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 29, 2000
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.
March 29, 2000
Item 5. Other Events.
See Exhibit 99.1, Exhibit 99.2 and Exhibit 99.3 to this Form 8-K.
Item 7. Financial Statements and Exhibits.
(c) Exhibits.
Exhibit 99.1 AT&T Corp. Press Release issued March 29, 2000.
Exhibit 99.2 AT&T Corp. Press Release issued March 31, 2000.
Exhibit 99.3 AT&T Corp. Press Release issued April 3, 2000.
<PAGE>
Form 8-K
AT&T Corp.
March 29, 2000
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
March 29, 2000
Exhibit 99.1
Excite@Home's Principal Cable Partners Extend Distribution Agreements,
AT&T Assumes More Prominent Role
FOR RELEASE WEDNESDAY, MARCH 29, 2000
NEW YORK AND REDWOOD CITY, CALIF. -- Excite@Home (Nasdaq: ATHM) and its
principal cable partners - AT&T, Comcast Corporation and Cox Communications -
announced today that they have agreed to new extended distribution arrangements
and a reorganization of the governance of the company. This will enhance
Excite@Home's decision-making and ability to capitalize on growth opportunities.
Based on these new agreements, AT&T and Excite@Home have extended their
relationship through 2008, and Comcast and Cox have extended their relationship
with Excite@Home through 2006. The new distribution agreements reflect a common
belief among Excite@Home and its cable partners that growing subscribers on
high-speed cable Internet services is a key objective over the coming years.
Excite@Home will be the provider of platform/connectivity services used
by its principal cable partners in delivering their high-speed Internet
services. Excite@Home's portal also will be featured on AT&T's high-speed
Internet service start page for the length of the new agreement. In addition,
Excite@Home will work with AT&T to deliver services to consumers via advanced
TV, narrowband initiatives and, subject to negotiation with AT&T Wireless Group,
wireless services. Overall, these new arrangements expand Excite@Home's current
business model and represent a significant opportunity for the company as it
provides connectivity and content distribution services in partnership with
cable companies.
Specifically, AT&T agreed to extend its distribution relationship with
Excite@Home through 2008 and to feature the Excite@Home portal on its cable
Internet service through the same period. Excite@Home will also work with AT&T
to provide connectivity services to third party Internet Service Providers who
want to use AT&T's platform to deliver broadband services to consumers. AT&T
reiterated its intention to offer a choice of multiple service providers and
portals on its high-speed Internet systems following the June, 2002 expiration
of its current exclusive arrangements with Excite@Home. In addition Excite@Home
will work with AT&T to deliver services to consumers via advanced TV, wireless
and narrowband initiatives.
<PAGE>
The exclusivity provisions of the Comcast and Cox distribution
agreements with Excite@Home remain in effect until June 2002. Comcast and Cox
have also agreed to use Excite@Home to provide platform/connectivity services,
and to be their featured portal, in delivering their high-speed Internet
services through June, 2006. Subject to the forfeiture of certain warrants, and
based on their other business considerations, Comcast and Cox will each have the
right to end the exclusivity provisions and may also terminate the entire
distribution arrangement beginning in June 2001.
Under today's agreements, Comcast and Cox will give up certain veto
rights they have at the Excite@Home board level and their representatives will
resign from the board. AT&T will have the right to elect a majority of the board
members and Excite@Home will amend its charter to allow board action by simple
majority.
The agreements announced today have been approved by a committee of the
Excite@Home's independent directors, as well as by unanimous vote of the full
Board.
"Now, we can work even more effectively with Excite@Home to realize our
common vision of putting the Internet to work for individuals, families and
businesses," said C. Michael Armstrong, chairman and chief executive officer of
AT&T. "We can extend Excite@Home across access platforms, add new capabilities
of our own, and engage the creativity of third parties, such as content
providers and other web portals, to enrich the service. Working with
Excite@Home, we can bring broadband communications, information and transaction
services to millions of the world's homes, offices, and shops."
Brian L. Roberts, president of Comcast Corporation said, "From the
outset, we have viewed Excite@Home as an invaluable strategic partner. Together,
we have made significant progress in reducing installation time and in expanding
the online marketing, OEM, and retail channels that have accelerated our
deployment of high-speed cable Internet services. The extension of our
agreements gives us clarity and the ability to continue our aggressive
deployment of Comcast@Home."
"From the beginning, we have combined broadband content and high-speed
access to offer our customers a superior online experience," said David Woodrow,
executive vice president of business development, Cox Communications. "However,
this is just the tip of the iceberg in terms of how broadband information,
communications, and entertainment services, combined with digital television
technologies will dramatically change the way consumers use and view the
Internet. We are pleased to extend our relationship with Excite@Home."
