SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 or 15(d) of the
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported):
December 6, 1999
AT&T CORP.
----------
(Exact name of registrant as specified in charter)
New York
--------
(State or other jurisdiction of incorporation)
1-1105 13-4924710
(Commission File No.) (IRS employer identification no.)
32 Avenue of the Americas, New York, New York 10013-3412
--------------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:
(212) 387-5400
<PAGE>
Form 8-K
AT&T Corp.
December 6, 1999
ITEM 5. OTHER EVENTS
On December 6, 1999, AT&T Corp. (the "Company") issued two
press releases that included information presented by the Company at
a meeting with analysts held on December 6, 1999. The press releases
are attached as Exhibits 99.1 and 99.2 and are incorporated herein
by reference.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(c) Exhibits.
99.1 Press release, dated December 6, 1999
99.2 Press release, dated December 6, 1999
<PAGE>
Form 8-K
AT&T Corp.
December 6, 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.
By: /s/ Marilyn J. Wasser
---------------------------------
Name: Marilyn J. Wasser
Title: Vice President - Law and Secretary
Date: December 6, 1999
<PAGE>
EXHIBIT INDEX
Exhibit
No. Description
------- -----------
99.1 Press release, dated December 6, 1999
99.2 Press release, dated December 6, 1999
Exhibit 99.1
FOR RELEASE MONDAY, DECEMBER 6, 1999
AT&T OUTLINES PLANS FOR GROWTH
COMPANY PROVIDES FINANCIAL GUIDANCE FOR 2000 AND CONFIRMS PLANS FOR WIRELESS
TRACKING STOCK
NEW YORK -- AT&T Chairman C. Michael Armstrong today announced plans for the
creation of a wireless tracking stock, outlined a series of steps to accelerate
growth and provided financial guidance for 2000.
At a meeting with securities analysts, Armstrong announced executive
appointments to enhance AT&T's top management team; a major expansion of its
fiber optic network for high-speed bandwidth and Internet-based services, and
plans to increase revenue in the company's key high-growth businesses - Internet
protocol (IP), data, networking management and outsourcing, broadband cable,
wireless and all-distance communications services.
"We've got a full-court press underway to accelerate revenue growth and
fast-forward AT&T's transformation into a leading global communications and
information company," Armstrong said.
AT&T projected total pro forma revenue growth in 2000 to range between 8 - 9
percent, a 30 - 60 percent increase from the revenue growth rate expected for
1999, excluding the impact of Concert, the global joint venture with BT.
Operational earnings per share (EPS) for 2000 is projected to range between
$2.10 - $2.15. Cash EPS (which adds back the impact of amortization of purchased
intangibles) in 2000 is expected to range between $2.50 - $2.60. Operational
earnings before interest, taxes, depreciation and amortization (EBITDA) are
projected to range between $24 billion - $26 billion in 2000.
"No other company outside of financial services currently matches that level of
performance," Armstrong noted.
Capital expenditures are expected to total between $13 billion - $14 billion
next year. And the company also reaffirmed its commitment to cut $2 billion in
costs in 2000.
Separately, AT&T announced the appointment of Daniel E. Somers, 51, as president
and chief executive officer of AT&T Broadband and Internet Services. Somers, who
was also AT&T's chief financial officer, has temporarily led the broadband and
Internet services unit since October.
<PAGE>
AT&T Wireless Tracking Stock Planned
- ------------------------------------
AT&T today announced plans to create a new wireless company, AT&T Wireless
Group, and a new class of AT&T common stock that will track the performance of
the new enterprise. The new tracking stock will reflect the performance of
AT&T's voice and data mobility businesses, as well as its fixed-wireless
business, and its ownership interests in international wireless operators. AT&T
is the largest wireless service provider in North America, delivering wireless
service to nearly 12 million people. Following three consecutive quarters of
comparable growth of 40 percent or more, the unit expects to report revenues of
more than $7.6 billion this year. EBITDA, excluding other income, grew 53
percent in the third quarter of 1999 versus the year-ago quarter, due to revenue
growth and an improving cost structure.
