AT&T CORP, 10-K, 1995-03-27

AT&T CORP
10-K, 1995-03-27
TELEPHONE COMMUNICATIONS (NO RADIOTELEPHONE)

Previous: AMERICAN MAIZE PRODUCTS CO, SC 14D1/A, 1995-03-27

Next: AMP INC, DEF 14A, 1995-03-27

<PAGE>
FORM 10-K

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

(X) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934

For The Fiscal Year Ended December 31, 1994

( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934

For The Transition Period From _________ to _________

Commission File Number 1-1105

AT&T CORP.

A NEW YORK I.R.S. EMPLOYER
CORPORATION NO. 13-4924710

32 Avenue of the Americas, New York, New York 10013-2412

Telephone Number 212-387-5400

Securities registered pursuant to Section 12(b) of the Act: See attached
SCHEDULE A.

Securities registered pursuant to Section 12(g) of the Act: None.

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes....x.... No........

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K. ( )

At February 28, 1995, the aggregate market value of the voting stock held by
non-affiliates was $81,379,399,770.

At February 28, 1995, 1,579,466,394 common shares were outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

(1) Portions of the registrant's annual report to security holders for
the year ended December 31, 1994 (Part II)

(2) Portions of the registrant's definitive proxy statement dated
February 28, 1995, issued in connection with the annual meeting of
shareholders (Part III)
<PAGE>
<PAGE>
SCHEDULE A

Securities registered pursuant to Section 12(b) of the Act:

Name of each exchange on
Title of each class which registered

Common Shares # New York, Boston, Chicago,
(Par Value $1 Per Share) ## Philadelphia and Pacific Stock
# Exchanges

#
Two Year Fixed/Floating Rate Notes, #
due May 4, 1995 #
#
Three Year 4-1/2% Notes, #
due February 15, 1996 #
#
Thirty-Four Year 4-3/8% Debentures, #
due October 1, 1996 #
#
Thirty-Seven Year 4-3/4% Debentures, #
due June 1, 1998 #
#
Thirty-Six Year 4-3/8% Debentures, #
due May 1, 1999 #
#
Thirty-Three Year 6% Debentures, #
due August 1, 2000 #
#
Thirty-Five Year 5-1/8% Debentures, ## New York Stock Exchange
due April 1, 2001 #
#
Ten Year 7-1/8% Notes, #
due January 15, 2002 #
#
Ten Year 6-3/4% Notes, #
due April 1, 2004 #
#
Twelve Year 7-1/2% Notes, #
due June 1, 2006 #
#
Thirty Year 8-1/8% Debentures, #
due January 15, 2022 #
#
Thirty-Two Year 8-1/8% Debentures, #
due July 15, 2024 #
#
Forty Year 8-5/8% Debentures, #
due December 1, 2031 #
#
<PAGE>
<PAGE>

TABLE OF CONTENTS

PART I

Item Description Page

1. Business ........................................................ 1
2. Properties ...................................................... 13
3. Legal Proceedings ............................................... 14
4. Submission of Matters to a Vote of Security-Holders ............. 15

PART II

Description

5. Market for Registrant's Common Equity and Related Stockholder
Matters ....................................................... 17
6. Selected Financial Data ......................................... 17
7. Management's Discussion and Analysis of Financial Condition and
Results of Operations ......................................... 17
8. Financial Statements and Supplementary Data ..................... 17
9. Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure ...................................... 17

PART III

Description

10. Directors and Executive Officers of the Registrant .............. 17
11. Executive Compensation .......................................... 17
12. Security Ownership of Certain Beneficial Owners and Management .. 17
13. Certain Relationships and Related Transactions .................. 17

PART IV

Description

14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K. 17

See page 16 for "Executive Officers of the Registrant."

PART I

ITEM 1. BUSINESS.

GENERAL

AT&T Corp. ("AT&T" or "Company") was incorporated in 1885 under the laws
of the State of New York and has its principal executive offices at 32 Avenue
of the Americas, New York, New York 10013-2412 (telephone number
212-387-5400).

AT&T is a major participant in two industries: the global information
movement and management industry and the financial services and leasing
industry.

In the global information movement and management industry, AT&T is among
the world's networking leaders, providing wireline and wireless communications
services and products, communications products, network equipment, business
information processing systems, and other systems, products and services
that combine communication and computers, to business, consumers,
telecommunications service providers and government agencies. Worldwide,
AT&T's network handles more than 175 million voice, data, video and facsimile
messages on an average business day. AT&T's operations in the financial
services and leasing industry involve direct financing and finance leasing
programs for AT&T and third party products, leasing products to customers
under operating leases, as well as the general purpose credit card business.

GLOBAL INFORMATION MOVEMENT AND MANAGEMENT

To meet the needs of its customers and the demands of the complex and
rapidly changing information movement and management industry, AT&T maintains
business units that develop, engineer, market, and maintain telecommunications
services and business units that develop, manufacture, market, provide,
install and service information movement and management products and systems.

BUSINESS GROUPS

To better serve the needs of customers, AT&T's businesses are clustered
into the Communications Services Group, AT&T Global Information Solutions
Group, Multimedia Products Group and Network Systems Group.

o COMMUNICATIONS SERVICES GROUP

The Communications Services Group addresses the needs of large and small
businesses, the Federal government, state and local governments and consumers
for voice, data and image telecommunications services. Business units within
this group provide regular and custom long distance communications services,
including message telecommunications services ("MTS"), wide area
telecommunications services ("WATS"), satellite transponder services, AT&T
True Connections# 500 services, toll-free or 800 services, 900 services,
private line services, Software Defined Network services ("SDN"), integrated
services digital network ("ISDN") technology based services, and electronic
mail, electronic data interchanges and enhanced facsimile services through
AT&T EasyLink* services. They also provide special long distance services,

______________
*Registered trademark of AT&T
#Registered servicemark of AT&T
<PAGE>
<PAGE>
-2-

including AT&T Calling Card services and special calling plans and the
Company's domestic and international operators. AT&T provides communications
services internationally, including transaction services, global networks,
network management and value added network services (i.e., services offered
over communications transmission facilities that employ computer processing
applications) and sells and maintains submarine cable systems.

AT&T provides interstate and intrastate long distance telecommunications
services throughout the continental United States and provides, or joins in
providing with other carriers, interstate telecommunications services to and
from Alaska, Hawaii, Puerto Rico and the Virgin Islands and international
telecommunications services to and from virtually all nations and territories
around the world.

In the continental United States, AT&T provides long distance
telecommunications services over its own network. Virtually all switched
services are computer controlled and digitally switched and interconnected by
a packet switched signaling network. Transmission facilities consist of
approximately 2 billion circuit-miles using lightwave, satellite, wire and
coaxial cable and microwave radio technology. International
telecommunications services are provided via multiple international
transoceanic submarine cable (primarily lightwave) systems and via
international satellite and radio facilities.

On March 13, 1995, the Federal Communications Commission ("FCC") announced
the conclusion of the broadband Personal Communications Services ("PCS")
auction commenced on December 5, 1994. The auction involved a total of 99 PCS
licenses in 51 Major Trading Areas ("MTAs") authorizing service on 30 MHz of
spectrum in the 1.8 GHz band. At the start of the auction, AT&T was eligible
to bid in 30 MTAs. AT&T bid a total of $1.685 billion to win broadband PCS
licenses covering 21 MTAs. AT&T must submit to the FCC an application for a
broadband PCS license in each MTA where it has been declared the winning
bidder. Other interested parties will have the opportunity to file petitions
with the FCC commenting upon or challenging AT&T's applications. After a
review of the applications and the conclusion of the public comment process,
the FCC will determine whether there are any reasons precluding it from
granting the licenses; if there are none, it will grant the licenses. AT&T is
required to provide adequate service to at least one-third of the population
in its licensed areas within five years of being licensed and two-thirds of
the population in its licensed areas within ten years of being licensed. The
licenses are granted for ten year terms from the original date of issuance and
may be renewed by AT&T by meeting the FCC's renewal criteria and upon
compliance with the FCC's renewal procedures. AT&T has submitted to the FCC a
down payment equal to 20% of the 1.685 billion; the remainder is due within
five business days after the grant of each license. Construction of the
network to support these licenses will require substantial capital
expenditure, the level of which is dependent on a number of factors which have
not been determined.

AT&T Solutions is a new business unit established to assist corporations in
global network and computer management. AT&T Solutions will design, build and
operate corporate clients computer networks, design software and manage data
centers for its clients.

<PAGE>
<PAGE>
-3-

o AT&T GLOBAL INFORMATION SOLUTIONS GROUP

AT&T Global Information Solutions ("AT&T GIS" formerly known as NCR
Corporation) offers computing and communications solutions together to provide
customers easy access to information and to each other. These solutions are
comprised of computer products and systems, as well as software and
professional services and support. AT&T GIS' primary focus is on six key
industries: financial, retail, communications, consumer goods manufacturing,
transportation and the public sector. Key product lines include: Financial
Systems, such as automated teller machines, image capture systems and
financial processing systems; Decision Enabling Systems, such as commercial
massively parallel processing and database systems; Platform and Systems,
including scalable multiprocessing systems, systems software and processing
systems; Software Products, including groupware, messaging, and distributed
computing middleware; Network Products, including networking tools and
management systems such as OneVision* Network Management Solutions. The unit
also has a fully integrated business, Systemedia, that provides business forms
and media products. In addition, Worldwide Services provides comprehensive
multi-vendor support and professional services.

o MULTIMEDIA PRODUCTS GROUP

The Multimedia Products Group addresses the equipment needs of large and
emerging businesses, the Federal government, state and local governments,
international distributors and consumers. Business units in this group offer
products such as private branch exchanges ("PBXs") including the Definity*
communications system, voice processing systems and voice messaging systems
including the AUDIX* and Conversant* systems, video conferencing systems,
installations, maintenance and repair services and other business
communications systems, corded and cordless telephones, cellular telephones,
answering systems, security systems, facsimile machines, modems, multiplexers,
data transceivers, the Merlin* and Partner* communications systems,
videophone, and imaging and personal communicator products.

The Multimedia Products Group also includes:

AT&T Ventures, an internal venture capital business. The mission of AT&T
Ventures is to identify and nurture new markets for the application of
AT&T-developed and other technologies. AT&T Ventures explores new businesses
in markets not addressed by existing business units.

AT&T Microelectronics, a business unit that produces three broad categories
of components: integrated circuits, photonics and other electronic components
such as discrete components, power systems and printed wiring boards, which
are included in most AT&T products and systems. Certain of these components
and many other specially designed components are sold commercially to other
companies.

______________
*Registered trademark of AT&T

<PAGE>
<PAGE>
-4-

o NETWORK SYSTEMS GROUP

The Network Systems Group includes business units that primarily
manufacture, market, engineer, install and maintain switching systems,
transmission systems, cable and wire products, cellular systems, and
operations systems for AT&T, local exchange carriers, other carriers, private
businesses, government agencies, foreign telephone administrations
and others. Switching systems include the 5ESS* switch; transmission systems
include lightwave and digital radio products, digital cross connect and
multiplex products, and digital loop carrier products; cable and wire products
include optical fiber, optical fiber cable and related apparatus; and
operations systems include mechanized systems for managing telecommunications
networks.

AT&T markets its services, products and systems throughout the United
States. It also markets many of its services, products and systems outside of
the United States.

The Company sells its services and products directly to all types of
customers through its own direct sales force. The Company also sells certain
of its products to distributors and other intermediaries who may resell these
products to others. Some of the Company's services are also sold to
businesses that resell them, usually in conjunction with other services, to
others.

WIRELESS SERVICES (Merger With McCaw Cellular Communications, Inc.)

In September 1994, McCaw Cellular Communications, Inc. ("McCaw"), the
nation's largest cellular communications company, became a wholly owned
subsidiary of AT&T. McCaw has cellular operations in more than 100 cities and
operates the sixth largest U.S. messaging service, serving more than 700,000
customers, and a digital air-to-ground telephone service for commercial
airlines and corporate aircraft.

In connection with the merger, AT&T, McCaw and the United States entered
into a proposed antitrust consent decree (the "Proposed Consent Decree") on
July 15, 1994, which permitted the merger by settling a suit challenging the
merger filed the same day by the United States in the United States District
Court for the District of Columbia (the "court"). The Proposed Consent Decree
imposes several conditions on the future operations of AT&T and McCaw.

These conditions include: (i) the maintenance of McCaw (and McCaw
affiliates) as a subsidiary or entity separate from AT&T; (ii) requirements
that McCaw cellular systems, within 21 months of the commencement of the
action, cease providing interexchange services and provide customers of McCaw
cellular systems with equal access to any interexchange carrier that offers
service to the system; (iii) requirements that McCaw cellular systems provide
to all interexchange carriers exchange access on an unbundled basis that is
equal in type, quality, and price to that provided to AT&T; (iv) a prohibition
on the sale by each of AT&T and McCaw of interexchange or local cellular
services, respectively, at a price, term or discount that depends on whether
the customer obtains both AT&T's interexchange and McCaw's local cellular
services; (v) requirements that AT&T not discriminate in favor of McCaw in the
way in which certain services and products are made available; (vi)
restriction of the flow of certain non-public information between AT&T and
McCaw relating to unaffiliated wireless system equipment customers of AT&T and
unaffiliated wireless system equipment suppliers of McCaw; (vii) a requirement
for AT&T to continue to provide technological and other support to its
unaffiliated cellular system equipment customers; and (viii) a requirement

________________________
*Registered trademark of AT&T

<PAGE>
-5-

that AT&T buy back any cellular system equipment sold to an unaffiliated
cellular carrier if the United States determines AT&T has violated any of the
provisions described in (v) through (vii) of this paragraph.

The requirements of the Antitrust Procedures and Penalties Act, 15 U.S.C.
Section 16, must be complied with before the Proposed Consent Decree may be
entered by the court. The requirements include: (i) filing with the court and
publication of the Proposed Consent Decree and a competitive impact statement
in the Federal Register at least 60 days prior to the effective date of the
decree; (ii) an opportunity for the public to provide written comments and an
opportunity for the United States to reply to such comments; and (iii) a
determination by the court that the Proposed Consent Decree is in the public
interest. Comments have been filed with the court by all interested parties
and AT&T is awaiting the U.S. Department of Justice's ("DOJ") response to
these comments. AT&T does not know when the court will act on this matter.

If the requirements of the Antitrust Procedures and Penalties Act are not
complied with and court does not approve the Proposed Consent Decree, the suit
brought by the United States challenging the merger could be revived, which
may lead to a divestiture or further conditioning of the merger.

LIN Broadcasting Corporation

LIN Broadcasting Corporation ("LIN") is 52% owned by AT&T indirectly
through McCaw. Under a private market value guarantee agreement (the "PMVG")
between McCaw and LIN, a process began on January 1, 1995, to determine the
private market value per share of LIN (the "Private Market Price") using
independent appraisers. On March 7, 1995, the Private Market Price was
determined to be $127.50 per share. McCaw will have 45 days from March 7,
1995, to decide whether to proceed with the acquisition of all the public
shares at that price, subject to the approval of the LIN public shareholders.
Based on the approximately 25 million shares of LIN held by the public, the
total purchase price would be approximately $3.26 billion.

AT&T and McCaw have not decided if McCaw will offer to acquire LIN's public
shares and must evaluate the final price. If McCaw does not proceed with an
acquisition, the PMVG provides that McCaw will put LIN in its entirety up for
sale under the direction of the LIN independent directors and subject to the
approval of the LIN public shareholders. In connection with this matter,
several purported class action suits have been filed against AT&T and others.
See Item 3. Legal Proceedings.

INTERNATIONAL

The WorldPartners alliance was founded in 1993 by AT&T, Kokusai Denshin
Denwa Company, Ltd of Japan and Singapore Telecommunications to provide
multinational customers with a new level of seamless, high quality advanced
telecommunications and related services around the globe, under the brand name
WorldSource**. In 1994, Unisource N.V. (a joint venture of the Dutch,
Swedish, Swiss and, it is expected, Spanish carriers in Europe) joined
WorldPartners along with Telstra of Australia, Hong Kong Tel, Korea Telecom,
and others. As of the end of 1994, WorldPartners included eleven members who
will provide WorldSource Services to multinational customers covering more
than two dozen countries in North America, Europe and Asia.

AT&T has numerous subsidiary companies and offices throughout the world.
AT&T has implemented an international organizational structure, along regional
lines, to complement the functional groups described above and to promote
shared accountability between regional units and those groups. Three regional
units, representing all AT&T businesses, are: Asia/Pacific, with headquarters
__________________
**Unregistered trademark

<PAGE>
-6-

in Hong Kong; Europe/Middle East/Africa, with headquarters in Brussels; and
Caribbean/Latin America, with headquarters in Coral Gables, Florida.

AT&T has established a number of international alliances, ventures and
manufacturing facilities, including the following:

Asia/Pacific Region

AT&T owns 60% of AT&T Taiwan Telecommunications Co., Ltd., a joint venture
with the Taiwanese government and others in Taiwan which manufactures
switching and transmission systems.

AT&T owns approximately 15% of United Fiber Optic Communications Inc., a
venture with Pacific Electric Wire and Cable Ltd., Chiao Tung Bank and others
in Taiwan which manufactures fiber cable and transmission equipment.

AT&T owns semiconductor assembly and test facilities in Singapore.

AT&T owns 80% of AT&T Software Japan, Ltd., a joint venture with Industrial
Bank of Japan and Software Research Associates, which provides software
development.

AT&T owns approximately 60% of AT&T Jens Corporation, a joint venture with
22 major Japanese companies which provides value added network services.

AT&T, through joint ventures, operates manufacturing facilities in the
People's Republic of China for the production of copper and fiber cable,
switching systems, and transmission equipment.

Europe/Middle East/Africa Region

AT&T owns AT&T ISTEL Limited, a United Kingdom based company, that
manufactures software and provides software related services.

AT&T Network Systems International B.V. is a joint venture between AT&T,
which indirectly owns approximately 94% of the equity, and Compagnia
Telefonica Nacional de Espana, the national telephone company of Spain, which
owns approximately 6%. It designs, develops, manufactures and markets Network
Systems' products in Europe and elsewhere. In addition, the joint venture
itself has established businesses and participates in joint ventures in a
number of countries, including: the Netherlands, Belgium, the People's
Republic of China, the Czech Republic, France, Germany, Ireland, Italy,
Kazakhstan, Poland and the Russian Federation.

AT&T owns 19.5% of UTEL, a Ukrainian joint venture company with PTT Telecom
and the Ukrainian State Committee of Communications, which provides services
and products to improve Ukraine's domestic and international
telecommunications services.

AT&T owns AT&T Wireless Communications Products Limited (formerly "Shaye
Communications Limited"), a United Kingdom company engaged in research,
development and marketing of products for the ultra low power, portable,
radio-based telecommunications market.

AT&T owns in excess of 90% of Barphone S.A., a French company engaged
principally in the development, design, manufacture and marketing of small
PBXs and related equipment.

AT&T owns 50% of A/O Telmos, a Russian joint venture company with Moscow
City Telephone Company which will own and operate a subscriber network in
Moscow.
<PAGE>
<PAGE>
-7-

AT&T owns various controlling interests in joint ventures in the Czech
Republic, Hungary, Poland and Slovakia which market key systems, PBXs, related
equipment and other AT&T products.

AT&T owns AT&T Microelectronica de Espana S.A., a Spanish company which
manufactures integrated circuits.

In addition, AT&T, through a joint venture, operates a manufacturing
facility in Ireland.

Caribbean/Latin America Region

AT&T owns four companies in Mexico which manufacture microelectronics
products, telephone answering machines, cordless telephones and corded
telephones, and repair various items of AT&T's consumer products business
unit.

AT&T owns 51% of AT&T Elecon Telesistemas C.A., a Venezuelan joint venture
with Electroconductores, C.A., which manufactures copper cable for the
Venezuelan market.

AT&T owns 5% of VenWorld Telecom, C.A., a Venezuelan joint venture company
with GTE Venezuelan Telephone Incorporated and three Venezuelan corporations,
which owns 40% of the Venezuelan Telephone Company, Compania Anonima Nacional
Telefonos de Venezuela ("CANTV").

AT&T owns 49% of AT&T Network Systems do Brasil, S.A., a Brazilian joint
venture with SID Telecommunicacoes e Controles, S.A. and Marcep, S.A. which
manufactures and markets telephone switching systems.

AT&T owns 10% of Compania de Telefonas del Interior, S.A., a joint venture
with GTE Mobile Communications International, Inc. and others which provides
wireless telecommunication service in Argentina.

AT&T owns 35% of Jamaica Digiport International Limited, a joint venture
with Cable & Wireless PLC and Telecommunications of Jamaica, Ltd. which
provides certain telecommunications services in the free-trade zone, Montego
Bay, Jamaica.

Canada

AT&T owns 22.5% of Unitel Communications Holdings, Inc., the sole
shareholder of Unitel Communications, Inc., a Canadian long distance carrier.

AT&T BELL LABORATORIES

AT&T Bell Laboratories provides support to all business units. It designs
and develops new products, systems, software and services, and carries out a
broad program of fundamental research, to provide the technology base for
AT&T's future.

AT&T Bell Laboratories has made significant contributions to information
science and technology since its founding in 1925. These contributions
include the invention of the transistor, the development of the nationwide
microwave radio network, and the design and development of integrated circuits
and many types of lasers. Areas of AT&T Bell Laboratories research and
development work in recent years include lightwave transmission, which offers
greater transmission capacity than other transmission systems; electronic
switching technology, which enables faster call processing, increased
reliability and reduced network costs; and microelectronics components, which
bring the latest advantages of scale of integration to the full range of
products offered by AT&T.

<PAGE>
-8-

Other advances achieved by AT&T Bell Laboratories include: the development
of the Karmarkar Algorithm, a mathematical optimization technique which is
being applied to the efficient layout of AT&T's long distance
telecommunications network; the development of optical amplifiers that
dramatically increase the distance messages can be transmitted optically
before they must be reamplified, and the invention of a self-electro optic
effect device ("SEED") useful for optical storage, optical switching and
optical logic, thus advancing the future of photonic technologies; the
development of polysilicon memory structures widely used in dynamic random
access memories ("DRAMS"); the development of speech recognizers which provide
for the human control of complex systems with verbal commands; and
improvements to AT&T's ACCUNET* T1.5 service (a wideband, all-digital,
customer-dedicated service that combines voice, data and video communications)
that permit customer control of reconfigurations.

AT&T Bell Laboratories also undertakes the architectural effort required to
see that AT&T products can be integrated within a framework of national and
international standards. An emphasis on use of the UNIX@ Operating System, "C"
language and other software suited to open architecture and easy connectivity
facilitates this architectural effort. AT&T Bell Laboratories has also made
significant contributions to the efficient coding of television pictures and
to wireless communications technology.

In order to increase focus on customers and to create more responsive
organizations, much of the AT&T Bell Laboratories systems engineering and
development resource has been more formally aligned with business units.
These organizations remain AT&T Bell Laboratories, but they receive day-to-day
guidance from the business units they support.

COMPETITION, REGULATION AND LEGISLATION

Changing Competitive Environment

Communications services and products and information services and products
today are provided, in significant part, by companies in different industries.
Many of AT&T's competitors as well as participants in other segments of the
communications and information industries are large companies which have
substantial capital, technological and marketing resources. The business and
competitive environment in the global information movement and management
industry is changing, however, and will likely be reshaped by numerous forces,
including customer preferences and needs, technological developments,
increased competition and a reduction in domestic and foreign regulation.
While it is difficult to predict the specific nature and pace of changes that
might affect the business and competitive environment, AT&T anticipates that
these changes will cause many major companies to expand into other segments of
the communications and information industries. This may increase AT&T's
ability to participate in the provision of a broader range of services with
fewer regulatory constraints but result in increased competition in AT&T's
existing markets.

Regulation of Rates

AT&T is subject to the jurisdiction of the FCC with respect to interstate
and international rates, lines and services, and other matters. For many
years prior to July 1, 1989, the system of regulation used by the FCC for AT&T
was rate-of-return regulation. Effective July 1, 1989, the FCC adopted a new
system of regulating AT&T known as "price caps" under which AT&T's prices,
rather than its earnings, are limited. In a series of decisions, beginning in
1991, the FCC removed the vast majority of AT&T's business services from price
caps regulation. Residential, 800 directory assistance and analog private
line services, however, are still subject to such regulation.
________________
*Registered trademark of AT&T
@Registered trademark of Novell, Inc.

<PAGE>
-9-

The FCC's "price caps" system of regulation is designed to maximize the
incentive for AT&T to increase productivity and lower costs and increases
AT&T's flexibility to respond to market conditions. AT&T's price capped
services are subject to price ceilings, defined by indices based on AT&T's
price levels at the initiation of price cap regulation and adjusted annually
to reflect changes in inflation and certain other costs of doing business.
The price ceilings for services are also subject to a 3% annual decrease,
which reflects a 2.5% productivity level that the FCC says AT&T has achieved
historically plus an additional 0.5%. AT&T may raise prices of individual
services, but must stay within the ceilings overall. Generally, AT&T is
prohibited from raising or lowering the overall price of particular service
categories by more than 5% annually.

In 1991, the FCC adopted an order in its "interexchange competition"
proceeding (CC Docket No. 90-132), confirming that the interexchange market is
largely competitive. As a result, the order streamlined the regulation of
most AT&T outbound business services. In 1993, inbound 800 services were
streamlined and, on January 12, 1995, streamlining was extended to services
used by small business customers. These services are no longer subject to
price cap regulation; AT&T can file tariff revisions for these services on 14
days' notice; and AT&T can offer individually negotiated contract-based rates
for these services.

AT&T's intrastate telecommunications services are subject to regulation in
many states by public service commissions or similar state authorities having
regulatory power over intrastate rates, lines and services and other matters.
The system of regulation used in many states, at least for some of AT&T's
services, is rate-of-return regulation. In recent years, recognizing the
competitive nature of AT&T's services, many states have adopted different
systems of regulation, such as: complete removal of rate-of-return regulation,
pricing flexibility rules for some or all of AT&T's services, price caps, and
incentive regulation.

Legislation and Other Regulation

During 1994, a number of bills were introduced in Congress which would have
permitted the Regional Bell Operating Companies (the "RBOCs") to offer long
distance services under certain conditions and accelerated competition for
local access and local phone services. While none of these bills was enacted,
several key members of Congress announced plans to introduce new bills in the
current session that would set conditions under which the RBOCs would be
permitted to provide long distance services and manufacture equipment, and
permit competition in local services. On March 23, 1995, the Senate Commerce
Committee approved a telecommunications bill which establishes conditions
relating to local competition an RBOC must meet before it can provide long
distance service in the area in which it is the dominant provider of local
exchange service but would permit the RBOC to provide long distance service
elsewhere without satisfying these conditions. The bill would also permit
RBOC entry into the manufacturing of telecommunications equipment when long
distance entry is permitted. Proceedings are also pending before a number of
state regulatory commissions, including New York, California and Illinois,
concerning changes in the nature of the state regulation of telecommunication
services and the removal of constraints on local service providers. AT&T has
taken the position that because of the RBOCs' current monopoly position in
providing local service, it is inappropriate for the RBOCs to receive relief
from the restrictions on providing long distance service, manufacturing
equipment and other regulatory constraints currently imposed on them until
competition in local service has developed. In this regard, AT&T and a number
of participants in the telecommunications industry have identified at least
nine critical conditions necessary to create the potential for effective
competition in the local service market, including the unbundling of basic
network functions, interconnection to local network
<PAGE>
<PAGE>
-10-

facilities and services, dialing parity and number portability. There is no
certainty that any federal legislation will be passed, or if passed enacted
into law, or state regulatory changes will be effected, or if enacted or
effected, what form any such legislation or regulatory changes will take.

