<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Form 8-K/A#1
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report: October 26, 1994
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
<PAGE> 2
Form 8-K/A#1
October 26, 1994 AT&T Corp.
Item 5. Other Events
On September 19, 1994, Ridge Merger Corporation, a wholly owned
subsidiary of AT&T Corp. ("AT&T" or the "Company") was merged (the "Merger")
into McCaw Cellular Communications, Inc. ("McCaw"). As a result of the
Merger, McCaw has become a wholly owned subsidiary of AT&T. The Merger was
accounted for as a pooling of interests and the merged business is significant
under Rule 11-01(b) of Regulation S-X. Accordingly, AT&T is filing restated
consolidated financial statements as required by Item 11(b)(iii) of Form S-3.
AT&T has the following effective registration statements on Form S-3 for
continuous offerings under Rule 415 of the Securities Act of 1933, as amended:
(1) Shareowner Dividend Reinvestment and Stock Purchase Plan (R.S. Nos. 33-
56249 and 33-49093); and
(2) $2,600,000,000 Notes and Warrants to purchase Notes (R.S. No. 33-49589)
--Page(s)--
Report of Independent Auditors 3
Consolidated Statements of Income for the Years
Ended December 31, 1993, 1992 and 1991 4
Consolidated Balance Sheets at December 31, 1993 and 1992 5
Consolidated Statements of Cash Flows for the
Years Ended December 31, 1993, 1992 and 1991 6
Notes to Consolidated Financial Statements 7-29
Schedule II - Amounts Receivable from Related Parties and
Underwriters, Promoters, and Employees Other Than Related
Parties 30-38
Schedule V - Property, Plant and Equipment 39-42
Schedule VI - Accumulated Depreciation 43-44
Schedule VIII - Valuation and Qualifying Accounts 45-46
Schedule IX - Debt Maturing Within One Year 47
Schedule X - Supplementary Income Statement Information 48
<PAGE>
<PAGE> 3
Form 8-K/A#1
October 26, 1994 AT&T Corp.
REPORT OF INDEPENDENT AUDITORS
To the Shareowners of AT&T Corp.:
We have audited the consolidated financial statements and the
consolidated financial statement schedules of AT&T Corp. (AT&T) and
subsidiaries listed in the index on page 2 of this Form 8-K/A. These
financial statements and financial statement schedules are the responsibility
of AT&T's management. Our responsibility is to express an opinion on these
financial statements and financial statement schedules based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the consolidated financial position of AT&T
and subsidiaries at December 31, 1993 and 1992, and the consolidated results
of their operations and their cash flows for the years ended December 31,
1993, 1992 and 1991, in conformity with generally accepted accounting
principles. In addition, in our opinion, the financial statement schedules
referred to above, when considered in relation to the basic financial
statements taken as a whole, present fairly, in all material respects, the
information required to be included therein.
As discussed in Note 2 to the financial statements, in 1993 AT&T changed
its methods of accounting for postretirement benefits, postemployment benefits
and income taxes.
COOPERS & LYBRAND L.L.P.
1301 Avenue of the Americas
New York, New York
January 27, 1994 (September
19, 1994 as to Notes 4, 21
and 22)
<PAGE>
<PAGE> 4
Form 8-K/A#1
October 26, 1994 AT&T Corp.
CONSOLIDATED AT&T CORP. (AT&T) AND SUBSIDIARIES
STATEMENTS OF INCOME Years ended December 31
Dollars in millions (except per share amounts) 1993 1992 1991
==========================================================================
SALES AND REVENUES
Telecommunications services $41,623 $40,968 $39,860
Products and systems 17,925 16,579 16,031
Rentals and other services 7,299 7,206 7,180
Financial services and leasing 2,504 1,894 1,384
__________________________________________________________________________
TOTAL REVENUES 69,351 66,647 64,455
__________________________________________________________________________
COSTS
Telecommunications services
Access and other interconnection costs 17,772 18,186 18,439
Other costs 7,623 7,553 7,242
__________________________________________________________________________
Total telecommunications services 25,395 25,739 25,681
Products and systems 10,953 9,972 9,237
Rentals and other services 3,473 3,373 3,444
Financial services and leasing 1,711 1,310 1,072
__________________________________________________________________________
TOTAL COSTS 41,532 40,394 39,434
__________________________________________________________________________
GROSS MARGIN 27,819 26,253 25,021
__________________________________________________________________________
OPERATING EXPENSES
Selling, general and administrative expenses 17,665 16,642 16,765
Research and development expenses 3,088 2,919 3,114
Provisions for business restructuring 498 64 3,572
__________________________________________________________________________
TOTAL OPERATING EXPENSES 21,251 19,625 23,451
__________________________________________________________________________
OPERATING INCOME 6,568 6,628 1,570
Other income-net 476 163 273
Gain (loss) on sale of stock by subsidiaries (9) - 43
Interest expense 1,032 1,153 1,305
__________________________________________________________________________
INCOME BEFORE INCOME TAXES AND CUMULATIVE
EFFECTS OF ACCOUNTING CHANGES 6,003 5,638 581
Provision for income taxes 2,301 2,196 410
__________________________________________________________________________
Income before cumulative
effects of accounting changes 3,702 3,442 171
__________________________________________________________________________
Cumulative effects on prior years
of changes in accounting for:
Postretirement benefits (net of income
tax benefit of $4,294) (7,023) - -
Postemployment benefits (net of income
tax benefit of $681) (1,128) - -
Income taxes (1,457) - -
__________________________________________________________________________
Cumulative effects of accounting changes (9,608) - -
__________________________________________________________________________
NET INCOME (LOSS) $(5,906) $ 3,442 $ 171
==========================================================================
Weighted average common
shares outstanding (millions) 1,547 1,519 1,479
PER COMMON SHARE:
Income before cumulative effects
of accounting changes $ 2.39 $ 2.27 $ .12
Cumulative effects of accounting changes (6.21) - -
__________________________________________________________________________
NET INCOME (LOSS) $(3.82) $ 2.27 $ .12
==========================================================================
The notes on pages 7 through 29 are an integral part of the consolidated
financial statements.
<PAGE>
<PAGE> 5
Form 8-K/A#1
October 26, 1994 AT&T Corp.
CONSOLIDATED AT&T CORP. (AT&T) AND SUBSIDIARIES
BALANCE SHEETS at December 31
Dollars in millions (except per share amount) 1993 1992
==========================================================================
ASSETS
Cash and temporary cash investments $ 671 $ 1,512
Receivables, less allowances of $1,040 and $861
Accounts receivable 12,294 11,306
Finance receivables 11,370 8,569
Inventories 3,222 2,674
Deferred income taxes 2,079 2,118
Other current assets 732 1,007
__________________________________________________________________________
TOTAL CURRENT ASSETS 30,368 27,186
__________________________________________________________________________
Property, plant and equipment-net 21,015 20,798
Licensing costs-net 3,995 3,992
Investments 3,060 2,730
Finance receivables 3,815 3,643
Prepaid pension costs 3,575 3,480
Other assets 3,565 4,275
__________________________________________________________________________
TOTAL ASSETS $69,393 $66,104
==========================================================================
LIABILITIES AND DEFERRED CREDITS
Accounts payable $ 4,853 $ 5,169
Payroll and benefit-related liabilities 3,802 3,374
Postretirement and postemployment
benefit liabilities 1,301 -
Debt maturing within one year 11,063 7,691
Dividends payable 448 443
Other current liabilities 4,587 5,309
__________________________________________________________________________
TOTAL CURRENT LIABILITIES 26,054 21,986
__________________________________________________________________________
Long-term debt including capital leases 11,802 14,166
Postretirement and postemployment
benefit liabilities 9,083 -
Other liabilities 4,363 2,718
Deferred income taxes 2,231 4,699
Unamortized investment tax credits 270 350
Other deferred credits 263 181
__________________________________________________________________________
TOTAL LIABILITIES AND DEFERRED CREDITS 54,066 44,100
__________________________________________________________________________
MINORITY INTERESTS 1,953 1,691
__________________________________________________________________________
SHAREOWNERS' EQUITY
Common shares par value $1 per share 1,547 1,526
Authorized shares: 2,000,000,000
Outstanding shares: 1,546,518,000 at December 31, 1993;
1,525,957,000 at December 31, 1992
Additional paid-in capital 14,324 13,485
Guaranteed ESOP obligation (355) (407)
Foreign currency translation adjustments (32) 65
Retained earnings (deficit) (2,110) 5,644
__________________________________________________________________________
TOTAL SHAREOWNERS' EQUITY 13,374 20,313
__________________________________________________________________________
TOTAL LIABILITIES AND SHAREOWNERS' EQUITY $69,393 $66,104
==========================================================================
The notes on pages 7 through 29 are an integral part of the consolidated
financial statements.
<PAGE>
<PAGE> 6
Form 8-K/A#1
October 26, 1994 AT&T Corp.
CONSOLIDATED AT&T CORP. (AT&T) AND SUBSIDIARIES
STATEMENTS OF CASH FLOWS Years ended December 31
Dollars in millions 1993 1992 1991
==========================================================================
OPERATING ACTIVITIES
Net income (loss) $(5,906) $ 3,442 $ 171
Adjustments to reconcile net income to net
cash provided by operating activities:
Cumulative effects of accounting changes 9,608 - -
Depreciation and licensing cost
amortization 4,082 3,825 3,817
Provision for uncollectibles 1,665 1,983 1,259
Provisions for business restructuring 498 64 3,572
(Increase) in accounts receivable (2,211) (1,577) (2,135)
(Increase) decrease in inventories (560) 549 (59)
(Decrease) increase in accounts payable (295) 46 135
Net decrease (increase) in other operating
assets and liabilities 125 (908) (1,109)
Other adjustments for non-cash items-net 418 612 459
__________________________________________________________________________
NET CASH PROVIDED BY OPERATING ACTIVITIES 7,424 8,036 6,110
__________________________________________________________________________
INVESTING ACTIVITIES
Capital expenditures net of proceeds from
sale or disposal of property, plant and
equipment of $241, $250 and $119 (4,296) (4,328) (4,376)
Increase in finance receivables, net of
lease-related repayments of $3,633,
$4,325 and $3,521 (3,483) (3,878) (3,052)
Net (increase) decrease in investments (453) 33 514
Acquisitions, net of cash acquired (228) (308) 332
Other investing activities-net (205) (125) (138)
__________________________________________________________________________
NET CASH USED IN INVESTING ACTIVITIES (8,665) (8,606) (6,720)
__________________________________________________________________________
FINANCING ACTIVITIES
Proceeds from long-term debt issuance 4,386 3,368 1,785
Retirements of long-term debt (5,879) (3,732) (1,659)
Issuance of common shares 1,053 703 1,167
Dividends paid (1,774) (1,748) (1,563)
Increase in short-term borrowings-net 2,586 1,341 969
Other financing activities-net 25 (162) (4)
__________________________________________________________________________
NET CASH PROVIDED BY (USED IN)
FINANCING ACTIVITIES 397 (230) 695
__________________________________________________________________________
Effect of exchange rate changes on cash 3 26 (19)
__________________________________________________________________________
Net (decrease) increase in cash and
temporary cash investments (841) (774) 66
Cash and temporary cash investments at
beginning of year 1,512 2,286 2,220
__________________________________________________________________________
Cash and temporary cash investments at
end of year $ 671 $ 1,512 $ 2,286
==========================================================================
The notes on pages 7 through 29 are an integral part of the consolidated
financial statements.
<PAGE>
<PAGE> 7
Form 8-K/A#1
October 26, 1994 AT&T Corp.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AT&T CORP. (AT&T)
AND SUBSIDIARIES
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES ............................
CONSOLIDATION
Ownership of affiliates Accounting method
_____________________________________________________________________
More than 50% Fully consolidated
20% to 50% Equity method
Less than 20% Cost method
_____________________________________________________________________
We include the accounts of operations located outside the U.S. on the basis
of their fiscal years, ended either November 30 or December 31.
CURRENCY TRANSLATION
For the business we transact in currencies other than U.S. dollars, we
translate income statement amounts at average exchange rates for the year,
and we translate assets and liabilities at year-end exchange rates. We
show the adjustments from balance sheet translation as a separate component
of shareowners' equity.
