Greetings and welcome to Lumen Technologies' third quarter 2024 earnings call. After the speaker's remarks, there will be a question-and-answer session, and if you would like to ask a question, please press star one on your telephone keypad. As a reminder, this conference is being recorded. I would now like to turn the conference over to Jim Breen, Senior Vice President, Investor Relations. Jim, please go ahead. Good afternoon, everyone, and thank you for joining Lumen Technologies' third quarter 2024 earnings call. On the call today are Kate Johnson, President and Chief Executive Officer, and Chris Stansbury, Executive Vice President, Chief Financial Officer. Before we begin, I need to call your attention to our safe harbor statement on slide one of our third quarter 2024 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 and the risk factors in our SEC filings. We'll be referring to certain non-GAAP financial measures reconciled to the most comparable GAAP measures, which can be found on our earnings press release. In addition, certain metrics discussed today exclude costs for special items as detailed in our earnings materials, which can be found on our investor relations section of our Lumen website. With that, I'll turn the call over to Kate. Good afternoon, everyone, and thanks for joining. Lumen's third quarter headline is this: The transformation is happening. We're making progress on our journey to turn Lumen into a digital network services company with simple and modern product offerings, infrastructure, and operations. We're pursuing two major growth vectors: building the AI backbone and cloudifying telco, and have made material progress with each. That said, and as expected, our financial performance still reflects the secular headwinds on our legacy revenues. We're also investing heavily in transformation programs while running the core business, which weighs heavily on our EBITDA results. We fully recognize we have a long way to go on this journey, and we understand that our current financial results, coupled with the fact that telcos in the industry are not talking about a turnaround, make it difficult to imagine long-term success for Lumen. But our team sees a clear path to turn this company around. We have a plan to take cost out, deleverage our balance sheet, and drive growth by using our assets and intellectual property to give enterprise customers new value in a multi-cloud hybrid architecture environment. All of this will take time to execute, and it will take time to show up in our financials. But the path is real, and today I want to share more on the opportunity ahead and what we've accomplished so far. I'll be covering three topics: one, how we are continuing to drive operational efficiency with sales growth and higher customer sat in our core business to ensure we maximize cash generation, customer lifetime value, and cost out, number two, how Lumen is building the backbone for the AI economy, adding more than $3 billion in incremental Private Connectivity Fabric sales in partnership with the biggest names in the technology industry, and number three, how Lumen Digital is cloudifying the industry, driving NaaS adoption to well over 400 customers and positioning the company for high-value digital revenue growth. Let's start with our operational turnaround. We continue to see solid sales performance in the third quarter, with North American Large Enterprise and Mid-Market sales up nearly 14% year-over-year. We saw notable strength in IP sales, up 18% year to date, and 100 and 400 Gig Wave sales up 50% year to date through September. To complement these sales results, once again, we saw significant year-over-year improvement in customer sat scores for every one of our enterprise customer channels, as measured by transactional Net Promoter Scores: 17 points for Large Enterprise, up 11 points for Wholesale, 28 points for Mid-Market, and a whopping 98 points for Public Sector. We continue to improve our efforts to secure the base by focusing on five key levers of installs, renewals, migrations, usage, and disconnects. While installs were down slightly in the quarter, we did see a 14% sequential improvement in disconnects, with total disconnects being at their lowest level in over five quarters. In Mass Markets, the team continues to execute well and drive increased value for our consumer segment, and once again had record quarter for fiber net adds. Finally, last quarter, we announced a $1 billion cost takeout by the end of 2027 by unifying our network from four architectures to one, allowing dramatic simplification of our product portfolio and IT estate. While this work is incredibly complicated, given our long history of mergers and accumulation of tech debt, we're on track to developing the plan to execute. As we have said, these cost-out efforts will require upfront spending with a back-end loaded cost takeout curve. We'll provide further details on this important work as we progress. To summarize, we're pleased with how we're galvanizing Lumen's core network services business, how we're driving growth in Quantum Fiber, and how we're simplifying and modernizing the company. But I want to be clear here: we are not here to find revenue growth in legacy telco. All of our transformation work is in service to customers who need and want to leverage technology like GenAI to transform their business. The legacy networks of yesterday just won't serve tomorrow's enterprise. They're not big enough, they're not fast enough, and they're not secure enough. Of course, the customer experience in legacy telco is neither quick nor effortless, especially in complex multi-cloud hybrid environments, which have become the norm for every business. Lumen is fixing all of that by reinventing digital networking, and that is what will fuel the company's long-term financial growth. We see several growth factors in digital networking, and I'm going to share two that we're going after right now. The first is what's been receiving a lot of attention given the size of the deals we're signing. Lumen is building the backbone for the AI economy. The market now recognizes that AI needs data, data needs data centers, and those data centers need to be connected. Several of the biggest names in technology, including Microsoft, Meta, AWS, and Google, have chosen Lumen as their trusted network for AI. We get asked all the time, "What does the AI market mean for Lumen? How many of these deals are out there? How long will this growth spurt last?" As I've shared, we see a few phases playing out. In phase one, hyperscalers, social platforms, and cloud companies are massively