Greetings and welcome to the CenturyLink’s Second Quarter 2019 Earnings Conference Call. During the presentation, all participants will be in a listen-only mode. Afterwards, we will conduct a question-and-answer session. [Operator Instructions] As a reminder, this conference is being recorded today, Wednesday, August 07, 2019. It is now my pleasure to turn the conference over to Valerie Finberg, Vice President of Investor Relations. Please go ahead, Valerie.

Thank you, France. Good afternoon, everyone, and thank you for joining us for the CenturyLink second quarter 2019 earnings call. With us on the call today are Jeff Storey, President and Chief Executive Officer and Neel Dev, Executive Vice President and Chief Financial Officer. Before we get started, I need to call your attention to our Safe Harbor statement on slide 2 of our 2Q19 presentation, which notes that this conference call may include forward-looking statements, subject to risks and uncertainties. In addition, we will refer to certain non-GAAP financial measures, which are reconciled to the most comparable GAAP measures. Those reconciliations can be found in our earnings press release or our supplement schedule. Additionally, please note that certain metrics discussed on the call today exclude transformation costs and other special items as noted in our earnings materials. With that, I’ll turn the call over to Jeff.

Thanks, Valerie, and thank you to everyone for joining us. On today's call, I'll give you an update on the state of the business. Neel will provide an overview of the quarter’s financial results, and then we'll go directly to your questions. I’ll start by saying during the quarter, we continued to improve our customer experience, increased our business and wholesale sales sequentially, and expanded our adjusted EBITDA margins to 40.7%. The quarter’s results continue to validate a core tenant of CenturyLink. By delivering outstanding products over a world-class infrastructure, with a primary focus on operational excellence, we can drive revenue, margin expansion, and bottom line profitability. While we have a long way to go to simplify and streamline our internal operations and our customer interactions with CenturyLink, we certainly see the tangible results of our efforts that benefit both customers and shareholders. Since the close of the Level 3 acquisition, our adjusted EBITDA margins have expanded by more than 500 basis points. And as we've said previously, we already have identified 800 million to 1 billion in run rate transformation savings. As of the end of the second quarter, our transformation initiatives delivered annualized run rate savings of 290 million, and we believe our results validate our ongoing ability to find, capture, and generate savings while focusing on profitable revenue growth. During the quarter, we made good progress on our deleveraging objectives and our leverage ratio of net debt to adjusted EBITDA is now 3.8 times. We feel confident in our ability to meet our leverage target of 2.75 to 3.25 times within the next three years. From a revenue perspective, while year over year total revenue declines -- increased slightly, we saw improvement in sequential total revenue performance. We also saw improved revenue performance in iGAM and Enterprise…

Thank you, Jeff. And good afternoon, everyone. I'll start with our financial summary on slide 7. We grew adjusted EBITDA to 2.269 billion from 2.262 billion in the first quarter 2019. We expanded adjusted EBITDA margin over 500 basis points to 40.7% this quarter compared to 35.5% at the close of the Level 3 transaction. We were able to accelerate our cost transformation initiatives and deliver 290 million of annualized run rate adjusted EBITDA savings, and based on our continued progress today, we feel good about our financial performance and are reiterating our outlook for adjusted EBITDA and free cash flow for the full-year 2019. To put the first half of 2019 into perspective, we grew adjusted EBITDA by 80 million compared to the first half of 2018, while revenue declined more than 600 million over the same period. This was driven in part by our focus on adding profitable revenue in de-emphasizing unprofitable lines of businesses, managing legacy product declines, along with synergies and our cost transformation initiatives. Turning to revenue on slide 8. Total revenue in the first quarter declined 5.5% to 5.58 billion. Quarter-over-quarter, total revenue declined 1.2% compared to the 2.3% sequential decline we saw last quarter. As I just mentioned, last year, during the course of 2018, we implemented guardrails to drive profitable revenue, which has led to difficult year over year comparisons. Our iGAM revenue was roughly flat compared to the second quarter 2018. Adjusting for FX, iGAM grew 1.6%. Sequentially, revenue increased 1.2% compared to a 3.5% decrease last quarter. We did see an impact to revenue this quarter from the contract rewrites that we mentioned last quarter. However, those revenue declines were offset by strength in non-recurring revenue items. Keep in mind, this group contains some of our largest customers, and we…

[Operator Instructions] Our first question from the line of Batya Levi with UBS. Please go ahead.

