T - Earnings call 4 2023

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Operator

Thank you for standing by. Welcome to AT&T's Fourth Quarter 2023 Earnings Call. [Operator Instructions] And as a reminder, this conference is being recorded. I would like to turn the conference call over to your host, Amir Rozwadowski, Senior Vice President of Finance and Investor Relations. Please go ahead, sir.

Amir Rozwadowski

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

on call me Pascal Joining the Desroches, CEO; Stankey, our and our CFO. today are John

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

differ risks As to described AT&T's and such, they're SEC materially. in uncertainties subject filings. Results may

the our Investor well information as earnings materials available as website. Relations on Additional are

over to With John that, I'll the John? turn call Stankey.

John Stankey

today, us to joining my all you appreciate I and ahead Amir. for wishes year productive all and a Thanks, best you. healthy of

XXXX quarter annual We that free financial consistent positive progress America's substantial a and quarter again finished results, We of high-performance we're delivering including best with fourth strong XXXX showed as we being throughout and strategy expansion our fourth cash operating in made margin provider. growth. sustained network flow the on and

the and drive and invest best places, do enhancing to way, customers and to simplifying at this, all assets experience. customer the fiber while right and more while levels grow our historic deliver to XG more operations work we efficiency network To the best-in-class

ever-growing sustainable best provide As base for the customer positioned meet communications need growth. supporting their a technologies to our connectivity with to result, now we're growing

allocating financial to We flexibility are returns. deliberately our improve enhance capital to expand shareholder networks and and drive incremental

in year on, I'd later some full quarter like detail our long-term accomplishments and Since results Pascal business fourth cover will highlight of trends. the to

Let's start with wireless.

churn, where maintaining ARPUs. strategy more back, with strong only service how taken continued our For step postpaid years historically ago. and stood than it's million additions all us healthy has far year, net revenue the X.X while full from X investment-led a clear we we phone postpaid Taking delivered growth phone low

our our improved brand start share growing We to losing position substantially and the of XXXX, of perception. share subscribers. went we've from Mobility wireless Since

subscribers. XX.X to This X-year stretch than a postpaid add As of base by decade. represents our net than than postpaid a result, best phone more more more phone million XX% we increased in our growth

same wireless and increased span, than annual team by XG by networks. added from the our fiber and network our sustained X-year revenue success growth, This revenues enhance wireless of of and to expand more $X level service about across to EBITDA company, Mobility billion. industry grew During our we've $X.X including requires that time share the contributions continues billion service our

XXX enhanced Our and network than million mid-band speeds to XG now offering experience. is an available faster more people,

excites because also fiber, fiber me We're more bringing than build where we win. we to else. This anyone Americans

passing locations. X Over we consumer went more the than passing business past to XX from years, and million about locations XX million now

AT&T continue As growing Fiber our AT&T straight net million for expand generated to X we more adds we've Fiber reach, than million base. X XXXX, annually With in adds years. net we're fiber our X.X

Over X.X or X nearly trends AT&T than customer as we've by wins new the success we This see past that years, XX% lower sustainable. churn, million grown and Fiber reflects X.X subscribers more by million. to

XXXX. to faster realize continue customers benefits XX% fiber billion fiber seek to $X.X focus than doubled revenues continue value climbed to our through ARPU and plans higher over financial as compared XXXX, significant more We've The our to broadband we than with more are our in speeds.

fiber-fueled the expanding revenues service In we fiber maintenance levels longer. less fiber flywheel expansion. to to future. our continue faster of customers similar higher drive confidence in margin us footprint, as efficient, growth, gives growth and repeat addition growth, and high-margin requires scale our delivering This energy subscriber more expect we in is ability margins of revenue to Therefore, the to keep

networks brand. growing trend Consumer now brand a and satisfaction, the We're highly best competitive leading are and our Wireline fiber improved the summary, to convergence businesses and the drive a long-term as wireless returns increased fashion. Mobility in develops. are In sustainable positioned customer We've

July, of achieved billion-plus target efficiencies. an let's set goal improving progress of this We announced in we a making target second cost we strong ahead by schedule. well $X our our for shift then rate early run incremental $X to savings new mid-XXXX. target. Now Last rate cost billion-plus savings on We're run

we're EBITDA Importantly, is improved the the fall these margin from in the line. seeing expansion by increasingly leverage benefits cost-reduction we This evidenced adjusted bottom operating into to as delivered efforts translating XXXX.

progress to I'm now goals. continue. deliver to We team promised our expansion margin in in our expect further our we the on ability made has the proud forward, business. Going of have streamlining confidence

to are flow last in our our of again allocation from through in billion, our above delivered free a connectivity XG America's Even and results. $XX.X were We previously full evident is in year The raised networks elevated priority. of investor benefits Turning our strategy capital XXXX. cash fiber our key levels with we better-than-expected investment, our meaningful guidance. and which top

free nonrecurring We significantly this simultaneously obligations. payments. while obligations higher $X reducing all clearing of our financing spectrum achieved XXXX, short-term our reduced in vendor $X.X more than billion billion by flow while we cash making Furthermore,

year-end half improved achieve flexibility below in adjusted XXXX and path our debt a dedicate the Xx X.Xx net debt in in first we of the to confident the With to XXXX. to to EBITDA now are reduction, more ratio cash range

of XXXX. proud team our what overall, accomplished So in I'm has

XXXX to XXXX we said end our of We would. quarter XXXX, objectives. like the success in year again fourth stated we accomplished our all replicated exactly strong in Our

do be Again, XXXX, to no ahead. we'll to in that off how again. is surprise here's Moving our plan should build momentum it year our it the

on approach with elevated proposition. adding value to expect continue customer and of the strength In go-to-market our Mobility, success customers quality we our

our to well and businesses customers as fiber targeting to performance penetrating intend customer like improve small- value-oriented underpenetrated medium-sized as expanding also by segments We our better base.

remaining the And we'll value growth. this, service steadfast do the and disciplined by become we favorite on win. to love accordingly, we As customers fiber, we profitable Where approach take build same the offer. we

on our XX business the our XXXX. reaches and businesses fiber. consumer as extend lead track to We and pass company homes fiber the location more We'll of end to that million-plus target by continue remain with

our seeing million investments regulatory roughly the our better-than-expected a million on As to also last remains locations. parameters we build XX to similar by returns expands additional beyond XX fiber I attractive This mentioned that environment target initial go in building month, potentially are assumes the opportunity to infrastructure.

don't access. in Internet Internet where have Air And fiber, customers us serve areas better fixed AT&T we with yet in markets to wireless select allows

basis our We GigaPower proven to and extend explore also unique we expect AT&T converged year our to traditional the opportunities be for XXXX footprint. a other initiative, brand beyond on plan to the

for to already have We is America's than network. call answer news the that AT&T. one largest converged no good connectivity and better The is network largest and North fiber wireless fastest-growing suited the nation's

best down hands There is debate that simply and connectivity fiber available. technologies XG no are the

We from owners' only that scale the provider economics on at are both benefits technologies.

to of Why is years. XX% the over each in continued this excess so has year past Traffic network increase on our important? X

position an most footprint, the marginal Our in the advantaged grow cost unique puts to fiber structure. the pervasive with network at U.S. position largest wireless us

that continuing scaled, or At the get right on States. in flexible AT&T, networking the the and they open to where breadth networks investment at in to no to Internet this making doing and we're moves United address how a are by our second matter deliver We're converged scale increasingly none needs situated. customers' high-performance

effectively package to every segment most the the secure, price. right and well to the technology effective in with in wireless right in literally to from right technology the customers. existing corporations Our largest allows multinational and market combines the high-performance most us basic consumer satellite seamlessly grow commercialize Accordingly, at mobile the that our scale fiber, solution presence strength desired we're positioned networking and fixed by

company and will in is personalized part This by our customer This This a channels are become everything more increasingly efficient further AI. converged customer future. shape help for experiences put being XXXX. effortless includes of all prioritize enhancing truly growth to in first the and orienting required supported simplicity the to our do digital we work self-service and the that and

cost are $X announced on efficiencies savings progress another achieving make rate target run significant by of we efforts AI-driven as our savings mid-XXXX. our also incremental billion-plus leg

the where operating we XXXX is in suspect I our to direction will the that the formula X the come. momentum shape a have to enter as momentum over industry about broader right our remain with pleased AT&T of established In exiting summary, decade year positioned I'm last the continue we and industry optimistic the years. improved in

over turn it I'll Pascal. that, Pascal? to With

Pascal Desroches

Thank you, John, good morning, and everyone.

John maintained we've our XG fiber. As shared, momentum and across both

by our the full This offset growth by Wireline for in offset Let's up Business the Adjusted and and by up driven was Wireline. decline a financial a reviewing by year largely Wireline. the quarter fourth decline revenues was revenue, full Revenues EBITDA wireless year start partly Mexico. broadband Consumer X.X% for Mobility, as were X.X% Mexico X. service on the Slide in Business and for were partly and X.X% X.X% for quarter quarter summary in

EPS down interest, equity $X.XX, rate. adjusted XX.X% lower quarter, due the noncash fourth income was capitalized the for from a DIRECTV effective impact tax costs, from to a $X.XX lower pension higher higher and In quarter

from our low previously of full $X.XX, with EPS the the stated adjusted For line year, was operations continuing expectations $X.XXs in range.

in was Free including cash DIRECTV quarter flow about distributions. $XXX the $X.X million for billion,

taxes about cash above even an year, $X.X full $XX.X our of year-over-year We free lower and $X $XXX flow. or free of is up higher raised cash billion billion came this guidance XX%. in about from the in cash cash already of we For billion DIRECTV. recently growth improvement with This with achieved million distributions flow

$X.X as previously for activities year-over-year. came Cash financing billion reduced from $XX.X mentioned, in by [indiscernible] billion at we obligations up billion operating Additionally the $X quarter, year. and last

$X.X historic billion. fiber expenditures billion For as continue investments capital to investment levels. were was at Full year in of $XX.X and capital XG invest the billion quarter, capital we with $X.X

FX our burdened strengthen to year-over-year by $X.X for we $X.X We also was billion, debt. continue by net Last debt related about changes which rates also to sheet. in year, billion foreign balance lowered increase

the of last business. of We pension of all wireline liability annuities billion insurance part despite the declines in an done spring. meaningful $X additionally we've overcoming legacy this transfer our through And purchase completed

our on X. operating Now let's Mobility look results segment Slide at

revenues Our for results, the Mobility business consecutive growing sixth continues strong to both EBITDA deliver year. and

general which customers. resonate with phone of industry net the are XXX,XXX and some the that the wireless strategy, of given the by consistency the high-value pleased promotion adds quarter, risk with postpaid of health go-to-market for peers. We to success continues our our our demonstrates This particularly

