8-KMaterial AgreementsOther EventsExhibits & Filings

AT&T INC. 8-K Report, Agreement Terminated (Apr 14, 2022)

Filed April 14, 2022For Securities:TT-PCTBBT-PA

Summary

AT&T Inc. (T) filed an 8-K on April 14, 2022, primarily to report the completion of its previously announced separation and merger of its WarnerMedia business with Discovery, Inc. This transaction, referred to as the 'Transactions,' involved AT&T transferring the WarnerMedia segment to a subsidiary (Spinco), distributing Spinco shares to AT&T stockholders, and then merging Spinco with Discovery, which has been renamed Warner Bros. Discovery (WBD). As a result of this merger, AT&T stockholders now hold approximately 71% of the outstanding capital stock of WBD on a fully diluted basis. Additionally, the filing confirms AT&T's repayment and termination of two material term loan credit agreements totaling $9.35 billion, which had been previously announced. These actions demonstrate a significant step in AT&T's strategic shift to reduce debt and focus on its core business segments. Investors should note the significant dilution of AT&T's ownership in the former WarnerMedia assets, now part of a separate publicly traded entity, and the company's continued commitment to deleveraging its balance sheet.

Key Highlights

  • 1Completion of the WarnerMedia and Discovery merger, creating Warner Bros. Discovery (WBD).
  • 2AT&T stockholders now own approximately 71% of WBD on a fully diluted basis.
  • 3Repayment and termination of $9.35 billion in outstanding term loan credit agreements.
  • 4The termination includes a $7.35 billion Syndicated Term Loan and a $2 billion Bilateral Term Loan.
  • 5This filing is an update to previous disclosures regarding the WarnerMedia separation and the debt extinguishment.
  • 6The company has filed unaudited pro forma financial statements as of December 31, 2021, reflecting these changes.

Frequently Asked Questions

The primary event reported is the completion of the merger between AT&T's WarnerMedia business and Discovery, Inc., forming a new company named Warner Bros. Discovery (WBD). The filing also confirms the repayment and termination of $9.35 billion in outstanding term loan credit agreements.

Following the merger, AT&T shareholders, through their ownership of shares in the spun-off entity (Spinco), now collectively own approximately 71% of the outstanding capital stock of the newly formed Warner Bros. Discovery (WBD) on a fully diluted basis. AT&T itself no longer directly owns the WarnerMedia assets.

AT&T repaid the term loans, totaling $9.35 billion, as part of its strategic plan to deleverage its balance sheet and focus on its core communications and connectivity businesses. This action reduces AT&T's outstanding debt obligations.

This 8-K filing includes Exhibit 99.1, which contains the unaudited pro forma condensed consolidated balance sheet of AT&T as of December 31, 2021, and the unaudited pro forma condensed consolidated statements of income for the years ended December 31, 2021, 2020, and 2019. Additional information regarding WarnerMedia can be found in previous filings referenced in this report.