First, little bit more color on the Enterprise trends if you could provide for the second half. I believe you typically see higher CPE sales. Can you parse out the improvement on regular services versus CPE? And just a follow up, I believe you mentioned a couple of non-recurring items in iGAM and wholesale in the quarter, any chance you could quantify those? And third, a lot of discussions on potential changes in terms of CAF subsidies that you collect right now. How do you think about that going forward? Would you -- would the -- I believe you collect about 500 million on an annual basis right now? Would you still be interested in participating in the auction next year? Thank you.

Good. Batya, I think there's a lot of questions in there. So, if I miss any, we’ll come back. So, on enterprise, if you think about our Enterprise segment, our sales in fourth quarter, and January and February were impacted by the government shutdown, but we saw good sales in March and we saw good sales in second quarter of this year. So, we got good sequential growth in sales. So given timing of installs and that's part of the reason we feel good about the second half of this year. On CPE, we've really de-emphasized on profitable CPE. So, our CPE revenue is down a fair amount on a year-over-year basis. So, the driver for enterprise growth is sales and installs. Just to put that in…

And just to add, I apologize Neel, on the CPE, that's a conscious decision. That's something that we intentionally did. We still sell CPE. But we do it when it brings network with it when we can do managed services and professional services, when we can do things to increase the margin around it. But in the past, there were times when we would just sell CPE without any of those other services. And we stopped doing that, that doesn't make us money, distracts our organization, and that's one of the efforts around profitable revenue that we focused on.

And just to put in the context, I think if you look at our enterprise, year-over-year, we're down about 1.2%, that’s about 18 million or so. And last year, we terminated a government contract that was unprofitable, we de-emphasize low margin CPE sales, and we put a lot of guardrails around profitable business. So, in that context, we're fairly pleased with the performance of the enterprise business and the latter half of the year is driven by sales and installs. In terms of iGAM, in the first quarter, I noted that we had a large renegotiation with a customer, hyperscaler customer and that drove sequential pressure on revenue. But we did offset that with non-recurring services, professional services, and other things and that was, call it, roughly around 15 million or so. And, again, in iGAM, we saw growth in sales sequentially and we feel good about the second half of the year. My comment on wholesale one time was more related to the comment I made in first quarter, we had a large carrier renegotiation in the first quarter that impacted revenue, and we saw the full quarter impact of that in second quarter. And if you're looking at year-over-year for wholesale, second quarter of last year had a large carrier settlement that impacts the year-over-year comparison.

And then with respect to the CAF question and whether we’ll participate in upcoming auction. The rule, the suggested rules have just come out. We've got a comment period, I think till the end of the year, we'll look at it and we'll see if it makes sense. And if it does for us, and we will participate in those auctions. And if it doesn't make sense, then we won’t. If you look historically, there were some times we participated and sometimes we didn't. And so we will evaluate that, as the rules get finalized, and as we look at the specifics.

Yeah. The other thing just to add to that I think keep in mind, on CAF, there is a capital offset as well. So to the extent that we’re not getting funding at the revenue line, we're also not spending capital.

Our next question is from the line of Simon Flannery with Morgan Stanley, please go ahead.

Great. Thanks a lot. Thank you for the color on the fiber deployment. Can you just give us a sense of, you know, how much that is costing and what -- what the timeline is to get to completion there? And maybe any thoughts about is this capital intensity likely to continue into 2020? And then any comments on M&A opportunities? I think you've talked about tuck-ins and maybe some international opportunities over time, but we haven't seen you do much for a while. And any color on what you might be interested in there would be great, thank you.