REVENUE RECOGNITION
Revenue from Basis of recognition
_____________________________________________________________________
Telecommunications Minutes of traffic processed and
Services contracted fees
Products and Systems Upon performance of contractual
obligations
Rentals and Other Proportionately over contract
Services period or as services are
performed
Financial Services Over the life of the finance
and Leasing receivables using the interest
method
_____________________________________________________________________
RESEARCH AND DEVELOPMENT
We expense research and development expenditures as incurred (including
development costs of software that we plan to sell) until technological
feasibility is established. After that time, we capitalize the remaining
software production costs as other assets and amortize them to product
costs over the estimated period of sales.
INTEREST EXPENSE
Interest expense is the interest on short-term and long-term debt and
accrued liabilities, excluding the interest related to our financial
services operations, which is included in cost of financial services and
leasing, and net of interest capitalized in connection with construction.
<PAGE>
<PAGE> 8
Form 8-K/A#1
October 26, 1994 AT&T Corp.
INVESTMENT TAX CREDITS
For financial reporting purposes, we amortize investment tax credits as a
reduction to the provision for income taxes over the useful lives of the
property that produced the credits.
EARNINGS PER SHARE
We use the weighted average number of shares of common stock and common
stock equivalents outstanding during each period to compute earnings per
common share. Common stock equivalents are stock options that we assume to
be exercised for the purposes of this computation.
TEMPORARY CASH INVESTMENTS
We consider temporary cash investments to be cash equivalents for cash flow
reporting purposes. They are highly liquid and have original maturities
generally of three months or less.
INVENTORIES
We state inventories at the lower of cost or market. We determine cost
principally on a first-in, first-out (FIFO) basis.
PROPERTY, PLANT AND EQUIPMENT
We state property, plant and equipment at cost and determine depreciation
using either the group or unit method. The unit method is used primarily
for factory facilities, laboratory equipment, large computer systems, and
certain international earth stations and submarine cables. The group
method is used for most other depreciable assets. Repair and maintenance
costs are charged to expense when incurred. Renewals and betterments are
capitalized. Gains or losses on disposition of property and equipment are
reflected in income currently. When we dispose of assets that were
depreciated using the unit method, we include the gains or losses in
operating results. When we sell or retire plant that was depreciated using
the group method, we deduct the original cost from the plant account and
from accumulated depreciation.
We use accelerated depreciation methods for factory facilities and
digital equipment used in the telecommunications network, except switching
equipment placed in service before 1989. All other plant and equipment is
depreciated on a straight-line basis.
In our Wireless Services Unit, property and equipment are stated at cost.
Depreciation is computed using the straight-line method over the estimated
useful lives of the assets which are generally 10 to 12 years for cellular,
2 to 12 years for messaging, 10 to 20 years for broadcast, 3 to 12 years
for air-to-ground and 3 to 5 years for other equipment. Leasehold
improvements are amortized using the straight-line method over the terms of
the leases.
LICENSING COSTS
Licensing costs primarily represent costs incurred to develop or acquire
cellular and messaging licenses. Generally, amortization begins with the
commencement of service to customers and is computed using the straight-
line method over a period of 40 years.
<PAGE>
<PAGE> 9
Form 8-K/A#1
October 26, 1994 AT&T Corp.
GOODWILL
Goodwill is the difference between the purchase price and the fair value of
net assets acquired in business combinations treated as purchases. We
amortize goodwill on a straight-line basis over the periods benefited,
principally in the range of 10 to 40 years.
RECLASSIFICATIONS
We reclassified certain amounts for previous years to conform with the 1993
presentation.
2. CHANGES IN ACCOUNTING PRINCIPLES ......................................
POSTRETIREMENT BENEFITS
We adopted Statement of Financial Accounting Standards (SFAS) No. 106,
"Employers' Accounting for Postretirement Benefits Other Than Pensions,"
effective January 1, 1993. This standard requires us to accrue estimated
future retiree benefits during the years employees are working and
accumulating these benefits. Previously, we expensed health care benefits
as claims were incurred and life insurance benefits as plans were funded.
When we adopted the new standard, we had an accumulated liability related
to past service from retirees and active employees. A portion of that
liability was provided for by group life insurance benefits and trusts for
health care benefits funded before 1993.
We also reimburse the divested regional Bell companies for a portion of
their costs to provide health care benefits, increases in pensions and
other benefits to predivestiture retirees under the terms of the
Divestiture Plan of Reorganization. Through 1992 we expensed these
reimbursements as incurred. In January 1993 we recognized this liability
in connection with the adoption of SFAS No. 106.
We elected to record a one-time pretax charge of $11,317 million to
record the unfunded portions of these liabilities. That charge reflects
$12,986 million of liabilities less $1,669 million of plan assets and
amounts previously recorded. After taxes, that charge was $7,023 million
($4.54 per share), including $1,375 million for predivestiture retirees.
Apart from these cumulative effects on prior years of the accounting
change, our change in accounting had no material effect on net income in
1993 and is not expected to affect net income materially in future periods.
This change does not affect cash flows.
POSTEMPLOYMENT BENEFITS
We also adopted SFAS No. 112, "Employers' Accounting for Postemployment
Benefits," effective January 1, 1993. Analogous to SFAS No. 106, this
standard requires us to accrue for estimated future postemployment
benefits, including separation payments, during the years employees are
working and accumulating these benefits, and for disability payments when
the disabilities occur. Before this change in accounting, we recognized
costs for separations when they were identified and disability benefits
when they were paid.
<PAGE>
<PAGE> 10
Form 8-K/A#1
October 26, 1994 AT&T Corp.
When we adopted the new standard, we had an accumulated liability for
payments to employees who were then disabled and for benefits related to
the past service of active employees. We recorded a one-time pretax charge
of $1,809 million to record the unprovided portion of these liabilities.
That charge reflects $2,221 million of liabilities less $412 million of
reserves for business restructuring activities that were established before
1993 and reclassified to postemployment liabilities as part of this
accounting change. After taxes, that charge was $1,128 million ($0.73 per
share). The change in accounting reduced operating income by $301 million,
and net income by $171 million ($0.11 per share) in 1993. This change does
not affect cash flows.
INCOME TAXES
We also adopted SFAS No. 109, "Accounting for Income Taxes," effective
January 1, 1993. Among other provisions, this standard requires us to
compute deferred tax accounts using the enacted corporate income tax rates
for the years in which the taxes will be paid or refunds received. Before
1993 our deferred tax accounts reflected the rates in effect when we made
the deferrals.
The adoption of this standard reduced net income by $1,457 million
($0.94 per share) as a result of deferred liabilities that were created by
McCaw Cellular Communications' ("McCaw") acquisitions prior to the merger.
Apart from this reduction, the new accounting method had no material
effect on net income in 1993. Unless Congress changes tax rates, we do not
expect this change to affect net income materially in future periods. This
change does not affect cash flows.
3. PROSPECTIVE ACCOUNTING CHANGES ........................................
DEBT AND EQUITY SECURITIES
In 1994 we must adopt SFAS No. 115, "Accounting for Certain Investments in
Debt and Equity Securities." This standard addresses the accounting and
reporting for investments in equity securities that have readily
determinable fair values and for all investments in debt securities. We do
not expect this new standard to affect net income materially at or after
adoption, and it will not affect cash flows.
IMPAIRED LOANS
By 1995 we must adopt SFAS No. 114, "Accounting by Creditors for Impairment
of a Loan." This standard requires us to compute present values for
impaired loans when determining our allowances for credit losses. We do
not expect this new standard to affect net income materially at or after
adoption, and it will not affect cash flows.
<PAGE>
<PAGE> 11
Form 8-K/A#1
October 26, 1994 AT&T Corp.
4. MERGER WITH MCCAW CELLULAR COMMUNICATIONS, INC. ......................
On September 19, 1994, AT&T merged with McCaw. As a result, 197.5
million shares of McCaw common stock were converted into AT&T common stock
at an exchange ratio of 1 share of AT&T common stock for each McCaw share.
In addition, AT&T assumed 11.3 million McCaw options which were converted
into AT&T stock options at the same exchange ratio resulting in 11.3
million additional AT&T stock options at an average exercise price of
$27.01. The merger was accounted for as a pooling of interests and the
consolidated financial statements of AT&T have been restated for all
periods prior to the merger to include the accounts and operations of
McCaw. Intercompany transactions have not been eliminated due to the
immateriality of the amounts involved. Certain reclassifications have been
made to McCaw's accounts to conform to AT&T's presentation. Operating
results of the companies for periods prior to the merger were:
Sales and Revenues 1993 1992 1991
Dollars in millions
===========================================================================
AT&T $67,156 $64,904 $63,089
McCaw 2,195 1,743 1,366
___________________________________________________________________________
Total $69,351 $66,647 $64,455
Net Income (Loss)
===========================================================================
AT&T $(3,794) $ 3,807 $ 522
McCaw (2,112)* (365) (351)
___________________________________________________________________________
Total $(5,906) $ 3,442 $ 171
* Includes a charge of $45 million previously reported as an extraordinary
item for the early redemption of debt.
5. SUPPLEMENTARY FINANCIAL INFORMATION ...................................
SUPPLEMENTARY INCOME STATEMENT INFORMATION
Dollars in millions 1993 1992 1991
====================================================================
INCLUDED IN COSTS OF PRODUCTS AND SYSTEMS
Amortization of software production costs $ 359 $ 315 $ 311
====================================================================
COSTS OF FINANCIAL SERVICES AND LEASING
Interest expense $ 506 $ 485 $ 446
Depreciation, allowance for losses, etc. 1,205 825 626
____________________________________________________________________
Costs of financial services and leasing $1,711 $1,310 $1,072
====================================================================
INCLUDED IN SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
Amortization of goodwill $ 89 $ 80 $ 64
====================================================================
OTHER INCOME-NET
Interest income $ 141 $ 167 $ 200
Royalties and dividends 59 48 55
Earnings (losses) applicable to
minority interests (28) 40 (15)
Miscellaneous-net 304 (92) 33
____________________________________________________________________
Other income-net $ 476 $ 163 $ 273
====================================================================
DEDUCTED FROM INTEREST EXPENSE
Capitalized interest $ 72 $ 62 $ 79
====================================================================
<PAGE> 12
Form 8-K/A#1
October 26, 1994 AT&T Corp.
SUPPLEMENTARY BALANCE SHEET INFORMATION
Dollars in millions at December 31 1993 1992
===========================================================
INVENTORIES
Completed goods $ 1,927 $ 1,705
Work in process and raw materials 1,295 969
___________________________________________________________
Inventories $ 3,222 $ 2,674
===========================================================
PROPERTY, PLANT AND EQUIPMENT
Land and improvements $ 757 $ 700
Buildings and improvements 8,608 8,330
Machinery, electronic and other equipment 33,930 32,954
___________________________________________________________
Total property, plant and equipment 43,295 41,984
Less: Accumulated depreciation 22,280 21,186
___________________________________________________________
Property, plant and equipment-net $21,015 $20,798
===========================================================
INVESTMENTS
Accounted for by the equity method $ 2,603 $ 2,473
Stated at lower of cost or market 457 257
___________________________________________________________
Investments $ 3,060 $ 2,730
===========================================================
OTHER ASSETS
Unamortized software production costs $ 413 $ 521
Goodwill, net of accumulated amortization 1,359 1,210
Prepaid postretirement healthcare costs - 773
Deferred charges and other 1,793 1,771
___________________________________________________________
Other assets $ 3,565 $ 4,275
===========================================================
DEBT MATURING WITHIN ONE YEAR
Commercial paper $ 8,761 $ 6,053
Long-term debt 2,019 1,249
Long-term lease obligations 52 108
Other notes 231 281
___________________________________________________________
Debt maturing within one year $11,063 $ 7,691
===========================================================
<PAGE>
<PAGE> 13
Form 8-K/A#1
October 26, 1994 AT&T Corp.
SUPPLEMENTARY CASH FLOW INFORMATION
Dollars in millions 1993 1992 1991
====================================================================
Interest payments net of
amounts capitalized $ 1,640 $ 1,510 $ 1,504
Income tax payments 1,733 727 1,239
====================================================================
The following table displays the non-cash items excluded from the
consolidated statements of cash flows:
Dollars in millions 1993 1992 1991
====================================================================
Machinery and equipment acquired under
capital lease obligations $ 15 $ 60 $ 114
====================================================================
EXCHANGE OF STOCK
Net assets $ (43) - -
Investments 260 - -
Licenses 96
____________________________________________________________________
$ 313 - -
====================================================================
ACQUISITION ACTIVITIES
Net receivables $ 19 $ 131 $ (1)
Inventories 1 48 5
Property, plant and equipment 132 82 12
Licensing costs (5) 75 (112)
Accounts payable (7) (37) (27)
Short- and long-term debt (3) (93) (4)
Other operating assets and liabilities-net 91 102 (205)
____________________________________________________________________
Net non-cash items 228 308 (332)
Net cash used for acquisitions $ 228 $ 308 $ (332)
====================================================================
6. BUSINESS RESTRUCTURING AND OTHER CHARGES...............................
Provisions for business restructuring include the estimated costs of
specific plans to close offices, consolidate facilities, relocate employees
and fulfill contractual obligations, and of other activities involved in
restructuring operations. These provisions also cover separation payments
made as a result of special offers related to defined benefit plans.
