AT&T Inc. (T) Earnings Call Transcript & Summary

[Presentation] Good afternoon. I'm Stacey Maris, Senior Vice President, Deputy General Counsel and Secretary at AT&T. Welcome to the AT&T 2022 Annual Stockholders' Meeting. Please note that today's meeting is being recorded. If you'd like to follow along with our slide presentation, click the Slides button located above the upper right-hand corner of the webcast screen. Before we get started, I'd like to call your attention to our safe harbor statement. Some of our comments today may be forward-looking. As such, they're subject to risks and uncertainties referenced in our filings with the Securities and Exchange Commission. Actual results may differ materially. Later in today's meeting, we will have a question-and-answer session in response to questions and comments we've received from stockholders. We've already received many questions. But if you are a stockholder and wish to submit a question or a comment, we invite you to do so at any time by clicking on the Q&A icon. Depending on the number of questions we get, we may not be able to answer them all during this meeting. For questions we don't reach, we will post responses on our Investor Relations website within 30 days. If your question is about your AT&T account, we will follow up with you individually. It's my pleasure to turn our meeting over to AT&T Chairman, Bill Kennard.

Thank you, Stacey. Good afternoon. I'm Bill Kennard, your independent Chairman of AT&T's Board of Directors. On behalf of our Board, our management team and our employees, I want to welcome you to AT&T's 2022 Annual Stockholders' Meeting. In a few moments, we'll begin with the business portion of the meeting. And then John Stankey, our CEO, will give a report on the state of your company, and then we'll end by answering your questions. But first, I'd like to introduce our Board of Directors. The following directors have been nominated for reelection: Scott Ford, member and CEO of Westrock Group and former President and CEO of Alltel; Glenn Hutchins, Chairman of North Island and North Island Ventures and a Cofounder of Silver Lake; Steve Luczo, Managing Partner of Crosspoint Capital Partners and a former Chairman of the Board of Seagate Technology; Mike McCallister, retired Chairman and CEO of Humana; Beth Mooney, retired Chair and CEO of KeyCorp; Matt Rose, former Chairman and CEO of Burlington Northern Santa Fe; john Stankey, President and CEO of AT&T; Cindy Taylor, President and CEO of Oil States International; Luis Ubiñas, former President of the Ford Foundation; and myself, the Chairman of the Board, a position that I'm very honored to hold. Before we move to the official business of today's meeting, I want to recognize 3 Board members who stepped down from the AT&T Board last month to join the Warner Bros. Discovery Board of Directors when we completed that transaction: Sam Di Piazza, Debra Lee and Geoff Yang, and I want to thank them for their dedication and years of counsel to AT&T. In addition to Stacey, with us today are John Stankey and David McAtee, our General Counsel. Also joining us is Chris Chastain. He's the Global Assurance Partner representing our auditor, Ernst & Young. So let's turn to the business portion of the meeting, starting with a few reminders about voting. If you have already submitted your proxy or voting instructions, you do not need to vote today. Your shares will be voted in accordance with the directions you provided. If you are a stockholder and have not yet submitted your vote or you want to change your vote, you may vote today by clicking on the Vote button on the website hosting this broadcast. And so with that, the polls are now open. Our first order of business is to vote on the election of directors. This is item #1 in the proxy. The Board has nominated all incumbent directors for reelection. To reflect the departures of Sam Di Piazza, Debra Lee and Geoff Yang at the close of our transaction with Discovery, your Board voted to reduce the number of directors from 13 to 10 prior to today's meeting. The name and background of each director can be found in the proxy statement. Your Board of Directors recommends a vote for each nominee. Next step is ratification of the appointment of Ernst & Young as our independent auditors for 2022. This is item #2. Your Board recommends a vote for this item as well. The next item is the advisory vote on executive compensation. This is item #3. Given the dynamic global marketplace in which we compete, your Board of Directors is committed to attracting and retaining the talent necessary to deliver on our strategic objectives and create shareholder value. As described more fully in our proxy, the Board's Human Resources Committee has designed an executive compensation program that pays for performance. It's competitive in the market for key talent and aligns the interest of our executives with your interest as shareholders. Your Board of Directors recommends a vote for approval of this proposal. Now next is a stockholder proposal submitted by Mr. Jing Zhao. This is item #4, and I understand Mr. Zhao has submitted a statement introducing the proposal. We'll listen to it now.