With respect to how much capital, we haven't given out any of that information, what I will tell you is, it's fully contemplated in our 2019 capital outlook that we provided and it's part of the growth initiatives that we talked about in previous earnings calls. The completion is -- is the end of 2021, but the majority of that long delay has to do with Europe, and North America, I don't have the exact date in front of me, but it's not a network where you got to wait until everything's turned up, we prioritize the routes based on the demand from our customers, we will activate those routes, we are in the process of activating them, we will install the fiber, you know, we’ll continue to do that based on the prioritization that our customers want. So, you know, we're really pleased with our ability to roll this out very quickly. If you -- if you have a network that's direct buried into the earth, it costs you an enormous amount to open a new trench. It costs you an enormous amount of time to get all the rights of way and all of that. And what we do is we [indiscernible] we pull the fiber directly into the conduits. It's very simple, very straightforward, and very cheap compared to the alternatives. So we're really pleased to use our -- our very extensive conduit network to take advantage of that. With respect to M&A, we don't really talk about M&A before we do something, we will continue to be active and looking, we are an inquisitive company, we will make sure that anything we do is accretive to the business and free cash flow basis and functionality basis. And, so, we’ll continue to look at that. But right now, our real effort is transforming CenturyLink. And looking at the way that we interact with our customers and creating an environment where we can do seamless things. I mentioned in the -- in the prepared remarks, our dynamic connections. Dynamic connections for enterprise customers allow them to establish connectivity with us. And then use that connectivity by typing in a few keystrokes to either increase the speed or redirect it from one cloud service provider to another or one of their data centers to another and really give them the flexibility to use that in a digital way. The next step of that, obviously, is to create a connection between their systems and our systems where -- where their AI tells us to automatically upgrade that capacity or do something. And so -- so that's really the effort of ours over the next couple of years. And so there's some tuck-in type ideas that might make sense to go with that. But we don't talk about any specifics until we do something.

Our next question from the line of Philip Cusick with JPMorgan, please go ahead.

I guess two. First on the consumer side, I recognize you don't want to talk about strategic options, can you tell us if you've ruled anything out at this point, or things that you may have talked about ruling out back in May, if those have possibly come back to the fore. And then sticking with the fiber bill, can you expand on your plans from here around Metro and long distance fiber? And how that fiber build may have impacted any dark fiber bookings? And how we should think about that going forward? Thanks very much.

Sure. I got distracted. On the consumer, first of all, I don't know anything that we might have said in May, if there's something specifically I’ve said, remind me of it. But no, in answer to your question and I won't take any more questions on the consumer process just because it's still early in the process, and I don't have -- anything any real updates. But we haven't ruled anything out. We're open minded. And we think that it's important for us to look at all options, and including continuing to own and operate it. And so we're open to all of the various options, and really just trying to understand the best way to maximize free cash flow per share for our shareholders over the long time. And then the second question was on the overbuild and the impact that has on dark fiber. Is that right?

Correct. Thank you.

It has great impact on dark fiber. We are quietly a very large dark fiber sales company. We don't emphasize it that much externally. But we love it. We have great customers. This ultra-low loss fiber is important to our dark fiber customers and some of our dark fiber customers, not all of them, but hyper scalars. I mentioned, large enterprises that have huge bandwidth requirements. And then again, some of our dark fiber customers that are trying to serve their own needs internally. And so we think it'll be, we think it's a real opportunity for us.

Our next question is from the line of Brett Feldman with Goldman Sachs.

Thanks. And just to follow up on something you were discussing during your prepared remarks, Jeff, you’ve talked about low calorie revenues and how you've been waiting the company off of products and services that weren't helpful to the bottom line for a while now. I still think your current period, top line results are being compared against prior periods where maybe there was more of that in the mix. So I guess I'm just trying to understand, do you think you've hit a lot of the significant opportunities to maybe get the mix from a profitability standpoint where you want to be, so that maybe will have better visibility into sort of the true organic trajectory of the business? Or do you still have more of this you want to do? And then just overall, I'd be interested in hearing your thoughts on the enterprise and iGAM demand environment. I feel like we've gotten mixed messages from some of your large peers about what the market environment is like, and I'm curious the extent to which the demand backdrop is influencing your view on where the second half of the year is going to shape out.

