At&t Inc. · NYSE:T
At&t — Q3 2009 Earnings Presentation
21 slides from At&t's earnings presentation, Oct 22, 2009
Slide 1: AT&T Investor Update: 3Q09 Earnings Conference Call
AT&T Investor I t Update U d t 3Q09 Earnings Conference Call October 22, 2009 © 2009 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. All other marks contained here
Slide 2: Agenda
Agenda g Introduction Brooks McCorcle Senior Vice President-Investor Relations Results Rick Lindner Senior Executive Vice President and Chief Financial Officer Wireless & Consumer 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 fi financial i l estimates ti t and d other th forward-looking f d l ki statements that are subject to risks and uncertainties, and actual results might differ materially. A discussion of fa
Slide 4: 3Q09 AT&T Consolidated Financial Summary
3Q09 AT&T Consolidated Financial Summary AT&T Diluted Earnings Per Share $30.9 $30 9 billi billion consolidated lid t d revenues: $0.55 $0.53 $0.54 $0.54 • (1.6)% versus 3Q08 $0.41 $ • +0.4% versus 2Q09 Stable consolidated operating income margin – 17.5% versus 17.9% in year-earlier quarter and in 2
Slide 5: AT&T 3Q09 Highlights
AT&T 3Q09 Q Highlights g g • 2.0 million total wireless net subscriber additions with record-low churn • 4.3 million postpaid 3G integrated devices added Solid execution to network, best-ever quarterly total across the business, • 3.8% increase in postpaid ARPU with 1.7% % sequentiall growth, h d dr
Slide 6: Consolidated Revenue Trends
Consolidated Revenue Trends AT&T Consolidated Revenues Consolidated revenues declined ($ in billions) 1.6% versus ppeak level in 3Q08, Q , $31.3 $31.1 with second consecutive quarter $30.6 $30.7 $30.9 of sequential improvement Sequential YOY e ess Services Wireless Se ces 3.5% 3 5% 10.0% 0 0% Wireli
Slide 7: 3Q09 Highlights: Rapid Transformation of AT&T Mobility and Consumer Business
3Q09 Highlights: Rapid Transformation of AT&T Mobility and Consumer Business Clear benefits from integrated device strategy and aggressive expansion of wireless data network capabilities • Strong subscriber gains • Best-ever integrated device quarter • High-quality, data-centric base • Record-low Re
Slide 8: Strong Wireless Subscriber Gains, Accelerated Service Revenue Growth
Strong Wireless Subscriber Gains, Accelerated Service Revenue Growth AT&T Wireless Service Revenues ($ in billions) $ 2 $12.4 $11.7 $12.0 10.0% year-over-year wireless $11.5 $11.3 service revenue growth • Up from 9.4% growth in 2Q09 • 3.5% 3 5% sequential growth Best-ever third-quarter total 3Q08 4Q
Slide 9: Record-Low Subscriber Churn, Significant Step Up In ARPU
Record-Low Subscriber Churn, Significant Step Up In ARPU Total Postpaid Subscriber ARPU Subscriber ARPU $61.23 3.8% year-over-year postpaid $51.21 $50.80 $58.99 ARPU growth: • Seventh straight quarter of year over year postpaid ARPU year-over-year growth • 1.7% sequential growth 3Q08 3Q09 3Q08 3Q09
Slide 10: Strength in Integrated Devices, 33.6% Wireless Data Revenue Growth
Strength in Integrated Devices, 33.6% Wireless Data Revenue Growth Postpaid Wireless Data Independent p data shows Subscribers with Revenues twice as many smartphone Integrated Devices ($ in billions) customers have chosen AT&T Postpaid Data ARPU 41.7% over any other competitor $3.6 • 4.3 million in
Slide 11: Leadership in Emerging Devices, Next Wave of Wireless Growth
Leadership in Emerging Devices, Next Wave of Wireless Growth eReaders • Kindle from Amazon.com Amazon com • Sony Daily Edition • Plastic Logic QUETM • Barnes and Noble nook Personal • TomTom XL 340S LIVE Navigation • Garmin Nuvi 1690 Devices Netbooks • Nokia • Acer A • Dell • Lenovo 11
