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 9, 1999
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 10013-3412
Telephone Number (212) 387-5400
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Form 8-K AT&T Corp.
March 9, 1999
Item 5. Other Events.
(a) Acquisition of Tele-Communications, Inc.
On March 9, 1999 AT&T Corp. (AT&T) completed the acquisition of
Tele-Communications, Inc. (TCI) through a merger. In the merger, AT&T issued
(1) 0.7757 AT&T common shares for each share of TCI Group Series A tracking
stock, (2) 0.8533 AT&T common shares for each share of TCI Group Series B
tracking stock, (3) one share of newly created Liberty Media Group Class A or
Class B tracking stock for each outstanding TCI Liberty Media Group Class A or
Class B tracking stock, (4) 0.52 share of newly created Liberty Media Group
Class A or Class B tracking stock for each outstanding TCI Ventures Group Class
A or Class B tracking stock, and (5) a cash payment in lieu of any fractional
AT&T common share or newly created Liberty Media Group tracking share. In the
merger, AT&T also exchanged AT&T common shares or newly created Liberty Media
Group tracking shares for shares of TCI convertible preferred stock. In total,
AT&T issued approximately 439 million common shares (excluding Liberty Media
Group tracking shares).
(b) Selected Pro Forma Condensed Financial Information
The unaudited pro forma condensed financial information set forth below for AT&T
gives effect to the TCI merger, certain merger-related asset transfers and the
charter amendments relating to the combination of Liberty Media Group and TCI
Ventures Group (New Liberty Media Group), as if they had been completed on
January 1, 1998 for income statement purposes, and on December 31, 1998 for
balance sheet purposes.
Because AT&T will not obtain a "controlling financial interest" in the New
Liberty Media Group, the New Liberty Media Group has been reflected as an equity
method investment in the pro forma financial statements. In addition, as a
tracking stock all of its earnings or losses are excluded from the earnings
available to the holders of AT&T common stock.
This unaudited selected pro forma information reflects certain assumptions
including the following,
a)$9.5 billion of additional borrowings and related interest expense to
fund the merger-related asset transfers and share repurchase program at a mix of
20% short-term and 80% long term.
b)Preliminary allocation of the purchase price to TCI assets and
liabilities. This allocation is subject to the completion of a study undertaken
by AT&T as discussed below.
This unaudited selected pro forma condensed financial information should be read
in conjunction with the separate historical financial statements and
accompanying notes of AT&T. Such financial statements are included in a current
report on a separate Form 8-K filed on March 9, 1999. You should not rely on the
unaudited selected pro forma financial information as an indication of the
results of operations or financial position that would have been achieved if the
merger, certain merger-related asset transfers and the charter amendments
relating to the combination of Liberty Media Group and TCI Ventures Group had
taken place earlier or of the results of operations or financial position of
AT&T after the completion of such transactions.
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Form 8-K AT&T Corp.
March 9, 1999
(b) Selected Pro Forma Condensed Financial Information (cont'd)
The pro forma financial information was prepared using the purchase method of
accounting with AT&T treated as the acquiror. For purposes of preparing the AT&T
consolidated financial statements, AT&T will establish a basis for TCI's assets
and liabilities based upon the fair values thereof and the AT&T purchase price,
including the costs of the Merger. A final determination of required purchase
accounting adjustments, including the allocation of the purchase price to the
assets acquired and liabilities assumed based on their respective fair values,
has not yet been made. Accordingly, the purchase accounting adjustments made in
connection with the development of the pro forma combined financial information
are preliminary and have been made solely for purposes of developing such pro
forma combined financial information. AT&T has undertaken a study to determine
the fair value of certain of TCI's assets and liabilities (as so adjusted) and
will make appropriate purchase accounting adjustments upon completion of that
study.
At or for the
Dollars in millions except, per share amounts (Unaudited) Year Ended
December 31,
Income Statement Data: 1998
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Revenues $ 59,427
Income from continuing operations (1) 3,994
Net income (1) 5,157
Income from continuing operations
available to the AT&T common shareowner (2) 3,769
Net income available to the AT&T common shareowner(2) 4,932
Weighted-average AT&T common shares (millions) 2,093
Weighted-average AT&T common shares and
potential common shares (millions) 2,174
Basic earnings per AT&T common share:
Income from continuing operations 1.80
Net income 2.36
Diluted earnings per AT&T common share:
Income from continuing operations 1.74
Net income 2.28
Balance Sheet Data:
Cash and cash equivalents 3,506
Total assets (3) 137,972
Short-term debt 4,010
Long-term debt, including capital leases 24,901
Shareowners' equity- AT&T 44,297
Shareowners' equity- New Liberty Media Group 23,351
(1) Income from continuing operations and net income exclude the dividend
requirements on preferred stock.
(2) Income available to the AT&T common shareowner excludes the results of
the New Liberty Media Group.
(3) Includes goodwill associated with the TCI merger.
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Form 8-K AT&T Corp.
March 9, 1999
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/ N. S. Cyprus
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By: N. S. Cyprus
Vice President and Controller
March 9, 1999