expanding their networks to support data center build-ups for their AI model training. As long as these companies keep building data centers, we will have the opportunity to connect them. These deals are deeply accretive to Lumen and well-timed for our transformation. We shared that we booked more than $5 billion of PCF sales in last quarter's call, providing ample liquidity to close near-term funding gaps. Since then, we have booked more than $3 billion in additional PCF sales, giving us the opportunity to use the extra cash to do some deleveraging. We remain in active discussions for more deals like this, and we're going to update you on our progress when they materially affect guidance. Finally, we've established a dedicated operations team to build these next-gen AI networks, and they've already broken ground on this exciting work. If you're wondering why and how we're able to close more than $8 billion in PCF sales so quickly, I'll share this. Big Tech is choosing Lumen because our geographically diverse conduit-based intra and intercity fiber network was built for this moment. Lumen's Private Connectivity Fabric, just awarded the Competitive Strategy Leadership Award by Frost & Sullivan, is a best-in-class architecture that gives customers the control, capacity, performance, and security they need. We believe the second phase of AI evolution is starting to emerge as enterprises are beginning to use those AI models at scale, and they recognize the need for major network upgrades. These enterprises are calling Lumen because they know we connect all three public clouds, and they also see that we are investing in the future networking needs unlike any other company in the networking marketplace. We believe Lumen has become the thought leader in the space, and it's showing up in our business results. We're seeing an increased demand for higher performance Lumen services, specifically for Wave and IP in our Large Enterprise and Mid-Market segments, with IP sales up 18% year to date and Wave sales up over 25% year to date through September for these customers. That's why we expanded our high-speed IP service to include 400 Gig ports in 14 different markets, with plans to expand to several more markets this year. Additionally, we currently offer 400 Gig Waves in over 70 markets across nearly 80,000 route miles, with plans to increase Waves CapEx to further expand the footprint in 2025. In the third phase of AI evolution, we see AI talking to AI, driving another potential parabolic increase in data workload volume. It's too early to share proof points for the space, but given our network, our digital platform, and our portfolio of intellectual property, we believe that Lumen is well-positioned to handle the volume, pace, and complexity of enterprise networking needs, and we are playing to win. Cloudifying telecom is going to disrupt the industry and provide Lumen with another major growth vector. Expanding the internet and building out the required critical infrastructure is just step one, but customers expect to be able to quickly, securely, and effortlessly use that infrastructure. That's why Lumen is building a digital platform, natively integrating with our fiber network to enable enterprises to digitally design, price, order, and consume secure networking in a hybrid multi-cloud world. To our knowledge, no other telco that owns a fiber network is doing this, and we see it as a material differentiator and revenue generation opportunity for Lumen in the future. A year ago, we established a Lumen Digital team and launched our flagship network as a service or NaaS offering. As of today, over 400 customers have adopted Lumen NaaS, a good start for sure. The NaaS overlay lets our customers get the network pieces they want, when they want it, how they want it, in true consumption form. Recent wins for our NaaS product include Agilysys, the BlackStar Group, the Pac-12, and C3 Aero, among others. MEF, formerly known as the Metro Ethernet Forum, just named Lumen the best NaaS provider in North America. Our progress in a short period of time isn't just exciting or encouraging. It has fundamentally repositioned this company. NaaS is just the beginning. With our world-class fiber network, our PCF architecture, ExaSwitch, and an ecosystem of big tech companies, all three clouds, committed to our network for the long haul, we have all the pieces to redefine networking and drive massive value in a multi-cloud hybrid world, which is exactly what our customers want and need. To finish up, we have the cash, we have the assets and intellectual property, we have a world-class leadership team and culture, we have a great strategy, and we have a lot of momentum. Lumen's future is very bright. With that, I'll turn the call over to Chris. Thanks, Kate. Lumen continues to move forward along its path to transforming the business, and in the third quarter, we've taken additional steps towards achieving that goal. We signed over $3 billion in incremental PCF deals as we continue to be the partner of choice in building the trusted networks for AI. We successfully executed a debt exchange, terminating out over $800 million in 2026 through 2029 maturities to 2032. We also, given our confidence in the free cash flow generation, contributed $170 million to our pensions in the quarter, bringing us to nearly 90% funded. As Kate discussed, we are now at over $8 billion in new PCF sales since June. Our customers have validated Lumen's unique position to build the backbone of the AI economy. While we will not be reporting on specific PCF sales every quarter, we chose to highlight the over $3 billion today for three reasons. First, we're incredibly proud of our team for how quickly they've been able to capture what we believe is a once-in-a-generation market opportunity. We have the right assets and the right people to build the trusted networks for AI. Second, given the incremental size of this over $3 billion, it will positively impact our 2024 guidance for free cash flow, which I will update you on shortly. Lastly, the PCF sales we're announcing today look similar in scope to the previous $5 billion largely sold on existing routes. Future PCF sales will also include new routes with a diverse set of enterprise customers. Given the complexity of these builds, these discussions are ongoing and will take place over several quarters. In the future, we will provide updates to the extent PCF sales have a material impact on our financial guidance. We introduced PCF sales last quarter and updated them this quarter because there was a need for investors to understand our strategy, the market opportunity, and