Greetings and welcome to Lumen Technologies Second Quarter 2021 Earnings Conference Call. [Operator Instructions]. As a reminder, this conference is being recorded, Tuesday, August 3, 2021. It is now my pleasure to turn the conference over to Mike McCormack, Senior Vice President, Investor Relations. Please go ahead, sir.

Thank you, Franz. Good afternoon, everyone, and thank you for joining us to the Lumen Technologies Second Quarter 2021 Earnings Call. Joining on the call today are Jeff Storey, President and Chief Executive Officer; and Neel Dev, Executive Vice President and Chief Financial Officer. Before we begin, I need to call your attention to our safe harbor statement on Slide 2 of our 2Q 2021 presentation, which notes that this conference call may include forward-looking statements subject to certain risks and uncertainties. All forward-looking statements should be considered in conjunction with the cautionary statements on Slide 2 and the risk factors in our SEC filings. We will be referring to certain non-GAAP financial measures reconciled to the most comparable GAAP measures that can be found in our earnings press release. In addition, certain metrics discussed today exclude costs for special items as detailed in our earnings material, all of which can be found in the Investor Relations section of the Lumen website. With that, I'll turn the call over to Jeff.

Good afternoon, everyone, and thank you for joining today's call. It's an exciting day for Lumen, and we have a lot to cover. I'll begin today's call with our recently announced transactions, including the just announced sale of a portion of our legacy local exchange business to Apollo. I'll then ask Neil to review a few second quarter highlights as well as provide a preliminary view of the expected effects of these transactions on Lumen's financial profile. And of course, we'll reserve time for your questions at the end of the call. So let's jump in. Last week, we announced the sale of our Latin American assets to Stonepeak at a value of $2.7 billion, representing an approximately 9x multiple of the Latin American business' 2020 estimated adjusted EBITDA. There are more details about this transaction in the release materials, but the simplest way to think about LATAM is that we will transfer ownership of substantially all our LATAM-ased customers and assets to Stonepeak, and are entering into a services agreement with Stonepeak to continue to serve the needs of our enterprise customers based outside the region. Subject to customary regulatory approvals, we expect this transaction to close in the first half of 2022. I'm also pleased to share that we have agreed to sell our legacy local exchange business in 20 states to Apollo for $7.5 billion, representing a multiple of approximately 5.5x our 2020 estimated adjusted EBITDA. In short, with this transaction, we are transferring to Apollo all our legacy local exchange assets in 20 states, along with the consumer, small/medium business, state and local government, education and wholesale customers served by those assets. Lumen will retain ownership of our non-local exchange fiber assets in those 20 states, including our long-haul fiber and the enterprise CLEC assets. Lumen…

Thank you, Jeff, and good afternoon, everyone. I want to leave ample time for your questions on our announced transactions so I will briefly review our second quarter results. Let me begin with our financial highlights in our earnings presentation. For the second quarter 2021, we delivered solid adjusted EBITDA and expanded margins year-over-year. Cash flow remains very robust, providing the opportunity to ramp investment in our key growth areas in the second half of the year. However, given our spending in the first half, we are reducing our CapEx guidance to be in the range of $3.2 billion to $3.5 billion. And accordingly, we are adjusting our free cash flow expectation to $3.1 billion to $3.3 billion for the full year 2021. As Jeff mentioned, our Board has approved a $1 billion share buyback program over 2 years, with which we will be opportunistically buying back shares. Turning to second quarter revenue by sales channel. Total revenue in the second quarter declined 5.2% on a year-over-year basis to $4.924 billion. Normalizing for the sale of our correctional facility business in the third quarter of 2020, our revenue would have declined 4.9%. It is important to remember that year-over-year metrics were meaningfully affected by the surge in demand for voice collaboration and conferencing in the second quarter of last year, making comparisons less relevant. From a sequential perspective, total revenue declined by 2.1%, primarily driven by lower sales in the last couple of quarters. Moving to business segment. In the second quarter, total business revenue declined 2% sequentially and 5.2% on a year-over-year basis to $3.522 billion. Normalizing for the sale of the correctional facility business, the decline was 4.9%. Within our business segment, IGAM revenue declined 0.9% sequentially and 2.6% on a year-over-year basis. The year-over-year decline was primarily…

[Operator Instructions]. Our first question is from the line of Phil Cusick with JPMorgan.

