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  Title	LUMEN TECHNOLOGIES, INC. Lumen Technologies : 2025 Annual Report 2024 Annual Report and 2025 Proxy Statement
  ID	8111693
  External ID	7671757708
  Author	Unknown
  Published Date	April 1, 2025, 9:39 a.m.
  Summary	2024 was a remarkable year for Lumen Technologies! We strengthened our financial position and restored market confidence in Lumen. It started with our balance sheet and debt restructuring, giving us
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  URL	https://www.marketscreener.com/quote/stock/lumen-technologies-inc-14056214/news/lumen-technologies-2025-annual-report-2024-annual-report-and-2025-proxy-statement-49499087/
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  Content ID	5416939
  Key	ea33cd8d-cdc5-407a-bfab-b98829201d75
  Content	2024 was a remarkable year for Lumen Technologies! We strengthened our financial position and restored market confidence in Lumen. It started with our balance sheet and debt restructuring, giving us ample time to execute our transformation. We lowered our debt load by $1.6B and drove material improvement in our equity and debt trading values. We established Lumen as the trusted network for AI, closing $8.5B in sales with big tech companies like Microsoft, Amazon, Google, and Meta. These partnerships helped strengthen our free cash flow and amplified a key message to the market: in a multi-cloud, AI-first world, fiber networking is critical infrastructure. We made material progress transforming Lumen's corporate functions to drive overall productivity, efficiency, and better customer experiences. For example: • In Service Operations & Assurance, we delivered materially better year-over-year (YOY) customer satisfaction scores in all four enterprise segments, four quarters in a row. • We delivered over 15% YOY sales growth in our North American Enterprise channels, growing sales 13+% in IP and Waves, and driving more than 500 customers to adopt our Lumen Digital Network-as-a-Service (NaaS) platform. • We enabled 85% of new Ethernet and IP data service sales in our major metro markets on a unified network architecture-a key breakthrough for cost reduction and customer experience efficiency! This unified network not only enables our advanced digital services, but in some use cases also reduces our average delivery time by more than 12 days and implementation costs by as much as 50%. • Our Quantum Fiber team delivered more than 500K enablements with 90+% YOY growth in fiber net adds, while reducing expenses year over year. We are excited for the road ahead. We have three clear priorities, each with detailed plans to deliver greater customer, investor, and employee value in 2025 and beyond. As we plan to deliver the next wave of value to investors, we shift our focus beyond functional excellence and seek to differentiate ourselves by completely redefining Lumen's customer experience. We believe our vision comes at exactly the right time for both public and private sector organizations looking for that next-generation, simple, and secure networking experience in the complex world of multi-cloud, AI-first architectures. In the public sector, the new administration seeks to modernize and simplify our country's infrastructure to ensure the United States remains the premier economic and technology powerhouse. Lumen's vision is perfectly positioned to operationalize government agencies' transformation plans, with our fiber network's dense national coverage, a fully digital customer experience in development, and an ecosystem of the world's largest cloud providers already embedded in our fabric. And across industries, as commercial enterprises accelerate their cloud transformation journeys, there is a race for high performing, highly secure, digitally consumable bandwidth and Lumen is ready to deliver, faster than any other provider. Our customers, partners, employees and, of course, our investors deserve more than they've received from traditional telecom companies. And Lumen intends to deliver it with three clear priorities. Priority #1: Driving Operational Excellence We continue to drive operational excellence in everything we do, ensuring continuous improvement in sales execution and churn mitigation, simplifying our core business processes, and leveraging modern platforms and AI to deliver fundamental improvement in customer, partner, and employee experiences. We have identified more than $1B of operating expenses and a substantial amount of network expenses that we plan to eliminate by year end 2027, with over $250M of run rate cost benefit expected to be realized when we exit 2025. Letter from our CEO Mitigating revenue decline, simplifying our cost structure, and modernizing our enterprise technology backbone are just the beginning of this transformation. What is most exciting about the Lumen