-----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, GJ8/ykGa7U+0fmMM0frmrA4HgFgxRk4N3iGmESBPQRnJS8d1Q7Hb3ZNGhrQ2dkrv ATc+NXgBNijuiFtvAMNeRg== /in/edgar/work/0000898822-00-000791/0000898822-00-000791.txt : 20001026 0000898822-00-000791.hdr.sgml : 20001026 ACCESSION NUMBER: 0000898822-00-000791 CONFORMED SUBMISSION TYPE: 425 PUBLIC DOCUMENT COUNT: 1 FILED AS OF DATE: 20001025 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: AT&T CORP CENTRAL INDEX KEY: 0000005907 STANDARD INDUSTRIAL CLASSIFICATION: [4813 ] IRS NUMBER: 134924710 STATE OF INCORPORATION: NY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 425 SEC ACT: SEC FILE NUMBER: 001-01105 FILM NUMBER: 745882 BUSINESS ADDRESS: STREET 1: 295 NO MAPLE AVENUE CITY: BASKINGRIDGE STATE: NJ ZIP: 07920 BUSINESS PHONE: 9082214268 MAIL ADDRESS: STREET 1: 295 NO MAPLE AVENUE CITY: BASKINGRIDGE STATE: NJ ZIP: 07920 FORMER COMPANY: FORMER CONFORMED NAME: AMERICAN TELEPHONE & TELEGRAPH CO DATE OF NAME CHANGE: 19920703 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: AT&T CORP CENTRAL INDEX KEY: 0000005907 STANDARD INDUSTRIAL CLASSIFICATION: [4813 ] IRS NUMBER: 134924710 STATE OF INCORPORATION: NY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 425 BUSINESS ADDRESS: STREET 1: 295 NO MAPLE AVENUE CITY: BASKINGRIDGE STATE: NJ ZIP: 07920 BUSINESS PHONE: 9082214268 MAIL ADDRESS: STREET 1: 295 NO MAPLE AVENUE CITY: BASKINGRIDGE STATE: NJ ZIP: 07920 FORMER COMPANY: FORMER CONFORMED NAME: AMERICAN TELEPHONE & TELEGRAPH CO DATE OF NAME CHANGE: 19920703 425 1 0001.txt FORM 425 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 FAMILY OF FOUR SEPARATE AT&T COMPANIES WIRELESS BROADBAND CONSUMER BUSINESS 1 [AT&T LOGO] 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. 2 [AT&T LOGO] MIKE ARMSTRONG CHAIRMAN AND CEO 3 [AT&T LOGO] FAMILY OF FOUR SEPARATE AT&T COMPANIES WIRELESS BROADBAND CONSUMER BUSINESS 4 [AT&T LOGO] 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 5 [AT&T LOGO] 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] 6 [AT&T LOGO] CHANGES DRIVING TRANSFORMATION Telecommunications Industry - --------------------------- - Regulatory & Competitive Changes - Customer Demands - Globalization - Technology Evolution 7 [AT&T LOGO] TRANSFORMING AT&T CRITERIA FOR PUBLIC INVESTMENT - Operationally ready - Currency for growth - Shareowner value - Performance focused and motivated 8 [AT&T LOGO] 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%] 9 [AT&T LOGO] 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 | | | -------------- 10 [AT&T LOGO] VALUE TRANSPARENCY SECOND HALF - 2001 ---------------- --------------- | | | | | AT&T | | AT&T | | Business | | Wireless | | | | | |-----|-----| |-----|------| | | | ------|--|------ | --------------- | | | | | AT&T | | AT&T | | Broadband | | Consumer | | Tracker | | Tracker | | | | | ------------- -------------- 11 [AT&T LOGO] LEADERSHIP LINKAGES - Brand - Performance Standards - AT&T Labs - Highly Skilled, Motivated Employees - AT&T Worldwide Intelligent Network - Collaborative Commercial Opportunities 12 [AT&T LOGO] 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 13 [AT&T LOGO] CHUCK NOSKI SENIOR EXECUTIVE VP AND CFO 14 [AT&T LOGO] 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] 15 [AT&T LOGO] 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] 16 [AT&T LOGO] EVOLUTION OF AT&T 2002 END STATE ------------------ ----------------- ---------------- | | | | | | | | | | | | | AT&T | | AT&T | | AT&T | | Business | | Broadband | | Wireless | | | | | | | | | | | | | | ---------------- | | | | ------------|----- | ----------------- ---------------- | AT&T | | Consumer | | Tracker | | | --------------- 17 [AT&T LOGO] 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 | | | ------------------------------------------------------------ 18 [AT&T LOGO] 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) 19 [AT&T LOGO] FAMILY OF FOUR SEPARATE AT&T COMPANIES WIRELESS BROADBAND CONSUMER BUSINESS 20 [AT&T LOGO] 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% 21 [AT&T LOGO] 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 22 [AT&T LOGO] 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 23 [AT&T LOGO] 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 24 [AT&T LOGO] 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 25 [AT&T LOGO] 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 26 [AT&T LOGO] 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 27 [AT&T LOGO] BUSINESS SERVICES TRANSFORMATION [BAR GRAPH DEPCITING REVENUE FOR LONG DISTANCE VOICE AND GROWTH BUSINESS FOR THE YEARS 1999, 2000 AND 2001] 28 [AT&T LOGO] 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 29 [AT&T LOGO] FAMILY OF FOUR SEPARATE AT&T COMPANIES WIRELESS BROADBAND CONSUMER BUSINESS 30 [AT&T LOGO] -----END PRIVACY-ENHANCED MESSAGE-----