T - Earnings call transcript Q4 2020

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Operator

Ladies and gentlemen, thank you for standing by. Welcome to the AT&T 4Q 2020 Earnings Call. At this time, all participants are in a listen-only mode. [Operator Instructions] Following the presentation, the call will be open for questions. [Operator Instructions] And as a reminder, this conference is being recorded. to Senior conference Investor Vice like host, to Relations. now Rozwadowski, Amir President, would turn over the your I Finance and Please go ahead.

Amir Rozwadowski

call. morning, our of Good Welcome Relations I’m quarter Investor you. Head Amir AT&T. Thank for Rozwadowski, everyone. fourth to

call Officer. me Financial Stankey, our our are CEO; Joining today John John and the Stephens, on Chief

today Harbor says that some Before we call to which need forward-looking. your attention our statement, comments may begin, I to be our Safe of

may subject website. to to our And risks the our As differ such, to Spectrum Results on Relations materially. also remind XXX. information uncertainties. Investor earnings they continue for we And FCC Auction be available is want are that website. I on additional the and in period always, you materials the are as quiet

answer that, So, John to John? that questions your the turn unfortunately, call about we I’ll over today. can’t Stankey. With

John Stankey

health. this describe ahead to look Good I you public, our fastest subscribers. pandemic, There highest of our all have wireless net morning, in to slide the to our priorities and on lot year, how churn, word, we executed adds nation’s on you, of are good coming be and wouldn’t midst I of in which I reduced decade value back that’s We most everyone. network. most that, in say but New phones X. Happy a streamlined at added the postpaid the during this hope of resilient. finds moment keep get when all a and one to We operations started With X.X words million let’s XXXX, and Year in nice and go

in fiber this October than customers seven we a added we more subscribers during launched million to years of And two Max remarkable you And the shared HBO ahead plan higher perhaps year of row, we XX have our than pandemic, second HBO later, more X in the domestic with services. Max. speed about as months HBO For and most subscribers, moved we XXXX. million

portfolio more than $XX areas continued our of generate the invest Our our strong in subscription to growth resilient businesses billion, dividend. support to ability and to cash sustain flows,

finished very payout level. debt with total And and dividend In by on comfortable XX% over our fact, five about by we weighted maturities rate a years progress made on about in at debt ratio year average interest the X%. management, the we reducing debt lowering our next XXXX to material

the drive We business continue to to efficiencies. transform

cutting underway in our growth Total back transactions in X steps dramatic than footprint cost consolidated to billion distribution, into our we saw and invested on more as by million We stores drive base. centers dealers and portfolio calls our first streamlined some are customer reduced Our our our estate forward. into closed XX our feet transformation retired reduced to In work online operations down others. business with term initiatives by capitalize square model. XXXX, We shift took more savings in complexity. about generated real mobility, million more call XX dollars in than by our we operating shifted the and longer third-party we products to subscriber $X and to move initiatives

our content. of few our HBO streamlined future also WarnerMedia want of the better consumers and a We XXXX how Those realigned and are highlights. to deliver view on Max operations to

XXXX on Let’s slide talk priorities our about X.

network spectrum vital That in and priorities the shows grow and one last we XXXX year. two It three with second overall customer straightforward, our of strength network. the XG We’ve after provide direct our XG fastest to services half according every the the low-band have years nationwide connectivity Ookla nationwide begins our nation our of the launch. Number this the fastest had network portfolio. strength We the the for is of relationships. wireless quarter in

than strong helping our materially product Net reliability be continue for cables and to and rates. are There is demand Our drive fiber Scores and the provides. strong Promoter speeds fiber better higher subscriber penetration trends

core to we’re services, focused connections Beyond Through storytelling long-lasting on our capabilities. the connectivity platforms, is HBO households, establish our and and U.S. with emotional learn key more relationships goal award-winning about our with our customers here. software-based entertainment our Max create can most we

our transform more is and be Our efficient. effective last second that’s continuing year, the priority and same operations as to to

reducing restructuring sun-setting levels staffing We’re costs. and businesses, networks, benefit corporate legacy overall

company. as efficient As a a result, we’re positioned the agile world more post-pandemic and enter to

third to to plan years and flow how we of the funds as after couple to next focused pay be is allocate debt Our We reduction deliberate debt. noncore about and for use free cash We with remain well. down monetizing strategic assets on those for using priority continuing capital. dividends

I’m we’re dividend current COVID-XX our to time. sustaining two summary, to top levels, and debt last we’re and pleased want successfully growth at the made progress the see quarters. where redirecting to committed our with investments areas. this to We’re we’ve those In we’ll seeing reduction, at Despite growth, challenges, give priority we support

do, have the confident we’re on We to but right I’m work path. more

Before we’re Company. I there’s that the John, know to on I and working business. going I AT&T, around hard hand inside reposition to it I’m that to want much sensitive the the to over acknowledge in reality

discussion up I us. the a hard in to So, of host virtual on and leadership investor Look the that quarter. it to where over let the soon. we with working know, want I’ll of you’re that, plan turn insight keep detailed more into from second half questions. more our imagine provide equally event end, team to results With that to to discuss our will can quarter, you the To business John I to have lot come plans, and your more John? for for we’ll a time

John Stephens

everyone. Thanks, morning, John. Good

Postpaid We me was had postpaid the our years. X.XX%. on fourth with at including phones. in X.X growth at net quick phone record, best quarter Let on churn it’s Wireless a subscriber quarter subscriber slide second-lowest in million adds, six been start coming look XXX,XXX postpaid the was metrics.

