Lumen Technologies (LUMN) Bank of America Securities 2024 Leveraged Finance Conference summary

Strategic focus and capital allocation

• Prioritizing enterprise investments due to faster payback (18–36 months) versus nine years for consumer fiber-to-the-home.

• No plans to accelerate residential fiber spending; enterprise digitization and AI-driven services are the main focus.

• Monetization of residential assets is under consideration, with valuation and asset type (fiber vs. copper) as key factors.

• Exploring various separation scenarios for residential business, including state-by-state or asset-type splits.

PCF deals and network capacity

• $8.5B in announced PCF deals, with $2B upfront cash expected in 2024; CapEx to ramp up mainly in 2025–2026.

• PCF deals leverage unique network footprint; no material labor or material constraints reported.

• Additional $3.5B PCF opportunity involves new routes, with a focus on maximizing customer participation and efficient buildout.

• Corning partnership secures advanced fiber technology and significant production capacity.

Enterprise growth and technology trends

• Strong momentum in enterprise demand for IP and waves, with capital reallocated to support this growth.

• Network upgrades shifting from 100G to 400G, scalable to 800G and 1.6TB as technology evolves.

• Six million miles of new fiber planned outside PCF deals to meet enterprise needs.