QWEST CORP

Results of Operations

The following table summarizes the results of our consolidated operations for the three and nine months ended September 30, 2025 and 2024:

For a discussion of certain trends that impact our business, see the MD&A discussion of trends impacting Lumen's business included in Lumen's reports filed with the SEC, including most recently its Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2025.

Operating Revenue

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

Total operating revenue decreased by $202 million and $555 million, respectively, for the three and nine months ended September 30, 2025 as compared to the three and nine months ended September 30, 2024. Within each product category, these decreases were primarily due to the following factors:

•Decreases in Other Broadband of $40 million and $128 million, respectively, primarily due to fewer Mass Market customers for our lower speed copper-based broadband services;

•Decreases in Voice and Other of $16 million and $55 million, respectively, principally due to the continued loss of copper-based Mass Market voice customers and a decrease of $11 million due to the voluntary relinquishment of our funding received under the FCC's Rural Digital Opportunity Fund (“RDOF”) in the second quarter of 2025. See the "Liquidity and Capital Resources—Future Contractual Obligations" in Item 2 of Part I below for more information;

•Decreases in Fiber Broadband of $14 million and $43 million, respectively, driven by fewer Mass Market subscribers for our fiber services, primarily as a result of customers migrating 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);

•Decreases in Harvest of $26 million and $71 million, respectively, primarily attributable to declines in legacy voice and copper broadband services for Business customers of $12 million and $52 million, respectively, and declines in private line services of $12 million and $15 million, respectively;

•Decreases in Nurture of $11 million and $20 million, respectively, primarily due to declines in Ethernet services;

•Grow revenues were relatively flat period over period; and

•Decreases in Affiliate Services of $93 million and $235 million, respectively, primarily due to (i) a decrease of $101 million and $299 million, respectively, in direct legacy telecommunication services provided to our affiliates and (ii) for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024, a decrease of $5 million in employee shared services expense allocated to our affiliates. These decreases were partially offset by an increase of $2 million and $68 million, respectively, in fiber broadband services provided to our affiliates and for the three months ended September 30, 2025 compared to the three months ended September 30, 2024, an increase of $6 million in employee shared services expense allocated to our affiliates.

Operating Expenses

The following table summarizes our consolidated operating expenses:

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

Cost of services and products (exclusive of depreciation and amortization) decreased by $10 million and $36 million, respectively, for the three and nine months ended September 30, 2025 as compared to the three and nine months ended September 30, 2024. The decrease was primarily due to lower employee-related expenses of $14 million and $50 million partially offset by higher network and facilities expense of $4 million and $11 million for each respective period.

Selling, General and Administrative

Selling, general and administrative expenses increased by $45 million and decreased by $1 million, respectively, for the three and nine months ended September 30, 2025 as compared to the three and nine months ended September 30, 2024. For the three months ended September 30, 2025 compared to the three months ended September 30, 2024, the increase was primarily due to an increase of $41 million in professional fees and legal expenses. For the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024, the decrease was primarily due to (i) a decrease of $27 million employee-related expenses and (ii) a decrease of $11 million in bad debt expense. These decreases were partially offset by (i) an increase of $34 million in professional fees and legal expenses and (ii) an increase of $12 million due to fees related to the voluntary relinquishment of our funding received under the FCC's Rural Digital Opportunity Fund (“RDOF”).

Operating Expenses - Affiliates

Operating expenses - affiliates increased by $39 million and $27 million, respectively, for the three and nine months ended September 30, 2025 as compared to the three and nine months ended September 30, 2024. These increases were due to an increase of $31 million and $43 million, respectively, in allocated employee and professional services provided to us by our affiliates and an increase of $11 million of network services purchased from affiliates for the three months ended September 30, 2025, as compared to September 30, 2024. These increases were partially offset by decreases of $3 million and $13 million, respectively, in direct telecommunication services charged to us by our affiliates.

Depreciation and Amortization

The following table details our depreciation and amortization expense:

Depreciation expense decreased by $25 million and $26 million, respectively, for the three and nine months ended September 30, 2025 as compared to the three and nine months ended September 30, 2024. These decreases are attributable to a decrease of $25 million and $40 million for the three and nine months ended September 30, 2025, as compared to the three and nine months ended September 30, 2024, due to the discontinuation during the second quarter of 2025 of the depreciation of the tangible assets of the Lumen Mass Markets fiber-to-the-home business held for sale. These decreases were partially offset by an increase of $14 million due to net growth in depreciable assets for the nine months ended September 30, 2025, as compared to the nine months ended September 30, 2024.

Amortization expense increased by $4 million and decreased by $4 million, respectively, for the three and nine months ended September 30, 2025 as compared to the three and nine months ended September 30, 2024 primarily due to a net change in the amount of amortizable assets.

Other Consolidated Results

The following tables summarize our total other expense, net and income tax 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 increased by $14 million and $27 million for the three and nine months ended September 30, 2025 respectively, as compared to the three and nine months ended September 30, 2024, primarily due to lower capitalized interest of $14 million and $33 million, respectively, which was partially offset by a decrease in our average interest rate from 6.79% to 6.69% for the nine months ended September 30, 2024 as compared to the nine months ended September 30, 2025.

Interest Income - Affiliate, Net

Interest income - affiliate, net increased by $18 million and $49 million, respectively, for the three and nine months ended September 30, 2025 as compared to the three and nine months ended September 30, 2024. The increase in interest income - affiliate, net was primarily due to a higher average receivable from affiliates.

Income Tax Expense

For the three and nine months ended September 30, 2025, our effective tax rate was 28.7% and 26.9%, respectively. For both the three and nine months ended September 30, 2024, our effective tax rate was 26.6%.