<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Form 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report: March 21, 1996
AT&T Corp.
A New York Commission File I.R.S. Employer
Corporation No. 1-1105 No. 13-4924710
32 Avenue of the Americas, New York, New York 10013-2412
Telephone Number (212) 387-5400
<PAGE>
<PAGE> 2 AT&T Corp. Form 8-K
Item 5. Other Events
On September 20, 1995 AT&T Corp. ("AT&T" or the "Company") announced a
plan, subject to certain conditions, to separate into three independent,
publicly held, global companies: communications services (which will retain
the AT&T name), communications systems and technologies (which has been named
Lucent Technologies Inc. "Lucent") and transaction-intensive computing
(formerly AT&T Global Information Solutions Company, now NCR Corporation
"NCR"). Also announced as part of the plan was the Company's intent to pursue
the sale of its remaining 86% interest in AT&T Capital Corporation ("AT&T
Capital").
On March 21, 1996, the Company received a favorable Private Letter Ruling
from the Internal Revenue Service approving the tax-free status of the planned
Lucent stock distribution to AT&T shareholders.
Pursuant to Accounting Principles Board Opinion No. 30 "Reporting the
Results of Operations - Reporting the Effects of Disposal of a Segment of a
Business, and Extraordinary, Unusual and Infrequently Occurring Events and
Transactions" ("APB 30"), the Consolidated Financial Statements of AT&T have
been restated to reflect the probable dispositions of Lucent, NCR and AT&T
Capital. Accordingly, the revenues, costs and expenses, and assets and
liabilities of Lucent, NCR and AT&T Capital have been excluded from the
respective captions in the Consolidated Statements of Income and Consolidated
Balance Sheet. The net operating results of these entities have been
reported, net of applicable income taxes, as "Income (loss) from discontinued
operations" and the net assets of these entities have been reported as "Net
assets of discontinued operations". In addition, the consolidated results for
continuing operations have been reclassified to reflect the results of the new
business and to improve comparability with the communications services
industry.
The Company's Consolidated Statements of Income for the three years ended
December 31, 1995 and Consolidated Balance Sheet at December 31, 1995
presented in accordance with APB 30 follow.
<PAGE>
<PAGE> 3 AT&T Corp. Form 8-K
FINANCIAL INFORMATION
CONSOLIDATED STATEMENTS OF INCOME
(Dollars in Millions Except Per Share Amounts)
(Unaudited)
For Years Ended December 31,
1995(a) 1994 1993
Sales and Revenues
Communications services.................... $49,113 $46,477 $44,227
Financial services......................... 2,261 1,838 1,329
Total revenues............................. 51,374 48,315 45,556
Operating Expenses
Access and other interconnection........... 17,618 17,797 17,772
Network and other communications services.. 8,420 7,113 7,023
Depreciation and amortization.............. 3,547 2,424 2,171
Selling, general and administrative........ 14,437 11,728 10,718
Total communications services............. 44,022 39,062 37,684
Financial services......................... 1,974 1,622 1,158
Total Operating Expenses................... 45,996 40,684 38,842
Operating income........................... 5,378 7,631 6,714
Other income - net......................... 268 93 321
Loss on sale of stock by subsidiary........ - - 9
Interest expense........................... 478 435 628
Income from continuing operations before
income taxes and cumulative effects of
accounting changes....................... 5,168 7,289 6,398
Provision for income taxes................. 2,016 2,866 2,492
Income from continuing operations before
cumulative effects of accounting changes. 3,152 4,423 3,906
Discontinued operations:
Income (loss) from discontinued operations
(net of tax benefits of $1,220 in 1995, $58
in 1994 and $191 in 1993)................ (3,013) 287 (204)
Income before cumulative effects of
accounting changes........................ 139 4,710 3,702
Cumulative effects of accounting changes... - - (9,608)
Net income (loss).......................... $ 139 $ 4,710 $(5,906)
Weighted average common shares
outstanding (millions)................... 1,592 1,564 1,547
Per common share:
Income from continuing operations before
cumulative effect of accounting changes.. $ 1.98 $ 2.83 $ 2.52
Income from discontinued operations........ (1.89) 0.18 (0.13)
Cumulative effects of accounting changes... - - (6.21)
Net income (loss).......................... $ 0.09 $ 3.01 $ (3.82)
<PAGE> 4 AT&T Corp. Form 8-K
CONSOLIDATED BALANCE SHEET
(Dollars in Millions Except Per Share Amount)
(Unaudited)
December 31,
1995
ASSETS
Cash and cash equivalents .............. $ 129
Receivables less allowances of $1,267
Accounts receivable................... 8,457
Finance receivables................... 10,665
Deferred income taxes................... 2,437
Other current assets.................... 753
Total current assets.................... 22,441
Property, plant and equipment, net of
accumulated depreciation of $17,729... 16,375
Licensing costs, net of accumulated
amortization of $743.................. 8,056
Investments............................. 3,646
Long-term finance receivables........... 768
Prepaid pension costs................... 1,793
Other assets............................ 2,524
Net assets of discontinued operations... 7,047
TOTAL ASSETS............................ $62,650
(CONT'D)
<PAGE>
<PAGE> 5 AT&T Corp. Form 8-K
CONSOLIDATED BALANCE SHEETS (CONT'D)
(Dollars in Millions Except Per Share Amount)
(Unaudited)
December 31,
1995
LIABILITIES
Accounts payable....................... $ 5,174
Payroll and benefit-related
liabilities.......................... 2,914
Debt maturing within one year.......... 12,176
Dividends payable...................... 527
Other current liabilities.............. 3,923
Total current liabilities.............. 24,714
Long-term debt......................... 8,545
Long-term benefit-related liabilities.. 2,871
Deferred income taxes.................. 5,458
Other long-term liabilities and
deferred credits..................... 3,788
Total liabilities ..................... 45,376
SHAREOWNERS' EQUITY
Common stock - par value $1 per share.. 1,596
Authorized shares: 2,000,000,000
Outstanding shares:
1,596,005,351 at December 31, 1995
Additional paid-in capital............. 16,614
Guaranteed ESOP obligation............. (254)
Foreign currency translation
adjustments.......................... 5
Retained earnings...................... (687)
Total shareowners' equity.............. 17,274
TOTAL LIABILITIES/SHAREOWNERS' EQUITY.. $62,650
<PAGE> 6 AT&T Corp. Form 8-K
Notes to Consolidated Financial Statements
(a) In the fourth quarter of 1995, AT&T recorded a pre-tax charge to income
from continuing operations of $3,140 million to cover restructuring costs of
$2,418 million and asset impairments and other charges of $722 million.