Good afternoon, fellow shareholders and especially the Board members of AT&T. My name is Jing Zhao. My proposal is to improve executive compensation program. There is no rationality to decide the executive compensation. The executive compensation policy is a political economy issue. The American Board is not democratically elected. Even the Chinese Communist Party's Central Committee now is elected with a little more candidates than the Central Committee seats. Some 2,400 years ago, Aristotle told us that in a policy, society will not be stable when the disparity is over 5 times. Today, the oligarch class in Russia is the root cause of social instability and even war. Americans' oligarchs class is also the main cause of social inequalities problems. Learning from the better EU under the U.K. corporate governance practice, we should include the executive pay ratios and employees' voice to improve the executive compensation program. Thank you very much.

Thank you. AT&T opposes this proposal. Now with regard to the request for employee representation on the Board of Directors, the Board reviews the composition of your Board of Directors with attention to skills, experience and diverse perspectives. The Board also considers investor feedback and input in sharing priorities to help identify future directors of your Board. Our Board's Human Resources Committee regularly reviews executive pay, which is based on input from company shareholders, industry experts and our employees. The committee incorporates this feedback to ensure that AT&T encourages company executives to produce outstanding and sustainable financial and operational results for our stockholders. Therefore, your Board recommends a vote against this shareholder proposal. Item #5 in our proxy is a stockholder proposal submitted by Kenneth Steiner. I understand that [ Cam Williams ] has submitted a statement on behalf of Mr. Steiner introducing the proposals, and we will listen to that now.

Proposal 5, independent Board Chairman, sponsored by Kenneth Steiner. The shareholders request that the Board of Directors adopt a policy and amend the governing documents as necessary in order that 2 separate people hold the Office of the Chairman and the Office of the CEO. Whenever possible, the Chairman of the Board shall be an independent director. The Board has the discretion to select a temporary Chairman of the Board who is not an independent director to serve while the Board is seeking an independent Chairman of the Board. The Chairman shall not be a former CEO of the company. This proposal topic won 52% at Boeing and 54% support at Baxter International in 2020. Boeing then adopted this proposal topic in 2020. The roles of Chairman and CEO are fundamentally different and should be held by 2 directors, a CEO and a Chairman who is completely independent of the CEO and our company. This proposal topic won 40% support from AT&T shareholders in 2020. This 40% support may have represented 51% support from the shares that have access to independent proxy voting advice and are not forced to rely on the biased resistance of management. When the current policy of allowing a CEO to serve as Chair, this means giving up a substantial check and balance safeguard that can only occur with an independent Board Chairman. A lead director is no substitute for an independent Board Chairman. A lead director can delegate most of the lead director duties to the CEO office and then simply rubber stamp it. There is no way shareholders can be sure of what goes on. The lack of an enduring policy for an independent Board Chairman policy is an unfortunate way to discourage promising new outside ideas in an unfortunate way to encourage the CEO to pursue pet projects that would not stand up to effective oversight. It is important to have an enduring independent Board Chairman policy given the flat record of our stock during the past 2 decades, which way underperformed the bull market. Our stock was $50 in 2001. AT&T shareholders have been -- would have been far better off investing in an index fund. Plus a majority of shares rejected management pay with 1.8 billion negative votes. Directors Scott Ford, Michael McCallister, Beth Mooney and Geoffrey Yang each received more than 600 million negative votes; and Matthew Rose, Chair of the Management Pay Committee, received more than 900 million negative votes. Clearly, AT&T needs an independent Chairman to help manage the AT&T directors. Please vote yes, independent Board Chairman, Proposal #5.