So much to ask about today. I guess the first question I have is can you just give us an idea of the -- you gave us the revenue and EBITDA sold of the U.S. business. But in terms of locations kept and sold, the insight and learning you have. And then what's been the growth trajectory of each of these pieces?

So Phil, I think if you look, we posted also a map that shows you in terms of the ILEC asset sales transaction, which states we're selling. Now they're not the entire states. We're selling just the ILEC operations in those states. So we will retain the CLEC networks and the IXC networks in those states. So it's about 20 states. And the transaction includes, not only our mass markets revenue but also think about it as ILEC access revenue for wholesale and enterprise. So roughly $2.5 billion of revenue and $1.4 billion of EBITDA. In terms of the growth profile you mentioned, 50% of that revenue is voice and other. So that revenue is declining similar to kind of the rest of the portfolio for mass markets in terms of voice and other. But in terms of mix, only, call it, less than 10% of our fiber revenues are in that area because that area is largely rural, if you will. Another data point that kind of highlights that is about 60% of our CAF subsidy, CAF II subsidy and about 60% of our CAF II units are in the footprint that we're selling. And so -- but broadband revenues in those states have been relatively stable because of the competitive landscape today. We think that's going to change going forward. But at a high level, that's the summary in terms of mix and the footprint.

And if I can, one more. It sounds like buybacks at this point are more of an option or consideration than a plan. Can you just expand on what opportunistic means and how that fits into the leverage plan?

Yes, I'll start, and I'll let Neel add to that. Our Board has authorized $1 billion worth of buybacks. And what that means for us is if we see good opportunity to buy the stock at prices that we think are undervalued, then we'll do so. And you've heard us talk a lot about some of the parts. And we think that our business in this transaction shows that the sum -- these 2 transactions show that the sum of the parts is pretty strong and pretty good.

Yes. And in terms of your question, Phil, on leverage. Like Jeff mentioned, we expect to be largely leverage-neutral. And as we look forward, the key thing to highlight there is that we're going through an investment cycle. So we do plan to scale up our investment in the remaining 16 states. We've proven out our model with the micro-targeting approach. And as Jeff highlighted, we're moving more from a micro-targeting to really scale up our investment with a market-based approach. And so as we go through this investment cycle, simple way to think about it is we're directing more of our operating cash flow towards investment versus paying down debt. But we haven't changed our long term.

Our next question is from the line of Eric Luebchow with Wells Fargo.

First, you mentioned that the dividend might be pressured throughout this -- sorry, the payout ratio might be pressured throughout this investment cycle. So I wonder if you could talk about kind of pro forma what the payout ratio looks like, where you're comfortable with that going over the next couple of years. And how are you going to make the decision whether it makes sense to keep the dividend or potentially reduce it in favor of additional investment.

So Eric, I think, like -- and Jeff summarized it well. We've just closed the transaction, we do plan on leaning into investment. And I'll just make a couple of broader comments in terms of the variables that we're thinking through. One is the capitalization of the company is going to look very different by the time we get to closing the transaction and shortly thereafter. We are paying down debt. We are buying back -- or we intend to buy back shares, so that's one thing to keep in mind. Jeff also mentioned, we continue to rationalize the portfolio. So we'll be active on that front. And then in terms of incremental growth capital, it's a timing and scaling question. We do want to ramp up, but we also want to ramp up in a responsible way where we don't have stranded capital, that we're driving penetration where we're investing. And so there's a set of variables that we're working through. And so I can't really give you a payout number as such, but we know that as we scale, like Jeff mentioned, it'll put pressure on the payout ratio. But we're far from that point today, but that was just something we wanted to highlight. But the next point there also is the pressure comes from us investing in an area that we've proven has good returns, and net-net, it will be positive for shareholders.

And the only thing that I'll add is that we have the benefit of a strong balance sheet and we continue to invest in growth, and also, return cash to shareholders through dividend and share buybacks. And so we view that as a strength for us and will be part of our balanced approach to capital allocation moving forward.

And just maybe one more on the fiber expansion in consumer fiber. You have 2.4 million fiber-enabled homes today. I know you've said in the past, you still think you're underpenetrated. I mean how meaningful do you think that business can become? I mean where are you seeing opportunities where returns or penetration levels you can get are attractive. Maybe you could just expand a little bit on where you plan to take that business in the next few years.

