Lumen Technologies Expands NOL Rights Plan to Safeguard Shareholder Value

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Tech News Summary:

  • Lumen Technologies has extended its NOL Entitlement Plan through December 1, 2026 to protect valuable federal net operating loss carryforwards.
  • The decision to extend the plan comes as Lumen seeks to protect its valuable federal net operating loss carryforwards of approximately $1 billion as of December 31, 2022, which can be utilized to reduce future payments of US federal income taxes.
  • The amended and restated NOL Rights Plan was approved by the company‚Äôs shareholders at its 2021 Annual Meeting and includes several changes reflecting updates since its initial adoption, demonstrating Lumen’s commitment to protecting their financial interests and positioning themselves for future success.

Lumen Technologies, a leading telecommunications company, announced today that it has extended its existing Net Operating Loss (NOL) Rights Plan in an effort to protect shareholder value. The NOL Rights Plan is designed to preserve the company’s ability to utilize its tax assets to offset future taxable income.

The plan, originally put in place in 2014, was set to expire on September 28, 2021, but has now been extended through September 28, 2024. According to the company, the extension is intended to ensure that Lumen can continue to fully utilize its tax assets, which will help to enhance shareholder value.

Lumen’s NOL Rights Plan is a common tool used by companies to protect their ability to utilize valuable tax assets, such as net operating losses, in order to reduce future tax liabilities. Without such protections in place, a change in ownership or control of the company could potentially limit or eliminate the use of these tax assets, which could have a negative impact on shareholder value.

In a statement, Lumen Technologies CEO Jeff Storey explained, “Extending our NOL Rights Plan is a proactive step to protect the value of our significant tax assets, and it underscores our commitment to enhancing long-term shareholder value. By preserving our ability to offset future taxable income, we can continue to invest in our business, return cash to shareholders, and drive sustainable growth.”

The company emphasized that the extension of the NOL Rights Plan does not prevent a takeover, but rather ensures that any potential change in ownership or control would be done in a manner that protects the interests of all Lumen shareholders.

Overall, the extension of Lumen’s NOL Rights Plan reflects the company’s dedication to safeguarding its tax assets and maximizing shareholder value in the years to come.

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