Thank you. AT&T opposes this proposal. The AT&T Board is committed to independent Board leadership. Actually, our current practice is to elect Independent Chairman of the Board, and I'm honored to serve in that capacity. The Board believes that it's in the best interest of its shareholder for the Board to adjust to change business conditions which may require a different independent Board leadership structure. The Board, therefore, opposes a policy that would restrict future Boards on this important topic in response to the facts and circumstances relevant to the company at that time. So your Board, therefore, recommends a vote against this stockholder proposal. Next is a stockholder proposal submitted by the organization As You Sow on behalf of Myra K. Young. This is item #6. I understand that Meredith Benton has submitted a statement on behalf of the proponent introducing her proposal, and we will listen to that now.

I, Meredith Benton, am speaking on behalf of the nonprofit equity organization As You Sow and the consultancy Whistle Stop Capital. I formally move proposal #6, requesting a report on the congruency of AT&T's political expenditures to its publicly stated values. Inconsistency between the company's stated values and its political activities can pose real risks to a company. We have recently seen this with Disney, which has long advertised a commitment to the LGBTQ community. Its association with the Don't Say Gay bill in Florida, through its political contributions, led to extended protest from employees and consumers. In its efforts to mollify those stakeholders who oppose the bill, the company then alienated the bill's allies, leading to real operating and tax implications for Disney. AT&T faces similar risks of alienating key stakeholders through its political expenditures. As examples, news site Popular Information placed AT&T within the top 5 corporate donors to anti-abortion political committees with AT&T giving close to $1.5 million since 2016. This action seems to sit in contrast with AT&T's stated commitment to gender equality. Similarly, AT&T says that it is "committed to supporting organizations and projects that strengthen the LGBT community." But AT&T is also associated with legislation in Texas that seeks to classify gender-affirming care as child abuse. Other incongruences seem to exist around restrictive voting legislation and in the company's involvement with a lobbying group, slowing U.S. climate legislation. A report from AT&T assessing where its political involvement may be contrary to its public positions is expected to reduce risk to the company's brand, strengthen oversight and reassure investors. Thank you.

Thank you. AT&T opposes this proposal. The contributions to particular lawmakers did not mean that we support their views or actions on every issue. And AT&T's political-giving is already disclosed publicly, as is our fulsome policy for determining how we give. In fact, AT&T has been recognized for its transparency, receiving the highest possible score on the 2021 CPA-Zicklin Index. Because of the company's transparency, the information sought by the proponent is available to them already. To try to further assess the congruence of the company's giving to its values based solely on a highly subjective assessment of political contributions would be an incomplete and distorted reflection of the company's activities and our values and would ignore the many other ways the company works to advance its values through charitable giving, employee activities and our other efforts. Therefore, your Board recommends a vote against this stockholder proposal. The next and last item is a stockholder proposal submitted by the National Center for Public Policy Research. I understand the proponent has submitted a statement introducing its proposal. We'll listen to it now.

AT&T opposes our proposals antithetical to its objective of creating a diverse and inclusive workforce. But in doing so, it demonstrates exactly why a nondiscrimination audit is needed. For instance, its opposition statement contains a litany of the company's efforts to advance diversity, equality and inclusion. Its examples include a Senior Executive Diversity Council, a variety of employee groups, an education and training awards and reporting programs to support its DEI goals. However, what DEI initiatives, such as those touted by the company failed to recognize, is that there is much disagreement across the ideological spectrum over whether, instead of combating discrimination, DEI efforts actually create a discriminatory and segmented environment. For example, while some of AT&T's employee groups appear to focus on workplace characteristics, such as administrative or emerging professionals, others are strictly based on surface characteristics such as race, sex or sexual orientation. The company attempts to appear neutral through its mention of programs that encompass all segments of society, not just the racially diverse, but again, it seems that these programs are merely grounded in surface characteristics other than race. Ironically, the company refers to our proposal as divisive, yet our proposal simply seeks to ensure that our employees, not just those deemed diverse by the company, including so-called diversity of race, sex, sexual orientation or other superficial trait, feel included and receive equal treatment. By opposing our proposal and arguing against an independent audit and report that seeks to include a variety of viewpoints and perspectives, the company demonstrates this disapproval of those who may disagree with its approach to equality and thereby underscores the very need for our proposal in the first place. Voting yes on item 7 would provide shareholders and the public with an impartial assessment of how the company's policies and practices are impacting the business and potentially causing discrimination in the name of opposing it. Please vote yes on item 7. Thank you.