X.X% X% more the and In to were were profitable rose up than about quarter growth. steady Service improve, full to Revenues also X% revenues for revenues quarter, the year. the the they continued service year. subscriber up while thanks and for for X.X%

was up about the growth or Mobility revenues. driven $XXX million for service EBITDA by in quarter X.X%

to full and grew the Mobility X.X%, see year, we For margin continue EBITDA year-over-year. expansion

higher-priced unlimited largely year-over-year. was X.X% growth pricing trading to Mobility continues targeted up customers ARPU to plans. postpaid actions our phone $XX.XX, from ARPU by be up and driven

phone of Postpaid quarter historically for the churn low. X.XX% remains

continued getting churn clearly prefer low value customers levels they proposition the demonstrate Our AT&T. are from

the In service encouraged than lower. at business phone and phone substantially remain churn grow as overall to will with industry our a and of less customers, was expect in are healthy to the clip by X% confident Mobility again we health prepaid, wireless that in deliver our [indiscernible] continue EBITDA churn We revenues XXXX.

let's move Consumer results, and on X. which Wireline Now Slide Business are to

Let's start with Consumer Wireline.

operational financial of As continue expectation. is exceeding we win. we and to fiber performance John Wherever business initial our have mentioned, fiber, our the

fourth we moves. added experience and quarter, customers. fiber accentuates it quarter This even provides customers slow of in seasonally superior fourth the household resiliency and year-over-year XXX,XXX lower the the a In fiber

up revenue now growth. $XX.XX, revenues than intake Broadband more fiber $XX. ARPU Fiber X% grew to more sequentially ARPU was than due at $X.XX year-over-year with

than by Consumer our the also of And and more fiber. our the this of XX,XXX the more AT&T full service. while growth year and grew Wireline for to XX% profile the now efficient parts at remains AT&T the Internet focus fiber We in X% the than cost been access we've air locations. of fixed more encouraged offer and initial due Air, and product, Internet service lead for introduction revenues in subscribers fiber wireless had targeted XX of quarter EBITDA year end

discrete million $XXX not Business was down about to the was of items, This primarily in repeat Turning that XXXX. intellectual had fourth quarter. we impacted in by in property EBITDA XX% fourth quarter transaction revenues the of XXXX about Wireline. quarter the of did

expect we on moment, Wireline a XXXX. to EBITDA in full basis year improve in discuss will Business I in trends a As

service we Business grow the where area grew nearest nearly In This quarter, wireless our is faster Solutions fourth our an continue than peer. to X%. revenues

us for sequentially. to about continues growing growth also connections FirstNet be vector by a with wireless XXX,XXX

move to Slide Now financial our XX guidance. for let's XXXX

Here are for our year. expectations the

growth. expect but we a to First, Mobility subscribers again grow against normalized healthy industry

This ARPUs. base the the year. subscriber full postpaid We larger a revenue modest phone also anticipate growth in range in result in from growth should continued service and benefits X% for wireless

X%-plus of growth consolidate revenue to mix For we expect fiber Overall, broadband, we to growth subscriber continue shift reflects for higher expect continued next year. ARPUs the and full This fiber. from the [indiscernible] year. revenues increases

trends think down disciplined our to digits we grow the about grow EBITDA in minus. we approach Business in us EBITDA about Mobility As to XX% as valuable subscribers. XXXX, EBITDA be In expect mid-single the or to Wireline, we plus helps expect

expect declines Wireline be cost offset fiber wireless legacy to Business partially incremental and revenues. by fixed increased We and savings

Additionally, our impact our of guidance expected of reflects the services the deconsolidation business. cybersecurity

in degree, [indiscernible] we will grow range, a to revenues and partly mid-single-digit continued by the thanks decline wireless Wireline, legacy to This be in growth in expected subscribers. In in EBITDA expect Consumer revenues. lesser offset to continued fiber an growth fixed

benefit this X% adjusted growth cost expect These in full the corporate for combined range factors from similar to ongoing year. deliver last Finally, consolidated year, again year. the to reductions we EBITDA

Moving to EPS.

think what your when about to calculations. Here's do you

full reflects through on following: Our and this impacted our continue include we Nokia to about $X.XX assets of XXXX. guidance by $X.XX, headwinds year which depreciation. noncash expect Ran accelerated from transformation, depreciation half the is Open impact Approximately higher

depreciation other and in our declines XG pension costs half prior is from elevated with noncash Headwinds in $X.XX approximately by amortization. higher benefit builds. driven largely fiber and incremental The credit service postretirement of associated

in of that reminder, post-retirement service a As our are prior years amendments plan benefits. the to credit result made reduced benefit prior

as the these credit service service amortized equity a XXXX, $X.X In about Under or XXXX, to positive period was GAAP, $XXX prior $X service planned amendments the expected of and a and million. of over recorded prior other credit billion, amortization income In of into amortization credit to be decline participants. which is impact billion is a we income. expect contribution

in continuing years Next more year decline subsequent decrease prior moderate in changes amortized. as amortization, to year, prior become we fully planned credit expect service the a

amortization our We have document website. in year on provided the of by the footnotes Relations our trends annual financial Investor projected future supplemental