the structure of these PCF deals. We will continue to educate the market on those opportunities for Lumen, and the AI economy will also focus on the core metrics of sales growth, margin improvement, and free cash flow generation. As we stated last quarter, we believe the progress we've made on driving PCF sales in 2024 is just the beginning of a large new TAM, which brings long-term sticky revenue offsetting higher churn legacy product declines. We're now in the planning stages of constructing these networks, securing the necessary equipment and labor, and we're confident in the cost and margin structure we've estimated for the AI network builds. We estimate the cash received from the first $5 billion in PCF sales provides free cash flow to fuel our business to the point where we expect to reach sustainable positive free cash flow growth. The incremental cash provided by the over $3 billion recently signed contracts provides increased flexibility to deliver our balance sheet and continue to address our capital structure in a meaningful way. With respect to the balance sheet, another highlight of the quarter was our successful execution of a debt exchange, terminating out over $800 million in 2026 through 2029 maturities to 2032. We now have approximately $1.8 billion in maturities, excluding leases, due through 2028, down from approximately $2.6 billion at the end of the second quarter, and we're not done yet. Now, transformations are messy, and particularly in industries where it has never happened before. As we move through ours, we strive to bring you the transparency of both the good and the less good. In Q1, we said demand for networking was heating up. In Q2, we delivered against that, substantially increased free cash flow guidance, and said there was an additional opportunity. This quarter, we announced progress against that opportunity and increased free cash flow guidance again. Importantly, in both Q2 and today, we're saying our legacy business is declining, consistent with industry trends, and needs investment to both build our digital future and unlock $1 billion of cost efficiency, the result of which will be lower 2025 EBITDA before improving in 2026. In short, we recognize credibility is critical, and we're taking great care in making sure our messaging is consistent with our delivery. We believe the value creation path for Lumen is clear: through additional sales, balance sheet improvements, and cost structure optimization, all as we continue to execute on our core strategic goals of driving operational efficiency, building the backbone for AI, and cloudifying the industry. We recognize we're in the early stages of a significant transformation of Lumen and remain laser-focused on accomplishing the goals we've set for ourselves. Now, let's move on to the discussion of financial results for the third quarter. Our sales growth engines within our large and Mid-Market enterprise channels and our business segment, along with our mass market segment, showed solid performance this quarter, with Large Enterprise and Mid-Market sales up nearly 14% year-over-year, and Quantum Fiber broadband net additions once again setting an all-time record. While consolidated revenue and Adjusted EBITDA still feel the impacts of legacy declines, we're encouraged by improvements we're making in the business as disconnects improve both sequentially and year-over-year. On a year-over-year basis, total reported revenue declined 11.5% to $3.221 billion. 32% of the decline was due to the impact of divestitures, commercial agreements, and the sale of the CDN business. Business segment revenue declined 12.7% to $2.536 billion, and approximately 37% of that decline was due to the impact of divestitures, commercial agreements, and the sale of the CDN business. Mass market segment revenue declined 6.9% to $685 million. Adjusted EBITDA was $899 million, with a 27.9% margin, and free cash flow was positive $1.2 billion, benefiting from the cash contribution from recent PCF sales. Next, I'll review our detailed revenue results for the quarter on a year-over-year basis. Within our North America enterprise channels, which is our business segment excluding Wholesale, international, and other, revenue declined 6.9%. Overall, North America business declined 7.5%. Large Enterprise revenue declined 8.2% in the third quarter. Our growth revenue increased 1.6% year-over-year, with continued pressure in Nurture and Harvest product revenue. We expect continued variability and trends as we drive towards overall stabilization. Mid-Market revenue declined approximately 6.9% year-over-year, with an improvement in Grow revenue to 5% year-over-year, offset by Nurture and Harvest. Public Sector revenue declined 4% year-over-year. Public Sector revenue can be lumpy quarter to quarter. However, we continue to see traction with large bookings in this space, which takes time to ramp to revenue. These wins give us continued confidence that Public Sector will grow year-over-year in 2024. Wholesale revenue declined approximately 9% year-over-year. The Harvest portion of the Wholesale portfolio, which is comprised of products like TDM, Voice, and Private Line, saw revenue contract by 16.3% year-over-year in the third quarter. This is primarily driven by telco partners that are selling legacy services. Our Harvest product revenue will likely continue to decline over time and is an area that we will manage for cash. International and other revenue declined 64.8%, driven primarily by the divestiture of our EMEA business and the sale of select CDN contracts in the fourth quarter of last year. Moving to our business product lifecycle reporting, I'll reference the results based on our North America enterprise channels. Higher sales in our grow product portfolio were led by enterprise broadband, dark fiber, and IP. These sales were offset by declines in Nurture and Harvest, resulting in an overall decline of 6.9% year-over-year. While results can vary in any quarter, we expect sustained growth in the grow product revenue as we execute on our core turnaround. Within North America enterprise channels, grow products revenue increased 4% year-over-year, up from 1.5% year-over-year last quarter. Grow represents approximately 45% of our North America enterprise revenue, and for our total business segment, carried in approximately 80% direct margin this quarter. Nurture products revenue decreased 15.2% year-over-year, largely impacted by declines in VPN and Ethernet. Nurture represents 29% of our North America enterprise revenue, and for our total business segment, carried in approximately 67% direct margin this