Sure. I'll answer the low calorie and then let Neel add any specifics he wants to do. I think it's getting behind us. There's not any super major low calorie revenue that we're targeting today. In the consumer business, we said we're going to de-emphasize the Prism linear TV. We’ve deemphasized contracts and gotten out of contracts that we thought were underwater, we stopped selling CPE. A lot of that is still in the year over year comparisons, Brett. So that makes it kind of difficult, but if you start looking at the sequential comparisons, it'll be in there less and less. So I think that that going forward, we’ll stop talking about that, even though there's going to be some here and there that affect us. The other thing that we're trying to do though is with some of this low calorie revenue, we're trying to increase the profitability by moving things off net to on net. And then we will do rate hikes. And if we can -- if we can't make it profitable, then with rate hikes, and the customer may leave us. But those are small things around the edges. I think it's starting to fall out of the year over year comparisons, but it's going to be faster falling out of the sequential comparisons.

Yeah, just to add a couple of, it really is around the edges, Brett. I think if you look in the other -- in the product breakdown for other for example, in consumer, that's where a lot of the Prism revenue is. So sequentially, it was down 6 million, 7 million. So that will continue. If you look at our IT and managed services products, that's where we have some of the legacy hosting, if you will, and some of that will continue to attract. So it really is around the edges. And that was part of the reason why we talked about in our enterprise and IGAM growth, we said second half will be higher than first half, because first half is relatively clean compared to last year where we were working through a lot of that.

And with respect to IGAM enterprise, the demand environment that we see, look, we love this business. We think there's great demand out there for the types of products and services that we sell, and that the demand is growing for those types of products and services. Now, some, there are some products that are going to decline as customers transition to that and transition to the newer products and services. And we think that's a good opportunity to go out and take share from other people and help those customers make that transition. So we think market is good for us. We think we have great assets and great network capabilities. We want to continue to expand that and augment it, adding 4500 buildings in the first Quarter gets us two more customers, adding 5000 buildings in the second quarter gets us to more customers, gives us a better footprint to deliver those services on. We know when we sell on net, we do a better job for the customer, we make more money. It's all around a good thing. And so, we look at the market, and I've said this for a long time, it's whether -- whether it's the market or the economy, we look at it and say it's up to us to execute. If CenturyLink executes in the way that we can with the network assets that we have, with the capabilities and the products and services and the managed services and all of those things, if we invest appropriately for growth continuing to augment our capabilities, we win. And so I don't really have any great comments on the market other than it's good for our products and services.

Our next question is from the line of Frank Louthan with Raymond James, please go ahead.

Walk us through the current pricing in wholesale in general. And then I know you said you're not going to really touch too much on M&A. But can you -- are there other assets possibly that you might want to divest, to try and help with leverage maybe data centers or CDN business, something like that?

So I'll take the second question and then Neel can talk about the pricing. As I said in the previously on the -- in the answer and in the prepared remarks, we look at everything and we are not opposed to evaluating each individual business that we have each individual line of business, and we will continue to do those types of things. There's nothing I want to call out that that there are some things that we're actively looking at and have been since the -- over the past several months and we’ll continue to do that. One of the things you got to do is you got to have a willing buyer and a willing seller. And we're in the process of figuring out, first of all, if we're willing seller, and secondly, if there's a willing buyer out there. Now that what we do know is that regardless of the particular product or the particular line of business, if we focus on growing free cash flow, then and we have options to whether we want to keep it or not keep it and so every part of our company, we are looking at how do we get it to contribute free cash flow. And if we don't think we can, for example, the Prism TV, if we don't think we can get it to contribute the level of free cash flow that we want, we’ll stop doing it.