Importantly, this pension a assets pension any plans pension decade. don't including we balance of we material for to obligation, required lot have contributions And the certain our continued year. lower to of transfer our [indiscernible] last expect our and

$X.XX also deployment In our these guidance lower other includes addition to DIRECTV, significant noncash billion XXXX. XXXX. interest which beyond from as These capitalized expect don't We completion of headwind a interest lower be about initial from to of adjusted be to $X.XX spectrum-related C-band near items, we impact $X.XX from equity a the capitalization versus spectrum XXXX expect income and impact in in $X.X include headwinds. $X.X we billion

expect Lastly, rate. we the an rate with XXXX in XXXX effective consistent tax

$X.XX assumptions, expected $X.XX EPS for these range. the Given be is to adjusted XXXX to in

in apply these Normalizing our would guidance for consistent X adjusted EPS our growth expected items, growth with adjusted EBITDA. XXXX

again in be expect to We our in adjusted begin to position a to EPS grow XXXX.

free to flow. Turning cash

consider what XXXX. for to Here's

the in growth EBITDA range. adjusted expect we X% First,

We law. taxes also on based $X.X about be tax expect current up cash billion to

we XXXX, $X increase XXXX. around billion over anticipate to cash out look we would to As taxes

about billion, prior the million were compared year. from distributions $X.X DIRECTV in $XXX down Cash XXXX to

forward, to similar and rate Looking distributions in decline expect thereafter. XXXX DIRECTV cash at a we

not that I'd levels XXXX, end also and debt to of its AT&T. DIRECTV's out like debt changed is since materially to nonrecourse point have the

Another lower to cash capital impact free is investment. flow

range. expect levels investment $XX XXXX billion capital in to billion $XX We the

this move investment and in free capital shift a to project financings cadence. we vendor more plan also Accordingly, flow mix ratable vendor direct even obligations to increases. It's shape as cash decline and an as financing note short-term continue and down important direction to our year to sustainable capital of we continues the pay quarterly that favorable supplier spend

plus obligations spend. from prior there reductions current significant year, capital use payments investments our of saw prior in less payments consist due we financing. in year vendor be year This than would capital spend Remember, of XXXX to

higher spend However, in projects. the year, we expect do on

When Xx is than factors, greater year. you $XX other to This commitments. to flow these this to in than annual all dividend we more free cash enough combine $XX common range deliver current and cover the billion billion our expect

cash discussed year, to the Last free was in on our back-end improving half. to about flow. XX% free cash the ratability we our make quarters, of second continue As recent loaded we progress flow

XX% that to be expect to this We closer year.

at to EBITDA quarter flow free cash XXXX. of enable achieve our Accordingly, in $X.X first flows X.Xx remain deleveraging progress range free billion. fewer will we combination cash and increased continue expect onetime to and half XXXX debt items adjusted Overall, of of least first to track the the us our target in net on of

our for that's We're presentation. now Amir, the ready Q&A.

Amir Rozwadowski

Thank you, the Operator, Pascal. to take we're question. first ready

Operator

John come of will line question the first Our Hodulik UBS. of from

John Hodulik

Great.

but the but the phone thanks on free Pascal, postpaid gross in X.X on added flow, the in fourth we cash growth First, the all detail a quarter. 'XX? million the down adds were focus You of bit can sustainability for subs,

of you're could And about shaping how markets, you you the segments, color and I X SME give about here first that first, 'XX? up? Any the guess, us can you underpenetrated in address an seeing to talk in segments how momentum talked expect terms of underpenetrated converged. then, quarter you how value, or these those [indiscernible] opportunity these are competition John, big and is the

John Stankey

saw first indicating, So from aggregate -- look, previous all, bit a that slowdown we've activity little been we the year's thought was going of the as 'XX. a in be to market, there happen level. of in We

expecting I going now. is a right We're continue think next that to we're into level kind at more of year. normalized

that right market going see our to we've X the over way place. the it been been it. dramatically the probably we're continue We're years. expectations about same around attacking attack And to different. same going really will to the And It not be consistent are last we've

to over than you've of the And the tactics the and should years is of there we any be and that the market our now. to previous I what less think see market And seen right a expect couple sustainability going healthy you use. is don't strategies performance

I quarter at the disciplined profitable what and would on look at fact net gross postpaid trying is would say it phone be think the fourth an on And growth. around delivered that look reflects accurate I statement. if to adds, incredibly your you we point we're

our very We we outgrow by levels already very that did that channels being on promotional has our to and the that managed in. disciplined reported. one We strategic operate in of being peers

which It's to we managed that We've I've that. helped As level, level do customers easier calls, while previous churn keep them incredible [indiscernible] the to growing delivered out. churn we've us indicated on an churn ARPU. keep been always

leverage EBITDA We're fashion. driving a strong and operating growth in really

I to where is sustainable we're incredibly right think a we that's tweak was to what are doing some alluding know in the And things better. areas what We're probably do equation it. some of with bit little there we now. could that going I