quarter. Harvest products revenue decreased 14.1% year-over-year and continues to be negatively impacted by declines in TDM-based Voice. Harvest represented approximately 16% of our North America enterprise revenue in the second quarter. For our total business segment, it carried in approximately 73% direct margin this quarter. Other product revenue declined 11.1% year-over-year. As a reminder, other product revenue tends to experience fluctuations due to the variable nature of these products. Now, moving on to Mass Markets, our fiber broadband revenue grew 16.6% year-over-year and represents approximately 40% of Mass Markets broadband revenue. During the quarter, fiber broadband-enabled location adds were 131,000, bringing our total to over 4 million as of September 30th and pacing towards our targeted annual 500,000 build target this year. We also added 43,000 Quantum Fiber customers, which is our best fiber net add quarter reported to date, and this brings our total to over 1 million. Fiber ARPU was $62, flat sequentially and up slightly year-over-year. This is just outstanding work by that team. At the end of the third quarter, our penetration of legacy copper broadband was approximately 9%, and our Quantum Fiber penetration stood at approximately 26%. As we look ahead, we'll continue our market-by-market assessment of the Mass Markets business as we explore a range of strategic options to maximize its value. Those options include potential joint ventures, wholesaling arrangements, or future divestitures to generate incremental cash. Now, turning to Adjusted EBITDA. For the third quarter of 2024, Adjusted EBITDA was $899 million, compared to $1.049 billion in the year ago quarter. Third quarter EBITDA was negatively impacted by legacy revenue declines, seasonally high operating expense, as well as some startup costs associated with our Custom Networks group. For the third quarter of 2024, our Adjusted EBITDA margin was 27.9%. EBITDA margins declined 90 basis points year-over-year, compared to a 270 basis point year-over-year decline in the second quarter. Special items impacting Adjusted EBITDA totaled $56 million. The majority of special items this quarter were related to transaction separation costs. Capital expenditures were $850 million, and free cash flow, excluding special items, was positive $1.2 billion. As we previously stated, we're leaning into our network investments to support the rapid growth and demand our customers are facing while improving our overall cost structure. Now, moving on to our financial outlook, we continue to estimate FY24 EBITDA to be in the range of $3.9 billion -$4 billion. However, given the overall trends in the business and initial cost impacts from the incremental PCF sales, we see FY24 EBITDA at the low end of that range. As we said previously, we expect EBITDA to decline year-over-year in 2025 as a result of continued legacy declines, startup costs for PCF contracts, and incremental transformation costs, with a longer-term goal of improving the broader cost structure. 2024 CapEx is expected to be in the range of $3.1 billion -$3.3 billion, and cash interest in the range of $1.15 billion -$1.25 billion. Lastly, we're raising our 2024 free cash flow guidance from $1 billion -$1.2 billion to $1.2 billion -$1.4 billion. This guidance includes some incremental OpEx, CapEx, and cash flows associated with our PCF sales growth, as well as incremental spending to ultimately improve our cost structure and margins. And with that, I'll turn it back to Kate for closing remarks. Thanks, Chris. I know what we're saying is different than what everyone else in the industry is saying. It's going to take some time for the growth vectors I talked about to overcome the secular headwinds and show up in our financials. But we're confident that our plans will achieve exactly that. And we appreciate you taking the time to understand our story. With that, operator, we're ready for questions. Thank you. As a reminder, to ask a question, please press star one on your telephone keypad. If you would like to withdraw your question, simply press star one again. Please ensure that your phone is not on mute when called upon. Thank you. Your first question comes from the line of Michael Rollins with Citi. Your line is open. Thanks, and good afternoon. I wanted to just ask on some of the PCF disclosures. There were three new customer announcements over the last few weeks. Did those specifically relate to these new sales in this quarter, or did that relate to the prior initial $5 billion? And then, Kate, you mentioned at the beginning of the call some details where you're seeing improvements in the business sales, and just curious where that's coming from. Can you give us maybe an update on the marketing and distribution? And are these PCF sales also providing you with a magnet to get additional wins from these hyperscale customers? Thanks. Yeah, for sure. So thanks, Mike. Basically, the four customer stories that we told come from the $8.5 billion in total. And we're not going to differentiate between buckets, but they are a magnet, very much so. When you get all three clouds in the bag, you've got yourself an ecosystem. You couple that with a digital platform to make it easy to consume the services that you're running on that infrastructure, and you've got something pretty special. It's different than what everybody else is doing. We've got the cash to do it, so we're super excited about that. Regarding the uptick in IP and Waves, particularly at the higher capacity levels, it's purely an indication that our customers are recognizing a need for expanded networks because of the workloads we're running. We don't have specific data to say it's all AI. That is a conversation and the signals we're getting from the conversations that we're having with our customers, and so we think it fits perfectly in line with that trajectory we talked about. First, the big tech builds the networks and the AI models and trains them. The second step is these customers are saying, "I'm using these models to transform my business, and I'm having a massive uptick in my own networking needs." I think we've realized that every AI strategy needs a network strategy, and customers are coming to Lumen because we've become a thought leader. Thanks. Next question, please. Your next question comes from the line of Sebastiano Petti with JPMorgan. Your line is open. Hi, thank you. Quick housekeeping on the incremental PCF announcements. Should we think about that broadly as having a similar timeline to what was discussed last quarter as we're thinking about contribution and the IRU constructs