AT&T ANALYST MEETING Mike Viola Senior Vice President, Investor - - PowerPoint PPT Presentation

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AT&T ANALYST MEETING Mike Viola Senior Vice President, Investor - - PowerPoint PPT Presentation

Aug 09, 2023 538 likes •905 views

AT&T ANALYST MEETING Mike Viola Senior Vice President, Investor Relations, AT&T Inc. Cautionary Language Concerning Forward-Looking Statements Information set forth in this presentation contains financial estimates and other

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AT&T ANALYST MEETING

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Mike Viola

Senior Vice President, Investor Relations, AT&T Inc.

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Cautionary Language Concerning Forward-Looking Statements

Information set forth in this presentation 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

  • bligation to update and revise statements contained in this presentation based on new information or otherwise.

This presentation 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. The “quiet period” for FCC Spectrum Auctions 101/102 (28Ghz and 24Ghz) is now in effect. During the quiet period, auction applicants are required to avoid discussions of bids, bidding strategy and post-auction market structure with

  • ther auction applicants.
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Randall Stephenson

Chairman and CEO, AT&T Inc.

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AT&T Composition

3rd Quarter

Note: WarnerMedia revenue shown net of eliminations

39% 48% 16% 17% 15% 17% 25% 15%

  • ADJ. EBITDA

REVENUE

Mobility Entertainment Group Business Wireline Latin America / Other WarnerMedia

5%

100% 100%

3%

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John Donovan

CEO, AT&T Communications, LLC

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~50%

Growing revenues and EBITDA

+2.3% service revenue growth YoY1

High quality phone subscriber base

+2.7mn smartphones added since 3Q17

Nation’s Best Network

Mobility

Of AT&T’s Adj. EBITDA1

1 On a comparable basis; 3Q 18
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Leading the Path to 5G

Laying 5G groundwork Exploring service

  • pportunities

Working with Developers

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Steady EBITDA over last 3 years

3Q16 3Q17 3Q18

Comparable Business Wireline EBITDA

$2.8 $2.7 $2.7 $2.7 $2.6 $2.8

Business

3,600 Agencies 250,000+ Subscribers ~1/3 FirstNet square

miles covered Reimbursements to come $2.7 $2.6 $2.6

Billions ($B)

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Broadband growing Video product evolution Path to EBITDA stability

Entertainment Group

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2019 EBITDA

~25mn Video Subscribers

~$10B ~$10B

~($1B) ~$1B ~$0.2B ~$0.4B ~$0.4B

2018 EBITDA

~25mn Video Subscribers Voice and Accounting Pressure

~($1B)

Video Subscriber Losses Linear Improvement OTT Profitability Broadband Growth Cost Initiatives 2-year price lock roll-off Xandr advertising ARPU growth Fiber subscriber growth Increased efficiency and automation ARPU growth Repackaging Adjusted promotions

Entertainment Group

Path to stabilizing EBITDA

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John Stankey

CEO, WarnerMedia

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WarnerMedia Highlights

$2.4 $2.0 $2.0 $1.8 $2.6 $7.7 $8.7 $8.1 $7.9 $8.2

  • 2.0
4.0 6.0 8.0 10.0 12.0

3Q17 4Q17 1Q18 2Q18 3Q18

Revenues Operating Income

Turner

CNN continues as the #1 digital news destination 3 of the top 5 ad-supported cable nets in primetime YTD3

Home Box Office

23 Primetime Emmy Awards in 2018 Over 140 million global subscribers2

Warner Bros.

Strong 4Q theatrical slate Producing >70 series for the 2018-2019 TV season

Revenues & Operating Income1

$ in billions

1Reflects historic Time Warner adjusted results and RSNs. Otter Media is included in WarnerMedia results following AT&T's 8/7/18 acquisition of the controlling interest. Note: All stats through Q3; (2) As of year end 2017. Includes Cinemax and unconsolidated joint ventures; (3) Among adults 18-49
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Watching Monetization Models Longform & Shortform Premium / Native Digital Dynamic & Mobile

RAPIDLY SHIFTING TOWARDS DIGITAL CONSUMPTION AND SPENDING… … AND DIRECT CUSTOMER RELATIONSHIP IS CRITICAL

The Entertainment Industry is Evolving

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Well Positioned to Capitalize

Iconic brands and franchises Award winning content Creative excellence Top talent relationships Strong global presence

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Complements existing businesses Good for distribution partners Enables expanded reach and growing subscriber bases Captures data and analytics to inform new products and enable better monetization

Direct to Consumer

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Our New Direct to Consumer Offer

WARNERMEDIA AND LICENSED CONTENT FROM OTHERS

TARGET LAUNCH: 4Q 2019

Entry-level Service Premium Service Additional

  • Classics
  • Kids & Family
  • Theatrical

BUNDLE

SERVICE

PREMIUM

SERVICE

Premium & Popular Original Programming Blockbuster Movies

ENTRY

SERVICE

Movie-Focused

  • Comedy
  • Niche/Genre
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aVOD Wholesale Distribution sVOD

Positioned for the Future

Engagement Penetration ARPU AT&T Reach

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Lori Lee

CEO, AT&T Latin America and Global Marketing Officer

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  • Descriptive content for stat

is Aleck Sans 40pt.

