-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, X1Ug4+MWN5CpxlJ5WO7N/v3ZTMt4I/3/+HpaTXsKm3LiH6s7QCKYtMGQXAS7eXiq 20heiLe4mjOWJAhHNwi6Xg== 0000950146-95-000015.txt : 19950608 0000950146-95-000015.hdr.sgml : 19950608 ACCESSION NUMBER: 0000950146-95-000015 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19950124 ITEM INFORMATION: Other events FILED AS OF DATE: 19950125 SROS: BSE SROS: MSE SROS: NYSE SROS: PHLX SROS: PSE FILER: 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: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-01105 FILM NUMBER: 95502674 BUSINESS ADDRESS: STREET 1: 32 AVENUE OF THE AMERICAS CITY: NEW YORK STATE: NY ZIP: 10013 BUSINESS PHONE: 2123875400 FORMER COMPANY: FORMER CONFORMED NAME: AMERICAN TELEPHONE & TELEGRAPH CO DATE OF NAME CHANGE: 19920703 8-K 1 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: January 24, 1995 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 10013-2412 Telephone Number (212) 387-5400 Form 8-K January 24, 1995 AT&T Corp. Item 5. Other Events Results for the Year Ended December 31, 1994 On January 24, 1995, AT&T Corp. ("AT&T" or the "Company") announced the earnings results for the year ended December 31, 1994. The following information is set forth below: 1. Consolidated Statements of Income for the Three Months and Twelve Months Ended December 31, 1994 and December 31, 1993. 2. Consolidated Balance Sheets at December 31, 1994 and December 31, 1993. 3. Notes to Consolidated Financial Statements. Form 8-K January 24, 1995
AT&T CONSOLIDATED STATEMENTS OF INCOME Dollars in millions except per share amounts Three Months Ended Twelve Months Ended December 31 December 31 1994 1993(a) 1994(a) 1993(a) ------- ------- ------- ------- SALES AND REVENUES Telecommunications services $10,959 $10,394 $43,425 $41,623 Products and systems 7,086 5,927 21,161 17,925 Rentals and other services 2,170 2,037 7,391 7,299 Financial services and leasing 895 712 3,117 2,504 ------- ------- ------- ----- TOTAL REVENUES 21,110 19,070 75,094 69,351 COSTS (c) Telecommunications services: Access and other interconnection costs 4,377 4,417 17,797 17,772 Other costs 1,823 1,938 7,466 7,623 ------- ------- ------ ------ Total telecommunications services 6,200 6,355 25,263 25,395 Products and systems 4,518 3,665 13,273 10,966 Rentals and other services 1,125 1,055 3,629 3,563 Financial services and leasing 628 496 2,152 1,711 ------- ------- ------- ------ TOTAL COSTS 12,471 11,571 44,317 41,635 GROSS MARGIN 8,639 7,499 30,777 27,716 OPERATING EXPENSES (c) Selling, general & administrative expenses (b) 5,591 4,988 19,637 18,037 Research & development expenses 832 833 3,110 3,111 ------- ------- ------- ------- TOTAL OPERATING EXPENSES 6,423 5,821 22,747 21,148 OPERATING INCOME 2,216 1,678 8,030 6,568 Other income - net (d) 67 (39) 236 476 Loss on sale of stock by a subsidiary (e) - - - 9 Interest expense 168 326 748 1,032 ------- ------- ------- ------- Income before income taxes and cumulative effects of accounting changes 2,115 1,313 7,518 6,003 Provision for income taxes 777 537 2,808 2,301 ------- ------- ------- ------- Income before cumulative effects of accounting changes 1,338 776 4,710 3,702 ------- ------- ------- ------- Cumulative effects on prior years of changes in accounting for: Postretirement benefits (net of income tax benefit of $4,294) (f) - - - (7,023) Postemployment benefits (net of income tax benefit of $681) (g) - - - (1,128) Income taxes (h) - - - (1,457) -------- -------- -------- -------- Cumulative effects of accounting changes - - - (9,608) -------- -------- -------- -------- NET INCOME (LOSS) $ 1,338 $ 776 $ 4,710 $ (5,906) ======= ======= ======= ========= Weighted average common shares outstanding (millions) 1,571 1,554 1,564 1,547 PER COMMON SHARE: Income before cumulative effects of accounting changes $ 0.85 $ 0.50 $ 3.01 $ 2.39 Cumulative effects of accounting changes - - - (6.21) --------- --------- -------- --------- NET INCOME (LOSS) $ 0.85 $ 0.50 $ 3.01 $ (3.82) ======== ======== ======== ========= Dividends declared per common share $ 0.33 $ 0.33 $ 1.32 $ 1.32
The accompanying footnotes are an integral part of the financial statements. Form 8-K January 24, 1995
