-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, JjpzpLpt/KQlK73zjnmTktrgeyxSW8c7Mw49q3HnKk31iKEAW4WMF2tciCohdyRp jiuIA4mAHY9yoTWUKvHxaw== 0000950103-02-000231.txt : 20020415 0000950103-02-000231.hdr.sgml : 20020415 ACCESSION NUMBER: 0000950103-02-000231 CONFORMED SUBMISSION TYPE: 425 PUBLIC DOCUMENT COUNT: 1 FILED AS OF DATE: 20020304 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: AT&T CORP CENTRAL INDEX KEY: 0000005907 STANDARD INDUSTRIAL CLASSIFICATION: TELEPHONE COMMUNICATIONS (NO RADIO TELEPHONE) [4813] IRS NUMBER: 134924710 STATE OF INCORPORATION: NY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 425 SEC ACT: 1934 Act SEC FILE NUMBER: 001-01105 FILM NUMBER: 02566365 BUSINESS ADDRESS: STREET 1: 32 AVENUE OF AMERICAS CITY: NEW YORK STATE: NY ZIP: 10013-2412 BUSINESS PHONE: 9082214268 MAIL ADDRESS: STREET 1: 32 AVENUE OF AMERICAS CITY: NEW YORK STATE: NY ZIP: 10012-2412 FORMER COMPANY: FORMER CONFORMED NAME: AMERICAN TELEPHONE & TELEGRAPH CO DATE OF NAME CHANGE: 19920703 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: COMCAST CORP CENTRAL INDEX KEY: 0000022301 STANDARD INDUSTRIAL CLASSIFICATION: CABLE & OTHER PAY TELEVISION SERVICES [4841] IRS NUMBER: 231709202 STATE OF INCORPORATION: PA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 425 BUSINESS ADDRESS: STREET 1: 1500 MARKET STREET CITY: PHILADELPHIA STATE: PA ZIP: 19102-2148 BUSINESS PHONE: 2156651700 MAIL ADDRESS: STREET 1: 1500 MARKET STREET CITY: PHILADELPHIA STATE: PA ZIP: 19102-2148 425 1 mar0402_425.txt Filed by Comcast Corporation 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 Date: March 4, 2002 The following presentation was used by Comcast at Bear Stearns 15th Annual Media, Entertainment & Information Conference: Bear Stearns 15th Annual Media, Entertainment & Information Conference March 4, 2002 COMCAST Logo Safe Harbor Caution Concerning Forward-Looking Statements This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. In some cases, you can identify those so-called "forward-looking statements" by words such as "may," "will," "should," "expects," "plans," "anticipates," "believes," "estimates," "predicts," "potential," or "continue," or the negative of those words and other comparable words. Comcast Corporation ("Comcast") wishes to take advantage of the "safe harbor" provided for by the Private Securities Litigation Reform Act of 1995 and you are cautioned that actual events or results may differ materially from the expectations expressed in such forward-looking statements as a result of various factors, including risks and uncertainties, many of which are beyond the control of Comcast. Factors that could cause actual results to differ materially include, but are not limited to (1) the effects of legislative and regulatory changes; (2) the potential for increased competition; (3) technological changes; (4) the need to generate substantial growth in the subscriber base by successfully launching, marketing and providing services in identified markets; (5) pricing pressures which could affect demand for Comcast's services; (6) Comcast's ability to expand its distribution; (7) changes in labor, programming, equipment and capital costs; (8) Comcast's continued ability to create or acquire programming and products that customers will find attractive; (9) future acquisitions, strategic partnerships and divestitures; (10) general business and economic conditions; (11) other risks described from time to time in Comcast's periodic reports filed with the Securities and Exchange Commission; and (12) with respect to statements relating to the proposed combination of Comcast and AT&T Broadband, factors that could cause actual results of the combined businesses of Comcast and AT&T Broadband to differ materially from expected results for such businesses, including failure to integrate the businesses successfully or to achieve the expected combination benefits. Bear Stearns March 4, 2002 COMCAST Logo COMCAST Logo Stephen B. Burke President Comcast Cable Communications 2001 Achievements Completed Rebuild of Our Cable Systems Exceeded New Service Goals o 2.3 Million Digital Subscriptions o 950,000 High-Speed Internet Subscribers Delivered Accelerating OCF Growth Integrated Nearly 2 Million Subscribers While Improving OCF Margins Bear Stearns March 4, 2002 COMCAST Logo Upgraded Network Homes Passed (in Millions) 1996 1997 1998 1999 2000 2001 Less Than 550MMz 3.4 2.5 1.3 1.9 1.3 0.7 550MHz to 750MHz 1.9 1.6 1.7 2.1 1.7 2.1 750MHz or More 1.6 3 4.4 5.5 9.7 11 --- --- 50% 95% Bear Stearns March 4, 2002 COMCAST Logo Leveraging an Upgraded Network -> New Services COMCAST digital cable Subscriptions (000s) YE98 YE99 YE00 YE01 YE02E Subscriptions 78 515 1,350 2,300 3,000* Penetration 5% 10.2% 18.7% 27% 34.8% * 2002 Guidance: 600-700,000 net additions. Bear Stearns March 4, 2002 COMCAST Logo Digital Growth Strategy [Graph representing Digital Penetration increasing to 100%+ through the combination of Digital Classic ($9.95), Digital Plus ($14.95), Video-On-Demand, Interactive TV and T Commerce has been omitted.] Bear Stearns March 4, 2002 COMCAST Logo Building on the Digital Platform Video-On-Demand o Differentiate vs. Satellite o Drive Digital Penetration o Today: 3 Million VOD-Ready Homes in 16 Markets o YE02: 5-6 Million VOD-Ready Homes Bear Stearns March 4, 2002 COMCAST Logo Building on the Digital Platform High-Definition Television o Today: Availability to 1.3MM Customers in Mid-Atlantic Super Cluster o Broadcasts Include: ABC, NBC, HBO and Showtime Bear Stearns March 4, 2002 COMCAST Logo COMCAST High-Speed Internet Subscribers (000s) YE98 YE99 YE00 YE01 YE02E Subscribers 51 142 400 948 1,400* Penetration 3% 5% 7% 9.5% 12.2% * 2002 Guidance: 400-500,000 net additions. Bear Stearns March 4, 2002 COMCAST Logo COMCAST High-Speed Internet o Completed Transition to Comcast Network o Improved Control and Network Reliability o Significant Cash Flow Opportunity After Transition o Designed to Support Multiple ISPs and Tiered Services o First ISP Deal: Juno and NetZero Bear Stearns March 4, 2002 COMCAST Logo New Services: Revenue Growth $ In Millions 1997 1998 1999 2000 2001 2002E High-Speed Internet 2.7 14.3 43.2 115 294 565 Digital Cable --- 2.2 31.6 114.7 241 340 Bear Stearns March 4, 2002 COMCAST Logo Accelerating Contribution to Cash Flow $ In Millions 1997 1998 1999 2000 2001 2002E High-Speed Internet -10 -9 -9 3 35 125 Digital Cable -- 1 25 92 192 272 Bear Stearns March 4, 2002 COMCAST Logo Integration Success Integrated 3.6 Million Subscribers in Past Two Years Cable EBITDA (in Billions) 1996 1997 1998 1999 2000 2001 Cable EBITDA $0.81 $0.9877 $1.0966 $1.353 $1.899 $2.193 EBITDA Margins 49.3% 47.6% 48.1% 46.2% 45% 42.7% Note: Excludes Impact of High-Speed Internet Transition in 2001 Bear Stearns March 4, 2002 COMCAST Logo Integration Success: Our Roadmap o Clear Priorities o Focus on Cash Flow Growth o New Products o Strong Local Management o Local Budgeting o Line by Line Reviews by Senior Management o Monthly Follow-Up Bear Stearns March 4, 2002 COMCAST Logo Integration Success: Acquired Systems AT&T Broadband: 1.4MM Subscribers Acquired January 2001 2000 2001 2002E ---- ---- ----- Revenue (Millions) $831.3 $878.2 $964.6 Cash Flow (Millions) $262.5 $330.9 $391.3 OCF Margin 31.6% 37.7% 40.6% Annual OCF/ Avg. Subscriber $179.7 $224.3 $262.3 Bear Stearns March 4, 2002 COMCAST Logo Integration Success: Acquired Systems AT&T Broadband: 1.4MM Subscribers Acquired January 2001 Royal Oak, MI (78K Subs) 