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SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Form 8-K/A#5
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report: August 16, 1993
AT&T Corp.
A New York Commission File I.R.S. Employer
Corporation No. 1-1105 No. 13-4924710
32 Avenue of the Americas, New York, New York 10013-2412
Telephone Number (212) 387-5400
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Form 8-K/A#5 AT&T Corp.
August 16, 1993
Item 5. Other Events.
On August 16, 1993, AT&T Corp. ("AT&T") and McCaw Cellular
Communications, Inc. ("McCaw") entered into a definitive merger agreement
(the "Merger Agreement"). The Merger Agreement provides for the merger of
McCaw and a subsidiary of AT&T (the "Merger"), as a result of which McCaw
will become a wholly owned subsidiary of AT&T. (See Item 5. Other
Information in Part II of the registrant's Form 10-Q for the period ended
June 30, 1993.)
AT&T has the following effective registration statements on Form S-3
for continuous offerings under Rule 415 of the Securities Act of 1933:
(1) Shareowner Dividend Reinvestment and Stock Purchase Plan (R.S.
No. 33-49093); and
(2) $2,600,000,000 Notes and Warrants (R.S. No. 33-49589)
AT&T is filing the following information as required by Item 11(b)of
Form S-3.
Item 7. Financial Statements, Pro Forma Financial Information and
Exhibits.
(b) Pro Forma Financial Information.
Page
(1) Unaudited Pro Forma Combined Financial Statements 3
(2) Unaudited Pro Forma Combined Statement of Income for 4
the Six Months Ended June 30, 1994
(3) Unaudited Pro Forma Combined Statement of Income for 5
the Six Months Ended June 30, 1993
(4) Unaudited Pro Forma Combined Balance Sheet at June 6
30, 1994
(5) Notes to Unaudited Pro Forma Combined Financial 8
Statements
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Form 8-K/A#5 AT&T Corp.
August 16, 1993
AT&T AND SUBSIDIARIES AND McCAW AND SUBSIDIARIES
UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS
The following Unaudited Pro Forma Combined Statements of Income and
Balance Sheet give effect to the Merger on a pooling-of-interests basis of
accounting. These Unaudited Pro Forma Combined Financial Statements have
been prepared from the historical consolidated financial statements of AT&T
and McCaw and should be read in conjunction therewith.
This pro forma combined information is not necessarily indicative of
actual or future operating results or financial position that would have
occurred or will occur upon consummation of the Merger.
The Unaudited Pro Forma Combined Balance Sheet gives effect to the
Merger as if it had occurred on June 30, 1994, combining the balance sheets
of AT&T and McCaw at June 30, 1994. The Unaudited Pro Forma Combined
Statements of Income give effect to the Merger as if it had occurred at the
beginning of each of the periods presented, combining the results of AT&T
and McCaw for the six month periods ended June 30, 1994 and 1993.
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Form 8-K/A#5 AT&T Corp.
August 16, 1993
AT&T AND SUBSIDIARIES AND McCAW AND SUBSIDIARIES
UNAUDITED PRO FORMA COMBINED STATEMENT OF INCOME
Six Months Ended June 30, 1994
(Dollars in Millions, Except Per Share Amounts)
Historical Pro Forma
AT&T McCaw Adjustments Combined
Sales and Revenues
Telecommunications services........... $20,559 $1,065 $21,624
Sales of products and systems......... 9,049 - 9,049
Rentals and other services............ 3,267 248 3,515
Financial services and leasing........ 1,414 - 1,414
Total revenues................... 34,289 1,313 35,602
Costs
Telecommunications services........... 12,473 393 12,866
Products and systems.................. 5,539 - 5,539
Rentals and other services............ 1,591 145 1,736
Financial services and leasing........ 951 - 951
Total costs...................... 20,554 538 21,092
Gross margin.......................... 13,735 775 14,510
Operating Expenses
Selling, general and administrative
expenses............................ 8,592 581 9,173
Research and development expenses..... 1,461 - 1,461
Total operating expenses......... 10,053 581 10,634
Operating income...................... 3,682 194 3,876
Other income, net..................... 184 88 272
Interest expense...................... 263 143 406
Income before income taxes and
preferred stock dividend of a
subsidiary.......................... 3,603 139 3,742
Provision (benefit) for income taxes . 1,379 (24) 1,355
Provision for preferred stock
dividend of a subsidiary............ - 34 34
Net Income ........................... $ 2,224 $ 129 $ 2,353
Weighted average common shares
outstanding......................... 1,361 209 (14)(3B) 1,556
Earnings per common share............. $ 1.63 $ 1.51
Dividends declared per common share... $ 0.66 $ 0.66
See accompanying notes to unaudited pro forma combined financial
statements.
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Form 8-K/A#5 AT&T Corp.
