FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
(X) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For The Fiscal Year Ended December 31, 1996
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF
THE SECURITIES EXCHANGE ACT OF 1934
For The Transition Period From _________ to _________
Commission File Number 1-1105
AT&T CORP.
A NEW YORK I.R.S. EMPLOYER
CORPORATION NO. 13-4924710
32 Avenue of the Americas, New York, New York 10013-2412
Telephone Number 212-387-5400
Securities registered pursuant to Section 12(b) of the Act: See attached
SCHEDULE A.
Securities registered pursuant to Section 12(g) of the Act: None.
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes....x.... No........
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. ( )
At February 28, 1997, the aggregate market value of the voting stock held by
non-affiliates was $64,782,019,250.
At February 28, 1997, 1,624,837,277 common shares were outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
(1) Portions of the registrant's annual report to security
holders for the year ended December 31, 1996 (Part II)
(2) Portions of the registrant's definitive proxy statement dated April 1, 1997,
issued in connection with the annual meeting of shareholders (Part III)
SCHEDULE A
Securities registered pursuant to Section 12(b) of the Act:
Name of each
exchange on which
Title of each class registered
Common Shares # New York, Boston, Chicago,
(Par Value $1 Per Share) ## Philadelphia and Pacific Stock
# Exchanges
Thirty-Seven Year 4-3/4% Debentures, #
due June 1, 1998 #
#
Thirty-Six Year 4-3/8% Debentures, #
due May 1, 1999 #
#
Thirty-Three Year 6% Debentures, #
due August 1, 2000 #
#
Thirty-Five Year 5-1/8% Debentures, # ##New York Stock Exchange
due April 1, 2001 #
#
Ten Year 7-1/8% Notes, #
due January 15, 2002 #
#
Ten Year 6-3/4% Notes, #
due April 1, 2004 #
#
Ten Year 7% Notes, #
due May 15, 2005 #
#
Twelve Year 7-1/2% Notes, #
due June 1, 2006 #
#
Twelve Year 7-3/4% Notes, #
due March 1, 2007 #
#
Thirty Year 8-1/8% Debentures, #
due January 15, 2022 #
#
Medium Term Note 8.2%, #
due February 15, 2005 #
#
Thirty Year 8.35% Debentures, #
due January 15, 2025 #
#
Thirty-Two Year 8-1/8% Debentures, #
due July 15, 2024 #
#
Forty Year 8-5/8% Debentures, #
due December 1, 2031 #
TABLE OF CONTENTS
PART I
Item
Description Page
1. Business............................................................... 1
2. Properties............................................................. 10
3. Legal Proceedings...................................................... 10
4. Submission of Matters to a Vote of Security-Holders.................... 11
PART II
Description
5. Market for Registrant's Common Equity and Related Stockholder
Matters.............................................................. 13
6. Selected Financial Data................................................ 13
7. Management's Discussion and Analysis of Financial Condition and
Results of Operations................................................ 13
8. Financial Statements and Supplementary Data............................ 13
9. Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure............................................. 13
PART III
Description
10. Directors and Executive Officers of the Registrant..................... 13
11. Executive Compensation................................................. 13
12. Security Ownership of Certain Beneficial Owners and Management ........ 13
13. Certain Relationships and Related Transactions......................... 13
PART IV
Description
14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K....... 14
See page 12 for "Executive Officers of the Registrant."
PART I
ITEM 1. BUSINESS.
GENERAL
AT&T Corp. ("AT&T" or the "Company") was incorporated in 1885 under the
laws of the State of New York and has its principal executive offices at 32
Avenue of the Americas, New York, New York 10013-2412 (telephone number
212-387-5400). Internet users can access information about AT&T and its services
at http://www.att.com/.
AT&T is currently a major participant in two industries:
telecommunications and financial services. AT&T is among the world's
communications leaders, providing voice, data and video telecommunications
services to large and small businesses, consumers and government entities. AT&T
and its subsidiaries furnish regional, domestic, international and local
communication transmission services. AT&T's wholly owned subsidiaries, including
AT&T Wireless Services, Inc., provide cellular telephone and other wireless
services. AT&T also provides billing, directory, and calling card services to
support its communications business as well as offering a general purpose credit
card through its wholly owned subsidiary, AT&T Universal Card Services Corp.
("AT&T Universal Card Services").
On September 20, 1995, AT&T announced a plan to separate (the
"Separation") into three publicly held stand-alone global companies focused on
serving certain core businesses: communication and information services and
general purpose credit card (to be carried on by the new AT&T, which includes
AT&T Universal Card Services), communications systems and technology (to be
carried on by Lucent Technologies Inc. ("Lucent")), and transaction-intensive
computing (to be carried on by NCR Corporation ("NCR", formerly AT&T Global
Information Solutions Company)).
