DALLAS, April 7, 2020 /PRNewswire/ -- As countries and companies around the world respond to the COVID-19 pandemic, AT&T wanted to provide a financial update to investors.
The company said it has a strong cash position, including a strong balance sheet and attractive liquidity.
AT&T had about $12 billion in cash on hand on Dec. 31, 2019.
In February, AT&T received ~$4 billion from preferred stock issuances at rates which were measurably below that of its common dividend. During the first quarter, the company executed a $4 billion Accelerated Share Repurchase (ASR) agreement which was completed in March 2020.
In March, AT&T canceled a $4 billion ASR (planned for 2Q) and stopped all share repurchases.
AT&T today 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.
Going forward, AT&T expects:
The strength and relevance of our core subscription businesses, our continued execution on our business transformation initiatives, and sizing our 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.
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.
Company 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.
Continued access to commercial paper, bond markets and other financing activities which, as in the past, will be utilized 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.
As it has for the past 36 years, the company looks forward to continuing to pay a quarterly dividend to shareholders. On March 27, the Board of Directors declared a dividend payable on May 1, 2020, to stockholders of record of its common and preferred shares at the close of business on April 9, 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.
AT&T's pension plan assets are invested conservatively and are well diversified. As disclosed in AT&T's 2019 annual report, the company's pension plan asset allocation to domestic and international equities made up only 29% of plan assets as of December 31, 2019, greatly reducing the impact to total plan results of recent equity market declines. The plan has allocated substantially all of the remaining assets to fixed income, preferred securities and other investments which have returns much less impacted by current equity markets.
Over the past several years, the company has 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 will provide more information on COVID-19 impacts to its financial and operational results on its first-quarter earnings call on April 22.
*About AT&T AT&T Inc. (NYSE:T) is a diversified, global leader in telecommunications, media and entertainment, and technology. It executes in the market under four operating units. WarnerMedia is a leading media and entertainment company that creates and distributes premium and popular content to global audiences through its consumer brands, including: HBO, HBO Max, Warner Bros., TNT, TBS, truTV, CNN, DC Entertainment, New Line, Cartoon Network, Adult Swim and Turner Classic Movies. AT&T Communications provides more than 100 million U.S. consumers with entertainment and communications experiences across TV, mobile and broadband. Plus, it serves high-speed, highly secure connectivity and smart solutions to nearly 3 million business customers. AT&T Latin America provides pay-TV services across 11 countries and territories in Latin America and the Caribbean and wireless services to consumers and businesses in Mexico, where it is the fastest-growing wireless provider. Xandr provides marketers with innovative and relevant advertising solutions for consumers around premium video content and digital advertising through its platform.
Cautionary Language Concerning Forward-Looking Statements
Information set forth in this news release contains financial estimates and other forward-looking statements that are subject to risks and uncertainties, and actual results might differ materially. A discussion of factors that may affect future results is contained in AT&T's filings with the Securities and Exchange Commission. AT&T disclaims any obligation to update and revise statements contained in this news release based on new information or otherwise.
This news release may contain certain non-GAAP financial measures. Reconciliations between the non-GAAP financial measures and the GAAP financial measures are available on the company's website at https://investors.att.com.