The Wall Street Journal - 11.09.2019

B2| Wednesday, September 11, 2019 ** THE WALL STREET JOURNAL.**

INDEX TO BUSINESSES

These indexes cite notable references to most parent companies and businesspeople
in today’s edition. Articles on regional page inserts aren’t cited in these indexes.

A
Airbus..........................B3
Alibaba Group.............B4
Alphabet...........B4,B5,B8
Amazon.com.....B1,B4,B8
Anbang Insurance Group
.....................................B6
Antero Resources.....B13
Apple...........A1,B1,B5,B8
Applied Materials.....B13
Ashford Hospitality
Trust..........................B6
AT&T.......................B1,B2
B
Bank of America.......B12
Barclays.....................B12
Boeing..................B3,B13
British Land..............A12
C
Caterpillar.................B13
Cerner..........................B4
Charles Schwab........B12
Chesapeake Energy..B13
Citigroup....................B12
Convene.....................A12
Cox Enterprises..........B8
D
DoorDash...................B14
Dow...........................B13
E
Electronic Arts............B5
Elliott Management
............................... B1,B2

Empire State Realty Trust.......................A12 EQT............................B13 F Fannie Mae.................A2 Fifth Wall..................A12 Ford Motor...........B8,B13 Freddie Mac................A2 G GameStop....................B8 General Electric..........B3 GrubHub....................B14 Gulfport Energy........B13 H H.I.G. Capital.............B12 Hines Interests...........A1 Home Depot................B1 Host Hotels & Resorts .....................................B6 I-J Industrious................A12 Jones Lang LaSalle..A12 JPMorgan Chase..B2,B12 L L Brands......................B2 Lyft......................A2,B14 M Mallinckrodt..............B12 Mammoth Energy Services....................A5 Marriott InternationalB6 Microsoft........B4,B5,B13

Morgan Stanley..........B2 N National Commercial Bank of Saudi Arabia .....................................B2 Netflix.........................B1 P Postmates.................B14 Priceline....................A12 Prologis.......................B7 Provenance Hotels......B6 Providence St. Joseph Health.......................B4 R-S Range Resources......B13 Rivian Automotive.....B8 Samsung Electronics..B5 Sunstone Hotel Investors...................B6 T-U Target..........................B1 Tesla............................B8 Tishman Speyer..........A1 Uber................A2,B3,B14 V-W Verizon........................B2 Victoria's Secret.........B2 Walmart......................B7 WarnerMedia..............B1 We Company.............A12 Wells Fargo........B12,B13 Wendy's....................B13 WeWork......................A1

INDEX TO PEOPLE

Stankey, has since emerged as the likely successor to Mr. Ste- phenson. “For a content business now owned by a telecommunications company and under the direct supervision of a life- long telecom executive, this lack of continuity in leadership presents a real concern for investors,” Elliott said. While some senior executives such as HBO head Richard Plepler have left the company, WarnerMedia has also brought in new management including Robert Greenblatt, former NBC and Showtime programming chief, as chairman of Warner- Media entertainment. On Tuesday, WarnerMedia unveiled a new distribution unit for its cable channels—a

visers and Saudi officials. Longstanding oil official Prince Abdulaziz bin Salman, the son of the king, has re- placed Mr. Falih as energy minister. Yasir al-Rumayyan, the head of Saudi Arabia’s sov- ereign-wealth fund and a con- fidant of the crown prince, now chairs Aramco. To ensure the IPO’s success and potentially boost the valuation, Prince Mohammed wants wealthy Saudi families to act as anchor investors in the domestic share sale, one adviser to Aramco said. When the prince first broached the idea of a listing in 2016, he met with some of the coun- try’s richest families to en- courage them to back the IPO, the adviser said. However, in 2017, Prince Mohammed locked up hun- dreds of businessmen and roy-

als in Riyadh’s Ritz Carlton hotel, in what the government described as a corruption crackdown. Critics have labeled the roundup a purge of political opponents, which, coupled with the killing last year of journalist Jamal Khashoggi, has damped business senti- ment. Bankers have shown they are willing to move past these events to win business in Saudi Arabia, but it is un- clear foreign investors are ready to bet on the market. Stock analysts say an Aramco IPO could suck cash from other Tadawul-listed companies, as Saudi investors rebalance their portfolios to invest in the landmark listing. Tadawul officials have said the exchange is ready to ab- sorb the entire 5% listing of Aramco, up to $100 billion.