Before we changed our accounting for postemployment benefits in 1993, costs
for other types of separation payments were also included in these
provisions.
Our $498 million in provisions for business restructuring in 1993 covered
$227 million of costs at AT&T Global Information Solutions (including, in
millions, $137 for special termination benefits, $43 for closing
facilities, $18 for employee relocation, $19 for contractual obligations
and $10 for other related expenses). We also provided $215 million for
reengineering customer support functions for telecommunications services
(including, in millions, $55 for employee relocation, $25 for outplacement
costs, $30 for legal contingencies and $105 for closing facilities, lease
terminations and asset abandonments associated with centralizing support
services). The remaining provisions consist of $23 million related to
closing plants for manufacturing telecommunications network systems, and
$33 million for employee relocation, outplacement services and legal
liabilities related to restructuring operations that service the U.S.
federal government.
<PAGE>
<PAGE> 14
Form 8-K/A#1
October 26, 1994 AT&T Corp.
In 1991 we recorded approximately $4.5 billion of business restructuring
and other charges, reducing net income by $2,863 million ($1.94 per share).
The charges covered estimated costs of changes in our computer operations,
PBX operations and product distribution processes; consolidating operations
in leased and owned buildings and recognizing costs of vacant space;
eliminating a future subsidy to an Alaskan long distance company; writing
down an investment; and other restructuring-related activities, merger-
related expenses and other charges. We recorded these charges as $3,572
million in provisions for business restructuring; $501 million as selling,
general and administrative expenses; $123 million as cost of products and
systems; and the remainder as other costs and expenses, including other
income - net. Charges included in other accounts in 1991 were primarily for
expenses related to the restructuring activities, writing down impaired
assets and merger-related expenses.
The remaining reserves for separation payments at January 1, 1993, were
included in the cumulative effect of the change in accounting for
postemployment benefits. We believe that the balance of reserves for all
other business restructuring activities, $1,440 million at December 31,
1993, is adequate for the completion of those activities.
7. OTHER INCOME-NET.......................................................
In June 1993 we sold our remaining 77% interest in UNIX System
Laboratories, Inc. to Novell, Inc. (Novell) in exchange for approximately
3% of Novell common stock. Our gain on the sale was $217 million.
In 1993 we incurred an expense of $124 million associated with the write
down of equipment.
We sold our remaining interest in Compagnie Industriali Riunite S.p.A. in
1993 for a slight gain. We reduced the carrying value of that investment
by $68 million in 1992 and by $218 million in 1991 because of a sustained
decline in its market value.
We accrued $134 million for a preferred stock dividend in 1993, 1992 and
1991 for the mandatorily redeemable preferred stock issued by LCH
Communications ("LCH"), a subsidiary of LIN Broadcasting ("LIN"), (a
subsidiary of McCaw).
In 1991 we had a $171 million gain from selling our 19% equity investment
in Sun Microsystems, Inc. We also had a $243 million gain on the sale of
our cellular assets in Indiana, Wisconsin and Illinois to BellSouth.
8. SALE OF STOCK BY SUBSIDIARIES ........................................
In August 1993 AT&T Capital Corporation sold 5,750,000 shares of common
stock in an initial public offering and approximately 850,000 shares of
common stock in a management offering. That was about 14% of the shares
outstanding, so our ownership is now about 86%. The shares were sold at
$21.50 per share, yielding net proceeds of $115 million excluding $18
million of recourse loans attributable to the management offering. Because
of these loans, we recorded a $9 million loss on the sale. When the loans
are collected in seven years, we expect to report a net $6 million gain
from this sale of stock.
In 1991 UNIX Systems Laboratories, Inc. sold about 20% of its stock to
other companies to encourage their support for open computing standards.
We had a $43 million gain on that sale. Proceeds from the sale were in
cash and we did not provide for deferred taxes on the gain.
<PAGE>
<PAGE> 15
Form 8-K/A#1
October 26, 1994 AT&T Corp.
9. INCOME TAXES .........................................................
This table shows the principal reasons for the difference between the
effective income tax rate and the United States Federal statutory income tax
rate:
Dollars in millions 1993 1992 1991
====================================================================
U.S. Federal statutory income tax rate 35% 34% 34%
Federal income tax at statutory rate $2,101 $1,917 $ 198
Amortization of investment tax credits (92) (221) (142)
State and local income taxes, net of
federal income tax effect 287 243 71
Amortization of intangibles 24 110 108
Foreign rate differential 45 75 54
Taxes on repatriated and accumulated
foreign income, net of tax credits (20) 67 (12)
Research credits (47) (18) (5)
Capital loss carryforward - (13) 32
Effect of tax rate change on
deferred tax assets (23) - -
Other differences-net 26 36 106
____________________________________________________________________
Provision for income taxes $2,301 $2,196 $ 410
====================================================================
Effective income tax rate 38.3% 39.0% 70.6%
====================================================================
The U.S. and foreign components of income before income taxes
and the provision for income taxes are presented in this
table:
Dollars in millions 1993 1992 1991
==============================================================
INCOME BEFORE INCOME TAXES
United States $5,705 $5,308 $ 71
Foreign 298 330 510
______________________________________________________________
$6,003 $5,638 $ 581
==============================================================
PROVISION FOR INCOME TAXES
CURRENT
Federal $ 925 $ 533 $ 826
State and local 206 142 206
Foreign 169 215 302
______________________________________________________________
1,300 890 1,334
______________________________________________________________
DEFERRED
Federal 910 1,384 (800)
State and local 212 225 (96)
Foreign (41) (85) 140
______________________________________________________________
1,081 1,524 (756)
______________________________________________________________
Deferred investment tax
credits-net* (80) (218) (168)
______________________________________________________________
Provision for income taxes $2,301 $2,196 $ 410
==============================================================
* Net of amortization of $92 in 1993, $221 in 1992 and $142 in
1991.
Deferred tax liabilities are taxes we expect to pay in future
periods. Similarly, deferred tax assets are taxes we expect to
get refunded in future periods. Deferred taxes arise because of
differences in the book and tax bases of certain assets and
liabilities.
<PAGE>
<PAGE> 16
Form 8-K/A#1
October 26, 1994 AT&T Corp.
This table shows the December 31, 1993 amounts of deferred
tax assets and liabilities, which include the effects of our
January 1, 1993 accounting changes:
Dollars in millions Assets Liabilities
==============================================================
Property, plant and equipment $ - $5,607
Business restructuring charges 666 -
Employee, postretirement and
postemployment benefits 4,056 56
Reserves and allowances 1,053 -
Credit carryforwards 395 -
Unamortized investment tax credits 119 -
Other 60 633
Valuation allowance (205) -
______________________________________________________________
Deferred income taxes $6,144 $6,296
==============================================================
Prior year financial statements were not restated to reflect
the new accounting standards. This table shows the principal
sources of deferred taxes in prior years:
Dollars in millions 1992 1991
==============================================================
Property, plant and equipment $ 992 $ 559
Business restructuring charges 218 (1,103)
Employee pensions and other benefits 234 (26)
Reserves and allowances 108 (208)
Other timing differences-net (28) 22
______________________________________________________________
Deferred income tax provision $1,524 $ (756)
==============================================================
10. LEASES ...............................................................
AS LESSOR
We provide financing on sales of our products and those of other
companies and lease our products to customers under sales-type
leases. This table displays our net investment in direct financing
and sales-type leases:
Dollars in millions at December 31 1993 1992
===========================================================
Minimum lease payments receivable $4,226 $3,780
Estimated unguaranteed residual values 543 484
Unearned income (797) (736)
Allowance for credit losses (110) (91)
___________________________________________________________
Net investment $3,862 $3,437
===========================================================
This table shows the scheduled maturities of the $4,226
million minimum lease payments receivable on these leases at
December 31, 1993:
1994 1995 1996 1997 1998 Later Years
===========================================================
$1,434 $1,080 $797 $489 $234 $192
===========================================================
<PAGE>
<PAGE> 18
Form 8-K/A#1
October 26, 1994 AT&T Corp.
11. SHAREOWNERS' EQUITY ..................................................
Foreign
Additional Currency Retained
Common Paid-in Translation Earnings
Dollars in millions Shares Capital Adjustments (deficit)
=====================================================================
At December 31, 1990 $1,454 $11,477 $ 50 $ 5,466
1991
Net income - - - 171
Dividends declared - - - (1,612)
Shares issued:
Under employee plans 7 126 - 34
Under shareowner plans 11 381 - -
In private placement 18 629 - -
Other 2 58 - -
Shares repurchased (1) (3) - (20)
Translation adjustments - - 108 -
Other changes - 2 - 77
_____________________________________________________________________
At December 31, 1991 1,491 12,670 158 4,116
1992
Net income - - - 3,442
Dividends declared - - - (1,759)
Shares issued:
Under employee plans 14 307 - -
Under shareowner plans 10 402 - -
Other - 2 - -
For merger with Teradata 11 103 - -
Teradata balance recorded - - - (178)
Shares repurchased - (2) - -
Translation adjustments - - (93) -
Other changes - 3 - 23
_____________________________________________________________________
At December 31, 1992 1,526 13,485 65 5,644
1993
Net income - - - (5,906)
Dividends declared - - - (1,780)
Shares issued:
Under employee plans 6 183 - -
Under shareowner plans 8 450 - -
Other 7 208 - -
Shares repurchased - (4) - -
Translation adjustments - - (97) -
Other changes - 2 - (68)
_____________________________________________________________________
At December 31, 1993 $1,547 $14,324 $ (32) $(2,110)
=====================================================================
In 1992 we recorded the retained earnings of Teradata Corporation
(Teradata) as of January 1, after making adjustments associated with the
merger. In September 1991 NCR Corporation (NCR) issued 6.3 million shares
of NCR common stock in connection with the merger with AT&T. The shares
were converted into approximately 17.9 million shares of our common stock
upon consummation of the merger.
In March 1990 we issued 13.4 million new shares of common stock in
connection with the establishment of an ESOP feature for the non-management
savings plan. The shares are being allocated to plan participants over ten
years commencing in July 1990 as contributions are made to the plan.
We have 100 million authorized shares of preferred stock at $1 par value.
No preferred stock is currently issued or outstanding.
<PAGE>
<PAGE> 19
Form 8-K/A#1
October 26, 1994 AT&T Corp.
12. LONG-TERM DEBT OBLIGATIONS ...........................................
This table shows the outstanding long-term debt obligations in
millions at December 31:
Interest Rates Maturities 1993 1992
===================================================================
DEBENTURES
4 3/8% to 4 3/4% 1996-1999 $ 750 $ 750
5 1/8% to 7 1/8% 2000-2001 500 1,673
8% to 9% 2008-2031 1,676 2,690
11 1/2% to 14% 1998-2008 1,217
NOTES
4 1/4% to 7 3/4% 1994-2004 3,605 2,515
7 4/5% to 8 19/20% 1994-2006 445 740
9% to 13% 1994-2020 616 1,310
Variable rate 1994-1999 6,072 4,250
___________________________________________________________________
13,664 15,145
Long-term lease obligations 163 302
Other 89 148
Less: Unamortized discount-net 43 72
___________________________________________________________________
13,873 15,523
Less: Amounts maturing within one year 2,071 1,357
___________________________________________________________________
Total long-term obligations $11,802 $14,166
===================================================================
This table shows the maturities, at December 31, 1993, of the
$13,664 million in debentures and notes:
1994 1995 1996 1997 1998 Later Years
===================================================================
$2,019 $1,444 $1,491 $1,168 $1,874 $5,668
===================================================================
A consortium of lenders provides revolving credit facilities of $6
billion to AT&T and $2 billion to AT&T Capital Corp. (AT&T Capital). These
facilities are intended for general corporate purposes, which include
support for AT&T's and AT&T Capital's commercial paper. They were unused
at December 31, 1993.