Sure. And we'll give you more information in coming quarters about the plans there. But we've looked at this business. We've been doing our micro-targeting that Neel mentioned, and we've been growing our penetration pretty successfully. And so we believe there's a lot of opportunity. If you look at the retained 16 states, that's something like a little more than 20 million homes passed, and 70% of those we consider an urban or suburban market. So that's 15 million homes, something like that. We think all those are great opportunities for us to invest fiber into. And so we want to ramp our plans and put some scale behind them because we think that they are -- based on our experience over the last couple of years, we've done a very good job at continuing to invest fiber and grow where we invest.

Our next question is from Simon Flannery with Morgan Stanley.

Great. On the CIO and the enterprise spending, I think last quarter, you talked about expecting a resumption or an increase in delayed decision-making improving in the second half. Is that still your expectation? Have you sort of seen a pickup in activity here? Or when do you think that's going to really become more meaningful in terms of accelerated bookings? And then coming back to the deal flow, help us with timing here because you actually took your CapEx guidance down even though you're highlighting higher CapEx. Is the CapEx contingent on closing these deals? Or will you start that more aggressively in the near term. And sort of the same with the buyback, is that tied to the deal close? So could you start that imminently?

Okay. So I'll try and take all 3 of your questions. And Neel, if I leave one out or answer incompletely, please add to it. Enterprise spending. We -- I said in the prepared remarks that we've seen -- we saw the slowdown in the fourth quarter. We saw the slowdown in the first part of the first quarter. We've seen sequential improvement since then. That's a true statement. And we are -- we're seeing sequential improvement in sales. But the Delta variant is here. Our customers are beginning to change the way that they're coming back to work. We're doing that ourselves in response to some of the challenges that are out there. And so we have confidence that the sales cycles will improve and that we'll return to the sales expectations that we have. But there are still a number of factors we're seeing the evidence, but there's still a number of factors that could work against us in that. With respect to the CapEx, that is actually tied to your first question more than it's tied to deal flow. When we see a slowdown in sales cycles and purchasing cycles, we don't spend as much capital. Our capital is highly correlated to our growth. And so we haven't spent as much capital in the first couple of quarters as we thought. Now we expect all that to improve. So we expect higher capital utilization in the second half of the year as we continue to improve in sales and continue to drive revenue growth through the business. And then the last question with respect to buybacks, and is that tied to the deal closing? The answer is no. That is not tied to the deal closing. That's tied to -- our Board has authorized $1 billion worth of repurchases, and that's tied to us evaluating the market and being opportunistic about the timing.

And when does the Quantum acceleration start? Is that kind of early next year? Or could that happen this year?

Yes. That's what I was going to add, Simon. I think the underrun that Jeff highlighted is really related to the current environment and the enterprise business, and that's what we manage on a success-based basis. But we haven't slowed down on Quantum, and we are looking to accelerate that second half of this year and going into next year. And that's not contingent on the deal. But with these things, it takes a while because there is this actual physical deployment, so permitting, et cetera, but we're scaling up.

The next question is from Batya Levi with UBS.

With all the pieces on the financials that you helped us with, I think dividend payout would look more close to 70%, 75% without really leaning into CapEx. So can you please provide a bit more color why you would like to maintain the dividend at these levels now and not maybe accelerate the buyback beyond what you have announced? And just a couple of follow-ups. On the taxes, would the NOL cover most of the taxes? Or will there be some leakage? And if you can also talk about how much has subsidies these assets that you're selling we're receiving?

So Batya, on the dividend, I would really refer you back to kind of Jeff's comments. In essence, if you look at the deal timing, it's first half of the year next year for the LATAM sale, second half for the ILEC asset sale. We're hoping the ILEC asset sale is 12 months but it could be longer. So there is a fair amount of uncertainty -- not uncertainty, just the timing associated with all the approvals, et cetera. And like I mentioned, there is a series of variables between now and then in terms of us -- our capitalization of the company going forward, the growth capital, et cetera, et cetera. So we think it's a little premature to kind of declare. It's something that Jeff and the Board are going to be very thoughtful about. But we also thought the math that you're doing is the math everybody is going to do, and there is going to be some trade-off between growth capital and how we allocate between growth capital and the dividend. And -- but it's not something we need to decide on today. In terms of your question on the NOL, again, a lot of variables there. One is depending on deal timing, there's taxable income that we have in the core business. Then there's the tax regulation at the time when we close the deal, so that's another variable. But not -- I would say that we know, given our NOL balance, these assets have a low tax basis. And so we would be using up all of the NOL. And we'll have some cash taxes on top of that by the time we get to closing the deals and will become a cash tax payer after that.

Our next question is from Brett Feldman with Goldman Sachs.

