Lumen Technologies reports first quarter 2023 results

________________________________

¹ Adjusted EBITDA and Adjusted EBITDA excluding Special Items for the first quarter of 2022 includes (i) $415 million of Adjusted EBITDA from the divestitures, which will not recur in periods following the completion of these divestitures, and (ii) $59 million of revenue from the Federal Communications Commission's Connect America Fund ("CAF") Phase II program, which lapsed on Dec. 31, 2021. The Company believes that these figures will allow analysts and investors to understand the amounts associated with these transactions to understand the impact they had on the Company's past, but not current or future, financial performance. Therefore, these amounts will impact the Company's ability to match its past performance in current and future periods. Additionally, the Company believes that this provides useful information to investors to understand the impact that the CAF Phase II program had on the Company's revenue generating activities in relation to the Company's past, but not current or future, financial performance. The post-closing financial impacts of actual amounts received or paid by the Company under the post-closing agreements with the purchasers of the divested businesses were a net reduction of $(48) million for the first quarter 2023. The Company believes that this provides useful information to investors to understand the impact that the post-closing agreements have had on the Company's activities and its current financial performance.

² Includes the impact of $90 million in cash tax payments related to our divestitures completed on Aug. 1, 2022 and Oct. 3, 2022.

Metric, as reported

First Quarter

($ in millions, except per share data)

2023

2022

Large Enterprise

$      1,194

1,442

Mid-Market Enterprise

515

573

Public Sector

430

479

Enterprise Channels

2,139

2,494

Wholesale

817

907

Business Segment Revenue

2,956

3,401

Mass Markets Segment Revenue

782

1,275

Total Revenue⁽¹⁾⁽²⁾

$      3,738

4,676

Cost of Services and Products

1,817

1,985

Selling, General and Administrative Expenses

721

800

Loss on disposal group held for sale

77

—

Stock-based Compensation Expense

14

23

Operating Income

390

1,083

Adjusted EBITDA^(3)(4)(5)

1,137

1,914

Adjusted EBITDA, Excluding Special Items^(3)(4)(5)(6)

1,251

1,966

Operating Income Margin

10.4 %

23.2 %

Adjusted EBITDA Margin⁽⁵⁾

30.4 %

40.9 %

Adjusted EBITDA Margin, Excluding Special Items⁽⁵⁾⁽⁶⁾

33.5 %

42.0 %

Net Cash Provided by Operating Activities

595

1,375

Capital Expenditures⁽⁷⁾

640

577

Unlevered Cash Flow⁽⁵⁾

305

1,183

Unlevered Cash Flow, Excluding Cash Special Items⁽⁵⁾⁽⁸⁾

275

1,231

Free Cash Flow⁽⁵⁾

(45)

798

Free Cash Flow, Excluding Cash Special Items⁽⁵⁾⁽⁸⁾

(75)

846

Net Income

511

599

Net Income, Excluding Special Items⁽⁵⁾⁽⁹⁾

97

636

Net Income per Common Share - Diluted

0.52

0.59

Net Income per Common Share - Diluted, Excluding Special Items⁽⁵⁾⁽⁹⁾

0.10

0.63

Weighted Average Shares Outstanding (in millions) - Diluted

982.3

1,015.2

⁽¹⁾ Revenue for the first quarter of 2022 includes (i) $716 million of revenue from the Latin American business divested Aug. 1, 2022 and the 20-state ILEC business divested Oct. 3, 2022 (the "divestitures"), which will not recur in periods following the completion of these divestitures, and (ii) $59 million of revenue from the CAF Phase II program, which lapsed on Dec. 31, 2021. The Company believes that these figures will allow analysts and investors to understand the amounts associated with these transactions to understand the impact they had on the Company's past, but not current or future, financial performance. Therefore, these amounts will impact the Company's ability to match its past performance in current and future periods. Additionally, the Company believes that this provides useful information to investors to understand the impact that the CAF Phase II program had on the Company's revenue generating activities in relation to the Company's past, but not current or future, financial performance.

⁽²⁾ The post-closing revenue impact of actual amounts received by the Company under the post-closing agreements with the purchasers of the divested businesses was $28 million for the first quarter of 2023. The Company believes that this provides useful information to investors to understand the impact that the post-closing agreements have had on the Company's activities and its current financial performance.