One state regulatory commission has taken regulatory action of the kind
described above. In November 1994, the New York Public Service Commission
approved the Open Market Plan of Rochester Telephone Company ("RTC"), pursuant
to which RTC was granted additional pricing flexibility for certain local and
toll services as part of a plan to permit other carriers to offer local and
toll service, either independently or using some of RTC's facilities. The
Open Market Plan did not satisfy all of the conditions AT&T has identified as
a prerequisite to establishing competition in local services. In January
1995, AT&T filed a petition for reconsideration of the Open Market Plan based
on its inability, as adopted, to foster local competition.

Competition; New Opportunities

AT&T currently faces significant competition in the provision of long
distance service and AT&T expects that the level of competition in
communications services will continue to increase. If regulatory, legislative
or technological changes occur, AT&T anticipates that it will experience new
and different competitors. These may include entrants from other segments of
the telecommunications and information services industries seeking to expand
their market opportunities. Such new competitors may enter with a strong
market presence, well recognized names and pre-existing direct customer
relationships. Depending on the timing and circumstances of, and any
competitive inequities not addressed by regulatory or legislative conditions
or restrictions on, their entry, AT&T's revenues and net income could be
adversely affected in future years.

Some of the same regulatory and technological changes that AT&T anticipates
will increase competition in its historic markets also are anticipated to open
new markets for AT&T in different segments of communications services,
end-to-end services, value-added services and multimedia services that AT&T
can provide through its advanced, intelligent network. AT&T's competitive
strategy includes positioning itself to best take advantage of these new
opportunities through the use of its leading networking
capabilities, respected brand name and other resources.

MFJ Activity

On July 6, 1994, four RBOCs (Bell Atlantic Corporation, BellSouth
Corporation, NYNEX Corporation, and Southwestern Bell Corporation) filed a
motion with U.S. District Court for the District of Columbia (the "District
Court") to vacate the Modification of Final Judgment of 1982 ("MFJ") in its
entirety, or, in the alternative, to remove the line of business restrictions.
The MFJ currently forbids the RBOCs from providing long distance services and
from manufacturing telecommunications equipment and customer premises
equipment. The motion maintains that changed circumstances have obviated the
need for the MFJ, that the local exchange is (or soon will be) competitive,
that regulation can prevent anticompetitive abuse of the local exchange
bottleneck, and that consumers and the nation will benefit from RBOC entry
into the long distance services and equipment markets. The DOJ is currently
investigating the motion. AT&T filed with the DOJ on December 7, 1994 its
opposition to the motion. Bell Atlantic has since withdrawn its support for
the motion. It is AT&T's position that the District Court and the Court of
Appeals have previously rejected these claims, and nothing has changed since
these rejections that could now justify elimination of the line-of-business
restrictions and that the RBOCs retain the ability to use their local exchange
monopolies to impede competition in long distance and equipment markets, and
regulation cannot prevent anticompetitive behavior. Proceedings before the
District Court are expected to begin in the third quarter of 1995.
<PAGE>
<PAGE>
-11-

Throughout the last two years, Ameritech Corporation has been pursuing its
"Customers First" plan before the FCC, the DOJ, and, most recently, the
Illinois Commerce Commission. That plan seeks to obtain relief from the MFJ's
interLATA restriction in return for the implementation of certain conditions
that could foster the development of local exchange competition. AT&T has
been vigorously contesting Ameritech Corporation's plan in each jurisdiction,
and has filed its own petition asking the Illinois Commerce Commission to
implement all of the conditions needed to test the potential for local
exchange competition, without any linkage to MFJ relief. The Illinois hearing
examiners have released a proposed order that generally recognizes that
certain conditions are necessary to implement local exchange competition.

FINANCIAL SERVICES AND LEASING

AT&T is a major participant in the financial services and leasing industry,
with its operations conducted through AT&T Capital Corporation ("AT&T
Capital"), a majority-owned subsidiary of AT&T, and AT&T Universal Card
Services Corp. ("AT&T Universal Card Services"), a wholly owned subsidiary of
AT&T.

o AT&T CAPITAL

In August 1993, an initial public offering combined with a management stock
offering took place, which totaled approximately 14 percent of AT&T Capital's
common stock. As a result of the stock offerings, approximately 86 percent of
the outstanding common stock of AT&T Capital (approximately 82% on a
fully-diluted basis) is owned by AT&T indirectly through subsidiaries.

AT&T Capital is a full-service, diversified equipment leasing and finance
company that operates in the United States, Canada, Europe, the Asia-Pacific
region and Mexico.

AT&T Capital works side by side with AT&T and its affiliates to provide
customized financing for AT&T customers acquiring AT&T and associated
equipment. AT&T Capital also provides: financing in connection with general
equipment used by AT&T entities; the AT&T affiliate investment recovery
program; and AT&T's employee vehicle leasing program. AT&T Capital's captive
programs are dependent upon sales of products by AT&T and its affiliates and
the continued acceptance of these products in the marketplace.

AT&T Capital also leases and finances non-AT&T equipment including office,
manufacturing, data center and data processing and transportation equipment.
Additionally, the Company provides inventory financing for equipment dealers
and distributors, Small Business Administration lending, and asset management
and remarketing services.

AT&T Capital's business is diversified by customer, customer type,
equipment segments, geographic location of its customers and maturity of
receivables.

In 1994 and January 1995, AT&T Capital expanded its international equipment
leasing and financial services operations to customers in Canada, Europe, and
Hong Kong and established operations in Australia and Mexico.

The equipment leasing and finance industry is highly competitive.
Participants in the industry compete through price (including the ability to
control costs), risk management, innovation and customer service. Principal
cost factors include the cost of funds, the cost of selling to or acquiring
new end-user customers and vendors, and the cost of managing portfolios
(including, for example, billing, collection, credit risk management and
residual management. There is no assurance as to the volume of financing
<PAGE>
<PAGE> -12-

opportunities that will be generated by sales or leases of equipment by AT&T
and its affiliates.

In its leasing and financing operations and programs, AT&T Capital competes
with captive or related leasing companies (such as General Electric Capital
Corporation and IBM Credit Corporation), independent leasing companies (such
as Comdisco, Inc.), certain banks engaged in leasing, lease brokers and
investment banking firms that arrange for the financing of leased equipment,
and manufacturers and vendors who lease their own products to customers. In
addition, AT&T Capital competes with all banking and other financial
institutions, manufacturers, vendors and others who extend or arrange credit
for the acquisition of equipment and, in a sense, with the available cash
resources of end-users (i.e., end-users may use their available cash resources
to purchase equipment otherwise financeable by AT&T Capital). Many of the
competitors of AT&T Capital are large companies that have substantial capital,
technological and marketing resources; some of these competitors are
significantly larger than AT&T Capital and have access to capital at a lower
cost.

o AT&T UNIVERSAL CARD SERVICES

AT&T Universal Card Services began operations in early 1990. The AT&T
Universal Card is a combined general-purpose consumer credit card and AT&T
Calling Card that at year-end had receivables in the amount of $12.3 billion
in 1994, $9.2 billion in 1993, $6.6 billion in 1992, $3.8 billion in 1991, and
$1.6 billion in 1990. The AT&T Universal Card is offered directly through
AT&T Universal Financial Corp., a Utah industrial loan company, and Universal
Bank, N.A., in Columbus, Georgia, which are both wholly owned by AT&T, and
under an affinity relationship with Columbus Bank and Trust Company in
Columbus, Georgia, a subsidiary of Synovus Financial Corp. AT&T Universal Card
Services provides marketing and customer support for the AT&T Universal Card
program and it purchases cardholder receivables generated by the AT&T
Universal Card program.

The consumer credit card industry is highly competitive and some
seasonality exists, with a higher number of purchases occurring during the
year-end holiday season. The Company believes that the AT&T Universal Card
program is one of the top two or three bankcard/credit card programs, based on
generally available industry information, and on the number of cardholder
accounts in the United States.

SEGMENT, OPERATING REVENUE AND RESEARCH
AND DEVELOPMENT EXPENSE INFORMATION

For information about the Company's industry and geographic segments, see
Note 16 to the Consolidated Financial Statements. Such information is
incorporated herein by reference pursuant to General Instruction G(2).
For information about the consolidated operating revenues contributed by the
Company's major classes of products and services and about consolidated
research and development expenses, see revenue tables and descriptions on
pages 22 through 26 and Consolidated Statements of Income on page 30 of the
Company's annual report to security holders for the year ended December 31,
1994. Such information is incorporated herein by reference pursuant to
General Instruction G(2).

EMPLOYEE RELATIONS

AT&T employs approximately 304,500 persons in its operations. About 35% of
the employees of AT&T are represented by unions. Of those so represented
about 80% are represented by the Communications Workers of America ("CWA"),
which is affiliated with the AFL-CIO, about 19% by the International
Brotherhood of Electrical Workers ("IBEW"), which is also affiliated with the
AFL-CIO, and the remainder by other unions. Labor agreements with most of
<PAGE>
<PAGE>
-13-

these unions extend through May 27, 1995. AT&T expects to commence
negotiations in April 1995 with union representatives concerning these
expiring agreements.

ENVIRONMENTAL MATTERS

The operations of the Company involve the release of materials to the
environment that are subject to regulation under environmental protection
laws. The Company is involved in a number of remedial actions to clean up
hazardous wastes in accordance with the Comprehensive Environmental Response,
Compensation and Liability Act ("CERCLA", or "Superfund"), the Resource
Conservation and Recovery Act ("RCRA") and state environmental laws. Such
statutes require that certain parties fund remedial actions regardless of
fault. During 1994, as in prior years, the Company has been making capital
expenditures for environmental control facilities.

An estimate of the costs of remedial actions or the amounts of capital
expenditures for future periods is subject to a number of uncertainties
including the following: the developing nature of administrative regulations
being promulgated under CERCLA, RCRA and other environmental protection laws;
the availability of other responsible parties at a site; the availability of
information regarding conditions at potential sites; uncertainty as to how the
laws and regulations may be applied to such sites; multiple choices and costs
associated with diverse technologies that may be used in corrective actions at
such sites; the eventual outcome of claims for insurance coverage; and the
time periods (which may be quite lengthy) over which eventual remediation may
occur. In the opinion of the Company's management, capital expenditures and
expenses in connection with remedial actions to comply with the present
environmental protection laws will not have a material effect upon the
Company's future expenditures, annual consolidated financial statement or
competitive position beyond that provided for at year-end.

ITEM 2. PROPERTIES.

The properties of AT&T consist primarily of plant and equipment used to
provide long distance telecommunications services, manufacturing plants at
which the Company's products and systems are produced and administrative
office buildings.

Telecommunications plant and equipment consists of: central office
equipment, including switching and transmission equipment; connecting lines
(cables, wires, poles, conduits, etc.); land and buildings; and miscellaneous
properties (work equipment, furniture, plant under construction, etc.). The
majority of the connecting lines are on or under public roads, highways and
streets and international and territorial waters. The remainder are on or
under private property.

AT&T operates 92 manufacturing facilities located throughout the United
States and abroad which at December 31, 1994, had a total of about 29 million
square feet. Approximately 26 million square feet are in owned facilities and
the remaining 3 million square feet are in leased premises. Some of the
non-U.S. operations are operated through joint ventures with other parties
(see the discussion of international alliances and ventures contained in Item
1. Business). AT&T also operates a number of sales offices, service, repair
and distribution centers, and other facilities, such as research and
development laboratories.

AT&T continues to manage the deployment and utilization of its assets in
order to meet its global growth objectives while at the same time ensuring
that these assets are generating economic value added for the shareholder.
AT&T will continue to manage its asset base consistent with globalization
initiatives, marketplace forces, productivity growth and technology change.
<PAGE>
-14-

A substantial number of the administrative offices of AT&T are in leased
buildings. Substantially all of the important communications facilities are
in buildings owned by AT&T or leased from the regional holding companies
created at divestiture. Substantially all of the major manufacturing plants
and major centers are in owned buildings. Many of the smaller facilities are
in rented quarters. Most of the important buildings are on land held in fee,
but a few are on land held under long-term leases.

ITEM 3. LEGAL PROCEEDINGS.

In the normal course of business, AT&T is 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,
AT&T is unable to ascertain the ultimate aggregate amount of monetary
liability or financial impact with respect to these matters at December 31,
1994. While these matters could affect operating results of any one quarter
when resolved in future periods, it is management's opinion that after final
disposition, any monetary liability or financial impact to AT&T beyond that
provided for at year-end would not be material to AT&T's annual consolidated
financial statements.

In connection with the merger of AT&T and McCaw, the parties entered into a
Proposed Consent Decree with the United States. For a discussion of the
Proposed Consent Decree, see Item 1. Business.

On February 17, 1995, two purported class actions were filed in the
Delaware Chancery Court entitled Fried v. MMM Holdings Inc., et al. (the
"Fried Action") and Blake v. AT&T Corp., et al. (together with the Fried
Action, the "Delaware Actions"). On February 21, 1995, a purported class
action was filed in New York State Supreme Court against AT&T and its
directors entitled Katz v. Robert E. Allen, et al. (the "New York Action").
The Delaware Actions allege that AT&T, among others, has violated its
fiduciary duties, and one of the Delaware Actions alleges that AT&T, among
others, has violated its obligations under the PMVG, in each case by virtue
of, among other things, the McCaw Appraiser's view that the private market
value of LIN as defined under the PMVG is $105 per share. The New York Action
similarly alleges that AT&T and its directors have violated their fiduciary
duties by virtue of, among other things, the McCaw Appraiser's determination
under the PMVG. On March 3, 1995, plaintiffs in the Delaware Actions
requested of the court that those actions be consolidated with two additional
actions that have been filed in the Delaware Court of Chancery entitled
Phillip Frank v. McCaw Cellular Communications, et. al. and H. Richard
Dollinger v. MMM Holdings, Inc. Pursuant to the proposed order of
consolidation, the complaint in the Fried Action would be designated as the
complaint in the consolidated action. AT&T believes that the actions are
without merit.

On July 31, 1991, the United States Environmental Protection Agency Region
III issued a complaint pursuant to Section 3008a of the Resource Conservation
and Recovery Act alleging violations of various waste management regulations
at the Company's Richmond Works, Richmond, Virginia. The complaint seeks a
total of $4,184,304 in penalties. The Company is contesting both liability
and the penalties.

In addition, on July 31, 1991, the United States Environmental Protection
Agency filed a civil complaint in the U.S. District Court for the Southern
District of Illinois against the Company and nine other parties seeking
enforcement of its CERCLA Section 106 cleanup order, issued in November 1990
for the NL Granite City Superfund site, Granite, Illinois, past costs, civil
penalties of $25,000 per day and treble damages related to certain United
States' costs. The Company is contesting liability.
<PAGE>
<PAGE>
-15-

On January 31, 1994, the Company pleaded guilty to a misdemeanor and paid a
fine of $175,000 in connection with environmental violations at the Company's
facilities in Reading, Pennsylvania.

During 1994, AT&T Nassau Metals Corporation ("Nassau"), a wholly owned
subsidiary of AT&T, and the New York State Department of Environmental
Conservation ("NYSDEC") were engaged in negotiations over a study and cleanup
of the Nassau plant located on Richmond Valley Road in Staten Island, New
York. During these negotiations, in June 1994, NYSDEC presented Nassau with a
draft consent order which included not only provisions relating to site
investigation and remediation but also a provision for payment of a $3.5
million penalty for alleged violations of hazardous waste management
regulations. No formal proceeding has been commenced by NYSDEC. Nassau has
denied most of the allegations and is also contesting the penalty.
Negotiations and discussions are still continuing.

The foregoing environmental proceedings are not material to the
consolidated financial statements or business of the Company and would not be
reported but for Instruction 5 C. of Item 103 of Regulation S-K, which
requires disclosure of such matters.

See also the discussion herein in Item 1. Business, for additional
information about environmental matters.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY-HOLDERS.

No matter was submitted to a vote of security holders in the fourth quarter
of the fiscal year covered by this report.
<PAGE>
<PAGE>
- 16 -

Executive Officers of the Registrant
(as of March 1, 1995)
Became
AT&T
Executive
Officer
Name Age on

Robert E. Allen* ....... 60 Chairman of the Board and Chief
Executive Officer ............ 9-86
Richard S. Bodman ...... 56 Senior Vice President, Corporate
Strategy and Development ..... 8-90
Harold W. Burlingame ... 54 Senior Vice President, Human
Resources .................... 9-86
Marilyn Laurie ......... 55 Senior Vice President, Public
Relations .................... 2-87
Alex J. Mandl .......... 51 Executive Vice President and
Chief Executive Officer,
Communications Services Group 8-91
William B. Marx, Jr. ... 55 Executive Vice President and
Chief Executive Officer,
Multimedia Products Group .... 7-89
Richard A. McGinn ...... 48 Executive Vice President and
Chief Executive Officer,
Network Systems Group ........ 10-94
Richard W. Miller ...... 54 Executive Vice President and
Chief Financial Officer ...... 8-93
Victor A. Pelson** ..... 57 Executive Vice President and
Chairman Global Operations
Team ......................... 3-89
Daniel C. Stanzione .... 49 President, AT&T Bell
Laboratories ................. 1-95
John D. Zeglis ......... 47 Senior Vice President - General
Counsel and Government
Affairs ...................... 9-86

____________
*Member of the Board of Directors and Chairman of the Executive
and Proxy Committees.
**Member of the Board of Directors.

All of the above executive officers have held high level managerial
positions with AT&T or its affiliates for more than the past five years,
except Messrs. Bodman, Mandl and Miller who have been officers of AT&T since
August 23, 1990, August 1, 1991 and August 9, 1993, respectively. Prior to
joining AT&T, Mr. Bodman was President of Washington National Investment
Corporation, an investment company, for more than five years. Prior to
joining AT&T, Mr. Mandl was Chairman and Chief Executive Officer of Sea-Land
Service, Inc., an ocean transportation and distribution services company, for
four years and prior thereto held executive positions at CSX Corporation.
Prior to joining AT&T, Mr. Miller was with Wang Laboratories, Inc. from 1989
through 1993, serving as President and Chief Operating Officer and later as
Chairman, President and Chief Executive Officer.

Officers are not elected for a fixed term of office but hold office until
their successors have been elected.

<PAGE>
<PAGE>
- 17 -

PART II

Items 5. through 8.

The information required by these items is included in pages 21 through 44
and on the inside back cover of the Company's annual report to security
holders for the year ended December 31, 1994. The referenced pages of the
Company's annual report to security holders have been filed as Exhibit 13 to
this document. Such information is incorporated herein by reference, pursuant
to General Instruction G(2).

Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.

There have been no changes in independent auditors and no disagreements
with independent auditors on any matter of accounting principles or practices,
financial statement disclosure, or auditing scope or procedure during the last
two years.

PART III

Items 10. through 13.

Information regarding executive officers required by Item 401 of Regulation
S-K is furnished in a separate disclosure in Part I of this report because the
Company did not furnish such information in its definitive proxy statement
prepared in accordance with Schedule 14A.

The other information required by Items 10 through 13 is included in the
Company's definitive proxy statement dated February 28, 1995, on page 6, the
first paragraph on page 7, the last paragraph on page 7 through page 13, and
the last paragraph on page 24 through the first full paragraph on page 41.
Such information is incorporated herein by reference, pursuant to General
Instruction G(3).

PART IV

Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K.

(a) Documents filed as a part of the report:

(1) Financial Statements:
Pages
Report of Management ................................ *
Report of Independent Auditors ...................... *

Statements:

Consolidated Statements of Income ............... *
Consolidated Balance Sheets ..................... *
Consolidated Statements of Cash Flows ........... *
Notes to Consolidated Financial Statements ...... *

____________
*Incorporated herein by reference to the appropriate portions of the
Company's annual report to security holders for the year ended
December 31, 1994. (See Part II.)
<PAGE>
- 18 -

(2) Financial Statement Schedules:

Report of Independent Auditors ...................... 21

Schedules:

II -- Valuation and Qualifying Accounts ............. 22

IX -- Short-Term Borrowings ......................... 24

Separate financial statements of subsidiaries not
consolidated and 50 percent or less owned persons are
omitted since no such entity constitutes a
"significant subsidiary" pursuant to the provisions of
Regulation S-X, Article 3-09.

(3) Exhibits:

Exhibits identified in parentheses below, on file with the
Securities and Exchange Commission ("SEC"), are incorporated
herein by reference as exhibits hereto.

Exhibit
Number

(3)a Restated Certificate of Incorporation of the
registrant, dated January 10, 1989, Certificate of
Change to Restated Certificate of Incorporation dated
March 18, 1992, Certificate of Amendment to Restated
Certificate of Incorporation dated June 1, 1992, and
Certificate of Amendment to the Certificate of
Incorporation dated April 20, 1994, (Exhibit 4B to
Registration Statement No. 33-53765).

(3)b By-Laws of the registrant, as amended May 18, 1994.

(4) No instrument which defines the rights of holders of
long term debt, of the registrant and all of its
consolidated subsidiaries, is filed herewith pursuant
to Regulation S-K, Item 601(b)(4)(iii)(A). Pursuant
to this regulation, the registrant hereby agrees to
furnish a copy of any such instrument to the SEC upon
request.

(10)(iii)(A)1 AT&T Short Term Incentive Plan as amended March, 1994.

(10)(iii)(A)2 AT&T 1987 Long Term Incentive Program as amended
July 17, 1989 (Exhibit (10)(iii)(A)2 to Form SE dated
March 24, 1993, File No. 1-1105).

(10)(iii)(A)3 AT&T Senior Management Individual Life Insurance
Program dated January 1, 1987 (Exhibit (10)(iii)(A)1
to Form SE, dated March 25, 1987, File No. 1-1105) and
as revised December 1, 1994.

<PAGE>
<PAGE>
-19-

Exhibit
Number

(10)(iii)(A)4 AT&T Senior Management Long Term Disability and
Survivor Protection Plan dated February 23, 1984
(Exhibit (10)(iii)(A)1 to Form SE, dated February 21,
1986, File No. 1-1105).

(10)(iii)(A)5 AT&T Senior Management Financial Counseling Program
dated December 29, 1994.

(10)(iii)(A)6 AT&T Deferred Compensation Plan for Non-Employee
Directors, as amended December 15, 1993 (Exhibit
(10)(iii)(A)6 to Form 10-K for 1993, File No. 1-1105).

(10)(iii)(A)7 AT&T Directors Individual Life Insurance Program dated
January 1, 1987 (Exhibit (10)(iii)(A)3 to Form SE,
dated March 25, 1987, File No. 1-1105).

(10)(iii)(A)8 AT&T Plan for Non-Employee Directors' Travel Accident
Insurance (Exhibit (10)(iii)(A)8 to Form 10-K for
1990, File No. 1-1105).

(10)(iii)(A)9 Extract from AT&T (formerly Bell System) Management
Pension Plan regarding limitations on and payments of
pension amounts which exceed the limitations contained
in The Employee Retirement Income Security Act, with
amendments effective October 1, 1985 (Exhibit
(10)(iii)(A)2 to Form SE, dated February 21, 1986,
File No. 1-1105).

(10)(iii)(A)10 AT&T Non-Qualified Pension Plan, (with amendments
effective June 1, 1988) (Exhibit 10(iii)(A)10 to
Form SE, dated March 26, 1990, File No. 1-1105).

(10)(iii)(A)11 AT&T Senior Management Incentive Award Deferral Plan,
as amended January 20, 1994 and March 25, 1994.

(10)(iii)(A)12 AT&T Mid-Career Hire Program revised effective January
1, 1988, including AT&T Mid-Career Pension Plan, as
amended May 15, 1985 (Exhibit (10)(iii)(A)4 to
Form SE, dated March 25, 1988, File No. 1-1105).

(10)(iii)(A)13 AT&T 1984 Stock Option Plan, as modified December 19,
1984 (Exhibit 10(t) to Form SE, dated February 27,
1985, File No. 0-13247).

(10)(iii)(A)14 Form of Indemnification Contract for Officers and
Directors (Exhibit (10)(iii)(A)6 to Form SE, dated
March 25, 1987, File No. 1-1105).

(10)(iii)(A)15 Pension Plan for AT&T Non-Employee Directors revised
February 20, 1989 (Exhibit (10)(iii)(A)(15) to Form
10-K for 1993, File No. 1-1105).

<PAGE>
<PAGE>
-20-

Exhibit
Number

(10)(iii)(A)16 AT&T Senior Management Basic Life Insurance Program
(Exhibit (10)(iii)(A)16 to Form 10-K for 1990, File
No. 1-1105).

(10)(iii)(A)17 Form of AT&T Benefits Protection Trust Agreement
(Exhibit (10)(iii)(A)17 to Form SE, dated March 25,
1992, File No. 1-1105).

(10)(iii)(A)18 Employment Agreement between American Telephone and
Telegraph Company and Alex J. Mandl dated August 1,
1991 (Exhibit (10)(iii)(A) 18 to Form 10-K for 1993,
File No. 1-1105).

(12) Computation of Ratio of Earnings to Fixed Charges.

(13) Specified portions (pages 21 through 44 and the inside
back cover) of the Company's Annual Report to security
holders for the year ended December 31, 1994.

(21) List of subsidiaries of AT&T.

(23) Consent of Coopers & Lybrand L.L.P.

(24)a Powers of Attorney executed by officers and directors
who signed this report.

(24)b Board of Directors' Resolution.

(27) Financial Data Schedule.

AT&T will furnish, without charge, to a security holder upon
request a copy of the annual report to security holders and the
proxy statement, portions of which are incorporated herein by
reference thereto. AT&T will furnish any other exhibit at cost.

(b) Reports on Form 8-K:

Forms 8-K dated October 26, 1994, December 8, 1994, December
13, 1994 and October 26, 1994, as amended (filed December 27,
1994).

<PAGE>
<PAGE>
-21-

REPORT OF INDEPENDENT AUDITORS

To the Shareowners of AT&T Corp.:

Our report on the consolidated financial statements of AT&T Corp. and
subsidiaries has been incorporated by reference in this Form 10-K from page
29 of the 1994 Annual Report to the Shareowners of AT&T Corp. In connection
with our audits of such financial statements, we have also audited the related
consolidated financial statement schedules listed in the index on page 18 of
this Form 10-K.