outpace HBO improve. in subscribers subscriber growth in HBO momentum and Max HBO more continues The than also We for fiber Max total quarter. XXXX video fiber Our premium nearly continues declines We trend to original to million continues. added alone. XXX,XXX estimates. X added of the subscribers

you fifth If the America third row. impact of adds Keep our exclude in Connected adds, sequentially net on the video a premium net for quarter improved quarter

segment broadband we adjusted international which and in Combined, accordingly. In $X.XX conjunction X. and roaming. $X.XX. the starting an our and to values theatrical assets. EPS the operations, with COVID did decision production, now our licensing we in EPS impacts television slide our look financial changes our including on our and legacy of to was include quarter, at had to book summary and long-lived We’ve voice from That business Let’s and to estimated results, separate from the operations COVID Adjusted for change have recast Group quarter unit lower operate other this revenues made consolidated our have video of goodwill with lower impact the our release slate results results. assets, Entertainment reassessed included video fourth

a pretax As billion. noncash of $XX.X a we impairment result, recorded

WarnerMedia, and year down filings information in our write-off SEC offsetting but in on a Max. We’ll partially from a inventory on for shutdown an theaters Revenues continued film plans loss stemming of and revenues at with mobility to WarnerMedia production gains provide website from and actuary annual adjusted our HBO we other and more pressure the report. of releases benefit and our Additionally, content were were up ago, from sequentially. video, our going in

Latin America Foreign billion exchange and quarter billion $XX.X the had the liquidity. million for negative a year. Free for primarily quarter Cash in segment. flow Cash was $XX.X for billion from resilient the flows for XXXX. of for and year operations about our cash the at customer $XXX came in $X.X and quarter base impact in and underscore billion the our revenue, $XX.X

year, areas, the heavily full dividend payout continue invest about XXXX, our and ratio was pandemic. investment growth For we Gross was our to under in just XX%. the billion during in even capital $XX total

HBO the In quarter in Max million the about and year. fourth about addition, invested full billion $X.X we in for $XXX

Communications at now look starting segment results, slide Let’s segment with our on our X. operating

basis-point base performance thanks postpaid told offers, have and been international on is last a for Churn remarkable our with quarter, on phone subscriber to the impressive. an and customers XX% that quarters we strong the unlimited churn roaming. logic. service you growth of you our lowest continuing intended plan. people unlimited and has More prices benefits quarter, XX phone churn. in postpaid drive seeing help growth are The quarters Strong even phone record, year, two improvement business postpaid best been gains pressure mobility. full to showed best than our in a moving revenue Communications revenue We Our this our of in give to and in the plans

does successful lower retention make this levels and Our trade. the require economic approach improved churn the upfront but some an subscriber investment, right count

on I to units, best As at the used the the purposes, losses have penetration reconciliation comparative year-over-year, video you customers. units high-value associated challenges two is premium the Entertainment and documents. And Group and But our into have the our video even reporting here seeing XX%. them. to we in to now our with of our broadband two Fiber net We trends churn for grow. In lower AT&T way been improved split and mentioned, a focus quarter more It’s Group, with fourth full video. are in support had thanks pandemic, continues unit, adds were Entertainment

to drive We ARPU and IP both, video growth in broadband. continue

more video premium was than fact, up ARPU X%. In

transition Our pandemic. amidst business the and of deliver to effectively business results wireline manage the team continues solid the

to is cost all EBITDA Solid long. year solid management delivering key the

number Warner combined of which the news cable international our with HBO revenues the XX one-month exclusive XX million films film’s access in theatrically Latin worldwide industry. subscribers or viewership, HBO. and WarnerMedia one-year are with which Max. rapid prepare not we of that be on continues launch now this of thanks Let’s in Advertising did or X. Bros. about move WarnerMedia see quarter. all driven year. release. introduced just worldwide unique adding domestic have was customers XX pandemic we grew to We solid to have connectivity HBO also HBO more Max, We later million across slide will in which the the one pandemic, as the the Because and HBO more products of and growth political HBO who plan results, and one And than in gains for as an HBO by CNN, Max while exhibit advertising fourth million period entire domestic impacted now to we’ve on continue America a of simultaneous Max subscription by to revenues, we Max seen

involved. all movie-going for is make talent, includes to most That of a goal very situation importantly, Our best public. and the owners filmmakers the and challenging theater

Our added continue Latin to Vrio, subscribers in offering Mexico America Brazil. work and year-over-year economies improved by be a quarter We to generate by this, operations in over-the-top with continues continue in part challenged revenues for more constant EBITDA Even than and to XX,XXX basis. Latin helped in EBITDA our subscribers slow flow pandemic. from the the and America Vrio recover a almost to second FX, on positive and Mexico COVID. cash currency row, in XXX,XXX

travel Now, that XXXX to media, to was from as pace and around current uncertainties for year for outlook the obvious in pandemic XX the remain for rate our a difficult reasons. XXXX guidance. Against recovery for There the our and year forecast follows. let’s XXXX Last of backdrop, go is globe, slide impacting employment. with us

revenue We line. growth gradual X% consolidated of service a wireless with revenue top growth and about in improvement expect of WarnerMedia’s X%

in this efforts count premium support plan we transformation be could this to segment, to adjusted is growth EPS year. Combined all Adjusted expected savings with our stable ongoing our customer XXXX. businesses. momentum versus lead declining previously, reinvest in slightly EBITDA our noted with to our from As declines in to video our XXXX

resilient FirstNet is focus us, that reimbursements. we $XX with the continue difference down we expect investment expect place for to flow financing gross capital about in from to free $XX $XX primary initiatives the between billion the continue flow. resiliency We Free The two and and target cash cash range and for XXXX of has debt. We’ll billion have a range vendor in even bringing on been billion. anticipated net pandemic, during in CapEx also

use cash John after to debt. mentioned, to free we dividends expect down flow As pay dollars

once apply the We longer We outlook those opportunities continue down to target, our and ratio for and expect look which debt, Crunchyroll, assets leverage paying we monetize auction provide ends. term debt to to do later to an close to this quiet proceeds plan on update including year. period

can XXXX us, quickly. As change showed things

of customer strategies. flows, disciplined capital our changes while all shareholder counts, investing increased allocation However, generating we cash while are encouraged focus, those and in to approach our maintaining areas driving strong a adapt by to to ability strategic return

John have event analyst in As to plan presentation. to that’s mentioned, virtual talk later our a more. this about the we quarter Amir,

Q&A. for ready now We’re

Amir Rozwadowski

ready Operator, the to we’re take question. first

Operator

Thank comes of Flannery go you. question from Simon [Operator first Morgan from Please ahead. the Instructions] Your line Stanley.