13. EMPLOYEE BENEFIT PLANS ...............................................
PENSION PLANS
We sponsor non-contributory defined benefit plans covering the majority of
our employees. Benefits for management employees are principally based on
career-average pay. Benefits for occupational employees are not directly
pay-related.
Pension contributions are principally determined using the aggregate cost
method and are primarily made to trust funds held for the sole benefit of
plan participants. We compute pension cost using the projected unit credit
method and assumed a long-term rate of return on plan assets of 9.0% in
1993, 9.0% in 1992 and 8.6% in 1991. Pension cost includes the following
components:
<PAGE>
<PAGE> 20
Form 8-K/A#1
October 26, 1994 AT&T Corp.
Dollars in millions 1993 1992 1991
====================================================================
Service cost-benefits earned during
the period $ 536 $ 452 $ 303
Interest cost on projected benefit
obligation 2,294 2,225 2,136
Amortization of unrecognized prior
service costs 251 346 310
Credit for expected return on plan
assets* (3,108) (2,973) (2,728)
Amortization of transition asset (502) (502) (502)
Charges for special pension options 74 11 108
____________________________________________________________________
Net pension cost (credit) $ (455) $ (441) $ (373)
====================================================================
*The actual return on plan assets was $5,068 in 1993, $2,153 in 1992
and $6,980 in 1991.
This table shows the funded status of the defined benefit plans:
Dollars in millions at December 31 1993 1992
====================================================================
Actuarial present value of accumulated
benefit obligation, including vested benefits
of $28,119 and $24,818, respectively $30,943 $27,316
====================================================================
Plan assets at fair value $41,481 $38,767
Less: Actuarial present value of projected
benefit obligation 32,680 28,719
____________________________________________________________________
Excess of assets over projected benefit obligation 8,801 10,048
Unrecognized prior service costs 2,052 2,200
Unrecognized transition asset (3,960) (4,463)
Unrecognized net gain (3,513) (4,613)
Net minimum liability of non-qualified plans (72) (45)
____________________________________________________________________
Prepaid pension costs $ 3,308 $ 3,127
====================================================================
We used these rates and assumptions to calculate the projected
benefit obligation:
At December 31 1993 1992
====================================================================
Weighted-average discount rate 7.5% 8.3%
Rate of increase in future
compensation levels 5.0% 5.0%
____________________________________________________________________
The prepaid pension costs shown above are net of pension liabilities for
plans where accumulated plan benefits exceed assets. Such liabilities are
included in other liabilities in the consolidated balance sheets.
We are amortizing over approximately 15.9 years the unrecognized
transition asset related to our 1986 adoption of SFAS No. 87, "Employers'
Accounting for Pensions." We amortize prior service costs primarily on a
straight-line basis over the average remaining service period of active
employees. Our plan assets consist primarily of listed stocks (including
$378 million and $451 million of AT&T common stock at December 31, 1993 and
1992, respectively), corporate and governmental debt, real estate
investments, and cash and cash equivalents.
<PAGE>
<PAGE> 21
Form 8-K/A#1
October 26, 1994 AT&T Corp.
SAVINGS PLANS
We sponsor savings plans for the majority of our employees. The plans
allow employees to contribute a portion of their pretax and/or after-tax
income in accordance with specified guidelines. We match a percentage of
the employee contributions up to certain limits. Our contributions in
millions amounted to $347 in 1993, $331 in 1992 and $279 in 1991.
14. POSTRETIREMENT BENEFITS ..............................................
Our benefit plans for retirees include health care benefits, life insurance
coverage and telephone concessions. This table shows the components of the
net postretirement benefit cost:
Dollars in millions 1993
===========================================================
Service cost-benefits earned during the period $ 95
Interest cost on accumulated postretirement
benefit obligation 868
Credit for expected return on plan assets* (180)
Amortization of unrecognized prior service costs 29
Charge for special options 29
___________________________________________________________
Net postretirement benefit cost $841
===========================================================
* The actual return on plan assets was $243.
We did not restate our 1991 and 1992 financial statements to reflect the
change in accounting for retiree benefits. This table shows our actual
postretirement benefit costs on a pay-as-you-go basis in those years:
Dollars in millions at December 31, 1992 1991
=====================================================================
Cost of health care benefits for retirees $532 $532
Cost of life insurance benefits for retirees 3 26
Cost of telephone concessions and other benefits 39 35
Payments to regional Bell companies
for predivestiture retirees 145 125
_____________________________________________________________________
Postretirement benefit cost $719 $718
=====================================================================
We had approximately 142,200 retirees in 1993, 141,200 in 1992 and
138,500 in 1991.
Our plan assets consist primarily of listed stocks, corporate and
governmental debt, cash and cash equivalents and life insurance
contracts. This table shows the funded status of our postretirement
benefit plans reconciled with the amounts recognized in the consolidated
balance sheet:
Dollars in millions at December 31 1993
===========================================================
Accumulated postretirement benefit obligation
Retirees $ 8,928
Fully eligible active plan participants 893
Other active plan participants 2,092
___________________________________________________________
Accumulated postretirement benefit obligation 11,913
Plan assets at fair value 2,900
___________________________________________________________
Unfunded postretirement obligation 9,013
Unrecognized prior service costs 283
Unrecognized net loss 569
___________________________________________________________
Accrued postretirement benefit obligation $ 8,161
===========================================================
<PAGE> 22
Form 8-K/A#1
October 26, 1994 AT&T Corp.
We made these assumptions in valuing our postretirement
benefit obligation at December 31, 1993:
===========================================================
Weighted-average discount rate 7.5%
Expected long-term rate of return
on plan assets 9.0%
Assumed rate of increase in the per
capita cost of covered health care benefits 9.4%
===========================================================
We assumed that the growth in the per capita cost of covered health care
benefits (the health care cost trend rate) would gradually decline after
1994 to 5.6% by the year 2021 and then remain level. This assumption
greatly affects the amounts reported. To illustrate, increasing the
assumed trend rate by 1% in each year would raise our accumulated
postretirement benefit obligation at December 31, 1993 by $758 million and
our 1993 postretirement benefit costs by $64 million.
15. STOCK OPTIONS ........................................................
In our Long Term Incentive Program, we grant stock options, stock
appreciation rights (SARs), either in tandem with stock options or
free-standing, and other awards. On January 1 of each year, 0.6% of the
outstanding shares of our common stock become available for grant. The
exercise price of any stock option is equal to or greater than the stock
price when the option is granted. When granted in tandem, exercise of an
option or SAR cancels the other to the extent of such exercise. Before our
mergers with McCaw, NCR and Teradata, stock options were granted under the
separate stock option plans of those companies. No new options can be
granted under those plans. Option transactions are shown below:
Number of Shares 1993 1992 1991
===================================================================
Balance at January 1 36,777,098 37,267,956 30,521,623
Options assumed in merger
with Teradata - 1,848,642 -
Options granted 7,261,355 7,580,568 10,592,414
Options and SARs exercised (5,766,132) (9,504,536) (3,489,599)
Average price $23.93 $13.66 $16.77
Options forfeited (260,843) (415,532) (356,482)
At December 31:
Options outstanding 38,011,478 36,777,098 37,267,956
Average price $33.52 $28.53 $23.84
Options exercisable 24,063,837 23,759,421 26,121,224
Shares available for grant 25,264,307 22,614,535 18,231,260
===================================================================
During 1993 167,747 SARs were exercised and no SARs were granted. At
December 31, 1993, 925,210 SARs remained unexercised and all of these were
exercisable.
<PAGE>
<PAGE> 23
Form 8-K/A#1
October 26, 1994 AT&T Corp.
16. SEGMENT INFORMATION ..................................................
INDUSTRY SEGMENTS
Our operations in the global information movement and management industry
involve providing wireline and wireless telecommunications services,
business information processing systems, and other systems, products and
services that combine communications and computers. Our operations in the
financial services and leasing industry involve direct financing and
finance leasing programs for our products and the products of other
companies, leasing products to customers under operating leases and being
in the general-purpose credit card business. Miscellaneous other
activities, including the distribution of computer equipment through retail
outlets, in the aggregate, represent less than 10% of revenues, operating
income and identifiable assets and are included in the information movement
and management segment. Revenues between industry segments are not
material.
Dollars in millions 1993 1992 1991
====================================================================
REVENUES
Information movement and management $66,847 $64,753 $63,071
Financial services and leasing 2,504 1,894 1,384
____________________________________________________________________
$69,351 $66,647 $64,455
====================================================================
OPERATING INCOME
Information movement and management $ 6,839 $ 7,200 $ 2,220
Financial services and leasing 339 193 (34)
Corporate and non-operating (1,175) (1,755) (1,605)
____________________________________________________________________
Income before income taxes $ 6,003 $ 5,638 $ 581
====================================================================
ASSETS
Information movement and management $52,371 $50,661 $49,748
Financial services and leasing 17,033 14,003 9,809
Corporate assets 704 1,849 2,809
Eliminations (715) (409) (294)
____________________________________________________________________
$69,393 $66,104 $62,072
====================================================================
DEPRECIATION AND AMORTIZATION
Information movement and management $ 4,271 $ 4,046 $ 4,323
Financial services and leasing 431 352 160
====================================================================
CAPITAL EXPENDITURES
Information movement and management $ 3,831 $ 3,710 $ 3,888
Financial services and leasing 457 633 472
____________________________________________________________________
TOTAL LIABILITIES
Financial services and leasing $15,329 $12,250 $ 8,720
====================================================================
<PAGE>
<PAGE> 24
Form 8-K/A#1
October 26, 1994 AT&T Corp.
GEOGRAPHIC SEGMENTS
Transfers between geographic areas are on terms and conditions comparable
with sales to external customers. The methods followed in developing the
geographic area data require the use of estimation techniques and do not
take into account the extent to which product development, manufacturing
and marketing depend upon each other. Thus the information may not be
indicative of results if the geographic areas were independent
organizations.
Dollars in millions 1993 1992 1991
=====================================================================
REVENUES-EXTERNAL CUSTOMERS
United States $63,775 $60,977 $59,013
Other geographic areas 5,576 5,670 5,442
_____________________________________________________________________
$69,351 $66,647 $64,455
=====================================================================
TRANSFERS BETWEEN GEOGRAPHIC AREAS
(ELIMINATED IN CONSOLIDATION)
United States $ 1,374 $ 1,077 $ 870
Other geographic areas 1,125 911 884
_____________________________________________________________________
$ 2,499 $ 1,988 $ 1,754
=====================================================================
OPERATING INCOME
United States $ 7,425 $ 7,441 $ 1,790
Other geographic areas (247) (48) 396
Corporate and non-operating (1,175) (1,755) (1,605)
_____________________________________________________________________
Income before income taxes $ 6,003 $ 5,638 $ 581
=====================================================================
ASSETS
United States $63,594 $60,409 $55,304
Other geographic areas 6,901 5,373 4,931
Corporate assets 704 1,849 2,809
Eliminations (1,806) (1,527) (972)
_____________________________________________________________________
$69,393 $66,104 $62,072
=====================================================================
Data on other geographic areas pertain to operations that are located
outside of the U.S. Our revenues from all international activities,
including those in the table, international telecommunications services and
exports, provided 24.4% of consolidated revenues in 1993.
Business restructuring and other charges were taken primarily in the
information movement and management segment and the U.S. geographic area.
Corporate assets are principally cash and temporary cash investments.
17. FINANCIAL INSTRUMENTS ................................................
We use various financial instruments in the normal course of our business.
By their nature all such instruments involve risk, and our maximum
potential loss may exceed the amount recognized in our balance sheet. As
is customary for these types of instruments, we usually do not require
collateral or other security from other parties to these instruments.
However, because we control our exposure to credit risk through credit
approvals, credit limits and monitoring procedures, we believe that our
reserves for losses are adequate.
<PAGE>
<PAGE> 25
Form 8-K/A#1
October 26, 1994 AT&T Corp.
COMMITMENTS TO EXTEND CREDIT
We participate in the general-purpose credit card business through AT&T
Universal Card Services Corp., a wholly owned subsidiary. We purchase
essentially all cardholder receivables under an agreement with the
Universal Bank, a subsidiary of Synovus Financial Corporation, which issues
the cards.
LETTERS OF CREDIT
Letters of credit are purchased guarantees that ensure our performance or
payment to third parties in accordance with specified terms and conditions.
GUARANTEES OF DEBT
From time to time, we guarantee the financing for product purchases by
customers outside the U.S., and the debt of certain unconsolidated joint
ventures.