At a Glance

31M SUBSCRIBERS 12 COUNTRIES $8.3B

2017 REVENUE

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Environment for Growth Network Investment Completed

Mexico

2015 2016 2017 3Q-2018

MOBILE SUBS

9M 12M 15M 17M

PEOPLE COVERED

44M 78M 94M ~100M

The Most Reliable Network in Mexico

1

1 Claim based on a 3rd party analysis during drive-testing developed by Nielsen. The test reported that AT&T’s network leads in overall composite “reliability” indicator ( Note - reliability factors in 2G, 3G and 4G LTE networks).
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Sustained track record

  • f growth and cash generation

Opportunity with OTT

Vrio

2016 2017 3Q 2018

.

1Simple Free Cash Flow = Adjusted EBITDA less Capital Expenditures 2Revenue growth figures are on a constant currency basis, excluding Venezuela.

10.8% 8.5% 8.5% Revenue growth2 Simple free cash flow1

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Brian Lesser

CEO, Xandr

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Buying in mass buying audiences

DIGITAL ADVERTISING IS BORN EXPLOSION OF AD TECH AND PLATFORMS BUYING CONTEXTUALLY

AD AD

SUBSCRIBER DATA PURCHASE DATA SITE VISIT DATA 3RD PARTY DATA BROWSING DATA TV VIEWERSHIP DATA LOCATION DATA COMEDY CENTRAL ESPN NFL NETWORK FOX SPORTS AMAZON PRIME VIDEO FACEBOOK NETFLIX YOUTUBE A&E GOOGLE

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Ad tech has brought us to a critical moment in time

MAJOR PLAYERS NOT WELL POSITIONED IN PREMIUM TV AND VIDEO ADVERTISERS AND AGENCIES ARE FRUSTRATED NO SINGLE PLAYER HAS ASSEMBLED THE ASSETS

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Compelling Set

  • f Assets

DISTRIBUTION DATA CONTENT TECHNOLOGY

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Our Media Sales Business and Platform Businesses Complement Each Other to Magnify the Opportunity

INVENTORY

AGENCIES & ADVERTISERS AUDIENCES/ VIEWERS

Direct Sales Programmatic Sales 3rd party

TV Platform Digital Platform

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Measuring Success

OUTPACE THE MARKET SCALE WITH 3RD PARTIES INTERNAL USE OF PLATFORM

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John Stephens

CFO, AT&T Inc.

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The Integrated Growth Story

AT&T LATIN AMERICA AT&T COMMUNICATIONS Mobility: top and bottom line growth Stable EBITDA in Entertainment Group in 2019 Continued solid performance with managed growth Direct-to-consumer plan to launch in 4Q 19 Nearly $7B annualized revenues and growing Management team, ad inventory and platform in place AT&T Mexico improving profitability Sustained cash generation at Vrio

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Merger Synergies

END OF YEAR RUN RATE

RUN RATE TARGET 2019 2020 2021 COST SYNERGIES $1.5B

  • Marketing
  • Corporate overhead
  • Procurement

REVENUE SYNERGIES $1.0B

  • Advertising
  • Churn reduction
  • Cross selling

TOTAL SYNERGIES $2.5B ~ $0.7B ~ $2.0B ~ $2.5B

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Leverage Update 2019

2019 PLAN

YE 2018 2019 YE 2019

~$170B ~$150B

~2.8x1 ~2.5x1

LIQUIDITY AND REFINANCING

~$6-$8B

Other cash generation initiatives ~$158B

~2.6x1

1 Net debt to Adj. EBITDA ratio; illustrative of $60B Adj. EBITDA

Pension plan essentially fully funded

~$12B Free cash flow after dividends

Hedged against rising interest rates Successfully managed near term maturities and refi risk

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2019

Consolidated Guidance

2019 2019 FREE CASH FLOW

$26B range

DIVIDEND PAYOUT

High 50s %

NET DEBT TO ADJ. EBITDA

2.5x range

GROSS CAPITAL INVESTMENT

1

$23B range

  • ADJ. EPS GROWTH %

2

Low single digits

1 Excludes expected FirstNet reimbursement in the $1 billion range; includes potential vendor financing. 2 Adjustments include merger-related adjusted amortization costs in the range of $7.5 billion, a non-cash mark-to-market benefit plan gain/loss, merger integration and other
  • adjustments. We expect the mark-to-market adjustment which is driven by interest rates and investment returns that are not reasonably estimable at this time, to be a
significant item. Accordingly, we cannot provide a reconciliation between forecasted adjusted diluted EPS and reported diluted EPS without unreasonable effort.
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AT&T ANALYST MEETING