DALLAS, Oct. 9, 2019 /PRNewswire/ -- 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.
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.