"By highlighting the exceptional performance of AT&T's fast-growing wireless
operations, we are confident that investors will see the value of this
business," said Armstrong. "That unlocked value, which will be reflected in the
tracking stock, will provide us with the currency to take advantage of the
outstanding growth opportunities available in the wireless industry, including
fixed wireless, wireless data and international expansion."
John D. Zeglis, 52, currently president of AT&T, will be chairman and CEO of the
AT&T Wireless Group and remain on the AT&T Board of Directors. Daniel R. Hesse,
46, will remain president and CEO of AT&T Wireless Services, the mobility unit,
and will become executive vice president of the AT&T Wireless Group. Michael G.
Keith, 51, currently president of AT&T Business Services, also will join the
AT&T Wireless Group as executive vice president responsible for developing and
launching the company's nationwide fixed-wireless local exchange business in
areas where AT&T-branded cable communications are not available.
"The AT&T Wireless Group launches with the strongest leadership team in the
industry," said Armstrong. "John Zeglis has been my partner for the last two
years. In that time, he successfully led our international expansion and grew
the profitability of our consumer businesses. He knows how to create shareowner
value.
"Dan Hesse led the transformation of the wireless industry with the introduction
of Digital One Rate, fueling AT&T's wireless growth and market share gains. And
Michael Keith has demonstrated that he knows how to develop new products and
markets. Under his leadership, AT&T's growth in frame relay, IP and other packet
data services outstripped the industry, making Business Services our biggest
revenue engine."
AT&T intends to conduct an initial public offering of AT&T Wireless Group
tracking shares in the spring. AT&T anticipates that a full distribution of the
remaining shares in the AT&T Wireless Group tracking stock would be made to
shareowners of AT&T common stock. AT&T expects to file a registration statement
with the SEC in January. The company then plans to send a proxy to all AT&T
shareowners calling for a shareholder vote to approve the creation of the
Wireless Group stock, which is expected in the spring of 2000.
AT&T Wireless is expected to continue to grow at a level outpacing the industry
on a number of fronts. Revenue growth is expected to range between 25 - 30
percent in 2000. EBITDA growth,
<PAGE>
excluding other income, is projected to range between 35 - 40 percent compare to
an industry average of 29 percent in 2000. And subscriber growth is expected to
grow between 21 - 24 percent, compared to an industry growth rate projected at
21 percent.
Business Services Refocuses Efforts
- -----------------------------------
AT&T is realigning the units that market services to business customers -
especially large corporations - to exploit opportunities in its fast-growing
Internet, data and managed-services segments.
"We have made significant investments in our data, Internet and AT&T Solutions
businesses over the past year," Armstrong said. "Today's moves will assure that
we're translating those investments into customer value with increased speed,
clarity and innovation."
AT&T named Richard R. Roscitt, 48, currently president and CEO of AT&T
Solutions, president of a redefined AT&T Business Services. He will lead all of
the company's units focused on the business market, including AT&T Solutions.
Kathleen Earley, 47, a former IBM Corp. executive with deep industry knowledge,
is being named president of AT&T Data and Internet Services, a newly formed unit
within business services. The new unit will be responsible for managing all IP,
data and managed-network services offerings to business customers. Earley, who
will report to Roscitt, will bring together the best of AT&T's existing IP, data
and managed- services offers with resources gained through the acquisition of
the former IBM Global Network business, now called AT&T Global Network Services.
Gary R. Weis, 52, the veteran IBM Corp. executive who leads AT&T Global Network
Services, has assumed the added responsibility for the design, development and
delivery of data and IP network capabilities based on the network architecture
defined by AT&T Labs and the customer needs identified by AT&T's data and
Internet services organization. He will continue to operate the global network
services unit, including its international regional operations. Additionally, to
capitalize on increasing demand from more than 600 leading accounts for
customized networks and industry-specific networking offers, Armstrong announced
that the company's Global Sales organization, which delivers complex networks to
large, multinational corporations, will be directly aligned with AT&T Solutions,
which provides network consulting, integration and outsourcing.
By increasing revenues from high-growth services such as data/IP, AT&T Solutions
and local, Business Services is expected to grow revenue between 9 - 11 percent
in 2000. The percentage of Business Services revenue that comes from voice long
distance is expected to decrease to 53 percent of the unit's total revenue in
2000, down from 59 percent projected for 1999. Revenue growth for packet-based
services (IP, frame-relay, ATM) is expected to grow more than 60 percent in
2000.