In our opinion, the consolidated 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 our report referred to above and in Note 2 to the
consolidated financial statements, in 1993 the Company 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 24, 1995

<PAGE>
<PAGE>
-22-

<TABLE>
Schedule II--Sheet 1
<CAPTION>
AT&T CORP.
AND ITS CONSOLIDATED SUBSIDIARIES

SCHEDULE II--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 1994
<S> <C> <C> <C> <C> <C>
Allowances for doubtful accounts (b) ..... $1,225 $1,929 $59 $1,753 $1,460
Reserves related to business
restructuring and facility
consolidation (d) ...................... $1,440 $ (53) $(28) $ 465 $ 894
Deferred tax asset valuation allowance ... $ 212 $ -- $(34) $ -- $ 178

Year 1993

Allowances for doubtful accounts (b) ..... $1,013 $1,665 $66(c) $1,519 $1,225
Reserves related to business
restructuring, including force
and facility consolidation (d) ......... $2,006 $ 416 $ 5 $ 987(e) $1,440
Deferred tax asset valuation allowance ... $ 212 $ -- $-- $ -- $ 212

<FN>
The Notes on Sheet 2 are an integral part of this Schedule.

</TABLE>

<PAGE>
<PAGE>
-23-
<TABLE>
Schedule II--Sheet 2
<CAPTION>
AT&T CORP.
AND ITS CONSOLIDATED SUBSIDIARIES

SCHEDULE II--VALUATION AND QUALIFYING ACCOUNTS

(Millions of Dollars)

Year 1992
<S> <C> <C> <C> <C> <C>
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>

____________

(a) Amounts written off as uncollectible, payments and reversals.
(b) Includes allowances for doubtful accounts on long-term receivables of $209, $185 and $153 in 1994, 1993 and 1992,
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>
<PAGE>

-24-

AT&T Corp.
AND ITS CONSOLIDATED SUBSIDIARIES

SCHEDULE IX - SHORT-TERM DEBT

(Millions of Dollars)

-----------------------------------------------------------------------------

Col. A Col. B Col. C
-----------------------------------------------------------------------------

Weighted
Amount Average
at December 31 Interest Rate
-------------------------- ------------------------
1994 1993 1992 1994 1993 1992
------ ------ ------ ------ ------ ------

Notes Payable:
Commercial Paper... $10,777 $ 8,761 $ 6,053 4.7% 3.3% 3.8%
Other Notes....... 324 231 281 9.7% 10.0% 10.9%
Current Portion of
long-term lease
obligations......... 30 52 108
Current portion of
long-term debt...... 2,535 2,019 1,249
----- ----- -----
$13,666 $11,063 $ 7,691

Amount for the Year
1994 1993 1992
---- ---- ----

Average amounts of
Notes Payable
outstanding during
the year........... $ 8,400 $ 8,010 $ 5,117 4.6%(b) 3.7%(b) 4.4%(b)

Maximum amounts of
Notes Payable at
any month end
during the year.... 11,357 $ 9,959 $ 6,334

---------------------

NOTE: In future years, the information contained herein will be added to the
Company's Consolidated Financial Statement Footnotes included in the Company's
Annual Report to Shareowners.

(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>
-25-

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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.

AMERICAN TELEPHONE AND TELEGRAPH COMPANY

By S. L. Prendergast
Vice President and Treasurer

March 24, 1995

Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the date indicated.

Principal Executive Officer: #
#
Robert E. Allen Chairman #
of the Board #
#
#
Principal Financial Officer: #
#
Richard W. Miller Executive Vice #
President and #
Chief Financial #
Officer #
#
Principal Accounting Officer: #
#
Maureen B. Tart Vice President ## By S. L. Prendergast
and Controller # (attorney-in-fact)*
#
Directors: #
# March 24, 1995
Robert E. Allen #
M. Kathryn Eickhoff #
Walter Y. Elisha #
Philip M. Hawley #
Carla A. Hills #
Belton K. Johnson #
Drew Lewis #
Donald F. McHenry #
Victor A. Pelson #
Donald S. Perkins #
Henry B. Schacht #
Michael I. Sovern #
Franklin A. Thomas #
Joseph D. Williams #
Thomas H. Wyman #

EXHIBIT INDEX

Exhibits identified in parentheses below, on file with the SEC, are
incorporated herein by reference as exhibits hereto.

Exhibit
Number

(3)a Restated Certificate of Incorporation of the registrant,
dated January 10, 1989, Certificate of Change to Restated
Certificate of Incorporation dated March 18, 1992,
Certificate of Amendment to Restated Certificate of
Incorporation dated June 1, 1992, and Certificate of
Amendment to the Certificate of Incorporation dated April
20, 1994, (Exhibit 4B to Registration Statement No. 33-53765).

(3)b By-Laws of the registrant, as amended May 18, 1994.

(4) No instrument which defines the rights of holders of long
term debt, of the registrant and all of its consolidated
subsidiaries, is filed herewith pursuant to Regulation S-K,
Item 601(b)(4)(iii)(A). Pursuant to this regulation, the
registrant hereby agrees to furnish a copy of any such
instrument to the SEC upon request.

(10)(iii)(A)1 AT&T Short Term Incentive Plan as amended March, 1994.

(10)(iii)(A)2 AT&T 1987 Long Term Incentive Program as amended July 17,
1989 (Exhibit (10)(iii)(A)2 to Form SE dated March 24, 1993,
File No. 1-1105).

(10)(iii)(A)3 AT&T Senior Management Individual Life Insurance Program
dated January 1, 1987 (Exhibit (10)(iii)(A)1 to Form SE,
dated March 25, 1987, File No. 1-1105) and as revised
December 1, 1994.

(10)(iii)(A)4 AT&T Senior Management Long Term Disability and Survivor
Protection Plan dated February 23, 1984 (Exhibit
(10)(iii)(A)1 to Form SE, dated February 21, 1986, File No.
1-1105).

(10)(iii)(A)5 AT&T Senior Management Financial Counseling Program dated
December 29, 1994.

(10)(iii)(A)6 AT&T Deferred Compensation Plan for Non-Employee Directors,
as amended December 15, 1993 (Exhibit (10)(iii)(A)6 to Form
10-K for 1993, File No. 1-1105).

(10)(iii)(A)7 AT&T Directors Individual Life Insurance Program dated
January 1, 1987 (Exhibit (10)(iii)(A)3 to Form SE, dated
March 25, 1987, File No. 1-1105).

(10)(iii)(A)8 AT&T Plan for Non-Employee Directors' Travel Accident
Insurance (Exhibit (10)(iii)(A)8 to Form 10-K for 1990, File
No. 1-1105).
<PAGE>
<PAGE>
Exhibit
Number

(10)(iii)(A)9 Extract from AT&T (formerly Bell System) Management Pension
Plan regarding limitations on and payments of pension
amounts which exceed the limitations contained in The
Employee Retirement Income Security Act, with amendments
effective October 1, 1985 (Exhibit (10)(iii)(A)2 to Form SE,
dated February 21, 1986, File No. 1-1105).

(10)(iii)(A)10 AT&T Non-Qualified Pension Plan, (with amendments effective
June 1, 1988) (Exhibit 10(iii)(A)10 to Form SE, dated March
26, 1990, File No. 1-1105).

(10)(iii)(A)11 AT&T Senior Management Incentive Award Deferral Plan, as
amended January 20, 1994 and March 25, 1994.

(10)(iii)(A)12 AT&T Mid-Career Hire Program revised effective January 1,
1988, including AT&T Mid-Career Pension Plan, as amended May
15, 1985 (Exhibit (10)(iii)(A)4 to Form SE, dated March 25,
1988, File No. 1-1105).

(10)(iii)(A)13 AT&T 1984 Stock Option Plan, as modified December 19, 1984
(Exhibit 10(t) to Form SE, dated February 27, 1985, File No.
0-13247).

(10)(iii)(A)14 Form of Indemnification Contract for Officers and Directors
(Exhibit (10)(iii)(A)6 to Form SE, dated March 25, 1987,
File No. 1-1105).

(10)(iii)(A)15 Pension Plan for AT&T Non-Employee Directors revised
February 20, 1989 (Exhibit (10)(iii)(A)(15) to Form 10-K for
1993, File No. 1-1105).

(10)(iii)(A)16 AT&T Senior Management Basic Life Insurance Program (Exhibit
(10)(iii)(A)16 to Form 10-K for 1990, File No. 1-1105).

(10)(iii)(A)17 Form of AT&T Benefits Protection Trust Agreement (Exhibit
(10)(iii)(A)17 to Form SE, dated March 25, 1992, File No.
1-1105).

(10)(iii)(A)18 Employment Agreement between American Telephone and
Telegraph Company and Alex J. Mandl dated August 1, 1991
(Exhibit (10)(iii)(A) 18 to Form 10-K for 1993, File No. 1-1105).

(12) Computation of Ratio of Earnings to Fixed Charges.

(13) Specified portions (pages 21 through 44 and the inside back
cover) of the Company's Annual Report to security holders
for the year ended December 31, 1994.

(21) List of subsidiaries of AT&T.

(23) Consent of Coopers & Lybrand L.L.P.

(24)a Powers of Attorney executed by officers and directors who
signed this report.

(24)b Board of Directors' Resolution.

(27) Financial Data Schedule.

<PAGE>1 Exhibit (3)b

BY-LAWS
OF
AT&T CORP.
AS AMENDED
MAY 18, 1994

CONTENTS
ARTICLE I

MEETINGS OF SHAREHOLDERS

Section 1--Annual Meeting--Notice
2--Record Date
3--Special Meetings--Notice
4--Failure to Receive Notice
ARTICLE II

CONDUCT OF SHAREHOLDERS'
MEETINGS

Quorum, Adjournment and Voting
ARTICLE III

INSPECTORS
ARTICLE IV

BOARD OF DIRECTORS

Section 1--Election
2--Number
3--Vacancy
ARTICLE V

MEETINGS OF DIRECTORS

Section 1--Regular Meetings
2--Special Meetings
3--Notice of Meeting
4--Quorum
5--Location
6--Participation by Telephone
and Action Taken Without a
Meeting
ARTICLE VI

EXECUTIVE AND OTHER
COMMITTEES

Composition, Quorum, Authority,
Alternate Members and Action by
Written Consent
ARTICLE VII

OFFICERS OF THE COMPANY

Section 1--Election and Titles
2--Appointments--Other
Officers and Agents
<PAGE>2

CONTENTS--CONTINUEDARTICLE VIII

DUTIES OF OFFICERS

Section 1--Chairman of the Board
2--Other Officers
3--Absence of Chairman
ARTICLE IX

DUTIES OF TREASURER AND
ASSISTANT TREASURERS

Section 1--Funds--Receipts and
Disbursements

2--Reports
3--Depositaries
4--Assistant Treasurers'
Authority
5--Security
ARTICLE X

DUTIES OF SECRETARY AND
ASSISTANT SECRETARIES

Section 1--Notices--Shareholders' and
Directors' Meetings

2--Records of Shareholders' and
Directors' Meetings
Custody and Use of Seal

3--Assistant Secretaries'
Authority
ARTICLE XI

DUTIES OF CONTROLLER
ARTICLE XII

TRANSFER OF SHARES

Section 1--Issuance and Transfer
2--Loss of Certificates
ARTICLE XIII

INDEMNIFICATION OF
DIRECTORS AND OFFICERS
ARTICLE XIV

SEAL
ARTICLE XV

AMENDMENTS
<PAGE>
<PAGE>3

BY-LAWS

ARTICLE I.
Meetings of Shareholders

Section 1. The annual meeting of the shareholders shall be held in April each
year on such day, at such time and at such place as shall be designated in
the notice of the meeting.

A notice of the annual meeting as approved by the Board of Directors shall be
mailed not less than ten nor more than fifty days before the meeting,
directed to each shareholder entitled to vote at said meeting at his address
as it appears on the record of shareholders unless he shall have filed with
the Secretary a written request that notices intended for him be mailed to
some other address, in which case it shall be directed to him at such other
address.

Section 2. The Board of Directors may fix, in advance, a date not more than
fifty nor less than ten days before the date of any meeting of the
shareholders as the record date for determination of shareholders entitled to
notice of or to vote at such meeting, and only shareholders of record on such
date shall be entitled to notice of or to vote at such meeting.

Section 3. Special meetings of the shareholders may be called at any time by
either the Chairman of the Board or the Board of Directors, and shall be
called upon a request to the Chairman of the Board or Secretary, signed by
shareholders representing at least one-third of the shares. Any such request
shall specify the time and the purpose or purposes of the proposed meeting.
The meeting shall be held at such place within or without the State of New
York as may be designated in the notice of the
meeting.

A notice of not less than ten nor more than fifty days shall be given by mail
for each special meeting, in the manner provided for notice of the annual
meeting. Such notice shall state the purpose or purposes for which the
meeting is called and the time when and the place where it is to be held and
shall indicate that the notice is being issued by or at the direction of the
person or persons calling the meeting.

Section 4. Failure to receive notice of any meeting shall not invalidate the
meeting.

ARTICLE II.
The Conduct of Shareholders' Meetings

At all meetings of the shareholders, the holders of forty per centum of the
shares entitled to vote thereat shall constitute a quorum, except as
otherwise required by law; but the shareholders present may adjourn the
meeting to another time or place despite the absence of a quorum. Every
shareholder entitled to vote shall be entitled to one vote for each share
standing in his name on the record of shareholders; and every shareholder
entitled to vote may vote in person or by proxy.

All elections by shareholders shall be by ballot.
<PAGE>
<PAGE>4

ARTICLE III.
Inspectors

The Board of Directors, in advance of any shareholders' meeting, shall
appoint three Inspectors to act at the meeting or any adjournment thereof. In
case any person appointed fails to appear or act, the vacancy may be filled
by appointment made by the Board in advance of the meeting or at the meeting
by the person presiding thereat.

ARTICLE IV.
The Board of Directors

Section 1. The business of the company shall be managed under the direction
of its Board of Directors, who shall be elected by the shareholders at the
annual meeting.

Section 2. The number of Directors shall not be less than ten nor more than
twenty-five, the exact number of Directors within such minimum and maximum
limits to be fixed and determined by the vote of a majority of the entire
Board. In case of any increase in the number of Directors, the additional
Directors may be elected by a majority of the Directors then in office.

Section 3. Any vacancy in the Board may be filled by a majority vote of the
remaining Directors, though less than a quorum.

ARTICLE V.
Meetings of Directors

Section 1. Regular meetings shall be held at such times and places as the
Board may determine.

Section 2. Special meetings of the Directors may be called at any time by the
Chairman of the Board, or by two members of the Executive Committee, and
shall be called by the Chairman of the Board, or by the Secretary, forthwith
upon request in writing signed by two Directors and specifying the object of
the meeting. At least three days' notice of a special meeting shall be given
in the manner provided for herein.

Section 3. Any notice of a meeting of Directors required to be given may be
given to each Director by mail or telegraph, addressed to him at his
residence or usual place of business, or in person or by telephone, stating
the time and place of the proposed meeting.

Section 4. One-third of the entire Board shall constitute a quorum.

Section 5. Meetings of the Directors may be held within or without the State
of New York.

Section 6. Any one or more members of the Board may participate in a meeting
of the Board by means of a conference telephone or similar communications
equipment allowing all persons participating in the meeting to hear each
other at the same time. Participation by such means shall constitute presence
in person at a meeting.

Any action required or permitted to be taken by the Board may be taken
without a meeting if all members of the Board consent in writing to the
adoption of a resolution authorizing the action. The resolution and the
written consents thereto by the members of the Board shall be filed with the
minutes of the proceedings of the Board.
<PAGE>
<PAGE>5

ARTICLE VI.
Executive Committee and Other Committees

The Board of Directors, by resolution adopted by a majority of the entire
Board, may designate from their number an Executive Committee and other
committees, and may determine the quorum thereof. Any such committee shall
consist of three or more members and shall serve at the pleasure of the
Board.

The Chairman of the Board, one or more Vice Chairmen of the Board and the
President, if any, shall be members of the Executive Committee. The Executive
Committee shall, except as otherwise provided by law or by resolution of the
Board, have all the authority of the Board of Directors during the intervals
between the meetings of the Board. The Executive Committee shall keep a
record of its proceedings, which shall from time to time be reported to the
Board of Directors. The Chairman of the Board shall preside at the meetings
of the Executive Committee.

Committees other than the Executive Committee shall, except as otherwise
provided by law, have such authority as shall be provided by resolution of
the Board.

The Board may designate from time to time one or more Directors as alternate
members of the Executive Committee or of any other committee, who may replace
any absent member or members at any meeting of the committee.

Any one or more members of the Executive Committee or any other committee
established by the Board pursuant to this Article VI may participate in a
meeting of such committee by means of a conference telephone or similar
communications equipment allowing all persons participating in the meeting to
hear each other at the same time. Participation by such means shall
constitute presence in person at the meeting.

Any action required or permitted to be taken by the Executive Committee or
any other committee established by the Board pursuant to this Article VI may
be taken without a meeting if all members of the committee consent in writing
to the adoption of a resolution authorizing the action. The resolution and
written consents thereto shall be filed with the minutes of the proceedings
of the committee.

ARTICLE VII.
Officers of the Company

Section 1. The officers of the company shall be elected by the Board of
Directors, and may consist of a Chairman of the Board, one or more Vice
Chairmen of the Board, a President, such number of Executive Vice Presidents
and Senior Vice Presidents as the Board of Directors shall from time to time
determine, a Secretary, a Treasurer and a Controller. The officers shall hold
office until their successors have been elected.

Section 2. The Board of Directors may appoint one or more Assistant
Secretaries, one or more Assistant Treasurers, one or more Assistant
Controllers, and such other officers and agents as the Board may consider
necessary.
<PAGE>
<PAGE>6

ARTICLE VIII.
Duties of the Chairman of the Board,
President, Vice Chairmen of the Board,
Executive Vice Presidents
and Senior Vice Presidents

Section 1. The Chairman of the Board shall be the chief executive officer of
the company and shall have such authority and perform such duties as usually
appertain to the chief executive office in business corporations. He shall
preside at the meetings of the Board of Directors and he, or such officer as
he may designate from time to time, shall preside at meetings of the
shareholders.

Section 2. The President, Vice Chairmen of the Board, Executive Vice
Presidents and Senior Vice Presidents shall perform such duties as the Board
of Directors or Chairman of the Board may from time to time determine.

Section 3. In case of absence or inability of the Chairman of the Board, the
President shall possess all the authority of the Chairman of the Board.

ARTICLE IX.
Duties of the Treasurer and Assistant Treasurers

Section 1. The Treasurer shall receive all the funds of the company, and
shall disburse them under the direction of the Board of Directors. All
disbursement instruments shall be signed by such person or persons and in
such manner as the Board may from time to time provide.

Section 2. The Treasurer shall keep full and regular books, showing all his
receipts and disbursements, which books shall be open at all times to the
inspection of the Chairman of the Board or of any member of the Board of
Directors; and he shall make such reports and perform such other duties as
the Chairman of the Board or Board of Directors may require.

Section 3. The Treasurer shall deposit all moneys received by him, in the
corporate name of the company, with such depositaries as shall be approved
from time to time by the Board of Directors or by the Chairman of the Board,
the President, a Vice Chairman of the Board or the Treasurer.

Section 4. Assistant Treasurers shall have such of the authority and perform
such of the duties of the Treasurer as may be provided in these by-laws or
assigned to them by the Board of Directors or the Chairman of the Board or by
the Treasurer upon the approval of the Chairman of the Board, the President
or a Vice Chairman of the Board. During the Treasurer's absence or inability,
his authority and duties shall be possessed by such Assistant Treasurer or
the President or a Vice Chairman of the Board may designate.

Section 5. The Board of Directors may require the Treasurer and Assistant
Treasurers to give such security for the faithful performance of their duties
as the Board shall from time to time determine.
<PAGE>
<PAGE>7

ARTICLE X.
Duties of the Secretary and Assistant Secretaries

Section 1. The Secretary shall send notice to the shareholders of all annual
and special meetings, and to the Directors of meetings of the Board where
notice is required to be given; and he shall perform such other duties as may
be required of him by the Chairman of the Board or Board of Directors, and
such as usually appertain to the office of Secretary.

Section 2. The Secretary or in his absence an Assistant Secretary shall keep
an accurate record of the proceedings of the Board of Directors and of the
Executive Committee, and of all meetings of shareholders, and shall have the
custody of the seal of the company and affix it to all instruments requiring
the seal.

Section 3. Assistant Secretaries shall have such of the authority and perform
such of the duties of the Secretary as may be provided in these by-laws or
assigned to them by the Board of Directors or the Chairman of the Board or by
the Secretary upon the approval of the Chairman of the Board, the President
or a Vice Chairman of the Board. During the Secretary's absence or inability,
his authority and duties shall be possessed by such Assistant Secretary or
Assistant Secretaries as the Board of Directors, the Chairman of the Board,
the President or a Vice Chairman of the Board may designate.
<PAGE>
<PAGE>8

ARTICLE XI.
Duties of the Controller

The Controller shall be the principal accounting officer of the company and
shall perform such duties as may be required of him by the Chairman of the
Board or Board of Directors.

ARTICLE XII.
Transfer of Shares

Section 1. Certificates for shares shall be issued by the Treasurer. Shares
shall be transferable only on the record of shareholders of the company by
the holder thereof in person or by attorney, upon surrender of the
outstanding certificate therefor. This requirement shall be embodied in each
certificate.

Section 2. In case of the loss of a certificate, a new certificate may be
issued upon such terms as the Board of Directors may prescribe.

ARTICLE XIII.
Indemnification of Directors and Officers

The company is authorized, by (i) a resolution of shareholders, (ii) a
resolution of Directors, or (iii) an agreement providing for such
indemnification, to the fullest extent permitted by applicable law, to
provide indemnification and to advance expenses to its Directors and officers
in respect of claims, actions, suits or proceedings based upon, arising from,
relating to or by reason of the fact that any such Director or officer serves
or served in such capacity with the company or at the request of the company
in any capacity with any other enterprise.
<PAGE>
<PAGE>9

ARTICLE XIV.
Seal

The corporate seal of the company shall be in the following form.

ARTICLE XV.
Amendments

These by-laws may be amended by the shareholders at any meeting; or by the
Board of Directors at any meeting by a majority vote of the full Board, or at
two successive meetings by a majority vote of a quorum present. The notice of
a special meeting of the Board at which such action is to be taken shall set
forth the substance of the proposed amendment.

<PAGE>1 Exhibit (10)(iii)(A)1
AT&T Form 10-K

AT&T SHORT TERM INCENTIVE PLAN

(As Amended March, 1994)

1. PURPOSE. The purpose of the AT&T Short Term Incentive Plan (the
"Plan") is to provide Senior Managers of American Telephone and Telegraph
Company (the "Company") and its Affiliates with incentive compensation based
upon the level of achievement of financial and other performance criteria.
The Plan will enhance the ability of the Company and its Affiliates to attract
individuals of exceptional managerial talent upon whom, in large measure, the
sustained progress, growth and profitability of the Company depends.

2. DEFINITIONS. As used in the Plan, the following terms shall have
the meanings set forth below:

(a) "Affiliate" shall mean (i) any Person that directly, or through one
or more intermediaries, controls, or is controlled by, or is under common
control with, the Company or (ii) any entity in which the Company has a
significant equity interest, as determined by the Committee.

(b) "Award" shall mean a cash payment.

(d) "Calendar Year" shall mean the year, following the Performance Year,
in which the Award is made.
<PAGE>
<PAGE>2

(e) "Change in Control" shall be deemed to have occurred if (a) there
shall have been a change in the composition of the Board such that at any time
a majority of the Board shall have been members of the Board for less than
twenty-four months, unless the election of each new director who was not a
director at the beginning of the period was approved by at least two-thirds of
the directors then still in office who were directors at the beginning of such
period (but in no event by fewer than three such directors); or (b) any Person
acquiring 30% or more of the outstanding common shares of the Company.

(f) "Committee" shall mean the Compensation Committee of
the Board.

(g) "Covered Employees" shall mean a Participant who is a "covered
employee" within the meaning of Section 162(m) of the Internal Revenue Code
with respect to any Performance Year.

(h) "Outside Directors" shall mean those members of the Committee who
are "outside directors" within the meaning of Section 162(m) of the Internal
Revenue Code.

(i) "Participant" shall mean each and every Senior Manager of the
Company and its Affiliates other than those Senior Managers who are determined
by the Committee, or such person or committee empowered by the Committee, to
be ineligible to participate in the Plan.

(j) "Performance Year" shall mean the year in which the award was
earned.

(k) "Person" shall mean any individual, corporation, partner- ship,
association, joint-stock company, trust, unincorporated organization, or
government or political subdivision thereof.

(l) "Senior Manager" shall mean any manager of the Company or any
Affiliate holding a position above "E" level or any future salary grade level
that is the equivalent thereof.

(m) "Target Award" shall mean an Award level that will be
paid if certain performance criteria are achieved in the Performance Year.

3. AWARDS-GENERAL. Awards will be made in each Calendar Year with
respect to a Performance Year. Awards shall be paid as soon as practicable
after the Performance Year, except to the extent that a Participant has made
an election to defer the receipt of such Award pursuant to the AT&T Senior
Management Incentive Award Deferral Plan.

The Committee shall approve a Target Award for each structure rate of
management eligible for Awards under the Plan prior to each Performance Year
for which it intends to make Awards. For each Performance Year the Committee
shall also establish performance criteria as described in A and B below to be
applicable to Awards for such Performance Year (and future Performance Years,
as the case may be).

Performance criteria are:

A. Financial performance criteria of the Company and its Affiliates (in
each case, prepared on the same basis as the financial statements published
for financial reporting purposes except as adjusted pursuant to Section 5
hereof); and

B. Other performance criteria of the Company and its Affiliates.

<PAGE>3

Except as provided in Section 4 (relating to Award to "covered
employees"), Awards for any Performance Year will be determined by the
Committee, or such person or committee empowered by the Committee, based upon
the level of achievement during such Performance Year of the criteria referred
to in A or B above and on individual merit of each Participant. The Target
Awards shall serve only as a guideline in making Awards under the Plan.
Depending upon individual performance, in the case of each Participant, an
Award may be more or less (including no Award) than such Target Award.

4. AWARD TO "COVERED EMPLOYEES". Notwithstanding any other provision
of the Plan to the contrary, the following provisions shall apply to any
Participant who is a "covered employee" within the meaning of Section 162(m)
of the Code (i.e., the CEO and four most highly compensated officers of the
Company, other than the CEO, as of the end of a Performance Year):

(a) The total of all Awards payable to all such Participants who are
"covered employees" shall be 0.4% of the "Net Cash Provided by Operating
Activities," as publicly disclosed in the Company's consolidated financial
statements for such Performance Year, and the Award to each Participant with
respect to such Performance Year shall be such amount divided by the number of
Participants who are "covered employees" with respect to such Performance
Year, subject to adjustment as described in (b) below. Prior to the payment
of any award to a "covered employee" with respect to a Performance Year, those
Compensation Committee members who are "outside directors" under Section
162(m) of the Code shall certify the amounts under this Section 4(a) with
respect to such Performance Year.

(b) Those Compensation Committee members who are "outside directors"
(within the meaning of Section 162(m) of the Code), in their sole discretion,
shall have the authority to set the actual Award to any Participant under this
Section 4 at any amount lower than the amount described in (a) above, based on
factors, including but not limited to, individual merit and financial and
other performance criteria of the Company established by the Compensation
Committee along with any adjustments (as described herein under "Plan
Administration and Termination"). The award to any Participant may be less
than (including no award), but never more than, the amount determined under
(a) above.