person familiar with the mat- ter has said. Disney earlier this year said its streaming service, Disney+, would launch in November and cost $6.99 a month. Apple TV+ will cost $4.99 a month start- ing Nov. 1, the company said Tuesday. After prevailing in the anti- trust fight, AT&T moved to break down the corporate walls and fiefs at WarnerMe- dia, leading to the exits of the top executives at the HBO and Turner divisions this spring. AT&T Chief Executive Randall Stephenson had earlier said he wasn’t looking to change the culture of WarnerMedia nor the leadership at key units. The executive AT&T picked to lead WarnerMedia, John

but we are also ready for list-
ing outside in other jurisdic-
tions.”
JPMorgan Chase &Co.,
Morgan Stanley and National
Commercial Bank , which is
owned by the Saudi govern-
ment, are expected to be the
lead underwriters on the list-
ing, people familiar with the
details said.
Saudi officials plan to list
Aramco first domestically and
then internationally in 2020
or 2021, possibly in Tokyo.
Reuters reported plans for
a two-part domestic listing
Monday.
The comments from
Aramco’s CEO came ahead of a
gathering of the Organization
of the Petroleum Exporting
Countries’s joint ministerial
monitoring committee later in
the week. Saudi Arabia is
OPEC’s de facto leader.
The Saudi government re-
moved powerful energy minis-
ter Khalid al-Falih on Sunday,
less than a week after he was
removed as chairman of
Aramco. Mr. Falih publicly
supported a stock offering, but
also worked to delay and re-
duce its scope due to concerns
about low oil prices and a pos-
sible world recession, accord-
ing to Aramco executives, ad-

Continued from page B1

Aramco

Prepares

For Listing

An activist investor’s at- tempt to force a strategy re- vamp at AT&T Inc. spotlights the diverging paths the two largest U.S. wireless carriers have taken in search of growth. Elliott Management Corp.’s detailed criticism Monday of decisions made by AT&T’s leaders effectively praises Verizon Communications Inc.’s focus on upgrading its wireless net- work over becoming a media giant. While AT&T has spent heavily on entertainment and advertising assets, Verizon has put building a faster 5G net- work at the center of its strategy. Investors have rewarded Verizon with a similar market valuation, even though AT&T has nearly 30% more annual revenue. Displacing Verizon is a “po- tential reset of incredible im- portance,” Elliott wrote to AT&T’s board, arguing that the Dallas company’s wireless business isn’t just losing market share but is becoming less prof- itable. AT&T and Verizon have long been the two largest wireless providers in the U.S. by subscribers, but each has taken a different approach to generat- ing new revenue in a wireless market. Technology giants and startups made billions on the back of the wireless connec- tions that the carriers provided, leading each to seek ways to

capture more of that spending. “AT&T to a certain extent di- versified away from the wireless business, despite the fact that the wireless business has been very good over the last few years, whereas the pay-TV and the traditional media business has been under more pres- sure than expected,” said John Hodulik, an analyst at UBS Group AG. Many of the suggestions El- liott made are already being implemented or are under dis- cussion at AT&T, he said. Enter- ing this week, AT&T has posted a total shareholder return—or stock-price changes plus divi- dends—of roughly 20% over the

past year, compared with 14% for Verizon. AT&T spent $49 billion to buy satellite-TV provider Di- recTV and another $81 billion on Time Warner Inc., aiming to control content as well as connectivity. But cord-cutting has sapped customers from the pay-TV industry, prompting AT&T and others to launch streaming services. On Monday, AT&T defended its current strategy and “the unique portfolio of valuable assets” it has assembled. “We look forward to engaging with Elliott,” AT&T said. Verizon spent $130 billion in 2014 to take full control of its