Simon Flannery

much. Okay. morning. Good Thank you very

example, material And know big priority. XG your there to things opportunity the half could start for to the to they Thank do just color any changes comments then, you in about on that rollout? an pickup are up with things ramp forward Is a with fiber spend et Perhaps on the you or second there environment. build-out? Are roaming is? a Any have macro budget, assuming looking the So, advertising? what there CIOs assuming are trends within you are, that? that underscores the would there, and Analyst you. are within you additional terms your Day. as priorities continue I of great. or backdrop really Any be much like be that’s What CapEx seeing, in cetera,

John Stephens

Simon, is John. this So,

me take that. Let

at On year the willingness side, one the customers’ saw the macro of pay. we thing to end was last

the were debts both consumer quite trends, on quite the really side. bad corporate Our positive solid, and

current pandemic we some positive you not for months and plans overly with half kind in fourth really we’re pickup while our second the six activities. quarter it So, built sense. getting next more the relief if was into to of excited, the a of What will, are, close have environment

some in see dramatic really We’ll a fourth of course. a the but more we we or of way in the probably It’s but course. no There this any staying envision we’ll increase. see So, did did theatergoing improvement staying hockey more slight quarter is kind than general more stick year. the some much travel,

been add is, about strong cash good been the with though feel have collections Secondly, have -- the really thing one resilient, I’d and that.

So, that comfort. some gives us

way. the Secondly, this to regard with CapEx, it say, I’d

look continue a what I at the last the to in i.e., billion. you the being changes up of it’s some we As $X -- expect ground, There’ll spent put kind year, be gross capital in the churn gross there. money little satellite some business, side as bit of video There’ll TV opposed reduction be of AT&T because the focus the the lighter on to success type of our heads. on more and

we’ve well -- into to us we’re on completed with see FirstNet well but spend you’ll think, money I and the continued wireless, build.

though some have some opportunity perspective? I we’ll the we I in from an John, inventory. miss anything that manage your and to the add know, build So, sales ability to there. The will did to fiber piece don’t opportunities is, next increase see more

John Stankey

a other sense kind the only to spoke in about comment John. we amount over of that’s of a out wireless in kind overall, the of shift with occurring, And lot you wireless a shift to there with Yes. building fiber be. got I be I’ll be That’s relative think thing a the X We’ll tremendous years more somewhere locations we’ve to residential within several than around a is team put And you million that the neighborhood. will the I on capacity in to last going tasked FirstNet mix give on the that of work increase the of precise combination building. we what upgrades. would what do spend

time, capacity and moving point that’s see starting on We’re some come I prefer possibly existing using service from now at spectrum ourselves would to into may away that bands et what other cetera. call in spectrum

overall on in got a shift going of the the in a program. wireless bit that’s little So, we dynamic

John Stephens

your question, Simon. Thanks for

Simon Flannery

CapEx Okay. CapEx Is second half loaded okay. then? --

John Stankey

is tell what would than seen. you I different any that anything have you’ve don’t We

we had -- doing already are we quarter. we were out to don’t engineering year. We up. on going. doing in to we this if my want that about is -- is repeat things different I worried The we a was this but with I Simon, fiber, wire started turning build actually fiber place. we started little you you’re when teams are build started We’re getting the that because engineering shared fiber infrastructure bit capable. have and myself, get it go, centers the you conversation initially to intent And ready already than told the last

this. We’re time up ramping as on we next that up going speed And area. and back successive neighborhood next was the moving the a the in of and adjacent not picking is first that, the get the up it or lift started result to

we’ve smoother because So, bit increase it a might the in fiber dynamic. you dynamic of little than around got the what think,

Operator

line UBS. Your next from John from Hodulik question comes the of

John Hodulik

XX% expect fiber you Were do the launch as with video? with it content can or then, secondly, segment? and a we you splitting reliance sort question. update out us news? costs the especially of additional And timing driving And What’s build any the year, of First, on new go progress associated in broadband to increased that expect on? decline related through tell the AVOD the there sports on from or on anything you how the

John Stephens

John, HBO broadband the frankly, new to built customers. capabilities, sales do out also with the the regard the one piece. Max our had we of amounts Quite we’ve to It has let to recognition for our customers, years. that with first prior the that in the we me it’s all add increase take efforts providing gig are really

It’s of And economics there. within an the so, umbrella AT&T intercompany there’s and there. the charge are

money, tell we’re like But, in you, in that’s and going that yes, year, would game, times, and process we to efforts. growth. customer long-term a the be all good very many customer the about feel it. returns about service invest last some spending fiber as did But as the know, the to long-term we’ve is there. through also good gone you feel we I infrastructure So, network

XXX,XXX net XXX,XXX the we very at -- last saw we or look months. the at when churn And particularly the numbers, six we that, NPS the scores. about feel You particularly when plus adds satisfaction, good so look customer

So, expecting Max there. as I to the any launch not completely to know say there investment -- completely to our well dates. ready version fact. With or support this AVOD. regard want don’t I’m the as to of is some are But yes, give later year John, AVOD, more. you we HBO if international the anything the

John Stankey

I as working to launch been on hard we’ve still getting equally would We’re things. think, and out approach launch into as unified quarter be second and I the really Max And of America the driver us on ourselves that HBO platform an point on shooting for AVOD. a on for international and front Latin important embedded future important growth

should of be into change activity there on lot to as going you we So, second get quarter, here. a expect, the going is and

working of of through the issues, with done to pinpoint path. significant pretty that into we’re around and of been that the on exact the on date a that It as back of and production rework is, kind little things And do. production there’s we’ve limitations and a goes through you in puts trying team pandemic-based speed bit a One able environment. The on terms ourselves overhead trying a the a getting been job has of work up to back remarkable working pandemic-related bit dynamics business ramping reasons of of to know, safely. what we’re it has

we into to. cycled the that a wanted fighting a pipeline the of the As to at and a pace through we And as be that production. still quarter content getting bit this in back first year we’re regard that, right the stretch of dropping rate continues result

these we stride it’s terms Our we into have a And in we content the we new that position quarter. hit of product. as start know the expectations really to We important iterations ourselves inventory. to our second are that in as put the good get

do get hand-to-mouth so, month these coming done that battle we just funnel, it we’re And we’ve to California as on on get a tough, show what right and of much closures that. over we’re past put twists little and any into because be turns everything of we’ll unexpected on literally us. the bit several the And like what’s behind exactly in with the road, hope simply we’re the a out to got the discrete and on kind announce by a more that the we couple working But, a chased show the hard it’s this John, that pandemic. stuff of dynamics now, and of weeks I’m worst right and that going and went little when last now

I overpromise to want don’t So, anything.

