AT&T Inc.

Good morning and welcome to AT&T Sports Quarter 2024 Earnings Call. At this time, all participants are in listen-only mode. Should you need assistance during the call, please press star then zero and an operator will assist you offline. Following the presentation, the call will be open for questions. If you would like to ask a question, please press star then one and you will be placed in the question queue. If you are in the question queue and would like to withdraw your question, you can do so by pressing star then two. As a reminder, this conference is being recorded. I would now like to turn the conference call over to your host, Brett Feldman, Senior Vice President, Finance and Investment Relations. Please go ahead.

Thank you, and good morning. Welcome to our fourth quarter call. I'm Brett Feldman, Head of Investor Relations for AT&T. Joining me on the call today are John Stanky, our CEO, and Pascal DeRoche, our CFO. Before we begin, I need to call your attention to our Safe Harbor statement. It says that some of our comments today may be forward-looking. As such, they're subject to risks and uncertainties described in AT&T's SEC filings. Results may differ materially. Additional information as well as earnings materials are available on the Investor Relations website. With that, I'll turn the call over to John Stanky. John?

Thanks, Brett. I appreciate you joining us. I hope you'll find there aren't going to be any surprises on today's call. We finished 2024 strong, like we said we would at our Analyst and Investor Day in December. We achieved full-year results that are in line or better than all the consolidated financial guidance we provided at the beginning of the year. Before I cover our accomplishments, I'd like to extend my heartfelt sympathies to everyone in Southern California. Our thoughts and prayers with all those people whose lives, homes, and families have been deeply impacted by the most destructive wildfires in modern U.S. history. In these moments, the importance of connection becomes increasingly apparent and I'd like to thank our teams. for their commitment to keeping customers, communities, and first responders connected in the face of this historic devastation. Now, turning to our 2024 performance, our team delivered another solid year as they again drove durable 5G and fiber subscriber growth mobility. Our consistent go-to-market strategy continues to resonate as more customers are choosing and staying with AT&T. Last year, we had about 1.7 million postpaid phone net additions with service revenue growth of 3.5%. We also expect to lead the industry in postpaid phone churn for the 14th time in the last 16 quarters and to lead the industry on an annual basis for the fourth straight year. This is an impressive winning run in wireless. As you've heard me say before, where we have fiber, we win as well. We've now added one million or more AT&T Fiber subscribers for a remarkable seven straight years. It's clear that fiber is the best broadband alternative technology available. This was validated by Ookla just last week when they named AT&T Fiber America's fastest internet with the most reliable speeds. Following another strong quarter for both AT&T Fiber and AT&T Internet Air, we've now achieved six consecutive quarters of positive broadband net ads. Once again, we demonstrated our ability to grow in a healthy and sustainable manner by adding valuable subscribers while simultaneously simplifying experiences and processes for our customers and employees. You see the results of these efforts and the margin expansion and free cash flow growth we delivered in 2024, as we outlined at our Analyst and Investor's Day. We expect these trends will continue. Our investment in 5G and fiber is fueling this sustained growth. This is why we're so focused on building a durable franchise for the long term. Our deliberate and balanced approach to capital allocation is putting us on a strong foundation to deliver attractive returns for years to come. With about $22 billion in capital investment last year, we again invested at the top of the industry as we continue to focus on building the largest, highest capacity, lowest marginal cost, converged broadband network in the country. Investing to build a truly differentiated network will provide long-term benefits to AT&T and the many customers, businesses, and communities we serve. And if the new Trump administration is successful in extending expiring tax incentives this year, we feel there's ample opportunity for even more investment in U.S. communications infrastructure. Ultimately, we did what we said we would last year. As a result, we exited 2024 in a stronger competitive position. We still have a few things to accomplish. In 2025, we'll focus on executing against the priorities we laid out at our analyst and investor day. This starts with our customers. We plan to grow 5G and fiber subscribers by offering an elevated customer experience with a compelling opportunity to enjoy both of these connectivity services from one provider. We remain focused on growing our business the right way, which we expect to achieve by once again gaining profitable customers and operating our business more efficiently. In December, we established a new 3 billion plus run rate cost savings target that runs through the end of 2027. In 2025, we'll make progress on this goal by further integrating AI throughout our operations. We also expect to realize cost savings as we evolve our technology stacks and worked to exit our legacy copper network operations across the large majority of our wireline footprint by the end of 2029. Last month, we received FCC approval to begin the process to stop selling, transition, and discontinue legacy voice services in a small number of wire centers, utilizing our AT&T phone advanced service as a replacement. This was an important first step to establish a template that supports a deliberate and planned transition to a more capable and modern communications infrastructure. Within the next few weeks, we will make detailed filings with the FCC to stop selling legacy products in about 1,300 wire centers, which is about a quarter of the wire centers across our footprint. We look forward to working with the CAR FCC to accelerate and advance policies and actions that stimulate investment and modernization of the U.S. communications infrastructure. On the investment front, we anticipate capital investment in the $22 billion range again this year as we invest in modernizing our wireless network, expanding where we're able to offer fiber. We also expect to achieve our target of net debt to adjusted EBITDA in the two and a half times range in the first half of this year. This keeps us on pace to commence common stock repurchases using our initial board-approved tranche of approximately $10 billion during the second half of 2025. is part of a broader 40 billion dollar plus shareholder return plan that we expect to deliver over the next three years which includes more than 20 billion dollars in total dividend payments and an overall capacity for about 20 billion dollars in share repurchases under this plan we also have an additional 10 billion dollars in incremental financial flexibility to pursue strategic opportunities improve our balance sheet or deliver further capital returns to shareholders. Now, before I wrap, I'd like to finish where I started, with the customer, and briefly share how the AT&T Guarantee builds on the vision we shared with you in December. Over the past several years, we've pivoted the AT&T brand by using our deep knowledge and insights to orient our services around putting our customers and what they want first. This has led to improvements in how customers feel about AT&T, as evidenced by our broadband customer satisfaction leadership, our improving wireless net promoter scores, and our overall continued low churn. After over a year of research and preparation, we are taking the important step to establish a platform to differentiate our brand in the marketplace with the AT&T guarantee. AT&T is the first and only telecommunications company to offer a guarantee for both its wireless and fiber network. AT&T Guarantee is a bold promise to our customers that we'll deliver connectivity that they can depend on, deals they want, and the prompt friendly service they deserve, or we'll make things right if we fall short. With the AT&T Guaranty, customers have peace of mind that the company stands behind our products and services in a way that no one else in our industry is doing. Our Guaranty is a truly converged, full company effort. It spans across both wireless and fiber, covering both consumers and small businesses. And with enterprise customers, we remain committed to providing high-quality service in our contractual agreements as we always have. We were able to offer this unique promise to our customers because we own and operate scaled 5G and fiber networks where we control the network architecture, operations, and end-to-end customer experience. This allows us to provide a proactive and compelling customer guarantee that's tough to beat and an internal operating posture that focuses all of AT&T's employees on getting it right for our customers. We feel confident that our customers will repay us with loyalty, and we can attract new customers as well. So in summary, we have a clear strategy in place to advance the plan we shared at our Analyst and Investor Day. We have the right people, capabilities, and differentiated assets to achieve our goals in 2025 and beyond. With that, I'll turn it over to Pascal. Pascal?