On the pricing side, Frank, I would say overall, in the wholesale, I think your question was specific to wholesale. We see rational behavior and we follow the market fairly closely for access, particularly we see areas where others are raising prices, so we start to stay competitive. But if there is an opportunity to raise prices, we'd raise if there are multiple competitors, and we need to lower price as we do. But overall, we think the return profile, given the current pricing looks very good. And part of our business is a wholesale voice business in wholesale and we manage that as a trading desk on an everyday basis. So that's all based on margin. So we really don't care about the top line there. We have guard rails around what margins we want to make on a per minute basis and we manage that like a trading desk.

Our next question is from the line of Nick Del Deo with MoffettNathanson.

First, the billing additions you've noted the past two quarters have been pretty substantial. Can you talk about what share of those ads are primarily during my efforts to move off net traffic on net for existing customers versus buildings that you've otherwise targeted? And should we think of this pace as what you can sustain for the next several quarters.

First of all, thank you for noticing that they’re substantial because we're working hard at it and I will tell you that we prioritize buildings for off net to on net, we prioritize them for free cash flow. I hate to keep using the same phrase, but it actually offered -- it's the driving factor behind our company and so off net to on net is a guarantee and we know it. Existing sales is another way that we prioritize them. And there's not quite, not all that many that we do build it and they will come type approach. That's very, very rare. So the addressable market or opportunity for us to remain at this pace. And I can't predict how long, but it's going to be driven by as long as we're finding buildings that we can profitably build into that make us money, we’ll continue to do that and it's not a limiting factor of our ability to turn those buildings up. It's -- the limiting factor over the long term will be what types of returns do we get for each of those buildings and right now we're very pleased with it. So I can't give you a prediction of how long it will last, what I will tell you is that when we look at our capital outlook, we factor in these building ads as well. So as you look at our capital outlook, and you think about it for the year, whether it's long haul, ultra-low loss fiber, whether it’s edge computing expansions, or building ads, that's factored into our capital outlook.

And then, Jeff, you noted in your prepared remarks, your focus on customer satisfaction, kind of along those lines, can you share any details regarding what churn trends have been like in the business?

Yeah. So qualitatively, the churn has been pretty good, especially a year after an acquisition, we're pretty pleased with the churn. And that tells us, we didn't do anything wrong in working with our customers. It doesn't say you necessarily did everything right, but it tells you, you didn't do anything wrong. And if you look at our churn across the business, broadband subs and in consumer, although there's seasonality in the second quarter, typically, if you look at year-over-year, second quarter, you know, we're pretty pleased with our overall churn, enterprise, wholesale, wholesale, we've described for a long time to be flat to slightly down, and it's going to continue if the trend is that it is, that's just the nature of that business. But we manage it again, we manage it pretty heavily for margin and for contribution.

Our next question is from the line of Tim Horan with Oppenheimer.

Do you think this is kind of peak revenue decline, year-over-year at this point? Or can you give a little bit more color? I know you gave two line items on revenue decline for the second half of the year. And maybe, obviously, there's a lot of moving parts and you're throwing a lot of money at putting infrastructure in place that leverages a lot of your existing infrastructure was a really, really smart move and de-emphasizing obviously a lot of legacy products that we're talking about, any color on when you can get to break even on revenues. Thanks.

So I think, Tim, I think the year-over-year gets complicated because of all the noise last year and then if you think back to fourth quarter of last year, we had the noise, but then we also had strength in a lot of non-recurring revenue items that we called out in our fourth quarter earnings call. But in general, I would say, if I look at the first half of this year, compare that to first half of last year, more than a third of the revenue decline is driven by a lot of the actions we took, whether it's prism unprofitable GAM contract, unprofitable government contract, deemphasizing CPE, et cetera. So, like Jeff mentioned earlier, we don't have a lot more left to go. So going forward, the comparisons are going to get more cleaner. And in terms of trajectory, I think like we said, we feel good about IGAM and enterprise. SMB, the challenge we have is it still has a fair amount of legacy voice. Our sales actually grew sequentially second -- first quarter, second quarter over first quarter. While we need a lot more improvement, which we think we have the addressable market, and we're focused on growing sales. So again, at some point offset some of the legacy declines.