⁽³⁾ Adjusted EBITDA and Adjusted EBITDA excluding Special Items for the first quarter of 2022 includes (i) $415 million of Adjusted EBITDA from the divestitures, which will not recur in periods following the completion of these divestitures, and (ii) $59 million of revenue from the CAF Phase II program, which lapsed on Dec. 31, 2021. The Company believes that these figures will allow analysts and investors to understand the amounts associated with these transactions to understand the impact they had on the Company's past, but not current or future, financial performance. Therefore, these amounts will impact the Company's ability to match its past performance in current and future periods. Additionally, the Company believes that this provides useful information to investors to understand the impact that the CAF Phase II program had on the Company's revenue generating activities in relation to the Company's past, but not current or future, financial performance.

⁽⁴⁾ The post-closing financial impacts of actual amounts received or paid by the Company under the post-closing agreements with the purchasers of the divested businesses were a net reduction of $(48) million for the first quarter of 2023. The Company believes that this provides useful information to investors to understand the impact that the post-closing agreements have had on the Company's activities and its current financial performance.

⁽⁵⁾ See the attached schedules for definitions of non-GAAP metrics and reconciliations to GAAP figures.

⁽⁶⁾ Excludes Special Items in the amounts of (i) $114 million for the first quarter of 2023 and (ii) $52 million for the first quarter of 2022.

⁽⁷⁾ Capital expenditures for the first quarter of 2022 includes (i) $95 million of capital expenditures relating to the divested businesses, which will not recur in periods following the completion of these divestitures, and (ii) $6 million of capital expenditures related to the CAF Phase II program, which lapsed on Dec. 31, 2021. The Company believes that these figures will allow analysts and investors to understand the amounts associated with these transactions to understand the impact they had on the Company's past, but not current or future, capital expenditures. Therefore, these amounts will impact the Company's ability to match its past capital expenditure activities in current and future periods. Additionally, the Company believes that this provides useful information to investors to understand the impact that the CAF Phase II program had on the Company's capital expenditure activities in relation to the Company's past, but not current or future, capital expenditures.

⁽⁸⁾ Excludes cash paid for Special Items of (i) $(30) million for the first quarter of 2023 and (ii) $48 million for the first quarter of 2022.

⁽⁹⁾ Excludes Special Items (net of the income tax effect thereof) in the amounts of (i) $(414) million benefit for the first quarter of 2023 and (ii) $37 million charge for the first quarter of 2022.

Metrics

First
Quarter

Fourth
Quarter

QoQ
Percent

First
Quarter

YoY
Percent

($ in millions)

2023

2022

Change

2022

Change

Revenue By Sales Channel

Large Enterprise

$  1,194

1,217

(2) %

1,442

(17) %

Mid-Market Enterprise

515

522

(1) %

573

(10) %

Public Sector

430

431

— %

479

(10) %

Enterprise Channels

2,139

2,170

(1) %

2,494

(14) %

Wholesale

817

835

(2) %

907

(10) %

Business Segment Revenue

2,956

3,005

(2) %

3,401

(13) %

Mass Markets Segment Revenue

782

795

(2) %

1,275

(39) %

Total Revenue⁽¹⁾

$  3,738

3,800

(2) %

4,676

(20) %

Revenue by Business Segment Product Category

Grow

$  1,128

1,091

3 %

1,186

(5) %

Nurture

905

934

(3) %

1,093

(17) %

Harvest

739

777

(5) %

947

(22) %

Other

184

203

(9) %

175

5 %

Business Segment Revenue

$  2,956

3,005

(2) %

3,401

(13) %

Adjusted EBITDA, Excluding Special Items⁽²⁾

$  1,251

1,393

(10) %

1,966

(36) %

Adjusted EBITDA Margin, Excluding Special Items

33.5 %

36.7 %

(9) %

42.0 %

(20) %

Capital Expenditures⁽³⁾

$    640

833

(23) %

577

11 %

⁽¹⁾ Revenue for the first quarter of 2022 includes amounts from the (i) Latin American business divested on Aug. 1, 2022 and the 20-state ILEC business divested on Oct. 3, 2022 and (ii) the CAF Phase II program, which lapsed on Dec. 31, 2021. Revenue for the first quarter of 2023 and the fourth quarter of 2022 includes amounts related to the post-closing commercial agreements with the purchasers of the divested businesses. Refer to footnote 1 and 2 on the preceding table for details.