BUSINESS & FINANCE

wireless business but avoided a blockbuster media deal. It paid about $9 billion to buy AOL in 2015 and Yahoo two years later, but struggled to generate revenue and took a hefty charge to write down its internet business. Now, it focuses on team- ing up with content providers. Hans Vestberg, who became Verizon’s chief executive last year, restructured the company’s business lines and has made wireless connectivity and finding new applications for 5G technology top priorities. Verizon is also in the pro- cess of cutting $10 billion in costs, a plan that has included a large voluntary severance pro- gram as well as outsourcing ef- forts. A Verizon spokesman de- clined to comment. Elliott called on AT&T to fol- low suit and cut more costs from its operations. “While revenue per employee was nearly identical at both companies just over a decade ago (~$400k), today Verizon’s revenue per employee (~$900k) is nearly 30% higher than AT&T’s (~$700k),” Elliott wrote. Elliott told AT&T’s leaders that the next generation of wireless service presented an opportunity for the carrier to reclaim market leadership. AT&T should gain, Elliott said, from its spectrum holdings as well as benefits associated with being the provider of the First- Net communications system for emergency responders.

BYSARAHKROUSE

Elliott to AT&T: Be Like Verizon

Sources: FactSet (market cap, shareholder returns); the companies (revenue, employees); S&P Capital IQ (debt ratio)

*As of end of 2018 †Last 12 months June 30, 2019

Employees 135,900

258,000

Wirelessrevenue asapercentage oftotalrevenue*

AT&T Marketcap 247

$275B Verizon

Netdebtto EBITDAratio† 2.7

3.4times

Totalshareholder returnsoverpast fiveyears

36% 49

42% 70

continuation of the combining of the HBO and Turner units under one umbrella. AT&T also said it would up- end the $70 billion traditional television-advertising market, using its reams of data—on everything from its DirecTV subscribers to where its customers take their phones—to help advertisers target con- sumers with ads across their TVs and digital devices. The company’s plans put the spotlight on Xandr, the tar- geted advertising division cre- ated when AT&T acquired ad- tech marketplace AppNexus for about $1.6 billion in 2018. Cable and satellite TV operators have long promised marketers would be able to target TV commer- cials to individual homes, but the offering has been slow to catch on. AT&T’s plan has faced hurdles, including privacy and regulatory concerns around how telecommunications and broadband providers may le- verage customer data. Meanwhile, the Federal Trade Commission is scrutiniz- ing how AT&T and other internet-service providers use consumer data for advertising. The agency ordered AT&T’s advertising subsidiary and other companies to provide informa- tion on their privacy practices for user data last month. AT&T said at the time that it would respond appropriately. —Drew FitzGerald contributed to this article.

WarnerMedia has acquired streaming rights for ‘Friends.’

WARNER BROS./EVERETT COLLECTION

to-consumer] strategy and the management of the business itself,” Elliott said. AT&T now says there will be a limited or “beta” launch late this year, with a broad commercial launch next spring, after rival offerings from Walt Disney Co. and Apple Inc. have already hit the market. WarnerMedia executives counter that while there have been tweaks to the strategy, it isn’t fair to say there is “con- fusion” and a “lack of plan,” as Elliott claimed. The long anti- trust battle against the government slowed the company down, the executives said, and AT&T plans to lay out its strategy at an investor meeting at the end of October. WarnerMedia has unveiled a large number of original TV shows and movies for HBO Max as well as reacquiring key library content including re- runs of the hit comedy “Friends.” It hasn’t yet an- nounced a price for the service, but it is likely to cost slightly more than the $14.99 average price for HBO Now, a

Continued from page B1

Video

Strategy

Questioned

B
Bastien, Jordan...........R6
Bernard, Daniel...........R4
Bettinger, Walt.........B12
Blank, Mike.................B5
Borsch, Matthew........A3
C
Campbell, Harry........B14
Creutz, Doug...............B5
Croft, Helima............B13
D-E
Dimon, James...........B12
Ellenberger, Don.......B13
F
Fadia, Ami.................B12
Flynn, Phil.................B13
Frank, Catherine.........R4
G-H
Greenblatt, Robert.....B2
Hammerle, Virginia....R4