August 16, 1993
AT&T AND SUBSIDIARIES AND McCAW AND SUBSIDIARIES
UNAUDITED PRO FORMA COMBINED STATEMENT OF INCOME
Six Months Ended June 30, 1993
(Dollars in Millions, Except Per Share Amounts)
Historical Pro Forma
AT&T McCaw Adjustments Combined
Sales and Revenues
Telecommunications services......... $19,800 $ 830 $20,630
Sales of products and systems....... 7,729 - 7,729
Rentals and other services.......... 3,348 190 3,538
Financial services and leasing...... 1,158 - 1,158
Total revenues................. 32,035 1,020 33,055
Costs
Telecommunications services......... 12,370 377 12,747
Products and systems................ 4,632 - 4,632
Rentals and other services.......... 1,573 93 1,666
Financial services and leasing...... 780 - 780
Total costs.................... 19,355 470 19,825
Gross margin........................ 12,680 550 13,230
Operating Expenses
Selling, general and administrative
expenses.......................... 8,258 403 8,661
Research and development expenses... 1,487 - 1,487
Total operating expenses....... 9,745 403 10,148
Operating income.................... 2,935 147 3,082
Other income, net................... 421 111 532
Interest expense.................... 313 205 518
Income before income taxes,
preferred stock dividend of a
subsidiary and cumulative effects
of accounting changes............. 3,043 53 3,096
Provision for income taxes ......... 1,102 22 1,124
Provision for preferred stock
dividend of a subsidiary.......... - 67 67
Income (loss) before cumulative
effects of accounting changes..... 1,941 (36) 1,905
Cumulative effects on prior years of
changes in accounting for:
Postretirement benefits, net... (7,023) - (7,023)
Postemployment benefits, net... (1,128) - (1,128)
Income taxes................... 383 - $(1,840)(3C)(1,457)
Net Loss............................ $(5,827) $ (36)$(1,840) $(7,703)
Weighted average common shares
outstanding.......... ............ 1,350 199 (10)(3B) 1,539
Per common share:
Income before cumulative effects of
accounting changes................ $ 1.44 $ 1.24
Cumulative effects of accounting
changes........................... (5.76) (6.24)
Net loss............................ $ (4.32) $ (5.00)
Dividends declared per common share. $ 0.66 $ 0.66
See accompanying notes to unaudited pro forma combined financial statements
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Form 8-K/A#5 AT&T Corp.
August 16, 1993
AT&T AND SUBSIDIARIES AND McCAW AND SUBSIDIARIES
UNAUDITED PRO FORMA COMBINED BALANCE SHEET
June 30, 1994
(Dollars in millions)
Historical Pro Forma
AT&T McCaw Adjustments Combined
ASSETS
Cash and temporary cash
investments ................. $ 967 $ 165 $ 1,132
Receivables, net of allowances
Accounts receivable ......... 12,118 376 12,494
Finance receivables ......... 12,492 - 12,492
Inventories ................... 3,972 48 4,020
Deferred income taxes ......... 2,230 - 2,230
Other current assets .......... 975 84 1,059
Total current assets ..... 32,754 673 33,427
Property, plant and
equipment, net .............. 19,133 1,871 21,004
Licensing costs, net .......... - 4,096 4,096
Investments ................... 1,237 1,528 $(400)(3B) 2,365
Finance receivables ........... 4,099 - 4,099
Prepaid pension costs ......... 3,893 - 3,893
Other assets, net ............. 3,159 937 (39)(3C) 4,057
TOTAL ASSETS .................. $64,275 $9,105 $(439) $72,941
LIABILITIES and
DEFERRED CREDITS
Accounts payable .............. $ 5,353 $ 93 $ 5,446
Payroll and benefit-related
liabilities ................. 3,431 60 3,491
Postretirement and postemploy-
ment benefit liabilities .... 1,188 - 1,188
Debt maturing within one year . 9,213 188 9,401
Dividends payable ............. 449 - 449
Other current liabilities ..... 4,737 368 5,105
Total current liabilities. 24,371 709 25,080
Long-term debt, including
capital leases .............. 9,114 5,339 14,453
Postretirement and postemploy-
ment benefit liabilities..... 8,981 - 8,981
Other liabilities ............. 4,371 75 4,446
Deferred income taxes ......... 484 1,966 2,450
Unamortized investment tax ....
credits ..................... 245 - 245
Other deferred credits......... 432 - 432
Total liabilities and
deferred credits ....... 47,998 8,089 56,087
Minority interests............. 618 445 1,063
(continued)
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Form 8-K/A#5 AT&T Corp.
August 16, 1993
AT&T AND SUBSIDIARIES AND McCAW AND SUBSIDIARIES
UNAUDITED PRO FORMA COMBINED BALANCE SHEET
(continued)
June 30, 1994
(Dollars in millions)
Historical Pro Forma
AT&T McCaw Adjustments Combined
SHAREOWNERS' EQUITY
Common stock ............... $ 1,360 $ 2 $ 193 (3A) $ 1,555
Additional paid-in capital . 12,413 3,348 (193)(3A) 15,168
(400)(3B)
Guaranteed ESOP
obligation ............... (331) - (331)
Foreign currency translation
adjustments .............. 50 - 50
Retained earnings (deficit). 2,167 (2,779) (39)(3C) (651)
Total shareowners'
equity .............. 15,659 571 (439) 15,791
TOTAL LIABILITIES
& SHAREOWNERS' EQUITY .... $64,275 $9,105 $(439) $72,941
See accompanying notes to unaudited pro forma combined financial
statements.