⁽²⁾ Adjusted EBITDA excluding Special Items for the first quarter of 2022 include the financial impacts of (i) the Latin American business divested on Aug. 1, 2022 and the 20-state ILEC business divested on Oct. 3, 2022 and (ii) the CAF Phase II program, which lapsed on Dec. 31, 2021. Adjusted EBITDA excluding Special Items for the first quarter of 2023 and the fourth quarter of 2022 include the financial impacts from the post-closing commercial agreements with the purchasers of the divested businesses. Refer to footnote 3 and 4 on the preceding table for details.

⁽³⁾ Capital expenditures for the first quarter of 2022 includes the impacts of (i) capital expenditures related to our divested businesses, which will not recur in periods following the completion of these divestitures, and (ii) capital expenditures related to the CAF Phase II program, which lapsed on Dec. 31, 2021. Refer to footnote 7 on the preceding table for details.

________________________________

³ Includes the impact of $90 million in cash tax payments related to our divestitures completed on Aug. 1, 2022 and Oct. 3, 2022.

Metric ⁽¹⁾⁽²⁾

Current Outlook⁽³⁾

Previous Outlook⁽³⁾

Adjusted EBITDA

$4.6 to $4.8 billion

$4.6 to $4.8 billion

Free Cash Flow⁽⁴⁾⁽⁵⁾

$0 to $200 million

$0 to $200 million

Net Cash Interest

$1.1 to $1.2 billion

$1.1 to $1.2 billion

GAAP Interest Expense

$1.200 billion

$1.200 billion

Capital Expenditures

$2.9 to $3.1 billion

$2.9 to $3.1 billion

Depreciation and Amortization

$2.9 to $3.1 billion

$2.9 to $3.1 billion

Stock-based Compensation Expense

~$125 million

~$125 million

Cash Income Taxes⁽⁵⁾

~$300 to $400 million

~$200 to $300 million

Full Year Effective Income Tax Rate

~26%

~26%

⁽¹⁾  For definitions of non-GAAP metrics and reconciliations to GAAP figures, see the attached schedules and our Investor Relations website.

⁽²⁾  Outlook measures in this chart and the accompanying schedules (i) exclude the effects of Special Items, future changes in our operating or capital allocation plans, unforeseen changes in regulation, laws or litigation, and other unforeseen events or circumstances impacting our financial performance and (ii) speak only as of May 2, 2023. See "Forward-Looking Statements."

⁽³⁾  Includes accounting impacts of assets and liabilities held for sale and assumes the proposed sale of Lumen's EMEA business is not completed during 2023.

⁽⁴⁾  Assumes no discretionary pension plan contributions during 2023.

⁽⁵⁾  Excludes approximately $1 billion impact of taxes related to our divestitures completed on Aug. 1, 2022 and Oct. 3, 2022.

Lumen Technologies, Inc.

CONSOLIDATED STATEMENTS OF OPERATIONS

THREE MONTHS ENDED MARCH 31, 2023 AND 2022

(UNAUDITED)

($ in millions, except per share amounts; shares in thousands)

Three months ended
March 31,

(Decrease)
/ Increase

2023

OPERATING REVENUE

3,738

4,676

(20) %

OPERATING EXPENSES

Cost of services and products (exclusive of depreciation and amortization)

1,817

1,985

(8) %

Selling, general and administrative

721

800

(10) %

Loss on disposal group held for sale

77

—

nm

Depreciation and amortization

733

808

(9) %

Total operating expenses

3,348

3,593

(7) %

OPERATING INCOME

390

1,083

(64) %

OTHER (EXPENSE) INCOME

Interest expense

(279)

(352)

(21) %

Net gain on early debt retirement

609

—

nm

Other (expense) income, net

(40)

70

nm

Income tax expense

(169)

(202)

(16) %

NET INCOME

$                511

599

(15) %

BASIC EARNINGS PER SHARE

0.52

0.59

(12) %

DILUTED EARNINGS PER SHARE

0.52

0.59

(12) %

WEIGHTED AVERAGE SHARES OUTSTANDING

Basic

981,555

1,008,430

(3) %

Diluted

982,283

1,015,215

(3) %

DIVIDENDS PER COMMON SHARE

—

0.25

(100) %

Exclude: Special Items⁽¹⁾

(414)

37

nm

NET INCOME EXCLUDING SPECIAL ITEMS

97

636

(85) %

DILUTED EARNINGS PER SHARE EXCLUDING SPECIAL ITEMS

0.10

0.63

(84) %

⁽¹⁾ Excludes the Special Items described in the accompanying Non-GAAP Special Items table, net of the income tax effect thereof.

nm - Percentages greater than 200% and comparisons between positive and negative values are considered not meaningful.