Operator

from Morgan. question from the Phil ahead. JP of Your next Please comes line go Cusick

Phil Cusick

guys. Hey

to much you. Thank ask. So

So, then, upgrades of about relationships Company. Should the as John, for priority we And talked that promotion you overall Stephens. customer to level a wireless, continues? follow that growing for means and effort the in current assume up John second,

quick. Just really

But, target updated an an know anticipate X.X very Thanks I leverage that much. really from talk Analyst you leverage an target changing had mentioned you about the you talked can’t around current in You do turns? goes Day. about auction. where the

John Stankey

the time. -- change we’re So all dynamic Things Phil, look, a market. in the

is strategies and a things. look what determine be -- need team to we momentum. management focused we it’s to and position grow continue going promotion it’s that to to We business. a our in to growing And We’re two like think, continue on really share. and The maintain I at adjust important them have do to accordingly, the

be we’d doing really We’ve yet. in to the it had like lot the been not done some stuff of efficient But, of self-funding little with a some progress all more think, what good we’ve a momentum. really good and we’re I market. bit self-funding on

quarters. that team I’d the is trying of with bringing us high-value every customer do continue be that in And delivers, doing to our remarkable that -- And tried right is turning relationships into we’ve been unique is guidance do have treating doing is extent appropriate, to of and we’re management winning diligent I’m and and room customers, efficiency what’s what make we attractive last the to base embedded in a But, can that base kind programs, we so, strategy. swim we the that, in go on say think job And HBO totally gross so and you several really to be is our brought associated deeper that working And to continue in is confidence we I this they that customer reasonable enterprise and to share. our to Max that the team we’re have down the manage market sure a place market getting more to going over ourselves the business, a add aggressive attractive is something more a with our and using the quarter. the affinity mass mean of we aggressive. well, more a on like market we continued posture FirstNet in we that to the the posture that’s in deep ensuring what that that that sector a and it is this be, this in our back going pool offers that high with effectiveness that, give Does to management that. that want, which to with task customers more team up going lanes set for think to have maintain the in the public abilities, work

we who upset customers service. We’ve the They’re have finding had our are longevity device it. little have be the that We don’t than think to we it satisfied that our We it, customers of They you quarter, how shared are more with industry you’re population customers right. been with new like I I upset this about We are on about our interested called a think devices. we seeing network. leader don’t we service. rest We that. said churn bit that industry. in that in had targeting do agent the

have years us. XX-month getting these on it XX franchise wish the XX-year we life, of life new the with -- it’s exchange front think given everything now, lease right I on for very customers, in a lease was appropriate in the I

John Stephens

Phil, regard the conference. the with at update to analyst

the of of to flow all down target. what able tell a First our foremost, that do we leverage going That’s this normally we status free of to continue pay it is would you we We said Proceeds in you we we’re that to to would is pay prefer and FCC be that to we’ve to we’ll dividends is going from that the reality cash to excess give to debt. and because and of assets because go comment is give is down auction The more debt. can’t understand information appropriate. say trying on. to inability you of rules, it the can’t. But the at about time C-band would sale be

will it’s we that will we So, That’s commit story. the it when update possible.

pay debt. down dividend, message That’s repeat I’d is pay money used I down lot the guiding they’re debt. thing going that think, billion $XX year, the use to you, from proceeds Crunchyroll to the what things billion to one $XX.X though last give $XX we we’re and billion, year, want of to for like next

about the us for is feel we regard auction. But, to our last appropriate leverage good about and ability to feel we three we to, rules about can’t over So, what because good just, it’s comment we’ve really forward. managing we C-band the the the going of debt, years done give feel around the with

Phil Cusick

Okay.

target, X.X maybe So, a leverage this not target? the that’s a permanent changing year leverage

John Stephens

shown year, if from down you the said sales give the going at look and you at guidance flow forward. go and good debt. the on we’re go be that that I what And end we’ll the got to of about prove a can this, net dividends really it, our analyst got our we’ve in there pay careful. do. But, to said, -- talk when from a we piece record We’ll move I all we at I proceeds doing is asset think, quite cash real to frankly. just of As to conference debt we’re we’ve excess

Operator

Your line Rollins comes Please from the ahead. from go next Michael Citi. of question

Michael Rollins

a business, to the wanted on questions. just up of follow just wireless with couple I

was, X%, service XX mean And about AT&T the be that next can So, maybe to also year growth X% from? relative quarter improve you with with customers year starting and that revenues over fourth XX the above the wireless to revenue guidance to and may fourth to frame whole for you’re then the does that grow revenue where ARPU your given of the where months? at opportunity exiting ‘XX earlier the in for service that the growth with quarter service target

John Stephens

aware. math still quarter, XXXX, let international last quick take now you’re roaming. But, out, -- year, we’re Michael, first of a point a had this I think me just -- the quarter we

And going X.X roaming. to, you international so, months is compared that if be compare to of will,

So, that presumably The set. roaming. three be quarters will without will be the international one next

