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News Release
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AT&T ANNOUNCES PLAN TO SPIN OFF LIBERTY MEDIA
Liberty Media to Become Independent Company
FOR RELEASE WEDNESDAY, NOVEMBER 15, 2000
NEW YORK - AT&T today announced that its Board of Directors had voted
to spin off Liberty Media Group, which it acquired through its acquisition of
TeleCommunications, Inc. (TCI). The company said the spin off is subject to a
favorable tax ruling. AT&T expects to convert the Liberty Media tracking stock
into an asset-based security and launch Liberty Media Group as an independent,
publicly traded company in the second quarter of 2001. The new asset based
security will be issued to holders of Liberty Media tracking stock in exchange
for their shares of Liberty Media tracking stock.
AT&T said the spin off is consistent with the rationale behind the
company's recent decision to restructure into four companies. The spin off would
better enable Liberty Media to raise capital on its own, use its stock as
currency in acquiring, merging or partnering with other companies and help the
public markets to better value Liberty Media. This action would alleviate the
competitive and conflict of interest concerns that arise from the differing
business directions of AT&T and Liberty Media. It would also reduce regulatory
concerns arising from the FCC's interpretation of its new cable ownership and
attribution rules.
This step also gives AT&T the option of deciding to use the spin off of
Liberty Media to comply in large part with one of the three conditions set forth
by the Federal Communications Commission in its June order approving AT&T's
merger with MediaOne.
AT&T intends to seek rulings from the Internal Revenue Service that the
Liberty Media spin off is tax-free to AT&T, Liberty Media and their shareowners.
AT&T does not anticipate the need for other regulatory, Department of Justice or
court approval, but said that certain existing agreements would require
modification. While the company said it is confident that it will receive all
necessary approvals, there can be no guarantee that the spin-off plan will be
implemented or that changes in the plan will not be made.
Financial details on the transaction will be released as they become
available in accordance with securities regulations.
In March of 1999, TCI combined Liberty Media Group, its programming
arm, and TCI Ventures Group, its technology investment unit, to form the new
Liberty Media Group. In connection with the closing of the AT&T and TCI merger,
the shareowners of the new Liberty Media Group were issued separate tracking
stock by AT&T in exchange for the shares held in Liberty Media Group and TCI
Ventures Group. Although Liberty Media is a 100-percent-owned-subsidiary of
AT&T, it has been accounted for as an equity investment. Under the tracking
stock arrangement, all of Liberty Media's earnings and losses have been excluded
from the earnings available to the AT&T Group common shareowner.
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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. Investors and security
holders may obtain a free copy of AT&T's filings when they become available at
the Securities and Exchange Commission's website at http://www.sec.gov. In
addition, these materials and other documents may be obtained for free from AT&T
by directing a request to AT&T at 295 North Maple Drive, Basking Ridge, NJ
07920; Attn: Investor Relations. 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.
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