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Form 8-K/A#5 AT&T Corp.
August 16, 1993
AT&T AND SUBSIDIARIES AND McCAW AND SUBSIDIARIES
NOTES TO UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS
(Dollars in millions, except per share amounts)
Note 1 - Historical Presentation
Previously reported quarterly results for AT&T for 1993 were restated
to reflect the adoption of Statement of Financial Accounting Standards
("SFAS") No. 112, "Employers' Accounting for Postemployment Benefits." In
addition, the provisions for business restructuring have been reclassified
to costs and operating expenses.
Certain amounts reported in McCaw's historical financial statements
have been reclassified to conform to the AT&T presentations in the
accompanying Unaudited Pro Forma Combined Balance Sheet and Statements of
Income. Such reclassifications are not material to the Unaudited Pro Forma
Combined Financial Statements.
Note 2 - Exchange Ratio
As defined in the Merger Agreement, the Exchange Ratio will be one
AT&T Common Share for each share of McCaw Common Stock; provided, however,
that (i) in the event the Closing Date Market Price of one AT&T Common
Share (as such terms are defined in the Merger Agreement) is less than
$53.00, the Exchange Ratio will be equal to $53.00 divided by the Closing
Date Market Price of one AT&T Common Share, but in no event greater than
1.111 AT&T Common Shares, and (ii) in the event the Closing Date Market
Price of one AT&T Common Share is greater than $71.73, the Exchange Ratio
will be equal to $71.73 divided by the Closing Date Market Price of one
AT&T Common Share, but in no event less than .909 of an AT&T Common Share.
For purposes of the Unaudited Pro Forma Combined Financial Statements, an
Exchange Ratio of one AT&T Common Share per share of McCaw Common Stock (as
defined in the Merger Agreement) is assumed.
Note 3 - Other Pro Forma Adjustments
(A) The McCaw Common Stock account has been adjusted to reflect the
assumed exchange of one AT&T Common Share, par value $1.00 per share, for
each of approximately 195.3 million shares of McCaw Common Stock, par value
$.01 per share, outstanding at June 30, 1994 (excluding shares of McCaw
Common Stock held by AT&T - see Note 3(B)). The difference between the par
value of the AT&T Common Shares and the par value of the McCaw Common
Stock, after giving effect to the assumed Exchange Ratio, is reflected as a
reduction to additional paid-in capital of $193.
(B) The $400 investment by AT&T in 14.5 million shares of Class A
Common Stock purchased in February 1993 has been eliminated. The weighted
average common shares outstanding for the six months ended June 30, 1993
and June 30, 1994 have been adjusted to give affect to the elimination of
this investment.
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Form 8-K/A#5 AT&T Corp.
August 16, 1993
(C) McCaw's historical financial statements reflect the adoption of
SFAS No. 109, "Accounting for Income Taxes," retroactive to January 1,
1991. AT&T adopted SFAS No. 109 effective January 1, 1993. For conformity
purposes, the pro forma combined financial statement information for AT&T
and McCaw has been adjusted as if McCaw had adopted SFAS No. 109 on January
1, 1993. Such adoption would result in the use of different tax
assumptions related to intangible assets McCaw acquired in purchase
business combinations in 1991 and 1992 that would increase the cumulative
effect of adopting SFAS No. 109 by $39. Accordingly, the pro forma
combined net income and earnings per common share have been decreased by
$1,840 and $1.20, respectively, for the period ended June 30, 1993. Pro
forma combined total assets and shareowners' equity have been decreased $39
at June 30, 1994. Also, effective January 1, 1993, AT&T adopted SFAS No.
112, "Employers' Accounting for Postemployment Benefits." McCaw adopted
SFAS No. 112 effective January 1, 1994. The impact of this standard on
McCaw's financial statements is immaterial, therefore no adjustment has
been made to the Unaudited Pro Forma Combined Financial Statements.
(D) No adjustments have been reflected in the Unaudited Pro Forma
Combined Financial Statements for direct expenses related to the Merger.
Direct expenses included in the historical periods presented have not been
adjusted for in the Unaudited Pro Forma Combined Financial Statements as
such amounts are not material.
(E) No adjustments to eliminate intercompany transactions and balances
have been made in the Unaudited Pro Forma Combined Financial Statements as
such amounts are not material.
(F) The cash dividends per common share in the Unaudited Pro Forma
Combined Financial Statements reflect AT&T's cash dividends declared in the
periods presented. McCaw has never paid cash dividends on the McCaw Common
Stock.
Note 4 - Federal Income Tax Consequences of the Merger
The Unaudited Pro Forma Combined Financial Statements assume that the
Merger qualifies as a "tax-free" reorganization for federal income tax
purposes.
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Form 8-K/A#5 AT&T Corp.
August 16, 1993
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
AT&T Corp.
By S. L. Prendergast
----------------------------------
S. L. Prendergast
Vice President and Treasurer
August 22, 1994
