Lumen Technologies Inc (LUMN)

Interest coverage

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Earnings before interest and tax (EBIT)	US$ in thousands	1,142,000	-9,079,000	341,000	4,140,000	824,000
Interest expense	US$ in thousands	1,372,000	1,158,000	1,332,000	1,522,000	1,668,000
Interest coverage		0.83	-7.84	0.26	2.72	0.49

December 31, 2024 calculation

Interest coverage = EBIT ÷ Interest expense
= $1,142,000K ÷ $1,372,000K
= 0.83

Interest Coverage Analysis for Lumen Technologies Inc:

Lumen Technologies Inc's interest coverage ratio reflects its ability to meet interest obligations through its operating profits. An interest coverage ratio below 1 indicates that the company is not generating enough operating income to cover its interest expenses.

- As of December 31, 2020, the interest coverage ratio stood at 0.49, indicating that the company's operating income was insufficient to cover its interest expenses. This could raise concerns about its ability to service debt obligations.

- By December 31, 2021, the interest coverage ratio improved significantly to 2.72, showing a healthier position compared to the previous year. This suggests that the company's operating income was more comfortable in meeting its interest payments.

- However, the interest coverage ratio declined sharply to 0.26 by December 31, 2022, signaling a potential strain on Lumen Technologies Inc's ability to cover its interest expenses with operating income.

- The ratio further deteriorated to -7.84 by December 31, 2023, indicating a significant negative impact on the company's ability to cover its interest payments. This raises red flags regarding its financial stability and debt servicing capacity.

- It slightly improved to 0.83 by December 31, 2024, but still remains below 1, indicating ongoing challenges in meeting interest obligations.

In conclusion, Lumen Technologies Inc's interest coverage has been volatile in recent years, with fluctuations impacting its ability to meet interest expenses. Investors and creditors should closely monitor these trends to assess the company's financial health and debt repayment capabilities.