On December 3, 2024, AT&T Inc. (T, Financial) released a significant update regarding its strategic direction and financial outlook. The telecommunications giant announced a new share repurchase authorization, signaling confidence in its financial health and commitment to returning value to shareholders.
In a move to enhance financial transparency and comparability, AT&T will recast its financial metrics starting with the first-quarter 2025 results. This change comes in light of the pending disposition of its DIRECTV equity method investment. The company plans to exclude results and cash distributions from DIRECTV, both from operating and investing activities, in its adjusted diluted earnings per share (EPS) and free cash flow calculations. These adjustments aim to provide a clearer picture of AT&T's core operational performance.
Adjusted diluted EPS and free cash flow are non-GAAP financial measures that are widely used by investors and credit rating agencies to assess a company's financial health. The adjusted diluted EPS will exclude certain significant non-operational or non-recurring items, such as dispositions, merger integration costs, and other material gains and losses. Meanwhile, free cash flow will be redefined to exclude cash flows related to the DIRECTV investment, capital expenditures, and vendor financing payments.
This strategic update reflects AT&T's ongoing efforts to streamline its operations and focus on its core telecommunications business. The share repurchase authorization further underscores the company's commitment to enhancing shareholder value.
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