<PAGE>
AT&T Solutions expects to exceed its 40-percent growth rate this year and is
expected to grow another 38 - 40 percent next year. Revenue is projected to
reach $4 billion in 2002.
Broadband and Internet Services Accelerating New Services
- ---------------------------------------------------------
AT&T said its Broadband and Internet Services unit is meeting or exceeding
targets for upgrading facilities, consolidating systems and accelerating the
rollout of a new generation of communications, information and entertainment
services.
AT&T said it will have about 51 percent of its cable facilities upgraded to
two-way capability by the end of this year and will have 85 percent completed by
year-end 2000. Broadband telephony trials are underway in eight markets -- 13
cities -- and the company expects to have between 400,000 and 500,000 customers
in 2000. High-speed Internet service through AT&T@Home is also in strong demand.
AT&T currently has 164,000 AT&T@Home customers, will have about 277,000
customers by the end of the first quarter of 2000 and expects to have more than
700,000 customers by the end of next year. Every day, AT&T adds more than 3,000
new digital cable customers. Next year, the company said it will have between
2.5 - 3.0 million digital cable customers, about 25 percent of its subscriber
base.
The company expects the Broadband and Internet services unit to increase
revenues between 12 - 14 percent next year and is aggressively building five
high-growth businesses -- telephony, high-speed Internet access, video,
interactive video services and broadband for business. Revenue growth for cable
operations is expected to increase in the high-single digits in 2000. And
operating cash flow is expected to grow in the mid- to high-single digits next
year.
Consumer Services
- -----------------
The company announced that Gene Lockhart, 50, currently president of AT&T
Consumer Services, will now assume responsibility for the entire consumer
services franchise and will report to Armstrong. AT&T said Consumer Services
will focus its efforts to continue to generate industry-leading returns by
attracting and retaining high- value customers with compelling and innovative
bundled offers, and move aggressively to enter local markets.
Last week AT&T unveiled an "all-distance" One Rate offer in New York that
combines both local and long distance service. A trial of the service is also
underway in Texas. The company expects to be an all-distance market share leader
in New York by the end of next year with more than 700,000 - 800,000 customers,
or a local market share of 12 percent.
AT&T said its One Rate(R) 7 Cents plan received strong market reception with
about 4 million customers enrolling since its introduction in August, easily
exceeding early sales targets. AT&T said more than 30 percent of customers
signing up for the offer were new to the company. Given the initial success,
AT&T extended its seven-cent-per-minute offer for calls to Canada, its most
popular international calling destination. The company's international plan,
AT&T One Rate(R) International Value Plan, includes low flat rates to hundreds
of other countries.
<PAGE>
The company noted that Consumer Services has had six consecutive quarters of
year-over-year EBIT growth in excess of 20 percent. Consumer Services' EBIT
margin, or return on sales, was about 35 percent at the end of the third quarter
of 1999, an increase from the 22 percent reported for 1996. The unit's revenue
is expected to decline between 3 - 5 percent in 2000, as customers move to more
attractively priced calling plans and industry-wide pricing pressure continues.
Fiber-Optic Network Expansion Set
- ---------------------------------
With unprecedented demand for high-speed bandwidth and Internet-based services,
the company announced that it had begun an aggressive plan to work with three
companies to add a new overlay, state-of-the-art, fiber-optic network to link 30
major metropolitan areas nationwide. "This project allows us to maintain our
low-cost position in the industry, leapfrog our competitors and provide quick
and economical deployment of ultra high-speed bandwidth OC-192, and later
OC-768, technology," said Frank Ianna, president of AT&T Network Services.
By working with three companies in a cost-sharing arrangement, AT&T plans to
complete the expansion in the next 24 months - considerably faster and at a cost
of 40 percent less than it would have been otherwise. When the expansion is
completed, AT&T will be among the first to offer ultra-high-speed OC-192
services initially and OC-768 services when available. The 30 metropolitan areas
are expected to generate about 80 percent of the future demand for high-speed
services. Excess fiber capacity will be leased to other companies to generate
incremental revenue.
