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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: March 27, 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 10013-3412
Telephone Number (212) 387-5400
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Form 8-K AT&T Corp.
March 27, 2000
ITEM 5 OTHER EVENTS.
a) AT&T Group 1999 Segment Financial Information
AT&T is making available 1999 quarterly and annual financial information
for AT&T Group's segments restated to reflect changes in accordance with
the company's 2000 management model. This information is included in
Exhibit 99.
c) Exhibits
Exhibit 99 AT&T Group 1999 Segment Financial Information
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Form 8-K AT&T Corp.
March 27, 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/ N. S. Cyprus
----------------------------------
By: N. S. Cyprus
Vice President and Controller
March 27, 2000
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Exhibit 99
AT&T Group Segment Restatements
AT&T continually reviews the company's management model and segment structure to
best reflect the dynamics of our business. As part of that ongoing review, we
announced in early December anticipated changes to certain segments within the
AT&T Group that would allow us to align our business to better capitalize on the
fast changing telecommunications market.
SEGMENT RESTATEMENTS
- Each segment of the AT&T Group has been restated, as
applicable, to reflect the 1999 results aligned with the 2000
reporting model.
- Revenue has been normalized for the impact of Concert, the
global communications joint venture with British
Telecommunications plc (BT), as if the operations that were
contributed to Concert were contributed as of January 1, 1999.
Wireless Services and Broadband were not impacted by Concert.
- - Revenue has also been normalized for certain acquisition and divestment
activity.
AT&T GROUP
AT&T Group normalized revenue was $14,981 million, $15,436 million, $15,874
million and $15,868 million for 1Q99, 2Q99, 3Q99 and 4Q99 respectively.
BUSINESS SERVICES
This segment reflects the results associated with services provided to business
customers. Business Services now includes the AT&T Solutions outsourcing unit,
AT&T Global Network Services (AGNS), and the AT&T Information Technology
Services unit, formerly all part of the Solutions Group. The IBM outsourcing
contract which was part of AGNS is now being accounted for within AT&T Solutions
outsourcing, which changes the revenue growth target to 25-30%. The elimination
of internal revenue between AT&T Solutions outsourcing, AGNS and Business
Services was previously included in Corporate and Other, but is now eliminated
within Business Services. Business Services also now includes internal revenue
from AT&T WorldNet Services, which is eliminated in Corporate and Other.
Additionally, management of the business sales force that supports wireless
products was transferred to Wireless Services. Revenue has been normalized to
show the impact of AGNS for periods prior to the acquisition and for Concert as
if the operations that were contributed to Concert were contributed as of
January 1, 1999. The net impact of Concert reflects AT&T's contribution to
Concert of certain multinational customer accounts, foreign billed revenue and
other international products, and Concert's purchase from AT&T of the domestic
component of global offerings.
<TABLE>
<CAPTION>
BUSINESS SERVICES SUMMARY 4Q99 3Q99 2Q99 1Q99 1999
---- ---- ---- ---- ----
($M)
<S> <C> <C> <C> <C> <C>
REVENUE $7,212 $7,056 $6,764 $6,448 $27,480
NORMALIZED REVENUE 7,058 6,950 6,870 6,732 27,610
EBITDA 2,540 2,347 2,269 2,332 9,488
OPERATIONAL EBITDA 2,635 2,347 2,269 2,332 9,583
OPERATIONAL EBITDA MARGIN 36.5% 33.3% 33.6% 36.2% 34.9%
EBIT 1,600 1,509 1,435 1,592 6,136
OPERATIONAL EBIT 1,695 1,509 1,435 1,592 6,231
</TABLE>
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<TABLE>
<S> <C> <C> <C> <C> <C>
OPERATIONAL EBIT MARGIN 23.5% 21.4% 21.2% 24.7% 22.7%
</TABLE>
<TABLE>
<CAPTION>
BUSINESS SERVICES SUMMARY (CONT.) 4Q99 3Q99 2Q99 1Q99 1999
---- ---- ---- ---- ----
($M)
<S> <C> <C> <C> <C> <C>
SOLUTIONS OUTSOURCING REVENUE 801 703 506 299 2,309
SOLUTIONS OUTSOURCING NORMALIZED REVENUE 814 728 682 627 2,851
</TABLE>
Note: Operational EBITDA and EBIT exclude the pretax business restructuring
charge of $95 million in 4Q99.
CONSUMER SERVICES
This segment includes the results of providing telecommunications services to
residential customers. Fixed wireless has been moved from Consumer Services into
the Wireless Services segment. Additionally, there have been some other impacts
associated with transfers between Business Services and Corporate and Other.