that you kind of laid out last time? I know you kind of said they're similar to the last deals, but just try to think about timing as they kind of come on. Because it does seem as though part of that cash was probably reflected in the free cash flow upgrade. Just housekeeping there. Yeah, Sebastiano. Yeah. Oh, sorry, go ahead. No, no, go ahead, Chris, and then I can follow up. Yeah, you're exactly right. If you just look at the shape of those deals, the incremental deals that were signed this quarter, in terms of the margins, the cash flows, how all that will work, the timing, it looks very similar to what we did on the $5 billion. So I think that's a good way to model it. Okay, that's helpful. And then thinking about, I mean, just you did guide to the lower end of the 2024, your guidance range. Does imply a pretty decent acceleration sequentially even to kind of get to that point? Anything specifically that we should be thinking about there as it pertains to just maybe cost cuts kind of coming online or anything that we should be thinking about from a timing perspective? Thank you. Yeah, it's really more, I would say, the seasonality that we see in the summer months. We obviously have more construction, maintenance, higher energy costs, and that abates somewhat in the fourth quarter. We also made some intentional investments in the quarter to help accelerate the work that we need to do to go capture $1 billion. And so when you look at the timing of those things, that's what gives us confidence in delivering on the lower end of the guidance for the year. Thank you. The next question comes from Batya Levi with UBS. Your line is open. Great, thank you. In terms of the incremental PCF sales that you've signed, should we assume that they're mostly big tech, or are you starting to see a little bit of enterprise demand as well? And just to confirm, I think you mentioned that this new mix will be on the existing construct that you're building for the original PCF deal. Does that mean the CapEx requirements would be pretty much included in the original deal? And how should we think about the prepaid revenue mix of the incremental sales? Thank you. I'll cover the first part. You cover the second part, Chris. So the customer mix we shared last quarter, that it's more than 15 customers were in these tranches. We had some repeat business. We had some new business. So it's a mix. Predominantly, those customers are building AI models. And if you look at some of the logos that we shared that are standing side by side with us going long in our strategy, it's all three clouds and a large social platform. And what those companies are reporting are massive infrastructure investments to build out the infrastructure for AI. And they're coming to Lumen. That's the story. The second piece of it, the next wave, is really enterprises, and they're not buying at the same size because they're not planning on commercializing their AI models for the most part. They're using it to transform their own business and maybe some of their own products and services that they offer their customers. So it's not the same size and build-out as the hyperscalers and the social platforms. Yeah, and on the second piece of the question, Sebastiano, I would say, so of the total kind of $12 billion opportunity set, the $8.5 that we've talked about today that we've secured to date really does look the same. So I would say that the same ratio of CapEx to sales value, the amount that's recurring versus the amount that's upfront, I would use those same parameters that we shared last quarter. What you see in terms of the impact for this year is just timing of cash flows, where given the time of year those were signed, we do have some inflows coming this year, but we'll incorporate a lot of that CapEx, obviously, into next year's guidance when we give 2025 guidance. I think the important thing is that as we move forward from here, as we've said at a number of investor conferences, the second half of that $7 billion opportunity, our new networks, just like we've built, the difference is they're on new routes rather than existing routes. Those economics will look different. We're in the middle of multiple conversations with customers around that. And as we get better cost estimation around that, we'll update guidance and give you guys more clarity. But that'll probably be something that takes a few quarters until we have that locked down. Got it. Thanks. Next question, please. The next question is from Jim Schneider with Goldman Sachs. Your line is open. Good afternoon. Thanks for taking my question. I was wondering if you could maybe just clarify on the incremental $3 billion of the $7 you talked about. Does that mean that there's $4 billion of pipeline left to go, as you mentioned, or is there an incremental pipeline above and beyond the first $7 that you had seen before that sort of extends that beyond the $12 billion total pipeline? And then maybe as a second question, can you maybe just kind of comment on your Mass Markets business and, given the amount of deal activity there, maybe clarify whether you're seeing any kind of firm indications of interest and potential interest in acquiring that asset? Thank you. Sure, Jim. So really, just so we're all on the same page, in the $7 billion of opportunity, we said today that we had secured over $3 billion of that. So let's just call that roughly half. Of the remainder, that's really new routes, as I just mentioned in my previous answer, that's going to take multiple quarters. Now, there continues to be customer interest in not just new routes, but existing routes. We're not going to continue to update pipeline because it really is now normal course of business, and we want to be in that motion. The entire point of talking about the $5 billion and the $7 billion was to alert the market with points of validation that what we'd been saying earlier this year was, in fact, true. This was a significant opportunity. It remains a significant opportunity, and we'll report against it. So you're going to see us get into a cadence of communicating updates really as it impacts guidance because of where we are in the process. Now, on the consumer side, I guess just a few thoughts. First, I want to emphasize the great work by the team, and we're not the only ones that noticed that. The rest of the world is starting to notice what this team is doing on execution as it relates to enablements and penetration, and we couldn't be happier with the work they're doing. Now, we've also said a couple of things, right? We have said for years now that this was a space that should and would