I that of and adjust kind numbers we playbook and of against we areas some suspect are at in companies bit that we They're we do it, yesterday at that the from at looking approach can and look better like in. And regional that. how understand said they we player probably they the new reported, Verizon players play as market. things do the of some looked all we a that the a little can what there have kind

going how business. everybody to comes all understand My incumbent the and guess reports, see after wireless carriers run have to our quarters. had large We is effective very out X we're

we all how we're around pretty I being think it. about go disciplined

up levels as invested to into I that think returns and need of year. record make sure those for sustainable me, a of record to levels we're at the kind driving of outlook And that we that we've very we're investments. lines next fact on move all conscious

Operator

Stanley. Morgan of Flannery Simon And

Simon Flannery

where first at Wanted next sheet. hit We're looking or back to of the to of your time you X.Xx sort half year come balance 'XX. this now

you or great. opportunities closer. that be thoughts How And So at can fiber your give would then it's million that weighing that. to this the additional that your ACP us anything be on stock out BEAD, delever attack might or you either buy latest XX XX great to further? getting thoughts if would million how and exposure point and to are It on get on homes back play your to

John Stankey

Sure.

So I and really first would we've it on and all, this, of been doesn't say, clear change.

First level invest business we make think we to foremost, sure a our returns to to grow that the right drives we can in in at want way sustainable our it and that shareholders.

we protect the a return offering absolutely balance and dividend make then we have When want on, to the that we're the is and sheet make the to Secondly, the decision. where get that point, is at something fair it's getting we arrive to time sheet critical. that sure balance

to based rates continue us interest made has the have stock what business in is we in relative decision where trading, are of a to And front be the to as environment, where opportunities to All there's Board's grow country for opportunity policies this into will how things deliberation. get grow to things think us where returns. on go fair and in those evolve and the we

you're on, are is what around capital. what we we I though, important think do doorstep the touching most thing. that's about choices enter have the we And where to with ready that

And back to from on you that we think is progress investors, those but [indiscernible] at on for be that in sheet, our in step structure it of team. doorstep progress an business commitments of thing hard all the back and we aggregate the not year look the XXXX just the a made improvements of of that delivering have to in the incredible of made balance management we the have And momentum the the our fundamental and amount and I and the shows the exciting work. I really

tremendous a front of have We in optionality amount us. of

we're that with on will in pay the we flow that's in cash good we've our maturing carry us allow sheet our organic and and been really paying our is [ obligations to out shape how how of the shared debt terms As ] you, there. able to it in balance down rates

we really time. ensuring at management It's in on of the best go And what focused important to as and a that is the view we there. most incredibly choose to and driving know value, field of is the wide to we more the And us for do interest shareholder to being drive open value it point get our stock. is And us as that shareholder moment we important do. we it's in arrive to all something as what that wish so wish will team we we at. and And to to the where is

On the we're gain an regulatory comment guess the the unfortunate ensure have ACP from say of of subsidy awful that side, over I this the I American make important I'll editorial Internet. is lot can that's that moment, to deliberate and at it's access structures perspective we today, every are that in to -- they're which

we to place them the in Internet ensuring they approach to in get to able most afford that changed. so point time that view, And to need those different kind be and allows from that they've all to regulators that structured now energy subsidies, from of and have should spending shifted their ago. those structures cases, need the run that my and as a capable, a all And stepping access in -- how set coherent that subsidy today. get and access scalable been from everybody back subsidy country, we can and right to be understanding unfortunately, do say the years and are constructs many them as were their and that step many so critical time Internet can of to funded back things has industry in under products And up have take

reform, a that are I universal will If and money combination there, programs think political of out for policy it ACP, is and service our good for that a forward would other coherent a there be put that country. And was good through the industry there.

don't moment go. to goes, I fine. at it are ACP. way it's I Unfortunately, we'll either tell going where one we triage will you, looking now on a program, know be

choose isn't it that will what program We've year way deliver guidance and other. we plays over government and they given the our the have don't ACP. move one comfortable we what cancel fund you going to break in do the I'm on on plan to If can can chooses that hang with fully to knowing it, forward it run. next

approach things to our and what it. have customers do we'll respond We and do market to the that how with we we

a we manage manage the company the believe we to of the do we can to go fund our it that or future kind get AT&T and moment this holistic regulators and And of trying approach again. about lobby some other If the they approach continuing it to basis, don't and of in an be for will revised what way market. way size so be to fund should sustainable effective more that context and we go do how through on we right within they this thinking in a

think some battle us for not circumstance I the to away, thoughtful that go have it's in It's approach we a important that and can last-minute it. And will thing all of to do.

seen in couple their know some moving don't the has changed a of on incremental forward that we've than process. progress side, I other lot Simon, BEAD On a states

the last works you shared of As I we'll I ultimately this into how its probably BEAD with time question, recipes market. asked have XX the different was way

XX XX there on between states points of and view There may be is different but the of some this. each states, different similarity clearly

the I in and both terms very sector we're we the to of measured you are the as as that how investment targeted going think right be go well incent that. joint right to setting in, states for operate are rules where as kind rules that in up sustainable of that private the

like of financing. Seems to effectively I think was policy-wise, the sound a news work to me in It a benefactor Texas, me BEAD can point think we the to largest have I they story looks like is good approach state a pretty state. I to things.

good opportunity we'll large have a probably Given amount, it's a there.

not my million XX in I the There's to of a have few are and line organic and opportunities going policies XX said at the comments, as opening At day, build. we to I that to up sure effectively. other the million end and look say, I'm go states invest