2000 2001 2002E - -------------- ---- ---- ----- Revenue (Millions) $48.1 $51.6 $58.9 Cash Flow (Millions) $11.8 $17.9 $23.6 OCF Margin 24.5% 34.7% 40.1% Annual OCF/Avg. Subscriber $151.9 $227.6 $301.0 Bear Stearns March 4, 2002 COMCAST Logo Integration Success: Acquired Systems AT&T Broadband: 1.4MM Subscribers Acquired January 2001 Ann Arbor, MI (134K Subs) 2000 2001 2002E - -------------- ---- ---- ----- Revenue (Millions) $68.3 $81.0 $96.5 Cash Flow (Millions) $16.0 $26.8 $36.8 OCF Margin 23.5% 33.1% 38.2% Annual OCF/Avg. Subscriber $122.7 $200.3 $267.7 Bear Stearns March 4, 2002 COMCAST Logo Integration Success: Acquired Systems Telephone 2000 2001 2002E ---- ---- ----- Revenue (Millions) $ 4.6 $10.7 $15.5 Cash Flow (Millions) $ (3.7) $ 2.0 $ 4.0 Telephone Subscribers 12,776 20,768 28,020 Homes Passed (000) 176 188 230 Bear Stearns March 4, 2002 COMCAST Logo COMCAST Logo John R. Alchin Executive Vice President and Treasurer Comcast Corporation Strong Operating Performance Accelerating Cash Flow Growth $ in Millions FY00 FY01 FY02E Cable $2009.1 $2,251.3 $2,543 12% 12-14% FY00 FY01 FY02E QVC $619.2 $722.3 $838 16% mid-teens FY00 FY01 FY02E Content $130.3 $189.2 $208 45% mid-teens Consolidated 10.2% Revenue Growth and 12.3% Cash Flow Growth Note: Pro Forma Results; Excludes Impact of High-Speed Internet Transition in 2001 Bear Stearns March 4, 2002 COMCAST Logo Strong Operating Performance Free Cash Flow Generation Decrease in cable capital expenditures (Billions) 1998 1999 2000 2001 2002E ---- ---- ---- ---- ----- Cable 0.711 0.739 1.248 1.855 1.3 Consolidated $0.898 $0.893 $1.636 $2.181 $1.496 . . . leads to significant FCF generation 1998 1999 2000 2001 2002E ---- ---- ---- ---- ----- FCF $66.3 $402.6 $266.6 $110.1 $800 Free Cash Flow = EBITDA - Cap Ex - Interest Expense - Cash Taxes. Excludes One-Time Tax Payments, OCF losses from Business Telephony Initiatives and High-Speed Internet Transition Costs Bear Stearns March 4, 2002 COMCAST Logo Financial Flexibility At 12/31/01: o Solidly Investment Grade ------------ Consolidated Leverage (Debt/EBITDA)(1) 3.6x Consolidated Interest Coverage 4.0x o Significant Liquidity Cash $350 MM Investments $4.302 Bn Unused Bank Lines $3.250 Bn Modest Near-Term Maturities:(Dollars In Millions) 2002 2003 2004 ---- ---- ---- 450 75 325 (1) Net of Zones; Excludes Excite @Home Transition Costs Bear Stearns March 4, 2002 COMCAST Logo AT&T COMCAST LOGO OCF Growth Exceeding 20% 2003 2004 2005 ---- ---- ---- AT&T Broadband OCF Margin Improvement 26% --------------> 36% Operating Synergies (Millions) $300 $400 $500 Comcast Cable OCF Growth(1) 11% --------------> 11% (1) For Illustrative Purposes Only. Not Indicative of Guidance. Bear Stearns March 4, 2002 COMCAST Logo AT&T COMCAST LOGO 12/31/02 ------------------- Investment Grade Debt Cash Flow ----- --------- o QUIPS Convert to Equity o Rapid Reduction in Leverage Comcast $10BN $3.4BN o OCF Growth o Asset Monetization AT&T Broadband $20BN(1) $2.5BN o Solid Investment Grade Profile: ----- ----- Leverage Ratio After Asset $30BN $5.9BN Monetization:(1) QUIPS $5BN 2002 2003 2004 ----- 3.6x 3.0x 2.5x (1) Net of $5 billion of Exchangeable Securities For Illustrative Purposes Only. Not Indicative of Guidance Bear Stearns March 4, 2002 COMCAST Logo AT&T COMCAST LOGO Pro Forma Organizational Structure Guarantees Equalize Credit Across Issuers AT&T COMCAST Corporation [Primary Borrower] | __________________________________|___________________________________________ | | | | | | Comcast | Corporation AT&T [Unrestricted Group] Broadband | | | | _______________________|______________________________________________ ___________|__________ | | | | | | | | | | | | | | | | | | E! Entertainment QVC Comcast Comcast Cable MediaOne AT&T Televison Inc Spectacor Comunications Group Inc. Broadband [Unrestricted Group] [Unrestricted Group] [Unrestricted Group] [Restricted Group] [Restricted Group] [Restricted Group]
