At&t Inc. · NYSE:T
At&t — Merger or Acquisition (May 2021)
17 slides from At&t's merger presentation, May 17, 2021
Slide 1: Discovery and WarnerMedia to Combine
Discovery and WarnerMedia to Combine May 17, 2021 © 2021 AT&T Intellectual Property. AT&T and AT&T Globe logo are registered trademarks and service marks of AT&T Intellectual Property and/or AT&T affiliated companies. All other marks are the property of their respective owners.
Slide 2: Call Participants
Call Participants John Stankey Chief Executive Officer, AT&T Pascal Desroches Chief Financial Officer, AT&T David Zaslav President and CEO, Discovery Dr. Gunnar Wiedenfels Chief Financial Officer, Discovery
Slide 3: Cautionary Language Concerning Forward-looking Statements
Cautionary Language Concerning Forward-looking Statements Information set forth in this communication, including financial estimates and statements as to the expected timing, completion and effects of the proposed transaction between AT&T, Magallanes, Inc. (“Spinco”), and Discovery, Inc. (“Discovery
Slide 4: AT&T to merge WarnerMedia with Discovery
AT&T to merge WarnerMedia with Discovery • WarnerMedia and Discovery to combine operations to create a global entertainment leader • David Zaslav to be CEO of new company Transaction Rationale – Unlocks significant value for AT&T shareholders – Positions Discovery shareholders with enhanced long-ter
Slide 5: Transaction Summary
• Structured as Reverse Morris Trust transaction, Transaction Summary AT&T to spin/split out WarnerMedia1 which will merge into Discovery Resulting Structure • Discovery to contribute 100% of its business and receive 29% of common equity AT&T Discovery Shareholders Shareholders • AT&T will receive $
Slide 6: Discovery + WarnerMedia
Discovery + WarnerMedia David Zaslav and Dr. Gunnar Wiedenfels † See notes slide for details 6 Presentation title / Month XX, 2021 / © 2021 AT&T Intellectual Property - AT&T Proprietary (Internal Use Only)
Slide 7: Combination Significantly Enhances DTC Presence Across Key Criteria
Combination Significantly Enhances DTC Presence Across Key Criteria Global Brand Recognition & Reach Better Engagement, Best in Class Lifetime Value Technology & & Subscriber Growth Consumer Experience Customer Marketing Satisfaction Scale & Efficiency Broad Content Genres, Tentpole Films & Passion
Slide 8: Compelling Collection of Personalities, Franchises and IP
Compelling Collection of Personalities, Franchises and IP • Largest library with ~200k hours of video content • Leading scripted and unscripted content portfolio • Available in 220+ countries and territories and 50 languages • High quality production capabilities of Warner Brothers studio • #1 TV st
Slide 9: Enhances Global Linear Business
Enhances Global Linear Business • Portfolio positioned as stronger partner to advertising and distribution counterparts • Combined company pay TV portfolio reach can compete with combined pay and broadcast network reach 1 of other global players • News, sports, scripted and unscripted - combined por
Slide 10: Financial Highlights
Financial Highlights Greater scale with ~$52B of expected revenue and ~$14B of expected adjusted EBITDA† in 2023 Targeting $15+ billion of DTC revenues in 2023 Significant synergies with $3+ billion of expected run-rate cost savings Robust FCF† supports deleveraging, reinvestment and financial flexi
Slide 11: Financial Overview
Financial Overview Expected Rapid Deleveraging Revenue (in $ billions) Adj. EBITDA† (in $ billions) (Gross Leverage †) $15B+ of DTC 1 revenue $52 $14 ~5x 2 $39 ~3x $12 2020PF 2023E 2020PF 2023E At Closing +24 Months • ~60% FCF † conversion • Long-term leverage target† of 2.5x – 3.0x 1. Includes phas
Slide 12: AT&T Post Transaction
AT&T Post Transaction John Stankey and Pascal Desroches † See notes slide for details 12 Presentation title / Month XX, 2021 / © 2021 AT&T Intellectual Property - AT&T Proprietary (Internal Use Only)
Slide 13: AT&T Going Forward
AT&T AT&T’s Going Forward Deliberate Market Focus This transaction is the right move for our shareholders Provides financial flexibility required to be the leader in 5G Wireless broadband connectivity across all the U.S. Expect 200M POPs covered with C-Band by end of 2023 Focuses our management team
Slide 14: AT&T Post Transaction Financial Profile
AT&T Post Transaction Financial Profile Focused operational execution Annualized Proforma Growth Expectation Mobility ‘22 – ’24 CAGR †A1 • Retain focus on continued profitable market share gains Low single • Wireless service and broadband REVENUES digit % revenue growth • Invest transformation savin
Slide 15: AT&T Post Transaction Capital Allocation Strategy
AT&T Post Transaction Capital Allocation Strategy Investing for Growth Attractive Dividend Debt Reduction • Success-based Fiber expansion • Targeting dividend payout ratio†A4 • $43B net debt reduction at close of 40-43% on anticipated free cash • 5G capacity acceleration flow†A4 of $20B+ • Expected
Slide 16: Q&A
Q&A S AT&T Discovery
Slide 17: Notes
Notes A1. CAGR is Compound annual growth rate. D1. Free cash flow, gross leverage, net leverage and adjusted EBITDA are non-GAAP financial measures frequently used by investors and credit rating agencies to provide A2. EBITDA is operating income before depreciation and amortization. relevant and use