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: January 8, 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 10013-2412
Telephone Number (212) 387-5400
<PAGE>
Form 8-K
AT&T Corp.
January 8, 1999
Item 5. Other Events.
See Exhibit 99 to this Form 8-K.
Item 7. Financial Statements and Exhibits.
(c) Exhibits.
Exhibit 99.1 AT&T Corp. Press Release issued January 8, 1999 entitled
"AT&T Publicly Files TCI Merger Proxy; Expects to Begin
Mailing to Shareowners Shortly; Announces Plans for Stock
Repurchase and Stock Split."
Exhibit 99.2 AT&T Corp. Press Release issued January 8, 1999 entitled
"AT&T Provides Financial Guidance for 1999."
Exhibit 99.3 AT&T Corp. Press Release issued January 8, 1999 entitled "AT&T
Reaches Agreements To Form Commercial Joint Ventures With Five
Cable Operators."
<PAGE>
Form 8-K
AT&T Corp.
January 8, 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/ Marilyn J. Wasser
-----------------------------------
By: Marilyn J. Wasser
Vice President and Secretary
January 8, 1999
Exhibit 99.1
AT&T Publicly Files TCI Merger Proxy;
Expects to Begin Mailing to Shareowners Shortly;
Announces Plans for Stock Repurchase and Stock Split
FOR RELEASE: Friday, January 8, 1999
NEW YORK - AT&T said today that it has publicly filed the TCI merger
proxy with the Securities and Exchange Commission and is awaiting SEC clearance
to begin mailing copies to its shareowners. The proxy mailing is in preparation
for a special shareowner meeting the company expects to hold on February 17,
1999, at the Meadowlands Exposition Center in Secaucus, N. J., to vote on the
merger. To win approval, more than 50 percent of AT&T's outstanding common
shares must be voted in favor of the proposed merger.
"As we begin the New Year, AT&T and TCI are right on track with our
ambitious timetable for the pending merger," said AT&T Chairman C. Michael
Armstrong. "We expect to complete the merger in the first quarter of 1999,
presuming shareholder and regulatory approvals."
Armstrong also said AT&T's Board of Directors has authorized the
repurchase of up to $4 billion of AT&T common stock. The company intends to
repurchase shares from time to time prior to the closing of the TCI merger
through an open market share repurchase program. It will reissue the repurchased
shares as part of the shares to be issued for TCI. Purchases may not commence
immediately and will be subject to market conditions and SEC regulations, which
could limit the actual number purchased.
"In addition, the Board has announced its intention, following the
completion of the TCI merger, to declare a three-for-two stock split of the
company's common stock," Armstrong said. "This split further demonstrates our
confidence in AT&T's continued growth. As the country's most widely-held stock,
it will ensure that each share is affordably priced."
In a three-for-two split, AT&T's shareowners would receive
an additional share of stock for every two shares they own on the record
date of the split.
Finally, the company also reported that it will not create a consumer
services tracking stock at this time in order to focus on fully integrating its
acquisitions.
"The acquisitions and investments we've made over the last year will
transform AT&T from a company dominated by a single product line - long distance
voice - into the leader in a new generation of advanced communications,
information and video services," said Armstrong. "But we have to be able to
fully integrate these assets to deliver their true value to our customers.
That's why we have decided to consolidate our acquisitions before considering
the creation of a tracking stock. We believe that's in the best interests of our
customers and our shareowners."
John C. Malone, Chairman of Tele-Communications, Inc., who will become
a director of AT&T and one of its largest shareowners following the TCI merger,
agreed. "Under Mike Armstrong's stewardship, AT&T represents a unique set of
complementary assets," he said. "Making sure these assets are operationally
integrated before adding the complications of a separate tracking stock is the
right thing to do. I am personally extremely pleased with this decision, as is
the TCI Board, and I am confident that TCI's shareholders will agree."
In addition, AT&T said it would further report results by segment so
investors can evaluate each part of the business against similar businesses in
the industry and understand the company's "sum of the parts" value.
As part of the TCI merger, AT&T reiterated plans to issue a separate
tracking stock, called Liberty Media Group tracking stock, to holders of TCI's
programming and ventures arms (the Liberty Media Group and TCI Ventures Group)
to continue such holders' economic interests in the units now represented by
those shares. The Liberty Media Group's business will be separately managed and
will not be consolidated with the assets of the other AT&T groups.