Lumen Technologies, Inc.

CONSOLIDATED BALANCE SHEETS

AS OF MARCH 31, 2023 AND DECEMBER 31, 2022

(UNAUDITED)

($ in millions)

March 31, 2023

December 31, 2022

ASSETS

CURRENT ASSETS

Cash and cash equivalents

$                     1,148

1,251

Accounts receivable, less allowance of $84 and $85

1,432

1,477

Assets held for sale

1,946

1,889

Other

879

803

   Total current assets

5,405

5,420

Property, plant and equipment, net of accumulated depreciation of $20,291 and $19,886

19,321

19,166

GOODWILL AND OTHER ASSETS

Goodwill

12,657

12,657

Other intangible assets, net

6,034

6,166

Other, net

2,113

2,172

    Total goodwill and other assets

20,804

20,995

TOTAL ASSETS

$                   45,530

45,581

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES

Current maturities of long-term debt

$                        153

154

Accounts payable

1,131

950

Accrued expenses and other liabilities

Salaries and benefits

590

692

Income and other taxes

1,303

1,158

Current operating lease liabilities

326

344

Interest

88

181

Other

178

277

Liabilities held for sale

472

451

Current portion of deferred revenue

607

596

    Total current liabilities

4,848

4,803

LONG-TERM DEBT

19,743

20,418

DEFERRED CREDITS AND OTHER LIABILITIES

Deferred income taxes, net

3,200

3,163

Benefit plan obligations, net

2,358

2,391

Deferred revenue

1,808

1,758

Other

2,578

2,611

Total deferred credits and other liabilities

9,944

9,923

STOCKHOLDERS' EQUITY

Common stock

1,005

1,002

Additional paid-in capital

18,094

18,080

Accumulated other comprehensive loss

(1,069)

(1,099)

Accumulated deficit

(7,035)

(7,546)

Total stockholders' equity

10,995

10,437

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

$                   45,530

45,581

Lumen Technologies, Inc.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

THREE MONTHS ENDED MARCH 31, 2023 AND 2022

(UNAUDITED)

($ in millions)

Three months ended

March 31, 2023

March 31, 2022

OPERATING ACTIVITIES

Net Income

$                                  511

599

Adjustments to reconcile net (loss) income to net cash provided by operating activities:

Depreciation and amortization

733

808

Loss on disposal group held for sale

77

—

Deferred income taxes

46

179

Provision for uncollectible accounts

27

25

Net gain on early retirement of debt

(609)

—

Unrealized loss (gain) on investments

80

(66)

Stock-based compensation

14

23

Changes in current assets and liabilities, net

(225)

(249)

Retirement benefits

(15)

(38)

Changes in other noncurrent assets and liabilities, net

(16)

39

Other, net

(28)

55

Net cash provided by operating activities

595

1,375

INVESTING ACTIVITIES

Capital expenditures

(640)

(577)

Proceeds from sale of property, plant and equipment and other assets

23

6

Other, net

1

2

Net cash used in investing activities

(616)

(569)

FINANCING ACTIVITIES

Payments of long-term debt

(61)

(1,474)

Net proceeds from revolving line of credit

—

1,000

Dividends paid

(8)

(271)

Other, net

(17)

(31)

Net cash used in financing activities

(86)

(776)

Net (decrease) increase in cash, cash equivalents and restricted cash

(107)

30

Cash, cash equivalents and restricted cash at beginning of period

1,307

409

Cash, cash equivalents and restricted cash at end of period

$                               1,200

439

Cash, cash equivalents and restricted cash:

Cash and cash equivalents

$                               1,148

366

Cash and cash equivalents and restricted cash included in assets held for sale

41

59

Restricted cash

11

14

Total

$                               1,200

439

Lumen Technologies, Inc.

