Filed by AT&T Corp.
Pursuant to Rule 425 under the Securities Act of 1933
and deemed filed pursuant to Rule 14a-12 under
the Securities Exchange Act of 1934
Subject Company: AT&T Corp.
Commission File No. 1-1105
October 25, 2000
MATERIALS PRESENTED AT A PRESS CONFERENCE
ON OCTOBER 25, 2000
<PAGE>
FAMILY OF FOUR
SEPARATE AT&T COMPANIES
WIRELESS BROADBAND
CONSUMER BUSINESS
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<PAGE>
SAFE HARBOR
The following 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. The audiences 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. This
information solely to provide additional information to further understand the
results of AT&T.
In connection with these transactions, AT&T will be filing proxy statements,
tender offer statements and other materials with the Securities and Exchange
Commission. Security holders are urged to read these materials when they become
available because they will contain important information. Investors and
security holders may obtain a free copy of these materials when they become
available as well as other materials filed with the Securities and Exchange
Commission concerning AT&T 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, Baking Ridge, NJ 07920; Attn: Investor Relations.
AT&T and its officers and directors may be deemed to be participants in the
solicitation of proxies from AT&T's shareholders with respect to these
transactions. Information regarding such officers and directors is included in
AT&T's proxy statement for its 2000 annual meeting of stockholders filed with
the Securities and Exchange Commission on March 27, 2000. This document is
available free of charge at the SEC's internet site or from AT&T as described
above.
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<PAGE>
MIKE ARMSTRONG
CHAIRMAN AND CEO
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<PAGE>
FAMILY OF FOUR
SEPARATE AT&T COMPANIES
WIRELESS BROADBAND
CONSUMER BUSINESS
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<PAGE>
AT&T CREATES FOUR
INDUSTRY LEADING COMPANIES
WIRELESS BROADBAND
-------- ---------
Revenue: $9.6B Revenue: $9.3B
EBITDA Margin**: 16.6% EBITDA Margin**: 24.3%
Record 750K Sub Adds 28M Homes passes
$68.50 ARPU in 3Q 3.8M RGUs
CONSUMER BUSINESS
-------- --------
Revenue: $19.7B Revenue: $28.4B
EBITDA Margin**: 41.0% EBITDA Margin**: 36.1%
60M Customers $12B Solutions Backlog
~950K All Distance Subs >10K Web hosting customers
>2M local access lines
2000 Financial Results*
* Based on last twelve months of results & normalization of revenue
** Excluding other income
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<PAGE>
AT&T IS
TRANSFORMING AT A RAPID PACE
REVENUE DIVERSIFICATION
[PIE CHART DEPICTING 1997 REVENUE DIVERSIFICATION AMONG
LD VOICE, WIRELESS, AND BUSINESS DATA & OTHER]
[PIE CHART DEPICTING 2002 REVENUE DIVERSIFICATION AMONG
BUSINESS GROWTH AREAS, LD VOICE, WIRELESS, AND BROADBAND]
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<PAGE>
CHANGES DRIVING TRANSFORMATION
Telecommunications Industry
---------------------------
- Regulatory & Competitive Changes
- Customer Demands
- Globalization
- Technology Evolution
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<PAGE>
TRANSFORMING AT&T
CRITERIA FOR PUBLIC INVESTMENT
- Operationally ready
- Currency for growth
- Shareowner value
- Performance focused and motivated
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<PAGE>
EXECUTING IN GROWTH BUSINESSES
[LINE GRAPH DEPICTING THE FOLLOWING DATA FOR
2000 YTD REVENUE GROWTH:
Business Growth Areas
IP
Solutions ----> ~20%
Data
Wireless
Broadband
LD Voice
Consumer & Bunsess ----> ~5%]
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<PAGE>
TRANSFORMATION OF AT&T
[GRAPHIC DEPICTING THE FOLLOWING:
-----------------------
| |
Today | AT&T |
| Business |
| Consumer -----------------
| Broadband | | AT&T |
| | | Wireless |
--------------------|-- Tracker |
/ / \ | |
End State / / \ -----------------
2002 / / \ \
/ / \ \
--------------- / --------------- --------------
| | | | | | |
| AT&T -------------- | AT&T | | AT&T |
| Business | | | | Broadband | | Wireless |
| | | AT&T | | | | |
------------|- Consumer | -------------- --------------
| Tracker |
| |
--------------
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<PAGE>
VALUE TRANSPARENCY
SECOND HALF - 2001
---------------- ---------------
| | | |
| AT&T | | AT&T |
| Business | | Wireless |
| | | |
|-----|-----| |-----|------| | |
| ------|--|------ | ---------------
| | | |
| AT&T | | AT&T |
| Broadband | | Consumer |
| Tracker | | Tracker |
| | | |
------------- --------------
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<PAGE>
LEADERSHIP LINKAGES
- Brand
- Performance Standards
- AT&T Labs
- Highly Skilled, Motivated Employees
- AT&T Worldwide Intelligent Network
- Collaborative Commercial Opportunities
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<PAGE>
AT&T: FOUR LEADING COMPANIES
Wireless Broadband
-------- ---------
- Mobile - Video
- Data - Data
- Fixed - Telephony
- International - Video-On-Demand
- Interactive
Consumer Business
-------- --------
- LD Voice - Data
- WorldNet - IP/Web Hosting
- Transactional - Solutions
- All-distance - Local
- DSL Opportunity - Global
- LD Voice
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<PAGE>
CHUCK NOSKI
SENIOR EXECUTIVE VP AND CFO
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<PAGE>
EVOLUTION OF AT&T
4Q 2000 - 1Q 2001
------------------
| |
| |
| Business |
| Broadband |