eventually consolidate, and I think we're starting to see that happen today. And we've also said that we've got two great businesses in our enterprise business and our consumer business, that we have a responsibility to invest in both, but that ultimately they don't strategically belong together. They've got two different return profiles, and at the right time, we would make the decision to separate them. Now, we don't have any news to report today. What I will say is, at your conference and other conferences, we've been pretty clear about what the economics of the consumer business are when you look at it between copper and fiber. So I would leave it up to all of you to do the modeling and determine how significant an impact you think that would be on our ability to deliver the company and focus as an enterprise company. Thank you. The next question comes from. Thank you. From Jonathan Chaplin with New Street. Your line is open. Thanks, guys. Quick follow-up on that, Chris, and then I've got just a network question as well. So on the sort of thought process around the sale of Mass Markets, one thing I think you had been considering was separating out the fiber business from the rest of Mass Markets. And I'm wondering if you could give us just a little bit of context for how you would sort of accomplish that, the physical separation of those networks, and how that would work. And then maybe a little bit more of a difficult question, but it would be great to get some context for the network overall and how much of it has been consumed by these PCF contracts. So from memory, I think Level 3 initially had 12 conduits put fiber into, and we've heard that some of the conduits have been sold or have been sort of given the rights to them, have been given away in these new PCF contracts. I'm wondering how many have gone, how many you've got left. That would be, yeah. Thank you. Yeah. So I'll take the second question first. So as we were so clear on the last earnings call, we have not sold any of these assets. These are long-term leases of conduit, sometimes just fiber, sometimes both. It's new networks on existing routes. It's building net new routes, putting new conduit in the ground, etc. And we strategically plan with our customers and with our own business modeling when we should, in fact, put more conduit in the ground or less conduit in the ground. And I want to call your attention to a very, very strategic partnership that we did with Corning to utilize their new fiber solutions, which, as much as quadruples the capacity of our existing network. We have all the right network in all the right places, and we've got access to the best fiber in the world to continue to grow with and for our customers. Additionally, any of these long-term leases on those routes. These customers of ours, these are deep partnerships. They do not, by contract, have the right to compete with us in those spaces, so just to demystify, because I saw a few reports that had it very, very wrong. Okay, so these are great deals, huge cash infusion. We're super excited. They're giving us the jet fuel for this rocket. Now, Chris, you want to talk about consumer? Yeah. And on consumer, look, I don't want to get into a lot of details here because we don't know what we don't know, and we'll obviously tell you what we can when we can. But I will reiterate what we have said publicly. And you need to think about the consumer business as two businesses. You have a copper business that generates most of the EBITDA, and you have a fiber business that consumes most of the CapEx. So therein, you can do the modeling. The reality is it's definitely possible to separate. Nothing is easy, obviously, but I would say we've done harder things. And I think we've proven to the market that we're not afraid of doing hard things. So we'll see where that takes us, but that's all I can really comment on at this point. Chris, does the Ziply transaction change what you think that asset is worth? I think the transactions that are taking place in the market more broadly are validation of our thesis that consolidation needs to happen, and there's tremendous value in these assets. And we have an asset that is sizable in this consolidation play. And so I'll let you do the math on that. Great. Thanks, guys. The next question. Thank you. Comes from David Barden with Bank of America. Your line is open. Hey, guys. Thank you so much for taking my questions. I appreciate it. So two, if I could, the first is on the $3 billion. Chris, you kind of elaborated that this is going to look a lot like the $5 billion deal that you did before. And you gave us a lot of math that we could do around that $5 billion. And the net of it was that about 15% of that, or $800 million of the $5 billion, came in over a three- to four-year construction period, and then another 5% came in over a further 20 years in terms of IRU maintenance and stuff. So this $3 billion that looks like that would be about a $500 million cash contribution over the build period, which would be 2026, 2027, 2028 or so. And then another amount that would come out over the next 20 years. And you suggested that there's a lot of wiggle room that's been created with that new deal to address balance sheet issues. And it doesn't sound like it from the numbers if they're related to the $5 billion. But what is clear is that you did get a lot of upfront money before you have to spend it from these partners. I'm wondering if that's what you're talking about. Are you using some of this upfront payment money to do things with the balance sheet before you then come back and then spend it to go do the build-out projects? That would be my first question if I could. Yeah. No. I'm glad you asked it, David. Look, I've been here two and a half years. Kate's been here a couple of years. I put it in my prepared remarks for a reason because there's a lot of stuff being written that I think is calling into question our credibility and our intentions with all of this. I want to be exceedingly clear. We are not going to message anything to the market that is off-base from what we can deliver. And so the way I would characterize it, rather than getting into specific pieces of math, number one, no, we are not spending other people's money to deliver the balance sheet and then come back and have to re-raise debt to go build these networks. We're not doing that. I want to be exceedingly clear. But the $5 billion, when we model out our transformation objectives and the investments required, which includes the investments to turn around the business and invest in our future, investments in things like pension, and