DALLAS, Oct. 9, 2019 /CNW/ -- AT&T announced today
that it plans to sell its wireless and wireline operations in
Puerto Rico and the U.S. Virgin Islands to Liberty Latin America. The transaction includes
network assets, including spectrum; real estate and leases;
customers, including 1.1 million wireless subscribers; and
contracts. At close, approximately 1,300 current AT&T employees
will move to Liberty Latin America.
To ensure a smooth transition for its customers, AT&T will
provide certain transition support functions to Liberty Latin America following close of the
transaction. Under terms of the agreement, AT&T will retain
FirstNet responsibilities and relationships as well as DIRECTV and
certain global business customer relationships.
The sale does not affect AT&T's FirstNet commitment.
AT&T retains its dedicated FirstNet network core and service
capabilities. Among other services, post-close Liberty Latin America will support AT&T's
FirstNet build in Puerto Rico and
the U.S. Virgin Islands, expanding
LTE coverage and capacity to best meet the needs of first
responders in the region. Eligible first responders subscribing to
AT&T's FirstNet services in Puerto
Rico and the U.S. Virgin
Islands will still have access to the benefits and
capabilities of the FirstNet network platform, including priority
and preemption.
"I'm proud of AT&T's history in Puerto Rico and the U.S. Virgin Islands," said Jose J. Davila, AT&T Vice President-General
Manager for the region. "I'm especially proud of our network and
the recent network enhancements that have helped AT&T rank as
the fastest network in Puerto
Rico.1 AT&T also has the most coverage on the
island, according to Mosaik. Our experienced and committed team
members will continue to support these operations as we join
Liberty Latin America. Liberty Latin America has expressed its
commitment to provide high-quality communications services to the
people of Puerto Rico and the
U.S. Virgin Islands. And we're
confident that it is equally committed to supporting these
communities."
"The combination of AT&T's leading mobile and wired
businesses with Liberty Puerto Rico's leading high-speed broadband
and TV business will create a strong and competitive integrated
communications player," said Balan
Nair, president and CEO, Liberty
Latin America. "At Liberty Latin America, we are focused on
investing in digital infrastructure, innovation and 5G networks and
on delivering a friendly customer service experience. This
transaction is evidence of that, and we are confident that this new
combination will be good for our customers and our employees,
including those joining us from AT&T."
Under the terms of the agreement, AT&T will receive
$1.95 billion in cash at close,
subject to customary closing adjustments. The transaction is
subject to review by the FCC and the Department of Justice. The two
companies expect the deal to close within 6 to 9 months.
To reach its de-leveraging goal, AT&T plans to use free cash
flow after dividends and to continue monetization initiatives.
AT&T has already surpassed its monetization goal of a net
$6 billion to $8 billion in 2019, with a cumulative total of
$10 billion raised year to date —
from both asset monetizations and working capital initiatives. With
this deal, the total of completed or announced monetization efforts
this year is more than $11
billion.
Given the company's confidence in reaching a net
debt-to-adjusted EBITDA ratio in the 2.5x range this year,
shareholders should expect that share buybacks will be in the mix
in the fourth quarter of 2019, along with continued
de-levering.
"This transaction is a result of our ongoing strategic review of
our balance sheet and assets to identify opportunities for
monetization," said John Stephens,
AT&T chief financial officer. "But doing so only made sense if
we received a fair value from a buyer that is committed to taking
this well-run business, with its skilled employees and loyal
customer base, and help it thrive. Liberty
Latin America has a strong reputation for quality of
service, and we believe they have the experience to build on the
success of these operations."
1 Based on analysis by Ookla® of Speedtest
Intelligence® data average download speeds for Q3 2019 average
download speeds. Ookla trademarks used under license and reprinted
with permission.
*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, Warner
Bros., TNT, TBS, truTV, CNN, DC Entertainment, New Line, Cartoon
Network, Adult Swim, Turner Classic Movies and others. AT&T
Communications provides more than 100 million U.S. consumers with
entertainment and communications experiences across TV, mobile and
broadband services. Plus, it serves nearly 3 million business
customers with high-speed, highly secure connectivity and smart
solutions. AT&T Latin America provides pay-TV services across
11 countries and territories in Latin
America and the Caribbean,
and is the fastest growing wireless provider in Mexico, serving consumers and businesses.
Xandr provides marketers with innovative and relevant advertising
solutions for consumers around premium video content and digital
advertising through its AppNexus platform.
AT&T products and services are provided or offered by
subsidiaries and affiliates of AT&T Inc. under the AT&T
brand and not by AT&T Inc. Additional information is available
at about.att.com. © 2019 AT&T Intellectual Property. All rights
reserved. AT&T, the Globe logo and other marks are trademarks
and service marks of AT&T Intellectual Property and/or AT&T
affiliated companies. All other marks contained herein are the
property of their respective owners.
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.
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SOURCE AT&T Inc.