumen and Level 3 Financing, Inc., (ii) fund the repayment of all amounts owed under our term loans maturing in 2027 and (iii) provide for the Qwest Guarantors to guarantee Lumen’s obligations under its newly-established credit agreements and newly-issued superpriority senior notes. As of March 31, 2024, we had a face amount of approximately $2.0 billion aggregate outstanding indebtedness (excluding finance leases, unamortized premiums, net, unamortized debt issuance costs, and Note Payable - Affiliate). None of our outstanding debt is due in the next 12 months (excluding finance lease obligations). For more information on the terms and impact of the TSA Transactions and our consolidated debt, see Note 5—Long-Term Debt And Note Payable - Affiliate to the financial statements included in Item 1 of Part I of this report.

Current wording

On March 22, 2024, Lumen completed the TSA Transactions with a group of Consenting Debtholders representing over $15 billion of Lumen's outstanding consolidated long-term debt to, among other things, (i) extend maturities of the debt instruments of Lumen and Level 3 Financing, (ii) fund the repayment of all amounts owed under our term loans maturing in 2027 and (iii) provide for the Qwest Guarantors to guarantee Lumen’s obligations under its newly-established credit agreements and newly-issued superpriority senior notes. As of June 30, 2024, we had a face amount of approximately $2.0 billion aggregate outstanding indebtedness (excluding finance leases, unamortized premiums, net and unamortized debt issuance costs). None of our outstanding debt is due in the next 12 months (excluding finance lease obligations). For more information on the terms and impact of the TSA Transactions and our consolidated debt, see Note 5—Long-Term Debt to the financial statements included in Item 1 of Part I of this report.

Previous wording

Subject to market conditions, and to the extent permitted under applicable debt covenants, Qwest Corporation may issue debt securities from time to time in the future primarily to refinance a portion of our maturing debt. The availability, interest rate and other terms of any new borrowings will depend on the ratings assigned to Qwest Corporation by credit rating agencies, among other factors.

Current wording

Subject to market conditions, and to the extent permitted under applicable debt covenants, Qwest Corporation may issue debt securities from time to time primarily to refinance a portion of our maturing debt. The availability, interest rate and other terms of any new borrowings will depend on the ratings assigned to Qwest Corporation by credit rating agencies, among other factors.

Previous wording

From time to time over the past couple of years, we have engaged in various refinancings, redemptions, tender offers, exchange offers, open market purchases and other transactions designed to reduce our consolidated indebtedness, improve our financial flexibility or otherwise enhance our debt profile. Subject to restrictions under our debt covenants, and other limitations we expect to opportunistically pursue similar transactions in the future to the extent feasible. See Note 5—Long-Term Debt and Note Payable - Affiliate for additional information.

Current wording

From time to time over the past couple of years, we have engaged in various debt, refinancings, redemptions, tender offers, exchange offers, open market purchases and other transactions designed to reduce our consolidated indebtedness, extend our debt maturities, improve our financial flexibility or otherwise enhance our debt profile. Subject to market conditions, restrictions under our debt covenants, and other limitations, we expect to opportunistically pursue similar transactions in the future to the extent feasible. See Note 5—Long-Term Debt for additional information.

Previous wording

We are permitted to borrow up to $2.0 billion from our parent Lumen Technologies under a revolving promissory note. On September 30, 2022, we repaid all amounts owed to Lumen Technologies under this promissory note. Since that time, we have not owed any amounts to Lumen Technologies under this promissory note. For additional information about our indebtedness, see Note 5—Long-Term Debt and Note Payable - Affiliate.

Current wording

We are permitted to borrow up to $2.0 billion from our parent Lumen Technologies under a revolving promissory note. On September 30, 2022, we repaid all amounts owed to Lumen Technologies under this promissory note. Since that time, we have not owed any amounts to Lumen Technologies under this promissory note.

