AT&T today announced its exposure to near-term equipment shortages is limited – in the wake of coronavirus epidemic.
Ericsson and Nokia are the main suppliers of telecom network to AT&T. AT&T does not source mobile network from China’s Huawei and ZTE.
“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,” AT&T said in a statement.
AT&T has reported revenues of $181.2 billion and capital expenditures of $19.6 billion in 2019. AT&T is planning to spend around $20 billion towards its capital expenditure plans — mainly on fiber and 5G network in 2020.
AT&T today announced a $5.5 billion term-loan agreement with 12 banks to provide more financial flexibility. The loans are pre-payable without penalty.
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 cancelled a $4 billion ASR (planned for 2Q) and stopped all share repurchases.
AT&T said the strength of core subscription businesses, execution on business transformation initiatives, and sizing operations to economic activity will provide cash from operations that will support network investments, dividend payments and debt retirement.
AT&T is expecting 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.
AT&T 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.
The company also has a fully committed $15 billion revolver in place and has no need or plans to use it in 2020.