INTEREST RATE AGREEMENTS
We enter into interest rate cap and swap agreements to manage our exposure
to changes in interest rates. The swap agreements generally involve the
exchange of fixed or floating interest payments without the exchange of the
underlying principal amounts. For cap agreements, we pay premiums to
protect us from rising interest rates on our floating rate debt.
FOREIGN EXCHANGE CONTRACTS
We enter into foreign currency exchange contracts, including forward,
option and swap contracts, to manage our exposure to changes in currency
exchange rates.
FAIR VALUES OF FINANCIAL INSTRUMENTS
Financial instrument Valuation method
=====================================================================
Universal Card finance receivables Carrying amounts. These accrue
interest at a prime-based rate.
All other finance receivables Future cash flows discounted at
market rates.
Debt excluding capital leases Market quotes or based on rates
available to us for debt with
similar terms and maturities.
Commitments to extend credit Receivables we would need to
purchase if all Universal Card
accounts were used up to their
full credit limits.
Letters of credit Fees paid to obtain the
obligations.
Guarantees of debt Costs to terminate agreements.
Interest rate swap agreements Costs to terminate agreements.
Interest rate cap agreements Costs to terminate agreements.
Foreign exchange contracts Market quotes.
=====================================================================
<PAGE>
<PAGE> 26
Form 8-K/A#1
October 26, 1994 AT&T Corp.
The table below shows the carrying or contract/notional amounts and
estimated fair values of material financial instruments used in the
normal course of our business.
Dollars in millions 1993 1992
=====================================================================
CARRYING FAIR Carrying Fair
AMOUNT VALUE Amount Value
=====================================================================
ON BALANCE SHEET
Finance receivables
other than leases $10,320 $10,337 $ 7,798 $ 7,803
Debt excluding capital leases 22,702 23,032 21,555 21,891
=====================================================================
CONTRACT/ Contract/
NOTIONAL Notional
AMOUNT Amount
=====================================================================
OFF BALANCE SHEET*
Commitments to extend credit $64,864 $39,934
Letters of credit 680 455
Guarantees of debt 455 271
Interest rate swap agreements 3,835 1,863
Interest rate cap agreements 1,640 2,700
Foreign exchange:
Forward contracts 783 972
Swap contracts 361 369
Option contracts - 35
=====================================================================
*The fair values of off balance sheet instruments are negligible.
18. CONTINGENCIES ........................................................
In the normal course of business we are subject to proceedings, lawsuits
and other claims, including proceedings under government laws and
regulations related to environmental and other matters. Such matters are
subject to many uncertainties, and outcomes are not predictable with
assurance. Consequently, we are unable to ascertain the ultimate aggregate
amount of monetary liability or financial impact with respect to these
matters at December 31, 1993. While these matters could affect the
operating results of any one quarter when resolved in future periods, we
believe that after final disposition, any monetary liability or financial
impact to us beyond that provided for at year-end would not be material to
our annual consolidated financial statements.
19. AT&T CREDIT HOLDINGS, INC. ...........................................
In connection with the March 31, 1993 legal restructuring of AT&T Capital
Holdings, Inc. (formerly AT&T Capital Corporation), we issued a direct,
full and unconditional guarantee of all the outstanding public debt of AT&T
Credit Holdings, Inc. (formerly AT&T Credit Corporation).
AT&T Credit Holdings, Inc. holds the majority of AT&T's investment in
AT&T Capital Corporation and the lease finance assets of the former AT&T
Credit Corporation. The table below shows summarized consolidated
financial information for AT&T Credit Holdings, Inc., which consolidates
the accounts of AT&T Capital Corporation. Financial information for prior
periods was restated for the legal restructuring. The summarized financial
information includes transactions with AT&T that are eliminated in
consolidation.<PAGE>
<PAGE> 27
Form 8-K/A#1
October 26, 1994 AT&T Corp.
Dollars in millions 1993 1992
===============================================================
Total revenue $1,432 $1,351
Interest expense 284 293
Operating and administrative expense 384 375
Income before cumulative effect of
change in accounting 70 100
Cumulative effect of change in
accounting (SFAS No. 109) 22 -
Net income 48 100
===============================================================
Finance receivables $6,220 $5,565
Net investment in operating lease assets 978 1,099
Total assets 7,886 7,252
Total debt 4,639 4,633
Total liabilities 6,867 6,422
Minority interest 251 110
Total shareowner's equity 768 720
===============================================================
20. QUARTERLY INFORMATION (UNAUDITED) ....................................
Quarters-Dollars in millions FIRST SECOND THIRD FOURTH
==================================================================
1993
Total revenues $16,199 $16,857 $17,225 $19,070
Gross margin 6,501 6,844 6,930 7,545
Income before cumulative
effects of accounting
changes 922 982 1,022 776**
Net income (loss) (8,686)*** 982 1,022 776
Per common share:
Income before cumulative
effects of accounting
changes .60 .64 .66 .50
Net income (loss) (5.65) .64 .66 .50
Dividends declared .33 .33 .33 .33
Stock price*:
High 59 1/8 63 7/8 65 61 3/8
Low 50 1/8 53 3/4 57 3/8 52
Quarter-end close 56 3/4 63 58 7/8 52 1/2
==================================================================
1992
Total revenues $15,750 $16,271 $16,628 $17,998
Gross margin 6,128 6,444 6,543 7,138
Net income 764 875 885 918
Per common share:
Net Income .51 .58 .58 .60
Dividends declared .33 .33 .33 .33
Stock price*:
High 41 3/8 44 5/8 45 3/8 53 1/8
Low 36 5/8 40 1/8 42 40 5/8
Quarter-end close 40 3/4 43 43 5/8 51
===================================================================
* Stock prices obtained from the Composite Tape.
** Includes a charge of $45 million previously reported as an extraordinary
item for the early redemption of debt.
*** Reflects adoptions of Accounting Changes (see also note 2).
The number of weighted average shares outstanding increases as we issue new
common shares for employee plans, shareowner plans and other purposes. For
this reason, the sum of quarterly earnings per common share may not be the
same as earnings per common share for the year, and the per share effects
of unusual items in a quarter may differ from the per share effects of
those same items for the year.
<PAGE> 28
Form 8-K/A#1
October 26, 1994 AT&T Corp.
In the second quarter of 1993, we recorded $278 million in provisions for
business restructuring activities. The effect of these provisions was
offset by the $217 million gain from selling UNIX System Laboratories, Inc.
and other miscellaneous credits. In the fourth quarter of 1993, we
recorded a $190 million provision for business restructuring at AT&T Global
Information Solutions, which reduced net income by $119 million
($0.08 per share).
21. PRIVATE MARKET VALUE GUARANTEE .......................................
We have entered in the Private Market Value Guarantee ("PMVG") with LIN for
the benefit of LIN's stockholders (other than AT&T and its affiliates).
The PMVG provides that for as long as AT&T and its affiliates beneficially
own, in the aggregate, at least 25% of the outstanding shares of LIN Common
Stock ("Shares") on a fully diluted basis or our designees constitute a
majority of the board of directors of LIN, and any Shares are held by other
persons, a number of provisions shall apply. They include:
a) Three members of LIN's board of directors will be independent
directors ("directors") as determined under the New York Stock Exchange
Rules. The initial directors are persons who served on LIN's board of
directors prior to the completion by McCaw of its tender offer for LIN.
New directors will be nominated by the current directors at each annual
meeting and elected by a majority vote of the public stockholders.
Majority vote of the public stockholders means the affirmative vote of the
holders of at least a majority of the public shares present and entitled to
vote at any meeting at which the holders of a majority of the public shares
are present, or the action by written consent of the holders of a majority
of the public shares.
b) On or about January 1, 1995 (the "Initiation Date"), the directors
will designate an investment banking firm of recognized national standing
and AT&T will designate an investment banking firm of recognized national
standing, in each case to determine the private market value per Share.
Private market value per Share is the private market price per Share that
an unrelated third party would pay if it were to acquire all outstanding
Shares in an arm's length transaction assuming that LIN was being sold in a
manner designed to attract all possible participants and to maximize
stockholder value.
Once the private market price is determined pursuant to the procedures
provided for in the PMVG, AT&T will have 45 days to decide whether it
desires to proceed with an acquisition of all of the public shares (an
"Acquisition")at that price. If AT&T decides to proceed with the
Acquisition, it may pay the private market price in cash or any combination
of cash, common equity securities and/or nonconvertible senior or
subordinated debt securities that the directors, after consultation with
their investment banking firm, believe in good faith will have an aggregate
market value, on a fully distributed basis, of not less than the private
market price. If AT&T determines to proceed with an Acquisition as set
forth above, it will enter into an agreement with LIN and will cause a
meeting of stockholders of LIN to be held as soon as practicable to
consider and vote thereon. The Acquisition may only be complete if it is
approved by a majority vote of the public stockholders.
If AT&T determines not to proceed with an Acquisition, or if despite
AT&T's good faith efforts and Acquisition has not been completed within 12
months following the Initiation Date (or if and Acquisition has been
approved by a majority vote of the public stockholders and is being pursued
in good faith by AT&T but has not been completed due to regulatory delays
or litigation within 20 months of the Initiation Date), AT&T will put LIN
in its entirety up for sale under direction of the directors in a manner
intended by the directors to maximize value for all shares. AT&T will not
<PAGE> 29
Form 8-K/A#1
October 26, 1994 AT&T Corp.
bid unless requested to do so by the directors. AT&T will fully cooperate
in this process and, if one or more of the transactions so selected by the
directors are approved by a majority vote of the public stockholders, will
cause all shares owned by it or its affiliates to be voted in favor
thereof.
22) SUBSEQUENT EVENTS ....................................................
REDEMPTION OF PREFERRED STOCK OF A SUBSIDIARY
On June, 24, 1994, LCH redeemed all of the outstanding Redeemable Preferred
Stock of LCH held by Comcast Cellular Communications, Inc., a subsidiary of
Comcast Corporation, in exchange for all of the capital stock of a
subsidiary of LCH, whose assets consisted primarily of LIN's 49.99%
interest in the Philadelphia "A Block" cellular system ("Philadelphia") and
GuestInformant (a publisher of advertiser-supported hard cover magazines
placed in hotel rooms).
As a result of the redemption, we eliminated our net assets related to
Philadelphia and GuestInformant, recorded a gain on the sale of assets of
$11.9 million and recorded a tax benefit of $73.6 million due to the
transaction's impact on deferred taxes. There was also an increase in
additional paid-in capital and minority interests of $407.6 million and
$376.2 million respectively due to the preferred stock redemption.
DISTRIBUTION OF STOCK OF LIN TELEVISION CORPORATION........................
On June 8, 1994, LIN Broadcasting Corporation announced that it intends to
distribute the common stock of its indirect subsidiary, LIN Television
Corporation, to its stockholders on a tax-free basis pursuant to Section
355 of the Internal Revenue Code of 1986. It also announced that it
entered into an Asset Purchase Agreement ("APA") with Cook Inlet
Communications Corp. ("CICC"), pursuant to which LIN Television would
acquire substantially all the assets and assume certain liabilities of
WYNH-TV from CICC in exchange for $120.2 million in cash subject to
adjustments as set forth in the APA, and approximately 11.5% of the common
stock of LIN Television.
As a result of the transaction, approximately 42.1% of LIN Televisions's
shares will be publicly traded. Approximately 11.5% will be owned by CICC
and approximately 46.4% will be owned by AT&T Corp. LIN Television intends
to apply for listing of its shares on the Nasdaq National Market. The
closing of the transaction is expected to occur by year-end. The record
date for the distribution will be announced at a later date.
<PAGE>
<PAGE> 30
<TABLE>
Form 8-K/A#1
October 26, 1994 AT&T Corp.
Schedule II--Sheet 1
<CAPTION>
AT&T Corp.
