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Press Release -- September 10th, 2020
Source: AT&T
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AT&T CFO John Stephens Updates Shareholders

AT&T Senior Executive Vice President and CFO John Stephens Updates Shareholders
John Stephens, senior executive vice president and chief financial officer of AT&T Inc.* (NYSE:T, news, filings), spoke recently at the Bank of America Securities 2020 Media, Communications & Entertainment Conference where he provided an update to shareholders.
Confident in ability to generate strong cash flows. Stephens said that the company continues to have limited visibility into the extent and duration of the impact of COVID and resulting government actions on the economy. In addition, while WarnerMedia continues to be impacted in areas such as the timing of theatrical releases as well its production schedule, the resumption of sports is expected to shift the timing of advertising revenues and costs into the third quarter from the second quarter. Despite these fluid dynamics, Stephens reiterated that AT&T remains confident in its ability to generate strong cash flows given the resiliency of wireless and broadband services and continued demand for business connectivity.
Network quality underscores wireless value proposition. Stephens said the wireless market remains very competitive but that AT&T continues to see benefits from its investment in significantly improving network capacity over the past few years. AT&T has nationwide 5G service and was recently named “Best Wireless Network” for the third consecutive year based on overall national wireless performance.1 This high level of service quality and network resiliency during the challenging economic backdrop is helping the company differentiate its wireless offerings. Additionally, AT&T continues to benefit in both customer acquisition and retention from its ability to bundle HBO Max with its high-quality wireless services.
HBO Max traction continues. AT&T is pleased with the initial success of HBO Max, including its activation growth and solid levels of viewer engagement. The company continues to see weekly viewing hours for HBO Max that are significantly higher than for HBO Now. AT&T plans to launch an advertising-based version of HBO Max and continues to look for opportunities to leverage the platform to identify both new content distribution opportunities as well as new audiences for the company’s expansive library to further drive customer acquisition and engagement.
Capital allocation. Stephens reiterated that AT&T continues to invest to support growth in its areas of market focus — broadband connectivity (fiber, 5G) and software-based entertainment (HBO Max, AT&T TV). Also, the company is investing in its transformation and efficiency efforts. Stephens said AT&T continues to expect a dividend payout ratio at year-end 2020 in the 60s% range and that the company is targeting the low end of that range.2 The company plans to use excess cash after dividends to further reduce net debt. Since the close of the Time Warner transaction, AT&T has reduced net debt by about $30 billion and, since the first quarter of 2020, the company has taken advantage of historically low interest rates to push out near-term debt obligations by about $30 billion.3 The company continues to explore monetizing non-core assets in its portfolio to drive incremental shareholder value.
1GWS OneScore, September 2020.
2Free cash flow dividend payout ratio is total dividends paid divided by free cash flow.
3Debt maturing in 2020 through 2025 excluding commercial paper.

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