Previous wording

Lumen Technologies is subject to material obligations under its existing defined benefit pension plans and post-retirement benefit plans. At December 31, 2023, the accounting unfunded status of Lumen's qualified and non-qualified defined benefit pension plans and qualified post-retirement benefit plans was approximately $769 million and approximately $1.9 billion, respectively. For additional information about Lumen's pension and post-retirement benefit arrangements, see "Critical Accounting Policies and Estimates—Pension and Post-Retirement Benefit Obligations" in Item 7 of Lumen's Annual Report on Form 10-K for the year ended December 31, 2023 and see Note 11—Employee Benefits to the consolidated financial statements in Item 8 of Part II of the same report.

Current wording

Lumen Technologies is subject to material obligations under its existing defined benefit pension plans and post-retirement benefit plans. At December 31, 2023, the accounting unfunded status of Lumen's qualified and non-qualified defined benefit pension plans and qualified post-retirement benefit plans was approximately $769 million and approximately $1.9 billion, respectively. For additional information about Lumen's pension and post-retirement benefit arrangements, see "Critical Accounting Policies and Estimates—Pension and Post-Retirement Benefit Obligations" in Item 7 of Lumen's Annual Report on Form 10-K for the year ended December 31, 2023; also see Note 11—Employee Benefits to the consolidated financial statements in Item 8 of Part II of the same report.

Previous wording

The affiliate obligations, net in other within current liabilities and noncurrent liabilities on our consolidated balance sheets primarily represents the cumulative allocation of expenses, net of payments, associated with QCII's pension plans and post-retirement benefits plans prior to the plan mergers. In 2015, we agreed to a plan to settle the outstanding pension and post-retirement affiliate obligations, net balance with QCII over a 30 year term. Under the plan, payments are scheduled to be made on a monthly basis. For the three months ended March 31, 2024, we made net settlement payments of $13 million to QCII in accordance with the plan. Changes in the affiliate obligations, net are reflected in operating activities on our consolidated statements of cash flows. For the year ended 2024, we expect to make aggregate settlement payments of $52 million to QCII under the plan.

Current wording

The affiliate obligations, net shown in Other within current liabilities and noncurrent liabilities on our consolidated balance sheets, primarily represent the cumulative allocation of expenses, net of payments, associated with QCII's pension plans and post-retirement benefits plans prior to the plan mergers. In 2015, we agreed to a plan to settle the outstanding pension and post-retirement affiliate obligations, net balance with QCII over a 30 year term. Under the plan, payments are scheduled to be made on a monthly basis. For the six months ended June 30, 2024, we made net settlement payments of $26 million to QCII in accordance with the plan. Changes in the affiliate obligations, net are reflected in operating activities on our consolidated statements of cash flows. For the year ended 2024, we expect to make aggregate settlement payments of $52 million to QCII under the plan.

Previous wording

For 2024, Lumen's expected annual long-term rate of return on pension plan assets is 6.5%. However, actual returns could be substantially different.

Current wording

For 2024, Lumen's expected annual long-term rate of return on pension plan assets is 6.5%. However, actual returns, if any, could be substantially different.

Previous wording

In early 2020, the FCC created the Rural Digital Opportunity Fund (the "RDOF"), which is a federal support program designed to fund broadband development 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. Lumen Technologies was awarded RDOF funding in several of the states in which we operate and began receiving monthly support payments during the second quarter of 2022, our share of which is not material.

Current wording

In early 2020, the FCC created the Rural Digital Opportunity Fund (the "RDOF"), which is a federal support program designed to fund broadband development in rural America. 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. Lumen Technologies was awarded RDOF funding in several of the states in which we operate and began receiving monthly support payments during the second quarter of 2022, our share of which is not material.

Previous wording

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 increase broadband regulation. 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. On April 25, 2024, the FCC re-adopted “net-neutrality” rules similar to those in effect between 2015 and 2018. These rules are expected to take effect mid-year, subject to the outcome of any legal challenges.

Current wording

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 increase broadband regulation. 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.

Previous wording

The following table summarizes our consolidated cash flow activities:

Current wording

The following table summarizes our consolidated cash flow activities for the six months ended June 30, 2024 and June 30, 2023: