AT&T Inc. · NYSE:T
AT&T — Q3 2008 Earnings Presentation
20 slides from AT&T's earnings presentation, Oct 22, 2008
Slide 1: AT&T Investor Update
AT&T Investor Update 3Q08 Earnings Conference Call October 22, 2008 © 2008 AT&T Intellectual Property. All rights reserved. AT&T, the AT&T logo and all other marks contained herein are trademarks of AT&T Intellectual Property and/or AT&T affiliated companies.
Slide 2: Agenda
Agenda Introduction Brooks McCorcle Senior Vice President-Investor Relations Results Rick Lindner Senior Executive Vice President and Chief Financial Officer Wireless Ralph de la Vega President and Chief Executive Officer, AT&T Mobility and Consumer Markets Q and A 2
Slide 3: Cautionary Language Concerning Forward-Looking Statements
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 futu
Slide 4: EPS Summary
EPS Summary 3Q08 3Q07 Reported EPS $0.55 $0.50 Strong iPhone 3G activations totaling 2.4 million. Initiative Adjustments: expands market, Merger integration costs 0.04 generates long-term value. 3Q08 reported Noncash merger-related costs 0.12 0.17 and adjusted EPS reduced $0.10 by iPhone activations
Slide 5: AT&T 3Q08 Highlights: Premier Assets, Disciplined Execution Across Operations
AT&T 3Q08 Highlights: Premier Assets, Disciplined Execution Across Operations • 1.7 million retail postpaid wireless net adds – best quarterly total in company’s history • 2.4 million iPhone 3G activations – approximately 40% new to AT&T • 50.5% wireless data revenue growth – Internet access revenue
Slide 6: Consolidated Revenue Growth
Consolidated Revenue Growth AT&T Adjusted Consolidated Revenues ($ in billions) Total adjusted revenues up $31.3 3.3% versus adjusted results $30.7 $30.9 for 3Q07, up 1.5% sequentially $30.3 $30.4 • 15.4% wireless revenue growth • 16.2% increase in wireline IP data revenues • Stable business trends
Slide 7: Accelerating a New Era of Wireless Growth
Accelerating a New Era of Wireless Growth iPhone 3G activations have exceeded expectations and have brought a significant halo effect The iPhone 3G is attracting high-quality, high-ARPU customers — winning share at the high end Robust data revenue growth, early in the game with substantial opportuni
Slide 8: Strong iPhone 3G Activations Drive Record Retail Postpaid Subscriber Growth
Strong iPhone 3G Activations Drive Record Retail Postpaid Subscriber Growth iPhone Retail Postpaid iPhone 3G exclusive is Activations Net Adds driving strong subscriber (in millions) (in millions) growth, winning customers at the high end: 2.4 1.7 • 2.4 million iPhone 3G activations, ~40% of them 1.
Slide 9: iPhone 3G Delivers High-Value Subscribers
iPhone 3G Delivers High-Value Subscribers 3Q08 iPhone ARPU Versus Average Postpaid Subscriber • High ARPU – iPhone 3G ARPU ARPU >1.6 times the > $95 average subscriber ARPU for postpaid base • Low churn – iPhone churn is significantly lower than $58.99 the average for postpaid base >1.6X • High NPV
Slide 10: Wireless Data Revenues Up 50.5%
Wireless Data Revenues Up 50.5% Wireless Data Revenues ($ in billions) Continued rapid growth, still early in the adoption curve: Percentage of AT&T wireless $2.7 postpaid subscribers with • Internet access revenues and integrated devices $2.5 multimedia message volumes $2.3 more than double 3Q07 le
Slide 11: Nation's Fastest 3G Network With Clear, Customer-Friendly Technology Path
Nation’s Fastest 3G Network With Clear, Customer-Friendly Technology Path Outstanding Spectrum Position • Unencumbered 700 MHz spectrum in 100% of top 200 markets • Average 90 MHz of spectrum in top 100 markets Premier 3G Network Today • Only U.S. carrier to have HSPA in a broadly deployed 3G networ
Slide 12: Wireless Service Margin
Wireless Service Margin AT&T Adjusted Wireless OIBDA Service Margin 3Q08 wireless OIBDA service ~42% 41.2% margin reflects the near-term 39.1% Impact impact of strong iPhone from iPhone activations and hurricane initiative, hurricanes costs. • Continued cost improvements 33.5% in network, customer s
Slide 13: Stable Business Trends With Strong IP Data Growth
Stable Business Trends With Strong IP Data Growth Enterprise AT&T Total Wireline Business Data Revenue • Total revenues up 0.8% sequentially, ($ in millions) down 1.4% versus 3Q07, reflecting some softness in voice and transport IP Data Revenues volumes $5,060 $5,001 • 17.8% enterprise IP data growt
Slide 14: Turnaround in Wholesale
Turnaround in Wholesale Wholesale Revenues Year-Over-Year Growth Rates Significant improvement continues with return to 0.7% year-over-year growth in wholesale revenues (0.2)% • Third consecutive quarter of sequential growth in wholesale revenues (4.0)% • Improved fundamentals driven by data service
Slide 15: Regional Consumer Driven by Broadband and Video
Regional Consumer Driven by Broadband and Video AT&T Regional Consumer Revenue Per Household Served AT&T consumer IP data revenues Total consumer IP revenues, up 19.0% versus 3Q07, reflecting including broadband and growth in U-verse TV and AT&T U-verse services $61.97 related services $61.41 $60.57
Slide 16: Further Ramp in AT&T U-verse TV
Further Ramp in AT&T U-verse TV AT&T U-verse TV Subscribers in Service (in thousands) 781 • Network deployment now reaches 14 million living units 549 • On track to reach >1 million 379 subscribers this year 231 • >10% penetration reached in 126 established market areas in less than 12 months 3Q07 4
Slide 17: Consolidated Margins
Consolidated Margins AT&T Adjusted Operating Income Margin 25.1% ~25% Consolidated margins reflect 23.7% Impact from iPhone near-term impact of better- initiative, hurricanes than-expected results from 21.4% iPhone initiative, hurricane- related costs • iPhone dilution of ~$900 million • Hurricane i
Slide 18: Strong Cash Generation, Sound Balance Sheet, Attractive Yields
Strong Cash Generation, Sound Balance Sheet, Attractive Yields Cash Summary Solid cash flow allows for ($ in billions) continued investments in 3Q08 YTD growth drivers while returning Cash From value to shareowners Operations $9.3 $22.8 • Continued strong balance sheet and credit ratings Capital Exp
Slide 19: AT&T 3Q08 Summary
AT&T 3Q08 Summary • Solid execution across operations, growing revenues • Strong wireless growth continues, with excellent gains in subscribers and data adoption • iPhone 3G delivering better-than-expected results and strong growth in high-value customers, creating value • Stable business trends, wi
Slide 20: AT&T Investor Update
AT&T Investor Update 3Q08 Earnings Conference Call October 22, 2008 © 2008 AT&T Intellectual Property. All rights reserved. AT&T, the AT&T logo and all other marks contained herein are trademarks of AT&T Intellectual Property and/or AT&T affiliated companies.