Windstream Holdings, Inc. (NASDAQ:WIN) Q2 2020 Earnings Conference Call - Final Transcript

Jul 30, 2020 • 08:30 am ET

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Windstream Holdings, Inc. (NASDAQ:WIN) Q2 2020 Earnings Conference Call - Final Transcript

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Presentation
Operator
Chris King

Good morning, everyone, and thank you for joining Windstream's Second Quarter 2020 Earnings Conference Call. Joining me on the call today are Tony Thomas, our Chief Executive Officer; and Bob Gunderman, our Chief Financial Officer and Treasurer.

To accompany today's call, we have posted the presentation slides, earnings release and supplemental schedule on our Investor Relations website. Today's discussion includes statements about expected future events and financial results that are forward-looking and subject to risks and uncertainties. A discussion of factors that may affect future results is contained in Windstream's filings with the SEC which are available on our website.

Let me now turn it over to Tony Thomas.

Executive
Tony Thomas

Thanks, Chris. Good morning, everyone, and thank you for joining us today.

Before we discuss our quarterly results, I'd like to provide an update on our response to the COVID-19 pandemic. As a critical infrastructure provider, Windstream continues to respond quickly to keep consumers and businesses connected during this unprecedented global health crisis. Our field technicians have performed exceptionally well during this time to install and repair services for customers, while following appropriate health and safety guidelines.

The remainder of our workforce has seamlessly adjusted to working remotely and using our various collaboration tools, including OfficeSuite HD Meeting. We continue to work through plans to address how and when we safely and gradually return employees to offices. Our guiding principle continues to be ensuring the safety of our employees, customers and the communities we serve through a standard and incremental approach.

Our network also continued to perform well during the pandemic. Broadband traffic is holding steady at about 30% above pre-pandemic levels. Our network is well equipped to handle the incremental capacity demands as a result of our past modernization efforts. I'm very proud the way our teams have continued to deliver essential telecommunication services. And I thank all of our employees for their dedication and flexibility.

Now let me turn to Slide 4. I'm excited to report that our path to emerge from restructuring is clear. On June 25, our plan of reorganization was confirmed, and we are targeting late summer for emergence, subject to regulatory approvals, which we expect to receive within the next month.

As a reminder, our plan provides for a reduction of more than $4 billion in Windstream's existing debt as well as access to exit financing after emergence. Our settlement with Uniti enhances Windstream's cash flow profile by nearly $300 million per year from 2021 to 2024. As a private company, Windstream will have increased flexibility to invest in our network, accelerate our transformation and return to growth.

As seen on Slide 5, Windstream delivered solid second quarter results, achieving consolidated adjusted OIBDAR of $424 million, which represents our third consecutive quarter of flat or sequentially higher adjusted OIBDAR. Our focus on expenses continues to drive higher margins. For the quarter, consolidated cash expenses fell by 9% year-over-year.

In our Windstream Enterprise segment, we continue to see an acceleration in our strategic products with OfficeSuite demand