AT&T completed the Separation in 1996. AT&T distributed to its
shareowners all of the shares AT&T owned of Lucent on September 30, 1996 and all
of the shares of NCR on December 31, 1996. These distributions were tax free to
shareowners, except to the extent cash was received for fractional shares. The
Lucent distribution had been preceded by the initial public offering of 17.6% of
Lucent shares. In addition, on October 1, 1996, AT&T completed the sale of its
majority interest in AT&T Capital Corporation, in which AT&T received $1.8
billion in cash, recognizing a $162 million after-tax gain.
COMMUNICATION AND INFORMATION SERVICES
AT&T's communication and information services business addresses the
needs of consumers, large and small businesses, the Federal government and state
and local governments for voice, data and video telecommunications services.
Business units within this group provide regular and custom long distance
communications services, data transmission services, 500 services, toll-free or
800 and 888 services, 900 services, private line services, software defined
network services ("SDN"), integrated services digital network ("ISDN")
technology based services, and electronic mail, electronic data interchanges and
enhanced facsimile services.
AT&T also provides special long distance services, including AT&T
Calling Card services, special calling plans and the Company's domestic and
international operator services. AT&T provides communications services
internationally, including transaction services, global networks, network
management and value added network services (i.e., services offered over
communications transmission facilities that employ computer processing
applications).
AT&T provides interstate and intrastate long distance
telecommunications services throughout the continental United States and
provides, or joins in providing with other carriers, telecommunications services
to and from Alaska, Hawaii, Puerto Rico and the Virgin Islands and international
telecommunications services to and from virtually all nations and territories
around the world.
In the continental United States, AT&T provides long distance
telecommunications services over its own network. Virtually all switched
services are computer controlled and digitally switched and interconnected by a
packet switched signaling network. Transmission facilities consist of
approximately 2 billion circuit-miles using lightwave, satellite, wire and
coaxial cable and microwave radio technology. International telecommunications
services are provided via multiple international transoceanic submarine cable
(primarily lightwave) systems and via international satellite and radio
facilities.
AT&T has also begun providing a variety of new services, including
online services, internet access and local telecommunications services. Online
and internet access services include AT&T WorldNet* Service, a service providing
dedicated and dial-up access to the internet, AT&T Easy World Wide Web* Service,
an internet web site creation and hosting service, custom web site hosting
services, and AT&T SecureBuy* Service, an Internet transaction service that
simplifies buying and selling on the Internet.
Following passage of the Telecommunications Act of 1996 (the
"Telecommunications Act"), AT&T has applied for permission to provide local
service in all 50 states. At December 31, 1996, AT&T had received authority to
provide service in 42 states and anticipates that it will receive the remaining
approvals as the other states take the actions contemplated by the
Telecommunications Act. In the fourth quarter of 1996, AT&T began providing
local telephone service to residential customers on a controlled basis in
Sacramento, California. In addition, in February 1997 AT&T began offering local
telephone service to business customers throughout California as well as
offering in 45 states AT&T Digital Link, which enables business customers to
place local calls over high capacity lines connected directly to AT&T's existing
switches.
AT&T Solutions, Inc., established in 1995, assists corporations in
global network and computer management. AT&T Solutions designs, builds and
operates corporate clients' computer networks, designs software and manages data
centers for its clients.
AT&T is one of the world's largest wireless service providers. In the United
States, AT&T holds licenses to operate systems providing broadband wireless
services covering markets with a population of over 200 million nationwide and
messaging and air-to-ground services throughout the country. The
- ------------
* Service Mark
services provided by AT&T currently include cellular, messaging and
air-to-ground communications.
In addition, AT&T has purchased (primarily in auctions conducted by the
Federal Communications Commission ("FCC")) wireless broadband PCS (or "personal
communication services") licenses covering markets with a population of over 70
million. AT&T is required by the FCC to provide adequate broadband PCS service
to at least one-third of the population in its licensed areas within five years
of being licensed and two-thirds of the population in its licensed areas within
ten years of being licensed. The licenses are granted for ten year terms from
the original date of issuance and may be renewed by AT&T by meeting the FCC's
renewal criteria and upon compliance with the FCC's renewal procedures.
AT&T has created service clusters in major metropolitan areas and
linked its and other service providers systems into a network which permits its
wireless cellular subscribers to both place and receive calls anywhere they
travel in areas served by the network, even if the local wireless telephone
service is not provided by AT&T. AT&T is now integrating other communications
technologies, such as PCS, into the network. AT&T will continue to explore the
use of emerging technologies to expand the reach of the network and to provide
additional services (especially data and internet services).
