Telephone & Data Systems Inc. (NYSE:TDS) Q2 2020 Earnings Conference Call - Final Transcript

Aug 07, 2020 • 10:00 am ET

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Telephone & Data Systems Inc. (NYSE:TDS) Q2 2020 Earnings Conference Call - Final Transcript

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Executive
Jane W. McCahon

questions related to the FCC auctions and spectrum strategy.

Now I'd like to turn the call over to Pete Sereda. Pete?

Executive
Peter L. Sereda

Thanks, Jane, and good morning, everyone. I'm going to make some brief comments about the balance sheet and actions we've taken during the COVID-19 crisis to protect ourselves financially. But before doing so, I'd like to highlight the strong operational and financial results of both business units during the quarter. The pandemic has highlighted the criticality of our products to our customers, and the teams have stepped up and continued to deliver on their typically outstanding service levels. Now to the balance sheet. As we've talked about before, maintaining financial flexibility is one of the pillars of our corporate strategy. Over the years, we have worked to retain relatively low leverage levels, long-dated debt maturities, sufficient undrawn revolving credit facilities and significant cash balances. While at the same time, making sure we have the financial resources we need to fund our businesses.

As you can see on slide five, at June 30, TDS had $1.7 billion in available funding sources, including cash and cash equivalents, available credit facilities, undrawn term loans and undrawn portions of our EIP securitization. We took a number of steps earlier this year to solidify our overall liquidity and feel confident we are in a stable and sound position for the rest of the year. We also repurchased a little over 500,000 TDS common shares at favorable prices during the quarter, balancing the need to retain liquidity with the pricing opportunity offered by the market. As is our practice, we will look to take advantage of favorable market conditions to augment our balance sheet going forward. We believe we have additional access to the debt capital markets, both retail and institutional as well as other conventional debt sources.

If it were necessary, we believe we would also have a number of potential additional funding sources, including some related to our own towers and wireless partnerships, although we would view such financings less favorably than straight debt for costs and operational reasons. Finally, as you can see from the chart on the right side of the page, most of our existing debt is very long dated with essentially no near-term maturities pressuring our liquidity position.

I will now turn the call over to Ken.

Executive
Kenneth R. Meyers

Thanks, Pete. Good morning. I'd be lying if I told you this wasn't a bittersweet moment for me. I'm so proud we worked with TDS and U.S. Cellular for over 30 years by my count actually, by Jane's count. I've been involved in reporting for some 136 quarters with many of you on the receiving end of some of those, maybe even many of those, or maybe it just feels that way. I want to acknowledge, I've learned a lot from you, and we'll miss the exchange of ideas and information. And I want you to know that I'm confident that I'm leaving the organization in great hands. U.S. Cellular has an