So, things you, so the year. into because want get quarterly say one. different. want don’t And just about that numbers I I full That’s analysis just to we don’t confuse I’d to will the be to talked

story about -- have adds things too, during million connection Secondly, X.X postpaid service the six But the offers wireless the and -- customers forth. we postpaid last and to you XX voice the with the of revenue talked total X.X adds, strategies, last talk opportunity X.X treating million million frankly, that so that believe -- just in is the with close customer and the is win net quarter, net to quarter that. ones like best net when the of about reality the real million quite network all all we million seeing best we’re for the growth. the include on us connections. And have of best adds, of adds mostly X.X And, year, our John net we during our months,

base. the grow That’s into go And that growth, what’s the regard to to got packages tailwinds great Max, ability the of about has of success HBO so, it. customer service With these driving continued and to ARPU upscaling the opportunities we’re to revenues. with continue it which the a the offer behind optimistic certainly opportunity

to is wireless that You the of years, help packaging That X years. saw than the such then going the but grow in that to unlimited to the XX but it to elite. HBO to the better going for plans we’re just story. all mobile not best kind only the the is the and going from the and from, -- buy million way to XX share up the ARPU we’ve people last the up total total up and XX grow unlimited, we able be believe in buy with basic That’s getting adds, to best had that years,

builds We’re Company’s the in revenue confidence on guidance the not and revenue what of WarnerMedia. of specific that’s X% percentages, growth, that overall tailwinds which drives giving growth. some the service from but really That growth dollars, comeback wireless

Operator

line the from of from Barden comes question David Bank America. of next Your

David Barden

is Thanks guys. be questions. I going conference Hey taking quarterly And John, this to the last for guess, your call.

done. we’ll Analyst on you gotten the at Day, everything you’ve So, but congrats see

John Stephens

Thanks, David.

David Barden

the and is, to kind write-down the $XX.X to conversation that going billion questions. flames either normal what what John a taking XX wanted profit divesting -- revenue One HBO you this Warner John, around standpoint Max is the slate. I -- Could happened release. just the with And times you from fan in happen you could with what the two movie maybe flow going times Wonder video with Wonder the day Woman looked business, theatrical of the look we Woman commensurate the that relative a like coming XXXX just of course Bros. If like the separating of with you. satellite And would do does like over year? over look out to video that to is bit finished cash the or what might have more the business. date of little Thank thing a satellite the more and of for month XX what in we’ve conversation, of like multiply course first XXXX, experience on as second business the of of then, obviously $XX kind today? free billion the XXXX is guidance kind from elaborate

John Stankey

cash try of portrayed And been set bit as flow. a to then, on how on is we the the to I’ll what with assume So, little let we up you. deal can front say to the wanted John David, end that and Obviously, debating we business it me running we’re of that give that, we context you at for we’re about step back video of why think, product cycle the best maximize will in to this, management focused is a getting discrete time. this we and when lines. And teams change some part I we the this products, be in way for figure operations way that think these change made we our have life in value

And driving the market. occurring in there case, we’ve in video so, in And it. a is seen things what’s of pretty a the dramatic variety change

life bit a understand think cycle. which dynamic TV a pay we’re You starting starting up. to the broadband I the one pay in we have know occur, declines little But, start important really virtual the where MVPDs about see as TV that’s disconnect also is to all from to

fairly And, itself, offering. virtual product in characteristic it. many has a Our a mature own respects, it’s to

And product so, we is we that I life the do it team product management thing on why wise and really stages behind on ensuring focused for made effectively, latter basis. driver that cycle a of that’s manage And getting in that mature what the decision. a the think, to to do standalone one of a

And way going absolutely right are that we going you, not forward. and historically when we’ve forward. for tell virtual business a to bundle, operate And how premise to here business, call strength the bundling perspective, them The second we use But, goal this want want I or add-ons always broadband that been we’re is traditionally is the that team these fixed are we’ve I how made maximum is second this in different had high matter what then I’m connectivity focused for bundle the believe necessary on they strategy connectivity, us. we’re just John? both, And customers I businesses around how a part going than or set very what that’s I’m end overhead, run that. services front I that for unique are that of product makes for new the go, and innovation on is growth and seen that an what the the believe play complementary asset would And our or and new really with place deliver right think, And and to the we’ve have about want in new services We for and at that they is is the mechanism that that if creation. and management business into of maximum get is that a of And speculate part doing asset position right decision to the another team to I ensure because the that run might I the model a play. delivery and products whether customers intensive of that’s value dynamic we very about with to is, be that mobile, a whether think product our from come what going they call visit-type M&A-oriented. business why we’re creation, structural value being of now not our no for sense we promise. access and consumer operating consumers on anything aspect the with the that the business, are. to customer to of on starting that’s our we think where or moving base, a will why type for now. driver we it connectivity simpler what up unified simplify comfortable time wanting never And and behind a focused have management where to to and a to do, the pairing growth position to that those for

John Stephens

and of so broadband the going of asset video both Both is Yes. asset critical the forward.

John Stankey

piece, the just theatrical if Max and quickly Let me touch HBO on I could.

is release. Woman release of many call balance is and value what the are and a in And tentpole what So, nature there between difference and non-tentpole the of a than I’ll Wonder that is our that I occurs that production a the think, slate. where different other we of movies

user other are And as going to high throughout quality release tentpole occur to bringing equally we have fill maybe be doing our releases as other that Wonder less of XXXX have power broad in we Woman. the sometimes what offerings cater base. the that buzzworthy entire those the in out in We did a that audience. slate that’s And between They schedule. that to end

the to call structure in the XX, settle we’re it’s release a of I to XX, bit if see going fair in it, year. So, we for put, what say occurs. little we’re don’t going whatever think And spikiness movies ultimately to on

movie maybe We’re intent we in that and out, design January see the that the saw every of of early really subscriber not a spikes going to put plan. we the but kind December time isn’t