Thank you. AT&T opposes this proposal. This proposal asks that we conduct an analysis, which we already make on an ongoing basis. It further asked that we issue a report that covers programs and data about which we already make granular and comprehensive disclosures. Therefore, your Board recommends a vote against this stockholder proposal. That was the last item that required your vote today, so please finalize your votes and submit them now. [Voting]

The polls are now closed. That concludes our official business. So while we await preliminary voting results, John Stankey will provide you with an update on the state of your company, and then we'll take your questions. John?

Thanks, Bill, and good afternoon, everyone. Last month marked an important milestone for AT&T when we completed the spin-off of WarnerMedia. This allows us to return AT&T to a company centered on our core connectivity businesses of 5G and fiber, as we approach what I've come to call the dawn of a new age of connectivity. We are now a simpler, more focused company and management team that's committed to becoming America's best broadband provider. Let's review what this team delivered in 2021 toward that goal. We had 3.2 million wireless postpaid phone net adds, which is more than we saw in the previous 10 years combined. AT&T Fiber grew by 1 million or more subscribers for the fourth straight year. We improved our operating effectiveness through an enhanced customer service and customer acquisition engine. With our efficiency initiatives, we now expect to achieve more than $4 billion of our $6 billion cost saving run rate target by the end of this year with those savings falling to the bottom line later this year. Building on our momentum last year, our recent first quarter results also continue to demonstrate that our teams are executing well against our consistent business priorities. We saw record levels of net additions in Mobility and consistently strong AT&T Fiber growth, along with higher revenues across both segments, thanks to our disciplined go-to-market strategy. In Mobility, our strong network performance, simplified offers and improved customer experience brought in the most first quarter postpaid phone net adds in more than a decade. In Fiber, we had our ninth straight quarter, attracting more than 200,000 AT&T Fiber net adds, driven by our continued footprint expansion and great build velocity that now enables us to serve 17 million customer locations with fiber. Let me try to put this in perspective. Over the last 7 quarters, we've had an industry-best 5.3 million high-value postpaid phone net adds and nearly 2 million AT&T Fiber additions as our fast-growing fiber revenues now make up nearly half of our Consumer Wireline broadband revenues. This is real and sustainable momentum. Our success over the past 7 quarters can also be attributed to our focus on better recognizing and delivering on what customers want. Our Mobility and Fiber Net Promoter Scores are up year-over-year, and the fact that our churn remains near historically low levels across all businesses demonstrates how our improvements to the customer experience are delivering a positive impact. As I look ahead, I see unique opportunity for AT&T that I feel plays right into the DNA of our company. With our assets, employees and customers, I'm bullish about our ability to lead in this new era where consumers and industries will rely on connectivity like never before. We conservatively project a fivefold data increase on our networks over a 5-year period. This growth will come from a number of sources: consumer entertainment behavior that continues to transition from mass experiences to personalized and individualized consumption; demand for higher video resolution, moving from 4K to 8K that will be coupled with a growing appetite for 2-way interactivity; edge-driven point-of-service interaction with capabilities like artificial intelligence and autonomous transportation that require ubiquitous and reliable connectivity to achieve their promise; the evolution of social interaction, gaming and experiential alternate realities that will consume huge amounts of real-time connectivity and require low-latency and 2-way data; dramatically improved collaboration tools, enabling more effective distributed work environments; an improved health care services for an aging population that relies on access, telemetry and monitoring to address the challenge of rising medical cost curves; and the list goes on. AT&T today is a more focused and agile connectivity provider, a wireless network leader with a growing fiber footprint. Our products are essential to everyday life and critical as the foundation for the next stage of software innovation. Our customer relationships are strong, durable and linked to value, enabling intelligent pricing adjustments. Our progress has been engineered by our more than 170,000 committed and capable AT&T employees. I want to take a moment and thank them. I couldn't be more proud and appreciative of all they've done to move our business forward during some very challenging times. I'm equally proud of how our leadership has been deliberate and purposeful in caring for our employees' well-being. Your company navigated a challenging political, social and public health environment while working to grow confidence and trust among our coworkers. We not only demonstrated a great record of maintaining the health and fostering an inclusive environment, but we also renewed or extended 12 labor agreements since 2020 and the win-win constructive spirit that has been the hallmark of our long-standing relationship with our union partners. The care and concern demonstrated for our employees also extends to the communities where we operate and our obligations to the environment. With the passage of the Bipartisan Infrastructure Investment and Jobs Act, there's never been a better time to unlock the power of the Internet for every American to make Internet for all a reality. A few months ago, we voluntarily launched a robust, low-cost Internet access service that, when combined with the federal benefits from the Affordable Connectivity Program, makes Internet free to qualified households. This aligns with our 3-year $2 billion commitment to address the digital divide and also includes charitable contributions through our AT&T Connected Learning program. I'm also proud of our leadership as we work to make a difference in the environment through innovative Internet-powered climate solutions. AT&T has set an industry-leading target to help businesses collectively reduce a gigaton of greenhouse gas emissions by 2035, an effort that builds on our commitment to be carbon-neutral by 2035. I would stress an additional point here. Our leadership is not only focused on these areas as we serve our communities, but they are held accountable for our progress in them. So as I close, let me summarize what I think you should conclude from this past year. Our balance sheet is now meaningfully improved with our obligations largely fixed and long term in nature. There are no pressing needs for us to enter the long-term debt markets in the near term. Our deliberate capital allocation strategy now enables us to invest at record discretionary levels to grow a strong and sustainable franchise. As we give our management team the latitude to focus in their areas of expertise, I believe we're going to see an even better company. We're positioned to sustain strong cash flows and attractive dividend yield that places AT&T among the very best dividend-yielding stocks in the United States. Taken together, our free cash flow, our dividend, a much stronger balance sheet, no pressing needs to enter the long-term debt markets and more than 170,000 committed employees, this puts us in a strong position to pursue durable and sustainable growth. In short, we feel AT&T is positioned to navigate this moment from a position of strength, flexibility and opportunity. I couldn't be more excited about the future of AT&T and the opportunities ahead of us. I'd like to thank Bill and the entire Board for their wisdom, guidance and support. But most of all, I want to thank you, our stockholders. You have my word that we'll continue working hard every day to earn your trust and to deliver competitive returns for your faith in AT&T. Now Bill, I'll turn it back to you.