the payment of debt as it matures, the $5 billion closed that funding gap, as we said. The $3 billion, with that box checked, the deals that constitute the $3 billion give us now more flexibility to go and reduce debt. And remember, we started all of this with cash on the balance sheet. So you have to take all three pieces: cash on the balance sheet before the $5 billion, the $5 billion, the $3 billion. And when you look at all of those sources, we have ample cash to start to deliver the company. And you'll hear more from us on that when we can tell you, but you will see us start to deliver the company from these deals. Got it. Thank you. And then I guess my second question is maybe a little bit of a housekeeping question. As we think about your comments about the obvious need to step up the EBITDA in the fourth quarter, at a minimum, it's got to be about $1 billion as a jumping-off point for 2025. You've talked to us about how 2025 is going to be down. I guess I'm trying to figure out how far it's down. And I'm looking at the 2004 to 2023 EBITDA. I know that there's a lot that was in there that was extracted, right, that came out because of all the deals. Could you give us a starting point for thinking about from a kind of apples and apples 2004 to 2023 to 2004 to 2024, what that might look like, and would that be an appropriate kind of trajectory to think about how the 2025 down year plays out? Thank you. Yeah. So I don't want to get too much into 2025 guidance right now for obvious reasons because we are still quantifying what we see as the need to invest in both the deals. And because, by the way, we haven't said this yet, so I'll say it here. The customers that have signed these contracts, particularly in that first set, are calling us and asking us if we can go faster. And so there's discussions around that. So we're trying to finalize that, trying to finalize the investments required on the billion-dollar takeout and what we need to do there. I would say that at this point, if I look at kind of street averages, probably a little high versus expectations for next year. But at the same time, as I've said, we want to give you 2026 when we give you 2025 because I think 2026 will be a fairly significant inflection point given our ability to take cost out. So those are the things we said, and I think until we get a little further along, I don't want to I don't want to go further than that because we've got work to do. Yeah. I understand. I appreciate that question. Thank you, guys. Your next question comes from Nick Del Dio with MoffettNathanson. Your line is open. Hi. Thanks for taking my questions. First, you've shared metrics that suggest much better sales in North America Enterprise over the last several quarters. When should we start to see that flow through into the P&L in a more noticeable way? And then, Kate, you had also mentioned that you had over 400 NaaS customers signed up, which was good to hear. I mean, obviously, it's early, but I guess to what degree is NaaS contributing incremental revenue, either because those are new customers that came to you because of NaaS or their existing customers that are spending more because of the product? Thank you. Yeah. I'll take the second one, Chris. I'll pass the first one to you. So starting with the NaaS customers. So we're building a new digital platform, and the focus is about driving adoption. That's about customer obsession. It's about what capabilities do they need. We're super lucky to have the network that we do because everything we build on that digital platform is integrated into it natively. And so we can achieve the right economics and massive delta of capabilities compared to other offerings in the marketplace from those companies that simply don't have a network. And they, frankly, come to us to fill the circuits underneath their portal. And so it's very exciting, but we're going to stay focused on getting as many customers on there as possible. I think what we're seeing is customers testing it. I'll try one port. I'll try two ports. They have a good experience. They start to add ports. And that's where we start to innovate and drive additional service innovation. Like Lumen Defender, for example, is an opportunity for us on the horizon to sell into every NaaS customer, etc. That's the storyboard. How it impacts revenue, we're not going to give transparency to that for a while. We're simply not ready to. We have models that suggest that this is going to be very accretive over time, but it'll take time to get to scale. That's true for every cloud business, right? And we're using the cloud methodology to figure this thing out and plan it. So, Chris, do you want to take the first question? Yeah. And so typically, Nick, we would expect to see sales convert to revenue in about a three-month time window. Now, obviously, as we go forward and we're selling more digital services, that narrows, which is one of the benefits. But we're away from that. I would say this. In the Grow bucket, as we said, last quarter, we only grew 1.5% year-over-year. This quarter, it's 4%. So I think that's encouraging. We have to watch that closely. So there's not enough of a trend line there yet, but that's what we're watching. But I also want to be really realistic here. And it's a good problem to have. We have a legacy business that's enormous. It generates an enormous amount of cash, which is part of how we're able to invest in our future. That legacy business, given its size, will continue to offset the growth that we see in those Grow buckets. So I don't expect in the near term, given what's going on in the industry (I've commented on what I think is some bad re-rate behavior in some cases that's driving customer disconnects), I think those things will continue, and that'll continue to weigh on total revenue. But I think if we look at things like the TNPS scores, the sales, the fact that disconnects, at least in the near term, appear to be stabilizing, I hope that that starts to show a slight improvement in the rate of decline as we move forward over the coming quarters. Next question, please. The next question is from Greg Williams with TD Cowen. Your line is open. Great. Thanks for taking my questions. Just back on the potential mass market sale, we're just putting the fiber and the copper. Just wondering if you can provide an update on a dis-synergies. I remember when you guys sold off the assets to Brightspeed. You mentioned there were some dis-synergies there, but there wasn't a lot of enterprise overlap. In this situation, you'll have six or seven markets where you're heavily overlapped with enterprise. I'm just