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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: October 20, 1997
AT&T Corp.
A New York Commission File I.R.S. Employer
Corporation No. 1-1105 No. 13-4924710
32 Avenue of the Americas, New York, New York 10013-2412
Telephone Number (212) 387-5400
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Form 8-K AT&T Corp.
Item 5. Acquisition or Disposition of Assets
On October 20, 1997, AT&T Corp. ("AT&T" or the "Company") announced its plans to
sell AT&T Universal Card Services ("UCS"). Although a sale agreement has not
been reached, a sale is targeted to be completed by mid-1998. UCS represents
substantially all of AT&T's financial services segment.
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 decision to dispose of UCS. Accordingly, the
revenues, costs and expenses, and assets and liabilities of UCS have been
excluded from the respective captions in the Consolidated Statements of Income
and Consolidated Balance Sheet. The net operating results of this entity has
been reported, net of applicable income taxes, as "Income from discontinued
operations" and the net assets of this entity have been reported as "Net assets
of discontinued operations". Intercompany transactions associated with AT&T
entering into financing arrangements on behalf UCS to fund its operations, which
were previously eliminated in consolidation, are now reflected in the financial
statements. In addition, certain reclassifications have been made to the
consolidated results for continuing operations to conform to the current
presentation.
The Company's Consolidated Statements of Income for the year ended December
31, 1996 and the six months ended June 30, 1997 and Consolidated Balance Sheet
at June 30, 1997 presented in accordance with APB 30 follow.
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Form 8-K AT&T Corp.
FINANCIAL INFORMATION
CONSOLIDATED STATEMENTS OF INCOME
(Dollars in Millions Except Per Share Amounts)
(Unaudited)
For the Six For the
Months Ended Year Ended
June 30, December 31,
1997 1996
Revenues................................... $25,487 $50,546
Operating Expenses
Access and other interconnection........... 8,489 16,332
Network and other communications services.. 4,623 7,918
Depreciation and amortization.............. 1,841 2,740
Selling, general and administrative........ 7,384 14,793
Total Operating Expenses................. 22,337 41,783
Operating income........................... 3,150 8,763
Other income - net......................... 224 390
Interest expense........................... 108 343
Income from continuing operations before
income taxes............................. 3,266 8,810
Provision for income taxes................. 1,250 3,237
Income from continuing operations.......... 2,016 5,573
Discontinued operations:
Income from discontinued operations
(net of taxes of $43
and ($353), respectively)............... 69 173
Gain on sale of discontinued operation
(net of taxes of $138) .................. - 162
Net income................................. 2,085 5,908
Weighted average common shares and
common share equivalents (millions)....... 1,628 1,616
Per common share:
Income from continuing operations.......... $ 1.24 $ 3.45
Income from discontinued operations........ 0.04 .11
Gain on sale of discontinued operation..... - .10
Net income................................. $ 1.28 $ 3.66
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Form 8-K AT&T Corp.
CONSOLIDATED BALANCE SHEET
(Dollars in Millions Except Per Share Amount)
(Unaudited)
June 30,
1997
ASSETS
Cash and cash equivalents .............. $ 22
Receivables less allowances of $987.....
Accounts receivable.................... 8,617
Other receivables.................. 4,720
Deferred income taxes................... 1,311
Other current assets.................... 487
Total current assets.................... 15,157
Property, plant and equipment, net of
accumulated depreciation of $20,755... 19,928
Licensing costs, net of accumulated
amortization of $989.................. 8,397
Investments............................. 4,015
Long-term receivables................... 1,352
Prepaid pension costs................... 2,066
Other assets............................ 2,572
Net assets of discontinued operations... 1,567
TOTAL ASSETS............................ $55,054
(CONT'D)
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Form 8-K AT&T Corp.
CONSOLIDATED BALANCE SHEETS (CONT'D)
(Dollars in Millions Except Per Share Amount)
(Unaudited)
June 30,
1997
LIABILITIES
Accounts payable....................... $ 5,666
Payroll and benefit-related
liabilities.......................... 2,026
Debt maturing within one year.......... 3,231
Dividends payable...................... 538
Other current liabilities.............. 3,694
Total current liabilities.............. 15,155
Long-term debt......................... 7,216
Long-term benefit-related liabilities.. 3,074
Deferred income taxes.................. 5,074
Other long-term liabilities and
deferred credits..................... 3,227
Total liabilities ..................... 33,746
SHAREOWNERS' EQUITY
Common stock - par value $1 per share.. 1,625
Authorized shares: 2,000,000,000
Outstanding shares:
1,625,285,000 at June 30, 1997
Additional paid-in capital............. 15,715
Guaranteed ESOP obligation............. (84)
Foreign currency translation
adjustments.......................... 22
Retained earnings...................... 4,030
Total shareowners' equity.............. 21,308
TOTAL LIABILITIES & SHAREOWNERS' EQUITY $55,054
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Form 8-K AT&T Corp.
NOTE TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in Millions)
(Unaudited)
(a) Discontinued Operation
Summarized financial information for the UCS discontinued operation is as
follows:
For the Six For the
Months Ended Year Ended
June 30, December 31,
1997 1996
Revenues $ 734 $ 1,638
Income before income taxes 105 56
Net income 65 $ 35
At June
30, 1997
Current Assets $ 5,996
Total Assets 6,074
Current Liabilities* 4,442
Total Liabilities* 5,098
Net assets of discontinued
operation $ 976
*Current liabilities include $4,298 million of debt maturing within one
year and total liabilities include an additional $652 million of
long-term debt both of which are payable to AT&T.
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Form 8-K AT&T Corp.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
AT&T Corp.
/s/ M. B. Tart
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By: M. B. Tart
Vice President and Controller
Principal Accounting Officer)
November 3, 1997