Exhibit 99.2
AT&T Provides Financial Guidance for 1999
AT&T said today that it expects earnings per share (EPS) from
continuing operations for 1999 to be in the range of $4.20 to $4.30, excluding
the impact of its planned merger with Tele-Communications, Inc. (TCI) and the
separately announced stock split and share repurchase. The company said that as
a result of the TCI merger, AT&T expects EPS dilution to be approximately $1.00
per share on a pro forma basis, assuming the merger closes at the end of the
first quarter.
The company expects 1999 revenue growth to range from five to seven
percent on a pro forma basis, including the effect of its planned mergers with
TCI and Vanguard Cellular Systems and the previously announced acquisition of
the IBM global network business. The company said it expected these acquisitions
and investments to transform its revenue, cash-flow and asset base from
dependence on a single product line - long distance voice - to a more
diversified portfolio of high-growth communications, information and video
services.
Business Services is expected to increase revenue between seven and
nine percent as a result of continued growth in data, local and wholesale
services. AT&T Wireless Services plans to continue to expand its national
presence and its successful Digital One Rate plan. It expects to report revenue
growth, as well as growth in earnings before interest, taxes, depreciation and
amortization (EBITDA), in the high teens. AT&T Solutions expects to report
revenue growth of about 30 percent, given several major outsourcing contracts
signed and announced within the past year.
The company also said, as anticipated, that Consumer Services long
distance revenue is expected to decline between two to four percent, as a result
of declining prices in a hotly competitive market and the substitution of
wireless services for calling card and other higher-priced long distance
services.
As a key part of the company's strategy for growth in overall Consumer
Services revenue, AT&T said it is accelerating plans to offer cable telephony
services. In 1999, AT&T and TCI expect to conduct ten market trials in which
they will co-market voice, video and high-speed data services to customers in
two San Francisco Bay area communities, and in Chicago, Dallas, Pittsburgh,
Seattle, Denver, Salt Lake City, Portland, Ore., and St. Louis. AT&T said it
plans to quickly expand these market trials and to be offering local telephony
in most TCI markets in 2000. Initially, the company said it plans to offer
circuit switched telephony, but expects to begin to deploy IP technology when it
is available in 2000.
AT&T said it has made significant progress in transforming its cost
structure in 1998. Through the first three quarters of 1998, selling, general
and administrative (SG&A) expenses were cut from almost 30 percent of revenue to
less than 25 percent. The company expects to lower that ratio to 21 percent for
1999, excluding its wireless and local services businesses, which have a
different cost structure requiring additional investment to fund their growth.
AT&T estimated that its 1999 pro forma EBITDA would grow in the high
teens, to $18 to $20 billion, which would be primarily reinvested in its
business.
AT&T estimated 1999 capital spending would be approximately $9 to $10
billion. However, the company said it was shifting much of the spending from its
core long distance voice network into higher growth areas, primarily wireless,
local, and data/IP services. Assuming completion of the TCI merger at the end of
the first quarter, total capital spending is expected to range from $11 to $12
billion for the year. This reflects AT&T's decision to accelerate the upgrade of
TCI cable systems in certain major metropolitan areas to increase video capacity
and add power for telephony applications.
####
The foregoing are "forward looking statements" which are based on management's
beliefs as well as on a number of assumptions concerning future events made by
and information currently available to management. Readers are cautioned not to
put undue reliance on such forward looking statements, which are not a guarantee
of performance and are subject to a number of uncertainties and other factors,
many of which are outside AT&T's control, that could cause actual results to
differ materially from such statements. 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 99.3
AT&T REACHES AGREEMENTS TO FORM
COMMERCIAL JOINT VENTURES WITH FIVE CABLE OPERATORS
Jointventures will offer advanced communications
services for customers of Bresnan
Communications, Falcon Cable TV, Insight
Communications,
InterMedia Partners and Peak Cablevision
For Release: Friday, January 8, 1999
NEW YORK -- AT&T today announced that it had reached agreements with
five Tele-Communications, Inc. (TCI) affiliates to form separate joint ventures
to offer customers advanced communications services. AT&T expects to finalize
joint ventures with Bresnan Communications, Falcon Cable TV, Insight
Communications, InterMedia Partners and Peak Cablevision in early 1999, begin
piloting the new services later in the year and then begin commercial operations
in the year 2000.