5. ELIGIBILITY. (a) Persons employed by the Company or any of its
Affiliates during a Performance Year in active service at a Senior Manager
level are eligible to be Participants under the Plan for such Performance Year
(whether or not so employed or living at the date an Award is made); provided
that, except in the case of a manager promoted to Senior Manager, the manager
has at least three months of active service at such level during the
Performance Year with the Company or any Affiliate (excluding any time the
manager was absent on account of disability and receiving any Sickness or
Accident Disability Benefits ("Disability Benefits") under the Company or any
employing Affiliate's Sickness or Accident Disability Benefit Plan). A Senior
Manager is not rendered ineligible to be a Participant by reason of being a
member of the Board.

(b) The Target Award applicable to a Participant under the Plan for a
Performance Year shall be prorated over the Performance Year or the
Participant shall be ineligible for an Award, as follows:

(1) entrance to or exit from - prorate from date of
a level of Senior Manager entrance or exit to
after the beginning of the the nearest half
Performance Year, including month
exit due to death, retirement,
resignation, or leave of absence

<PAGE>4

(2) changes in designated - prorate according
structure rate to time of active
service at each
structure rate to the
nearest half month

(3) receipt of Disability - prorate to the day
Benefits for more than based on time of
three months in a service while not
Performance Year under the receiving Disability
plan of the Company or any Benefits
Affiliate

(4) receipt of Disability - no reduction in
Benefits for three months applicable Target
or less in a Performance Award
Year under the plan of the
Company or any Affiliate

(5) dismissal during or after - no award
a Performance Year by the
Company or any Affiliate

6. ADJUSTMENTS. (a) In order to assure the incentive features of the
Plan and to avoid distortion in the operation of the Plan, the Committee may
make adjustments in the performance criteria established by it for any
Performance Year under Section 3 whether before or after the end of the
Performance Year to the extent it deems appropriate in its sole discretion,
which shall be conclusive and binding upon all parties concerned, to
compensate for or reflect any extraordinary changes which may have occurred
during the Performance Year which significantly alter the basis upon which
such performance criteria were determined. Such changes may include without
limitation changes in accounting practices, tax, regulatory or other laws or
regulations, or economic changes not in the ordinary course of business
cycles. The Company also reserves the right to adjust Target Awards to
insulate them from the effects of unanticipated, extraordinary, major business
developments, e.g., unusual events such as a special asset writedown, sale of
a division, etc. The determination of financial performance achieved for any
Performance Year may, but need not be, adjusted by the Committee to reflect
such extraordinary, major business developments. Any such determination shall
not be affected by subsequent adjustments or restatements.

(b) In the event of any change in outstanding shares of the Company by
reason of any stock dividend or split, recapitalization, merger,
consolidation, combination or exchange of shares or other similar corporate
change, the Committee shall make such adjustments, if any, that it deems
appropriate in the performance criteria established by it under Section 3 for
any Performance Year not then completed; any and all such adjustments to be
conclusive and binding upon all parties concerned.

(C) In order to maintain the Participants' rights in the event of any
Change in Control of the Company the Committee as constituted before such
Change in Control may, in its sole discretion, as to any Award, either at the
time a Target Award is determined hereunder or any time thereafter, take any
one of the following actions: (i) provide for the acceleration of any time
periods relating to the realization of any Award so that such Award may be
realized in full on or before a date fixed by the Committee; (ii) make such
adjustment to any Target Award then outstanding as the Committee deems
appropriate to reflect such Change in Control; (iii) cause the Company's
obligation with respect to such Target Award and any other obligations
hereunder to be assumed, or new obligations substituted therefor, by the
acquiring or surviving corporation after such Change in Control.

<PAGE>5

7. OTHER CONDITIONS. (a) No person shall have any claim to an Award
under the Plan and there is no obligation for uniformity of treatment of
Participants under the Plan. Awards under the Plan may not be assigned or
alienated.
(b) Neither the Plan nor any action taken hereunder shall be construed
as giving to any Participant the right to be retained in the employ of the
Company or any Affiliate.
(c) The Company or any Affiliate shall have the right to deduct from
any Award to be paid under the Plan any federal, state or local taxes required
by law to be withheld with respect to such payment.

(d) Awards under the Plan will be included in the base for determining
pensions, retirement and death related benefits under the following plans:
- AT&T Non-Qualified Pension Plan
- AT&T Mid-Career Pension Plan
- AT&T Senior Management Long Term Disability
and Survivor Protection Plan

(e) In the event an Award under the Plan is deferred under the AT&T
Senior Management Incentive Award Deferral Plan, it will be reflected in the
calculations of the above benefit plans as if it had been paid as scheduled
and not deferred.

8. DESIGNATION OF BENEFICIARIES. A Participant may designate a
beneficiary or beneficiaries to receive all or part of the Award which may be
made to the Participant, or may be payable, after such Participant's death. A
designation of beneficiary may be replaced by a new designation or may be
revoked by the Participant at any time. A designation or revocation shall be
on a form to be provided for this purpose and shall be signed by the
Participant and delivered to the Company or Affiliate employing the
Participant prior to the Participant's death. In case of the Participant's
death, an Award with respect to which a designation of beneficiary has been
made (to the extent it is valid and enforceable under applicable law) shall be
paid to the designated beneficiary or beneficiaries. Any Award granted or
payable to a Participant who is deceased and not subject to such a designation
shall be distributed to the Participant's estate. If there shall be any
question as to the legal right of any beneficiary to receive an Award under
the Plan, the amount in question may be paid to the estate of the Participant,
in which event the Company or it's employing Affiliate shall have no further
liability to anyone with respect to such amount.

9. PLAN ADMINISTRATION. (a) The Committee shall have full power to
administer and interpret the Plan and to establish rules for its
administration subject to such resolutions, not inconsistent with the Plan, as
may be adopted by the Board, except that the "outside directors" shall have
such power with respect to Awards to "covered employees" under the provisions
of Section 4. In making any determinations under or referred to in the Plan
the Committee, or the outside directors, as applicable, shall be entitled to
rely on opinions, reports or statements of officers or employees of the
Company and its Affiliates and of counsel, public accountants and other
professional or expert persons.

(b) The Plan shall be governed by the laws of the State of New York and
applicable Federal law.

10. MODIFICATION OR TERMINATION OF PLAN. The Board may modify or
terminate the Plan at any time, effective at such date as the Board may
determine. The Senior Vice President - Human Resources of the Company (or any
successor to that officer's responsibilities) with the concurrence of the
General Counsel, or the Vice President-Law for Corporate Matters, of the
Company (or any successor to either of such officer's responsibilities), shall
be authorized to make minor or administrative changes in the Plan or changes
required by or made desirable by government regulation. A modification may
affect present and future Participants.

<PAGE> Exhibit (10)(iii)(A)3

THE AT&T
SENIOR MANAGEMENT INDIVIDUAL LIFE INSURANCE
PROGRAM

January 1, 1987

Revised 12/1/94
<PAGE>
<PAGE>
TABLE OF CONTENTS

PAGE
____

PROGRAM OVERVIEW ......................................................... 1

ELIGIBILITY .............................................................. 1

COVERAGE ................................................................. 1

INSURABILITY ............................................................. 1

PREMIUM SHARING/BENEFIT SHARING .......................................... 2

PREMIUM PERIOD ........................................................... 2

PREMIUM AMOUNT ........................................................... 2

PREMIUM WAIVERS .......................................................... 2

OWNERSHIP ................................................................ 3

CASH VALUE ............................................................... 3

CASH AVAILABILITY ........................................................ 3

SECURED BENEFIT .......................................................... 3

EARLY RETIREMENT, TERMINATION OR DEMOTION ................................ 4

CONTRACTUAL AGREEMENT .................................................... 4

TAXES .................................................................... 4

ENROLLMENT ............................................................... 5
<PAGE>
<PAGE>

ENROLLMENT PACKAGE
PROGRAM OVERVIEW

The Senior Management Individual Life Insurance Program (SMILIP) is an
arrangement where the Company and you purchase a permanent life insurance
policy on your life and share the premium payment. If you die while AT&T is
still a party to the policy, typically before you reach age 65, the death
benefit is also shared between the Company and your designated beneficiary.
This type of arrangement this known in the insurance industry as "Split
Dollar." After attaining age 65 or if later, 10 years (in some cases it may
be longer to avoid violation of the Internal Revenue Service Regulations
Section 7702 guidelines) from the date of issuance of this policy, the Company
will recoup its premium payments from the cash value build-up in the policy
and cease to have any interest in the policy. The remaining cash value will
be sufficient to give you a "paid-up" death benefit after attaining normal
retirement age, i.e., all premiums will cease and the death benefit of the
policy will be secured for the designated beneficiary with no further cost to
you.

At the time of enrollment your death benefit will be, at your option, one or
one-and-one-half times base salary. Your death benefit will increase annually
at 7% to approximate assumed growth in base salary over an extended period of
time. The premium cost to you will also increase to reflect your increasing
age as well as the increased death benefit. The Company will pay a
significant portion of the premium (see the attached illustration). Over
time, the Company portion of the premium will decrease.

Although this arrangement is primarily designed to pay a benefit upon your
death, there is also a cash value build-up occurring coincident with the
premium payments that continues after the premium payments cease. Once
sufficient funds have accumulated and the Company no longer has an interest in
the policy, because it has recouped its premiums, you have the option to use
some or all of the remaining cash in lieu of some or all of the death benefit.

ELIGIBILITY

SMILIP is for AT&T Senior Managers. Employees who are promoted or hired into
Senior Management are immediately eligible to enroll in this program.

COVERAGE

Once you select the amount of coverage (one or one-and-one half times base
salary), the death benefit will automatically increase 7% on January 1 of each
year to approximate salary increases. Periodically over the life of the
policy this amount may be adjusted by the Company to more closely approximate
your actual salary.

INSURABILITY

If you enroll within 60 days of becoming a Senior Manager, you are
guaranteed to be insured. You may lower your coverage, e.g.,
one-and-one-half times to one times at any point after enrollment. If
you choose to delay enrollment or later choose to increase coverage,
e.g., one times to one-and-one-half times, proof of insurability may be
required at that time before a policy can be written or coverage
increased. If you are on disability (i.e., receiving Sickness and
Disability Benefits) at the time of eligibility, enrollment must be
delayed until you return to work.
-1-<PAGE>
<PAGE>

PREMIUM SHARING/BENEFIT SHARING

SMILIP has its origin in what the insurance industry calls a "Split
Dollar" program. The term "Split Dollar" insurance comes from a concept
of the Employer and the Employee sharing the premium payment on a life
insurance policy on the employee. At age 65 or if later, 10 years (in
some cases it may be longer to avoid violation of the Internal Revenue
Service Regulations Section 7702 guidelines) from the date of issuance
of the policy, the Company's aggregate premiums are returned from a
"special" cash value built into the policy expressly for this purpose.
Should you die before the Company's aggregate premiums are returned,
death benefit payments are made to both the Company and your
beneficiary. However, the benefit the Company receives DOES NOT REDUCE
THE DEATH BENEFIT PAID TO YOUR BENEFICIARY. After the Company's
aggregate premiums are returned, the Company no longer has an interest
in the policy. At that time you will have a "paid up" permanent life
insurance policy with a cash value that can be made available to you at
your option.

EXAMPLE:*
Sample Senior Manager's Program
Current Age 50
Annual Premium Cash Value
Attained Death Senior Senior
Age Benefit Manager Company Manager Company
50 $200,000 $ 880 $17,090 0 $ 14,350
55 280,500 1,740 16,232 $ 15,700 101,000
60 393,400 4,092 13,878 85,350 178,500
64 515,700 5,364 12,606 195,700 231,000
65# 515,700 0 0 203,800 0

* This example is for illustrative purposes only and assumes a 7% annual
growth in death benefit (assumed base salary) and an 8% yield on
investment for the cash value. The yield on investment is not
guaranteed.

# At normal retirement the death benefit becomes constant, premiums
cease, the Company's aggregate premiums are returned and your cash value
may continue to grow.

PREMIUM PERIOD

SMILIP is designed for premiums to be extended over a period of time to ease
the impact on cash flow to both you and the Company. This period is normally
from the time of your enrollment until you reach age 65, however, premiums
must be paid for a minimum of 10 years (in some cases it may be longer to
avoid violation of the Internal Revenue Service Regulations Section 7702
guidelines). Therefore, if you enroll in the program after age 55, you and
the Company will continue premium contributions until the minimum is reached.

PREMIUM AMOUNT

Included as an attachment are two personal illustrations (one times and
one-and-one-half times your base salary coverage). The policy, when issued,
will be based on illustration that you elect. These illustrations show the
Company's as well as your annual premiums through the life of the policy.

PREMIUM WAIVERS

There are no Premium Waivers associated with this policy.
-2-<PAGE>
<PAGE>

OWNERSHIP

There are three options:

SENIOR MANAGER AS OWNER
All paperwork should be signed by Senior Manager as proposed insured and
owner.

OWNER AT ENROLLMENT IS NOT THE SENIOR MANAGER
Another option is for you not to take ownership, but rather another,
i.e., individual, trust, etc., apply for ownership of the policy. It is
of particular importance that if the owner of the policy is not you, the
owner must sign as the "Applicant/Owner" and you must sign the
application as the "Proposed Insured".

TRANSFER OF OWNERSHIP
The owner of this policy may subsequently transfer ownership to another,
i.e., an individual, trust, etc. Please contact Executive Human
Resources at 908 221-4444 for the necessary forms and/or information.

SINCE OWNERSHIP HAS LONG TERM AND/OR IRREVOCABLE IMPLICATIONS, WE URGE
YOU TO CONSULT WITH AN ATTORNEY AND/OR TAX ADVISOR BEFORE MAKING THIS
DECISION.

CASH VALUE

This program is designed to provide you with a pre- and post-retirement
death benefit. However, in addition to the death benefit, there is a
cash value build-up. That is, part of each premium is placed in an
"investment fund" to earn income. Investment earnings beyond the
amounts necessary to increase the death benefit (as your salary
increases) build on a tax advantaged basis in the policy.

CASH AVAILABILITY

CASH BUILD-UP

Your share of the cash build-up will not begin until several years
into the policy but will build quickly after that. As with any
cash amount, the longer it is left intact the greater the amount
will be.

LOANS

The cash value attributed to you may be withdrawn in the form of a
loan after the Company no longer has an interest in the policy.
There are certain restrictions and tax implications associated
with a loan. We suggest that you speak with your financial
counselor/tax advisor before taking such a step.

INCOME STREAM OR LUMP SUM

It is possible, after retirement, to convert all or any portion of
the policy from a death benefit to either an income "stream"
(i.e., an annuity) or a lump sum cash payout. The extent to which
you convert to income or cash will cancel or reduce the valuable
death benefit. Once you convert, it is not possible to
re-establish the original death benefit.

SECURED BENEFIT

Changes to the tax law over the years have required more and more
of the Senior Management benefit programs to be paid from Company
operating income.
-3-
<PAGE>
<PAGE>

SMILIP allows the Company to contribute towards the cost of this
program on a timely basis while securing the benefit payment from
a third party (the insurance company).

EARLY RETIREMENT, TERMINATION OR DEMOTION

If, at retirement, you are "Pension Eligible" (i.e., you retire on a
Service or Disability Pension under the AT&T Management Pension Plan, or
with a Disability Allowance or Minimum Retirement Benefit under the AT&T
Senior Management Long Term Disability and Survivor Protection Plan) and
before age 65, the death benefit will continue to increase until age 65.
Both you and the Company will continue to pay premiums until you reach
age 65 or if later, 10 years-(in some cases it may be longer to avoid
violation of the Internal Revenue Service Regulations Section 7702
guidelines) from the date of issuance of the policy. At that time the
premiums will cease and the Company's aggregate premiums will be
returned to the Company. If you leave the Company and engage in
competitive activity as determined by AT&T, the process will be the same
as with retirement/termination without being Pension Eligible or
demotion.

If you separate from the Company without being Pension Eligible or are
demoted to a non Senior Manager position, the Company's aggregate
premiums will be immediately returned to the Company. You can, at your
option, either maintain the policy by continuing to pay the total
premium, i.e., both your amount and the amount previously paid by the
Company, use the remaining cash value (if any) to buy paid up life
insurance, or withdraw any remaining cash value and cancel the policy.

CONTRACTUAL AGREEMENT

One of the unique aspects of this insurance policy is the existence of a
contract between you and AT&T. This agreement has no relationship to
employment or any other benefit but rather defines the responsibilities
of both the Company and you in the operation of the policy. You will
own the policy and determine who beneficiary. The Company will hold the
policy and have a "Collateral Assignment" from the owner (you or another
you name) entitling AT&T, as long as it has a collateral interest in the
policy, to an amount equal to its premiums paid. This document is a
legal agreement and as such includes a significant amount of detail and
warrants your careful review before signing. Although somewhat unique
to life insurance, a collateral assignment is similar in context to an
automobile loan where the car becomes "collateral" for the money lent to
buy it. In this case, a portion of the value and benefit of the policy
is the collateral the Company receives for contributing premium payments
to "buy" the life insurance policy. The agreement is satisfied when the
premium paid by the Company is returned. Some of the major sections of
the agreement are:

- Description of the policy
- How the premiums are paid
- How the proceeds are paid
- How the agreement terminates
- Claims procedure
- Description of the assignment

The Agreement is included with this package.

TAXES

Split Dollar life insurance policies have been in existence for decades. The
IRS has issued several rulings over this period which treat these policies
favorably from a tax perspective. However, the Company does not assure any
particular tax treatment and recommends that you review your own situation
with your personal attorney and/or tax advisor.
-4-<PAGE>
<PAGE>

ENROLLMENT

Included with this package are the documents required for enrolling in the
Senior Management Individual Life Insurance Program. The Application Form
while appearing lengthy requires, for our purposes, just a few basic pieces of
information, as does the Beneficiary Designation form. Both of these
documents include instructions on how to complete. The Collateral Assignment
requires signatures only.

-5-

<PAGE>1 Exhibit (10)(iii)(A)5

December 29, 1994

SENIOR MANAGEMENT FINANCIAL COUNSELING PROGRAM

GENERAL DESCRIPTION OF SERVICES

AT&T offers a financial counseling program to all active Senior Managers.
This program is extended to retired Senior Managers during the first year of
retirement. In addition, eligibility is extended to the spouse and/or
immediate family members in the event of death of a participating Senior
Manager. Participation in the program is voluntary.

Upon election to participate in the program, the Senior Manager can select
from three financial counseling firms utilized by AT&T, all of which have
nation-wide branches; Asset Management Group (AMG), The AYCO Company and
Coopers & Lybrand. AMG has a base office in Englewood, Colorado and a local
office in Parsippany, New Jersey. The Ayco Company is based in Albany, New
York, and has a local office in Florham Park, New Jersey. Coopers & Lybrand,
has a local office in Parsippany, New Jersey.

Upon selection of a firm, the Senior Manager is assigned a personal counselor
who will schedule a preliminary interview which is primarily a get acquainted
session. During the interview, the counselor will outline the services
offered by the firm and describe the type of personal information and
documents the Senior Manager will need to provide to the counselor. The types
of documents and personal information include items such as wills, deeds,
insurance policies and trusts, as well as complete data on the Senior
Manager's financial status. All information is held strictly confidential
between the financial counseling firm and the Senior Manager.

The counselor will schedule a follow-up interview at which time an in depth
examination of the financial goals and objectives of the Senior Manager and
the spouse is completed.

After all pertinent data have been analyzed, the counselor will prepare a
comprehensive report for presentation to the Senior Manager. The report
outlines the Senior Manager's current financial status, indicates areas
requiring adjustments, if any, and recommends future financial actions.

The types of services provided in the program include:

* COMPANY PROVIDED BENEFITS PLANNING

* ESTATE PLANNING

* INSURANCE PLANNING

* INVESTMENT PLANNING

* INCOME TAX PLANNING

In addition to the above services, the Senior Management Financial Counseling
Program covers the cost of personal income tax preparation and the preparation
of wills and trusts associated with estate planning.

Although AMG, AYCO and Coopers & Lybrand provide tax preparation services, the
Senior Manager may engage their own attorney or tax accounting firm for both
estate planning and tax preparation.<PAGE>
<PAGE>2

Attached is a summary of the current financial counseling fees by firm and
type of service. Each of the three firms bills AT&T Executive Human
Resources, who in turn pays the bills and charges the expense to each
individual Senior Manager's budget.

The amount of each financial counseling invoice paid on behalf of a Senior
Manager by AT&T, is treated as imputed income to the Senior Manager. The
imputed amount is reflected in the Senior Manager's paycheck and appropriate
federal and state taxes are withheld from the imputed income at "flat" tax
rates.

Every February, a tax allowance payment is made to each Senior Manager to
offset any adverse tax effects as a result of the non-deductibility of all or
a portion of the financial counseling fees paid by AT&T on their behalf. The
tax allowance payment is considered taxable income in the year in which the
payment is received.

The Financial Counseling Program shall be forfeited if the employee, without
the consent of the AT&T Management Executive Committee, while employed by the
Company or after termination of such employment, becomes associated with,
employed by, renders services to, or owns any interest in (other than any non
substantial interest, as determined by the Committee), any business that is in
competition with the Company or with any business in which the Company has
substantial interest as determined by the Committee.

This program is administered by Executive Human Resources, who can be reached
on (908) 221-4444.

<PAGE>1 Exhibit(10)(iii)(A)(11)
AT&T Form 10-K

AT&T SENIOR MANAGEMENT

INCENTIVE AWARD DEFERRAL PLAN

(as amended January 20, 1994 and March 25, 1994)

1. ELIGIBILITY

Any Senior Manager (as defined in the AT&T 1987 Long Term
Incentive Program [the "1987 Plan"]) of American Telephone and Telegraph
Company ("AT&T") or an Affiliate (as defined in the 1987 Plan) who is eligible
for an award under the AT&T Short Term Incentive Plan (the "Short Term
Incentive Plan") and/or who has been granted a Performance Award under the
AT&T Senior Management Long Term Incentive Plan (the "Long Term Incentive
Plan") or the 1987 Plan, or who is eligible for an award under the AT&T
Paradyne GMT Short Term Incentive Plan (the "Paradyne Plan"), shall be
eligible to participate in this AT&T Senior Management Incentive Award
Deferral Plan (the "Plan"). For purposes of the Plan, AT&T and any Affiliate
shall be referred to as a "Participating Company". Prior to January 1, 1984,
the Plan was named the Bell System Senior Management Incentive Award Deferral
Plan.

2. PARTICIPATION

(a) Prior to the beginning of any calendar year, any Senior
Manager may elect to participate in the Plan by directing that (i) all or part
of the awards under the Short Term Incentive Plan or the Paradyne Plan, or the
Performance Awards under the Long Term Incentive Plan or the 1987 Plan and/or
(ii) all or part of the dividend equivalent payments under the Long Term
Incentive Plan or the 1987 Plan, which such employee's Participating Company
would otherwise pay currently to such employee in such calendar year and
subsequent calendar years, shall be credited to a deferred account subject to
the terms of the Plan. However, in no event shall the part of an award under
any plan credited during any calendar year be less than $1,000 (based on a
valuation at the time the award would otherwise be paid). There shall be no
such minimum limitation on amounts credited during any calendar year that are
related to dividend equivalent payments.

In addition, prior to the beginning of any calendar year, the
Chairman of the Board and any other Senior Manager designated by the Chairman
of the Board may elect to participate in the Plan by directing that all or
part of such Senior Manager's salary, which such employee's Participating
Company would otherwise pay currently to such employee in such calendar year
and subsequent calendar years, shall be credited to a deferred account subject
to the terms of the Plan.

(b) Such an election to participate in the Plan shall be in the
form of a document executed by the employee and filed with the employee's
Participating Company. An election related to awards, dividend equivalent
payments and/ or salary otherwise payable currently in any calendar year shall
become irrevocable on the last day prior to the beginning of such calendar
year.

(c) An election shall continue until the employee terminates or
modifies such election by written notice. Any such termination or
modification shall become effective as of the end of the calendar year in
which such notice is given with respect to all awards, dividend equivalents
and/or salary otherwise payable in subsequent calendar years.

<PAGE>2

(d) An eligible employee who has filed a termination of election
may thereafter again file an election to participate with respect to awards,
dividend equivalent payments and/or salary otherwise payable in calendar years
subsequent to the filing of such election.

3. DEFERRED ACCOUNTS

(a) (i) Deferred amounts related to awards, dividend equivalent
payments which would otherwise have been distributed in cash by a
Participating Company and deferred amounts related to salary shall be credited
to the employee's account and shall bear interest from the date the awards,
dividend equivalent payments and/or salary would otherwise have been paid.
The interest credited to the account will be compounded at the end of each
calendar quarter, and the annual rate of interest applied at the end of any
calendar quarter shall be determined by the AT&T Board of Directors from time
to time.

(ii) Furthermore, if an employee made an election described in
Section 2, which election was effective on December 31, 1983, then such
employee's account shall also be credited during 1984 with an amount equal to
the deferred amounts which would have been credited to the employee's account
during 1984 had the company which employed the employee on December 31, 1983
continued to be a Participating Company during 1984, and such amount shall
bear interest in accordance with (a)(i) above from the date such amount would
have been credited had such company continued to be a Participating Company
during 1984.

(b) Deferred amounts related to awards which would otherwise have
been distributed in AT&T common shares by a Participating Company shall be
credited to the employee's account as deferred AT&T shares. Furthermore, if
an employee made an election described in Section 2, which election was
effective on December 31, 1983, then such employee's account shall also be
credited during 1984 with the deferred AT&T Shares which would have been
credited to the employee's account had the company which employed the employee
on December 31, 1983 continued to be a Participating Company in the Plan and
in the Long Term Incentive Plan during 1984. The employee's account shall
also be credited on each dividend payment date for AT&T shares with an amount
equivalent to the dividend payable on the number of AT&T common shares equal
to the number of deferred AT&T shares in the employee's account on the record
date for such dividend. Such amount shall then be converted to a number of
additional deferred AT&T shares determined by dividing such amount by the
price of AT&T common shares, as determined in the following sentence. The
price of AT&T common shares related to any dividend payment date shall be the
average of the daily high and low sale prices of AT&T common shares on the New
York Stock Exchange ("NYSE") for the period of five trading days ending on
such dividend payment date, or the period of five trading days immediately
preceding such dividend payment date if the NYSE is closed on the dividend
payment date.

(c) In the event of any change in outstanding AT&T common shares
by reason of any stock dividend or split, recapitalization, merger,
consolidation, combination or exchange of shares or other similar corporate
change, the AT&T Board of Directors shall make such adjustments, if any, that
it deems appropriate in the number of deferred AT&T shares then credited to
employees' accounts. Any and all such adjustments shall be conclusive and
binding upon all parties concerned.