strategy is the two-pronged approach to how we are using our assets to uniquely serve our customers. Priority #2: Building the Backbone for AI We are leveraging our fiber network to capture what we see as a once-in-a-generation rise in demand for networking services. Our strategy focuses on maximizing investor returns by ensuring sufficient network capacity growth to capture market share, while simultaneously driving higher utilization of our existing network assets. We are increasing network capacity in three ways: building new routes funded by customers, partnering with Corning to use their latest fiber innovations for up to 4x more fiber capacity, and leveraging photonics innovation for up to 2x greater fiber efficiency. Our total inter-city network capacity has the potential to go from 12 million fiber miles in 2022 to 47 million fiber miles by 2028 (not including our 22 million miles of metro fiber). We are also achieving better overall network utilization than ever before, with a plan to grow from 57% to 70% by 2028. The big tech Private Connectivity Fabric SM (PCF) agreements we signed include leasing existing empty conduits as well as funding new builds. Meanwhile, enterprises have begun the journey to upgrade their networks to make way for AI adoption. Our data shows a nearly 50% increase in 100G and 400G wave sales across large enterprises and mid-markets in 2024 alone. Building the backbone for the AI economy presents a significant, accretive opportunity for Lumen. We are driving the strongest utilization of our network assets in Lumen's history while creating substantial capacity for growth. But we recognize that high speed, low latency connectivity is just table stakes, not the end game. CIOs need more, and that's what Lumen plans to deliver with our third priority. Priority #3: Cloudifying Telecom Today's enterprise CIOs are faced with the expectation that they will continue to deliver warp-speed innovation at an efficient cost, pushing lots of data to the right users, at the right places, at the right time, for the right cost. And the architectural landscape has never been more complex, with apps and data sprinkled all over on prem, at the edge, and in multiple clouds. CIOs need expansive fiber network coverage with a digital platform that allows them to seamlessly design, control, configure, and consume modern network services. Hello, Lumen Digital! What's more, legacy networks were not built for a multi-cloud world. Public and commercial enterprises alike have to use carrier neutral facilities to access the cloud connectivity market, resulting in costly and inefficient cross-connect architectures. With Lumen's digital networking ecosystem, customers can reduce the number of required ports, improving performance, lowering cost, and enhancing security in this multi-cloud, AI-first world. We have the right assets, the right vision, and the right team, at the right time. Our future is bright. On behalf of the Board of Directors and Lumen leadership team, thank you for your continued support and trust in Lumen. Sincerely, Kate Johnson President and Chief Executive Officer Lumen Technologies Letter from our Chairman of the Board Dear Investors, On behalf of Lumen's Board, I am honored to share some insight into our stewardship of the company. It was an incredible year for Lumen. In partnership with the Board, the team delivered shareholder value by strengthening our financial position, establishing ourselves as the trusted network for AI, and making significant progress on our transformation. In 2025, we look forward to delivering on three key company priorities-driving operational excellence, building the backbone for AI, and cloudifying telecom. We believe our plan will deliver even more value to customers, partners, employees, and investors. Our Board, with a refreshed blend of skills and expertise across function and industry, remains fully engaged in overseeing Lumen's strategic plan and works closely with our senior leadership team to foster teamwork, trust, and transparency. While we made significant strides in 2024, we have more work to do and remain focused on delivering value to our shareholders in 2025 and beyond. We are confident we have the right management team to execute our priorities. Thank you for your continued trust and investment in Lumen. Sincerely, T. Michael Glenn Chairman of the Board Lumen Technologies Table of Contents ITEM 1 15 Election of Directors Board of Directors and Governance 16 Skills and Relevance to Lumen's Strategy 16 Refreshment 17 Recent Board Changes 18 Our Director Nominees 19 How Our Board is Evaluated and Selected 25 How Our Board is Organized 29 Board Committees 30 Our Board's Responsibilities 34 Shareholder Engagement 35 Director Compensation 42 Independent Auditor ITEM 2 46 Ratify KPMG as Our 2025 Annual Evaluation and Selection of 47 Independent