Slide 12: Wireless Network Initiatives on Track, Delivering Benefits for Customers
Wireless Network Initiatives on Track, Delivering Benefits for Customers 3G dropped calls improved 12% over past year, Composite Quality Index approaching 1%; 3G blocked calls improved 30% improved >25% over past 10 months Percentage of 3G Percentage of 3G dropped calls blocked calls 2% S Sept 08 S
Slide 13: Next Major Wireless Network Deployments: HSPA 7.2 and LTE (4G)
Next Major Wireless Network Deployments: HSPA 7.2 and LTE (4G) HSPA 7.2 platform is ready now, Planned HSPA 7.2 d bl doubles th theoretical ti l speedd for f 3G Launches in 4Q09 • Six 7.2-compatible handsets available in 4Q, more to come • Charlotte • Chicago • Dallas • Houston • Provides better def
Slide 14: Wireless Margin Expansion
Wireless Margin g Expansion p AT&T Wireless OIBDA Service Margin Mid-40% Range Wireless OIBDA service margin up sequentially and year over year, driven by: 38 3% 38.3% 38 5% 38.5% • Strong revenue growth 33.5% • High-quality subscriber base • Continuing operational improvements in network and suppor
Slide 15: AT&T U-verse Innovation and Growth
AT&T U-verse Innovation and Growth AT&T U-verse’s broadband attach AT&T U-verse TV ranked rate continues to run above 90%, “Highest in Residential Television VoIP attach rate above 60% Service Satisfaction in the South and West Regions Two • >75% of U-verse subscribers have Years in a Row” by J.D. P
Slide 16: AT&T U-verse Driving Directional Improvement in Wireline Consumer Trends
AT&T U-verse Driving Directional Improvement in Wireline Consumer Trends 32.1% year-over-year growth in Regional Change in Consumer Regional revenues from consumer IP-based Revenue Per Consumer services, U-verse services and Household Connections broadband. Key drivers: Served (in thousands) $65.26
Slide 17: AT&T Business Solutions
AT&T Business Solutions AT&T Business Solutions Revenues Fundamental business trends ($ in billions) Sequential Year-Over- consistent with 1H09: strong Change Year Change growth in IP data and strategic services offset by economic Total (1.3)% (7.6)% pressures Services (excludes CPE) (1.3)% (6.4)% I
Slide 18: Stable Consolidated Margins
Stable Consolidated Margins g AT&T Consolidated Margins reflect continued sharp focus on Operating Income Margin cost discipline, di i li operational i l improvements i in both wireless and wireline 18.6% 18.0% • 3Q consolidated operating expenses down 1.0% year over year • Wireline operating expens
Slide 19: Strong Cash Flow, Balance Sheet Strength
Strong Cash Flow, Balance Sheet Strength AT&T Cash Flow ($ in billions)) 3Q09 YTD Cash Profile Cash From Free Cash Cash from Operating Activities $25.5 Operating Flow Activities Capital Expenditures $11.6 $25 5 $25.5 $13 9 $13.9 Free Cash Flow $13.9 $22.8 Dividends Paid $7.3 $7.9 Debt Reductions • T
Slide 20: 3Q09 Summary: Solid Execution, Good Momentum in Key Growth Areas
3Q09 Summary: Solid Execution, Good Momentum in Key Growth Areas • Strong wireless growth – 10.0% increase in service revenues, significant step up in postpaid ARPU, record-low churn • Wireless margin expansion – driven by high-quality subscriber base, operational improvements • Wireless network ini
Slide 21: AT&T Investor Update: 3Q09 Earnings Conference Call
AT&T Investor I Update U d 3Q09 Earnings Conference Call October 22, 2009 © 2009 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. All other marks contained herein a