AT&T Offers Financial Update
Tuesday, April 07, 2020 | Comments

AT&T offered a financial update in light of the COVID-19 pandemic. The company said it has a strong cash position, including a strong balance sheet and liquidity.

The carrier had about $12 billion in cash on hand Dec. 31. AT&T announced a $5.5 billion term-loan agreement at competitive rates with 12 banks to provide additional financial flexibility to an already strong cash position. The loans are pre-payable without penalty.

During the past several years, the company worked with its suppliers to ensure a geographically diverse supply chain to reduce risk in these types of situations. While the COVID-19 pandemic is subject to rapid change, in general, the company believes its exposure to near-term equipment shortages is limited.

The company said it expects the strength and relevance of its core subscription businesses, continued execution on its business transformation initiatives, and sizing its operations to economic activity will provide cash from operations that will support network investments, dividend payments and debt retirement, as well as the ability to invest in business opportunities that arise as the economies recover.

The carrier expects to close the sale of its Puerto Rico and U.S. Virgin Islands operations later this year and intends to use the proceeds to retire an outstanding preferred interest.

AT&T also expects about $2 billion from the expected closing later in 2020 from the previously announced divestiture of CME, as well as additional proceeds from a number of other real estate and tower monetizations.

In February, AT&T received about $4 billion from preferred stock issuances at rates that were measurably below that of its common dividend. During the first quarter, the company executed a $4 billion accelerated share repurchase (ASR) agreement that was completed in March. In March, AT&T canceled a $4 billion ASR planned for the second quarter and stopped all share repurchases.

The company noted its access to commercial paper, bond markets and other financing activities which, as in the past, will be used as part of normal financing activity based on cost, duration and overall market conditions. The company also has a fully committed $15 billion revolver in place and has no need or plans to use it in 2020.

AT&T’s pension trust’s funded status is substantially the same as year-end 2019. There are no cash funding requirements in the near term, and the company does not expect any required contributions through 2022.

The company will provide more information on COVID-19 impacts to its financial and operational results on its first-quarter earnings call April 22.

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Comments
On 4/8/20, Aaron Siegrist said:
Would be nice if AT&T would give discounts to first responders and law enforcement along with city officials.

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