Randall Stephenson and John Stephens Provide Update on Time Warner Acquisition, Company Expectations at Wells Fargo Conference
Randall Stephenson and John Stephens Provide Update on Time Warner Acquisition, Company Expectations at Wells Fargo Conference |
[21-June-2018] |
DALLAS, June 21, 2018 /PRNewswire/ -- Randall Stephenson, AT&T Inc.* chairman and chief executive officer, and John Stephens, AT&T Inc. senior executive vice president and chief financial officer spoke today at the Wells Fargo Securities 2018 Telecom 5G Forum. They discussed the recent acquisition of Time Warner by AT&T and plans for the combined company. Stephenson said that the Time Warner acquisition was the culmination of a strategy to build a modern media company around four critical elements:
Combined, these elements come together to help meet the needs of all 170 million D2C relationships — from price sensitive customers who prefer ad-supported lean bundles delivered over wireless to customers who prefer premium content bundles with a consistent user experience across all devices and who demand a great network experience to gamers who demand virtual reality on a 5G-like experience. Advertising opportunities This will let AT&T build a real-time exchange for premium video advertising coordinated across mobile devices and TV screens. Ultimately, the company plans to deliver a value proposition for premium video advertising similar to that of digital advertising. And Stephenson said Brian Lesser, CEO of AT&T's advertising & analytics business unit, is prepared to build a company that will lead to lower ad loads in programming but also more relevant and engaging ads delivered via smartphones. Financial impacts of Time Warner Stephens said that AT&T's final priority is to maintain a strong balance sheet and pay down debt to improve the company's credit metrics. At the close of Time Warner, AT&T's net-debt-to-adjusted-EBITDA ratio was in the 2.9x range. The company plans to reduce this to the 2.5x range by the end of the first year after close and to its historical range by the end of the fourth year after close. Many of the company's capital-intensive projects are well under way or are near completion, which will support AT&T's de-levering goals. The company now markets its 100% fiber network to 9 million locations, well on its way to the 12.5 million commitment it made as part of the DIRECTV acquisition. In fact, AT&T expects to reach 14 million customer locations by mid-2019. Also within the next year, the company expects to be in the 40% to 50% range of its FirstNet buildout commitment. And AT&T's 4G LTE build in Mexico is nearly complete. AT&T also expects continuing benefits from its software defined network (SDN) investments. Stephens also highlighted the expected financial impacts of the Time Warner acquisition. He said the company expects significant synergies and other financial benefits. Specifically, AT&T expects the deal will:
Second-quarter update
The company will provide pro forma financial statements no later than 71 days post close and will update guidance and provide additional information on the Time Warner acquisition on its second-quarter 2018 earnings call. AT&T's second-quarter results will include Time Warner's opening balance sheet and operations beginning on June 15, 2018, as well as transaction-related costs that could pressure free cash flow for the second quarter. As previously announced in a November 2016 SEC filing, the company expects to eliminate about $2.8 billion of intercompany revenues on an annualized basis. AT&T announces second-quarter earnings on July 24, 2018, after market close. Both Stephenson and Stephens will participate on the call, as well as John Stankey, CEO-WarnerMedia; John Donovan, CEO-AT&T Communications; and Brian Lesser, CEO of AT&T's advertising and analytics business unit. *About AT&T AT&T products and services are provided or offered by subsidiaries and affiliates of AT&T Inc. under the AT&T brand and not by AT&T Inc. Additional information is available at about.att.com. © 2018 AT&T Intellectual Property. All rights reserved. AT&T, the Globe logo and other marks are trademarks and service marks of AT&T Intellectual Property and/or AT&T affiliated companies. All other marks contained herein are the property of their respective owners. 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 U.S. 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. 1 Represents cumulative video-capable D2C relationships across the following services: Postpaid, prepaid and reseller wireless; US and LatAm pay-TV, including DIRECTV NOW; Mexico wireless; and US consumer broadband.
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Company Codes: NYSE:T |
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