Auditors Audit and Other Fees 47 Audit Committee Report 48 Proposals to Amend Articles of Incorporation Compensation Our Executive Officers 59 ITEM 5 60 Advisory Vote on Executive Compensation-"Say-On-Pay" Letter from the Chair of the Human Resources and 61 Compensation Committee Compensation Discussion & Analysis 63 SECTION ONE 64 Executive Summary Business Highlights 64 Recalibrating Our 2024 Incentive Programs to 65 Align with Our Business Transformation 2024 Executive Compensation Aligned with 67 Business Performance 2024 Shareholder Engagement Highlights 68 Our Compensation Best Practices 70 SECTION TWO 71 Compensation Philosophy and Principles Compensation Objectives and Principles 71 SECTION THREE 73 Pay and Performance Alignment Pay Mix 73 Realized and Realizable Pay for Our NEOs 73 SECTION FOUR 75 Compensation Design, Awards, and Payouts for 2024 Our Pay Elements 75 Recalibration of Our 2024 Incentive Programs 76 Target Compensation 79 Base Salary 81 2024 Short-Term Incentive Program 82 2024 Long-Term Incentive Compensation 88 LTI Linkage to Performance-No Payouts Under 94 2022 PBRS Awards LTI Governance of Share Usage 96 Goal Setting Process and Incentive 97 Program Guidelines Compensation Arrangements Related to 99 Leadership Transition Other Benefits 102 SECTION FIVE 106 HRCC Engagement and Compensation Governance Role of Human Resources and 106 Compensation Committee Equity Grant Timing Practices 106 Table of Contents Year-round Engagement Informs 107 Compensation Design and Awards Role of CEO and Management 108 Role of Compensation Consultants 108 Role of Peer Companies 108 Stock Ownership Guidelines Human Resources and Compensation 113 Committee Report Compensation Tables 114 Summary Compensation Table 114 Grant of Plan Based Awards 116 Outstanding Equity Awards 118 Stock Vesting Table 119 Pension Benefits 119 Deferred Compensation 121 Potential Termination Payments 121 CEO Pay Ratio Disclosure 125 Pay Versus Performance Disclosure 126 Other Items Other Matters 130 Equity Compensation Plan Information 130 Stock Ownership 131 Ownership of Executive Officers & Directors 132 Transactions with Related Parties 133 Insider Trading Policy 133 Delinquent Section 16(a) Reports 133 Compensation Committee Interlocks and 133 Insider Participation Lumen Performance History 134 ITEM 6 135 Shareholder Proposal - Simple Majority Vote Frequently Asked Questions About 137 Voting and the Annual Meeting Other Information 143 Proxy Materials 143 Annual Financial Report 143 Appendices APPENDIX A - Non-GAAP Reconciliations A-1 APPENDIX B - Annual Financial Report B-1 APPENDIX C - Proposed Amendments to Our C-1 Articles of Incorporation Pursuant to Item 3 APPENDIX D - Proposed Amended and Restated D-1 Articles of Incorporation Pursuant to Items 4A, 4B, 4C and 4D Forward-Looking Statements Except for historical and factual information contained herein, matters set forth in our 2025 proxy materials (and our accompanying 2024 annual report) identified by words such as "expects," "believes," "will" and similar expressions are forward-looking statements as defined by the federal securities laws and are subject to the "safe harbor" protection thereunder. These forward-looking statements are not guarantees of future results and are based on current expectations only and are subject to uncertainties. Actual events and results may differ materially from those anticipated by us in those statements due to several factors, including those disclosed in our other filings with the SEC. We may change our intentions or plans discussed in our forward-looking statements without notice at any time and for any reason. Certain Defined Terms All references in this proxy statement or related materials to "we," "us," "our," the "Company" or "Lumen" refer to Lumen Technologies, Inc. In addition, each reference to (i) the "Board" refers to our Board of Directors, (ii) "Voting Shares" refers collectively to our shares of Common Stock ("Common Shares") and shares of Series L Preferred Stock ("Preferred Shares"), (iii) "Meeting," "the meeting," "annual shareholders meeting" or "annual meeting" refers to the 2025 annual meeting of our shareholders described further herein, (iv) "named executives," "named officers," "named executive officers" or "NEOs" refers to the current and former officers listed in the Summary Compensation Table in this proxy statement, (v) the "Audit Committee" refers to the Audit Committee of our Board, (vi) "HRCC" refers to the Human Resources and Compensation Committee of our Board, (vii) "NCG Committee" refers to the Nominating and Corporate Governance Committee of our Board, (viii) the "Risk and Security Committee" refers to the Risk and Security Committee of our Board, (ix) "SLT," "senior leadership team" or "senior officers" refers to our executive officers and a limited number of additional officers whose