4. DISTRIBUTION

(a) At the time an eligible employee makes an election to
participate in the Plan, the employee shall also make an election with<PAGE>
<PAGE>3

respect to the distribution (during the employee's lifetime or in the event of
the employee's death) of the amounts credited to the employee's deferred
account. Such an election related to the distribution during the employee's
lifetime, of amounts otherwise payable currently in any calendar year, shall
become irrevocable on the last day prior to the beginning of such calendar
year. The election related to the distribution in the event of the employee's
death, including the designation of a beneficiary or beneficiaries, may be
changed by the employee at any time by filing the appropriate document with
the Secretary of the Company.

Amounts credited as cash plus accumulated interest shall be
distributed in cash; amounts credited as deferred AT&T shares shall be
distributed in the form of an equal number of AT&T shares.

(b) An employee may elect to receive the amounts credited to the
employee's account in one payment or in some other number of approximately
equal annual installments (not exceeding 20), provided however, that the
number of annual installments may not extend beyond the life expectancy of the
employee, determined as of the date the first installment is paid. The
employee's election shall also specify that the first installment (or the
single payment if the employee has so elected) shall be paid either (1) on the
first day of the calendar quarter next following the end of the month in which
the employee attains the age specified in such election, which age shall not
be earlier than age 55 or later than age 70-1/2, (2) on the first day of the
calendar quarter next following the end of the month in which the employee
retires from a Participating Company or otherwise terminates employment with
any Participating Company (except for a transfer to another Participating
Company); provided, however, that the AT&T Board of Directors or the
Compensation Committee of such Board may, in its sole discretion, direct that
the first installment (or the single payment) shall be paid on the first day
of the first calendar quarter in the calendar year next following the year of
retirement or other termination of employment, or (3) on the first day of the
first calendar quarter in the calendar year next following the calendar year
in which the employee retires from a Participating Company or otherwise
terminates employment with any Participating Company (except for a transfer to
another Participating Company).

(c) Notwithstanding an election pursuant to Paragraph (b) of this
Section 4, the entire amount then credited to an employee's account shall be
paid immediately in a single payment (a) if the employee is discharged for
cause by his or her Participating Company, (b) if the Board of Directors of
such Participating Company determined that the
employee engaged in misconduct in connection with the employee's employment
with the Participating Company, (c) if the employee without the consent of the
Board of Directors of his or her Participating Company, while employed by such
Participating Company or after the termination of such employment, becomes
associated with, employed by, or renders services to, or owns an interest in,
any business that is in competition with any Participating Company or with any
business in which a Participating Company has a substantial interest (other
than as a shareholder with a non-substantial interest in such business), or
(d) the employee becomes employed by a governmental agency having jurisdiction
over the activities of a Participating Company or any of its subsidiaries.

(d) An employee may elect that, in the event the employee should
die before full payment of all amounts credited to the employee's account, the
balance of the deferred amounts shall be distributed in one payment or in some
other number of approximately equal annual installments (not exceeding 10) to
the beneficiary or beneficiaries designated in writing by the employee, or if
no designation has been made, to the estate of the employee.
<PAGE>
<PAGE>4

The first installment (or the single payment if the employee has so elected)
shall be paid on the first day of the calendar quarter next following the
month of death; provided, however, that the AT&T Board of Directors or the
Compensation Committee of such Board may, in its sole discretion, direct that
the first installment (or the single payment) shall be paid on the first day
of the first calendar quarter in the calendar year next following the year of
death.

(e) Installments subsequent to the first installment to the
employee, or to a beneficiary or to the employee's estate, shall be paid on
the first day of the applicable calendar quarter in each succeeding calendar
year until the entire amount credited to the employee's deferred account shall
have been paid. Deferred amounts held pending
distribution shall continue to be credited with interest or additional
deferred AT&T shares, as applicable, determined in accordance with Section
3(a) and (b).

(f) In the event an employee, or the employee's beneficiary after
the employee's death, incurs a severe financial hardship, the AT&T Board of
Directors or the Compensation Committee of such Board, in its sole discretion,
may accelerate or otherwise revise the payment schedule from the employee's
account to the extent reasonably necessary to eliminate the severe financial
hardship. For the purpose of this subsection (f), a severe financial hardship
must have been caused by an accident, illness, or other event beyond the
control of the employee or, if applicable, the beneficiary.

(g) The obligation to make a distribution of deferred amounts
credited to an employee's account during any calendar year plus the additional
amounts credited on such deferred amounts pursuant to Section 3(a) and (b)
shall be borne by the Participating Company which otherwise would have paid
the related award or salary currently. However, the obligation to make
distribution with respect to deferred amounts which are related to amounts
credited to an employee's account under Section 3(a)(ii) and under the second
sentence of Section 3(b), and with respect to which no Participating Company
would otherwise have paid the related award currently, shall be borne by the
Participating Company which employed the employee on January 1, 1984.

5. MISCELLANEOUS

(a) The deferred amounts shall be held in the general funds of the
Participating Companies. The Participating Companies shall not be required to
reserve, or otherwise set aside, funds for the payment of such amounts.

(b) The rights of an employee to any deferred amounts plus the
additional amounts credited pursuant to Section 3(a) and (b) shall not be
subject to assignment by the employee.

(c) The Senior Vice President - Human Resources of AT&T shall have
the authority to administer and to interpret the Plan.

(d) The AT&T Board of Directors may at any time amend the Plan or
terminate the Plan, but such amendment or termination shall not adversely
affect the rights of any employee, without his or her consent, to any benefit
under the Plan to which such employee may have previously become entitled
prior to the effective date of such amendment or termination. The Senior Vice
President - Human Resources of AT&T with the concurrence of the Senior Vice
President and General Counsel of AT&T shall be authorized to make minor or
administrative changes to the Plan, as well as amendments required by
applicable federal or state law (or authorized or made desirable by such
statutes).

<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,
1994 1993 1992 1991 1990
---- ---- ---- ---- ----

Earnings Before Income
Taxes $7,518 $6,003 $5,638 $ 581 $5,565

Less Interest Capitalized
During the Period 47 72 62 79 79

Less Undistributed
Earnings of Less Than
50% Owned Affiliates 46 (39) (27) 32 26

Add Fixed Charges 1,928 1,940 2,127 2,371 2,371
------ ------ ------ ------ ------
Total Earnings $9,353 $7,910 $7,730 $2,841 $7,831
====== ====== ====== ====== ======

Fixed Charges

Total Interest Expense
Including Capitalized
Interest $1,561 $1,575 $1,737 $1,872 $1,764

Interest Portion of
Rental Expenses 367 365 390 499 607
------ ------ ------ ------ ------

Total Fixed
Charges $1,928 $1,940 $2,127 $2,371 $2,371
====== ====== ====== ====== ======

Ratio of Earnings to
Fixed Charges 4.9 4.1 3.6 1.2 3.3
====== ====== ====== ====== ======

<PAGE> 1 Exhibit 13
AT&T Form 10-K

FINANCIAL SECTION

THE MERGER OF AT&T AND MCCAW IS THE BEST AND QUICKEST WAY FOR THE TWO
COMPANIES TO TAKE ADVANTAGE OF DEVELOPING OPPORTUNITIES IN A DYNAMIC
INDUSTRY.

A DISCUSSION AND ANALYSIS OF OUR RESULTS AND OPERATIONS

The merger was the most important event of 1994 for us. Shareowners
now own a stronger AT&T with even better prospects for growth in
revenues and earnings. Our customers will choose from a wider array
of services.
Though completed, the merger remains subject to legal reviews.
In addition, under the terms of a proposed antitrust consent decree
between AT&T and McCaw and the United States, the operations of AT&T
and McCaw are subject to several conditions, including keeping McCaw
as a separate business with its own officers and employees. After
McCaw provides equal access connections to other long distance
carriers, McCaw may use the AT&T brand on McCaw's cellular services,
and AT&T may jointly market AT&T's long distance and McCaw's cellular
services, and provide customers with a single bill for both. For the
most part, these restrictions merely confirm commitments we made when
we announced our merger plans and they do nothing to alter the
fundamental logic or economics of the merger.
Operating now as the wireless unit of AT&T, McCaw is the leading
U.S. provider of wireless communications services, which include
cellular, messaging, data transmission and air-to-ground services.
McCaw has cellular operations in more than 100 cities. In most
markets McCaw offers its services under the brand name Cellular One#.
McCaw also operates the sixth largest U.S. messaging service, serving
more than 700,000 customers, and a digital air-to-ground telephone
service for commercial airlines and corporate aircraft.

AT&T's STRONG FINANCIAL PERFORMANCE

Accelerating revenue growth in products and services, aided by
effective cost and expense controls, boosted earnings to another
record in 1994. The climate for growth improved this past year
because of better economic conditions, and changes in technology and
world trade that spurred demand for network services as well as new
networks. We look forward to continued growth in revenues and
earnings in 1995.
Our financial performance was also strong in 1992 and 1993. Our
performance met growth targets despite the less favorable business and
economic environment. In 1993 we also had to adopt new accounting
methods. Because new rules apply to all U.S. companies, we changed

# Registered trademark
<PAGE>
<PAGE> 2

our accounting for retiree benefits, postemployment benefits and
income taxes. The net $9.6 billion after-tax charge to bring our
financial statements in line with the new accounting methods caused us
to report a net loss for that year. But those accounting changes do
not affect cash flows; they only change the expenses we report.
In our accounting for retiree benefits, we estimate and book
expenses during the years employees are working and accumulating
future benefits. When we used the former "pay-as-you-go" accounting,
we simply booked our contributions to trust funds for life insurance
benefits and the actual claims for benefits such as health care and
telephone concessions as they occurred.
Our accounting for postemployment benefits, including payments
for separations and disabilities, is very similar to the accounting
for retiree benefits. We book expenses for future separations during
the years employees are working and accumulating service with the
company and for disability benefits when the disabilities occur. In
the former accounting method, we booked expenses for separations when
we approved them and for disabilities when we made payments. Compared
with 1992, this change increased our costs and expenses by $301
million in 1993, which reduced earnings $171 million, or $0.11 per
share.
Our accounting for income taxes uses the enacted tax rates to
compute both deferred and current income taxes. Using our former
method, we held deferred tax assets and liabilities at their original
values even when Congress changed the tax rates.

*****************************************************************
REVENUE GROWTH
As a Percentage Increase in Total Revenues
Over Prior Year

10%
8.3
8 RR
RR
6 RR
4.1 RR
4 3.4 RR RR
RR RR RR
2 RR RR RR
RR RR RR
0 RR RR RR
1992 1993 1994
------------------------------------------------
In 1994 we achieved revenue growth that matches the 8-10% annual growth of the
global information industry as a whole.

**********************************************************************
REPORTING ON THE MERGER

To complete the merger, McCaw's owners exchanged their McCaw stock for
197.5 million shares of newly issued AT&T stock. At the market
closing price for AT&T stock on September 19, the official day of the
merger, that exchange was worth about $11.5 billion.
<PAGE>
<PAGE> 3

We accounted for the merger as a pooling of interests. That
means we combined the financial statements for the two companies. We
did, however, take out the business between the companies just as we
remove dealings between other AT&T units. Now all our financial
information shows combined amounts as if we had always been one
company.
**********************************************************************

AN OVERVIEW OF OUR BUSINESS OPERATIONS
Our main business is meeting the communications and computing needs of
our customers by using networks to move and manage information. We
divide the revenues and costs of this business into three categories
on our income statement: telecommunications services, products and
systems, and rentals and other services. AT&T Capital Corporation
(AT&T Capital) and AT&T Universal Card Services Corp. (Universal Card)
are partners with our communications and computing business units as
well as innovators in the financial services industry. We include
their revenues and costs in a separate category on our income
statement: financial services and leasing.
Competition in communications and computing is global and
increasingly involves multinational firms and partners from different
nations. To increase our global presence, we are hiring, building
facilities and investing outside the U.S. We believe these
commitments of resources are necessary to be successful in these
markets. However, the economies of Europe and Japan were very weak in
1992 and 1993, and we restructured some operations in those areas.
For these reasons we reported operating losses, in total, for the past
three years in our units outside the U.S. Nevertheless, we continue
to believe that these operations and markets provide excellent
opportunities for future growth in revenues and earnings.
All our business units face stiff competition. Prices and
technology are under continual pressure. Such market conditions make
the ongoing need for cost controls even more urgent. Managers must
continuously assess their resource needs and consider further steps to
reduce costs, which could include consolidating facilities, disposing
of assets, reducing workforce or withdrawing from markets.
In 1993 one of our business units, AT&T Global Information
Solutions Company, offered an early retirement program and a voluntary
separation program to its U.S.-based employees. About 2,200 employees
accepted the early retirement offer, and the total workforce at the
unit has declined by more than 10% since year-end 1993. We also
provided reserves in 1993 to restructure and centralize support
services for telecommunications services and for other restructuring
activities. In total we provided $498 million before taxes in 1993
for restructuring activities.
At year-end 1994 reserves for all restructuring activities
amounted to about $900 million, most of which relates to net lease
payments to be made over the life of the related leases. We believe
the balance of reserves is adequate for the completion of planned
activities to improve efficiency as part of our commitment to meet
intense competition.
Like other manufacturers, we use, dispose of and clean up
substances that are regulated under environmental protection laws. We
also have been named a potentially responsible party (PRP) at a number
of Superfund sites. At most of these sites, our share is very limited
and there are other PRPs who can be expected to contribute to the
cleanup costs. We review potential cleanup costs and costs of
compliance with environmental laws and regulations regularly. Using
<PAGE>
<PAGE> 4

engineering estimates of total cleanup costs, we estimate our
potential liability for all currently and previously owned properties
where some cleanup may be required, including each Superfund site
where we are named a PRP. We provide reserves for these potential
costs and regularly review the adequacy of our reserves. In addition,
we forecast our expenses and capital expenditures for existing and
planned compliance programs as part of our regular corporate planning
process. Despite these procedures, it is very difficult to estimate
the future impact of actions regarding environmental matters,
including potential liabilities. However, we believe that cleanup
costs and costs related to environmental proceedings and ongoing
compliance with present laws will not have a material effect on our
future expenditures, annual consolidated financial statements or
competitive position beyond that provided for at year-end.
Many of our employees are represented by unions. In 1995 we will
negotiate new labor agreements because the 1992 contracts are due to
expire on May 27.
<PAGE>
<PAGE> 5

<TABLE>

<CAPTION>
ELEVEN-YEAR SUMMARY OF SELECTED FINANCIAL DATA

(UNAUDITED)
AT&T Corp. and Subsidiaries

Dollars in millions (except per share amounts)

1994 1993* 1992 1991* 1990 1989 1988* 1987 1986* 1985 1984
------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
RESULTS OF OPERATIONS

Total revenues $75,094 $69,351 $66,647 $64,455 $63,228 $61,604 $62,067 $60,726 $61,975 $63,159 $60,326
Research and
development expenses 3,110 3,111 2,924 3,114 2,935 3,098 2,988 2,810 2,599 2,527 2,477
Operating income (loss) 8,030 6,568 6,628 1,570 5,622 4,931 (2,381) 4,164 978 3,562 2,825
Income (loss) before extraordinary
item and cumulative effects
of accounting changes 4,710 3,702 3,442 171 3,475 2,820 (1,527) 2,374 609 1,856 1,712
Net income (loss) 4,710 (5,906) 3,442 171 3,666 2,820 (1,527) 2,374 434 1,856 1,712
Earnings (loss) per
common share before extraordinary
item and cumulative effects
of accounting changes 3.01 2.39 2.27 0.12 2.38 1.95 (1.06) 1.61 0.36 1.21 1.14
Earnings (loss) per
common share 3.01 (3.82) 2.27 0.12 2.51 1.95 (1.06) 1.61 0.24 1.21 1.14
Dividends declared per
common share 1.32 1.32 1.32 1.32 1.32 1.20 1.20 1.20 1.20 1.20 1.20
------------------------------------------------------------------------------------------------------------------------------
ASSETS AND CAPITAL

Property, plant and
equipment - net $22,035 $21,015 $20,798 $19,887 $19,536 $17,653 $16,886 $22,159 $22,247 $23,182 $22,180
Total assets 79,262 69,393 66,104 62,071 57,036 45,228 41,945 45,583 44,305 44,824 43,461
Long-term debt including
capital leases 11,358 11,802 14,166 13,682 14,579 10,116 10,172 9,060 8,234 8,104 8,963
Common shareowners'
equity 17,921 13,374 20,313 17,973 17,928 15,727 13,694 16,913 15,849 16,945 15,852
Net capital expenditures 4,853 4,296 4,328 4,376 4,369 4,162 4,528 3,936 3,977 4,303 3,685
------------------------------------------------------------------------------------------------------------------------------

</TABLE>

<PAGE>
<PAGE> 6

<TABLE>

<CAPTION>
ELEVEN-YEAR SUMMARY OF SELECTED FINANCIAL DATA (Cont'd)

(UNAUDITED)

AT&T Corp. and Subsidiaries

Dollars in millions (except per share amounts)

Operating income (loss)
as a percentage of
revenues 10.7% 9.5% 10.0% 2.4% 8.9% 8.0% (3.8)% 6.9% 1.6% 5.6% 4.7%
Net income (loss) as a
percentage of revenues 6.3% (8.5)% 5.2% 0.3% 5.8% 4.6% (2.5)% 3.9% 0.7% 2.9% 2.8%
Return on average common
equity 29.5% (47.1)% 17.6% 0.9% 21.2% 19.1% (8.9)% 14.3% 2.0% 10.6% 10.4%
Data at year-end:
Stock price per share $50.25 $52.50 $51.00 $39.125 $30.125 $45.50 $28.75 $27.00 $25.00 $25.00 $19.50
Book value per common
share $11.42 $ 8.65 $13.31 $12.05 $12.33 $10.92 $ 9.57 $11.87 $11.04 $11.73 $11.19
Debt ratio 58.3% 64.4% 53.1% 54.8% 53.5% 45.0% 45.8% 38.4% 39.6% 39.9% 42.0%
Debt ratio excluding
financial services 34.1% 49.1% 40.8% 46.0% 47.6% 39.3% 42.2% 35.2% 37.6% 38.4% 41.7%
Employees 304,500 317,700 319,000 322,300 333,400 343,000 367,400 366,200 379,900 400,400 427,800
------------------------------------------------------------------------------------------------------------------------------
<FN>

* 1993 data reflect a $9.6 billion net charge for three accounting changes.
1991 data reflect $4.5 billion of business restructuring and other charges.
1988 data reflect a $6.7 billion charge due to accelerated digitization of the long distance network.
1986 data reflect $3.2 billion of charges for business restructuring, an accounting change and other items.
<PAGE>
<PAGE> 7

TELECOMMUNICATIONS SERVICES

These revenues, which include wireless services revenues, grew 4.3% in
1994 and 1.6% in 1993. Volume growth, caused by market share gains
among residential customers, strong demand from business customers,
new cellular customers and the improved economy, fueled the faster
growth in 1994.
Wireless services revenues, including cellular, messaging and
air-to-ground services revenues, grew to $2,280 million in 1994 from
$1,760 million in 1993 and $1,387 million in 1992, primarily because
of the added traffic coming from new customers. Cellular customers
served by companies in which AT&T has or shares a controlling interest
increased to 4.0 million at year-end 1994, from 3.0 million at the end
of 1993 and 2.2 million at the end of 1992.
Billed minutes for switched long distance services rose more than
7.5% in 1994 compared with 5.5% in 1993. Volume growth exceeds
revenue growth because many customers are selecting higher-value,
lower-priced services made possible by our increasing efficiency.
Although we raised prices on basic services over the past two years,
the shift in the mix of services that customers selected reduced
average per-minute revenues in 1994 and 1993.
AT&T True USA@ Savings and AT&T True Rewards@ offer savings and
other benefits to residential customers based on their calling
volumes. We also rolled out AT&T TrueVoice# service, a patented
technology to improve the sound quality on calls placed within the
continental U.S. and Canada. Other offers and calling plans now share
this theme of offering customers true value. These efforts helped us
retain and win back residential customers in 1994, allowing us to
recapture some market share for the first time since the breakup of
the Bell System in 1984.
We expect continuing strong volume growth in 1995, leading to
further growth in telecommunications services revenues. Several of
our initiatives will enhance future network capabilities for
communications and computing. For example, since late 1994, Network
Notes@ has enabled customers to access applications and information
hosted in the AT&T network that are compatible with the popular Notes
groupware software from Lotus Development Corp. Beginning in 1995,
Netware Connect@ services, based on popular networking software from
Novell, Inc., will enable users to link computers or use computer-based services through the AT&T network. Through our relationship
with Xerox Corp., users will be able to store and transmit high-quality production documents through our network. Our WorldWorx@
service, developed in cooperation with several major equipment
vendors, will permit interactive, multipoint video and data calls.
Customers using our PersonaLink@ service may program "intelligent
agents" to sort through, retrieve and monitor desired information on
networks.
Total cost of telecommunications services declined both years
despite higher volumes, in part because of reduced prices for
connecting customers through local networks. In addition, we improved

@ Service mark
# Registered trademark
<PAGE>
<PAGE> 8

our efficiency in network operations, engineering and operator
services. With lower costs and higher revenues, the gross margin
percentage rose to 41.8% in 1994 from 39.0% in 1993 and 37.2% in 1992.
**********************************************************************
SPOTLIGHT ON SOME TRENDS IN TELECOMMUNICATIONS SERVICES

COMPETITION IS CHANGING.

As we look ahead, along with growing opportunities, we see more direct
competition for AT&T coming from local telephone, long distance, cable
television, wireless and other companies that offer network services.
AT&T, as a supplier of networking systems, services and products, will
be a supplier as well as a customer and competitor of these firms.
There may also be other entrants from the communications and
information services industries, such as providers of information
systems, who will offer basic or integrated services.
Customers and competitors--present and future--are making
acquisitions, merging, and forming joint ventures and alliances to
expand their geographic reach, enter new markets and gain scale. Some
of the largest cable TV companies, such as Tele-Communications Inc.
(TCI) and Time Warner Inc., are clustering cable systems. Cables have
more capacity than current phone lines, suiting them for multimedia
use. Bell Atlantic Corporation, Nynex Corporation, U S West, Inc. and
Airtouch Communications Corp. formed an alliance of their cellular
operations to gain a national presence and bid against AT&T and others
for radio licenses to provide personal communications services. These
licenses are being auctioned by the Federal Communications Commission
to get as many as seven wireless competitors in each territory.
Sprint Corporation (Sprint), which already competes in local phone
service, long distance and cellular markets, is forming a joint
venture with cable companies TCI, Comcast Corp. and Cox Enterprises
Inc. to expand its presence in both local and wireless markets.
Several bills were introduced in Congress last year which would
have accelerated competition for local access and phone services and
permitted the Regional Bell Operating Companies (RBOCs) to offer long
distance services under certain conditions. Although none of these
bills was enacted, several key members of Congress have introduced or
announced plans to introduce new bills during 1995 that would permit
competition in local services and set conditions under which the RBOCs
would be permitted to offer long distance services and manufacture
equipment. Some of the RBOCs are also seeking this same kind of
permission through the courts. They requested relief from the decree
that broke up the Bell System-- the Modification of Final Judgment of
1982--including provisions that bar the RBOCs from offering long
distance services and manufacturing equipment. We believe the RBOCs
must face real competition for their local business before getting the
permission they seek. Absent local competition they could use their
bottleneck control over connections to customers to disadvantage
competitors.
It is not possible to predict the timing, course and
circumstances of changes that may come from technology, new alliances,
regulation and legislation. We set a high priority on anticipating
<PAGE>
<PAGE> 9

these changes and positioning AT&T for future success. However,
depending on their exact nature and timing, such changes could affect
our future revenues and earnings adversely.

COMPETITION WILL BE GLOBAL, AS LEGAL MONOPOLIES DISAPPEAR IN OTHER
COUNTRIES.

Mexico will open to competition beginning in late 1996. We are
working with Grupo Alfa to plan a joint venture to compete there.
Other U.S. companies--including MCI Communications Corp. (MCI), Sprint
and GTE Corporation--have or plan alliances with Mexican companies to
compete in telecommunications services.
The European Union is scheduled to be open fully to competition
beginning in 1998, but some changes are coming sooner. At year-end
1994 we were granted a license to provide switched voice and data
services and private lines within the United Kingdom (U.K.) and to
resell services between the U.K. and other countries. To better serve
multinational businesses in Europe, we plan a joint venture with the
Unisource consortium founded by PTT Telecom Netherlands, Swiss Telecom
PTT and Telia of Sweden. Telefonica de Espana will also become a
member. The new joint venture would then replace Unisource as the
European partner in the AT&T-sponsored WorldPartners seamless global
services alliance begun in 1993. British Telecommunications plc (BT)
took a 20% stake in MCI in 1994, and they jointly formed a venture to
compete in this same market sector.
Germany's Deutsche Telekom AG and France Telecom each seek
approval to buy a 10% stake in Sprint, securing entry to the U.S.
market similar to that of BT. We oppose their plans because the
French and German telecommunications services markets remain
fundamentally closed.
*****************************************************************

PRODUCTS AND SYSTEMS

Expansion abroad and into new customer segments, improved global
economic conditions and major contract wins raised sales by 18.1% in
1994 and 8.1% in 1993 despite stiff price competition. Sales outside
the U.S. grew at a faster rate than U.S. sales and were responsible
for more than half the growth both years. We expect sales under major
contracts and the continuing economic recovery outside the U.S. in
1995 to pave the way for further growth in revenues.

A pie chart appears containing the following information:

1994 SOURCES OF REVENUES
As Percentages of Total Revenues
10% INTERNATIONAL REVENUES
From operations located in other countries
15% INTERNATIONAL REVENUES
From U.S. operations (international telecommunications services, and exports)
75% U.S. REVENUES

Markets and competition in the information industry are increasingly global in
scope. Some of the fastest growing markets are outside the U.S.<PAGE>
<PAGE> 10

Revenues from sales of telecommunications network products and
systems grew 17.3% in 1994 and 8.5% in 1993. The 1994 increase
reflected higher sales across the product line, particularly in
switching and transmission systems and wireless products. About $243
million of switching revenues in 1994 came from consolidating A.G.
Communication Systems Corporation because AT&T raised its ownership to
80%. The 1993 increase came chiefly from higher sales of wireless
products, switching equipment and operations systems. For the last
two years, sales grew both inside and outside the U.S.

PRODUCTS AND SYSTEMS
Dollars in millions 1994 1993 1992
Revenues
Telecommunications network
products and systems $ 9,785 $ 8,345 $ 7,691
Computer products and systems 4,208 3,470 3,358
Communications products
and systems 4,494 3,692 3,279
Microelectronics products,
special-design products for
U.S. government, and other* 2,674 2,418 2,251
Products and systems $21,161 $17,925 $16,579
Gross margin percentage 37.3% 38.8% 39.8%

* "Other" is composed principally of media, predominantly for use with automated
teller machines and point-of-sale equipment, and business forms.