Concert - Global Joint Venture To Close First Quarter
- -----------------------------------------------------
Armstrong also reported that Concert, AT&T's global joint venture with BT, was
making good progress. "We have completed the operational close and fully expect
the financial closing in early January," he said.
"With the convergence of television, computing and telephony, no other company
is better positioned than AT&T to offer a whole new generation of communications
services to families and businesses worldwide," Armstrong said. "In 1998, AT&T
set its strategy and began to make investments. This year we focused on
integration and execution. Now, with the groundwork we've completed, we can
begin to achieve scale and accelerate growth in 2000."
THE FOREGOING ARE "FORWARD-LOOKING STATEMENTS" WITHIN THE MEANING OF THE
SECURITIES ACT, INCLUDING STATEMENTS CONCERNING FUTURE OPERATING PERFORMANCE,
AT&T'S SHARE OF NEW AND EXISTING MARKETS, AND AT&T'S REVENUE AND EARNINGS
GROWTH RATES. SUCH FORWARD LOOKING STATEMENTS, WHICH ARE NOT A GUARANTEE OF
PERFORMANCE, ARE SUBJECT TO A NUMBER OF UNCERTAINTIES AND OTHER FACTORS, THAT
COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM SUCH STATEMENTS,
INCLUDING VIGOROUS COMPETITION; THE ABILITY TO ESTABLISH A SIGNIFICANT MARKET
PRESENCE IN NEW GEOGRAPHIC SERVICE MARKETS, AND THE SUCCESS AND MARKET
ACCEPTANCE OF NEW PRODUCTS AND SERVICES. FOR A MORE DETAILED DESCRIPTION OF
THE FACTORS THAT COULD CAUSE SUCH A DIFFERENCE, PLEASE SEE AT&T'S FILINGS
WITH THE SECURITIES AND EXCHANGE COMMISSION. AT&T DISCLAIMS ANY INTENTION OR
OBLIGATION TO UPDATE OR REVISE ANY FORWARD-LOOKING STATEMENTS, WHETHER AS A
RESULT OF NEW INFORMATION, FUTURE EVENTS OR OTHERWISE.
Exhibit 99.2
FOR RELEASE MONDAY, DECEMBER 6, 1999
AT&T ANNOUNCES PLANS TO CREATE NEW WIRELESS COMPANY
OUTLINES PLANS FOR TRACKING STOCK, CREATION OF NATIONWIDE WIRELESS LOCAL
EXCHANGE CARRIER
NEW YORK - AT&T today announced plans to create a new wireless company, AT&T
Wireless Group, and a new class of AT&T common stock that will track the
performance of the new enterprise.
The new tracking stock will reflect the performance of AT&T's voice and data
mobility business, as well as its fixed-wireless business and ownership
interests in international wireless operators. AT&T is the largest wireless
service provider in North America, delivering wireless service to nearly 12
million people. Following three consecutive quarters of comparable growth of 40
percent or more, the unit expects to report revenues of more than $7.6 billion
this year. EBITDA, excluding other income, grew 53 percent in the third quarter
of 1999 compared to the year-ago quarter, due to revenue growth and an improving
cost structure.
"By highlighting the exceptional performance of AT&T's fast-growing wireless
operations, we are confident that investors will see the value of this
business," said AT&T Chairman C. Michael Armstrong. "That unlocked value, which
will be reflected in the tracking stock, will provide us with the currency to
take advantage of the outstanding growth opportunities available in the wireless
industry, including fixed wireless, wireless data and international expansion."
John D. Zeglis, 52, currently president of AT&T, will be chairman and CEO of the
AT&T Wireless Group and remain on the AT&T Board of Directors. Daniel R. Hesse,
46, will remain president and CEO of AT&T Wireless Services, the mobility unit,
and will become executive vice president of the AT&T Wireless Group. Michael G.
Keith, 51, currently president of AT&T Business Services, will join the AT&T
Wireless Group as executive vice president responsible for developing and
launching the company's nationwide fixed-wireless local exchange business in
areas where AT&T-branded cable communications are not available.