AT&T's restructuring plans include consolidating and reengineering numerous
corporate and business unit operations during the next two years including
force reductions of 17,000 positions as well as the write-down in value of
some unnecessary network facilities, of nonstrategic wireless assets and some
investments. Of the total charge, approximately $1.8 billion is future cash
flow impacting and approximately $1.3 billion is related to noncash items.
This charge reduced 1995 income from continuing operations by $2,104 million
or $1.32 per share.
The charge was recorded as $909 million of network and other communications
services, $934 million of depreciation and amortization, $1,291 million of
selling, general and administrative expenses, and $6 million of financial
services. If viewed by type of cost, the charge includes separation and other
related costs of $956 million; facility closings of $497 million; asset
write-downs of $1,342 million and other items of $345 million.
In addition, charges of $1,172 million (net of tax) in the third quarter and
$2,077 million (net of tax) in the fourth quarter are reflected in income
(loss) from discontinued operations. The third quarter charge related to
NCR's operations, while the majority of the fourth quarter charge related to
Lucent's operations. These charges reduced income (loss) from discontinued
operations by a total of $3,249 million or $2.04 per share.
<PAGE>
<PAGE> 7 AT&T Corp. Form 8-K
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
AT&T Corp.
By: M.B. Tart
Vice President and Controller
(Principal Accounting Officer)
April 5, 1996
<PAGE>
<PAGE> 8 AT&T Corp. Form 8-K
EXHIBIT INDEX
Exhibit
Number
- ------
27 Financial Data Schedule
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the audited
balance sheet of AT&T at December 31, 1994 and the audited consolidated
statement of income for the twelve-month period ended December 31, 1994 and is
qualified in its entirety by reference to such financial statements.
</LEGEND>
<RESTATED>
<MULTIPLIER> 1,000,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> DEC-31-1994
<CASH> N/A
<SECURITIES> N/A
<RECEIVABLES> N/A
<ALLOWANCES> N/A
<INVENTORY> N/A
<CURRENT-ASSETS> N/A
<PP&E> N/A
<DEPRECIATION> N/A
<TOTAL-ASSETS> N/A
<CURRENT-LIABILITIES> N/A
<BONDS> N/A
N/A
N/A
<COMMON> N/A
<OTHER-SE> N/A
<TOTAL-LIABILITY-AND-EQUITY> N/A
<SALES> 0
<TOTAL-REVENUES> 48,315
<CGS> 0
<TOTAL-COSTS> 40,684
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 1,712
<INTEREST-EXPENSE> 435
<INCOME-PRETAX> 7,289
<INCOME-TAX> 2,866
<INCOME-CONTINUING> 4,423
<DISCONTINUED> 287
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 4,710
<EPS-PRIMARY> $3.01
<EPS-DILUTED> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the audited
balance sheet of AT&T at December 31, 1995 and the audited consolidated
statement of income for the twelve-month period ended December 31, 1995 and is
qualified in its entirety by reference to such financial statements.
</LEGEND>
<RESTATED>
<MULTIPLIER> 1,000,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<CASH> 129
<SECURITIES> 0
<RECEIVABLES> 8,457
<ALLOWANCES> 1,267
<INVENTORY> 0
<CURRENT-ASSETS> 22,441
<PP&E> 34,104
<DEPRECIATION> 17,729
<TOTAL-ASSETS> 62,650
<CURRENT-LIABILITIES> 24,714
<BONDS> 8,545
0
0
<COMMON> 1,596
<OTHER-SE> 15,678
<TOTAL-LIABILITY-AND-EQUITY> 62,650
<SALES> 0
<TOTAL-REVENUES> 51,374
<CGS> 0
<TOTAL-COSTS> 45,996
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 2,172
<INTEREST-EXPENSE> 478
<INCOME-PRETAX> 5,168
<INCOME-TAX> 2,016
<INCOME-CONTINUING> 3,152
<DISCONTINUED> (3,013)
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 139
<EPS-PRIMARY> $0.09
<EPS-DILUTED> 0
</TABLE>
