CUSIP No. 550241103 13D
_____________________________________________________________________________
(1) NAMES OF REPORTING PERSONS
Southeastern Asset Management, Inc. I.D. No. 62-0951781
_____________________________________________________________________________
(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP:
(a)
(b) X
_____________________________________________________________________________
(3) SEC USE ONLY
_____________________________________________________________________________
(4) SOURCE OF FUNDS
00: Funds of investment advisory clients
_____________________________________________________________________________
(5) CHECK BOX IF DISCOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ]
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(6) CITIZENSHIP OR PLACE OF ORGANIZATION
Tennessee
_____________________________________________________________________________
:(7) SOLE VOTING POWER
: (Discretionary Accounts)
NUMBER OF SHARES BENEFICIALLY : 13,615,459 shares
OWNED BY EACH REPORTING PERSON __________________________________________
WITH :(8) SHARED OR NO VOTING POWER
: 42,762,140 shares (Shared)
: 9,312,209 shares (No Vote)
__________________________________________
:(9) SOLE DISPOSITIVE POWER
(Discretionary Accounts)
: 27,835,596 shares
__________________________________________
:(10) SHARED DISPOSITIVE POWER
: 37,854,212 shares (Shared)
: 0 shares (None)
_____________________________________________________________________________
(11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
65,689,808 shares
_____________________________________________________________________________
(12) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11 EXCLUDES
CERTAIN SHARES
_____________________________________________________________________________
(13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11
6.4 %
_____________________________________________________________________________
(14) TYPE OF REPORTING PERSON
IA
_____________________________________________________________________________
CUSIP No. 550241103
(1) NAMES OF REPORTING PERSONS
O. Mason Hawkins I.D. No. XXX-XX-XXXX
_____________________________________________________________________________
(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP:
(a)
(b) X
_____________________________________________________________________________
(3) SEC USE ONLY
_____________________________________________________________________________
(4) SOURCE OF FUNDS
00: None
_____________________________________________________________________________
(5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ]
_____________________________________________________________________________
(6) CITIZENSHIP OR PLACE OF ORGANIZATION
Citizen of United States
_____________________________________________________________________________
:(7) SOLE VOTING POWER
: (Discretionary Accounts)
NUMBER OF SHARES BENEFICIALLY : None
OWNED BY EACH REPORTING PERSON __________________________________________
WITH :(8) SHARED VOTING POWER
: None
__________________________________________
:(9) SOLE DISPOSITIVE POWER
: None
__________________________________________
:(10) SHARED DISPOSITIVE POWER
: None
_____________________________________________________________________________
(11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
None (See Item 3)
_____________________________________________________________________________
(12) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11 EXCLUDES
CERTAIN SHARES [ ]
_____________________________________________________________________________
(13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11
0.0 %
_____________________________________________________________________________
(14) TYPE OF REPORTING PERSON
IN
_____________________________________________________________________________
Item 4. Purpose of Transaction
The purpose of this amendment to our Schedule 13D is to urge re-authorization
and resumption of share repurchase.
We applaud the company for two excellent divestitures and for $1B of share
repurchase in the third quarter. Using the rough and very conservative Net
Asset Value (NAV) shown by the company in its previous Investor Presentation,
every $1B of share repurchase at $13.75 per share results in at least $2B of
shareholder value if the NAV is twice the price. This increases the midpoint
of the NAV range by over $1.25 per share. NAV per share is further supported by
the recent transactions happening at 9x EBITDA for the lowest multiple part of
the higher-multiple fiber business and 5.5x EBITDA for the lowest multiple
part of the lower-multiple legacy business, when the whole company trades at
less than 6x EBITDA, and a strong majority of its remaining business comes
from higher-multiple fiber assets. Additionally, each $1B of share repurchase
reduces the denominator such that Free Cash Flow (FCF) per share increases by
about $.20 per share.
Because of confusion on previous earnings calls about the "payout ratio" (i.e.,
mistakes in calculation and inconsistent methodology), we would point out to
those whose highest priority is the cash dividend that the FCF per share
benefits accruing from share repurchase meaningfully improve the payout ratio
when defined by dividend divided by FCF. This happens because the dividend
yield is much greater than the company's current after tax cost of debt, such
that each share of repurchase retires a high single digit after tax obligation
and replaces it with a low single digit after tax obligation. This is up to a
point of course, and we are not urging the company to leverage itself
excessively with buybacks.
We continue to support management and certain board members overall. We were
encouraged to hear on the recent quarterly call that additional asset sales are
possible. We are not opposed to high return capital spending projects which
expand the fiber network, but we want to make sure they are weighed against all
other capital allocation alternatives on a risk-adjusted basis. The dividend is
safely covered and provides flexibility for prioritized growth capital spending
and share repurchase.
Item 5. Interest In Securities of The Issuer
(a) The aggregate number and percentage of Securities to which this
Schedule 13D relates is 65,689,808 shares of the common stock of the Issuer,
constituting approximately 6.4% of the 1,023,894,166 shares outstanding.