OPERATING METRICS

(UNAUDITED)

Operating Metrics

1Q23

4Q22

1Q22⁽¹⁾

Mass Markets broadband subscribers

  (in thousands)

  Fiber broadband subscribers

856

832

760

  Other broadband subscribers⁽²⁾

2,125

2,205

2,497

Mass Markets total broadband subscribers⁽³⁾

2,981

3,037

3,257

Mass Markets broadband enabled units⁽⁴⁾

  (in millions)

  Fiber broadband enabled units

3.3

3.1

2.7

  Other broadband enabled units

18.5

18.7

18.9

Mass Markets total broadband enabled units

21.8

21.8

21.6

⁽¹⁾ These amounts have been adjusted to remove the impacts of the 20-state ILEC business divestiture completed Oct. 3, 2022, which included (i) fiber broadband subscribers of 70 thousand, (ii) other broadband subscribers of 1,140 thousand, (iii) fiber broadband enabled units of 0.3 million and (iv) other broadband enabled units of 7.0 million. The Company believes that this information will allow analysts and investors to understand the operating metrics associated with the divestiture of the 20-state ILEC business to understand the impact they had on the Company's past, but not current or future, financial performance.

⁽²⁾ Other broadband subscribers are customers that primarily subscribe to lower speed copper-based broadband services marketed under the CenturyLink brand.

⁽³⁾ Mass Markets broadband subscribers are customers that purchase broadband connection service through their existing telephone lines, stand-alone telephone lines, or fiber-optic cables. Our methodology for counting our Mass Markets broadband subscribers includes only those lines that we use to provide services to external customers and excludes lines used solely by us and our affiliates. It also excludes unbundled loops and includes stand-alone Mass Markets broadband subscribers. We count lines when we install the service. Other companies may use different methodologies.    

⁽⁴⁾ Represents the total number of units capable of receiving our broadband services at period end. Other companies may use different methodologies to count their broadband enabled units.

Lumen Technologies, Inc.

Non-GAAP Special Items

(UNAUDITED)

($ in millions)

Actual QTD

Special Items Impacting Adjusted EBITDA

1Q23

1Q22

Severance

$                      8

2

Loss on disposal group held for sale

77

—

Transaction and separation costs⁽¹⁾

29

50

Total Special Items impacting Adjusted EBITDA

$                 114

$                   52

Actual QTD

Special Items Impacting Net Income

1Q23

1Q22

Loss on disposal group held for sale

$                   77

—

Gain on early retirement of debt⁽²⁾

(609)

—

Severance

8

2

Transaction and separation costs⁽¹⁾

29

50

Income from transition and separation services⁽³⁾

(46)

(3)

Total Special Items impacting Net Income

(541)

49

Income tax effect of Special Items⁽⁴⁾

127

(12)

Total Special Items impacting Net Income, net of tax

$               (414)

37

Actual QTD

Special Items Impacting Cash Flows

1Q23

1Q22

Severance

$                      5

16

Transaction and separation costs⁽¹⁾

24

32

Income from transition and separation services⁽³⁾

(59)

—

Total Special Items impacting Cash Flows

$                  (30)

48

⁽¹⁾ Transaction and separation costs associated with (i) the sale of our Latin American business on Aug. 1, 2022, (ii) the sale of our 20-state ILEC business on Oct. 3, 2022, (iii) the agreement to divest Lumen's operations in Europe, the Middle East and Africa (the "EMEA business") initially announced on Nov. 2, 2022 and (iv) our evaluation of other potential transactions.

⁽²⁾ Reflects a gain as a result of $1.5 billion of debt exchanges in Q1 2023. There were no comparable gains or losses during Q1 2022.

⁽³⁾ Income from transition and separation services includes charges we billed for transition services and IT professional services provided to the purchasers in connection with our divestitures.

⁽⁴⁾ Tax effect calculated using the annualized effective statutory tax rate, excluding any non-recurring discrete items, which was 23.5% for Q1 2023 and 24.6% for all quarters of 2022.

Lumen Technologies, Inc.