BEAD what circumstances, cost is very higher unit is footprint. those organic us substantially for and per capital pass what measurable In to non-BEAD and of required would being per controlled areas. It's the of I private and what than market-driven know build that's living We average number. our our the average cost actually call the a location some amount is

that. so And try in the deep probably And in if that that to that the pretty getting are smart from weighs run to the to construct private shy existing with more in places and to ultimately your households those And to plays coming of I more scale some faster have very states voluminous going get I understand that understand think more incentive are policies to amounts requirements are what be can areas. against competitive areas, that invest. about up away scale, straightforward, think maybe I is cause with that's states matching capital don't and where

Operator

And of JPMorgan. Cusick Phil

Philip Cusick

talk in general seems wave this year, maybe wireless about increases is John, the It one. consumer of ran just price through and another Verizon pricing like slowing. inflation-driven

over Do you effort. little AT&T this space? possible how you maybe expand think think more does in many there's the more And more on a scale price take are time? markets Air year? just much to And room the How postpaid then this

John Stankey

drive our which can at string I with whether or probably value asked about we same where changes I'll just on value. up back every aligned we into give think think give my we kind go look, data suggest I'm time price deliberate driving a incremental pretty been add pricing and of this, look ultimately it. points the of that that could answer not additional there's to and you I observations are And on So customers is buttress to we've

getting They to networks. the of year. is XX% of out as of allowing I of more are earlier, our more a utility and over heck mentioned we've invested ways. things and do, we it in per using what capability the more And People are networks a more lot do them

And to as a I and that investments is in see result some places it to us in. growth. of that ARPU in And think we're putting drive certainly go the you in, of value level that, our allowing remuneration

we space. guidance next with our in some we expect modest in think the wireless through accretion probably shared I we as that ARPU year move you

you plans I'd movement. record. higher-priced to through from moving will Some I and with on I up pricing it come and will go more come track tell would of whistles, some bells our rest that people and of

You're seeing the numbers.

we've to able what seen do. been You've

may we churn the of it another -- can I run And I know, pretty market doing quarter be think to doing that stealth. we many performance we've it, and in darn to think plays same it at up don't is of ARPU that churn end I we're with close the or record We'll best-in-industry with we're levels continue run. quarter.

message think this. to how we So my I know is, do

done I it think effectively. we've pretty

about diligent pretty I think team the it. is

business. opportunities to do continue us I think our inflation-driven we've way XXXX not. I for plan need expect to do business what have been running running and And we in deliver to the the to or that the there's we'll do,

date. don't same my different pushing around are in not Air, narrative some others it the to again, that are the going the AT&T On be in market expect it. much way we I that to in product pushing

that we fixed to It market. mean wireless and does. in needs. company fixed a to broadband stationary doesn't conscious that we fiber, some that a as with choice deal segment long-term sustainable investing It believe a of we want dedicate We've to the more don't made means which think is capital serves

of in we'll space. advantage serves types certain circumstances certain the serves It those circumstances. of the certain in base. types It consumer circumstances take And business of

I've usage lot year. It's have lean small wireless that that there's something we this that to. fixed said, businesses of very will attractive into profiles is a As

the move throughout see we in it will reflected You performance as our year.

in to because spectrum a where the market more on. operating position see actively it associated competitive bit away a of And our product. service in consumer the with very out profile costs have on places and defining use those maybe of begin our little transition our we markets, to have product in we and can with as as lean that will shutter that told footprint, segment the We catch assets you our I've us fixed particular we that as this from might degree begin before, add aggressively serve can in to will use share continue penetration copper market network, you a we and very, infrastructure miles we square not take legacy some

there our to agreements, still or characteristics the what's meet yet not us our But et build in cetera. and of fiber catch especially allows of effective very the built we in given we franchise product areas, obligation some haven't it back that customer those a happened It's will to state density base fiber.

us great don't I you It's numbers So grow. to think but of our you're the for tool. quarterly to ever see from coming opportunity competitors, scale a and to going a great continue monthly it's kind of see a numbers

going continue we positive, the understand And seen I is you've think thing important broadband broadband aggregate broadband going aggregate positive. are we to be forward. most to as to positive are

And are to be only that base. we So not of have sustainable use that this start will to growing one EBITDA, tools we've think growth seeking. we're been we now I ratable the growing customer the going

Operator

question Bank We from of the have David a line America. Barden of of

David Barden

Is to first elaborate bit Pascal, flow capital in parts of a moving cash we you equation? XX potential see I guess that on where could that of investment within Or little range the it one, that the other XX? on the guidance. if kind don't lands are free there dependent largely

could support game effort XX plan of and kind there? guess Could you've which I a contain way bit year to by in at free you the to goal that, back you this doing, XX ended door the little flow guide. XXXX. passed. it capital an by John, end is on out got maybe, close you fiber the that to And million million to The of the investment choice the of you you've year the elaborate Obviously, the kind of throttle XX related kind a or continue deploy cash been to homes puts

Pascal Desroches

good cash. about XXXX, spend. over And think more in course obligations. I to We've more XXXX going the be way down capital financing the the in it's made weighted spend heavily short-term I of some Here's really project towards at paying progress therefore, look as

to really and feel you, line we we range We provided It's to of good within going have the be sight on that. really good about that.

have The our for to based good reasonably line year current other on cash legislation. factor it of sight taxes that is we the

