AT&T Senior Executive Vice President and CFO John Stephens Updates Shareholders
August 12 2020 - 10:41AM
Business Wire
John Stephens, senior executive vice president and chief
financial officer of AT&T Inc.* (NYSE:T), spoke recently at the
Oppenheimer Virtual Technology, Internet & Communications
Conference where he provided an update to shareholders.
Network resilience. While acknowledging the competitive
nature of the connectivity business, Stephens expressed confidence
in AT&T’s ability to deliver upon the strength of its wireless
and wireline networks. This comes at a time when connectivity has
proven to be even more critical for both consumers and
businesses.
Leveraging improved wireless capabilities via initiatives such
as new spectrum deployment (including FirstNet) and software based
network capabilities, the company continues to benefit from reduced
levels of wireless churn (even including disconnects for the
Keeping Americans Connected program), rising adoption of AT&T
Unlimited Elite wireless plans, which include access to HBO Max,
and ongoing resilience across its business operations. While the
Keeping Americans Connected Pledge expired on June 30, the company
continues to work with its customers to find ways to help them
become current on their accounts, including by offering extensions
and payment plans.
Financial flexibility. AT&T is confident that it can
continue to strengthen its balance sheet while simultaneously
investing for targeted growth in areas of market focus—broadband
connectivity, both fiber and 5G, and software-based entertainment
like HBO Max and AT&T TV. Stephens said that AT&T is
committed to supporting the dividend on its common stock, which has
increased for 36 straight years. For full-year 2020, the company
expects its dividend payout ratio to be in 60s% range and is
targeting the low end of that range.1
In addition, Stephens said that AT&T has continued to take
advantage of low borrowing costs and rates to address upcoming debt
maturities. As a result, the company has reduced the amount of its
debt maturing within the next 4 years by about $23 billion, an
improvement of about $8 billion since the end of the second
quarter.2 The company remains committed to opportunistically using
its excess cash flow (after dividend commitments and capital
expenses) to further reduce its debt levels. And AT&T continues
to pursue asset monetization opportunities to further expand the
company’s financial flexibility.
Cost transformation initiatives. While visibility into
the impact of COVID-19 on the overall economy and the duration of
that effect remains somewhat limited, Stephens noted that AT&T
is positioned to build upon its existing transformation
initiatives. This will allow AT&T to leverage prior network
expansion and optimization investments, streamline its IT /
distribution systems and align its operations to drive deliberate
investment in key areas of strategic focus. The recent retail
location changes and reorganization of WarnerMedia are some of the
steps taken to further execute against AT&T’s goal of driving
out incremental costs and realizing additional efficiencies
throughout its operations.
Capitalizing on evolving consumer demand for content.
Following the successful launch of HBO Max, Stephens noted that the
recent reorganization of WarnerMedia will accelerate the
businesses’ transition to meet evolving consumer needs. At the same
time, WarnerMedia plans to continue to invest in content, expand
its reach and scale and effectively operate its legacy
businesses.
The uncertainty around the duration of COVID-19’s impact makes
it difficult to assess the slope of recovery in key areas of
operations (e.g., advertising, theatrical release timelines and the
resumption of content production). However, recent initiatives will
better align WarnerMedia’s structure to help it meet its goal of
fulfilling consumers’ ever-growing desire for high-quality content
and well-told stories – when, where and how they want them. As
previously announced, AT&T ended its most recent quarter with
36.3 million domestic HBO Max and HBO subscribers, up 1.8 million
from the end of 2019 and tracking to the company’s original
end-of-year 2020 guidance.3
1Free cash flow dividend payout ratio is total dividends paid
divided by free cash flow. 2 AT&T’s reduction in debt
maturities is based on debt to be retired in 2020 through 2023 and
excludes commercial paper. 3 AT&T’s projections included both
HBO Max and HBO subscribers.
*About AT&T
AT&T Inc. (NYSE:T) is a diversified, global leader in
telecommunications, media and entertainment, and technology.
WarnerMedia is a leading media and entertainment company that
creates and distributes premium and popular content to global
audiences through its consumer brands, including: HBO, HBO Max,
Warner Bros., TNT, TBS, truTV, CNN, DC Entertainment, New Line,
Cartoon Network, Adult Swim and Turner Classic Movies. Xandr, now
part of WarnerMedia, provides marketers with innovative and
relevant advertising solutions for consumers around premium video
content and digital advertising through its platform. AT&T
Communications provides more than 100 million U.S. consumers with
entertainment and communications experiences across TV, mobile and
broadband. Plus, it serves high-speed, highly secure connectivity
and smart solutions to nearly 3 million business customers.
AT&T Latin America provides pay-TV services across 10 countries
and territories in Latin America and the Caribbean and wireless
services to consumers and businesses in Mexico.
AT&T products and services are provided or offered by
subsidiaries and affiliates of AT&T Inc. under the AT&T
brand and not by AT&T Inc. Additional information is available
at about.att.com. © 2020 AT&T Intellectual Property. All rights
reserved. AT&T, the Globe logo and other marks are trademarks
and service marks of AT&T Intellectual Property and/or AT&T
affiliated companies. All other marks contained herein are the
property of their respective owners.
Cautionary Language Concerning Forward-Looking
Statements
Information set forth in this news release contains financial
estimates and other forward-looking statements that are subject to
risks and uncertainties, and actual results might differ
materially. A discussion of factors that may affect future results
is contained in AT&T’s filings with the Securities and Exchange
Commission. AT&T disclaims any obligation to update and revise
statements contained in this news release based on new information
or otherwise.
This news release may contain certain non-GAAP financial
measures. Reconciliations between the non-GAAP financial measures
and the GAAP financial measures are available on the company’s
website at https://investors.att.com.
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version on businesswire.com: https://www.businesswire.com/news/home/20200812005499/en/
For more information, contact: Fletcher Cook AT&T
Inc. Phone: 214-912-8541 Email: fletcher.cook@att.com Daphne Avila
AT&T Inc. Phone: (972) 266-3866 Email: daphne.avila@att.com
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