Common % of outstanding
Shares Common Shares
Held
___________________________________________________________________
Voting Authority
Sole: 13,615,459 1.3%
Shared: 42,762,140* 4.2%
None: 9,312,209 0.9%
Total 65,689,808 6.4%
*Consists of shares owned by Longleaf Partners Fund, Longleaf Partners
Small-Cap Fund, and Longleaf Partners Global Fund, series of Longleaf
Partners Funds Trust, an open-end management investment company registered
under the Investment Company Act of 1940, and other advisory clients.
Dispositive Authority
Sole: 27,835,596 2.7%
Shared: 37,854,212* 3.7%
None: 0 0.0%
Total 65,689,808 6.4%
*Consists of shares owned by Longleaf Partners Fund, Longleaf Partners
Small-Cap Fund, and Longleaf Partners Global Fund a series of Longleaf
Partners Funds Trust, an open-end management investment company registered
under the Investment Company Act of 1940, and other advisory clients.
(b) Southeastern generally has the sole power to dispose of or to
direct the disposition of the Securities held for discretionary accounts of its
investment clients, and may be granted the sole power to vote or direct the
vote of such Securities; such powers may be retained by or shared with the
respective clients for shared or non-discretionary accounts. Shares held by
any Series of Longleaf Partners Funds Trust are reported in the "shared"
category.
(c) Purchase or sale transactions in the Securities during the past
sixty days are disclosed on Schedule II.
(d) The investment advisory clients of Southeastern have the sole
right to receive and, subject to notice, to withdraw the proceeds from the sale
of the Securities, and the sole power to direct the receipt of dividends from
any of the Securities held for their respective accounts. Such clients may
also terminate the investment advisory agreements without penalty upon
appropriate notice. Southeastern does not have an economic interest in any of
the Securities reported herein.
(e) Not applicable.
Signatures
After reasonable inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
Dated: November 4, 2021
Southeastern Asset Management, Inc.
By /s/ Andrew R. McCarroll
_______________________________________________
Andrew R. McCarroll
General Counsel
O. Mason Hawkins, Individually
/s/ O. Mason Hawkins
_______________________________________________
Joint Filing Agreement
In accordance with Rule 13d-1(k) under the Securities Exchange Act
of 1934, the persons or entities named below agree to the joint
filing on behalf of each of them of this Initial Schedule 13D with respect to
the Securities of the Issuer and further agree that this joint filing
agreement be included as an exhibit to this Initial Schedule 13D. In evidence
thereof, the undersigned hereby execute this Agreement as of
November 4, 2021.
Southeastern Asset Management, Inc.
By /s/ Andrew R. McCarroll
_______________________________________________
Andrew R. McCarroll
General Counsel
O. Mason Hawkins, Individually
/s/ O. Mason Hawkins
_______________________________________________
SCHEDULE II
Transactions in the Last Sixty Days
Transaction Type Date # of Shares Price per Share*
Sale 09/07/21 2,417 $11.92
Sale 09/07/21 1,142 $11.92
Sale 09/07/21 571 $11.92
Sale 09/07/21 380 $11.92
Sale 09/07/21 54 $11.92
Sale 09/07/21 4,000 $11.92
Sale 09/07/21 2,000 $11.92
Sale 09/07/21 1,000 $11.92
Sale 09/07/21 2,000 $11.92
Sale 09/07/21 811 $11.92
Sale 09/07/21 2,000 $11.92
Sale 09/07/21 1,500 $11.92
Sale 09/07/21 2,000 $11.92
Sale 09/07/21 1,000 $11.92
Sale 09/07/21 3,000 $11.92
Sale 09/07/21 1,000 $11.92
Sale 09/07/21 2,999 $11.92
Sale 09/07/21 399 $11.92
Sale 09/07/21 3 $12.00
Sale 09/07/21 1,000 $11.92
Sale 09/07/21 1,000 $11.92
Sale 09/07/21 1,000 $11.92
Sale 09/07/21 1,300 $11.92
Sale 09/07/21 2,600 $11.92
Sale 09/07/21 1,051 $11.92
Sale 09/07/21 2,600 $11.92
Sale 09/07/21 571 $11.92
Sale 09/07/21 1,300 $11.92
Sale 09/07/21 2,600 $11.92
Sale 09/07/21 7,857 $11.92
Sale 09/07/21 714 $11.92
Sale 09/07/21 141 $11.92
Sale 09/07/21 929 $11.92
Sale 09/07/21 1,400 $11.92
Sale 09/07/21 1,400 $11.92
Sale 09/07/21 1,400 $11.92
Sale 09/07/21 1,525 $11.92
Sale 09/07/21 301 $11.92
Sale 10/01/21 340 $12.72
Sales by Southeastern clients in the ordinary course of
business on the New York Stock Exchange or through Electronic
Communication Networks (ECNs).
* Net of commissions
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SCHEDULE 13D - Lumen Technologies, Inc. ("Issuer")
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