We good to sight towards where lands. of have pretty line that

be how investment. from I growth don't in we're going financing of may we're expecting down capital to the step anticipate capital, lean decide coupled those. driver That's with to the to Obviously, to doing, working short-term continue into any material grow. EBITDA albeit reduce upon headwinds depending we the obligations to

really But from are grow all, the feel there. the guidance look, the all ability factors. and those to business to in swing deliver on our good about continue So I

John Stankey

question That's you commitments. go tell to back was we deliver. way do. say, to understand important the about earlier made Those We've first you we've to a given would guidance. Dave, would the what us. capital I to that of I I and to and asked you, set need we need allocation are And got what foremost,

or where whatever here plan in we we themselves would to context And a opportunities efficient, in you of, you of incremental little -- has be not a ensuring we're business there. are were different a that a say in What present we go variety are I to we're There to delivering making ourselves making to of we get commitments. a to present something our our more it's homes do you, ahead there of little within tell decision should else that ultimately or fiber. consistent undertake got back well, decision just places with choice have can

you, side, And advantage to they pop you changes a could in commitment we a we million I something to meet know, that's go better out and and a where passings. see But in we don't vendor efficiencies get of I to of little bit back of circumstance allocate that time seen somebody And comfortable see in more we've we'll something we're happen like and wireless every decide tell coming very get where we're great up. going things results XX we GigaPower comes and pricing, our more those we place take capital. would -- on the

are things consistent back going And those our we We'll make to All decisions. We'll of to you within and tell the we're make commitment meeting sure you. context want come we'll to evolving. weigh we'll do, in, we're all what them. back

Operator

Michael Citi. Rollins of

Michael Rollins

for economy of And just stages how can more businesses. the the your curious I'm you improve of share you're what of the and in to of segment? in operating that performance Wireline consumers terms is planning Business seeing for AT&T playbook segment,

John Stankey

Michael, happy to.

of year, year. that favors is there's place. up of probably probably policy continue into economy It's this seems the it like right an terms that proven to to lining election year. winds that a the trying would it going look, going be like in to resilient. Not be expect it's economy is growth into an you I'm what keep moving to soothsayer election expect reasonably I So will great moving drive important the policy, but such in resilient

the was terms that's move inflation going And and continue I do of through tenuous in be economy park probably and probably and to might rates we think XXXX decline rate what the one along will bit that see us last take a a situation where to of growing. of year to growth that what

Our expectations growth. [ are in see ] that uptick we're going of kind some to

inflation see to to we But that bit little bit combination something level going to on economy, target the keep little it's expect of still down. what's in higher tampered a it's think the and in probably a going productive. We relatively aggregate than be it

with position services seen they're paying the We not or consumer buy that continue haven't to us. not a to bills anything from suggests their in

certainly this concern don't causes now We of right formation us any in see anything business that degree juncture. at

pretty I So variables feel system what we like occurs, that policy global we're place in think well. will pretty the by and in line XXXX. exogenous we call large, a Absent like moving would I probably feel good up into big

nearly a first in certainly onetime acknowledge his expected [indiscernible] to That's side, Wireline not $XXX explainable, I stuff of the we couple repeat. million would the had was Business of there's quarter we I'd of in one fully say think kind the that We fourth have is something be the case. stuff what one, things On comments. that didn't right

expected. subscription-based 'XX Those impacted we we probably that they were revenues over revenues more of at for beginning I important cycle higher -- because are wholesale think piece in The that services. what don't weaker margin, than further transpiring the up to that the the segment that was resilient, segment 'XX the ended be tend course planning of

There's restructuring relative been industry in to services the and wholesale. going access a fair on amount of

it's consolidation, been it's of technology. some new of Some through driven M&A

of through, now. we believe, We the that are worst

We've had forecasting different contracts. pressure better X renegotiation in good lot from repositioning don't position that we're things of side years that been expect that is pretty quite 'XX think is have where fundamentals kind we of our to than of we're a saw with and a for where a We and of bit having to the and deal from we that have visibility going perspective. of

into shoots to mid-market. focus And execute amount we seeing have how information and fair really given I've in a of then occurring. the to a the we're be we And green shipping much into provider differently. the are, go effective on mid-market of to I and that fact, trying more

of our represent I which cultivate what differently moving might doing. new effective rebundle relationships that I we've we've little than distribution in be a owned us bit open through slower direct call up to entirely us to would It's a new It done like. channels, than with been to products It traditionally the operated requires what requires and us repackage ways to and channels. to products requires space,

us third with. that to And parties do like reprice, build things change requires work systems, capabilities for to

seeing products we're that and starting instantiate coming itself want which to and revenues progress, that. and services. are products making fiber-driven we in are on see are sell, services connectivity-based that We We're to the

to important And also report only, marketplace understand a step We've continue that better to run got you But while I'd so an we're we say at us. should plays. for that little marketplace back is business and realize going wireline segment-wise to to bit those get the it.

still combined growing in we're and EBITDA a wireline, on segment. basis, wireless that And

wireless driven a is are it from their more businesses of goodness the the core and And run company being to on infrastructure. some more of able of

the being asset of of that cash on from we Air pressure when side. benefiting talk the about the be to in fixed some year for the put on you're that. do wireless better we're things much that Internet will this seeing an like the but we business, us, on AT&T wireline a And and opportunity And position other on some side the pickup of

frankly, structural move trajectory And one move run. I over for a a the think long not us that is a bad and that's

that's of segment how the in. kind So I moving view

have well. high ultimately our becomes And in think walk We want incredibly I further brand distinguish We've convergence right have optimism still and will them get got important, plays if the can that properly. as can customers mid-market. we that the ourselves in credibility. products we And distributed more we