You obviously had undergone a review -- strategic review of the consumer business a few years ago and decided not to move forward. I imagine one of the questions you're going to get is what changed? Was it really just finding the right counterparty? Or is there something else that changed that allowed you to pull it together? You've also clearly completed a fairly substantial review of your asset portfolio just based on the transactions you announced. Is that still ongoing? Or do you feel like these transactions are going to get you to the asset base that you're interested in? And then just on an operating question. We've got a lot of questions on this call about how you think about amplifying the investment in fiber in mass markets. But what about on the business side, to the extent you have excess capital, you can think about allocating towards growth. Are there areas where you can lean the business market a bit more as well?

Sure. So what's changed? I'm just trying to recap all your questions in my mind. But there's nothing that's changed. I said to you a couple of years ago that we were open-minded, that we wanted to do smart decisions for our shareholders, good returns on any investments we made and the divestitures we did that we wanted to do the smart thing. That's what we've done. We've been working with Apollo. We realized that they are the right partner to do this with, and now is the right time to do it with them. I think that they will invest heavily in these markets to help those markets grow and generate a great business for them. We will work with them closely. They're going to be a key provider to us as we continue to serve our Lumen customers in the 20 states that -- over the ILEC assets that they're going to be operating, so we'll continue to work with them. But we said we were going to be smart. We said we were going to be open-minded. And now we have these 2 transactions to show for that effort. With respect to -- is that an ongoing position? Absolutely. We will always try and be smart and open-minded about the assets that we have and how do we use those assets to generate the maximum shareholder value. And so we will continue to be open-minded. We'll continue to look forward toward acquisitions, toward divestitures, whatever makes sense for us as we continue to evolve our business. And that a little bit ties into your third question about amplifying growth on the business side. We have talked a lot about our Lumen platform. We think that is a growth amplifier on the Enterprise side. We've talked a lot about edge cloud and edge computing and the capabilities that we're delivering to our customers. We've talked about the partnerships that we've established with companies like Zoom, with VMware, with IBM, with a variety of other key industry leaders where we can partner with them to bring their capabilities to our customers and our capabilities to their customers via the Lumen platform. So those are some of the things that we've been doing and will continue to do to amplify, to use your words, the growth from our enterprise customers as well as penetrating buildings more effectively, continuing to light new buildings, all of those things that we do just as a regular course of our business.

Our next question is from the line of Frank Louthan with Raymond James.

When you look out at the ILEC operation that you're retaining, what do you think you can build to those customers per home passed? And it looks like you've got a little over 10% of the addressable locations with fiber. What's the overall broadband penetration? And what percentage of those homes ultimately do you think you can target to build fiber?

So, I'll let Neel answer the second question about how many homes and all of that. And I'm not 100% sure I have the first question right, Frank, but I'm going to answer the question as I heard it, which is what do I think we can build to those customers. I think we can build a great product set that we can deliver in a digitally consumed way. If you look at our fiber-based Quantum Fiber new customer experience, I think our NPS is like positive 74, which I would put up against anybody, anywhere. And so, I think that what we're building for them is a great product, is a highly secure, robust product that can be consumed digitally and through very ease of use for our customers, so we'll continue to deliver that. And then, Neel?

Yes. I think Jeff touched on this earlier. I think if you look at the footprint that we retained, about 15 million of that 21 million homes are urban, suburban. And most of that, we think -- or most of those are addressable. Now we're doing more work on that front, and we'll share more in future quarters. But we think a big chunk of that, a big high percentage of that is addressable. And from a cost structure standpoint, I won't give you a specific number, but I think we have a very competitive cost structure relative to all the public comps that we've seen. And in terms of penetration, for the areas that are -- where we've been there for a while, we see 40% to 50% type penetration in fiber-enabled to homes. And very high EBITDA margins from Jeff's perspective because we're heavily investing in self-service capabilities in terms of not only install for the second, third customers, but also in terms of how we serve the customer on an ongoing basis.

Okay. I apologize. My first question was really more on the cost per home passed. I probably didn't phrase it very well. Any insight there on what you think you can build in those states that you're keeping?

Yes. And I won't give you an exact number, but I'll tell you that we think that we have a good cost advantage based on the retained states that we're looking at. If you look at all of our lines of business that we will build infrastructure for, our government -- our state and local government, our federal government, our enterprise customers, our small and medium business customers, our consumer customers, if you look at all of those demands we think we can build at a very attractive price point, and we'll continue to focus on doing so.