The joint ventures will offer customers new communications services
that feature multiple phone lines per household, along with options such as
conference calling, call waiting, call forwarding and individual message centers
for family members.
In June 1998, AT&T announced plans to merge with TCI, the country's
second largest cable operator, passing more than 17 million U.S. households via
TCI's cable plant.
The announced telephony joint ventures combined will reach an
additional five million U.S. households.
"These joint ventures bring us another step closer to our goal of
giving U.S. consumers a choice in local phone service," said C. Michael
Armstrong, chairman and CEO of AT&T. "It's a facilities-based approach that
will allow us to deliver on our commitment to provide all-distance telephony
service to our customers."
AT&T, which expects to own between 51 percent and 65 percent of each of
these joint ventures, will have long-term exclusive rights to offer
communications services over the systems of each of the five operators in return
for one-time payments to be made when the systems meet certain performance
milestones. AT&T expects the total of these payments to be in the tens of
millions of dollars. In addition the operators will receive ongoing monthly
telephony subscriber payments.
Each cable company will bear the cost of upgrading its cable system to
support two-way communications. Upgrade efforts are currently underway at each
of the five cable companies and most expect to complete the process by the end
of the year 2000.
<PAGE>
The telephony joint venture, in each case, will bear the cost of adding
communications equipment when a customer signs up for service. AT&T estimates
those costs will eventually range from $300 to $500 per home, depending on
whether the customer already subscribes to the cable operator's digital video
service.
Each telephony joint venture will report to Leo Hindery, Jr., the
current president of TCI who will head AT&T's new cable services operations once
the AT&T-TCI merger is complete.
The five cable companies operate in various regions of the country.
Following completion of its cable system joint venture with TCI,
Bresnan Communications will serve more than 600,000 customers in Michigan,
Minnesota, Wisconsin and Nebraska and will pass approximately 900,000 homes. The
company is headquarterd in White Plains, N.Y.
"I'm excited that our broadband platform will now be associated with
the AT&T brand," said William J. Bresnan, president and founder of the cable and
telecommunications company. "Through this partnership, we'll be able to deliver
an even broader range of telecommunications services."
Falcon Cable TV operates systems in 26 states, including Washington,
Oregon and California. It serves more than one million customers, passes
approximately 1.6 million homes and is headquartered in Los Angeles.
Marc B. Nathanson, chief executive officer and founder of Falcon, said,
"This is a win-win deal for everyone. For us, it means an expansion into
telecommunications services. For AT&T, it means access to the local residential
phone market. And for consumers, it means the ease of one-stop shopping for all
cable and telecommunications services in small and medium sized communities
throughout the country."
Insight Communications, which also has customers outside its
partnership with TCI, collectively has more than 500,000 customers and passes
more than 800,000 homes in seven states, including Illinois, Indiana, Ohio and
California and is based in New York City.
"These ventures represent a new era in the cable and telecommunications
industries," said Michael S. Willner, chief executive officer of Insight.
"We're pleased to be a part of the convergence of these industries with the
undisputed leader in telecommunications services."
InterMedia Partners is based in Nashville and serves more than one
million customers and passes nearly 1.6 million homes in four states -
Tennessee, Kentucky, Georgia and South Carolina.
"I believe this is an exceptional growth opportunity for InterMedia
Partners and AT&T," said Robert J. Lewis, managing general partner and CEO for
InterMedia Partners. "It allows us to fully utilize our already upgraded network
to serve our customers with a single broadband platform for cable and
telecommunications services, which they have been seeking."
Peak Cablevision serves more than 100,000 customers and passes 180,000
homes primarily in Utah and Oklahoma. Its headquarters are in Englewood, Co.
Donne Fisher, president of Peak, said, "We're pleased to be able to
offer our customers access to AT&T's quality services and its reputation for
reliability."
The completion of the joint ventures are subject to a number of
conditions including execution of definitive documentation.
<PAGE>
####
The foregoing are "forward looking statements" which are based on management's
beliefs as well as on a number of assumptions concerning future events made by
and information currently available to management. Readers are cautioned not to
put undue reliance on such forward looking statements, which are not a guarantee
of performance and are subject to a number of uncertainties and other factors,
many of which are outside AT&T's control, that could cause actual results to
differ materially from such statements. 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.