Revenue has been normalized to show the impact of Concert as if operations that
were contributed to Concert were contributed as of January 1, 1999. The impact
of Concert reflects AT&T's contribution of foreign billed revenue.
<TABLE>
<CAPTION>
CONSUMER SERVICES SUMMARY 4Q99 3Q99 2Q99 1Q99 1999
---- ---- ---- ---- ----
($M)
<S> <C> <C> <C> <C> <C>
REVENUE $5,327 $5,578 $5,479 $5,470 $21,854
NORMALIZED REVENUE 5,263 5,524 5,372 5,362 21,521
EBITDA 2,267 2,352 2,029 2,044 8,692
OPERATIONAL EBITDA 2,273 2,352 2,029 1,891 8,545
OPERATIONAL EBITDA MARGIN 42.7% 42.2% 37.0% 34.6% 39.1%
EBIT 2,057 2,159 1,842 1,851 7,909
OPERATIONAL EBIT 2,063 2,159 1,842 1,698 7,762
OPERATIONAL EBIT MARGIN 38.7% 38.7% 33.6% 31.0% 35.5%
</TABLE>
Note: Operational EBITDA and EBIT exclude a pretax business restructuring charge
of $6 million in 4Q99 and a pretax gain on the sale of Language Line of $153
million in 1Q99.
WIRELESS SERVICES
This segment was restated to align the operations of the segment with the assets
included in the AT&T Wireless Group Tracking Stock. Fixed wireless has been
transferred from Consumer Services and management of the business sales force
that supports wireless products was transferred from Business Services.
Additionally, WOOD-TV (which was sold in 1999) was transferred and corporate
overhead related to the Wireless Tracking Stock was allocated to the segment,
both from Corporate and Other.
<TABLE>
<CAPTION>
WIRELESS SERVICES SUMMARY 4Q99 3Q99 2Q99 1Q99 1999
---- ---- ---- ---- ----
($M)
<S> <C> <C> <C> <C> <C>
REVENUE $2,137 $2,050 $1,878 $1,562 $7,627
EBITDA EXCLUDING OTHER INCOME (321) 397 321 184 581
OPERATIONAL EBITDA EXCL. OTHER INC. 210 397 321 184 1,112
OPERATIONAL EBITDA EXCL. OTHER INC. MARGIN 9.8% 19.4% 17.1% 11.8% 14.6%
EBIT (601) 54 125 (51) (473)
OPERATIONAL EBIT (70) 54 37 (51) (30)
OPERATIONAL EBIT MARGIN -3.3% 2.6% 2.0% -3.3% -0.4%
</TABLE>
Note: Operational EBITDA excluding other income and operational EBIT exclude a
pretax asset impairment charge of $531 million in 4Q99 and operational EBIT also
excludes a pretax gain of $88 million on the sale of WOOD-TV in 2Q99.
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BROADBAND
There are no restatements related to Broadband.
CORPORATE AND OTHER
This group reflects the results of international operations and ventures and
corporate staff functions, other corporate operations, and elimination of
transactions between segments. AT&T Solutions, AGNS, and the AT&T Information
Technology Services Unit, formerly all part of the Solutions Group, have been
removed from this segment and are now reflected within Business Services.
Eliminations between AT&T Solutions, AGNS and Business Services are now
reflected within Business Services. The elimination of the sales of business
services to AT&T WorldNet Services is now included in this group. Overhead costs
related to the Wireless Tracking Stock have been allocated to Wireless Services
and WOOD-TV (which was sold in 1999) has been transferred to Wireless Services.
Revenue has been normalized to show various divestments of international
businesses and for the impact of Concert as if the operations that were
contributed to Concert were contributed as of January 1, 1999. The impact of
Concert reflects the contribution of AT&T's international carrier services.
<TABLE>
<CAPTION>
CORPORATE AND OTHER 4Q99 3Q99 2Q99 1Q99 1999
---- ---- ---- ---- ----
($M)
<S> <C> <C> <C> <C> <C>
REVENUE $131 $144 $151 $133 $559
NORMALIZED REVENUE (94) (100) (112) (64) (370)
EBITDA (157) (120) 89 (365) (553)
OPERATIONAL EBITDA 15 (230) 10 (228) (433)
OPERATIONAL EBITDA MARGIN 11.8% -158.0% 6.9% -170.6% -78.4%
EBIT (269) (212) (3) (454) (938)
OPERATIONAL EBIT (97) (322) (82) (317) (818)
OPERATIONAL EBIT MARGIN -74.4% -220.5% -54.0% -238.0% -147.2%
</TABLE>
Note: Operational EBITDA and EBIT exclude certain gains and net charges of
$(172) million in 4Q99, $110 million in 3Q99, $79 million in 2Q99 and $(137)
million in 1Q99.
