- 120-150 million HBO Max/HBO subscribers by 2025. AT&T expects between 120 million and 150 million worldwide HBO Max and HBO subscribers by the tip of 2025, up from the 75-90 million projected in October 2019.1
- HBO Max worldwide enlargement and AVOD launch in June. AT&T expects to launch HBO Max in 60 markets exterior the USA in 2021 (39 territories in Latin America and the Caribbean in late June and 21 territories in Europe within the second half of 2021). Additionally in June, the corporate expects to launch within the U.S. market an advertising-supported (AVOD) model of HBO Max.
- 3 million new fiber places. In 2021, AT&T plans to extend its fiber footprint by an extra 3 million buyer places throughout greater than 90 metro areas.
- C-band spectrum deployment to start in 2021. AT&T acquired 80 MHz of C-band spectrum within the FCC’s Spectrum Public sale 107. The corporate plans to start deploying the primary 40 MHz of this spectrum by the tip of 2021. AT&T expects to spend $6-8 billion in capex deploying C-band spectrum, with the overwhelming majority of the spend occurring from 2022 to 2024. Anticipated C-band deployment prices are already included within the firm’s 2021 capex steerage and in its leverage ratio goal for 2024.
- Funding C-band spectrum. AT&T’s funding in C-band spectrum through Public sale 107 totals $27.4 billion, together with anticipated funds of $23 billion in 2021.
- To fulfill this dedication and different near-term priorities, in 2021 the corporate expects to have entry to money totaling at the least $30 billion, together with money available on the finish of 2020 of $9.7 billion,2 industrial paper issued in January 2021 of $6.1 billion and financing through a time period mortgage credit score settlement of $14.7 billion.
- Finish-of-year 2021 debt ratio goal of three.0x. The corporate expects to finish 2021 with a web debt-to-adjusted EBITDA ratio of about 3.0x,3 reflecting an anticipated improve in web debt of about $6 billion to fund the C-band spectrum buy.
- 2024 debt ratio of two.5x or decrease. Throughout 2024, AT&T expects to succeed in a web debt-to-adjusted EBITDA ratio of two.5x or decrease.3 To attain this goal, the corporate expects to make use of all money flows after complete dividends to pay down debt and can proceed to search for alternatives to monetize non-strategic belongings. The corporate additionally doesn’t plan to repurchase shares throughout this era.
- 2021 steerage unchanged. AT&T’s 2021 monetary steerage, introduced in January 2021, is unchanged on a comparative foundation. For the complete 12 months, the corporate continues to anticipate:
- Consolidated income progress within the 1% vary
- Adjusted EPS to be secure with 20204,5
- Gross capital funding6 within the $21 billion vary, with capital expenditures within the $18 billion vary
- 2021 free money movement7 within the $26 billion vary, with a full-year complete dividend payout ratio within the excessive 50’s% vary.8
Extra particulars will probably be shared through the webcast, which will probably be out there on the AT&T Investor Relations web site starting at 10 a.m. Jap time at the moment. Presenters will embrace: John Stankey, CEO; Jeff McElfresh, CEO-AT&T Communications; Jason Kilar, CEO-WarnerMedia; John Stephens, CFO and Pascal Desroches, incoming CFO. Associated supplies may even be posted to the web site.
“We’re being deliberate and strategic with how we allocate capital to put money into our market focus areas of 5G, fiber and HBO Max, whereas being dedicated to sustaining the dividend at present ranges and using money after dividends to scale back debt,” mentioned John Stankey, AT&T CEO.
“Our primary precedence in 2021 is rising our buyer relationships. It’s about extra than simply including to our buyer base. It’s about increasing the expansion alternative in our three market focus areas and in addition growing our share inside every market,” Stankey mentioned. “We’re centered on creating deeper relationships with our present clients to extend their day by day engagement with our services and products, enabling us to assemble extra significant insights, drive loyalty, and keep forward of their quickly altering preferences. As demand for connectivity and content material continues to develop, we’re effectively positioned to ship.”