<PAGE>
"When we began deploying high-speed Internet services in 1996, many
doubted that we would be able to use the cable networks to deliver broadband at
a price consumers could afford. But by working closely with our cable partners,
we were able to bring efficiencies to our network that lowered prices for
consumers and thereby sparked a broadband explosion," said Tom Jermoluk,
chairman of Excite@Home. "Now we are ready to move into the next phase of
leading the broadband revolution. We have established terms of carriage for the
post-exclusive period and this clarity will help drive new forms of business,
such as advanced TV and connectivity, that Excite@Home can exploit in
conjunction with its existing business model."
The Excite@Home Board of Directors also announced its intention to
withdraw plans for establishing a tracking stock for the media assets of its
business. "Through the new long-term extensions of our cable agreements, we have
achieved platform and content alignment with our partners," said George Bell,
president and CEO, Excite@Home. "Given this clarity, we believe we are better
served with a single unified company."
In addition, AT&T has agreed to give Comcast and Cox the right to sell
their shares in Excite@Home to AT&T for a minimum price of $48 a share any time
between January 1, 2001, and June 4, 2002. Comcast and Cox each own
approximately 30 million Class A shares, or about 8 percent, of Excite@Home.
AT&T's purchase obligation is limited to an aggregate value of approximately $3
billion. If Excite@Home's average share price exceeds $48 for 15 days before and
15 days after Comcast or Cox exercises their right to sell, they will receive
the higher price per share and the number of shares AT&T purchases will be
reduced commensurately. Comcast and Cox have the right to take payment in cash
or in shares of AT&T stock.
Under the agreements announced today, Comcast and Cox will each receive
new warrants to purchase two Series A shares for each home its system passes.
These warrants will vest in installments every six months beginning in June,
2001, and be fully vested in June, 2006, if Comcast and Cox have elected to
continue their extended non-exclusive distribution agreements through that
period. Excite@Home will also convert about 50 million of AT&T's Series A shares
into Series B shares, each of which has 10 votes. In connection with the new
distribution agreements through 2008, AT&T will also have the right to purchase
up to approximately 25 million Series A shares and 25 million Series B shares.
As a result, AT&T will have, on a fully diluted basis, 25 percent of the
economic interest in Excite@Home and 74 percent of the voting interest, as
compared to the 25 percent economic interest and 56 percent voting interest it
has today.
<PAGE>
Following the closing of the transactions announced today, AT&T will
consolidate Excite@Home's financial results with its own. This is expected to
increase AT&T's revenue in 2000 by approximately $400 million and will have no
significant impact on cash earnings. However, due to the amortization of
goodwill and other non-cash charges, it is expected to reduce 2000 operational
earnings per share by approximately 20 cents. Reported earnings per share for
2000 are expected to be reduced by approximately 5 cents as a result of the
agreements.
The changes to be made to Excite@Home's charter and the issuance of
additional Excite@Home stock require shareowner approval and other approvals.
The companies expect these transactions to be completed by the third quarter of
2000.
With more than one million cable modem subscribers, Excite@Home is
setting the pace for broadband and winning the hearts of consumers worldwide who
are enjoying the benefits of a high-speed, "always-on," and open connection to
the Internet afforded by the @Home service. Through the combination of content
and distribution, Excite@Home is changing the way consumers use and view the
Internet. Recognizing their positive impact on consumers, Excite@Home and its
cable partners look forward to accelerating and expanding the delivery of
high-speed services.
Excite@Home, the leader in broadband, offers media services through
Excite Network (www.excite.com, www.bluemountain.com and other properties), and
broadband subscription services through @Home (www.home.com) and @Work
(www.work.home.net). The company has a worldwide footprint of 72 million cable
homes under long-term contract. Excite@Home's MatchLogic subsidiary
(www.matchlogic.com) offers marketers industry-leading digital advertising
solutions including rich media production, targeted ad and email services, and
datamart management and analysis. 2000 At Home Corporation. Excite@Home, @Home,
@Work, Excite, the stylized logo and MatchLogic are trademarks of At Home
Corporation and may be registered in certain jurisdictions. All other brand
names are trademarks of their respective owners.
AT&T Corp (www.att.com) is among the world's premier voice, video and
data communications companies, serving more than 80 million customers, including
consumers, businesses and government. With annual revenues of more than $62
billion and 148,000 employees, AT&T provides services to customers worldwide.
Backed by the research and development capabilities of AT&T Labs the company
runs the world's largest, most sophisticated communications network and has one
of the largest digital wireless networks in North America. The company is a
leading supplier of data and Internet services for businesses and offers
outsourcing, consulting and networking-integration to large businesses. It is
also one of the nation's largest Internet service providers for consumers.