AT&T was selected for several large projects for network products
and systems over the past two years that we believe will lead to many
sales opportunities in the years ahead. Pacific Bell and Bell
Atlantic Corporation chose AT&T as the major equipment supplier and
system integrator for planned multimedia networks. These two projects
alone could generate up to $10 billion in revenues for AT&T over the
next seven years. AT&T was also awarded major contracts by other U.S.
telephone and cable companies, including Southern New England
Telephone Corp. and Time Warner, Inc. Outside the U.S., AT&T won a $4
billion contract with Saudi Arabia and signed a long-term system
support agreement, worth about $500 million over five years, with
China's Guangdong province government agencies.
Revenues from sales of computer products and systems grew 21.3%
in 1994 and 3.3% in 1993. The growth came mainly from higher U.S.
sales of workstations, automated teller machines, and mid-range and
high-end systems for enterprise-wide computing. Price competition for
this product line is very fierce, particularly for personal computers,
so revenue growth has lagged behind the gains in volumes. We changed
the end of the fiscal year for certain operations located outside the
U.S. to December from November in 1994 to report essentially all of
our operations on a calendar year. This added $223 million in
revenues and a marginal loss in income in 1994. About $113 million of
these revenues were from sales of computer products and systems.
Revenues from sales of communications products and systems rose
21.7% in 1994 and 12.6% in 1993. More than half this growth in both
years came from higher sales of business communications products and
systems. We also had higher sales of consumer communications products
<PAGE>
<PAGE> 11

--particularly cellular phones--submarine cables and data
communications equipment. AT&T Submarine Systems, Inc. and a partner
were awarded a $1.2 billion contract to supply and construct the
17,000-mile Fiber Optic Link Around the Globe (FLAG) cable system.
This system is scheduled to be completed during 1997. We will manage
the entire marine installation and also supply network management
equipment.
In total, revenues from sales of microelectronics products,
special-design products for the federal government, and other products
and systems grew 10.6% in 1994 and 7.4% in 1993. Growth in both years
came mainly from higher sales of microelectronics components and power
systems to equipment manufacturers outside the U.S. Sales of media
and business forms rose slightly in 1994, but were steady in 1993.
Because of reduced defense spending by the U.S. government, sales of
special-design products, such as secure phones, declined both years.
We sold several smaller operating units in 1994 and arranged to sell
NCR Microelectronics and are negotiating to sell a copper cable unit
in early 1995. These sales will reduce our revenues, as well as our
costs and expenses, by about $1 billion a year. Most of the revenues
related to product sales, about half in the microelectronics products
category.
The increase in cost of products and systems is mainly associated
with the higher sales volumes both years. The declining gross margin
percentage reflects pricing pressures and a changing product sales
mix.

RENTALS AND OTHER SERVICES

These revenues grew the last three years. The growth in 1994 came
mainly from communications equipment maintenance contracts and
professional services for computer products and systems. In 1993 we
saw higher revenues from newer telecommunications services, such as
network management and satellite services, which individually generate
small revenue streams. In both years these increases more than offset
the continuing, expected decline in communications equipment rentals.

RENTALS AND OTHER SERVICES
Dollars in millions 1994 1993 1992
Revenues
Computer products and systems $2,818 $2,641 $2,742
Communications products and
systems rentals 955 1,174 1,409
Communications products and
systems services 1,680 1,457 1,375

Other* 1,938 2,027 1,680
Rentals and other services $7,391 $7,299 $7,206
Gross margin percentage 50.9% 51.2% 53.3%

* "Other" is composed principally of global messaging and electronic mail services,
telemarketing services, information technology services and facility rentals.

<PAGE>
<PAGE> 12

The shift in revenue mix from rentals to lower-margin services
reduced the gross margin percentage. Also, provisions for business
restructuring added $90 million to cost of rentals and other services
in 1993.

FINANCIAL SERVICES AND LEASING

These revenues rose 24.5% in 1994 and 32.2% in 1993. Both Universal
Card and AT&T Capital contributed to the growth by profitably
expanding their portfolios of earning assets. We expect continuing
growth in these revenues, earnings and assets in 1995.

FINANCIAL SERVICES AND LEASING
In millions 1994 1993 1992
Revenues
AT&T Capital $ 1,384 $ 1,360 $ 1,266
Universal Card 1,782 1,228 831
Eliminations, adjustments
and other* (49) (84) (203)
Financial services and leasing $ 3,117 $ 2,504 $ 1,894
Gross margin percentage 31.0% 31.7% 30.8%
Universal Card Information:
Finance receivables $12,380 $ 9,154 $ 6,606
Accounts 15.1 11.7 10.3

* "Other" is composed principally of revenues from certain lease finance assets AT&T
retained when AT&T Capital was reorganized.

Universal Card rose to fourth in its industry in 1994 measured by
cardmember receivables. During the year it began its Something Extra@
program, which offers customers rewards for outstanding balances as
well as new purchases. Other promotions have convinced customers to
transfer balances from the credit card accounts held with competitors.
These programs and our highly regarded customer service contributed to
the 35.2% increase in outstanding cardholder receivables in 1994 and
38.6% increase in 1993. We set reserves for losses based on
experience and the future outlook for the economy.
AT&T Capital completed an initial public offering of its common
stock in August 1993, emerging as the largest publicly owned equipment
leasing and financing company in the U.S. AT&T still owns about 86%
of the stock, so AT&T Capital is still fully consolidated in our
financial statements. AT&T Capital limits its exposure to credit
risks by diversifying its business across customers, geographic
locations and lease maturities. It determines its allowance for
credit losses by analyzing previous experience on losses, current
delinquencies, and present and future economic conditions. We
unconditionally guaranteed all of AT&T Capital's debt outstanding at
the end of March 1993. Since then, all AT&T Capital debt has been
issued using its own credit. This change makes AT&T Capital
financially independent and permits us to focus on the financing needs
of our main business.

@ Service mark
<PAGE>
<PAGE> 13

The growth in cost of financial services and leasing over the
last two years is associated mostly with the growth in financing
activity. The improved gross margin percentage in 1993 mainly
reflects the maturation of the credit card receivables portfolio.
Lower interest rates in 1993 also contributed to the margin
improvement that year, but rising interest rates in 1994 narrowed our
margins.
By 1995 we must change our accounting on loans to customers.
Under new rules we must compute the present value of principal and
interest payments for troubled loans that may not be fully repaid.
Our current methods do not require present value calculations, but we
do not expect this change to affect our costs materially.

OPERATING EXPENSES

Selling, general and administrative expenses increased 8.9% in 1994
and 8.0% in 1993, largely because of spending for advertising and
promotions, and for sales and sales support activities. We focused
particularly on retaining and winning back residential customers of
telecommunications services and acquiring new cellular customers. We
expect marketing expenses will continue to grow because of competitive
conditions. The 1993 total also includes $373 million in provisions
for business restructuring activities, and the 1994 total includes
$246 million of expenses related to the merger of AT&T and McCaw.
Research and development expenses were level in 1994 but
increased 6.4% in 1993. The higher spending of the last two years was
mainly for work on cellular technology, advanced communications
services and devices, and projects aimed at international growth.

OTHER INCOME STATEMENT ITEMS

Other income--net depends mostly on our cash balance, investments and
joint ventures, and sales of assets. We also deducted dividends on
preferred stock of a subsidiary in other income before we redeemed
this stock in mid-1994. Interest income declined over the past two
years, and in 1993 we saw a decline in income related to investments
and joint ventures. Material pretax gains and losses also affected
other income--net:

o In 1994 there were no material transactions. Asset sales and
various other immaterial gains more than offset losses from the
shutdown of EO Inc. and the uninsured portion of a lost
telecommunications satellite.
o In 1993 we had a $217 million gain when we exchanged our
remaining 77% interest in UNIX System Laboratories, Inc. for
stock in Novell, Inc.
o Because of declines in its market value, we wrote down our
investment in Compagnie Industriali Riunite S.p.A. by $68 million
in 1992. We sold our remaining interest in that investment in
1993 for a slight gain.

<PAGE>
<PAGE> 14

Interest expense declined over the past two years because of
benefits from refinancing long-term debt at favorable rates. Reduced
requirements for contingent liabilities also contributed about half
the decline in 1993.
The provisions for income taxes increased the past two years
mainly because of higher "book income," that is, the income before
income taxes and cumulative effects of accounting changes. The
effective tax rate declined to 37.3% in 1994, from 38.3% in 1993 and
39.0% in 1992, due to credits for foreign tax payments and the effect
on deferred taxes from redeeming preferred stock. These benefits were
somewhat offset by the nondeductibility of some merger-related
expenses.
Congress increased the federal statutory tax rate to 35% in
August 1993 and made the change retroactive to January 1, 1993. We
recognized a $23 million benefit from adjusting our net deferred tax
assets for the new rate. However, this benefit was more than offset
by the increase in income taxes due to the new rate.

TOTAL ASSETS, WORKING CAPITAL AND LIQUIDITY

We raised our cash balance in 1994 so we could act quickly on new
opportunities outside the U.S. and because of some pending
reinvestments in projects. However, we continue to target a cash
balance of about $800 million. The higher cash balance as well as
higher inventories and receivables, which are primarily associated
with the growth in revenues, boosted net working capital to $6.7
billion at the end of 1994 from $4.3 billion at the end of 1993.
We turned over our inventory 3.4 times in 1994, the same turnover
rate as 1993. Accounts receivable for our communications and
computing business were outstanding an average of 56.4 days in 1994,
about the same as in 1993.
Net property,plant and equipment and net licensing costs rose
because of normal purchasing activity.
A 52%-owned subsidiary of McCaw, LIN Broadcasting Corporation
(LIN), exchanged its investment in the A Block Philadelphia cellular
system for all the outstanding redeemable preferred stock of one of
its subsidiaries. In addition, AT&T sold its remaining 20% interest
in Italtel S.p.A back to STET S.p.A., the Italian government's
telecommunications holding company. These transactions led to a
decline in investments during the year.
We also changed the way we report and account for investments in
equity securities that have readily determinable fair values and in
all debt securities. Starting in 1994 we account for the fair values
of these securities rather than our original investment. This change
did not affect our earnings or financial position materially.
The fair value of our pension plan assets is greater than our
projected pension obligations. We record pension income when our
expected return on plan assets plus amortization of the transition
asset (created by our 1986 adoption of the current standard for
pension accounting) is greater than the interest cost on our projected
benefit obligation plus service cost for the year. Consequently, we
had pension income that added to our prepaid pension costs in 1994.
<PAGE>
<PAGE> 15

The increase in other assets mainly reflects the advanced
purchase of rewards, such as frequent flyer miles and merchandise
certificates to be given to consumers who earn sufficient points to
claim them under our calling plans. At the same time, we accrued a
liability for the unredeemed points earned under our calling plans,
which led to higher other current liabilities.
Higher accounts payable and payroll and benefit-related
liabilities are mainly due to increases in the associated expenses and
benefit costs.
We issued more debt in 1994, mainly short-term financing, for
financial services and for higher inventories and receivables.
Contributions to trusts for retiree benefits led to the decline
in related liabilities. We redeemed all of LIN's outstanding
preferred stock, which increased additional paid-in capital and
minority interests.
Operating cash flows increased in 1994 mainly because of higher
income. The decline in 1993 was mainly due to working capital
requirements such as inventories and accounts receivable. For the
three years operating cash flows covered our additions to property,
plant and equipment and dividend payments. We expect operating cash
flows to continue covering usual capital expenditures and dividends in
1995. However, as discussed in the next section, we may have broader
capital requirements in 1995 which may require additional external
financing.

INVESTING ACTIVITIES

Most of our capital expenditures support telecommunications network
services, providing for growth in traffic, modernization and enhanced
reliability. Other capital additions include the equipment and
facilities used in leasing operations, manufacturing, and research and
development. We expect our net capital expenditures to continue
rising in 1995.
We plan substantial investments to expand and enhance our
cellular network in 1995. We are also bidding on broad-band personal
communication service (PCS) radio licenses to provide wireless
telephone service in 30 of 51 major trading areas in the U.S. The
Federal Communications Commission (FCC) auction began on December 5,
1994. It is not possible to predict the outcome of the auction or the
amounts successful bidders will be required to pay in order to win
licenses as about 30 companies have made deposits and are eligible for
bidding. In the event AT&T is successful in obtaining one or more
licenses, substantial expenditures could be required for the licenses
and for constructing associated systems.
Under an agreement between McCaw and LIN, a process, using
third-party appraisers, began on January 1, 1995 to determine the
private market value per share of LIN. The private market value is
the price per share, including control premium, that an unrelated
third party would pay if it were to acquire all the outstanding shares
of LIN, including the shares held by McCaw, in an arm's-length
transaction and assuming LIN was being sold in a manner designed to
attract all possible participants and to maximize shareholder value.
After the price is determined, McCaw will have 45 days to decide
<PAGE>
<PAGE> 16

whether to proceed with the acquisition of all the public shares at
that price, subject to the approval of the LIN public shareholders.
AT&T and McCaw have not made any decision as to whether McCaw should
proceed with an acquisition of the LIN public shares. If the private
market price is set at a level that AT&T and McCaw believe is
reasonable, AT&T and McCaw expect that McCaw would seek to proceed
with an acquisition. Any such acquisition would involve a substantial
capital expenditure. If the private market price is set at a level
that AT&T and McCaw believe is not reasonable, AT&T and McCaw expect
that McCaw would not proceed with an acquisition. If McCaw does not
proceed with an acquisition, the agreement provides that McCaw will
put LIN in its entirety up for sale under the direction of the LIN
independent directors.
In 1994 we agreed to acquire Alascom, one of Alaska's long
distance companies, for $290 million. This agreement is subject to
approval by the Alaska Public Utilities Commission and the FCC.
We also plan substantial expenditures to increase our presence
outside the U.S. in 1995. For example, we signed a memorandum of
understanding in 1994 with Grupo Alfa, a leading Mexican company, to
explore the feasibility of a joint venture to compete in
telecommunications services in Mexico when the market is opened to
competition beginning in late 1996. The capital requirements of such
a joint venture are not currently known, but we estimate that as much
as $1 billion of capital might be required over a 4- to 6-year period.
Our share of the joint venture would be 49%. We also signed an
agreement in principle with Unisource, a consortium of European
telecommunications companies, to form a joint venture to compete in
Europe, meeting the communications needs of multinational business
customers. Our ownership of the venture would be 40%. At the
formation, the venture would have $200 million of assets, but these
assets and our investment would be likely to grow.
We also signed a broad set of business agreements in 1994 with
the People's Republic of China to provide technologies, products and
services to modernize its telecommunications infrastructure. Those
agreements call for us to invest more than $150 million over two
years.
Our investments in finance receivables, particularly credit card
receivables, are required to support further growth in revenues and
earnings from our financial services businesses.
<PAGE>
<PAGE> 17

*****************************************************************
DEBT TO EQUITY ANALYSIS
AT&T Consolidated and AT&T Excluding Financial Services In Billions of Dollars

45
#D #D
#D #D #D
#D #D #D
30 #D @D #D @D #D
#D @D #D @D #D
#D @D #D @D #D @D
#E @D #D @D #D @D
15 #E @E #D @D #E @E
#E @E #E @E #E @E
#E @E #E @E #E @E
0 #E @E #E @E #E @E
1992 1993 1994
53.1% 40.8% 64.4% 49.1% 58.3% 34.1% Debt Ratio
------------------------------------------------
D: Debt
E: Equity

#: AT&T Consolidated
@: AT&T excluding Financial Services

Most of AT&T's debt supports our financial services. Our long-term goal is a 30%
debt ratio for AT&T excluding financial services. We are currently above that ratio
because of McCaw's capital structure and our heavy investment program to take
advantage of current opportunities and build a stronger AT&T for the future.
Accounting changes reduced our equity in 1993.
************************************************************************************

FINANCING ACTIVITIES AND CAPITALIZATION

Capital requirements due to the growth of our financial services and
leasing business will continue to grow in 1995.
Much of the financing activity shown on our cash flows statement
relates to refinancing activities. For example, in 1992 and 1993 we
took advantage of favorable levels of interest rates to extend debt
maturities by refinancing a substantial amount of long-term debt. In
1994 we refinanced McCaw's debt.
In the normal course of our business, we use certain derivative
financial instruments, mainly interest rate contracts and foreign
currency exchange rate contracts for purposes other than trading. The
interest rate contracts allow us to limit the effects of changing
interest rates and protect our margins on existing transactions. The
foreign currency contracts and options allow us to manage our exposure
to changing currency exchange rates. We design our credit policies to
limit the risks of dealing with other parties to these instruments.
In our view, the risks to AT&T from our use of these derivative
financial instruments are small and our benefits include more stable
earnings in periods when interest rates or currency exchange rates are
changing.
<PAGE>
<PAGE> 18

For the past three years we have issued new shares of common
stock in our shareowner and employee plans. The dilution in earnings
per share from new issuances was not material.
We sell equity interests in AT&T subsidiaries only when
opportunities or circumstances warrant. We have no current plans to
sell material interests in subsidiaries.
The ratio of total debt and preferred stock to total capital
(total debt, preferred stock and equity) declined to 58.3% at December
31, 1994, compared with 64.4% at December 31, 1993, primarily because
of higher equity from 1994 earnings. Excluding financial services and
leasing operations, the debt ratio declined to 34.1% at December 31,
1994, compared with 49.1% at December 31, 1993.
<PAGE>
<PAGE> 19

REPORT OF MANAGEMENT
Management is responsible for the preparation, integrity and
objectivity of the financial statements and all other financial
information included in this report. Management is also
responsible for maintaining a system of internal controls as a
fundamental requirement for the operational and financial
integrity of results.
The financial statements, which reflect the consolidated
accounts of AT&T and subsidiaries, and other financial
information shown were prepared in conformity with generally
accepted accounting principles. Estimates included in the
financial statements were based on judgments of qualified
personnel.
To maintain its system of internal controls, management
carefully selects key personnel and establishes the
organizational structure to provide an appropriate division of
responsibility. We believe it is essential to conduct business
affairs in accordance with the highest ethical standards as set
forth in the AT&T Code of Conduct. These guidelines and other
informational programs are designed and used to ensure that
policies, standards and managerial authorities are understood
throughout the organization. Our internal auditors monitor
compliance with the system of internal controls by means of an
annual plan of internal audits. On an ongoing basis, the system
of internal controls is reviewed, evaluated and revised as
necessary in light of the results of constant management
oversight, internal and independent audits, changes in AT&T's
business and other conditions.
Management believes that the system of internal controls,
taken as a whole, provides reasonable assurance that (1)
financial records are adequate and can be relied upon to permit
the preparation of financial statements in conformity with
generally accepted accounting principles, and (2) access to
assets occurs only in accordance with management's
authorizations.
The Audit Committee of the Board of Directors, which is
composed of directors who are not employees, meets periodically
with management, the internal auditors and the independent
auditors to review the manner in which these groups of
individuals are performing their responsibilities and to carry
out the Audit Committee's oversight role with respect to
auditing, internal controls and financial reporting matters.
Periodically, both the internal auditors and the independent
auditors meet privately with the Audit Committee. These auditors
also have access to the Audit Committee and its individual
members at any time.
<PAGE>
<PAGE> 20

The financial statements in this annual report have been
audited by Coopers & Lybrand L.L.P., Independent Auditors. Their
audits were conducted in accordance with generally accepted
auditing standards and include consideration of the internal
control structure and selective tests of transactions. Their
report follows.

Richard W. Miller Robert E. Allen
Executive Vice President, Chairman of the Board,
Chief Financial Officer Chief Executive Officer

REPORT OF INDEPENDENT AUDITORS
To the Shareowners of AT&T Corp.:
We have audited the consolidated balance sheets of AT&T Corp.
and subsidiaries (AT&T) at December 31, 1994 and 1993, and the
related consolidated statements of income and cash flows for the
years ended December 31, 1994, 1993 and 1992. These financial
statements are the responsibility of AT&T's management. Our
responsibility is to express an opinion on these financial
statements 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 at December 31, 1994 and 1993, and the
consolidated results of their operations and their cash flows for
the years ended December 31, 1994, 1993 and 1992, in conformity
with generally accepted accounting principles.
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 24, 1995
<PAGE>
<PAGE> 21

CONSOLIDATED STATEMENTS OF INCOME AT&T CORP. AND SUBSIDIARIES
Years Ended December 31

Dollars in millions (except per share amounts) 1994 1993 1992

SALES AND REVENUES
Telecommunications services $43,425 $41,623 $40,968
Products and systems 21,161 17,925 16,579
Rentals and other services 7,391 7,299 7,206
Financial services and leasing 3,117 2,504 1,894
TOTAL REVENUES 75,094 69,351 66,647

COSTS
Telecommunications services
Access and other interconnection costs 17,797 17,772 18,186
Other costs 7,466 7,623 7,553

Total telecommunications services 25,263 25,395 25,739
Products and systems 13,273 10,966 9,976
Rentals and other services 3,629 3,563 3,366
Financial services and leasing 2,152 1,711 1,310
TOTAL COSTS 44,317 41,635 40,391

GROSS MARGIN 30,777 27,716 26,256

OPERATING EXPENSES
Selling, general and administrative expenses 19,637 18,037 16,704
Research and development expenses 3,110 3,111 2,924
TOTAL OPERATING EXPENSES 22,747 21,148 19,628

OPERATING INCOME 8,030 6,568 6,628
Other income -- net 236 476 163
Loss on sale of stock by subsidiary - 9 -
Interest expense 748 1,032 1,153

INCOME BEFORE INCOME TAXES AND
CUMULATIVE EFFECTS OF
ACCOUNTING CHANGES 7,518 6,003 5,638
Provision for income taxes 2,808 2,301 2,196
Income before cumulative
effects of accounting changes 4,710 3,702 3,442
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) $ 4,710 $(5,906) $ 3,442
Weighted average common
shares outstanding (millions) 1,564 1,547 1,519
PER COMMON SHARE:
Income before cumulative effects
of accounting changes $ 3.01 $ 2.39 $ 2.27
Cumulative effects of accounting changes - (6.21) -
NET INCOME (LOSS) $ 3.01 $ (3.82) $ 2.27
The notes on pages 33 through 43 are an integral part of the consolidated
financial statements.
<PAGE>
<PAGE> 22

CONSOLIDATED BALANCE SHEETS AT&T CORP. AND SUBSIDIARIES
At December 31

Dollars in millions (except per share amount) 1994 1993
ASSETS
Cash and temporary cash investments $ 1,208 $ 671
Receivables, less allowances of $1,251 and $1,040
Accounts receivable 13,671 12,294
Finance receivables 14,952 11,370
Inventories 3,633 3,222
Deferred income taxes 3,030 2,079
Other current assets 1,117 732
TOTAL CURRENT ASSETS 37,611 30,368

Property, plant and equipment -- net 22,035 21,015
Licensing costs -- net 4,251 3,995
Investments 2,708 3,060
Finance receivables 4,513 3,815
Prepaid pension costs 4,151 3,575
Other assets 3,993 3,565
TOTAL ASSETS $79,262 $69,393

LIABILITIES AND DEFERRED CREDITS
Accounts payable $ 6,011 $ 4,853
Payroll and benefit-related liabilities 4,105 3,802
Postretirement and postemployment
benefit liabilities 1,029 1,301
Debt maturing within one year 13,666 11,063
Dividends payable 518 448
Other current liabilities 5,601 4,587
TOTAL CURRENT LIABILITIES 30,930 26,054

Long-term debt including capital leases 11,358 11,802
Postretirement and postemployment
benefit liabilities 8,754 9,083
Other liabilities 4,285 4,363
Deferred income taxes 3,913 2,231
Unamortized investment tax credits 232 270
Other deferred credits 776 263
TOTAL LIABILITIES AND DEFERRED CREDITS 60,248 54,066

MINORITY INTERESTS 1,093 648
REDEEMABLE PREFERRED STOCK - 1,305

COMMON SHAREOWNERS' EQUITY
Common shares par value $1 per share 1,569 1,547
Authorized shares: 2,000,000,000
Outstanding shares: 1,569,006,000 at December 31, 1994;
1,546,518,000 at December 31, 1993
Additional paid-in capital 15,825 14,324
Guaranteed ESOP obligation (305) (355)
Foreign currency translation adjustments 145 (32)
Retained earnings (deficit) 687 (2,110)
TOTAL COMMON SHAREOWNERS' EQUITY 17,921 13,374

TOTAL LIABILITIES AND SHAREOWNERS' EQUITY $79,262 $69,393

The notes on pages 33 through 43 are an integral part of the consolidated
financial statements. Page numbers refer to the Company's Annual Report to
security holders.
<PAGE>
<PAGE> 23

CONSOLIDATED STATEMENTS OF CASH FLOWS AT&T CORP. AND SUBSIDIARIES
Years Ended December 31

Dollars in millions 1994 1993 1992

OPERATING ACTIVITIES
Net income (loss) $ 4,710 $(5,906) $ 3,442
Adjustments to reconcile net income to net
cash provided by operating activities:
Cumulative effects of accounting changes - 9,608 -
Depreciation and licensing
cost amortization 4,039 4,082 3,825
Provision for uncollectibles 1,929 1,665 1,983
(Increase) in accounts receivable (2,672) (2,211) (1,577)
(Increase) decrease in inventories (392) (444) 549
Increase (decrease) in accounts payable 1,125 (295) 46
Net (increase) decrease in other operating
assets and liabilities (356) (1,272) (1,595)
Other adjustments for noncash items -- net 573 2,197 1,363
NET CASH PROVIDED BY OPERATING ACTIVITIES 8,956 7,424 8,036

INVESTING ACTIVITIES
Capital expenditures net of proceeds from
sale or disposal of property, plant and
equipment of $451, $241 and $250 (4,853) (4,296) (4,328)
Increase in finance receivables,
net of lease-related repayments of
$3,384, $3,512 and $3,316 (4,616) (3,484) (3,878)
Net (increase) decrease in investments (159) (453) 33
Acquisitions, net of cash acquired 144 (228) (308)
Other investing activities -- net (271) (204) (125)
NET CASH USED IN INVESTING ACTIVITIES (9,755) (8,665) (8,606)

FINANCING ACTIVITIES
Proceeds from long-term debt issuance 6,134 4,386 3,368
Retirements of long-term debt (5,637) (5,879) (3,732)
Issuance of common shares 976 1,053 703
Dividends paid (1,870) (1,774) (1,748)
Increase in short-term borrowings -- net 1,747 2,586 1,341
Other financing activities -- net (36) 25 (162)
NET CASH PROVIDED BY (USED IN)
FINANCING ACTIVITIES 1,314 397 (230)

Effect of exchange rate changes on cash 22 3 26

Net increase (decrease) in cash and
temporary cash investments 537 (841) (774)
Cash and temporary cash investments at
beginning of year 671 1,512 2,286

Cash and temporary cash investments at
end of year $ 1,208 $ 671 $ 1,512

The notes on pages 33 through 43 are an integral part of the consolidated
financial statements. Page numbers refer to the Company'a Annual Report to
security holders.
<PAGE>
<PAGE> 24

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AT&T CORP. AND SUBSIDIARIES (AT&T)

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

The fiscal year of essentially all AT&T operations ends December 31.

CURRENCY TRANSLATION
For operations outside of the U.S. that prepare financial statements
in currencies other than the U.S. dollar, 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
these translation adjustments as a separate component of shareowners'
equity.