And I am very focused and Lisa Miller who runs that business unit is very focused on selling to small and medium businesses in lit buildings outside the legacy CenturyLink footprint. Level 3 never focused there, because that's not the type of customer we focused on. CenturyLink never focused there, because that's not the type of -- we didn't have the network to sell to those customers. And so neither side of the previous companies focused on those. That's a great opportunity for us. We have to stay focused and we have to really drive our opportunities outside of the region for those customers.

And the one other comment I would add is on the consumer side, if you look at our broadband business, we're investing in that business. We're focused on the competitive asset. Broadband revenues grew year-over-year. This quarter, it grew year-over-year last quarter, and I think it grew year-over-year, all four quarters of last year and there, we're going to continue to focus on that business and also focus on expanding the margin for those business. That business like Jeff mentioned in terms of how we interact with customers, with self-install and the digital interaction, et cetera.

So maybe just one more question. Sorry. How about on the free cash flow front? Do you think the next couple of -- obviously a lot of moving parts of the business model, but do you think free cash flow can be relatively stable at this run rate over the next three years? Can it grow or should we expect some declines with all the moving parts?

So look, I think we'll have more to say about next year's free cash flow when we get to that point, but directionally, our objective is to continue to grow EBITDA and we feel good about that. From a capital standpoint, like Jeff mentioned, a lot of these investments that we're making are within the existing envelope. So if you look at our current capital guidance, I think it’s factored in there. In fact, a lot of the fiber deployment spending was last year when we spent only 3.2 billion. So we're going through a massive effort in terms of reorienting in terms of where we spend capital. So we're not spending capital in areas that we don't think we are getting a return and really focused on long life investments. So I think that's all factored into our capital. And if you think about net cash interest with our de-leveraging efforts, and given the interest rate environment, that should improve. So just to give you a flavor for where our free cash flow is at it.

Our next question is from the line of David Barton with Bank of America.

I guess just a couple. Neel, on the mathematics of getting better second half out of enterprise and IGAM, especially for enterprise, it suggests a pretty healthy kind of U-turn in the business and at least the third quarter, if not the fourth. And my guess is that you mentioned a few things that gave you conviction on there. You mentioned sales funnel in particular, I think both of you mentioned it. But I imagine mid third quarter, we've got to be on the install part of that kind of process. And I was wondering if you could kind of elaborate a little bit if the conviction that you're having on the second half being better than the first half is coming from that installation process and the fact that things are actually happening on the ground, especially if there was that 15 million one time or international? The second question was on the math of the transformation program that, the quarter to quarter change from 1Q to 2Q would suggest we're on track to maybe be at a $600 million run rate by the end of the year. I was wondering if you could kind of elaborate on whether that's realistic and if it is, kind of the pieces parts that will get you there. Thanks.

Sure, David. So on enterprise, you're right, a big part of that is installs, because like I mentioned, I think, a big sales ramp came up -- came in in March. And then second quarter was a good quarter of sales for enterprise. But given the nature of customers in that segment, some of these deals are large deals, several hundred node network, so it takes a while to get those installs. And so yeah, we need to execute on all the installs. And then there is the sales funnel, which people feel good about, but that will impact more fourth quarter. So the third quarter improvement in revenue will largely be driven by installs. And similar on the IGAM front as well. And so yeah, the leading indicators were positive about. On the transformation front, we were able to accelerate and -- but I think, for the second half of the year, I would say if you look at our overall guidance of 800 million to 1 billion over three years, with 10 more quarters to go, I will think about it as 50 million to 70 million per quarter is kind of the baseline, but at the end of the day, if we can accelerate, we will, but we're not banking on accelerating.