Thank you, John. So now we're going to move into the question-and-answer portion of the meeting. We've received a number of questions, and we're prepared to address the most common ones today. For any questions of general interest that we don't get to today, we'll post responses on our Investor Relations website within 30 days. For questions that are specific to individual stockholders, we will respond to you directly. Stacey, we're ready for questions.

Our first question is about our executive compensation practices and how we justify our executive pay.

Well, AT&T is committed to paying for performance and aligning the interest of our executives with those of our stockholders. In 2021, 89% of John's target compensation and an average of 88% of the target compensation for our currently active named executive officers, other than John, was variable and tied to performance goals that are important to stockholders. In light of the vote at our 2021 Annual Meeting, we stepped up engagement on this topic, both with stockholders who voted for and those who voted against say-on-pay at the meeting. In the fall of 2021, we reached out to stockholders representing more than 2/3 of shares held by institutions and engaged with stockholders representing nearly 50% of shares held by institutions. Beth Mooney, who chairs our Human Resources Committee, directly met with stockholders representing 40% of shares held by institutions. We gave these stockholders an opportunity to provide feedback, discuss proposed changes to our short- and long-term incentive programs. We then made a number of changes to further align our leaders' interests with those of our stockholders. So in terms of long-term compensation, we moved from 100% return on invested capital to 50% EPS growth and 50% return on invested capital. We doubled the impact of the total shareholder return modifier to 20% based on our performance against our peer group, providing greater reward for a high level of performance but also penalizing more harshly for underperformance. We also stipulated that the modifier will not be applied if AT&T is in the top quartile of its peer group but total return is negative. And for our short-term compensation practices, we replaced EPS with operating income as a short-term performance metric given that we added EPS as a performance goal for long-term compensation. I take pride in our history of engaging with stockholders on important topics such as executive compensation. And in particular, I want to thank Beth and the entire Human Resources Committee for their efforts and leadership in this area. Stacey, what's the next question?

