8-KMaterial AgreementsExhibits & Filings

AT&T INC. 8-K Report, Material Agreement (Oct 21, 2013)

Filed October 21, 2013For Securities:TT-PCTBBT-PA

Summary

AT&T Inc. (T) has entered into a significant Master Agreement with Crown Castle International Corp. (CCI) to lease and sell a substantial portion of its wireless tower portfolio. This transaction involves approximately 9,100 leased tower rights and the sale of 600 company-owned towers, generating approximately $4.85 billion in upfront cash for AT&T. The lease rights are for an average term of 28 years, with Crown Castle holding options to purchase these towers at the end of the lease term for an additional estimated $4.2 billion. This move is strategic for AT&T, as it allows them to monetize a significant asset while securing long-term access to tower capacity to support its growing mobile data services, including a minimum of 10 years of subleased capacity with renewal options up to 50 years.

Key Highlights

  • 1AT&T to receive approximately $4.85 billion in cash from the transaction with Crown Castle.
  • 2Lease and sale involves approximately 9,100 AT&T-owned wireless tower rights and 600 towers.
  • 3Crown Castle gains exclusive rights to lease and operate the towers for an average term of 28 years.
  • 4Crown Castle has future purchase options for leased towers totaling an estimated $4.2 billion.
  • 5AT&T will sublease capacity on the towers from Crown Castle for a minimum of 10 years, with renewal options up to 50 years.
  • 6The transaction is expected to close by the end of 2013, subject to customary closing conditions.
  • 7AT&T anticipates no significant impact on its financial results from this transaction.

Frequently Asked Questions

AT&T is set to receive approximately $4.85 billion in upfront cash from the transaction. While this is a significant cash inflow, AT&T expects no major impact on its financial results from the deal itself.

AT&T will sublease capacity on these towers from Crown Castle for at least 10 years, paying $1,900 per month per site with annual rent increases. AT&T also has the option to renew these leases for up to a total of 50 years and will have access to additional reserve capacity for future growth.

The transaction allows AT&T to monetize a significant portion of its tower infrastructure, generating substantial upfront cash. Simultaneously, it secures long-term access to essential tower capacity, which is crucial for meeting the growing demand for mobile Internet services and supporting its network expansion.

AT&T expects the transaction to close by the end of 2013, provided that all standard closing conditions are met.