AND ITS CONSOLIDATED SUBSIDIARIES
SCHEDULE II--AMOUNTS RECEIVABLE FROM RELATED PARTIES AND UNDERWRITERS, PROMOTERS, AND EMPLOYEES OTHER
THAN RELATED PARTIES
- --------------------------------------------------------------------------------------------------------------------------
COL. A COL. B COL. C COL. D COL. E
- --------------------------------------------------------------------------------------------------------------------------
Balance at
Balance at Deductions End of Period
Name of Debtor Beginning Additions --------------------------------------------------
of Period (1) (2) (1) (2)
Amounts Amounts
Collected Written Off Current Not Current
- --------------------------------------------------------------------------------------------------------------------------
Year 1993
<S> <C> <C> <C> <C> <C> <C>
Thomas C. Wajnert (a) $200,000 $ 0 $ 0 $ 0 $ 50,000 $ 150,000
(f) 0 2,616,403 3,580 0 2,612,823
Richard A. McGinn (b) 300,000 305,590 605,590 0 0 0
David K. Hunt (c) 0 1,200,000 350,000 0 0 850,000
Ron J. Ponder (d) 0 550,800 0 0 200,800 350,000
Daniel L. Clark (e) 0 340,000 0 0 113,333 226,667
Edward Andrews (f) 0 714,418 4,506 0 0 709,912
William Bridges (f) 0 168,527 266 0 0 168,261
Sterling Chadwick (f) 0 690,577 3,780 0 0 686,797
Frank Chartier (f) 0 457,226 3,125 0 0 454,101
Edward Cherney (f) 0 1,094,723 1,870 0 0 1,092,853
Nicholas Cyprus (f) 0 478,715 755 0 0 477,960
Michael DeBernardi (f) 0 451,366 2,847 0 0 448,519
George Deehan (f) 0 756,198 477 0 0 755,721
Edward Dwyer (f) 0 478,715 755 0 0 477,960
<FN>
The Notes on Sheets 6 through 9 are an integral part of this schedule.
</TABLE>
<PAGE> 31
<TABLE>
Form 8-K/A#1
October 26, 1994 AT&T Corp.
Schedule II--Sheet 2
<CAPTION>
AT&T Corp.
AND ITS CONSOLIDATED SUBSIDIARIES
SCHEDULE II--AMOUNTS RECEIVABLE FROM RELATED PARTIES AND UNDERWRITERS, PROMOTERS, AND EMPLOYEES OTHER
THAN RELATED PARTIES
- --------------------------------------------------------------------------------------------------------------------------
COL. A COL. B COL. C COL. D COL. E
- --------------------------------------------------------------------------------------------------------------------------
Balance at
Balance at Deductions End of Period
Name of Debtor Beginning Additions --------------------------------------------------
of Period (1) (2) (1) (2)
Amounts Amounts
Collected Written Off Current Not Current
- --------------------------------------------------------------------------------------------------------------------------
Year 1993
<S> <C> <C> <C> <C> <C> <C>
Geraldine Gold (f) $ 0 $ 544,993 $ 1,827 $ 0 $ 0 $ 543,166
Timothy Hammill (f) 0 645,898 1,068 0 0 644,830
Ann Henry (f) 0 146,534 231 0 0 146,303
Robert Ingato (f) 0 149,475 236 0 0 149,239
Michelle Langstaff (f) 0 290,149 458 0 0 289,691
Madelyn Law (f) 0 283,574 485 0 0 283,089
G. Daniel McCarthy (f) 0 896,872 1,414 0 0 895,458
Kenneth Miltenberger (f) 0 488,987 3,084 0 0 485,903
Ruth Morey (f) 0 817,744 5,158 0 0 812,586
Judith Pfister (f) 0 132,736 0 0 0 132,736
Irving Rothman (f) 0 1,121,106 1,768 0 0 1,119,338
Derek Soper (f) 0 871,665 6,029 0 0 865,636
Maureen Tart (f) 0 896,871 1,414 0 0 895,457
James Tenner (f) 0 642,481 366 0 0 642,115
Charles Van Sickle (f) 0 989,212 5,415 0 0 983,797
Charles Whittaker (f) 0 149,475 205 0 0 149,270
Carolyn Zachary (f) 0 146,534 802 0 0 145,732
William Zadrozny (f) 0 666,490 599 0 0 665,891
<FN>
The Notes on Sheets 6 through 9 are an integral part of this schedule.
</TABLE>
<PAGE> 32
<TABLE>
Form 8-K/A#1
October 26, 1994 AT&T Corp.
Schedule II--Sheet 3
<CAPTION>
AT&T Corp.
AND ITS CONSOLIDATED SUBSIDIARIES
SCHEDULE II--AMOUNTS RECEIVABLE FROM RELATED PARTIES AND UNDERWRITERS, PROMOTERS, AND EMPLOYEES OTHER
THAN RELATED PARTIES
- ----------------------------------------------------------------------------------------------------------------------------
COL. A COL. B COL. C COL. D COL. E
- ----------------------------------------------------------------------------------------------------------------------------
Balance at
Balance at Deductions End of Period
Name of Debtor Beginning Additions ----------------------------------------------------
of Period (1) (2) (1) (2)
Amounts Amounts
Collected Written Off Current Not Current
- ----------------------------------------------------------------------------------------------------------------------------
Year 1993
<S> <C> <C> <C> <C> <C> <C>
Houston Cellular $20,219,000 $ 0 $18,564,000 $ 0 $1,655,000(g) $ 0
Telephone Company
American Mobile 7,580,000 20,087,000 0 0 0 27,667,000(h)
Satellite Company
Galveston Cellular 1,238,000 0 0 0 1,238,000(g) 0
Telephone Company
John Chapple 449,000 0 0 0 449,000(i) 0
James Barksdale 250,000 0 250,000 0 0 0
Roseanne Jozwick 141,000 0 117,000 0 24,000(m) 0
N. Bruce Walko 108,000 0 0 27,000 13,000(j) 68,000(j)
Jose Felipe 120,000 0 0 40,000 40,000(k) 40,000(k)
William Oberlink 210,000 0 0 30,000 30,000(l) 150,000(l)
Richard Bryan 0 635,000 26,000 0 609,000(m) 0
Atlas Cellular 0 4,000,000 0 0 0 4,000,000(o)
Corporation
Louisiana-1 0 1,231,000 0 0 0 1,231,000(p)
Joint Venture
ICTC, Inc. 0 839,000 0 0 0 839,000(q)
John Stanton 0 469,000 469,000 0 0 0
Richard P. Begert 0 215,000 215,000(m) 0 0 0
<FN>
The Notes on Sheets 6 through 9 are an integral part of this schedule.
</TABLE>
<PAGE> 33
<TABLE>
Form 8-K/A#1
October 26, 1994 AT&T Corp.
Schedule II--Sheet 4
<CAPTION>
AT&T Corp.
AND ITS CONSOLIDATED SUBSIDIARIES
SCHEDULE II--AMOUNTS RECEIVABLE FROM RELATED PARTIES AND UNDERWRITERS, PROMOTERS, AND EMPLOYEES OTHER
THAN RELATED PARTIES
- ----------------------------------------------------------------------------------------------------------------------------
COL. A COL. B COL. C COL. D COL. E
- ----------------------------------------------------------------------------------------------------------------------------
Balance at
Balance at Deductions End of Period
Name of Debtor Beginning Additions ----------------------------------------------------
of Period (1) (2) (1) (2)
Amounts Amounts
Collected Written Off Current Not Current
- ----------------------------------------------------------------------------------------------------------------------------
Year 1992
<S> <C> <C> <C> <C> <C> <C>
Thomas C. Wajnert (a) $ 200,000 $ 0 $ 0 $ 0 $ 0 $ 200,000
Richard A. McGinn (b) 0 600,000 300,000 0 300,000 0
Houston Cellular 17,407,000 2,812,000 0 0 0 20,219,000(g)
Telephone Company
American Mobile 0 7,580,000 0 0 0 7,580,000(h)
Satellite Company
Galveston Cellular 0 1,238,000 0 0 0 1,238,000(g)
Telephone Company
John Chapple 449,000 0 0 0 449,000(i) 0
James Barksdale 0 450,000 200,000 0 250,000(m) 0
Roseanne Jozwick 0 141,000 0 0 141,000(m) 0
N. Bruce Walko 0 108,000 0 0 108,000(j) 0
Jose Felipe 0 120,000 0 0 40,000(k) 80,000(k)
William Oberlink 0 210,000 0 0 30,000(l) 180,000(l)
John Stanton 0 389,000 389,000 0 0 0
<FN>
The Notes on Sheets 6 through 9 are an integral part of this schedule.
</TABLE>
<PAGE> 34
<TABLE>
Form 8-K/A#1
October 26, 1994 AT&T Corp.
Schedule II--Sheet 5
<CAPTION>
AT&T Corp.
AND ITS CONSOLIDATED SUBSIDIARIES
SCHEDULE II--AMOUNTS RECEIVABLE FROM RELATED PARTIES AND UNDERWRITERS, PROMOTERS, AND EMPLOYEES OTHER
THAN RELATED PARTIES
- ----------------------------------------------------------------------------------------------------------------------------
COL. A COL. B COL. C COL. D COL. E
- ----------------------------------------------------------------------------------------------------------------------------
Balance at
Balance at Deductions End of Period
Name of Debtor Beginning Additions ----------------------------------------------------
of Period (1) (2) (1) (2)
Amounts Amounts
Collected Written Off Current Not Current
- ----------------------------------------------------------------------------------------------------------------------------
Year 1991
<S> <C> <C> <C> <C> <C> <C>
Thomas C. Wajnert (a) $ 0 $ 200,000 $ 0 $ 0 $ 0 $ 200,000
Houston Cellular 11,782,000 5,625,000 0 0 0 17,407,000(g)
Telephone Company
John Chapple 449,000 0 0 0 449,000 (i) 0
Craig McCaw 135,000 1,272,000 1,414,000 0 (7,000)(n) 0
John McCaw 3,000 218,000 221,000 0 0 0
<FN>
The Notes on Sheets 6 through 9 are an integral part of this schedule.
</TABLE>
<PAGE> 35
<TABLE>
Form 8-K/A#1
October 26, 1994 AT&T Corp.
Schedule II--Sheet 6
<CAPTION>
AT&T Corp.
AND ITS CONSOLIDATED SUBSIDIARIES
SCHEDULE II--AMOUNTS RECEIVABLE FROM RELATED PARTIES AND UNDERWRITERS, PROMOTERS, AND EMPLOYEES OTHER
THAN RELATED PARTIES
<FN>
____________
<S> <C>
(a) On September 20, 1991, AT&T granted a demand loan of $200,000 with interest compounded monthly to Thomas J. Wajnert,
Chairman of the Board and Chief Executive Officer--AT&T Capital Corporation (a subsidiary of AT&T), as a result of a
compensation negotiation between AT&T and Mr. Wajnert. The interest rate for any month in which there is an unpaid
balance shall be the rate established by the Internal Revenue Service ("IRS"), under Section 1274(d) of the Internal
Revenue Code, as the applicable Federal short-term interest rate in effect for such month (3.8% for December 1993, 4%
for December 1992).
Mr. Wajnert made two interest payments on each of the following dates: 9/30/92 and 9/30/93. Principal payments of
$50,000 each plus accumulated interest are due and payable on the following four dates: 9/30/94, 9/30/95, 9/30/96 and
9/30/97.
(b) On September 23, 1992, AT&T granted Richard A. McGinn, President and Chief Operating Officer--Network Systems Group, a
$300,000 demand loan for a period of 150 days with interest compounded monthly at the interest rate established by the
IRS, under Section 1274(d) of the Internal Revenue Code, as the applicable Federal short-term interest rate. This loan
was paid in full in October 1992.
On December 7, 1992, AT&T granted Mr. McGinn a 150 day demand loan for $300,000 with interest compounded monthly based
on the rate established by the IRS as the applicable Federal short-term interest rate (4% for December 1992). Full
repayment of principal and interest was due and payable on 5/5/93.
On May 26, 1993, AT&T granted Mr. McGinn a demand loan in the amount of $305,590 with interest compounded monthly on
the unpaid balance to satisfy the principal and interest on the December 7, 1992 loan. The interest rate for any month
in which there was an unpaid balance was the rate established by the IRS, under Section 1274(d) of the Internal Revenue
Code, as the applicable Federal short-term interest rate in effect for such month (3.8% for December 1993). Full
repayment of principal and interest was made on 12/31/93.
</TABLE>
<PAGE> 36
<TABLE>
Form 8-K/A#1
October 26, 1994 AT&T Corp.
Schedule II--Sheet 7
<CAPTION>
AT&T Corp.