REVENUE RECOGNITION
REVENUE FROM BASIS OF RECOGNITION
Telecommunications Services Minutes of traffic processed
and contracted fees
Products and Systems Upon performance of
contractual obligations
Rentals and Other Services Proportionately over contract
period or as services are
performed
Financial Services and Leasing Over the life of the finance
receivables using the
interest method, or straight-
line over life of operating
lease

SOFTWARE PRODUCTION COSTS
Until technological feasibility is established, we expense as
incurred the costs of developing computer software that we plan to
sell, lease or otherwise market. After that time, we capitalize the
remaining software production costs and amortize them to costs over
the estimated period of sales and revenues.

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.

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.
<PAGE>
<PAGE> 25

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. When we sell 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, 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, 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 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.

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 1994 presentation.
<PAGE>
<PAGE> 26

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.
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.
We recorded a one-time pretax charge for the unfunded portions of
these liabilities of $11,317 million ($7,023 million or $4.54 per
share after taxes). Apart from these cumulative effects on prior
years of the accounting change, our change in accounting had no
material effect on net income and it 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 approved and disability benefits when they were paid.
We recorded a one-time pretax charge for the unprovided portion of
these liabilities of $1,809 million ($1,128 million or $0.73 per
share after taxes). 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 amounts 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, Inc. acquisitions prior to
the merger. Apart from these cumulative effects on prior years of
the accounting change, 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.
<PAGE>
<PAGE> 27

3.PROSPECTIVE ACCOUNTING CHANGES
IMPAIRED LOANS
In 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.

4.MERGER WITH MCCAW CELLULAR COMMUNICATIONS, INC. (MCCAW)
On September 19, 1994, AT&T merged with McCaw. As a result, 197.5
million shares of McCaw common stock were converted into shares of
AT&T common stock at an exchange ratio of one share of AT&T common
stock for each McCaw share. In addition, AT&T assumed 11.3 million
McCaw stock 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 $27.43. The merger was
accounted for as a pooling of interests, and the consolidated
financial statements were restated for all periods prior to the
merger to include the accounts and operations of McCaw. Intercompany
transactions prior to 1994 were not eliminated due to immateriality.
Merger-related expenses of $246 million incurred in 1994
($187 million net of taxes) were reported as selling, general and
administrative expenses. Certain reclassifications were made to
McCaw's accounts to conform to AT&T's presentation. Premerger
operating results of the companies in the current presentation were:

NINE MONTHS YEAR
ENDED ENDED
SEPTEMBER 30, DECEMBER 31,
Dollars in millions 1994 1993 1992
SALES AND REVENUES
AT&T $ 52,178 $ 67,156 $ 64,904
McCaw 2,062 2,195 1,743
Eliminations (256) - -
Total $ 53,984 $ 69,351 $ 66,647

NET INCOME (LOSS)
AT&T $ 3,431 $ (3,794) $ 3,807
McCaw 34 (2,112)* (365)
Eliminations (93) - -
Total $ 3,372 $ (5,906) $ 3,442

* Includes a charge of $45 million previously reported as an
extraordinary item for the early redemption of debt.
<PAGE>
<PAGE> 28

5.SUPPLEMENTARY FINANCIAL INFORMATION
SUPPLEMENTARY INCOME STATEMENT INFORMATION
DOLLARS IN MILLIONS 1994 1993 1992

INCLUDED IN COSTS
Amortization of software production costs $ 370 $ 359 $ 315
Amortization of licensing costs 115 108 105

COST OF FINANCIAL SERVICES AND LEASING
Interest expense $ 725 $ 506 $ 485
Depreciation, provision for losses, etc. 1,427 1,205 825
Cost of financial services and leasing $2,152 $1,711 $1,310

INCLUDED IN SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
Amortization of goodwill $ 97 $ 89 $ 80

OTHER INCOME - NET
Interest income $ 80 $ 141 $ 167
Royalties and dividends 30 59 48
Minority interests in earnings
of subsidiaries (64) (9) 40
Miscellaneous - net 190 285 (92)
Other income - net $ 236 $ 476 $ 163

DEDUCTED FROM INTEREST EXPENSE
Capitalized interest $ 47 $ 72 $ 62
<PAGE>
<PAGE> 29

SUPPLEMENTARY BALANCE SHEET INFORMATION
DOLLARS IN MILLIONS AT DECEMBER 31, 1994 1993

INVENTORIES
Completed goods $ 2,022 $ 1,927
Work in process and raw materials 1,611 1,295
Inventories $ 3,633 $ 3,222

PROPERTY, PLANT AND EQUIPMENT
Land and improvements $ 761 $ 757
Buildings and improvements 9,240 8,608
Machinery, electronic and other equipment 35,981 33,930
Total property, plant and equipment 45,982 43,295
Less: Accumulated depreciation 23,947 22,280
Property, plant and equipment--net $22,035 $21,015

INVESTMENTS
Accounted for by the equity method $ 2,314 $ 2,603
Stated at cost or fair value 394 457
Investments $ 2,708 $ 3,060

OTHER ASSETS
Unamortized software production costs $ 483 $ 499
Unamortized goodwill 1,007 1,359
Deferred charges 746 270
Other 1,757 1,437
Other assets $ 3,993 $ 3,565

DEBT MATURING WITHIN ONE YEAR
Commercial paper $10,777 $ 8,761
Long-term debt 2,535 2,019
Long-term lease obligations 30 52
Other 324 231
Debt maturing within one year $13,666 $11,063
<PAGE>
<PAGE> 30

SUPPLEMENTARY CASH FLOW INFORMATION

DOLLARS IN MILLIONS 1994 1993 1992
Interest payments net of
amounts capitalized $ 1,280 $ 1,640 $ 1,510
Income tax payments 2,047 1,733 727

The following table displays the non-cash items excluded from the
consolidated statements of cash flows:

Dollars in millions 1994 1993 1992

Machinery and equipment acquired under
capital lease obligations $ 13 $ 15 $ 60

EXCHANGE OF STOCK
Net assets $ 2 $ (43) -
Investments - 260 -
Licenses 134 96 -
$ 136 $ 313 -
ACQUISITION ACTIVITIES
Net receivables $ 24 $ (19) $ (131)
Inventories (10) (1) (48)
Property, plant and equipment 3 (132) (82)
Licensing costs (79) 5 (75)
Accounts payable (8) 7 37
Short-term and long-term debt 47 3 93
Other operating assets and liabilities - net 167 (91) (102)
Net non-cash items consolidated 144 (228) (308)
Net cash received from (used for)
acquisitions $ 144 $ (228) $ (308)

6.BUSINESS RESTRUCTURING AND OTHER CHARGES
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 restructuring customer support functions
for telecommunications services (including, in millions, $55 for
employee relocation, $25 for outplacement costs, $30 for legal
matters, 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. These amounts were recorded as $13 million in
costs of products and systems, $90 million as costs of other
services, $373 million as selling, general and administrative
expenses and $22 million as research and development expenses.
We believe that the balance of reserves for business restructuring
activities, $894 million at December 31, 1994, is adequate for the
completion of those activities.<PAGE>
<PAGE> 31

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's common stock. Our gain on the sale was
$217 million.
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 because of a sustained decline
in its market value.

8.SALE OF STOCK BY SUBSIDIARY
In August 1993 AT&T Capital Corporation (AT&T Capital) 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 by the year 2000, we expect to report a net $6
million gain from this sale of stock.

9.INCOME TAXES
This table shows the principal reasons for the difference between the
effective tax rate and the United States federal statutory income tax
rate:

Dollars in millions 1994 1993 1992

U.S. federal statutory income tax rate 35% 35% 34%
Federal income tax at statutory rate $2,631 $2,101 $1,917
Amortization of investment tax credits (33) (92) (221)
State and local income taxes, net of
federal income tax effect 296 287 243
Amortization of intangibles 20 24 110
Foreign rate differential 36 45 75
Taxes on repatriated and accumulated
foreign income, net of tax credits (71) (20) 67
Research credits (66) (47) (18)
Capital loss carryforward - - (13)
Effect of tax rate change on
deferred tax assets - (23) -
Other differences-net (5) 26 36
Provision for income taxes $2,808 $2,301 $2,196
Effective income tax rate 37.3% 38.3% 39.0%
<PAGE>
<PAGE> 32

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 1994 1993 1992

INCOME BEFORE INCOME TAXES
United States $6,841 $5,705 $5,308
Foreign 677 298 330
$7,518 $6,003 $5,638
PROVISION FOR INCOME TAXES
CURRENT
Federal $1,618 $ 925 $ 533
State and local 300 206 142
Foreign 225 169 215
$2,143 $1,300 $ 890
DEFERRED
Federal $ 488 $ 910 $1,384
State and local 155 212 225
Foreign 60 (41) (85)
$ 703 $1,081 $1,524
Deferred investment tax credits -- net* (38) (80) (218)
Provision for income taxes $2,808 $2,301 $2,196
*Net of amortization of $33 in 1994, $92 in 1993 and $221 in 1992.

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. Deferred tax liabilities (assets) consist of the
following:

Dollars in millions 1994 1993

LONG-TERM DEFERRED INCOME TAX LIABILITIES:
Property, plant and equipment $ 5,964 $ 5,620
Other 1,713 964
Total long-term deferred tax liabilities $ 7,677 $ 6,584

LONG-TERM DEFERRED INCOME TAX ASSETS:
Business restructuring $ 479 $ 476
Credit carryforwards 166 425
Employee pensions and other benefits - net 2,618 3,348
Reserves and allowances 141 142
Unamortized investment tax credits 92 119
Valuation allowance (178) (212)
Other 446 55
Total long-term deferred income tax assets $ 3,764 $ 4,353
Net long-term deferred income tax liabilities $ 3,913 $ 2,231
<PAGE>
<PAGE> 33

CURRENT DEFERRED INCOME TAX LIABILITIES:
Other $ 110 $ 93
Total current deferred income tax liabilities $ 110 $ 93
CURRENT DEFERRED INCOME TAX ASSETS:
Business restructuring $ 99 $ 191
Credit carryforwards 99 -
Employee pensions and other benefits 1,166 850
Reserves and allowances 1,126 907
Other 650 224
Total current deferred income tax assets $ 3,140 $ 2,172
Net current deferred income tax assets $ 3,030 $ 2,079

This table shows the principal sources of deferred taxes in 1992:

Dollars in millions 1992

Property, plant and equipment $ 992
Business restructuring charges 218
Employee pensions and other benefits 234
Reserves and allowances 108
Other timing differences - net (28)
Deferred income taxes $1,524

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 1994 1993

Minimum lease payments receivable $5,414 $4,226
Estimated unguaranteed residual values 593 543
Unearned income (1,006) (797)
Allowance for credit losses (127) (110)
Net investment $4,874 $3,862

This table shows the scheduled maturities for our $5,414 million
minimum lease payments receivable on these leases at December 31,
1994:
1995 1996 1997 1998 1999 Later Years
$1,689 $1,402 $1,143 $659 $309 $212

<PAGE>
<PAGE> 34

We lease airplanes, energy-producing facilities and transportation
equipment under leveraged leases having original terms ranging from
10 to 30 years, expiring in various years from 1995 through 2025.
This table shows our net investment in leveraged leases:

Dollars in millions at December 31 1994 1993

Rentals receivable (net of principal
and interest on nonrecourse notes) $ 967 $1,010
Estimated residual value
of leased property 781 782
Unearned and deferred income (472) (537)
Allowance for credit losses (30) (22)
Investment in leveraged leases 1,246 1,233
Deferred taxes (1,066) (994)
Net investment $ 180 $ 239

We lease land, buildings and equipment to others through operating
leases, the majority of which are cancelable. This table shows our
net investment in operating leases:

Dollars in millions at December 31 1994 1993

Assets leased to others $2,129 $2,694
Less: Accumulated depreciation 817 1,230
Net investment $1,312 $1,464

This table shows the $977 million of future minimum rentals
receivable under noncancelable operating leases at December 31, 1994:

1995 1996 1997 1998 1999 Later Years
$354 $201 $104 $46 $32 $240

AS LESSEE
We lease land, buildings and equipment through contracts that expire
in various years through 2025. Our rental expense under operating
leases, in millions, was $1,098 in 1994, $1,095 in 1993 and $1,168 in
1992. The table below shows our future minimum lease payments due
under noncancelable leases at December 31, 1994. Such payments total
$2,968 million for operating leases. The net present value of such
payments on capital leases was $105 million after deducting estimated
executory costs of $1 million and imputed interest of $15 million.

1995 1996 1997 1998 1999 Later Years
Operating
leases $579 $445 $370 $301 $250 $1,023
Capital
leases 52 30 21 10 5 3
Minimum lease
payments $631 $475 $391 $311 $255 $1,026
<PAGE>
<PAGE> 35

11.SHAREOWNERS' EQUITY
Foreign
Additional Currency Retained
Common Paid-in Translation Earnings
Dollars in millions Shares Capital Adjustments (Deficit)
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)
1994
Net income - - - 4,710
Dividends declared - - - (1,940)
Shares issued:
Under employee plans 11 538 - -
Under shareowner plans 8 424 - -
To acquire licenses 3 133 - -
Shares repurchased - (2) - -
Preferred stock redemption - 408 - -
Translation adjustments - - 177 -
Other changes - - - 27
At December 31, 1994 $1,569 $15,825 $ 145 $ 687

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
nonmanagement savings plan. The shares are being allocated to plan
participants over ten years commencing in July 1990 as contributions
are made to the plan.
<PAGE>
<PAGE> 36

We have 100 million authorized shares of preferred stock at $1 par
value. No preferred stock is currently issued or outstanding.

12.LONG-TERM DEBT OBLIGATIONS
This table shows the outstanding long-term debt obligations in
millions at December 31:

Interest Rates Maturities 1994 1993
DEBENTURES
4 3/8% to 4 3/4% 1996-1999 $ 750 $ 750
5 1/8% to 6% 2000-2001 500 500
8% to 9% 2008-2031 1,700 1,676

NOTES
4 1/4% to 7 3/4% 1995-2009 6,291 3,605
7 4/5% to 8 19/20% 1995-2004 348 445
9% to 13% 1995-2020 373 616
Variable rate 1995-2054 3,187 6,072
13,149 13,664
Long-term lease obligations 105 163
Other 739 89
Less: Unamortized discount-net 69 43
13,924 13,873
Less: Amounts maturing within one year 2,566 2,071
Total long-term obligations $11,358 $11,802

This table shows the maturities, at December 31, 1994, of the
$13,149 million in debentures and notes:

1995 1996 1997 1998 1999 Later Years
$2,535 $2,115 $1,197 $1,288 $1,396 $4,618

A consortium of lenders provides revolving credit facilities of $7
billion to AT&T and $2 billion to 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, 1994.

13.EMPLOYEE BENEFIT PLANS
PENSION PLANS
We sponsor noncontributory 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 1994, 1993 and 1992.

<PAGE>
<PAGE> 37

Pension cost includes the following components:

Dollars in millions 1994 1993 1992
Service cost--benefits earned during
the period $ 669 $ 536 $ 452
Interest cost on projected benefit
obligation 2,400 2,294 2,225
Amortization of unrecognized prior
service costs 230 251 346
Credit for expected return on plan
assets* (3,260) (3,110) (2,973)
Amortization of transition asset (501) (500) (502)
Charges for special pension options - 74 11
Net pension cost (credit) $ (462) $ (455) $ (441)
*The actual return on plan assets was $601 in 1994, $5,068 in 1993
and $2,153 in 1992.

This table shows the funded status of the defined benefit plans:

Dollars in millions at December 31 1994 1993
Actuarial present value of accumulated
benefit obligation, including vested benefits
of $26,315 and $28,027, respectively $28,778 $30,804

Plan assets at fair value $40,150 $41,291
Less: Actuarial present value of projected
benefit obligation 30,090 32,495
Excess of assets over projected benefit obligation 10,060 8,796
Unrecognized prior service costs 2,319 2,052
Unrecognized transition asset (3,460) (3,960)
Unrecognized net gain (4,982) (3,504)
Net minimum liability of nonqualified plans (93) (122)
Prepaid pension costs $ 3,844 $ 3,262

We used these rates and assumptions to calculate the projected
benefit obligation:

At December 31 1994 1993
Weighted-average discount rate 8.7% 7.5%
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 $216 million and $378 million
of AT&T common stock at December 31, 1994 and 1993, respectively),
corporate and governmental debt, real estate investments, and cash
and cash equivalents.
<PAGE>
<PAGE> 38

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 $357 in 1994, $351 in 1993 and
$334 in 1992.

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 1994 1993

Service cost--benefits earned during the period $ 108 $ 95
Interest cost on accumulated postretirement
benefit obligation 852 868
Expected return on plan assets * (242) (180)
Amortization of unrecognized prior service costs 14 29
Charge for special options - 29
Net postretirement benefit cost $ 732 $ 841
* The actual return on plan assets was ($30) in 1994 and $243 in
1993.

We did not restate our 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 1992:

Dollars in millions 1992

Cost of health care benefits for retirees $532
Cost of life insurance benefits for retirees 3
Cost of telephone concessions and other benefits 39
Payments to regional Bell companies
for predivestiture retirees 145
Postretirement benefit cost $719

We had approximately 144,900 retirees in 1994, 142,200 in 1993 and
141,200 in 1992.
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:
<PAGE>
<PAGE> 39

Dollars in millions at December 31 1994 1993

Accumulated postretirement benefit obligation:
Retirees $ 7,861 $ 8,912
Fully eligible active plan participants 822 885
Other active plan participants 1,745 2,084
Accumulated postretirement benefit obligation 10,428 11,881
Plan assets at fair value 3,291 2,918
Unfunded postretirement obligation 7,137 8,963
Less:
Unrecognized prior service cost (46) 210
Unrecognized net (gain) loss (633) 558
Accrued postretirement benefit obligation $ 7,816 $ 8,195

We made these assumptions in valuing our postretirement benefit
obligation at December 31,: 1994 1993

Weighted-average discount rate 8.8% 7.5%
Expected long-term rate of return
on plan assets 9.0% 9.0%
Assumed rate of increase in the per
capita cost of covered health care benefits 8.6% 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 5.7% 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, 1994 by
$577 million and our 1994 postretirement benefit costs by $58
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.
<PAGE>
<PAGE> 40

Option transactions are shown below:

Number of Shares 1994 1993 1992

Balance at January 1 38,011,478 36,777,098 37,267,956
Options assumed in merger
with Teradata - - 1,848,642
Options granted 5,803,142 7,261,355 7,580,568
Options and SARs exercised (2,498,132) (5,766,132) (9,504,536)
Average price $25.04 $23.93 $13.66
Options forfeited (1,031,687) (260,843) (415,532)
At December 31:
Options outstanding 40,284,801 38,011,478 36,777,098
Average price $36.61 $33.52 $28.53
Options exercisable 28,010,381 24,063,837 23,759,421
Shares available for grant 22,014,728 25,264,307 22,614,535

During 1994, 41,300 SARs were exercised and no SARs were granted.
At December 31, 1994 881,385 SARs remained unexercised and all of
these were exercisable.
<PAGE>
<PAGE> 41

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 1994 1993 1992

REVENUES
Information movement and management $71,977 $66,847 $64,753
Financial services and leasing 3,117 2,504 1,894
$75,094 $69,351 $66,647

OPERATING INCOME
Information movement and management $ 8,188 $ 6,839 $ 7,200
Financial services and leasing 394 339 193
Corporate and nonoperating (1,064) (1,175) (1,755)
Income before income taxes $ 7,518 $ 6,003 $ 5,638

ASSETS
Information movement and management $56,551 $51,971 $50,661
Financial services and leasing 21,462 17,033 14,003
Corporate assets 1,714 1,104 1,849
Eliminations (465) (715) (409)
$79,262 $69,393 $66,104

DEPRECIATION AND AMORTIZATION
Information movement and management $ 4,193 $ 4,271 $ 4,046
Financial services and leasing 440 431 352

CAPITAL EXPENDITURES
Information movement and management $ 4,237 $ 3,831 $ 3,710
Financial services and leasing 609 457 633

TOTAL LIABILITIES
Financial services and leasing $19,463 $15,329 $12,250
<PAGE>
<PAGE> 42

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 1994 1993 1992

REVENUES - EXTERNAL CUSTOMERS
United States $67,769 $63,775 $60,977
Other geographic areas 7,325 5,576 5,670
$75,094 $69,351 $66,647
TRANSFERS BETWEEN GEOGRAPHIC AREAS
(ELIMINATED IN CONSOLIDATION)
United States $ 1,679 $ 1,374 $ 1,077
Other geographic areas 1,291 1,125 911
$ 2,970 $ 2,499 $ 1,988
OPERATING INCOME (LOSS)
United States $ 8,732 $ 7,425 $ 7,441
Other geographic areas (150) (247) (48)
Corporate and nonoperating (1,064) (1,175) (1,755)

Income before income taxes $ 7,518 $ 6,003 $ 5,638

ASSETS
United States $69,718 $63,194 $60,409
Other geographic areas 9,361 6,901 5,373
Corporate assets 1,714 1,104 1,849
Eliminations (1,531) (1,806) (1,527)
$79,262 $69,393 $66,104

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 25.2% of
consolidated revenues in 1994.
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
In the normal course of business we use various financial
instruments, including derivative financial instruments, for
purposes other than trading. These instruments include commitments
to extend credit, letters of credit, guarantees of debt, interest
rate swap and cap agreements, and foreign currency exchange
contracts. By their nature all such instruments involve risk
including the credit risk of non-performance by counterparties, 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<PAGE>
<PAGE> 43

exposure to credit risk through credit approvals, credit limits and
monitoring procedures, we believe that our reserves for losses are
adequate.

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. At December 31, the unused
portion of available credit was approximately $75,445 million in 1994
and $64,864 million in 1993. This represents the receivables we
would need to purchase if all Universal Card accounts were used up to
their full credit limits. The potential risk of loss associated
with, and the estimated fair values of, the unused credit lines are
not considered to be significant.

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 SWAP AND CAP AGREEMENTS
We enter into interest rate contracts to manage our exposure to
changes in interest rates and lower our overall costs of financing.
We enter into swap agreements to manage the fixed/floating mix of our
debt portfolio to reduce aggregate risk to interest rate movements.
These agreements involve the exchange of floating rate for fixed rate
payments without the exchange of the underlying principal amount.
Fixed interest rate payments are at rates ranging from 3.8% to 8.2%.
Floating rate payments are based on rates tied to prime, LIBOR or
U.S. Treasury bills. Interest rate differentials paid or received
under these swap contracts are recognized over the life of the
contracts as adjustments to the effective yield of the underlying
debt.
We pay premiums for cap agreements to protect us from rising
interest rates on our floating rate debt. There is no market risk of
loss beyond the premiums paid, which are amortized over the life of
the agreement. The weighted average remaining term of the agreements
is 5 years for swap contracts and 2 years for caps.

FOREIGN EXCHANGE
We enter into foreign currency exchange contracts, including forward,
option and swap contracts, to manage our exposure to changes in
currency exchange rates, principally Canadian dollars, Deutsche
marks, pounds sterling and Japanese yen. The use of derivative
financial instruments allows us to reduce our exposure to the risk
that the eventual dollar net cash inflows resulting from the sale of
products to foreign customers and purchases from foreign suppliers<PAGE>
<PAGE> 44

will be adversely affected by changes in exchange rates. Our foreign
exchange contracts almost entirely hedge firmly committed purchases
and sales. These transactions are generally expected to occur in
less than one year. Deferred gains and losses are recognized when
the future sales or purchases are recognized or immediately if the
commitment is canceled. At December 31, 1994, deferred unrealized
gains, based on dealer quoted prices, were $51 million and deferred
unrealized losses were $55 million.

FAIR VALUES OF FINANCIAL INSTRUMENTS INCLUDING DERIVATIVE FINANCIAL
INSTRUMENTS
The tables below show the valuation methods and the carrying or
notional amounts and estimated fair values of material financial
instruments held or issued for purposes other than trading:

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.
Letters of credit Fees paid to obtain the
obligations.
Guarantees of debt Costs to terminate agreements.
Interest rate swap agreements Net gains or losses to
terminate agreements.
Interest rate cap agreements Costs to obtain agreements.
Foreign exchange contracts Market quotes.

Dollars in millions 1994 1993
Carrying Fair Carrying Fair
Amount Value Amount Value
ON BALANCE SHEET INSTRUMENTS
Assets:
Finance receivables
other than leases $13,553 $13,528 $10,320 $10,337
Liabilities:
Debt excluding capital leases 24,920 24,449 22,702 23,032
Contract/ Contract/
Notional Fair Notional Fair
Amount Value Amount Value

OFF BALANCE SHEET
Interest rate swap agreements $ 4,423 $115 $ 3,835 $(37)
Interest rate cap agreements 1,333 2 1,640 4
Foreign exchange:
Forward contracts 1,573 (17) 783 (3)
Swap contracts 340 10 361 5
Purchased option contracts - - 41 1
Letters of credit 834 2 680 -
Guarantees of debt 423 - 455 -
<PAGE>
<PAGE> 45

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, 1994. 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 a 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 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. The summarized financial
information includes transactions with AT&T that are eliminated in
consolidation.

Dollars in millions 1994 1993 1992

Total revenue $1,437 $1,432 $1,351
Interest expense 302 284 293
Selling, general and administrative expense 387 329 309
Income before cumulative effect of
change in accounting 92 70 100
Cumulative effect on prior years of change in
accounting for income taxes (SFAS No. 109) - 22 -
Net income 92 48 100
Finance receivables $7,726 $6,220
Net investment in operating lease assets 903 978
Total assets 9,468 7,886
Total debt 5,682 4,639
Total liabilities 8,299 6,867
Minority interest 270 251
Total shareowners' equity 899 768

In some cases, AT&T Capital securitizes finance receivables, subject
to limited recourse provisions. In the unlikely event that all such
receivables had become uncollectible and subject to recourse, our
exposure was $353 million at December 31, 1994 and $347 million at
December 31, 1993. We record liabilities for the amounts we expect
to actually reimburse.
<PAGE>
<PAGE> 46

20.PREFERRED STOCK REDEMPTION
On June 24, 1994, LCH Communications (LCH), a subsidiary of LIN
Broadcasting Corporation (LIN), redeemed all $1.3 billion of its
outstanding redeemable preferred stock held by Comcast Cellular
Communications, Inc. in exchange for all of the capital stock of one
of LCH's subsidiaries.
As a result of the redemption, we eliminated the net assets and
recorded a gain on the sale of assets of $12 million and a tax
benefit of $74 million. The $784 million difference between the book
value of the preferred stock and the fair value of the assets
exchanged was recorded as $408 million of additional paid-in capital
and $376 million of minority interests.