[Guarantees are between (i) AT&T Comcast Corporation and each of Comcast Cable Communications, MediaOne Group, Inc. and AT&T Broadband LLC, (ii) Comcast Cable Communications and MediaOne Group, Inc. and (iii) MediaOne Group, Inc. and AT&T Broadband LLC.] Bear Stearns March 4, 2002 COMCAST Logo AT&T COMCAST LOGO Merger Funding Plan: Well On Its Way o $10 Billion Already Committed By Five Major Financial Institutions o Funding Requirement at Closing: $11-$14 Billion o Includes Repayment of AT&T Intercompany Debt and Near-Term Liquidity Needs for AT&T Comcast o Additional Liquidity Cushion in $4.5 Billion of Current Bank Facilities That Remain In Place Bear Stearns March 4, 2002 COMCAST Logo COMCAST LOGO Note: The following notice is included to meet certain legal requirements: FORWARD-LOOKING STATEMENTS The enclosed information contains forward-looking statements within the meaning of the "safe harbor" provisions of the United States Private Securities Litigation Reform Act of 1995. Investors are cautioned that such forward-looking statements with respect to revenues, earnings, performance, strategies, prospects and other aspects of the business of Comcast Corporation ("Comcast") are based on current expectations that are subject to risks and uncertainties. A number of factors could cause actual results or outcomes to differ materially from those indicated by such forward-looking statements. These factors include, but are not limited to, risks and uncertainties set forth in Comcast's filings with the Securities and Exchange Commission ("SEC"), including risks and uncertainties relating to: failure to obtain and retain expected synergies from the proposed transaction with AT&T Corp. ("AT&T") relating to AT&T's broadband business, delays in obtaining, or adverse conditions contained in, any regulatory approvals required for the proposed transaction, changes in laws or regulations, availability and cost of capital and other similar factors. Readers are referred to Comcast's most recent reports filed with the SEC. Comcast is under no obligation to (and expressly disclaims any such obligation to) update or alter its forward-looking statements whether as a result of new information, future events or otherwise. ADDITIONAL INFORMATION In connection with the proposed transactions, AT&T and Comcast will file a joint proxy statement/prospectus with the SEC. INVESTORS AND SECURITY HOLDERS ARE URGED TO CAREFULLY READ THE JOINT PROXY STATEMENT/PROSPECTUS REGARDING THE PROPOSED TRANSACTION WHEN IT BECOMES AVAILABLE BECAUSE IT WILL CONTAIN IMPORTANT INFORMATION. Investors and security holders may obtain a free copy of the joint proxy statement/prospectus (when it is available) and other documents containing information about AT&T and Comcast, without charge, at the SEC's web site at http://www.sec.gov. Free copies of AT&T's filings may be obtained by directing a request to AT&T Corp., 295 North Maple Avenue, Basking Ridge, N.J. 07920, Attention: Investor Relations. Free copies of Comcast's filings may be obtained by directing a request to Comcast Corporation, 1500 Market Street, Philadelphia, Pennsylvania 19102-2148, Attention: General Counsel. Comcast and its directors, executive officers and other members of its management and employees may be soliciting proxies from its stockholders in connection with the proposed transaction. Information concerning Comcast's participants in the solicitation is contained in a filing made by Comcast with the Commission pursuant to Rule 14a-12 on July 9, 2001. -----END PRIVACY-ENHANCED MESSAGE-----