Non-GAAP Cash Flow Reconciliation

(UNAUDITED)

($ in millions)

Actual QTD

1Q23

1Q22

Net cash provided by operating activities⁽¹⁾

$                 595

1,375

Capital expenditures

(640)

(577)

Free Cash Flow⁽¹⁾

(45)

798

Cash interest paid

363

386

Interest income

(13)

(1)

Unlevered Cash Flow⁽¹⁾

$                 305

$              1,183

Free Cash Flow⁽¹⁾

$                  (45)

$                 798

Add back: Severance⁽²⁾

5

16

Add back: Transaction and separation costs⁽²⁾

24

32

Remove: Income from transition and separation services⁽²⁾

(59)

—

Free Cash Flow excluding cash Special Items⁽¹⁾

$                  (75)

$                 846

Unlevered Cash Flow⁽¹⁾

$                 305

$              1,183

Add back: Severance⁽²⁾

5

16

Add back: Transaction and separation costs⁽²⁾

24

32

Remove: Income from transition and separation services⁽²⁾

(59)

—

Unlevered Cash Flow excluding cash Special Items⁽¹⁾

$                 275

$              1,231

⁽¹⁾ Includes the impact of $90 million in cash tax payments in Q1 2023 related to our divestitures completed on Aug. 1, 2022 and Oct. 3, 2022.

⁽²⁾ Refer to Non-GAAP Special Items table for details of the Special Items impacting cash included above.

Lumen Technologies, Inc.

Adjusted EBITDA Non-GAAP Reconciliation

(UNAUDITED)

($ in millions)

Actual QTD

1Q23

1Q22

Net income

$              511

599

Income tax expense

169

202

Total other (income) expense, net

(290)

282

Operating income

$              390

1,083

Depreciation and amortization expense

733

808

Stock-based compensation expense

14

23

Adjusted EBITDA⁽¹⁾

$          1,137

1,914

Add back: Severance⁽²⁾

$                  8

2

Add back: Loss on disposal group held for sale⁽²⁾

77

—

Add back: Transaction and separation costs⁽²⁾

29

50

Adjusted EBITDA excluding Special Items⁽¹⁾

$          1,251

1,966

Total revenue

$          3,738

4,676

Operating Income Margin

10.4 %

23.2 %

Adjusted EBITDA Margin

30.4 %

40.9 %

Adjusted EBITDA Margin excluding Special Items

33.5 %

42.0 %

⁽¹⁾ Adjusted EBITDA and Adjusted EBITDA excluding Special Items for the first quarter of 2022 include the financial impacts of (i) the Latin American business divested on Aug. 1, 2022 and the 20-state ILEC business divested on Oct. 3, 2022 and (ii) the CAF Phase II program, which lapsed on Dec. 31, 2021. Adjusted EBITDA excluding Special Items for the first quarter of 2023 include the financial impacts from the post-closing commercial agreements with the purchasers of the divested businesses. Refer to footnote 1 on the first page of this release for details.

⁽²⁾ Refer to Non-GAAP Special Items table for details of the Special Items included above.

Lumen Technologies, Inc.

2023 OUTLOOK ^{(1) (2) (3) (4) (5)}

(UNAUDITED)

($ in millions)

Adjusted EBITDA Outlook

Twelve Months Ended December 31, 2023

Range

Low

High

Net income

$                     185

670

Income tax expense

65

235

Total other expense, net

1,100

900

Depreciation and amortization expense

3,100

2,900

Stock-based compensation expense

150

95

Adjusted EBITDA

$                  4,600

$                  4,800

Free Cash Flow Outlook

Twelve Months Ended December 31, 2023

Range

Low

High

Net cash provided by operating activities

$                  2,900

3,300

Capital expenditures

(2,900)

(3,100)

Free Cash Flow

$                       —

200

⁽¹⁾ For definitions of non-GAAP metrics and reconciliation to GAAP figures, see the above schedules and our Investor Relations website.

⁽²⁾ Outlook measures in this chart (i) exclude the effects of Special Items, future changes in our operating or capital allocation plans, unforeseen changes in regulation, laws or litigation, and other unforeseen events or circumstances impacting our financial performance and (ii) speak only as of May 2, 2023. See "Forward-Looking Statements."

⁽³⁾ Includes accounting impacts of assets and liabilities held for sale and assumes the proposed sale of Lumen's EMEA business is not completed during 2023.

⁽⁴⁾ Assumes no discretionary pension plan contributions during 2023.

⁽⁵⁾ Excludes approximately $1 billion impact of taxes related to our divestitures completed on Aug. 1, 2022 and Oct. 3, 2022.