And Frank, we do have a separate slide deck on the website, which can help you get to a sort of an enablement percentage. If you look at that slide, we can follow up as well.

Our next question is from David Barden with Bank of America.

I guess just two questions, mostly around the Apollo deal. When you guys break out the segments, you've got the direct costs, there's -- historically, there was segment EBITDA. And then there was a lot of kind of corporately allocated overhead costs. Is the way that you're kind of getting to the EBITDA numbers for the divested properties, is this a function of the NSA that you talked about striking with, I guess, both counterparties, Neel. And do you expect them to kind of fully reimburse you for what you would have been allocating to these entities so you're kind of net neutral? And how has that NSA actually been nailed down? And I guess the second question was, Jeff, you mentioned kind of cash flow dilution. If I kind of just try to add up the numbers, the Latin American piece is a negative $100 million in EBITDA minus CapEx, and it's $1.1 billion for the ILEC, that's $1.2 billion. We're going to tax effect it because you're going to become a full taxpayer, so that's like maybe negative $800 million. Then you're going to be a full cash taxpayer, that's maybe going to be another $700 million, that's about $1.5 billion. You're going to lose CAF II, that's about $100 million, that's $1.6 billion. You're going to save some money from the debt, right, so let's say $10 billion of cash, 5% interest, after taxes of $350 million. So maybe a negative $1.250 billion kind of on a pro forma basis. Are there other things, other moving parts, Neel, that we need to be thinking about, like, as we try to model out what a 2023 Lumen looks like under these kind of constructs?

Yes. On your first question, I would say it's EBITDA on a stand-alone basis. So, it's really a direct cost to run the business. And then there's the NSA MSA netting out of that. So, at a high level, our 2020 EBITDA, like I mentioned, was $1.4 billion, that will be the impact to Lumen going forward. So that's the simple way of thinking about it. And in terms of the math that you're doing. Yes, those are the numbers that we provided. Obviously, like I mentioned a couple of times before, you have to make some assumptions in terms of the capitalization of the company going forward. And keep in mind, there's also CapEx for CAF II that's going to fall off. So, over the last 3 years or so, we've been averaging $300 million or so. So that will fall off as well. Now we're ramping up other investments, but that's another data point to keep in mind.

Our next question is from Nick Del Deo with MoffettNathanson.

First, a quick one for Neel. Do the revenue EBITDA and CapEx metrics you cited for the divested ILEC assets include or exclude CAF II? So are those going to -- you said they were 2020, I'm wondering if those are going to step down further in '21.

Yes. No, those are 2020 but excludes CAF II. So if you talk about the CAF II subsidy, that's something we already -- it's going to be behind us by the time the deal closes.

Okay. Okay. So those are clean numbers that won't step down. I guess kind of a bigger picture one regarding the buyback plan. Is buying back stock prudent in the context of your leverage, I think, which is close to 4x if you adjust for CAF II, the growth trajectory of the business, cash flow dilution from the deal, cash taxes coming up. Now I feel like historically, you've run the business -- and even Level 3 before in a fairly conservative manner financially. And it just seems like there's a bit of a philosophical change taking place.

I don't know if it's a philosophical change. We look at how do we return the best value to shareholders. And we believe that dividend is an important part of that. We believe growth is certainly an important part of that. But we also believe that there are times when it's appropriate to use a repurchase program. And our Board has decided that now is an appropriate time for us to authorize one. And then we will continue to look at the market. We'll look at our other opportunities to invest, and we'll make those decisions opportunistically.

Yes. The only thing I'd add is -- to what Jeff just said, the key word is opportunistic. So if we think our equity is undervalued, then that is an opportunistic investment from our perspective.

Our next question is from Ana Goshko with Bank of America.

So two questions. So first, I just wanted to clarify the planned use of proceeds, and then I had a second question on leverage. So the total sale price is $10.2 billion, $1.4 billion of that is assumed debt. I think people are assuming that's that EMBARQ fund due in 36. If you can just confirm that. But then that leaves $8.8 billion of cash proceeds, assuming that's all shielded from taxes. Is that all going to debt paydown? Or is that still TBD? Is some of that potentially earmarked for the fiber investment and/or potentially other share buyback.

So Ana, the $1.4 billion is the EMBARQ notes. And then if you think about leverage, our objective is to stay leverage-neutral. So if I look at kind of our leverage this quarter, based on LTM, we're roughly around 3.5x. If you adjust for CAF, we're probably 3.7x. So even with the deals and our investments, we expect to stay roughly in that ZIP code as we go through the investment cycle. So that's the objective.