21.PRIVATE MARKET VALUE GUARANTEE
Under the Private Market Value Guarantee (PMVG) between McCaw and its
52%-owned subsidiary, LIN, a process began on January 1, 1995, to
determine the private market price per share of LIN. The private
market value is defined as the price per share, including control
premium, that an unrelated third party would pay if it were to
acquire all the outstanding shares of LIN, including the shares held
by McCaw, in an arm's-length transaction and assuming that LIN was
being sold in a manner to attract all possible participants and to
maximize shareholder value. Using that definition, the private
market value is being determined by Morgan Stanley & Co.
Incorporated, designated as McCaw's appraiser, and by Lehman Brothers
Inc. and Bear, Stearns & Co., designated jointly as the LIN
independent directors' appraiser, and if necessary by a third-party
appraiser. After the price is determined, McCaw will have 45 days to
decide whether to proceed with the acquisition of all the public
shares of LIN at that price, subject to the approval of the LIN
public shareholders, or to put LIN in its entirety up for sale under
the direction of the LIN independent directors. Such a sale would
also be subject to approval by the LIN public shareholders.
<PAGE>
<PAGE> 47

22.QUARTERLY INFORMATION (UNAUDITED)
Dollars in millions
(except per share amounts) First Second Third Fourth
1994
Total revenues $17,097 $18,238 $18,649 $21,110
Gross margin 6,967 7,406 7,765 8,639
Net income 1,074 1,248 1,050 1,338
Per common share:
Net income .69 .80 .67 .85
Dividends declared .33 .33 .33 .33
Stock price*:
High 57 1/8 57 1/8 55 7/8 55 1/4
Low 50 5/8 49 1/2 52 1/2 47 1/4
Quarter-end close 51 1/4 53 3/8 54 50 1/4
1993
Total revenues $16,199 $16,857 $17,225 $19,070
Gross margin 6,491 6,785 6,941 7,499
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
* Stock prices obtained from the Composite Tape.

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.
In the third quarter of 1994, we recorded $227 million of costs
($169 million net of taxes) related to the McCaw merger primarily
consisting of legal and investment banking fees and bonus pool
funding.
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 Company,
which reduced net income by $119 million ($0.08 per share).<PAGE>
<PAGE> 48

BOARD OF DIRECTORS

ROBERT E. ALLEN, 59
Chairman of the Board and Chief Executive Officer of AT&T since
1988. Director since 1984. 6,8

M. KATHRYN EICKHOFF, 55
President of Eickhoff Economics, Inc., a business consulting
firm. Elected to Board in 1987. 1,5

WALTER Y. ELISHA, 62
Chairman and Chief Executive Officer of Springs Industries,
Inc., a textile manufacturing firm. Director since 1987. 2,4,7

PHILLIP M. HAWLEY, 69
Retired Chairman and Chief Executive Officer of Broadway Stores,
Inc. (formerly Carter Hawley Hale Stores, Inc.), department
stores. Director since 1982. 2,3,4

CARLA A. HILLS, 60
Chairman and Chief Executive Officer of Hills & Company
consulting firm and former U.S. Trade Representative. Elected
to Board in 1993. 1,2,5

BELTON K. JOHNSON, 65
Former owner of Chaparrosa Ranch. Chairman of Belton K. Johnson
Interests. Director since 1974. 3,5,6,8

DREW LEWIS, 63
Chairman and Chief Executive Officer of Union Pacific
Corporation, a rail transportation, natural resources and
trucking company. Elected to Board in 1989. 1,2,5

DONALD F. McHENRY, 58
President of IRC Group, international relations consultants;
educator and former U.S. Ambassador to the United Nations.
Director since 1986. 3,7

VICTOR A. PELSON, 57
Chairman of AT&T Global Operations Team and Executive Vice
President of AT&T. Elected to Board in 1993. 5

DONALD S. PERKINS, 67
Chairman of Kmart Corp., mass merchandise retailer. Director
since 1979. 2,3,6,7,8

HENRY B. SCHACHT, 60
Chairman and former Chief Executive Officer of Cummins Engine
Company, Inc., manufacturer of diesel engines. Elected to Board
in 1981. 1,5

MICHAEL I. SOVERN, 63
President Emeritus and Chancellor Kent Professor of Law at
Columbia University. Director since 1984. 1,4

<PAGE> 49

FRANKLIN A. THOMAS, 60
President of The Ford Foundation. Elected to Board in 1988.
1,2,5

JOSEPH D. WILLIAMS, 68
Retired Chairman and Chief Executive Officer of Warner-Lambert
Company, a pharmaceutical, health care and consumer products
company. Director since 1984. 4,6,7

THOMAS H. WYMAN, 65
Chairman of S.G. Warburg & Co. Inc., investment bankers.
Director since 1981. 2,4,7

1. Audit Committee 2. Committee on Directors 3. Committee on
Employee Benefits 4. Compensation Committee 5. Corporate Public
Policy Committee 6. Executive Committee 7. Finance Committee
8. Proxy Committee

MANAGEMENT EXECUTIVE COMMITTEE

ROBERT E. ALLEN, 59
Chairman of the Board and Chief Executive Officer since 1988.
During 37-year AT&T career, has been chairman of Chesapeake and
Potomac Telephone Companies, AT&T chief financial officer,
chairman and CEO of AT&T Information Systems, and president and
chief operating officer of AT&T.

RICHARD S. BODMAN, 56
Senior Vice President of Corporate Strategy and Development
since 1990. Previously president of Washington National
Investment Corporation and CEO of Comsat General Corporation.
Also held positions at E.I. du Pont de Nemours & Company, in the
federal government and at Touche Ross & Company.

HAROLD W. BURLINGAME, 54
Senior Vice President of Human Resources since 1987. During 33-
year AT&T career, has been vice president of public relations
for AT&T Information Systems and senior vice president of public
relations for the corporation.

MARILYN LAURIE, 55
Senior Vice President of Public Relations and Employee
Information since 1987. Chairman of the AT&T Foundation. Headed
public relations at AT&T Bell Laboratories and AT&T
Communications. A nationally recognized environmentalist, she
joined AT&T in 1971.

ALEX J. MANDL*, 51
Executive Vice President and Chief Executive Officer of
Communications Services since 1993. Joined AT&T in 1991 as chief
financial officer. Formerly chairman and CEO of Sea-Land
Service,Inc. Held senior positions at CSX Corporation and Boise
Cascade Corporation.

<PAGE> 50

WILLIAM B. MARX, JR.*, 55
Executive Vice President and Chief Executive Officer, Multimedia
Products, since 1994. Also responsible for worldwide purchasing
operations, global manufacturing planning and AT&T
Microelectronics. Held executive positions in several AT&T units
since joining the company in 1961, most recently as Chief
Executive Officer of AT&T Network Systems from 1989 to 1994.

JOHN S. MAYO+, 64
President of AT&T Bell Laboratories since 1991. Joined AT&T in
1955. Headed product development at AT&T Network Systems and was
senior vice president for network systems and network services at
Bell Labs. Recipient of the National Medal of Technology for
role in providing the technological foundation for Information
Age communications.

RICHARD A. MCGINN*, 48
Executive Vice President and Chief Executive Officer of Network
Systems since 1994. During 25-year AT&T career, has been a
regional director for AT&T International, president of AT&T
Computer Systems, and president and chief operating officer of
Network Systems.

RICHARD W. MILLER*, 54
Executive Vice President and Chief Financial Officer since 1993.
Formerly chairman and CEO of Wang Laboratories, Inc., senior vice
president and general manager for consumer electronics at General
Electric Company and chief financial officer for RCA.

WILLIAM T. O'SHEA*, 47
Interim Executive Vice President and Chief Executive Officer of
AT&T Global Information Systems following the departure of
Jerre L. Stead. Has spent more than 20 years in development,
marketing and sales of information systems since joining AT&T
Bell Laboratories in 1972. Currently senior vice president for
worldwide marketing of AT&T Global Information Solutions.

VICTOR A. PELSON*, 57
Executive Vice President and Chairman of the Global Operations
Team since 1993. Responsible for the effectiveness of AT&T's
operations worldwide. Joined AT&T in 1959 as an engineer. Named
head of Communications Services Group in 1989. Has held
executive positions in virtually every part of the company.

JOHN D. ZEGLIS, 47
Senior Vice President-General Counsel and Government Affairs
since 1986 and 1989, respectively. Joined AT&T in 1984.
Formerly a partner at the law firm of Sidley & Austin.

*Also a member of the Global Operations Team.

+Daniel C. Stanzione, president of AT&T Network Systems' Global
Public Networks unit, will succeed Dr. Mayo upon his retirement
February 28, 1995.

The Management Executive Committee leads the development and
implementation of AT&T's mission, values and strategic intent,
while the Global Operations Team is responsible for the
effectiveness of AT&T's operations worldwide.

<PAGE> 51

OUR THANKS and best wishes to three Management Executive
Committee members who left the company. Sam Willcoxon retired as
Group Executive of AT&T and President of the Telephone Pioneers
of America. Jerre Stead, Chief Executive Officer of AT&T Global
Information Systems, left to become Chief

Executive Officer of Legent Corp., and Robert Kavner, Chief
Executive Officer of AT&T Multimedia Products and Services,
joined Creative Artists Agency.
_________________________________________________________________

MAUREEN B. TART, 39
Vice President and Controller

S. LAWRENCE PRENDERGAST, 53
Vice President and Treasurer

MARILYN J. WASSER, 39
Vice President-Law and Secretary

GENERAL INFORMATION

GENERAL QUESTIONS
General questions or comments about AT&T may be addressed to the
office of Vice President-Law and Secretary at:

AT&T Corporate Headquarters
32 Avenue of the Americas
Room 2420E
New York, NY 10013-2412

FORM 10-K
Form 10-K (AT&T's annual report to the Securities and Exchange
Commission) is available without charge from AT&T's shareowner
services agent, First Chicago Trust Co., at the address shown at
right.

OTHER REPORTS
AT&T Capital Corporation's annual report and Form 10-K are
available without charge by calling 1 800 235-4288 or
201 397-3000, or writing:

AT&T Capital Corporation
Corporate Communications
44 Whippany Road
Morristown, NJ 07962-1983
______________

AT&T Foundation Report
Department BR
P.O. Box 45284
Jacksonville, FL 32232-5284
______________

<PAGE> 52

AT&T and the Environment
Department AR
131 Morristown Road
Room B1336
Basking Ridge, NJ 07920-1650

HELPFUL INFORMATION FOR INVESTORS

SHAREOWNER SERVICES
First Chicago Trust, our shareowner services and transfer agent,
will be happy to answer questions about your account and help you
with transactions. You may call them toll-free at:
1 800 348-8288.

Persons using a telecommunications device for the deaf (TDD) or a
teletypewriter (TTY) may call: 1 800 822-2794.

From outside the United States, call us collect at: 201 324-0293.

Our mailing address is:
AT&T
c/o First Chicago Trust Co. of NY
P.O. Box 2575
Jersey City, NJ 07303-2575

The First Chicago Trust address to which banks and brokers may
deliver certificates for transfer is 14 Wall Street in New York
City.

DIVIDEND REINVESTMENT
The Dividend Reinvestment and Stock Purchase Plan provides owners
of common stock a convenient way to purchase additional shares.
If interested, please call or write First Chicago Trust for a
prospectus and enrollment form.

INVESTOR RELATIONS
Security analysts and other members of the professional financial
community are invited to contact AT&T Corporate Investor
Relations with questions. Call 1 800 972-0784.

STOCK DATA
AT&T is listed on the New York Stock Exchange (ticker symbol
"T"). AT&T also is listed on the Boston, Midwest, Pacific and
Philadelphia stock exchanges in the U.S., and on stock
exchanges in Brussels, London, Paris, Geneva and Tokyo.

Shareowners of record (as of December 30, 1994): 2,302,327

1995 ANNUAL MEETING
The 110th Annual Shareowners Meeting will be held 9:30 a.m.,
Wednesday, April 19, 1995, at the Washington State Convention and
Trade Center in Seattle.

<PAGE> 53

INFORMATION VIA INTERNET
Internet World Wide Web users can access information on AT&T and
its products and services through the following Universal
Resource Locator address: http://www.att.com/.

Shareowners with an e-mail address can send account inquiries
electronically to our transfer agent, First Chicago Trust Co.
The Internet address is [email protected]. AT&T Mail Service
subscribers should address inquiries to !fctc.

</TABLE>

<PAGE>

Exhibit (21)
AT&T Form 10-K

List of Subsidiaries of AT&T Corp.

Jurisdiction of
Incorporation

AT&T Capital Corporation ......................................Delaware
AT&T Communications, Inc. .....................................Delaware
AT&T Communications of California, Inc. .......................California
AT&T Communications of Delaware, Inc. .........................Delaware
AT&T Communications of Hawaii, Inc. ...........................Hawaii
AT&T Communications of Illinois, Inc. .........................Illinois
AT&T Communications of Indiana, Inc. ..........................Indiana
AT&T Communications of Maryland, Inc. .........................Maryland
AT&T Communications of Michigan, Inc. .........................Michigan
AT&T Communications of the Midwest, Inc. ......................Iowa
AT&T Communications of the Mountain States, Inc. ..............Colorado
AT&T Communications of Nevada, Inc. ...........................Nevada
AT&T Communications of New England, Inc. ......................New York
AT&T Communications of New Hampshire, Inc. ....................New Hampshire
AT&T Communications of New Jersey, Inc. .......................New Jersey
AT&T Communications of New York, Inc. .........................New York
AT&T Communications of Ohio, Inc. .............................Ohio
AT&T Communications of the Pacific Northwest, Inc. ............Washington
AT&T Communications of Pennsylvania, Inc. .....................Pennsylvania
AT&T Communications of the South Central States, Inc. .........Delaware
AT&T Communications of the Southern States, Inc. ..............New York
AT&T Communications of the Southwest, Inc. ....................Delaware
AT&T Communications of Virginia, Inc. .........................Virginia
AT&T Communications of Washington, D.C. Inc. ..................New York
AT&T Communications of West Virginia, Inc. ....................West Virginia
AT&T Communications of Wisconsin, Inc. ........................Wisconsin
AT&T Credit Corporation .......................................Delaware
AT&T Global Information Solutions Company .....................Maryland
AT&T International, Inc. ......................................Delaware
AT&T Microelectronica de Espana S.A. ..........................Spain
AT&T Nassau Metals Corporation ................................New York
AT&T Network Systems International B.V. .......................Netherlands
AT&T Paradyne Corporation .....................................Delaware
AT&T of Puerto Rico, Inc. .....................................New York
AT&T Resource Management Corporation ..........................New York
AT&T Universal Card Services Corporation ......................Delaware
AT&T of the Virgin Islands, Inc. ..............................Delaware
Actuarial Sciences Associates, Inc. ...........................Delaware
American Transtech, Inc. ......................................Delaware
Istel Group, Ltd. .............................................United Kingdom
LIN Broadcasting Corporation ..................................Delaware
LIN Television Corporation ....................................Delaware
McCaw Cellular Communications, Inc. ...........................Delaware
Teradata Corporation ..........................................Delaware

<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 No.
33-56249), 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, 33-49465 and 33-20276, Form S-8 for the AT&T
Global Information Solutions Company Savings Plan (Registration No.
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 Savings Plan (Registration No. 33-50827),
Form S-8 for the AGCS Hourly Savings Plan (Registration No. 33-50829, Form S-8
for the 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), Form S-4 for the AT&T 5,000,000 Common Shares
(Registration No. 33-57745), and in 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, and the Post-Effective Amendment 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 Plan (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, and 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), of our reports, which include explanatory paragraphs regarding
the change in 1993 in methods of accounting for postretirement benefits,
postemployment benefits and income taxes, dated January 24, 1995, on our
audits of the consolidated financial statements and consolidated financial
statement schedules of the Company and its subsidiaries at December 31, 1994
and 1993, and for the years ended December 31, 1994, 1993 and 1992, which
reports are included or incorporated by reference in this Annual Report on
Form 10-K.

COOPERS & LYBRAND L.L.P.

1301 Avenue of the Americas
New York, New York
March 24, 1995

<PAGE>1
Exhibit (24)a
AT&T Form 10-K

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS:

WHEREAS, AT&T CORP., a New York corporation (hereinafter referred to as
the "Company"), proposes to file shortly with the Securities and Exchange
Commission, under the provisions of the Securities Exchange Act of 1934, as
amended, an annual report on Form 10-K; and

WHEREAS, the undersigned is both an officer and a director of the
Company:

NOW, THEREFORE, the undersigned hereby constitutes and appoints
R. W. MILLER, M. B. TART and S. L. PRENDERGAST, and each of them, as attorney
for him and in his name, place and stead, and in his capacity as both an
officer and a director of the Company, to execute and file such annual report,
and thereafter to execute and file any amendment or thereto, hereby giving and
granting to said attorneys full power and authority to do and perform each and
every act and thing whatsoever requisite and necessary to be done in and about
the premises, as fully, to all intents and purposes, as the undersigned might
or could do if personally present at the doing thereof, hereby ratifying and
confirming all that said attorneys may or shall lawfully do, or cause to be
done, by virtue hereof.

IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney
this 16th day of March, 1995.

Robert E. Allen
Chairman of the Board
and Director

<PAGE>
<PAGE>2
POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS:

WHEREAS, the undersigned is an officer of the Company:

NOW, THEREFORE, the undersigned hereby constitutes and appoints
M. B. TART and S. L. PRENDERGAST, and each of them, as attorneys for him and
in his name, place and stead, and in his capacity as an officer of the
Company, to execute and file such annual report, and thereafter to execute and
file any amendment or amendments thereto, hereby giving and granting to said
attorneys full power and authority to do and perform each and every act and
thing whatsoever requisite and necessary to be done in and about the premises,
as fully, to all intents and purposes, as the undersigned might or could do if
personally present at the doing thereof, hereby ratifying and confirming all
that said attorneys may or shall lawfully do, or cause to be done, by virtue
hereof.

IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney
this 9th day of March, 1995.

Richard W. Miller
Executive Vice President and
Chief Financial Officer
<PAGE>
<PAGE>3
POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS:

WHEREAS, AT&T CORP., a New York corporation (hereinafter referred to as the
"Company"), proposes to file shortly with the Securities and Exchange
Commission, under the provisions of the Securities Exchange Act of 1934, as
amended, an annual report on Form 10-K; and

WHEREAS, the undersigned is an officer of the Company:

NOW, THEREFORE, the undersigned hereby constitutes and appoints
R. W. MILLER and S. L. PRENDERGAST, and each of them, as attorneys for her and
in her name, place and stead, and in her capacity as an officer of the
Company, to execute and file such annual report, and thereafter to execute and
file any amendment or amendments thereto, hereby giving and granting to said
attorneys full power and authority to do and perform each and every act and
thing whatsoever requisite and necessary to be done in and about the premises,
as fully, to all intents and purposes, as the undersigned might or could do if
personally present at the doing thereof, hereby ratifying and confirming all
that said attorneys may or shall lawfully do, or cause to be done, by virtue
hereof.

IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney
this 16th day of March, 1995.

Maureen B. Tart
Vice President and Controller

<PAGE>
<PAGE>4
POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS:

WHEREAS, AT&T CORP., a New York corporation (hereinafter referred to as the
"Company"), proposes to file shortly with the Securities and Exchange
Commission, under the provisions of the Securities Exchange Act of 1934, as
amended, an annual report on Form 10-K; and

WHEREAS, the undersigned is a director of the Company:

NOW, THEREFORE, the undersigned hereby constitutes and appoints
R. W. MILLER, M. B. TART and S. L. PRENDERGAST, and each of them, as attorneys
for him or her and in his or her name, place and stead, and in his or her
capacity as a director of the Company, to execute and file such annual report,
and thereafter to execute and file any amendment or amendments thereto, hereby
giving and granting to said attorneys full power and authority to do and
perform each and every act and thing whatsoever requisite and necessary to be
done in and about the premises, as fully, to all intents and purposes, as the
undersigned might or could do if personally present at the doing thereof,
hereby ratifying and confirming all that said attorneys may or shall lawfully
do, or cause to be done, by virtue hereof.

IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney
this 16th day of March, 1995.

M. Kathryn Eickhoff
Director

<PAGE>
<PAGE>5
POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS:

WHEREAS, AT&T CORP., a New York corporation (hereinafter referred to as the
"Company"), proposes to file shortly with the Securities and Exchange
Commission, under the provisions of the Securities Exchange Act of 1934, as
amended, an annual report on Form 10-K; and

WHEREAS, the undersigned is a director of the Company:

IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney
this 9th day of March, 1995.

Walter Y.. Elisha
Director

<PAGE>
<PAGE>6
POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS:

WHEREAS, AT&T CORP., a New York corporation (hereinafter referred to as the
"Company"), proposes to file shortly with the Securities and Exchange
Commission, under the provisions of the Securities Exchange Act of 1934, as
amended, an annual report on Form 10-K; and

WHEREAS, the undersigned is a director of the Company:

IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney
this 16th day of March, 1995.

Philip M. Hawley
Director

<PAGE>
<PAGE>7
POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS:

WHEREAS, AT&T CORP., a New York corporation (hereinafter referred to as the
"Company"), proposes to file shortly with the Securities and Exchange
Commission, under the provisions of the Securities Exchange Act of 1934, as
amended, an annual report on Form 10-K; and

WHEREAS, the undersigned is a director of the Company:

IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney
this 16th day of March, 1995.

Carla A. Hills
Director

<PAGE>
<PAGE>8
POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS:

WHEREAS, AT&T CORP., a New York corporation (hereinafter referred to as the
"Company"), proposes to file shortly with the Securities and Exchange
Commission, under the provisions of the Securities Exchange Act of 1934, as
amended, an annual report on Form 10-K; and

WHEREAS, the undersigned is a director of the Company:

IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney
this 13th day of March, 1995.

Belton K. Johnson
Director

<PAGE>
<PAGE>9
POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS:

WHEREAS, AT&T CORP., a New York corporation (hereinafter referred to as the
"Company"), proposes to file shortly with the Securities and Exchange
Commission, under the provisions of the Securities Exchange Act of 1934, as
amended, an annual report on Form 10-K; and

WHEREAS, the undersigned is a director of the Company:

IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney
this 16th day of March, 1995.

Drew Lewis
Director

<PAGE>
<PAGE>10
POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS:

WHEREAS, AT&T CORP., a New York corporation (hereinafter referred to as the
"Company"), proposes to file shortly with the Securities and Exchange
Commission, under the provisions of the Securities Exchange Act of 1934, as
amended, an annual report on Form 10-K; and

WHEREAS, the undersigned is a director of the Company:

IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney
this 16th day of March, 1995.

Donald F. McHenry
Director

<PAGE>
<PAGE>11
POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS:

WHEREAS, AT&T CORP., a New York corporation (hereinafter referred to as the
"Company"), proposes to file shortly with the Securities and Exchange
Commission, under the provisions of the Securities Exchange Act of 1934, as
amended, an annual report on Form 10-K; and

WHEREAS, the undersigned is a director of the Company:

IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney
this 10th day of March, 1995.

Victor A. Pelson
Director

<PAGE>
<PAGE>12
POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS:

WHEREAS, AT&T CORP., a New York corporation (hereinafter referred to as the
"Company"), proposes to file shortly with the Securities and Exchange
Commission, under the provisions of the Securities Exchange Act of 1934, as
amended, an annual report on Form 10-K; and

WHEREAS, the undersigned is a director of the Company:

IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney
this 10th day of March, 1995.

Donald S. Perkins
Director

<PAGE>
<PAGE>13
POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS:

WHEREAS, AT&T CORP., a New York corporation (hereinafter referred to as the
"Company"), proposes to file shortly with the Securities and Exchange
Commission, under the provisions of the Securities Exchange Act of 1934, as
amended, an annual report on Form 10-K; and

WHEREAS, the undersigned is a director of the Company:

IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney
this 16th day of March, 1995.

Henry B. Schacht
Director

<PAGE>
<PAGE>14
POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS:

WHEREAS, AT&T CORP., a New York corporation (hereinafter referred to as the
"Company"), proposes to file shortly with the Securities and Exchange
Commission, under the provisions of the Securities Exchange Act of 1934, as
amended, an annual report on Form 10-K; and

WHEREAS, the undersigned is a director of the Company:

IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney
this 8th day of March, 1995.

Franklin A. Thomas
Director

<PAGE>
<PAGE>15
POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS:

WHEREAS, AT&T CORP., a New York corporation (hereinafter referred to as the
"Company"), proposes to file shortly with the Securities and Exchange
Commission, under the provisions of the Securities Exchange Act of 1934, as
amended, an annual report on Form 10-K; and

WHEREAS, the undersigned is a director of the Company:

IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney
this 16th day of March, 1995.

Joseph D. Williams
Director

<PAGE>
<PAGE>16
POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS:

WHEREAS, AT&T CORP., a New York corporation (hereinafter referred to as the
"Company"), proposes to file shortly with the Securities and Exchange
Commission, under the provisions of the Securities Exchange Act of 1934, as
amended, an annual report on Form 10-K; and

WHEREAS, the undersigned is a director of the Company:

IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney
this 16th day of March, 1995.

Thomas H. Wyman
Director

<PAGE>
<PAGE>17
POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS:

WHEREAS, AT&T CORP., a New York corporation (hereinafter referred to as the
"Company"), proposes to file shortly with the Securities and Exchange
Commission, under the provisions of the Securities Exchange Act of 1934, as
amended, an annual report on Form 10-K; and

WHEREAS, the undersigned is a director of the Company:

IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney
this the 17th day of March, 1995.

Director
Michael I. Sovern

<PAGE>

<PAGE>1 Exhibit (24)b
AT&T Form 10-K

I certify that the following is a true and correct copy of a
resolution adopted by the Board of Directors of AT&T Corp. at a meeting
held on March 15, 1995.

RESOLVED: that the form of the Company's Annual Report on Form
10-K for the year ended December 31, 1994, submitted to the meeting, is
approved, and each of the officers and directors of the Company signing the
Form 10-K is authorized to execute such report, personally or by
attorney-in-fact, in the name of and on behalf of the Company, and to file
such report with the Securities and Exchange Commission, with such changes
therein as the officers and directors signing such report shall approve,
such approval to be conclusively evidenced by the signing thereof, and to
cause to be filed any amendments or supplements to the foregoing, and to do
all other acts and things, and to execute, personally or by
attorney-in-fact, any and all other documents necessary or advisable in
connection therewith.

ORIGINAL SIGNED BY
MARILYN J. WASSER

Secretary

<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the audited
balance sheet of AT&T at December 31, 1994, audited consolidated statement of
income for the year ended December 31, 1994 and the statement of cash flows at
December 31, 1994 and is qualified in its entirety by reference to such
financial statements.
</LEGEND>
<MULTIPLIER> 1,000,000

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-START> JAN-01-1994
<PERIOD-END> DEC-31-1994
<CASH> 1,208
<SECURITIES> 294
<RECEIVABLES> 29,874
<ALLOWANCES> 1,251
<INVENTORY> 3,633
<CURRENT-ASSETS> 37,611
<PP&E> 45,982
<DEPRECIATION> 23,947
<TOTAL-ASSETS> 79,262
<CURRENT-LIABILITIES> 30,930
<BONDS> 11,358
<COMMON> 1,569
0
0
<OTHER-SE> 16,352
<TOTAL-LIABILITY-AND-EQUITY> 79,262
<SALES> 21,161
<TOTAL-REVENUES> 75,094
<CGS> 13,273
<TOTAL-COSTS> 44,317
<OTHER-EXPENSES> 22,747
<LOSS-PROVISION> 1,929
<INTEREST-EXPENSE> 748
<INCOME-PRETAX> 7,518
<INCOME-TAX> 2,808
<INCOME-CONTINUING> 4,710
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 4,710
<EPS-PRIMARY> $3.01
<EPS-DILUTED> 0

</TABLE>