wondering if there's going to be a greater level of dis-synergies as a result. Second question's on. Y eah. Go ahead. I'll have a follow-up. No, no. Go ahead. Go ahead. Sorry. Oh, so second question is actually separate. It's on the North American Enterprise. I noticed that the Nurture bucket was actually declining faster than the Harvest bucket. You mentioned that VPN and Ethernet had some impacts, but I found that kind of interesting and just wondering if you can help us understand that dynamic. Yeah. So a few things. So on the first one, one of the benefits of CenturyLink and Level 3 being put together is there are routes that came from CenturyLink that, frankly, Lumen would never sell. They're going to be critical for our enterprise delivery going forward. So I think there's, without getting too specific, I think there's ways for us to make sure that we continue the synergies that existed before. The other thing is, look, just like on the enterprise business where we talk about the simplification and better customer experience we can bring by unifying four networks, there's work we can do on legacy copper on the consumer side as well. So I would say that's less of a concern at this point, but again, more to follow as we have more to share. As it relates to what happened in Q3, the reality is that that Nurture bucket really is VPN and Ethernet. Nothing specific really to point to. We do have migration plays in place, new migration plays to help move many of those VPN and Ethernet customers to newer services. That has not yet hit. So that's an area of focus we have as well. But I would say there was nothing significant that you could point to that moved the needle. I would say it's just more of a quarterly blip. Got it. Thank you. Thanks. Next question, please. The next question comes from Frank Louthan with Raymond James. Your line is open. Great. Thank you. Can you give us an idea of the annual revenue on wavelengths and what the margins are on those relative to your other products? And then contracts of this nature tend to see some expansion over time. They're already telling you to go faster. What do you think is the potential for some upside to this $8 billion, and over what timeframe do you think you'll start to see some of that creep? Thanks. Yeah. So on the $8 billion, nothing really to share at this point because we're still in those conversations about how much faster we can go and what that means for us. I would simply say that, again, the reasons why customers are here is because of their confidence in our ability to build these networks for them. And they are calling us because they know of our capabilities, and they know it's possible that we could go faster. So that's something that they're willing to participate in with us. And as we know more, we'll share it. And I'm sorry, what was the first question again? It's been a long day, Frank. Yeah, the annual. Yeah. We're not at the point yet where we're disclosing individual product details. As we go forward, it's something we're looking at. I think it's a little bit early. But in time, I think we'll probably come to a different way of looking at it that we'll ultimately share with you guys. But it's too early yet, and we don't go below Grow, Nurture, Harvest at this point. And that's what we're going to stick with for now. All right. So on the back of the building - thanks. Operator, we have time for one more question. Thank you. Your final question will come from Eric Luebchow with Wells Fargo. Your line is open. Great. Appreciate you squeezing me in. So just to follow up on the Mass Markets business, as we've alluded to on the call, a lot of recent announcements and deal activity from a lot of private overbuilders. So as you look at your footprint today, I think you have roughly 18 million copper homes. How does some of this recent competitive activity or announcements play into how attractive you think that future growth opportunity is, either by you or a partner, and how you think about what could be built out with fiber at attractive economics? Yeah. So we've said publicly that of those 18 million, again, there's a fairly sizable piece that's rural. But there is eight million home potential, I think, is reasonable. Maybe it's a little more. Maybe it's a little less. We're at four right now. So the reality is that the markets where fiber is being built are really attractive markets. And if you look at the size of our fiber footprint today and you look at the potential fiber footprint, we are the largest asset out there that has yet to be consolidated. So those are the facts, and we'll see where we go from here. Appreciate that. And just to follow up, you touched on the funding gap is closed, and now you have more flexibility. Is that another way of saying you think Lumen will be kind of consistently free cash flow positive from here? I'm just trying to think about, obviously, a lot of puts and takes in the next year. You talked about EBITDA lower, presumably CapEx a bit higher from some of these PCF sales ramping, and then, obviously, kind of a wild card on PCF contributions next year. But just any kind of directional help you can provide on what free cash flow could look like. Yeah. No, it's a great question. Thank you for asking it. The answer is yes. I mean, when we said that we were funding the gap and we talked about the additional things we could do with the cash that comes from the $3 billion, we will be generating positive free cash flow. Now, I want to be really clear on one thing. That's cumulative. Because of the impact of tax payments and the timing of CapEx, there could be, and I just don't have enough information yet to be able to share it, there could be a year where maybe we're free cash flow negative, but we will have received the cash in advance of that and will plan accordingly. It's just that the size of the tax payments and the quantum of the CapEx that'll get spent, it's going to be really lumpy. And it's going to be lumpy quarter to quarter. It's going to be lumpy year to year. But cumulatively, yes, free cash flow positive. And especially with the $1 billion cost takeout, even with the pressures on revenue, we're confident in making that statement. Thank you. Thanks, Eric. This concludes the question and answer session. I'll turn the call to Kate for closing remarks. Thanks, everybody, for digging in and taking the time to understand our unique story. We look forward to meeting you at the upcoming conferences and updating you on the significant progress we're making. See you soon. This concludes today's conference call. We thank you for joining. You may now disconnect.