© Reuters. FILE PHOTO: AT&T logo is seen on a smartphone in front of displayed Discovery and Warner Media logos in this illustration taken May 17, 2021. REUTERS/Dado Ruvic
(Reuters) – Telecoms company AT&T (NYSE:) said it anticipates that the pending deal to combine WarnerMedia’s media assets with Discovery (NASDAQ:) Inc will close by the middle of 2022.
AT&T is in the process of unwinding its expensive media investments to focus on its original business of providing phone and internet services.
It is combining WarnerMedia’s media assets with Discovery to create a proposed stand-alone company, Warner Bros. Discovery.
“After close of that transaction and on a pro-forma basis, AT&T expects annual revenues to grow at a low single digits compound annual growth rate (CAGR) from 2022 to 2024 with annual adjusted EBITDA and adjusted earnings per share growing at a CAGR in the mid-single digit range”, AT&T Chief Financial Officer Pascal Desroches said in an update to shareholders on Tuesday.
After the deal closing, the company said it anticipates annual dividends paid of $8 billion to $9 billion, reflecting a payout ratio of 40% to 43% on projected free cash flow of $20 billion plus in 2023.
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