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2009 AT&T Intellectual Property. All rights reserved. AT&T, the AT&T logo and all other marks contained herein are trademarks of AT&T Intellectual Property and/or AT&T affiliated companies. All other marks contained herein are the property of their respective owners.
Solid quarter, strong cost execution, results in line with full-year outlook:
$0.53 EPS includes $0.05 of pressure from incremental noncash pension/retiree benefits costs Stable consolidated revenues (0.6)% versus 1Q08; continuing economic impacts largely offset by growth in wireless, U-verseSM, broadband and strategic business services Stable consolidated margins 18.8% in 1Q09 versus 18.6% for full-year 2008
1Q08
1Q09
Strong execution, solid cost discipline, continued advances in key growth areas for the future
OIBDA service margin is operating income before depreciation and amortization, divided by total service revenues.
Revenue Trends
AT&T Consolidated Revenues
($ in billions) $30.7 $30.9 $31.3 $31.1 $30.6
$30.6 billion 1Q09 consolidated operating revenues, down 0.6% Economic impacts primarily affecting wireline voice, which was down 12.2% Growth in wireless and data services:
1Q08
2Q08
3Q08
4Q08
1Q09
Wireline IP Data
Diversified mix with increased percentage of revenues coming from wireless and data services
Wireless service revenues up >$1 billion or 9.6% versus 1Q08 Total wireless subscribers up 6.9 million over past year, led by strong postpaid gains Year-over-year postpaid subscriber metrics:
1Q08
2Q08
3Q08
4Q08
1Q09
2.8
3.0 705
875
1Q08 1Q09
1Q08 1Q09
1Q08
1Q09
Wireless data revenue growth driven by more data-capable devices, richer applications
Continued strong data ARPU growth, up >25% year over year >94 billion text messages sent in 1Q09, more than double 1Q08 >40% growth in media bundles and Internet access revenues Postpaid subscribers with data plans up 900 basis points over past year, approaching 50%
$3.2
$2.3
$10.80
1Q08
1Q09
1Q08
1Q09
Strong Integrated Device Growth, More Than 1.6 Million iPhone Activations
AT&T Wireless Postpaid Integrated Devices in Service
(in millions) Percentage of Postpaid Subscribers with Integrated Devices
19.3
United States fastest 3G network strong spectrum position, increased use of 850 MHz for 3G Broad array of attractive devices Apple iPhone, BlackBerry BoldTM, quick messaging devices, netbooks Explosion of applications and content AT&T Apps Beta launched in first quarter, largest catalog of mobile music among U.S. wireless companies
16.2
31.7%
1Q08
2Q08
3Q08
4Q08
1Q09
ARPU and churn characteristics of growing iPhone 3G customer base Continuing operational improvements in network and support functions
iPhone 3G launch
35.8% 33.5%
1Q08
2Q08
3Q08
4Q08
1Q09
Continue to expect wireless OIBDA margin in the mid 40% range long term
OIBDA service margin is operating income before depreciation and amortization, divided by total service revenues.
1,329
AT&T U-verse TV subscriber growth delivering high broadband and VoIP attach rates Double-digit U-verse TV penetration of eligible living units Mid-teens penetration in areas marketed to for at least 18 months Service includes a host of advanced features including: Total Home DVR 100+ High Definition channels integrated voice and broadband AT&T U-verse voice launched in 86% of markets Total video penetration of households served at 12.6%
1Q08
2Q08
3Q08
4Q08
1Q09
264
284 170
120
2Q08
3Q08
4Q08
1Q09
10
Strong broadband growth driven by strength in wireline consumer connections 471,000 first-quarter increase in total broadband subscribers >50% sequential increase in wireline broadband net adds
16.7
AT&T U-verse high speed Internet connections more than tripled over the past year to 1.3 million Continued growth in wireless/ broadband bundles Industrys largest Wi-Fi footprint, with >20,000 U.S. hotspots
168 148
1Q08
2Q08
3Q08
4Q08
1Q09
11
Regional consumer revenues down 6.8% year over year; ARPU growth and improved connections trends driven by U-verse TV and broadband 2.0% increase in consumer ARPU 23.0% year-over-year growth in consumer IP revenues (AT&T U-verse and broadband services) Improved connections trends where AT&T U-verse TV is marketed
(504)
(870)
12
1Q09
Year-OverYear Growth
Total business trends reflect strong growth in IP data and strategic services, offset by continuing economic pressures, primarily impacting voice Economic impacts focused on voice usage; largest impacts in financial, transportation and general merchandise retailing sectors Largest economic impacts in low-margin areas such as CPE and international voice, with cost offsets New service adoption continues to be solid 10.5% growth in business IP data revenues 19.6% growth in strategic services
1Q08
2Q08
3Q08
4Q08
1Q09
Strategic business services include the new-generation capabilities that lead AT&Ts most advanced solutions including Ethernet, VPNs, hosting, IP conferencing and applications services.
13
1Q09
14
Free cash flow and capital expenditures in line with previously outlined full-year outlook
$3.4
Capital Expenditures
$4.6
Cash from operations improvement reflects progress on cost initiatives and lower cash taxes Full-year 2009 capital expenditures expected to be in the $17 $18 billion range Total debt reduced by $5.8 billion over the past three quarters
Dividends Paid
$2.4
Debt-to-Capital Ratio
1Q08 1Q09
43.2%
15
Free Cash Flow is defined as cash from operations less capital expenditures.
16
2009 AT&T Intellectual Property. All rights reserved. AT&T, the AT&T logo and all other marks contained herein are trademarks of AT&T Intellectual Property and/or AT&T affiliated companies. All other marks contained herein are the property of their respective owners.