Our next question is from the line of Mike McCormack with Guggenheim.

Jeff, maybe a quick comment just on the overall fiber capacity. Obviously, a lot of us have moved through the early 2000s with the fiber dot that occurred back then and there were new technologies coming to market, but how do you frame the current sort of capacity situation with respect to the domestic fiber networks? And then secondly, for Neel, on the leverage side, you obviously still have a lot of EBITDA coming out of legacy revenue streams, just trying to get a sense for how you sort of bifurcate those streams and whether or not it's more accessible to have maybe a higher threshold of leverage, some of the newer stuff and perhaps a little bit lower on the legacy declining revenue streams. Any thoughts around that would be great. Thanks.

Yeah. I've not had a fiber glut question in years. So Mike, thanks for bringing that one up. If you think back to 2000, 2002, when there was a glut of fiber, when the glut of fiber, there was a glut of fiber providers. And so we had Level 3 and Quest and [indiscernible] IXC and all these companies going out and building the same assets between the same locations and then they started getting into trouble and when you get into trouble, the next dollar of revenue is leased to another dollar of revenue. So you get irrational pricing, we don't have that today, we don't have a glut of fiber. Obviously, we wouldn't be augmenting fiber, if there was a glut in the industry. We don't have a glut of competitors out there. There are a lot of good fiber competitors, a lot of good companies, but for the most part, it's a rational market. And we're building fiber where we need it. I don't worry about a fiber glut. I don't worry about some irrational players selling fiber for ridiculous prices. It's a fairly rational market. It's a competitive market, but it's a fairly rational one. So I'm pretty pleased with where we are. I don't worry about that much. They were painful days for all of us.

So Mike, I'll take a shot at your question. I'm not sure I completely understand it, but I’ll come back by if I don't address it. So the way we think about it is we are, first of all, we're de-leveraging. So we're -- we feel good about that plan. In terms of all of our investments, they're going -- big chunk of that if you hear our commentary and what we're focused on is really on long life asset, primarily fiber which supports different technologies. And, what we're working on is really transitioning from legacy EBITDA to newer services on that, right. So and that will be an ongoing process. And as an industry, for some of us that have been in this industry for a really long time, we've gone through that transition several times. And so we're managing that at an aggregate level in terms of what leverage makes sense. And we don't really think about it in the piece parts if that makes any sense.

Yeah. I guess I was just sort of thinking about as that transition occurs, is that -- not so much obviously this year, but longer term, leverage ratio would have changed that dynamic for you. Obviously, legacy Level 3 was a bit more highly levered.

Yeah, yes. But for the near term, I think the range we feel good with a 2.75 and 3.25. We feel very comfortable with that. And if we get to a different dynamic, then we'll give it some more thought.

Before we finish, I think that was the last question. So before we finish the call, I'd like to wrap up with a few key points. We remain focused on growing adjusted EBITDA and expanding margins. We delivered on those objectives again this quarter, while also focusing on improving the customer and employee experiences. With a solid quarter of sales and a strong funnel, we’re seeing signs of improving revenue performance and expect a better second half of the year for IGAM and enterprise. We continue to evaluate strategic options to create value with our asset portfolio. In the meantime, we're working diligently to operate the business for growth, maximum efficiency and long term return to free cash flow per share. We're excited about the investments we're making to continue to enhance and expand our fiber network and to solve our customers’ evolving networking needs like edge computing. We continue to make progress toward our de-leveraging objectives and expect to meet our leverage target within our three year timeframe. And finally, before I conclude the call, I'll remind you that as always, our guiding principle is growing free cash flow per share. Every action we take and every option we review is in the context of that metric. Thank you all for joining today's call and for your continued support of CenturyLink. France, that concludes the call.

Thank you. We would like to thank everyone for your participation and for using CenturyLink’s conferencing service today. This does conclude the conference call. We ask that you all please disconnect your lines. Have a great day, everyone.