AND ITS CONSOLIDATED SUBSIDIARIES
SCHEDULE II--AMOUNTS RECEIVABLE FROM RELATED PARTIES AND UNDERWRITERS, PROMOTERS, AND EMPLOYEES OTHER
THAN RELATED PARTIES
<FN>
____________
<S> <C>
(c) On May 7, 1993, AT&T granted a loan of $1,200,000 with an interest rate of 5.33% compounded monthly to David K. Hunt,
President and Chief Executive Officer--Universal Card Services, to exercise stock options at his former employer,
Signet Banking Corp. On 7/14/93, Mr. Hunt repaid $350,000 in principal and $12,074 in interest. He rolled over the
balance of $850,000 into two new loans.
a) $701,000 effective 7/15/93 with interest compounded monthly on the unpaid balance. The loan was to exercise
stock options at Signet Banking Corp. Payment on this loan consists of two installments. The first payment of
$350,500 plus interest is due on 7/15/96. The second payment of $350,500 plus interest is due on 7/15/98. This loan
is secured by 52,720 shares of Signet Banking Corp. common stock.
b) $149,000 effective 7/15/93 with interest compounded monthly on the unpaid balance. The loan was to pay taxes on
the stock option exercise. Principle plus interest is due on 7/15/95.
The interest rate on these loans for any month in which there is an unpaid balance shall be the rate established by the
IRS, under Section 1274(d) of the Internal Revenue Code, as the applicable Federal mid-term interest rate in effect for
the month of July 1993 (5.4%).
(d) On July 1, 1993, AT&T granted an interest free loan of $200,800 to Ron J. Ponder, Senior Vice President AT&T and Chief
Information Officer, for monies owed to his former employer U.S. Sprint. Full repayment of the principle balance shall
be due and payable on 6/30/94 (one year from the effective date of the loan).
On July 30, 1993, AT&T granted an interest free loan of $350,000 to Ron J. Ponder to purchase a home. Full repayment
of the principle balance shall be due and payable on 7/30/98 (five years from the effective date of the loan).
</TABLE>
<PAGE> 37
<TABLE>
Form 8-K/A#1
October 26, 1994 AT&T Corp.
Schedule II--Sheet 8
<CAPTION>
AT&T Corp.
AND ITS CONSOLIDATED SUBSIDIARIES
SCHEDULE II--AMOUNTS RECEIVABLE FROM RELATED PARTIES AND UNDERWRITERS, PROMOTERS, AND EMPLOYEES OTHER
THAN RELATED PARTIES
<FN>
____________
<S> <C>
(e) On November 17, 1993, AT&T granted a loan of $340,000 plus interest compounded monthly to Daniel L. Clark, Vice
President--Consumer Communications Services, for monies owed to his former employer MCI, Inc. ("MCI"). Mr. Clark was
required to pay off his loan from MCI prior to working for AT&T. Payments of $113,333.33 plus accumulated interest are
due on the following dates: 11/1/94, 11/1/95 and 11/1/96. The interest rate for any month in which there is an unpaid
balance shall be the rate established by the IRS, under Section 1274(d) of the Internal Revenue Code, as the applicable
Federal mid-term interest rate in effect for the month of November 1993 (4.8%).
(f) The loans, made by AT&T Capital Corporation to its managers, represent seven year full recourse loans bearing interest
at a rate of 6% per annum payable at maturity, except to the extent mandatory payments of interest are required by the
AT&T Capital Corporation 1993 Leveraged Stock Purchase Plan ("LSPP"). The loans were made to participants in the AT&T
Capital Corporation LSPP to fund a significant portion of the purchase price of equity securities of AT&T Capital
Corporation. The purchased shares are pledged to AT&T Capital Corporation to secure repayment of the loan.
(g) Loans bear interest at Prime + 1%, are collateralized by cellular system equipment and are due June of 1994.
(h) Loan bears interest through December 31, 1992 at 12%; 10% thereafter. Amount was repaid in full subsequent to December
31, 1993.
(i) December 31, 1993, 1992, and 1991 balances are comprised of two notes. Note for $84,000 is unsecured, non-interest
bearing and due upon demand. Note for $365,000 is unsecured, non-interest bearing and due within 90 days of voluntary
termination of employment or within one year of involuntary termination of employment.
(j) Loan is secured, non-interest bearing and will be repaid in equal monthly payments over a two year period beginning
September of 1994.
(k) Note is unsecured, non-interest bearing and is forgiven in equal amounts over a three year period.
</TABLE>
<PAGE> 38
<TABLE>
Form 8-K/A#1
October 26, 1994 AT&T Corp.
Schedule II--Sheet 9
<CAPTION>
AT&T Corp.
AND ITS CONSOLIDATED SUBSIDIARIES
SCHEDULE II--AMOUNTS RECEIVABLE FROM RELATED PARTIES AND UNDERWRITERS, PROMOTERS, AND EMPLOYEES OTHER
THAN RELATED PARTIES
<FN>
____________
<S> <C>
(l) Note is unsecured, non-interest bearing and is forgiven in equal amounts over a seven year period.
(m) Represents employee advances to facilitate moves to their current locations. Amounts have been repaid in full during
1993 and 1994.
(n) Represents activity of Craig McCaw and his wholly owned company, COMCO Broadcasting, Inc. The loans bear interest at
10% per annum.
(o) Loan bears interest at Prime + 1 1/2% and is secured. Loan will be repaid in quarterly installments beginning in
September 1996 and is due in full in August 1998.
(p) Loan bears interest at Prime + 1 1/2% and is secured by the assets of the borrower. Loan will be repaid in quarterly
installments beginning in June 1996 and is due in full in June 2001.
(q) Loan bears interest at Prime + 2 1/2%, is secured by the assets of the borrower, and is due in full in December 1996.
</TABLE>
<PAGE>
<PAGE> 39
<TABLE>
Form 8-K/A#1
October 26, 1994 AT&T Corp.
Schedule V--Sheet 1
<CAPTION>
AT&T Corp.
AND ITS CONSOLIDATED SUBSIDIARIES
SCHEDULE V--PROPERTY, PLANT AND EQUIPMENT
(Millions of Dollars)
- ---------------------------------------------------------------------------------------------------------------------------
COL. A COL. B COL. C COL. D COL. E COL. F
- ---------------------------------------------------------------------------------------------------------------------------
Balance at Other Balance at
Beginning Additions Retire- Changes End of
Classification of Period at Cost (a) ments Add(Deduct)(b) Period
- ---------------------------------------------------------------------------------------------------------------------------
Year 1993
<S> <C> <C> <C> <C> <C>
Land and improvements ..................... $ 700 $ 11 $ 12 $ 58 $ 757
Buildings and improvements ................ 8,330 478 198 (2) 8,608
Machinery, electronic and other
equipment ............................... 32,954 4,067(c) 2,578(d) (513) 33,930
------- ------ ------ ----- -------
Total (e) ............................... $41,984 $4,556 $2,788 $(457) $43,295
======= ====== ====== ===== =======
<FN>
The Notes on Sheet 4 are an integral part of this Schedule.
</TABLE>
<PAGE> 40
<TABLE>
Form 8-K/A#1
October 26, 1994 AT&T Corp.
Schedule V--Sheet 2
<CAPTION>
AT&T Corp.
AND ITS CONSOLIDATED SUBSIDIARIES
SCHEDULE V--PROPERTY, PLANT AND EQUIPMENT
(Millions of Dollars)
- ---------------------------------------------------------------------------------------------------------------------------
COL. A COL. B COL. C COL. D COL. E COL. F
- ---------------------------------------------------------------------------------------------------------------------------
Balance at Other Balance at
Beginning Additions Retire- Changes End of
Classification of Period at Cost (a) ments Add(Deduct)(b) Period
- ---------------------------------------------------------------------------------------------------------------------------
Year 1992
<S> <C> <C> <C> <C> <C>
Land and improvements ..................... $ 694 $ 23 $ 8 $ (9) $ 700
Buildings and improvements ................ 8,301 422 90 (303) 8,330
Machinery, electronic and other
equipment ............................... 32,431 4,222(c) 3,454(d) (245) 32,954
------- ------ ------ ----- -------
Total (e) ............................... $41,426 $4,667 $3,552 $(557) $41,984
======= ====== ====== ===== =======
<FN>
The Notes on Sheet 4 are an integral part of this Schedule.
</TABLE>
<PAGE> 41
<TABLE>
Form 8-K/A#1
October 26, 1994 AT&T Corp.
Schedule V--Sheet 3
<CAPTION>
AT&T Corp.
AND ITS CONSOLIDATED SUBSIDIARIES
SCHEDULE V--PROPERTY, PLANT AND EQUIPMENT
(Millions of Dollars)
- ---------------------------------------------------------------------------------------------------------------------------
COL. A COL. B COL. C COL. D COL. E COL. F
- ---------------------------------------------------------------------------------------------------------------------------
Balance at Other Balance at
Beginning Additions Retire- Changes End of
Classification of Period at Cost (a) ments Add(Deduct)(b) Period
- ---------------------------------------------------------------------------------------------------------------------------
Year 1991
<S> <C> <C> <C> <C> <C>
Land and improvements ..................... $ 662 $ 6 $ 2 $ 28 $ 694
Buildings and improvements ................ 8,378 365 189 (253) 8,301
Machinery, electronic and other
equipment ............................... 33,494 4,238(c) 5,001(d) (300) 32,431
------- ------ ------ ----- -------
Total (e) ............................... $42,534 $4,609 $5,192 $(525) $41,426
======= ====== ====== ===== =======
<FN>
The Notes on Sheet 4 are an integral part of this Schedule.
</TABLE>
<PAGE> 42
Form 8-K/A#1
October 26, 1994 AT&T Corp.
Schedule V--Sheet 4
AT&T Corp.
AND ITS CONSOLIDATED SUBSIDIARIES
SCHEDULE V--PROPERTY, PLANT AND EQUIPMENT
(Millions of Dollars)
(a) The additions shown in column C are stated at original cost
plus capitalized interest.
(b) Includes changes in lease classification, reclassifications
between accounts, currency translation adjustments and, in
1993, relating to the consolidation of the $137 USG
investment, and in 1993, ($84) relating to McCaw sale of
Wichita/Topeka and CMT contribution, in 1992, $57 relating
to the merger with Teradata, and in 1991 ($28) relating to
the McCaw sale to BellSouth.
(c) Represents purchases of machinery and equipment, principally
telephone plant.
(d) Includes retirements of telecommunications network plant of
approximately $1,400, $2,000 and $3,100 in 1993, 1992 and
1991, respectively.
(e) See Note (1) to the Consolidated Financial Statements for a
description of depreciation policies.
<PAGE>
<PAGE> 43
<TABLE>
Form 8-K/A#1
October 26, 1994 AT&T Corp.
Schedule VI--Sheet 1
<CAPTION>
AT&T Corp.
AND ITS CONSOLIDATED SUBSIDIARIES
SCHEDULE VI - ACCUMULATED DEPRECIATION
(Millions of Dollars)
- -----------------------------------------------------------------------------------------------------------------------
COL. A COL. B COL. C COL. D COL. E COL. F
- -----------------------------------------------------------------------------------------------------------------------
Additions
Balance at Charged to Other Balance at
Beginning Costs and Retire- Changes End of
Description of Period Expenses ments Add(Deduct)(a) Period
- -----------------------------------------------------------------------------------------------------------------------
Year 1993
<S> <C> <C> <C> <C> <C>
Land improvements ......................... $ 97 $ 8 $ 7 $ 8 $ 106
Buildings and improvements ................ 3,020 323 81 40 3,302
Machinery, electronic and other
equipment ............................... 18,069 3,644 2,506 (335) 18,872
------- ------ ------ ------ -------
Total ................................... $21,186 $3,975 (b) $2,594 $(287)(c) $22,280
======= ====== ====== ====== =======
Year 1992
Land improvements ......................... $ 128 $ 6 $ -- $ (37) $ 97
Buildings and improvements ................ 2,256 275 113 602 3,020
Machinery, electronic and other
equipment ............................... 19,155 3,439 3,372 (1,153) 18,069
------- ------ ------ ------- -------
Total ................................... $21,539 $3,720 $3,485 $ (588)(c) $21,186
======= ====== ====== ======= =======
<FN>
The Notes on Sheet 2 are an integral part of this Schedule.
/TABLE
<PAGE>
<PAGE> 44
<TABLE>
Form 8-K/A#1
October 26, 1994 AT&T Corp.
Schedule VI--Sheet 2
<CAPTION>
AT&T Corp.