Hartwich, Lukas..........B6 I Isaac, Gareth.............B13 Ives, Dan.....................B5 K Kessler, Doug..............B6 Kublank, Nate.............R8 L Lane, Philip...............B12 Luschini, Mark............B1 M Ma, Jack......................B4 Manes, Christopher....R4 Martin, Thomas........B13 McNiven, Jordan.......B13 Mehas, John................B2 Montag, Thomas.......B12 Musk, Elon..................B8 N-P Nasser, Amin..............B1

Percy, Matt.................B5 Petrou, Karen............B14 R Rosenberg, Alex..........R8 S Scaringe, RJ................B8 Schwartz, Sandy.........B8 Serra, Davide............B12 Stephenson, Randall...B2 T-V Trokoudes, Victor.......R6 VanderBrug, Jackie.....R6 Veek, Jesse.................R8 W Wali, Bashar...............B6 Wexner, Leslie............B2 Wilbur, Elliot.............B12 Wollman, Ed................R4 Z Zino, Angelo................B5

Hauk, referring to the new videos and imagery. “I love the diversity.” Victoria’s Secret Lingerie CEO John Mehas said he began changing the marketing just a few weeks ago. He plans to accelerate the changes, including messaging that re- sponds to the #MeToo move- ment. One of the messages in the new marketing is “by her, for her,” he said. “There is a big belief in the company that we need to evolve.” At the start of Tuesday’s meeting, Leslie Wexner, long- time CEO of the retailer’s parent, L Brands Inc., addressed his relationship with his former financial adviser, Jeffrey Epstein, seeking to reassure investors that he isn’t dis- tracted. He said he feels enor- mous regret that Mr. Epstein took advantage of so many young women and said his former adviser was living a secret life. “We are all betrayed by friends,” he said.

COLUMBUS, Ohio— Victo-
ria’s Secret will no longer rely
on a small group of supermod-
els to promote its sexy linge-
rie, as the chain shifts to more
inclusive marketing to end a
prolonged sales slump.
Victoria’s Secret’s emphasis
on supermodel “Angels” has
alienated some women and in-
vited criticism that the brand
is out of touch. Demand for its
bras has cooled as customers
have turned to brands using
unretouched images featuring
women of more shapes and
sizes.
At an investor meeting here
Tuesday, executives showed
new videos for Victoria’s Se-
cret and its teen brand Pink
featuring a more diverse set of
women than the company has
used in the past, including
curvier models. Pink also re-
cently hired a transgender
model. They are “real girls,”
said Pink Chief Executive Amy

BYKHADEEJASAFDAR

Victoria’s Secret Looks

To Diversify Its Models

MarketHeavyweights AramcoplansadomesticlistingonSaudiArabia'sTadawul,a stockmarketdominatedbybanksandpetrochemicalcompanies.

SaudiArabia’sstockexchangebysector

Source: FactSet

Banksandfinancials Energyandmaterials Retailandconsumer Realestate Telecommunication Insurance Utilities Healthcare Transportation Professionalservices Media

44 8% 25 6 7 6 7 1 7 1 2 5 1 9 1 3 0 9 0 6 0 4

Indirect Path Is Needed to Tap IPO

Aramco is drawing up plans to list on Saudi Arabia’s domestic stock market, the Tadawul. Here’s how foreign investors might gain exposure to Aramco shares: How can international investors buy Aramco shares? Saudi Arabia first began allowing foreigners to own Saudi shares directly in 2015, but only institutions could invest, and they had to apply to become a Qualified Foreign Investor. QFIs must have at least $500 million in assets under management. So, individual investors have to go through an in- vestment firm? Yes. Foreign investors can buy into actively managed portfolios and passive invest- ment funds, such as exchange-traded funds, or ETFs. That means exposure to Aramco would most likely come through owning a group of stocks of which Aramco would be one of many. How much of Aramco can foreign investors own? A single QFI isn’t allowed to own more than 10% of a company’s shares, and multi- ple foreign investors can’t own more than 49%, although the Saudi government does allow strategic majority investors—usually corporate investors—in some sectors.

The Wall Street Journal - 11.09.2019

Get our desktop app

Company

Features

Documentation

Resources