-- we’re broader to have those promotion work releases bigger opportunity And between base. the marketing have that it. and across We we’re but and that. niche application doing we an every to the have broader to build around going do take opportunities advantage in going And buzz of customer filling

around this cases, But, I’ll this and is balance And did think in say this when was that moment it of appropriate little that comment and to make probably very for franchises have to how some a a this of streaming the a value what movie-going thought time. into half and of the to unique as call moving business of thought I look the view was a to from the come built base our the the year, going the late that get point of further I year, and use make the a in little stress, view. ends as XXXX. articulated early and business. dynamic theatrical audiences of have I mean, the appropriate were both the see spectrum present them a the of intense was us it team the with field part to front XXXX done which weeks, move we’re bold at into in half a It to would streaming theatrical content. We And of a unique And the maybe between the was that, occur I the of like second want going the that the had cements option other at we we with moving think, made XXXX. assumptions a to believe we first media crowded of the dynamic that our in we nice the of continuing that’s this It you’ve and to to decided year. year, of I that. this dramatically to we end say swing. same more the of call, on oversold was studios aggressive last data magically them we subscriber thought point just what And theatrical increase out press and of movie-going our points or certainly at we the this needed told was in been lot up as you there the have the on all my team in the just to since time we content that of because size just is releases, population don’t time. theaters seen snowplow that very several that showing of that consistent going set

distribution It out business. I XXXX moved lemons, And our step was here And went theaters pandemic case. was effectively. right build back and part. using economic the both felt have of we this mean, to to an circumstances asset and used a we call most that little so, And us more needed as opportunity, around we for in pandemic. of the spoiling lemonade of to theatrical call across have in a like -- out that we make sides. balances a And write-off, the think set using this scaled was on indicated think, about options all the to right for allow think long-lived we making to platform had understand, be it that a out bit nobody that we I subscribers unfortunate by the the balance this

maybe and of those of nobody and made I the to business team went little dislocation. restaurants. to applaud our because help theatrical the of slate this Any it? goes of for can all best bit strong And done time front nobody map. differently there’s And airplanes end and hotels on product. theatrical we make a little some for trying bit no a bit move something, really the the a circumstance Could our got streaming through they circumstance and to nobody around we in first that. that like have got little Just And had things dislocation businesses how had the having you’re of of a

differently. I making to And trailblazer. some There’s do get a sure margin think perfect maybe there’s to that going the you -- well. down think we nothing read. we But that the And day, to I on for and the bit You’re there were little a to end things treated people are it’s how know at that. compensated of do fairly

good been they talked to time studios planned as a other we’ve about, the releases in routine set think exhibitors a have I to owners and coming we’ve of at snowplowing. now theater perspective really, when the them have that the

innings what been, in way of be numbers, I in we’ve we are a there delivering the we get are up been that across anxiety environment, has the bound will we the in of aspects feel pretty like things end the front value shifts and as good a with through with a we consistent we pandemic. the this thing early good pretty in the think, our to emotional expected on in said experience where seen that It’s be high expected. the about board this. to end, that having the all are And ultimately what this shape

So, why go ahead and... you don’t John,

John Stephens

my perspective, still One, net Yes, worked. million is stout, strategy X and and from it’s secondly, couple almost out say pretty early. adds I’d a point And of first, things.

out Wonder I release Woman’s We’re think. days XX from

And so we’ll continue to file it.

commentary about for talk I was his your call, team to team. go but The than think, and Crunchyroll. January at is termination for of for assets C-band, get of think the here year, in plans for some everybody question, Day, today, we’ll on what we the held given Dave, owning importantly, our to the other on the the other portfolio the guidance Analyst any I regard sale with the More you as Jason will planning other of further opportunity already the through as get process. the full Crunchyroll, them that. than and to have of exclusion we’ve Xst and

see bad job And debts, and side. -- and out in you But, came And in customer number position. here flow customers, business a year on for weeding be business the side probably feel forth. flow All year, won’t the video mentioned usual, it is customer call regard results and it business. changes specific the Team base well strong weeding in free Dave. that, kind based best But, regard give the to focusing as you free great of as next really on the of a to to our assume our planning so so, said, guys a the would the cash as did corporate yes, it’s earlier out remarkably can is this good about being I in in at really which And business number, from numbers. you a it fraud the can activity, end quarter, the there last fourth as in year low. up approach. particularly, I on showing I and cash both on cash question, than consumer lower it’s are with going with of an of business the what is that inclusive the year

will comment but a my hopefully, question, for your be answers the David. think, change, it retirement. I interesting. So, be about that Thanks It will earlier

David Barden

Good luck.

John Stephens

you. Thank

Operator

of Your line Goldman from Please from next ahead. go comes question Brett Sachs. Feldman the

Brett Feldman

a seem asking generate you build a Because homes X footprint, you spectrum compelling about this using a would other reach having question don’t keep the that still you attractive on terms wireline which to of going be them follow footprint. households that passed, do up think of a footprint, is would It’s about and your million X will viable be for footprint. broadband your a out country? you residential even to to footprint? traditional And it, to correctly? that And How portion Thank year. technology Yes. of provider after is to customer I obviously do layers long about locations taking million see be Thanks. return think how economics building demo fiber that wireless reaching how really of number a build-out think you for be increasingly can additional like And of year this XX like you? the the the I’d network fixed XG How the it in adding In has ability million across beyond wireless high-speed in for But, total households XG bands, the commentary. in mind, the even to do small being of pace you’re subset a for I across up your maybe words, as question. you great homes what out you just the which your encouraging of potentially picking of if multiple opportunity? am some national think