AND ITS CONSOLIDATED SUBSIDIARIES
SCHEDULE VI - ACCUMULATED DEPRECIATION
(Millions of Dollars)
- -----------------------------------------------------------------------------------------------------------------------
COL. A COL. B COL. C COL. D COL. E COL. F
- -----------------------------------------------------------------------------------------------------------------------
Additions
Balance at Charged to Other Balance at
Beginning Costs and Retire- Changes End of
Description of Period Expenses ments Add(Deduct)(a) Period
- -----------------------------------------------------------------------------------------------------------------------
Year 1991
<S> <C> <C> <C> <C> <C>
Land improvements ......................... $ 121 $ 5 $ -- $ 2 $ 128
Buildings and improvements ................ 2,928 363 178 (857) 2,256
Machinery, electronic and other
equipment ............................... 19,948 3,620 4,779 366 19,155
------- ------ ------ ------- -------
Total ................................... $22,997 $3,988 $4,957 $ (489)(c) $21,539
======= ====== ====== ======= =======
<FN>
____________
(a) Includes changes in lease classification, reclassifications between accounts, and currency translation adjustments.
(b) Includes $124 McCaw valuation adjustment.
(c) Includes $(67) in 1993, $(232) in 1992 and $(193) in 1991 for the utilization of reserves established in 1988 for
costs associated with the accelerated digitization of AT&T's telecommunications network.
</TABLE>
<PAGE> 45
<TABLE>
Form 8-K/A#1
October 26, 1994 AT&T Corp.
Schedule VIII--Sheet 1
<CAPTION>
AT&T Corp.
AND ITS CONSOLIDATED SUBSIDIARIES
SCHEDULE VIII--VALUATION AND QUALIFYING ACCOUNTS
(Millions of Dollars)
- -----------------------------------------------------------------------------------------------------------------------
COL. A COL. B COL. C COL. D COL. E
- -----------------------------------------------------------------------------------------------------------------------
Additions
------------------------
(1) (2)
Balance at Charged to Charged Balance
Beginning Costs and to Other at End
Description of Period Expenses Accounts Deductions(a) of Period
- -----------------------------------------------------------------------------------------------------------------------
Year 1993
<S> <C> <C> <C> <C> <C>
Allowances for doubtful accounts (b) ..... $1,013 $1,665 $66(c) $1,519 $1,225
Reserves related to business
restructuring and facility
consolidation (d) ...................... $2,006 $ 416 $ 5 $ 987(e) $1,440
Deferred tax asset valuation allowance ... $ 205 $ -- $-- $ -- $ 205
Year 1992
Allowances for doubtful accounts (b) ..... $1,049 $1,983 $31(c) $2,050 $1,013
Reserves related to business
restructuring, including force
and facility consolidation (d) ......... $2,792 $ 64 $ 8 $ 858 $2,006
<FN>
The Notes on Sheet 2 are an integral part of this Schedule.
</TABLE>
<PAGE> 46
<TABLE>
Form 8-K/A#1
October 26, 1994 AT&T Corp.
Schedule VIII--Sheet 2
<CAPTION>
AT&T Corp.
AND ITS CONSOLIDATED SUBSIDIARIES
SCHEDULE VIII--VALUATION AND QUALIFYING ACCOUNTS
(Millions of Dollars)
- -----------------------------------------------------------------------------------------------------------------------
COL. A COL. B COL. C COL. D COL. E
- -----------------------------------------------------------------------------------------------------------------------
Additions
------------------------
(1) (2)
Balance at Charged to Charged Balance
Beginning Costs and to Other at End
Description of Period Expenses Accounts Deductions(a) of Period
- -----------------------------------------------------------------------------------------------------------------------
Year 1991
<S> <C> <C> <C> <C> <C>
Allowances for doubtful accounts (b) ..... $ 614 $1,259 $ 7(c) $ 831 $1,049
Reserves related to business
restructuring, including force
and facility consolidation (d) ......... $ 536 $3,067 $-- $ 811 $2,792
<FN>
____________
(a) Amounts written off as uncollectible, payments and reversals.
(b) Includes allowances for doubtful accounts on long-term receivables of $185, $153 and $88 in 1993, 1992 and 1991,
respectively (included in Finance receivables in the Consolidated Balance Sheets).
(c) Amounts previously written off which were credited directly to this account when recovered.
(d) Included primarily in Other current liabilities and in Other liabilities in the Consolidated Balance Sheets.
(e) Upon adoption in 1993 of Statement of Financial Accounting Standards No. 112, "Employers' Accounting for
Postemployment Benefits," $412 of business restructuring reserves established before 1993 were reclassified to
postemployment benefit liabilities.
</TABLE>
<PAGE> 47
Form 8-K/A#1
October 26, 1994 AT&T Corp.
AT&T Corp.
AND ITS CONSOLIDATED SUBSIDIARIES
SCHEDULE IX--DEBT MATURING WITHIN ONE YEAR
(Millions of Dollars)
- ------------------------------------------------------------------------------
COL. A COL. B COL. C
- ------------------------------------------------------------------------------
Weighted
Amount Average
at December 31 Interest Rate
-------------------------- ----------------------
1993 1992 1991 1993 1992 1991
------ ------ ------ ------ ------ ------
Notes Payable:
Commercial paper ... $ 8,761 $6,053 $4,775 3.3% 3.8% 6.0%
Other notes ........ 231 281 384 10.0% 10.9% 10.6%
Current portion of
long-term lease
obligations ........ 52 108 92
Current portion of
long-term debt ..... 2,019 1,249 1,850
------- ------ ------
Total(a) .... $11,063 $7,691 $7,101
======= ====== ======
Amount for the Year
1993 1992 1991
------ ------ ------
Average amounts of
Notes Payable
outstanding during
the year ........... $8,010 $5,117 $4,299 3.7%(b) 4.4%(b)6.8%(b)
Maximum amounts of
Notes Payable at
any month end
during the year .... $9,959 $6,334 $5,159
____________
(a) See Note (5) to the Consolidated Financial Statements.
(b) Computed by dividing the average face amount of notes payable into the
aggregate related interest expense.
<PAGE>
<PAGE> 48
Form 8-K/A#1
October 26, 1994 AT&T Corp.
AT&T Corp.
AND ITS CONSOLIDATED SUBSIDIARIES
SCHEDULE X--SUPPLEMENTARY INCOME STATEMENT INFORMATION
(Millions of Dollars)
- -----------------------------------------------------------------------------
COL. A COL. B
- -----------------------------------------------------------------------------
Item Charged to Costs and Expenses
- -----------------------------------------------------------------------------
1993 1992 1991
-------- -------- --------
Maintenance and repairs .................... $2,205 $2,177 $1,852
Taxes, other than payroll and income taxes . $ 681 $ 722 $ 726
Advertising ................................ $1,726 $1,322 $1,286
<PAGE>
<PAGE> 49
Form 8-K/A#1
October 26, 1994 AT&T Corp.
Item 7. Financial Statements and Exhibits.
(c) Exhibits.
Exhibit
Number
-------
12 Computation of Ratio of Earnings to Fixed Charges.
23 Consent of Coopers & Lybrand L.L.P.
<PAGE>
<PAGE> 50
Form 8-K/A#1
October 26, 1994 AT&T Corp.
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
Vice President and Treasurer
December 23, 1994
<PAGE>
<PAGE> 51
Form 8-K/A#1
October 26, 1994 AT&T Corp.
EXHIBIT INDEX
Exhibit
Number
- -------
12 Computation of Ratio of Earnings to Fixed Charges.
23 Consent of Coopers & Lybrand L.L.P.
<PAGE> 1
Exhibit (12)
AT&T CORP.
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(Dollars in Millions)
(Unaudited)
For the Year Ended December 31,
1993 1992 1991 1990 1989
---- ---- ---- ---- ----
Earnings Before Income
Taxes $6,003 $5,638 $ 581 $5,565 $4,444
Less Interest Capitalized
During the Period 72 62 79 79 89
Less Undistributed
Earnings of Less Than
50% Owned Affiliates (39) (27) 32 26 38
Add Fixed Charges 1,940 2,127 2,371 2,371 1,652
------ ------ ------ ------ ------
Total Earnings $7,910 $7,730 $2,841 $7,831 $5,969
====== ====== ====== ====== ======
Fixed Charges
Total Interest Expense
Including Capitalized
Interest $1,575 $1,737 $1,872 $1,764 $1,242
Interest Portion of
Rental Expenses 365 390 499 607 410
------ ------ ------ ------ ------
Total Fixed
Charges $1,940 $2,127 $2,371 $2,371 $1,652
====== ====== ====== ====== ======
Ratio of Earnings to
Fixed Charges 4.1 3.6 1.2 3.3 3.6
====== ====== ====== ====== ======
<PAGE> 1 Exhibit (23)
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the registration
statements of AT&T Corp. ("AT&T" or the "Company") on Form S-3 for the
Shareowner Dividend Reinvestment and Stock Purchase Plan (Registration Nos. 33-
56249 and 33-49093), Form S-8 for the AT&T 1984 Stock Option Plan (Registration
No. 2-90983), Form S-8 for the AT&T Long Term Savings and Security Plan
(Registration Nos. 33-34265 and 33-31362), Form S-8 for the AT&T Long Term
Savings Plan for Management Employees (Registration Nos. 33-34264, 33-29256,
33-21937 and 33-14373), Form S-8 for the AT&T Retirement Savings and Profit
Sharing Plan (Registration No. 33-39708), Form S-8 for Shares Issuable Under
the Stock Option Plan of the AT&T 1987 Long Term Incentive Program
(Registration Nos. 33-56643 and 33-20276), Form S-8 for the Shares for Growth
Program (Registration No. 33-49089), Form S-4 for the Consent Solicitation
Statement/Prospectus (Registration No. 33-52119), Form S-8 for the AT&T Global
Information Solutions Company Savings Plan (Registration Nos. 33-42917 and 33-
53765), Form S-8 for the 1994 Employee Stock Purchase Plan for AT&T Global
Information Solutions Company (Registration No. 33-54281), Form S-8 for the
AT&T Capital Corporation Retirement and Savings Plan (Registration No. 33-
50821), Form S-8 for the AT&T of Puerto Rico, Inc. Long Term Savings Plan for
Management Employees (Registration No. 33-50819), Form S-8 for the AT&T of
Puerto Rico, Inc. Long Term Savings and Security Plan (Registration No. 33-
50817), Form S-8 for the AGCS Hourly Savings Plan (Registration No. 33-50829),
Form S-8 for the AT&T Corp. 1995 AT&T Employee Stock Purchase Plan
(Registration No. 33-54797), Form S-3 for the AT&T $2,600,000,000 Notes and
Warrants to Purchase Notes (Registration No. 33-49589), the Post-Effective
Amendment Nos. 1, 2 and 3 on Form S-8 to Form S-4 Registration Statement
(Registration No. 33-42150) for the NCR Corporation 1989 Stock Compensation
Plan (Registration No. 33-42150-01), the NCR Corporation 1984 Stock Option Plan
(Registration No. 33-42150-02) and the NCR Corporation 1976 Stock Option Plan
(Registration No. 33-42150-03), respectively, the Post-Effective Amendment No.
1 on Form S-8 to Form S-4 Registration Statement (Registration No. 33-45302)
for the Teradata Corporation 1987 Incentive and Other Stock Option Plan
(Registration No. 33-45302-01), and the Post-Effective Amendments Nos. 1, 2, 3,
4 and 5 on Form S-8 to Form S-4 Registration Statement (Registration No. 33-
52119) for the McCaw Cellular Communications, Inc. 1983 Non-Qualified Stock
Option Plan (Registration No. 33-52119-01), the McCaw Cellular Communications,
Inc. 1987 Stock Option Plan (Registration No. 33-52119-02), the McCaw Cellular
Communications, Inc. Equity Purchase Program (Registration No. 33-52119-03),
the McCaw Cellular Communications, Inc. 1992 Stock Option Plan for Non-Employee
Directors (Registration No. 33-52119-04), and the McCaw Cellular
Communications, Inc. Employee Stock Purchase Plan (Registration No. 33-52119-
05), respectively, of our report, which includes an explanatory paragraph
regarding the change in 1993 in methods of accounting for postretirement
benefits, postemployment benefits and income taxes, dated January 27, 1994,
except as to Notes 4, 21 and 22 for which the date is September 19, 1994, on
our audits of the consolidated financial statements and consolidated financial
statement schedules of the Company and its subsidiaries at December 31, 1993
and 1992, and for the years ended December 31, 1993, 1992 and 1991, which
report is included in this Current Report on Form 8-K/A.
COOPERS & LYBRAND L.L.P.
1301 Avenue of the Americas
New York, New York
December 23, 1994