Improved Income and EBITDA Trajectory
Within the second half of 2021, AT&T expects to shut its lately introduced transaction to maneuver its U.S. video enterprise operations right into a newly shaped entity collectively owned with TPG Capital. Following shut of the transaction, which is topic to customary closing situations and regulatory evaluations, AT&T expects to deconsolidate the U.S. video unit from its consolidated outcomes. Whereas the video enterprise pressured the highest line by about 100 foundation factors and EBITDA margin by about 300 foundation factors in 2020, AT&T doesn’t anticipate the transaction to have a cloth impression on 2021 steerage as a result of timing of shut.
In the long term, AT&T expects an elevated give attention to progress areas enabled by separating the U.S. video enterprise will enhance the trajectory of income progress and adjusted EBITDA progress for its remaining enterprise going ahead. The corporate anticipates these enhancements may even be pushed by anticipated traits within the enterprise, together with:
- Wi-fi EBITDA progress from worthwhile share features, buyer progress and continued adoption of limitless plans
- Growth of the fiber footprint and elevated fiber penetration
- Improved margins within the enterprise wireline unit as the corporate continues to simplify the portfolio
- Enhancements at WarnerMedia as HBO Max scales, promoting regularly improves and price financial savings from latest group modifications offset funding in HBO Max
- Enchancment in AT&T Latin America from buyer progress and continued expense administration
Sturdy Money Place
Given its beforehand mentioned money place and entry to money, AT&T anticipates that it’ll have the flexibleness to satisfy its 2021 monetary commitments together with:
- The $23 billion in anticipated funds for C-Band spectrum
- Dividends to shareholders of almost $15 billion, topic to approval by the board of administrators
- Gross capital funding within the $21 billion vary6
- Continued compensation of debt
AT&T stays centered on rising connectivity inside its wi-fi and fiber merchandise. With its hybrid mounted and cell community strategy, the corporate is effectively positioned to satisfy the connectivity wants of all buyer segments.
Fiber. Fiber is foundational to AT&T’s broadband portfolio. Clients have a necessity for dependable, sturdy symmetrical expertise options like fiber, and the corporate continues to develop its fiber footprint to households and companies in 90 metro areas throughout the USA. AT&T expects the three million further fiber buyer places deliberate for 2021 will help continued momentum in its broadband enterprise unit. In areas the place AT&T has deployed its fiber community, the corporate has 10% greater market share than its opponents and about 70% of its gross provides are new to AT&T. In 2021, the corporate expects broadband income progress within the mid-single digits and increasing margins in its broadband enterprise unit.
Strengthened spectrum place. Over the past 4 years, AT&T has greater than doubled the spectrum deployed in its community, with 70% of its low and mid-band spectrum in service. Because it deploys the remaining 30% of low and mid-band spectrum, the corporate expects additional enhanced efficiency within the high 50 city markets, which it believes will assist help continued buyer progress.
As beforehand mentioned, AT&T expects to start to deploy 40 MHz of its 80 MHz of C-band spectrum by the tip of 2021. The corporate additionally expects millimeter wave spectrum to be a key a part of its broader community densification technique. AT&T continues to anticipate wi-fi service income progress within the 2% vary with modest wi-fi EBITDA progress for full-year 2021.
Scaling HBO Max
Along with its up to date steerage for HBO Max and HBO subscribers by the tip of 2025, AT&T additional expects to finish 2021 with between 67 and 70 million subscribers worldwide, up from about 61 million on the finish of 2020.1
AT&T expects its Residence Field Workplace enterprise unit revenues to greater than double over the subsequent 5 years. As HBO Max scales at a worldwide stage, the corporate plans to extend funding, with expectations for peak dilution in 2022 and break even in 2025.
Subscriber and income progress in 2021 are anticipated to be partially pushed by the preliminary worldwide enlargement of HBO Max and the launch of an advertising-supported model of HBO Max.
Tune into AT&T’s Analyst & Investor Day webcast at 10 a.m. Jap time at the moment. The webcast will probably be out there on the AT&T Investor Relations web site.