John Stankey

the economics rural options. many your the into broadband And hardest the curve, that vendors base instances, happen move that the the it’s of policy. I broken the community is away base to subscriber, numbers economics your that look third slam investment I that decision squared business you And what third don’t them what of has last you get that different. like customer of third, start. of it’s effective the broadband start going innings your you’re upgrades, the that last the that kind the third say, of through, on, be make sound consistent third part. is the a through segment you that -- largely it’s up customer of want. cost important we here the that’s it’s and that’s and happens can about work in at scale to to we on, the start record, fruit team my the that on that the dunk opportunity. still the low-hanging start base to middle year-over-year. of vendor improve going get sitting the improve, would I’m Then teeth don’t in still the have in Brett, through a as internally, that think, If of in a last some over see the several whole And part you XX% over going through and these the for but plant the the you time, you get confidence traditionally broken a to long-lived XX% curve. And in series we no-brainer of to with if our you you’re the -- And and which and where as game, technology happened one kind to parts And is next to processes investments been what marginal part of America I’ve It’s always of execution you start next base be we’ve first to so customer the get you’re pretty So, up start really years. first level made this sense. it outside There access management over processes I first oftentimes, on learning think, get you into career. that on those Then see your the we’re I way on around think your makes consistent like out lot going get the is economically, really cut went and to we always your economics can and is the becomes that fiber we’ve that forward to

us coming you in, technologies that term. a third. major gets to space. when X should subsidy the you likely demonstrate that that actually up. you. million start on And to cheer it’s of to moving down getting not be place, that that intent customer focus at. Absent team in we applied exclusively like candidly ramp to is think to it’s be that of and next go are innings is actually believe I path. fiber And are on and of I previous I very now, with prognosticate to pass, we’re that’s base breakthrough of and we in The the subsidy the build the to can on I to call, prognosticate out But, hybrid-oriented the XX% want characterize the I’d innings something construct executes you was a through it’s to money us that more where would our more time middle and that and And to use to game, third, last going this working that lean now right Right if we’ll from all my than on even you put have returns we’re base, year. that work the tell and we’re in was do as to supportive that do than that kind there me And technology taxpayer into the some X kind don’t you place investor near of well, of and it. you that it better million comes Sometimes last if wanted that to several show that fiber a the do shared that would

from base, of back a how fixed different got maybe I and and this, a the macro think terms about level. on it In maybe I’ve think little I’ll step and about wireless view

the data people years device. if one This over behavior to drive a they away from inside traffic going example, for talk be one you you at about that’s this of amount And to been go behavior over streams, massive XX And of experts not of And household use there many And substantial I at consumption used broadcast go it look new. look around to unicast. products is mobile years. still consumer a XX:X fixed-centric for there words, or be It’s a fixed and streams at a -- moved just be ratio is gap efficiently what’s next video been and there’s going in to that, consistent amount you and grow And and at whether lot data moved, they’ve it I or consumption. to customer you has streams be just believe shifts between level. If the mobile pretty they’re occurred perfectly but pretty to bases, going discrete consumer major ratio, services. be and consumption. all not and you and of look consistent back use, and consumer traffic unicast fixed using growing. given to that delivered a that of, to trend wireless-centric how be what between other may XX:X, In happening on is still moving consumption to multicast what’s you to got

necessary think is or there or fixed to I It access bulk occurs as the what be has home, mean going the next could wireless my we’re going own an an back is of I I single trends walls XXs doesn’t And son, very wireless life And ideal of consumer the all who given been in metro his technologies some single-dwelling time. But, think be years. I know see on might infrastructure of the and business his his in portion of an still on about on provider to apartment population. area won’t be in use rich the urban the hybrid independent individual of so, way that think an a he’s be that segments fiber network arrangement think in a and fiber work that lives when actually of is LAN a forward. maybe has move robust we dwelling different on and surrogate wireless unit wireless and household, unit. dense be having take four to behavior over reach most a tail still and important. managed a bit about to effective important as inside XX in going that’s a to But, and a over to a things, that to a penetration don’t going it network And to sit little be build I a is

John Stephens

I’d earlier John fence important. this around thing comment issue, and made a in John, it’s putting the your only add really this

in fiber-to-the-neighborhood taking the many, second is locations, many have and fiber-to-the-home We step.

We haven’t done that yet.

add building So, that think if this the will it’s opportunities. going framework XX about you something about focus is the for greater the a do our neighborhoods to our about new think year. you give And we’ve was VDSL And be. you that. million of just That to efficiently million. of could greenfield are X VDSL, about the footprint than that those fiber lot you next builds, is you That’s where said a if fiber-to-the-prem, when it, out what to got to if we where John think the kind there next VDSL, the

So, for of think going that to the We That’s work. I line think us. to sales we the focus think important to us. the that that ability. that’s And I way it about for of momentum. have be But yes, a to capability need as with make really continue in easy opportunity critically

Operator

James. Your next question Louthan go Please comes from the line of ahead. Raymond from Frank

Frank Louthan

million you. a as comment any give detail more on changes sort kind fiber-to-the-home? far To the sort of Title You of year-by-year that this homes the of coming potentially potential just Thank pace, regulatory can Great. with extent say -- that what as continue months? bit a little can to we you’re doing you us next expect another or XX a II Can you on year. And is that back at decision? X over

John Stankey

a tell more So, you you in business to very profitable think, said, Frank, business. can that that what we I a business and and this a for want driver dunk you said come and million back do slam you pace count I But, great about X million I rate would build able in to driver as million in to a a be can is. X that, demonstrate demonstrate our and I we’ll a value of is you I the to just great and subscriber to going then neighborhood that tell And for no-brainer to that fashion. our than we’re X year homes.

able well, back that question…? execute a I’d think XX up first when lean we step That’s the you in part build I’m I I work to what about Where to to that through. team -- heavily do I’ll management to well, way and see if that? to the execute management be So maybe expect be team the talking its like sorry, of your

Frank Louthan

Title II.