"The AT&T Wireless Group launches with the strongest leadership team in the
industry," said Armstrong. "John Zeglis has been my partner for the last two
years. In that time, he successfully led our international expansion and grew
the profitability of our consumer businesses. He knows how to create shareowner
value. Dan Hesse led the transformation of the wireless industry with the
introduction of Digital One Rate, fueling AT&T's wireless growth and market
share gains. And Michael Keith has demonstrated that he knows how to develop new
products and markets. Under his leadership, AT&T's growth in Frame Relay, IP and
other packet data services outstripped the industry, making Business Services
our biggest revenue engine."
<PAGE>
AT&T intends to conduct an initial public offering of AT&T Wireless Group
tracking shares in the spring. AT&T anticipates that a full distribution of the
remaining shares in the AT&T Wireless Group tracking stock will be made to
shareowners of AT&T common stock.
AT&T's Board of Directors approved the creation of the Wireless Group tracking
stock at a special meeting last night. The MediaOne Board of Directors also
agreed to the development of a Wireless Group tracking stock, provided that the
full distribution of its shares follows the close of AT&T's merger with
MediaOne.
AT&T expects to file the proxy with the Securities and Exchange Commission in
January. The company then plans to send a proxy to all AT&T shareowners calling
for a shareholder vote to approve the creation of the Wireless Group stock,
which is expected in the spring of 2000. The Wireless Group stock will trade as
a "letter" or "tracking stock" and is not expected to pay dividends.
"We have chosen a tracking stock structure because it preserves the many
benefits of having the Wireless Group as an integral part of AT&T," said
Armstrong. "That includes use of the powerful AT&T brand, cross-marketing and
bundling opportunities, purchasing, financing and network integration."
AT&T WIRELESS GROUP
- -------------------
The new company will include all of AT&T's mobile and fixed-wireless technology
and related spectrum rights covering more than 90 percent of the nation,
including all of AT&T's 850 MHz, 1900 MHz and 38 GHz licenses. Including its
affiliates and partners, the Wireless Group currently has licenses in areas
representing more than 250 million potential customers, and its network
build-out currently covers more than 170 million potential customers. In
addition to these licenses, the group will manage all elements of AT&T's
existing wireless businesses, including all wireless networks, operations and
facilities, and interests in partnerships and affiliates providing wireless
services in the United States and abroad.
"We are excited about the opportunities the AT&T Wireless Group has to grow its
business and create shareholder value by offering customers wireless
connectivity -- whether for voice or data -- wherever they may be, in their
homes or on the road, moving about in the U.S. or abroad," said Zeglis. "We'll
bring together the two great revolutions in communications: untethered
connections and the Internet. The extraordinary convenience of blending
information and personal mobility will put the Internet in people's pockets as
we make wireless data service as popular and easy to use as wireless voice
service."
The AT&T Wireless Group will pursue four business opportunities focused on
growth within the wireless industry: voice and data mobility, fixed wireless,
international wireless and e-business investments.
"AT&T Wireless is a growth engine hitting on all cylinders. We'll take a
disproportionate share of the growth in wireless mobility by pursuing three
priorities - completing our national footprint, achieving cost leadership and
leading the wireless data revolution," Hesse said.
<PAGE>
AT&T's wireless growth was driven by the continued success of targeting and
retaining high-value customers, expanding the national wireless footprint,
focusing on digital service and offering simple, compelling rate plans. The
company has been a leader in digitizing its network and rapidly migrating
customers to digital service. The introduction of its flat-rate, all-distance
"bucket of minutes" Digital One Rate plan in 1998 revolutionized the wireless
industry. In addition to its continued growth in wireless customers, AT&T's
focus on high-value subscribers has helped generate increased volume and
improved average revenue per user.
The company said the tracking stock currency will enable it to complete its
national footprint and bring growth-based marketing programs to the 85 million
people it doesn't currently reach. "AT&T has led the U.S. wireless industry not
only in wireless voice but also wireless data," Hesse added. "We have more than
100,000 wireless data customers - most of them high-value business customers who
not only use the Internet for information but also rely on the more valuable
information behind firewalls on corporate Intranets."