AT&T CONSOLIDATED BALANCE SHEETS Dollars in millions except per share amount DECEMBER 31 DECEMBER 31 1994 1993 -------------- ---------- ASSETS Cash and temporary cash investments $ 1,208 $ 671 Receivables less allowances of $1,251 and $1,040 Accounts receivable 13,671 12,294 Finance receivables 14,952 11,370 Inventories 3,633 3,222 Deferred income taxes 3,030 2,079 Other current assets 1,117 732 --------- --------- Total current assets 37,611 30,368 Property, plant and equipment net of accumulated depreciation of $23,947 and $22,281 22,035 21,015 Licensing cost, net of accumulated amortization of $613 and $505 4,251 3,995 Investments 2,708 3,060 Finance receivables 4,513 3,815 Prepaid pension costs 4,151 3,575 Other assets 3,993 3,565 --------- --------- TOTAL ASSETS $ 79,262 $ 69,393 ========= ========= LIABILITIES AND DEFERRED CREDITS Accounts payable $ 6,011 $ 4,853 Payroll and benefit-related liabilities 4,105 3,802 Postretirement and postemployment benefit liabilities 1,029 1,301 Debt maturing within one year 13,666 11,063 Dividends payable 518 448 Other current liabilities 5,601 4,587 -------- -------- Total current liabilities 30,930 26,054 Long-term debt including capital leases 11,358 11,802 Postretirement and postemployment benefit liabilities 8,754 9,083 Other liabilities 4,285 4,363 Deferred income taxes 3,913 2,231 Unamortized investment tax credits 232 270 Other deferred credits 776 263 -------- --------- Total liabilities and deferred credits 60,248 54,066 MINORITY INTERESTS (i) 1,093 1,953 SHAREOWNERS' EQUITY Common stock - par value $1 per share 1,569 1,547 Authorized shares: 2,000,000,000 Outstanding shares: 1,568,951,000 at December 31, 1994 1,546,518,000 at December 31, 1993 Additional paid-in capital (i) 15,825 14,324 Guaranteed ESOP obligation (305) (355) Foreign currency translation adjustments 145 (32) Retained earnings 687 ( 2,110) ------- -------- Total shareowners' equity 17,921 13,374 -------- ------- TOTAL LIABILITIES AND SHAREOWNERS' EQUITY $ 79,262 $ 69,393 ========= ========
The accompanying footnotes are an integral part of the financial statements. Form 8-K January 24, 1995 AT&T Corp. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Dollars in millions except per share amounts (a) Previously reported quarterly results were restated to reflect the merger of AT&T Corp. and McCaw Cellular Communications, Inc. ("McCaw") which was accounted for as a pooling of interests. See also note (b). Previously reported quarterly results for 1993 were restated to reflect the adoption of Statement of Financial Accounting Standards (SFAS) No. 112 "Employers' Accounting for Postemployment Benefits." See also note (g). These restatements include certain other reclassifications to conform with the current presentation: (1) The reclassification, for prior quarters of 1994, of certain benefits customers earned through our targeted marketing programs for telecommunications services. For example, benefits redeemed as long distance minutes are reported as a direct reduction to telecommunications services revenues rather than selling, general and administrative expense. (2) The reclassification of certain revenues and related costs in the Global Information Solutions unit from products and systems to the rental and other services category for all prior quarters. (3) The reclassification of provisions for business restructuring to costs and operating expenses for previously reported quarters in 1993. These reclassifications did not affect operating income or net income for the periods. (b) On September 19, 1994, AT&T merged with McCaw. As a result,197.5 million shares of McCaw common stock were converted into AT&T common stock at an exchange ratio of one share of AT&T common stock for each McCaw share. In addition, AT&T assumed 11.3 million McCaw options which were converted into AT&T stock options at the same exchange ratio resulting in 11.3 million additional AT&T stock options at an average exercise price of $27.01. The merger was accounted for as a pooling of interests and the consolidated financial statements of AT&T have been restated for all periods prior to the merger to include the accounts and operations of McCaw. Intercompany transactions prior to 1994 have not been eliminated due to the immateriality of the amounts involved. There were merger-related expenses of $227 million in the third quarter ($169 million net of taxes) which are reported as selling, general and administrative expenses. Certain reclassifications have been made to McCaw's accounts to conform to AT&T's presentation. Operating results of the companies for the current presentation are: Three Months Ended Nine Months Ended