AT&T Inc. (NYSE:T) is a diversified, international chief in telecommunications, media and leisure, and expertise. Shoppers and companies have greater than 225 million month-to-month subscriptions to our providers. AT&T Communications gives greater than 100 million U.S. shoppers with leisure and communications experiences throughout TV, cell and broadband. Plus, it serves high-speed, extremely safe connectivity and sensible options to almost 3 million enterprise clients. WarnerMedia is a number one media and leisure firm that creates and distributes premium and common content material to international audiences via its client manufacturers, together with: HBO, HBO Max, Warner Bros., TNT, TBS, truTV, CNN, DC Leisure, New Line, Cartoon Community, Grownup Swim and Turner Traditional Films. Xandr, now a part of WarnerMedia, gives entrepreneurs with progressive and related promoting options for shoppers round premium video content material and digital promoting via its platform. AT&T Latin America gives pay-TV providers throughout 10 nations and territories in Latin America and the Caribbean and wi-fi providers to shoppers and companies in Mexico.
AT&T services and products are offered or provided by subsidiaries and associates of AT&T Inc. below the AT&T model and never by AT&T Inc. Extra info is accessible at about.att.com.
© 2021 AT&T Mental Property. All rights reserved. AT&T, the Globe brand and different marks are emblems and repair marks of AT&T Mental Property and/or AT&T affiliated corporations. All different marks contained herein are the property of their respective homeowners.
Cautionary Language Regarding Ahead-Wanting Statements
Data set forth on this information launch comprises monetary estimates and different forward-looking statements which might be topic to dangers and uncertainties, and precise outcomes may differ materially. A dialogue of things which will have an effect on future outcomes is contained in AT&T’s filings with the Securities and Change Fee. AT&T disclaims any obligation to replace and revise statements contained on this information launch primarily based on new info or in any other case.
This information launch might comprise sure non-GAAP monetary measures. Reconciliations between the non-GAAP monetary measures and the GAAP monetary measures can be found on the corporate’s web site at https://traders.att.com.
1 Worldwide HBO Max and HBO subscribers encompass home HBO Max subscribers and home and worldwide HBO subscribers, and excludes free trials, fundamental and Cinemax subscribers. Home HBO Max and HBO subscribers encompass accounts with entry to HBO Max (together with wholesale subscribers that won’t have signed in) and HBO accounts, and excludes free trials and Cinemax subscribers.
2 Money and money equivalents as of December 31, 2020.
3 Internet debt-to-adjusted EBITDA ratios are non-GAAP monetary measures which might be steadily utilized by traders and credit standing businesses to supply related and helpful info. Our web debt-to-adjusted EBITDA ratio is calculated by dividing the web debt by the sum of the latest 4 quarters of adjusted EBITDA.
4 The corporate expects changes to 2021 reported diluted EPS to incorporate merger-related amortization within the vary of $4.3 billion and different changes, a non-cash mark-to-market profit plan acquire/loss, and different gadgets. Anticipate the mark-to-market adjustment, which is pushed by rates of interest and funding returns that aren’t fairly estimable presently, to be a major merchandise. Our 2021 EPS is dependent upon future ranges of revenues and bills which aren’t fairly estimable presently. Accordingly, we can not present a reconciliation between our non-GAAP metrics and the reported GAAP metrics with out unreasonable effort.
5 As beforehand indicated, administration expects a discount of $300 million in depreciation and amortization expense every quarter till the DIRECTV transaction closes. Slightly below half the discount displays the fourth-quarter 2020 impairment taken on the enterprise. The rest of the discount displays the reclassification of the belongings to “held on the market.” As well as, AT&T expects to replace the lives of video and broadband clients used to acknowledge subscriber prices. Within the first quarter of 2021, we estimate a rise in working bills of roughly $130 million attributable to this transformation.
6 Gross capital funding consists of capital expenditures and money funds for vendor financing and excludes FirstNet reimbursements. In 2021, vendor financing funds are anticipated to be within the $2 billion vary and FirstNet reimbursements are anticipated to be about $1 billion.
7 Free money movement is money from working actions minus capital expenditures. As a result of excessive variability and issue in predicting gadgets that impression money from working actions and capital expenditures, the corporate is just not capable of present a reconciliation between projected free money movement and essentially the most comparable GAAP metric with out unreasonable effort.
8 Free money movement complete dividend payout ratio is complete dividends paid divided by free money movement. For full-year 2020, dividends paid totaled $15.0 billion.
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