AT&T also offers one-way messaging systems such as paging services. As
of December 31, 1996, the Company had over 1.1 million messaging service
subscribers. The majority of these subscribers are in locations where AT&T holds
cellular or PCS licenses.
AT&T's wireless services are conducted primarily through subsidiaries
of AT&T Wireless Services, Inc. (formerly McCaw Cellular Communications, Inc.
("McCaw")), which was merged with a special-purpose subsidiary of AT&T in
September 1994. At that time, McCaw owned 52% of LIN Broadcasting Corporation
(which held cellular and broadcast television properties), which in turn owned
100% of LIN Television Corporation. In December 1994, LIN Broadcasting
Corporation distributed to its shareholders all of the stock of LIN Television
Corporation, so that upon the distribution AT&T became the direct owner (through
its wholly owned subsidiaries) of 52% of LIN Television Corporation. In
September 1995, AT&T acquired the remaining 48% publicly-held interest in LIN
Broadcasting Corporation at an aggregate price of approximately $3.3 billion.
AT&T has established a number of international alliances to increase
the reach and scope of AT&T's network over time and has invested in certain
countries in order to increase the range of services AT&T offers in those
countries. For example, AT&T founded the WorldPartners alliance in 1993 to
provide multinational customers with seamless telecommunications and related
services. As of the end of 1996, WorldPartners included 30 members who provide
services to multinational customers in North America, Europe and Asia. In
addition, in 1996 AT&T began offering business and consumer services in the
United Kingdom and in early 1997 AT&T's joint venture in Mexico, Alestra, began
offering long distance service. AT&T also has an interest in several wireless
communications companies outside of the United States, including cellular
operators licensed to serve Hong Kong, Columbia and parts of India.
AT&T UNIVERSAL CARD SERVICES
AT&T Universal Card Services began operations in early 1990. The AT&T
Universal Card is a combined general-purpose consumer credit card and AT&T
Calling Card that at year-end had managed receivables in excess of $13.5 billion
in 1996, $14.1 billion in 1995, $12.3 billion in 1994, $9.1 billion in 1993, and
$6.6 billion in 1992. The AT&T Universal Card is offered directly through AT&T
Universal Financial Corp., a Utah industrial loan company, and Universal Bank,
N.A., in Columbus, Georgia, which are both wholly owned by AT&T, and under an
affinity relationship with Columbus Bank and Trust Company in Columbus, Georgia,
a subsidiary of Synovus Financial Corp. AT&T Universal Card Services provides
marketing and customer support for the AT&T Universal Card program and it
purchases cardholder receivables generated by the AT&T Universal Card program.
Some seasonality exists in the consumer credit card industry, with a
higher number of purchases occurring during the year-end holiday season. Based
on the number of cardholder accounts, the AT&T Universal Card program is one of
the largest bankcard/credit card programs in the United States.
LEGISLATIVE AND REGULATORY DEVELOPMENTS
Telecommunications Act of 1996
In February 1996, the Telecommunications Act became law. The
Telecommunications Act, among other things, was designed to foster local
exchange competition by establishing a regulatory framework to govern new
competitive entry in local and long distance telecommunications services and
requiring incumbent local exchange carriers ("LECs"), including the Regional
Bell Operating Companies ("RBOCs"), to implement a checklist of conditions that
would support local exchange competition. These conditions include requiring
incumbent LECs to provide to competing service providers (i) local exchange
services for resale at wholesale rates, (ii) interconnection and access to
unbundled network elements at any technically feasible point and at cost-based
rates, (iii) telephone number portability for customers changing carriers, (iv)
dialing parity for customers and (v) access to rights of way.
The Telecommunications Act also permits an RBOC to petition the FCC at
any time for permission to provide interexchange services originating in any
state in its region. The FCC must review such request within 90 days, but cannot
approve such a request unless (i) approval is consistent with the public
interest, convenience and necessity; (ii) the FCC has consulted with the
Department of Justice ("DOJ") and given the DOJ's views substantial weight;
(iii) the RBOC has implemented the Telecommunications Act checklist of
conditions throughout such state; and (iv) either (A) the RBOC has entered into
a binding interconnection agreement, approved by the relevant state, with one or
more unaffiliated competing providers of telephone service to residential and
business subscribers which are offered either exclusively or predominantly over
such competitors' own facilities, or (B) the RBOC has received no such requests
for interconnection within the statutory prescribed time period.
In August 1996, the FCC adopted rules and regulations (the "Implementing Rules")
to implement the local competition provisions of the Telecommunications Act,
including with respect to the terms and conditions of interconnection with LEC
networks and the standards governing the purchase of unbundled network elements
and wholesale services from LECs. The Implementing
Rules rely on each state to develop the specific rates and procedures in such
state within the framework prescribed by the FCC for developing such rates and
procedures.