September 30 September 30 1994 1993 1994 1993 SALES AND REVENUES AT&T $17,993 $16,662 $52,178 $48,697 McCaw 735 563 2,062 1,584 Eliminations (79) - (256) - TOTAL $18,649 $17,225 $53,984 $50,281 NET INCOME (LOSS) AT&T $ 1,191 $ 1,051 $ 3,431 $(4,777) McCaw (95) (29) 34 (1,905) Eliminations (46) - (93) - TOTAL $ 1,050 $ 1,002 $ 3,372 $(6,682) Form 8-K January 24, 1995 AT&T Corp. (c) Provisions for business restructuring in the nine months ended September 30, 1993 totaled $308. These provisions included $215 for re-engineering customer support functions for telecommunications services (including $55 for employee relocation, $25 for outplacement costs, $30 for legal contingencies and $105 for closing facilities, lease terminations and asset abandonments associated with centralizing support services). There were also $93 in provisions to provide for lease terminations, closing facilities and other related expenses for restructuring activities in other areas. These provisions were reclassified as follows: $234 to selling, general and administrative expenses; $59 to the costs of products and systems; and $15 to other line items. (d) In June 1993, AT&T sold its remaining 77% interest in UNIX System Laboratories, Inc. to Novell, Inc. in exchange for approximately 3% of Novell common stock. The gain on the sale was $217. (e) AT&T Capital Corporation ("AT&T Capital") sold 14% of its common stock in an Initial Public Offering, thereby reducing AT&T's ownership to 86%. Due to the required recording of $18 of recourse loans by AT&T Capital to its senior management associated with the stock offering, a $9 loss was realized for the three and nine months ended September 30, 1993. The expected net gain on the sale after collecting these loans over seven years will be $6. (f) Effective January 1, 1993, AT&T adopted SFAS No. 106, "Employers' Accounting for Postretirement Benefits Other Than Pensions." This standard requires companies to accrue for estimated future postretirement benefit expenses during the years employees are working and earning benefits for retirement. Previously, AT&T expensed these benefits as claims were incurred. AT&T recorded an after-tax charge of $7,023 ($4.55 per share) to record the unprovided portion of these liabilities as the cumulative effect of an accounting change in the first quarter of 1993. This accounting change does not affect cash flows. (g) Effective January 1, 1993, AT&T adopted SFAS No. 112. This standard requires companies to accrue for estimated future postemployment benefits during the years employees are working and accumulating these benefits. Before this change in accounting method, AT&T recognized the separation costs as they were identified and disability benefits when paid. AT&T recorded an after-tax charge of $1,128 ($0.73 per share) to record the unprovided portion of these liabilities as the cumulative effect of an accounting change in the first quarter of 1993. This accounting change does not affect cash flows. (h) Also effective January 1, 1993, AT&T adopted SFAS No. 109, "Accounting for Income Taxes." Among other provisions, this standard requires tax assets and liabilities to be determined using the enacted income tax rates for the years in which taxes will be paid or refunds received. Prior to 1993, AT&T's deferred tax accounts reflected the statutory rates that were in effect when the deferrals were initiated. The adoption of SFAS No. 109 reduced net income by $1,457 million, or $0.94 per share, as a result of deferred liabilities that were created by McCaw's acquisitions prior to the merger. This reduction was recorded as the cumulative effect of an accounting change in the first quarter of 1993. This accounting change does not affect cash flows. (i) On June 24, 1994, LCH Communications ("LCH"), a subsidiary of LIN Broadcasting ("LIN"), redeemed all of their outstanding redeemable preferred stock in exchange for all of the capital stock of one of its subsidiaries. As a result of the redemption, the net assets were eliminated and a gain on the sale of assets of $12 million and a tax benefit of $74 million were recorded. There was also an increase in additional paid-in capital and minority interests of $408 million and $376 million, respectively. Form 8-K January 24, 1995 AT&T Corp. 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. By: S.L. Prendergast Vice President and Treasurer January 24, 1995 -----END PRIVACY-ENHANCED MESSAGE-----