We've been asked to address our political engagement practices and why we donate money to some politicians who are seen by some as a divisive.

Well, that's certainly a topical and relevant question right now. The political environment in our country is probably is as stressed and as polarized as ever, and it seems like nearly every issue that comes up is seen through a partisan political lens right now. And AT&T is a highly regulated company in a highly regulated industry. We're subject to an awful lot of policy development, and these policies and decisions have a huge impact on our company at state, federal and local levels. And our political engagement is essential in guiding these things, and our involvement in the political process is necessary as a result of that. And when we decide to engage, we put 3 priorities in front of us as we evaluate these things. First, we evaluate whether or not it contributes to U.S. economic stability and growth. Second, we determine whether or not it's something that helps for infrastructure deployment, technological progress and access to this technology. And third, we look at policies that allow us to hire, retain and promote a skilled workforce with good pay and good benefits. Now we're always mindful of our corporate values. And given our incredibly diverse employee body who probably represents the entirety of the political spectrum on virtually every issue, we always want to be mindful that we've approached these processes, ensuring that we maintain harmony within our business and that our contributions to particular lawmakers do not necessarily mean we support their views or actions on every issue. But we're supporting them because of their views on issues that are relevant and important to AT&T. Personally, I believe society functions best when we collectively find the center on issues, and doing that is important to AT&T's long-term best interest, and that's how we'll continue to approach this. Stacey?

Thanks, John. We've received a question asking how stockholders can trust the Board and management after 5 years of M&A activity that has negatively impacted stockholder value.

Well, I think as I mentioned a few minutes ago in my remarks, we've stated our intent to focus and simplify our company, improve our financial structure and make sure that our returns, becoming America's best broadband provider, are competitive. Our strategy for DIRECTV and WarnerMedia this past year was about unlocking what we felt was hidden value of each in matching the asset and the business model to the right capital structure and the right partners and enabling each of them to focus on the right opportunities that were in front of them. I will acknowledge, it's going to take a little bit of time for all these moves to play out and ultimately demonstrate the intrinsic value in each of the assets. But certainly, we're seeing positive signs at AT&T relative to the moves that we've recently made to structure ourselves in that fashion. I might remind everybody that in addition to the 71% of Warner Bros. Discovery that AT&T shareholders were dividend, AT&T received more than $40 billion from the spin-off, including nearly $39 billion in cash and $1.6 billion of debt retained by Warner Bros. Discovery. And investors can expect to see a significant debt reduction at AT&T in the short term. In fact, we've already addressed many near-term maturities, paying off more than $10 billion in bank loans. We redeemed an additional $12.5 billion in bonds. And just this week, we launched a tender offer for $8 billion of additional debt that we expect to retire very shortly. Our stronger balance sheet gives us a much greater flexibility to capitalize on what I described earlier as being the unprecedented demand for connectivity and leveraging our strong fiber and wireless asset base, our broad distribution across all product markets and our ability to be focused in the growth of both fiber and 5G. So with this sharper focus, I have every reason to believe that we will be successful. I'm bullish about that. I'm optimistic about that. And I assure you that this management team and Board is focused on driving shareholder returns through a disciplined allocation of capital. Stacey?

A couple of questions have come in asking how we will succeed in today's increasingly competitive landscape.