compensation is determined by the HRCC, (x) "Qwest" refers to our affiliate Qwest Communications International Inc., (xi) "Level 3" refers to our affiliate Level 3 Parent, LLC and its predecessor, Level 3 Communications, Inc., (xii) "SEC" refers to the U.S. Securities and Exchange Commission, (xiii) the "Exchange Act" refers to Securities Exchange Act of 1934, as amended, (xiv) "Dodd-Frank Act" refers to the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, (xv) "GAAP" refers to U.S. generally accepted accounting principles, (xvi) "NYSE" refers to the New York Stock Exchange, (xvii) "2023 proxy statement" refers to our proxy statement filed with the SEC on April 5, 2023 in connection with our 2023 annual meeting of our shareholders, (xviii) "2024 proxy statement" refers to our proxy statement filed with the SEC on April 5, 2024 in connection with our 2024 annual meeting of our shareholders, (xix) "TSR" refers to total shareholder return, (xx) "STI" refers to short-term incentive compensation, (xxi) "LTI" refers to long-term incentive compensation, (xxii) "CD&A" refers to the "Compensation, Discussion and Analysis" section of this proxy statement, and (xxiii) "Bylaws" refers to our Amended and Restated Bylaws (as amended and restated through May 17, 2023). Unless otherwise provided, all information is presented as of the date of this proxy statement. We include website addresses throughout this Proxy Statement for reference only. The information contained or referenced on our website and other websites mentioned in this Proxy Statement are not a part of this Proxy Statement and are not deemed incorporated by reference into this Proxy Statement or any other public filing made with the SEC. Notice of 2025 Annual Shareholders Meeting 2025 Annual Meeting Information Date and Time Tuesday May 13, 2025 8:30 am CT Location www.virtualshareholder meeting.com/ LUMN2025 Record Date Proxy Mail Date You can vote if you were a shareholder of record at the close of business on March 19, 2025 On or about March 31, 2025 Items of Business ITEM 1 ITEM 2 ITEM 3 Elect the 11 director nominees named in this proxy statement Ratify the appointment of KPMG LLP as our independent auditor for 2025 Amend our Articles of Incorporation to authorize a reverse stock split and a related reduction in our authorized Common Shares Vote FOR See page Vote FOR See page Vote FOR See page ITEMS 4A, 4B, 4C, and 4D ITEM 5 ITEM 6 Approve technical amendments and updates to our Articles of Incorporation Advisory Vote on Executive Compensation - "Say-On-Pay" Shareholder proposal regarding simple majority voting Vote FOR A, B, C, and D See page Vote FOR See page NO RECOMMENDATION See page Transact other business that may properly come before the annual meeting. Proxy Voting Shareholders are invited to attend the live virtual meeting. Even if you expect to attend, we urge you to vote in advance using any of the following methods: Your vote is important to us. We urge your participation. Headquarters: 100 CenturyLink Drive, Monroe, LA 71203 Meeting Details: See "Frequently Asked Questions About Voting and the Annual Meeting" in this proxy statement for further details. Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting of Shareholders to Be Held on May 13, 2025 The Notice of 2025 Annual Meeting, Proxy Statement, and 2024 Annual Report and information on the means to vote by Internet are available at www.proxyvote.co m By Order of the Board of Directors Chris D. Stansbury, Executive Vice President and Chief Financial Officer March 31, 2025 About Lumen Who We Are We are a networking company with the goal of connecting people, data, and applications quickly, securely and effortlessly. We are unleashing the world's digital potential by providing a broad array of integrated products and services to our domestic and global business customers and our domestic mass markets customers. We operate one of the world's most interconnected communications networks. Our platform empowers our customers to swiftly adjust digital programs to meet immediate demands, create efficiencies, accelerate market access and reduce costs, which allows our customers to rapidly evolve their IT programs to address dynamic changes. Financial Strength: 2024 Results Our Brands and Assets $13.1B Total Revenue On-Net buildings fiber route miles from Business ($10.4 billion revenue) from Mass Markets ($2.7 billion revenue) $3.9B 1.1M 4.2M 17.8M Adj. EBITDA Fiber Broadband Customers fiber broadband-enabled locations other broadband-enabled locations Recent Key Business Highlights Attachments Original document Permalink Disclaimer Lumen Technologies Inc. published this content on April 01, 2025 , and is solely responsible for the information contained herein. Distributed via , unedited and unaltered, on April 01, 2025 at 14:30 UTC
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