Pascal Desroches

to just as add Mike, other point one well.

hard. As that legacy to revenues have continue to continue decline, costs sector in hit fairly really opportunity we an to

And the will I'm that, be confident so that also over time. losses moderating in a factor

Operator

from will the line question last Oppenheimer. of Tim of come Our Horan

Timothy Horan

Can parts kind you're And like sense, It the your longer-term maybe a seems cash free relatively cash what about flow peers. lot of talk grow intensity of capital you year? for versus still high you of you flow, seems intensity can is capital your guess like a moving and this and can, thinking currently? I it free in

Just cash around longer-term some color growth. flow free

John Stankey

Yes.

going the back not the we're issues, should -- allocation capital of levels at be investment that me at forever. Let right now Tim. on that believe Obviously sustained we

infrastructure that for infrastructure years last a build building is that's view we're that will will of franchise point Our sustainable many come. to

time for And end, incredibly is beauty this do The out long an investment the lift durable capacity to technology glass a the the once go improving in got relatively fiber hard the is The incrementally a but on front is investment. at ground. you it's reason. light one the it levels of on a depreciation a

me of as this investment the revenue mid-teens front should as in through we a talk state be steady cycle. of get heard kind about at percent you a So end of we

should continue perform the way I'm As on comfortable we that. as we've the to that continue investment, long been level of elevated this to performing in market we do

kind right perform But make results we've on that. to continue to sure the we got and of deliver

juncture. worst come So the we've this of at it probably through

another on interface what We air will do we into we're fiber investment. kind need to before get through of

the it get fixed levels some intensity some us will of of give made to moving remarks us and to we investment the that I returns as public forward. December, I to fact portfolio to The way manage to manage to going the I tools another kind to that my in one capital to do of And in not that be we need investment historic mentioned that wish of will mobile it's kind services of our of way ORAN our is that different drive between we're capital describe moving of drive.

and in the capacity do of of in ORAN that get on do want to our investment gives us to going fixed wireless we some fashion forward meet the that our room that side. efficient more network still a growth tools the to moving more We're out of our things needs to the do

So I where we feel pretty are. about good

it. good on we're efficient of move continue we get performance. I We'll get to shape. more where We'll as think I we're can we based worst it our that? anything Pascal, be selective see want you through forward. to on market returns those kind did add the of And on overall, think in

Pascal Desroches

we've as obviously, the working. said look, And we've been investments are making, I No, look it. forward,

to operate the committed a mid-teens We're at that deliver value And intensity ways to capital also term. to that. plan also allocation looks shareholders. to expect all committed We having to long for we're capital

Amir Rozwadowski

very Thanks I Tim. John much, over comments. it to final turn for

John Stankey

atypical you you the some with guidance we about not as sticking enduring but that's longer thanks. business. prepared at end, into us, the I that. appreciate and give to of the and Well, some And visibility everybody apologize appreciate remarks I front try

would from us proud what parts thought the across XXXX the I'm done opening incredibly the incredibly reiterate year it. optimizing AT&T. an was as remarks business an what the at we in for move formula that we've various said execution I my through of in solid just of I I board perspective and

year solid, all history, in think the very flow at a certainly manifested If a them remember recent statement. It's you balance fundamental I see time. and the can I about our fundamentals, sheet through those in AT&T a as long cash way

position. that's strong we think very, XXXX back XXXX. important about I'm healthy and realize thing I to And where enters kind enter and very a the step from this in most excited business of

of that steps do future I great some are a have more in simplify base lines for entirely asset AT&T. that it's focused on but regard, still the to believe And We work right business. taken to well up we We've future incredibly our now. the

we're the convergence, the going. changing, of asset believe growth where to importance to is seeing are that's the positioning I as and tastes move consumer As the move and as we future the has base with this networking, occurring see AT&T high-performance

where what I'm going why us. we to the that place, optimistic have in would worked like very have hard And that's front and think And we about we so have of start get so front to of of we XXXX I the to us in to choices get. exciting we're a

one last we is last to do to for us able with before call him give we a housekeeping the what his I'll [indiscernible] business. years. be we're like give We've the to and X able final do we And you Amir's chapter, that separate. hard he's work what thing This learn any and about us. in going him show to to been on guess to send new is worked need next I hard, about him excited he's we opportunity

management me bit. as to couple result of those add We he'll welcoming job that. be Brett. been And an continue might AT&T. good keep the Air in around a to you it's of Amir in We're And as forward. delighted to addition fill and as Feldman He's to Jordans, you exceptional we'll moving has hope I a done, job hard Brett. a really will you Brett sure team. that, do join A work think And great Brett to a hard know of loop the I'm little to

we'll this and you all in very your much thank morning, you days. XX see So time for

Operator

using does that to you your a for wonderful today's day. gentlemen, participation, service. and Have you our AT&T's Ladies conclude like We'd thank and earnings for call. thank

may now disconnect. You

AT&T (T) 24 Jan 242023 Q4 Earnings call transcript