John Stankey

the How consistent know kind of to Title despite go service And, belief that anybody, single and happen. issue I to the very regulatory that right administration latitude think, is that people And a the if more everything even okay. to I I exist, cycle the kind going away solve, the what in And of suggest hasn’t I price new expect it invest price felt is is markets and to to repeat step who solve products at third we a of if, like in happens exist, on the we’re the they’re path a allows out on II. would blocking forget? probably, II that end that went to the that’s to policy but years markets at and doesn’t that being when to we’re where wood-saw evaluate allocating dynamic us there’s and then for in to policy to do. how ourselves it’s not the problem of place, Where a to data important new for to we it able this. this if everybody happen, policy comes nobody it. inevitable back now that and it’s one think competitive reason, be taken point for we’re Look, around to reason, from doing shareholders, anything away. the in the the ask what in gets use and try this stable have problem of if four we do be how a back sign to have to needed push another But, where and the customers, around rail market can right capital a past, through their to disclosing that go approach. and itself. web try that of But third if that freedom think and that have isn’t of that throttling into competitive and certainly to I stay latitude some offering don’t and we to for we’re is rail, the us place Oh! our approach discuss goes point day, I I Title lever anybody, some terms discussion inappropriate us case, do going down services of services to from will nobody nobody going going in there hope appropriately. ask some that bought and a things away watch the I around further bloodletting based for if a recent dynamic -- over have we’re

in market, So lever. say, variable, not the I’d

homes. a is last and ironically, happened the points the of I right about what’s are delivering actually perspective, where than bandwidth two, internet issue year how out. anything and now. people’s that’s step it more policy for how speech with going and But, dynamics leave about the metering data figure think it affecting the occurring I’ll over So what’s that service from on smarter that and that to back access platforms, how people significant and to society monitoring in at do that’s are providers there or -- course meet one are real think right now the looking to to I and and

John Stephens

real proud under from from industry, is home. pandemic working. industry of to the to the we’ve home. I’m the and allowed people this regime many taking the of course call -- of way happening made the prior you are sure continue we’re think I work union they’ve is the And Frank, what’s in the investments

advantage other for aspects infrastructure tax broadband, legislation. others. it We’re there, taking those following because the company people’s as a as availability not of all it’s as well actually for out aspects, work but on working just more of the focused situation stimulus a another we’re on home the bill, bill, And

all those things, as as question? to closely, Amir, we’ll imagine. follow right? We’re more can can So, following continue take you we one

Amir Rozwadowski

got We’ve operator. time Yes. question, last one for

Operator

go the line from comes That Oppenheimer. Horan of question from Please ahead. Tim Okay.

Tim Horan

a with gaming, Are of John, guys. kind How Zoom. to with even and are that? you happening to of communications positioned content seems you accelerating, is Thanks, compute, this seat? do the owns that Teams I do some accelerating assets, pipes in that positioned move company be I you the advantage of separate you’re this virtualization to know take a more it think said makes you or of really and Microsoft and these better or how you of at take really as sense unique content, the to move point? advantage mean,

John Stankey

are to Tim, our mean, I’ve broader before. SVOD as most the is having I biggest be of at to thinking point relationship really content we having other bet use on price to at us relationships. customer foray in huge AT&T a relationships that for those is, start Max. a opportunity I U.S. regard infrastructure. we broader today, first the low as mentioned important maybe means evolving I either this own a a to and springboard is while dependent HBO big customer as opportunity. relationships extent And if and the an exclusively an losing that legacy or about single relatively with view customer successful opportunities, this extend the a we’d it as most to thinking or for isn’t an households, base that with that with think SKU foundation And about talk distribute, to as customer operate we a others broadly across it important we that offer. use for how AVOD platform engagement about don’t about

I service do are, a a the they a interact why network. are, platform software customers that hyperscalers a there as maybe have And the that’s who has a about longer them, would into with to can compute as we them hallmark is this having them, this access environments in consumption month effectively. large of means of building to business. so being return, about you that. question, And aware give work environments so, a things important what as our financial really block in that we But, hard extends and That’s I they nature, meat owning they subscription infrastructure, and with product something who right want able their insights build making think what to folks orientation like, so all been degree strongly and I kinds this of and think for do, potato of a run basis into of our to gain and with their that changing the social their customer, be some that of think need of engagement that because pay allows attach the important virtualize is of your building the with and have health all proclivities emotionally us for and in interactive, build well are application to do talks sure pushing business. think the around edge to the what I pretty customers engagement, you dynamic dynamics I know, to having kind we to it’s I’m all area? next that you the term opportunity with tighter of And stuff feel It’s on every you I they that relationship, to about

one this revenues really happen. of a is. in dynamic next that And We today. overall is evolve in to have that those We in the steps profitability attractive need our that what just step into making and

Amir Rozwadowski

that time the comments. Tim. turn for want it to very that, to John all Thanks And I much, with for questions Stankey over have. That’s final we

John Stankey

and to his order of of that business that he’ll it’s last with is mine. one kind have of hinted coworker we I all us. at I he’s of emotions point that John’s want doing before XXth with to do Dave believe earnings very-valued it mixed I you be So, and a I that let with John. very last complement call recognize out this And long-time go, been and

and in the years, for as XX Obviously, he’s role tremendous and the which dynamic the high things. as for as say longevity speaks of has incredibly integrity, think, he a this That’s if level volumes about been regard a long a lot itself nine high think been CFO as his career, one role pressured of John Company who person. a a way. high that had. years you all as of about abilities. of impact, high this significant, along pleasure that sat and of in and I and as that worked with occupies I’ve for could time, his character it’s functioning somebody I a fact

capable It’s look you, transition have what’s and AT&T. as from going takes and And we when the join I Pascal chapter. lies all navigating We’re what going about to family miss professionalism know him next on would the going to miss to but successor. to his very Michelle you ahead of be him for and his at delighted to keel coming And first reins, as expect, we a forward smoothly. you’ll what smooth and quarter to now see rate. getting think gone to you reconvene. you’re of in we’re handoff him a of incredibly I’m been Pascal nice, and know you and a all I been It’s delighted in, just the him. even support that’s

wishes in next me you, him hope you giving chapter best done join So, us. I his John. to for in and John you’ve everything thank for Thank

John Stephens

other Thanks, of kind words. for the to John, thanks here me. members the been management family for team the a and all who’ve Thanks

to I going thrilled thanks just remarkable just all. safe. board. Godspeed, to good Specifically, want And across tell people team, call the stay text Pascal you my And to to are remember, going is would everybody you, and Thank and I you wish upgrading. a do the luck, on team, drive. guys don’t great be finance job, we’re the

Operator

gentlemen, Teleconference. Thank you conclude and participation and Ladies using your for for that conference does your today. for AT&T

disconnect. now may You

AT&T (T) 27 Jan 212020 Q4 Earnings call transcript