Well, I would say, first of all, we're doing just fine, as I shared in my comments previously. We're focused on what we frankly believe is going to be a multiyear secular tailwinds in connectivity demand as well as what's going to be an interesting opportunity as the government begins to bring subsidy into the marketplace through the Broadband Infrastructure Act. We haven't delivered a plan in place to deal with this. It's going to enable us to optimize asset returns across multiple segments where we benefit from onerous economics on the largest fiber network in the U.S. and an owned and operated wireless network. And our strength in distribution across literally every potential customer, whether it be the largest businesses in the United States or small consumers, gives us a great opportunity to leverage those assets in an effective fashion. Our capital investment is going to be elevated over the next few years as we aggressively build out our next-generation networks and our fiber that allows us to keep that lead that I just talked about, and I'm highly confident that our expertise and capabilities of the company and the employees that we have in building scaled networks and the results that you've seen us deliver over the past 7 quarters demonstrate that we can drive great returns off that level investment, even in the amazingly competitive markets that we operate in today. And I think I would just point to our results over the last 7 quarters and suggest they speak for themselves that, even without all that great investment being put in place yet, we're doing incredibly well and showing great strength. Stacey, what's the next question?

We've received a few questions asking if our new dividend is safe.

I'll take that one. The Board believes that with management's successful repositioning of the business, AT&T has the financial flexibility needed to allow the Board to sustain the dividend at current levels while enabling the company to reduce its leverage. AT&T continues to be among the highest dividend yield payers among the Fortune 500. And we believe by investing more in the business right now, we will deliver improved returns to stockholders in the years ahead. So we expect that the company's cash position and its access to cash will give us the flexibility we need to meet our -- really all of our commitments, including dividends. Okay. I think we have time for one more question.

Okay. Final question. What are we doing to deliver better Internet access in underserved and rural areas?

So there's a lot going on here. With the passage of the Bipartisan Infrastructure Bill, the Administration and Congress are investing $65 billion into our country's broadband future and significantly augmenting what private industry has been investing in the industry, last year at $80 billion alone, and actually working to form a policy of universal access to the Internet, which, in my personal opinion, is long overdue. We at AT&T have committed, as I mentioned in my previous remarks, $2 billion over 3 years to bring affordable and accessible Internet to more Americans and provide free resources to improve broadband adoption. We're working to bring high-speed Internet to unserved areas through public-private cooperation, including with state and local governments where we put our money in next to federal grant money to ultimately serve these areas, and we intend to be aggressive and active in moving on those things going forward as the government brings more money into the market. And as I mentioned in my previous remarks, I believe we have created what is seen in Washington, D.C. as one of the models for affordable Internet service, where we are offering a highly discounted Internet service to eligible households that, after subsidy from the government, effectively makes this service free. I think this is a tremendous plan to get scaled Internet now into households that, up to this point in time, couldn't receive it for purposes of affordability. So through a combination of aggressive network expansion, the new product offerings I just mentioned, the engagement we're doing with communities and policymakers to raise awareness, we are absolutely helping those who cannot afford Internet service or cannot get access to it now. And we're really excited about the opportunity for progress here and open up an even-playing field for all Americans to gain the benefits of access to health care, education, economic opportunity and entertainment and all the things that come with access to the Internet. So with that, I'm really anxious to hear the results of the voting. So Bill, let me turn it back to you, so we can find out what went on here.

Well, thank you, John. So Stacey, would you report the results of the voting for us, please?

The first item is the election of directors. Each of the 10 nominees were reelected. For item #2, the ratification of Ernst & Young as independent auditors for AT&T, there were 95.1% of votes cast in favor. As a result, the appointment of Ernst & Young as our independent auditors for 2022 has been ratified. For item #3, the advisory vote on executive compensation, there were 90.4% of votes cast in favor. Therefore, the proposal is approved. For Item #4, there were 87.7% of votes cast against the stockholder proposal. Therefore, the proposal is defeated. For item #5, there were 66.9% of votes cast against the stockholder proposal. Therefore, the proposal is defeated. For item #6, there were 55.9% of votes cast against the stockholder proposal. Therefore, the proposal is defeated. For item #7, there were 96% of votes cast against the stockholder proposal. Therefore, the proposal is defeated.

Thank you, Stacey. Well, that concludes our formal business. So I now declare that the meeting is adjourned. And on behalf of the Board and the executive team of AT&T, thank you all for joining us today, and thank you for your continued interest in our company.