today announced plans to invest $14 billion over the next three years to
significantly expand and enhance its wireless and wireline IP broadband
networks to support growing customer demand for high-speed Internet
access and new mobile, app and cloud services. The investment plan -
Project Velocity IP (VIP) - expands AT&T's high-potential growth
platforms, helping drive continued increases in revenues from existing
and new products and services, and earnings per share.
"This is a major commitment to invest in 21st Century
communications infrastructure for the United States and bring high-speed
Internet connectivity - 4G LTE mobile and wireline IP broadband - to
millions more Americans," said Randall
Stephenson, AT&T chairman and chief executive officer. "We have the
opportunity to improve AT&T's revenue growth and cost structure for
years to come, and create substantial value for shareowners.
"Revenues in our key growth areas - wireless data, U-verse
and strategic business services - are all growing at a strong
double-digit rate. Project VIP expands our potential in these key
platforms and makes them available to many more customers," Stephenson
said. "With our strong balance sheet, these capital investments are
manageable. We are very confident in our ability to execute this plan.
These are things we've done before - logical extensions of proven
technologies and already successful businesses.
"Given our confidence in our industry and in our future, today we
increased our quarterly dividend for the 29th straight year.
I'm confident we can continue to deliver for our owners as we invest to
position AT&T for stronger growth in the years ahead," Stephenson said.
AT&T's Project VIP consists of several individual wireless and wireline
initiatives, which are outlined below.
Investing in Mobile Internet Growth
Investing in Wireline IP Network Growth
AT&T plans to expand and enhance its wireline IP network to 57 million
customer locations (consumer and small business) or 75 percent of all
customer locations in its wireline service area by year-end 2015. This
network expansion will consist of:
Project VIP Supports New Growth Initiatives
Expanding AT&T's 4G LTE network to 300 million people, combined with its
leadership in smartphones and data access, provides a large platform for
the next wave of growth in mobility, including:
With business customers, AT&T expects Project VIP will strengthen its
ability to pursue multiple new billion-dollar business opportunities in
four key growth areas: strategic network services, cloud, security and mobility
Investment for Growth
Driven by Project VIP and assuming a stable economy, AT&T expects that
during the investment period:
AT&T has taken significant steps to further improve its capital
structure and strengthen its balance sheet, which provides a financial
footing to invest for growth. Over the last three years, the company has
reduced its debt by approximately $9 billion, has taken advantage of
historically low interest rates to refinance $20 billion in debt, and
has reduced its cost of debt by 60 basis points. AT&T recently filed a
proposal with the U.S. Department of Labor to contribute a preferred
equity interest in its wireless business, valued at $9.5 billion, to the
company's pension trust, which will substantially improve the funded
status of the plan.
AT&T expects to increase its capital intensity to the high end of the
mid-teens as a percentage of revenues in the next two years, returning
to normal levels in 2015. AT&T expects capital spending to be
approximately $22 billion for each of the next three years, then return
to pre-Project VIP levels.
AT&T expects to complete in 2012 its December 2010 share repurchase
authorization of 300 million shares and to continue to buy back shares
as market conditions allow under its July 2012 300 million share
repurchase authorization. Through October 19, 2012, AT&T had repurchased
271 million shares.
Over the next two years, AT&T expects its net-debt-to-EBITDA ratio to
move from 1.42 at the end of third-quarter 2012, up to the 1.8 range,
aligning with lower interest costs and debt capacity. The company
expects this ratio to trend back down in 2015. The company anticipates
tapping the debt markets to take advantage of historically low interest
rates, with a long-term goal of maintaining its credit rating in the "A"
range or higher.
And AT&T remains committed to returning value to shareholders. Year to
date the company has returned more than $19.6 billion to shareholders
through dividends and share repurchases. And today, AT&T announced it
will increase its quarterly dividend for the 29th consecutive
year. The AT&T board of directors increased the quarterly dividend rate
from $0.44 to $0.45 a share on a quarterly basis, which would be an
increase from $1.76 to $1.80 a share on an annualized basis. The
dividend will be payable on Feb. 1, 2013, to common stockholders of
record on Jan. 10, 2013.
*AT&T products and services are provided or offered by subsidiaries and
affiliates of AT&T Inc. under the AT&T brand and not by AT&T Inc.
1 Customer locations for U-verse are those locations which
are eligible to receive U-verse.
2 Business buildings with 6 or more tenants
3 EPS guidance does not include one-time significant items
that may occur, such as mark-to-market pension adjustments, impairments
and other items
Find More Information Online:
Third-Quarter Results: Solid EPS Growth, Strong Wireless Revenue
Gains and Record
Free Cash Flow With Increase of $2 Billion in Full-Year Free Cash
Historical Dividend Data
AT&T Inc. (NYSE:T) is a premier communications holding company and one
of the most honored companies in the world. Its subsidiaries and
affiliates - AT&T operating companies - are the providers of AT&T
services in the United States and internationally. With a powerful array
of network resources that includes the nation's largest 4G network, AT&T
is a leading provider of wireless, Wi-Fi, high speed Internet, voice and
cloud-based services. A leader in mobile Internet, AT&T also offers the
best wireless coverage worldwide of any U.S. carrier, offering the most
wireless phones that work in the most countries. It also offers advanced
TV services under the AT&T U-verse® and AT&T ¦DIRECTV
brands. The company's suite of IP-based business communications services
is one of the most advanced in the world.
Additional information about AT&T Inc. and the products and services
provided by AT&T subsidiaries and affiliates is available at http://www.att.com.
This AT&T news release and other announcements are available at http://www.att.com/newsroom and
as part of an RSS feed at www.att.com/rss.
Or follow our news on Twitter at @ATT.
© 2012 AT&T Intellectual Property. All rights reserved. 4G not available
everywhere. 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
Cautionary Language Concerning Forward-Looking Statements
Information set forth in this news release contains financial estimates
and other forward-looking statements that are subject to risks and
uncertainties, and actual results may differ materially. A discussion of
factors that may affect future results is contained in AT&T's filings
with the Securities and Exchange Commission. AT&T disclaims any
obligation to update or revise statements contained in this news release
based on new information or otherwise.
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