Through its recent cable acquisitions, AT&T will bring its bundle of broadband
video, voice and data services to customers throughout the United States.
Internationally, the AT&T/BT Global Venture - recently named Concert - will
serve the communications needs of multinational companies and international
carriers worldwide.
Comcast Corporation (www.comcast.com) is principally involved in the
development, management and operation of broadband cable networks and in the
provision of programming content through majority ownership of QVC,
Comcast-Spectacor, Comcast SportsNet, and The Golf Channel, a controlling
interest in E! Entertainment Television and through other programming
investments. Comcast Cable is the third largest cable company in the nation and,
incorporating pending cable transactions, will serve more than 8.2 million
subscribers. Comcast's Class A Special and Class A Common Stock are traded on
The Nasdaq Stock Market under the symbols CMCSK and CMCSA, respectively.
Cox Communications serves approximately 6 million customers nationwide,
making it the nation's fifth largest cable television company. A full-service
provider of telecommunications products, Cox offers an array of services,
including Cox Cable; local and long distance telephone services under the Cox
Digital Telephone brand; high-speed Internet access under the brands Cox@Home,
Road Runner and Cox Express; advanced digital video programming services under
the Cox Digital Cable brand; and commercial voice and data services via Cox
Business Services. Cox is an investor in telecommunications companies including
Sprint PCS and Excite@Home, as well as programming networks including Discovery
Channel, The Learning Channel, Outdoor Life and Speedvision. More information
about Cox Communications can be accessed on the Internet at www.cox.com.
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 the control of AT&T, Excite@Home,
Comcast Corporation and Cox Communications, that could cause actual results to
differ materially from such statements. The transactions described in this
release are subject to shareowner and other approvals and there can be no
assurance the transactions will be consummated or that the anticipated results
of the transactions will be realized. For a more detailed description of the
factors that could affect the companies' future results, please see the
companies' filings with the Securities and Exchange Commission. The companies
disclaim any intention or obligation to update or revise any forward-looking
statements, whether as a result of new information, future events or otherwise.
This information is presented solely to provide additional information to
further understand the results of the companies.
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Exhibit 99.2
AT&T-Led Consortium to Acquire 39 Percent Voting Stake in Net2Phone
FOR RELEASE FRIDAY, MARCH 31, 2000
NEW YORK - An AT&T-led consortium today announced it will acquire a 39
percent voting stake in Net2Phone, the leading provider of Internet telephony
and other web-based communications services.
Under terms of the agreement, the consortium will purchase four million
newly-issued Class A shares from Net2Phone at a price of $75 per share. In
addition, the consortium will purchase 14.9 million Class A Net2Phone shares
from IDT Corporation, Net2Phone's controlling shareholder, for $75 per share.
Following these transactions, the consortium will have a 39 percent voting stake
and a 32 percent economic stake in Net2Phone for a total cash investment of
approximately $1.4 billion.
In addition, the consortium and IDT have reached an agreement that
gives the consortium the right of first refusal to purchase IDT's remaining
stake of 10 million Class A shares in Net2Phone. If this right is exercised, the
consortium will have a 59 percent voting interest and a 48 percent economic
interest in Net2Phone. The consortium will also receive the option to convert
IDT's remaining 10 million Class A shares into common shares. Class A shares
have two votes per share, while common shares have one vote per share.
AT&T plans to invest $725 million for a 51 percent interest in the
consortium. Other partners -- including Liberty Media and BT -- are expected to
purchase the remaining partnership interest.
AT&T said it expects the transaction to be neutral to cash earnings per
share and minimally dilutive to earnings per share for the next few years.
"Net2Phone has established itself as the Internet's very own phone
company," said AT&T Chairman and CEO C. Michael Armstrong. "It handles two out
of every five calls routed over the Internet, and its award-winning
communications and voice mail services are featured on the web's leading
portals. Together with Net2Phone, we will develop a new generation of
voice-enhanced web-based communications services. Our goal is to make
telephones, web pages, and fax machines extensions of each other."
"I am thrilled to be entering this strategic alliance with Mike
Armstrong and his team," said Howard Jonas, chairman and CEO of IDT. "AT&T's
adoption of the Net2Phone technology, along with our growing relationships with
AOL and other major players in the Internet and telephony industries, provide a
solid base from which we can create a standard in IP telephony which will allow
the industry to move into the broadband future. We expect that the significant
synergies created by these arrangements will bring value to shareholders of both
companies and will ultimately benefit American consumers."
"This is the ultimate proof of the transformation of telecom," said
Howie Balter, CEO of Net2Phone. "AT&T, with its extended reach to every
communications platform possible today, has entrusted us to enable all forms of
communication with next generation IP voice technologies. We believe this is a
big win for the entire communications industry as it brings next generation
communicating into the new millennium with the companies that started it all."