| Consumer |
| |
| ----------------
------------|----- |
| AT&T |
| Wireless |
| Tracker |
| |
---------------
[EXCHANGE FROM BUSINESS BROADBAND CONSUMER TO AT&T WIRELESS TRACKER]
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EVOLUTION OF AT&T
SECOND HALF 2001
AT&T
---------------- ---------------
| | | |
| Business | | AT&T |
| Services | | Wireless |
| | | |
|-----|-----| |-----|------| | |
| ------|--|------ | ---------------
| | | |
| AT&T | | AT&T |
| Consumer | | Broadband |
| Tracker | | Tracker |
| | | |
------------- --------------
[DISTRIBUTION OF BUSINESS SERVICES TO AT&T CONSUMER TRACKER
IPO OF BUSINESS SERVICES TO AT&T BROADBAND TRACKER
SPIN-OFF OF BUSINESS SERVICES TO AT&T WIRELSS]
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EVOLUTION OF AT&T
2002
END STATE
------------------ ----------------- ----------------
| | | | | |
| | | | | |
| AT&T | | AT&T | | AT&T |
| Business | | Broadband | | Wireless |
| | | | | |
| | | | | |
| ---------------- | | | |
------------|----- | ----------------- ----------------
| AT&T |
| Consumer |
| Tracker |
| |
---------------
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<PAGE>
MAXIMIZING FINANCIAL FLEXIBILITY
Wireless Consumer Broadband Business
-------- -------- --------- --------
Debt Policy
------------------------------------------------------------
| |
| Target investment grade rating |
| consistent with industry comparables |
| |
------------------------------------------------------------
Dividend Policy
------------------------------------------------------------
| |
| Targeted to reflect financial |
| performance, comparable |
| companies, and ongoing capital needs |
| |
------------------------------------------------------------
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AT&T LINKAGES
- Brand license
- Market-based contracts for use of network and AT&T Labs
- Commercial agreements for continued cross-company collaboration
- Agreements to ensure smooth transition (e.g., systems, corporate
functions)
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<PAGE>
FAMILY OF FOUR
SEPARATE AT&T COMPANIES
WIRELESS BROADBAND
CONSUMER BUSINESS
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<PAGE>
WIRELESS 3Q OPERATING HIGHLIGHTS
- Continued solid performance
- Accelerating revenue growth of 36.6%
- Record net adds of 750K
- Strong ARPU at $68.50
- Churn of 2.9%
- Strong EBITDA margins at 17%
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AT&T CONSUMER SERVICES
Funding Vehicle - Flexibility to leverage
--------------- customer base, cash
--------------- flow, and AT&T brand
| |
Consumer: | Creation of | - Prioritize cash
--------- | Tracking | flow -> fuel growth
Wireless ---> | Stock | ---> initiatives
Business | allows for |
Broadband | | - Benefit consumers: new
--------------- and innovative services
- Strengthen performance
focus/ motivation
- Shareholder value
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<PAGE>
PORTFOLIO OF DIVERSE AND
INDUSTRY LEADING CONSUMER SERVICES
60M Customer Base
-----------------
- Internet Service Provider
AT&T worldnet service
- Long Distance
AT&T One Rate 7cent Plan
all day every day
- International
- DSL Opportunity
Voice & Data
- All Distance
AT&T Local One Rate (sm) New York
AT&T Local One Rate (sm) Texas
- Transacton
1 800 CALL ATT
for Collect calls
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TRANSFORMATION OPPORTUNITIES
- DSL: Integrated multi-line all distance voice and data offer
- Leverage WorldNet
- All-distance - UNE-P
- Co-marketing partners
- Consumer services
- Communication services
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CONSUMER 3Q OPERATING HIGHLIGHTS
- Maximizing returns: Solid EBIT margin of 39.7%
- Revenue decline of 10.9%
- All Distance success
- Nearly 650K net customers in New York
- >300K in Texas
- 10M+ customers on lead One Rate offers
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<PAGE>
THE LEADING BROADBAND PROVIDER
MID 2001 - IPO OF BROADBAND TRACKER
Includes:
---------
- 28M owned and operated homes passed
- Excite@Home
~25% economic interest
74% voting interest
- Growing customer base:
> 16M basic cable subs
3.8M new services RGUs
- Road Runner
- Cablevision
- Time Warner Entertainment
Portfolio of partnerships and affiliates
- HFC network capable of delivering wide array of advanced,
interactive services
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BROADBAND 3Q OPERATING HIGHLIGHTS
- Industry-leading Revenue Generating Units (RGUs) = 3.8M
- Added nearly 600K RGUs - 41% sequential add growth
- Telephony: 126K Adds (at 350K subs)
- High Speed Data: 197K Adds (at 888K subs)
- Digital: 273 Adds (at 2.5M subs)
- Expansion of new services penetration rates
- Revenue per customer > $50 per month
- Total revenue growth of 10.8% with continued acceleration
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<PAGE>
BUSINESS SERVICES TRANSFORMATION
[BAR GRAPH DEPCITING REVENUE FOR
LONG DISTANCE VOICE AND GROWTH BUSINESS FOR
THE YEARS 1999, 2000 AND 2001]
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<PAGE>
BUSINESS 3Q OPERATING HIGHLIGHTS
- Growth businesses revenue up nearly 20%
- Total revenue growth of 2.5% - dampened by voice
- Executing on Data/IP growth: 20+%
- Solutions growing 20%
- Cost controls driving solid 24.4% EBIT margins
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<PAGE>
FAMILY OF FOUR
SEPARATE AT&T COMPANIES
WIRELESS BROADBAND
CONSUMER BUSINESS
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