Okay. So then you could dial up or dial down the amount of debt that you'll repay because your target really is to maintain kind of neutral leverage at this point. Is that fair?

Yes, that's right.

Okay. And then on that topic, so your leverage target has been 2.75x to 3.25x. But that's for a business that has -- is heavily skewed with the ILEC assets, which, based on your own sum-of-the-parts presentation and has -- is a lower-valued business. So now that you're going to be skewed arguably toward a higher-valued business, is that leverage target potentially something to be reconsidered because on a debt-to-value business, you may believe that you can kind of absorb and maintain a higher leverage level.

Yes. That's a good question, and that's why we're comfortable staying leverage-neutral over the next few years as we go through the investment cycle. So to your point, if you were to look at the ILEC assets that we're selling, on a stand-alone basis, you could argue that that business would have a much lower leverage and without an investment commitment or profile. So we could have argued to pay down a lot less debt as we -- with that transaction. But we're staying where we are and comfortable with that as we go through the investment cycle.

Okay. And then have you socialized any of this with the rating agencies yet because they may take that approach to the ratings with even potentially, like, neutral to higher leverage actually think that you can have a -- is the rating beneficial with the separation of the ILEC assets?

Yes. We just closed the transaction today. And so we are -- we've had some conversations with them, but we will reach out and make sure that we continue those conversations.

And with that, our last question is from James Ratcliffe with Evercore ISI.

Just following up on the topic of delevering to make sure I understand how you're talking about this. The transaction itself clearly should be delevering. I mean looking at the numbers you've provided, you're losing $1.7 billion in EBITDA and taking in a touch over -- cutting net debt by $10 billion or so. So are you saying that the investments are going to be a meaningful increase in -- to ongoing EBITDA because of the cost? Or the free cash flow would run negative? I'm just trying to understand how this isn't a delevering transaction. And just secondly, any thoughts on the impact of potential, I guess, they're calling it digital discrimination legislation on your ability to efficiently deploy fiber within the remaining outlet footprint?

I'll take the first one, and Jeff can touch the second part of your question. So I would say our leverage-neutral comment is very simple. It's -- so don't try to read too much into it. We're not saying it's not a forward-looking guidance on EBITDA or cash flow or anything like that. All we're saying is the net debt to EBITDA, as we go through the investment cycle, we'll keep at roughly leverage-neutral for -- post the deal close. So that's a combination of organic performance of the business, deal proceeds, et cetera. So today we're at -- like I was saying, today we're at 3.5x. Adjusting for CAF, we're at 3.7x. So if you think roughly in that ZIP code is what we will manage to going forward as we go through the investment cycle.

When it comes to digital discrimination and all of those things, and I'll speak for Lumen, but I'll also point out that Apollo is investing in these 20 states for the opportunity to invest in fiber, for the opportunity to sell broadband services to homes passed in those areas. And so Lumen is doing the exact same thing. We invest in fiber, and we'll intend to grow the penetration of broadband services for customers, high-speed broadband services. It's part of what our investment thesis is. It's part of what we think is good for the communities that we serve. And so we will continue to work with government to make sure that we participate in any programs that they have to ensure that this digital divide is conquered. But it's part of what we want to accomplish as we invest moving forward. And if you look at our footprint of the remaining states, and we've already said it a couple of times, 70% are urban or suburban. That gives us a great opportunity. We have a high percentage of MDUs, multiple dwelling units. So that gives us a great opportunity to bring broadband to a very wide footprint of our customers. So with that, thank you for the questions, and I'll wrap up briefly. And I appreciate everybody getting on the call with very short notice. We're excited about the 2 transactions we've announced. Our overall company profile is rapidly changing as we invest in the business and continue to rationalize the portfolio at 5.5x on the ILEC business and on the adjusted EBITDA in the LATAM business, we believe the valuations highlight and support our view of the sum of the parts for the remaining business. We're pleased with the valuations, but we've also done these transactions to drive investment and operational focus within the remaining business. With a strong balance sheet, we continue to invest in growth and return cash to shareholders through dividend and share buybacks. And I'm very pleased -- I want to make this point. I'm very pleased with the transformation that we have achieved over the past few years and look forward to the growth opportunities that we see in front of us. So thank you, again, for your participation in this call, and we appreciate it very much. Operator, that concludes the call.

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