AT&T Wireless already has an established IP-based packet data network which,
with its partners, covers 146 million potential customers representing about 60
percent of the U.S. population.
"Our packet data network allows us to provide our customers with flat-rate,
'all-you-can-eat' pricing rather than charging by the minute or by the byte."
Hesse said. "The efficiency of our pure packet network will allow us to lead the
industry with data pricing that is as simple as what we introduced for voice.
This is particularly important because many in the industry predict that within
the next several years wireless devices will be the prevailing means of Internet
access."
Zeglis noted: "In addition to wireless mobility services, we see tremendous
growth opportunities in e-business applications. We'll have the advantage of
working with start-ups, and we'll do an AT&T first: We'll invest in them. We'll
win two ways: We'll enjoy the lift that better applications give the wireless
data service and we'll share in the value that our service creates for the
content business."
The Wireless Group also plans to develop a wireless local exchange capability
nationwide in areas of the U.S. not served by the company's cable operations.
Zeglis called the technology "proven" and said the economics are now "viable
and attractive."
A fixed wireless trial now underway in Dallas offers customers voice lines and
high-speed Internet access at substantial savings over the local Bell company.
The company plans to offer fixed wireless in Fort Worth and two other major U.S.
markets next year.
The company said its fixed wireless offer is an integrated broadband
telecommunications system with multiple lines of high-quality voice and
always-on high-speed data access, which can turn a home's existing inside
telephone wiring into a Local Area Network that will support multiple voice
communications and five data devices operating simultaneously.
<PAGE>
"An important advantage is that fixed wireless will share the infrastructure
with our national mobility business. And for customers, we'll integrate their
fixed and mobile services. When they walk into their homes, the mobile phone
will become a cordless phone and calls to the mobile number will enter the house
through its fixed connection, providing unprecedented customer convenience and
flexibility," Zeglis said.
ABOUT THE AT&T COMMON STOCK GROUP
"AT&T is now better positioned for growth," said Armstrong. "The tracking stock
provides investors with the option to participate in the growth of either or
both of our companies. And the value inherent in our other operations --
business and consumer communications, cable television and broadband and
Internet -- will also become more visible to the investment community."
The performance of all of the AT&T businesses not allocated to AT&T Wireless
Group will continue to be represented by the existing AT&T common stock. These
activities will include AT&T's domestic and international long distance,
regional and local telecommunications, as well as its cable television,
broadband and Internet services. The primary business segments, as reported,
will include business services, consumer services and broadband and Internet
services.
Goldman, Sachs & Co. and Merrill Lynch & Co. are serving as financial advisers
to AT&T in connection with the creation and distribution of the AT&T Wireless
Group tracking stock.
THE FOREGOING ARE "FORWARD-LOOKING STATEMENTS" WITHIN THE MEANING OF THE
SECURITIES ACT, INCLUDING STATEMENTS CONCERNING FUTURE OPERATING PERFORMANCE,
AT&T'S SHARE OF NEW AND EXISTING MARKETS, AND AT&T'S REVENUE AND EARNINGS GROWTH
RATES. SUCH FORWARD LOOKING STATEMENTS, WHICH ARE NOT A GUARANTEE OF
PERFORMANCE, ARE SUBJECT TO A NUMBER OF UNCERTAINTIES AND OTHER FACTORS, THAT
COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM SUCH STATEMENTS, INCLUDING
VIGOROUS COMPETITION; THE ABILITY TO ESTABLISH A SIGNIFICANT MARKET PRESENCE IN
NEW GEOGRAPHIC SERVICE MARKETS, AND THE SUCCESS AND MARKET ACCEPTANCE OF NEW
PRODUCTS AND SERVICES. FOR A MORE DETAILED DESCRIPTION OF THE FACTORS THAT COULD
CAUSE SUCH A DIFFERENCE, PLEASE SEE AT&T'S FILINGS WITH THE SECURITIES AND
EXCHANGE COMMISSION. AT&T DISCLAIMS ANY INTENTION OR OBLIGATION TO UPDATE OR
REVISE ANY FORWARD-LOOKING STATEMENTS, WHETHER AS A RESULT OF NEW INFORMATION,
FUTURE EVENTS OR OTHERWISE.
-------------------