<PAGE>
AT&T and Net2Phone plan to jointly develop new Internet voice
applications for cable telephony and the business communications market. AT&T
and IDT will each be granted a license to deploy Net2Phone's technologies on a
guaranteed lowest cost basis.
AT&T and IDT have also agreed to enter into a mutually beneficial
commercial relationship. For example, they will become preferred suppliers to
each other for a period of three years. AT&T will supply two-thirds of IDT's
domestic voice and data communications services, and the two companies will
co-locate equipment at each other's facilities. Further, IDT has reached similar
commercial agreements for international services with Concert, the global joint
venture of AT&T and BT. IDT expects to increase its revenue and lower its costs
through these arrangements.
The consortium will have the right to nominate three members to the
board of directors of Net2Phone. The transaction, which has been approved by the
boards of AT&T, IDT and Net2Phone, is expected to close by the third quarter
2000. The agreement is subject to the approval of federal regulatory agencies
and certain other conditions. Net2Phone's shareholders must approve the 4
million new shares to be issued to the consortium.
AT&T was advised by Merrill Lynch & Co., Inc. and Wachtell, Lipton,
Rosen and Katz; IDT was advised by Morgan Stanley Dean Witter, Credit Suisse
First Boston and by Sullivan & Cromwell; and the special committee of the board
of directors of Net2Phone was advised by Salomon Smith Barney and Hughes Hubbard
& Reed.
Net2Phone is a leading provider of voice-enhanced Internet
communications services to individuals and businesses worldwide. Net2Phone
develops and markets technology and services for IP voice and e-commerce
solutions for the web and other IP networks. Net2Phone's award-winning products
include PC-to-phone, PC-to-fax, free PC-to-PC calling, and free voicemail
capabilities.
AT&T Corp (www.att.com) is among the world's premier voice, video and
data communications companies, serving more than 80 million customers, including
consumers, businesses and government. With annual revenues of more than $62
billion and 148,000 employees, AT&T provides services to customers worldwide.
Backed by the research and development capabilities of AT&T Labs the company
runs the world's largest, most sophisticated communications network and has one
of the largest digital wireless networks in North America.
IDT Corporation is a leading full service telecommunications company
offering integrated and bundled telephone, Internet access, and Internet
telephony services. The company provides global long distance telephone services
in 120 countries for individuals, businesses, and other long distance carriers.
IDT is also one of the country's largest Internet service companies, providing
dial-up access to individuals and dedicated access to corporate customers
nationwide. It recently announced plans to release Net2Phone Direct, which will
enable users to place calls via the Internet using traditional telephones while
still maintaining high sound quality. Net2Phone, Net2Phone Direct, and IDT are
trademarks of IDT Corporation.
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,
<PAGE>
many of which are outside the control of AT&T, Net2Phone and IDT, that could
cause actual results to differ materially from such statements. The transactions
described in this release are subject to shareowner and other approvals and
there can be no assurance the transactions will be consummated or that the
anticipated results of the transactions will be realized. For a more detailed
description of the factors that could affect the companies' future results,
please see the companies' filings with the Securities and Exchange Commission.
The companies disclaim any intention or obligation to update or revise any
forward-looking statements, whether as a result of new information, future
events or otherwise. This information is presented solely to provide additional
information to further understand the results of the companies.
###
Exhibit 99.3
AT&T Provides Guidance On
AT&T Wireless Group's Mobility Unit
For Immediate Release: Monday, April 3, 2000
New York -- AT&T today issued selected estimated first quarter
financial information for the AT&T Wireless Group mobility unit as the company
begins a series of investor presentations relating to the upcoming initial
public offering of the AT&T Wireless Group.
AT&T said that the AT&T Wireless Group mobility unit is expected to
report first quarter revenue exceeding approximately $2.1 billion. Net wireless
subscriber additions are expected to exceed 400,000 for the first quarter. And
earnings before interest, taxes, depreciation and amortization (EBITDA),
excluding other income, is expected to exceed $350 million for the first
quarter.
AT&T expects to begin an initial public offering representing a portion
of the economic value of the AT&T Wireless Group this spring, depending on
market and other conditions.
# # #
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.
While the registration statement relating to these securities has been filed
with the Securities and Exchange Commission, it has not yet become effective.
These securities may not be sold nor may offers to buy be accepted prior to the
time the registration statement becomes effective. This press release shall not
constitute an offer to sell or the solicitation of an offer to buy nor shall
there be any sale of these securities in any state in which such offer,
solicitation or sale would be unlawful prior to registration or qualification
under the securities laws of any such state.
