AT&T Inc. · NYSE:T
AT&T — Q4 2009 Earnings Presentation
20 slides from AT&T's earnings presentation, Jan 28, 2010
Slide 1: AT&T Investor Update
AT&T Investor Update 4Q09 Earnings Conference Call January 28, 2010 © 2010 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 are the
Slide 2: Agenda
Agenda Introduction Brooks McCorcle Senior Vice President, Investor Relations Results Rick Lindner Senior Executive Vice President and Chief Financial Officer Network John Stankey President and Chief Executive Officer, AT&T Operations 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: 4Q09 Consolidated Financial Summary
4Q09 Consolidated Financial Summary AT&T Diluted EPS $30.9 billion consolidated revenues $0.51 • Third straight quarter of modest sequential improvement $0.41 • Continued wireless growth offset by slower declines in wireline Stable consolidated margins • Sharp focus on cost improvements Strong cash
Slide 5: AT&T 4Q09 Highlights: Solid Execution, Positive Outlook
AT&T 4Q09 Highlights: Solid Execution, Positive Outlook Solid Progress Across Key Growth Areas • 2.7 million wireless net adds, 9.2% service revenue growth AT&T Profile: • 248,000 U-verse TV net adds to >2 million in service • Leader in Mobile • 31.8% growth in wireline consumer IP revenues Broadban
Slide 6: Consolidated Revenue Trends
Consolidated Revenue Trends AT&T Consolidated Revenues ($ in billions) Third consecutive quarter of $31.1 $30.6 $30.7 $30.9 $30.9 sequential improvement in consolidated revenues reflecting: • Strong wireless growth • U-verse growth • Improved business comparisons 4Q08 1Q09 2Q09 3Q09 4Q09 4Q09 Revenu
Slide 7: Continued Strong Wireless Service Revenue Growth, Up 9.2%
Continued Strong Wireless Service Revenue Growth, Up 9.2% AT&T Wireless Service Revenues ($ in billions) 2.7 million total wireless net adds Total Wireless Subscribers (in millions) in 4Q09 — second-highest quarterly $12.6 $12.4 total in company’s history $12.0 $11.5 $11.7 85.1 Best-ever fourth-quar
Slide 8: 26.3% Wireless Data Revenue Growth, Continued Strength in Mobile Broadband
26.3% Wireless Data Revenue Growth, Continued Strength in Mobile Broadband Total Postpaid Wireless Data Wireless data revenues up $805 million, Integrated Revenues or 26.3%, driven by integrated device Devices ($ in billions) (in millions) adoption, 3G growth, rich applications Postpaid Data ARPU St
Slide 9: Wireless Margin Expansion
Wireless Margin Expansion AT&T Wireless OIBDA Service Margin Mid-40% Even with high integrated- Range device volumes, wireless OIBDA 38.5% 38.8% service margin up sequentially 35.8% and year over year, driven by: • Strong revenue growth • High-quality subscriber base • Continuing operational improve
Slide 10: AT&T Wireless Network Capabilities
AT&T Wireless Network Capabilities Voice and data service to AT&T’s network supports twice the 97 percent of the U.S. population number of smartphones versus any of its competitors United States’ fastest 3G AT&T is managing unprecedented network today mobile broadband growth — up more than 5,000% ov
Slide 11: Wireless Network Initiatives Drive Improved Voice and Data Performance
Wireless Network Initiatives Drive Improved Voice and Data Performance 3G Blocked Calls National 3G Voice Composite Down 25% YOY Quality Index up 22% in 2009 2009 Investments 1.41% • ~1,900 new cell sites 1.01% 1.05% • >100,000 new circuits for backhaul, 4X 2008 deployment Jan Dec Dec08 Nov09 Dec09
Slide 12: Closing the Gap: Aggressive Program of Network Enhancements for High-Usage Markets
Closing the Gap: Aggressive Program of Network Enhancements for High-Usage Markets San Francisco New York City 3G Voice Composite Quality Index 3G Voice Composite Quality Index Performance Performance Objective Objective New York Metro San Francisco Manhattan Sept Dec Sept Dec • 21% improvement in 3
Slide 13: HSPA 7.2 Deployment: Step Up in Speed, Major Competitive Differentiator
HSPA 7.2 Deployment: Step Up in Speed, Major Competitive Differentiator AT&T’s 3G Cell Sites Enabled Nationwide, Ahead of Schedule • Improves consistency in accessing data sessions • Prepares the network for faster speeds • Increases network efficiency • Immediate benefit to millions of AT&T custome
Slide 14: 2010 Capital Plan Includes Substantial Increase in Wireless Investment
2010 Capital Plan Includes Substantial Increase in Wireless Investment AT&T Total Capital Total Capital Expenditures expected to be Expenditures up 5% – 10% from 2009. Top priorities: Wireless and Backhaul: $18–$19B • ~$2B increase in 2010, which includes wireless spend and wireline backhaul in $17.
Slide 15: Improving Wireline Consumer Trends
Improving Wireline Consumer Trends AT&T U-verse TV Subscribers (in millions) 31.8% fourth-quarter growth in 2.1 revenues from consumer IP services 1.8 — AT&T U-verse and broadband 1.6 • AT&T U-verse revenues nearly tripled 1.3 over past year, now approaching 1.0 $3 billion annualized • >90% AT&T U-v
Slide 16: AT&T Business Solutions
AT&T Business Solutions AT&T Business Solutions Revenues Consistent fundamental business ($ in billions) Sequential Year-Over- trends reflecting economic Change Year Change activity and continued strength in strategic service, IP data Total (0.4)% (5.5)% Services (excludes CPE) (0.4)% (4.9)% • 17.0%
Slide 17: Stable Consolidated Margins
Stable Consolidated Margins AT&T Consolidated Operating Income Margin Sharp focus on cost discipline, operational improvements across the business 18.6% 18.6% Year-Over-Year • Major cost initiatives on track Noncash 17.5% Pension/Retiree • Total force down ~20,000 for Benefit Pressure the year • 4Q
Slide 18: Strong Cash Flow
Strong Cash Flow Cash From Free Cash 2009 Cash Profile Operations Flow ($ in billions) ($ in billions) Cash from Operating Activities $34.4 $17.1 Capital Expenditures $17.3 $34.4 Free Cash Flow $17.1 $33.7 $13.3 Dividends Paid $9.7 Debt Reduction Debt net of cash on hand reduced by $10.2 billion ove
Slide 19: 4Q09 Summary, 2010 Outlook
4Q09 Summary, 2010 Outlook Premier Growth Platforms, Financial Strength Set AT&T Apart • Leader in Wireless Broadband and Innovation — HSPA 7.2 deployment under way, investing for next generation of growth • Premier Business Capabilities — great networks, expanding product portfolio, strength in str
Slide 20: AT&T Investor Update
AT&T Investor Update 4Q09 Earnings Conference Call January 28, 2010 © 2010 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 are the