AT&T CFO Updates Shareholders at Bank of America Media, Communications and Entertainment Conference

Rhea-AI Summary

AT&T's CFO, Pascal Desroches, updated shareholders at the Bank of America Media, Communications, and Entertainment Conference, emphasizing a disciplined growth strategy. Key highlights include strong customer additions in 5G and fiber, with AT&T able to serve 18 million locations. Postpaid phone churn remains low, and expectations for improved cash conversion in 2023 are strengthened by anticipated growth in service revenue and reduced interest costs. The company projects $14 billion in free cash flow, ensuring financial flexibility to meet its $8 billion dividend commitment even with increased capital investments.

Positive

• Solid customer growth in 5G and fiber, serving 18 million locations.
• Low postpaid phone churn indicates strong demand.
• Expected improved cash conversion in 2023 with growth in service revenue and lower interest costs.
• Forecast of $14 billion in free cash flow supports $8 billion annual dividend commitment.

Negative

• None.

DALLAS--(BUSINESS WIRE)-- Pascal Desroches, senior executive vice president and chief financial officer, AT&T* Inc. (NYSE:T), spoke today at the Bank of America Media, Communications and Entertainment Conference where he provided an update to shareholders.

Desroches reiterated that AT&T continues to take a disciplined and return-focused approach to growth and investment and made the following points:

• The company continues to add customers in its strategic focus areas of 5G and fiber. Overall industry postpaid phone volumes remain healthy, and AT&T has continued to see solid demand with continued low postpaid phone churn. In addition, AT&T’s consistent, disciplined and simple go-to-market approach continues to attract high-value customers. Desroches indicated that the impacts of recent pricing action on churn are within AT&T’s expected range and the company continues to expect that the pricing changes will be accretive in the back half of the year.
• AT&T continues to expand its fiber footprint and has the ability to serve 18 million customer locations in more than 100 metro areas with AT&T Fiber. Desroches shared he’s pleased with the increasing penetration rates for new fiber build. As AT&T expands to new markets, the company has seen first-year penetration rates about two times greater than historical norms.
• Desroches noted that AT&T is not seeing any material incremental shift in its cash collection cycles, which are within the company’s expectations and largely consistent with normal pre-pandemic levels.
• While the current macroeconomic environment has reduced visibility into economic trends going into next year, Desroches reiterated expectations for improved cash conversion in 2023 compared to 2022. Factors driving the company’s outlook for improved cash conversion include expectations for better service revenue levels exiting 2023 — from both a larger customer base and higher ARPUs — lower interest costs and the benefits from continued transformation savings.
• Expectations for improved cash conversion off this year’s free cash flow guidance of the $14 billion range provide more than sufficient financial flexibility to meet AT&T’s financial obligations – including its annual dividend commitment of $8 billion, or $1.11 per common share – even after factoring in the company’s above historical capital investment levels.

*About AT&T

We help more than 100 million U.S. families, friends and neighbors connect in meaningful ways every day. From the first phone call 140+ years ago to our 5G wireless and multi-gig internet offerings today, we @ATT innovate to improve lives. For more information about AT&T Inc. (NYSE:T), please visit us at about.att.com. Investors can learn more at investors.att.com.

Cautionary Language Concerning Forward-Looking Statements

Information set forth in this news release 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 obligation to update and revise statements contained in this news release based on new information or otherwise.

This news release 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.

© 2022 AT&T Intellectual Property. All rights reserved. AT&T and the Globe logo are registered trademarks of AT&T Intellectual Property.

View source version on businesswire.com: https://www.businesswire.com/news/home/20220907006326/en/

Brittany Siwald

AT&T Corporate Communications

Phone: (214) 202-6630

Email: brittany.a.siwald@att.com

Source: AT&T Inc.

FAQ

What did AT&T announce at the Bank of America Conference?

AT&T announced disciplined growth strategies focusing on customer additions in 5G and fiber, and projected improved cash conversion for 2023.

How many customer locations can AT&T serve with its fiber network?

AT&T can serve 18 million customer locations in over 100 metro areas with its fiber network.

What is AT&T's expected free cash flow for this year?

AT&T expects a free cash flow of $14 billion for the year.

What is AT&T's annual dividend commitment?

AT&T's annual dividend commitment is $8 billion, or $1.11 per common share.

What factors are affecting AT&T's cash collection cycles?

AT&T is not seeing any material incremental shift in cash collection cycles, which remain consistent with pre-pandemic levels.