For example, the Implementing Rules identify a minimum set of
technically feasible points of interconnection that an incumbent LEC must
provide; identify a minimum set of network elements that must be made available
by an incumbent LEC on an unbundled basis, without restriction; and require
incumbent LECs to provide nondiscriminatory access to operations support systems
for ordering, provisioning, maintenance and repair.
In addition, the Implementing Rules establish a methodology that states
must use for determining the wholesale rates that LECs must provide to resellers
of their services and which is based on retail rates less marketing, billing,
collection and other avoided or avoidable costs. In addition, the Implementing
Rules establish a default discount in the range of 17-25% that states may use
pending implementation of this methodology.
Finally, the Implementing Rules require states to set prices for
interconnection and unbundled network elements pursuant to a forward looking
economic cost pricing methodology which is based on the Total Element Long-Run
Incremental Cost ("TELRIC") of providing a particular network element plus a
reasonable share of forward-looking joint and common costs. If states are unable
to conduct a cost study to determine such rates within the statutory time frame
for arbitrating interconnection disputes, the Implementing Rules establish
default ranges or ceilings for unbundled network elements.
Although the FCC deferred interstate access charge reform to another proceeding,
the Implementing Rules only permit incumbent LECs to recover from interexchange
carriers using unbundled network elements for local service certain portions of
the current interstate access charges. Such interexchange carriers will not be
required to pay these charges as of the earliest of July 1, 1997 or the
occurrence of certain other events, such as RBOC receipt of authority to provide
in-region long distance service.
In October 1996, the United States Court of Appeals for the 8th Circuit
ordered a stay of the effectiveness of those provisions of the Implementing
Rules addressed to the pricing of unbundled network elements and wholesale
services ("Pricing Rules"), among others, until such court resolves the
challenges to the Implementing Rules by local telephone companies and telephone
regulators in several states. The court heard argument on the challenges in
January 1997.
AT&T believes that the stay of the Pricing Rules may inhibit the
establishment of appropriate permanent rates for the provision of network
elements and wholesale services. Absent full effectiveness of the Implementing
Rules, each state will determine the applicable rates and procedures independent
of the framework of the Pricing Rules. Since the stay was issued, many states
have used the Pricing Rules as guidelines in establishing interim rates that
will apply pending the determination of permanent rates in subsequent state
proceedings. Nevertheless, in the absence of the Pricing Rules, there can be no
assurance that the prices and other conditions established in each state will
provide for effective local service entry and competition or provide AT&T with
new market opportunities.
AT&T has applied for permission to provide local service in all 50
states. At December 31, 1996, AT&T had received authority to provide service in
42 states and anticipates that it will receive the remaining approvals as the
other states take the actions contemplated by the Telecommunications Act. While
the Telecommunications Act makes clear that no state can prohibit AT&T or any
other entity from providing local services, AT&T cannot be certain as to when it
will receive certification in each state and the conditions that might attach to
each such certification. Most of the RBOCs have indicated their intention to
petition the FCC during 1997 for permission to provide interexchange services in
one or more states within their home market.
As a result of the legislative and regulatory developments discussed
above, there can be no assurance that all of the necessary preconditions for the
development of effective local competition will be achieved in a timely or even
manner and that long distance carriers will be in a position to compete
effectively against RBOCs in local service at the time RBOCs receive permission
to enter the long distance market. Because it is widely anticipated that
substantial numbers of long distance customers will seek to purchase local,
interexchange and other services from a single carrier as part of a combined or
full service package, any competitive disadvantage, inability to profitably
provide local service at competitive rates or delays or limitations in providing
local service or combined service packages could adversely affect AT&T's future
revenues and earnings.
Modification of Final Judgment of 1982
Prior to 1996, AT&T and the RBOCs were subject to the provisions of the
Modification of Final Judgment of 1982 (the "MFJ") since its implementation. The
Telecommunications Act effectively superseded future
operation of the MFJ.
Consequently, on April 11, 1996, Judge Harold Greene issued an order terminating
the MFJ.
Regulation of Rates
AT&T is subject to the jurisdiction of the FCC with respect to
interstate and international rates, lines and services, and other matters. From
July 1989 to October 1995, the FCC regulated AT&T under a system known as "price
caps" whereby AT&T's prices, rather than its earnings, were limited. On October
12, 1995, recognizing a decade of enormous change in the long distance market
and finding that AT&T lacked market power in the interstate long distance
market, the FCC reclassified AT&T as a "non-dominant" carrier for its domestic
interstate services. As a result, AT&T became subject to the same regulations as
its long distance competitors for such services. Thus, AT&T was no longer
subject to price cap regulation for these services, was able to file tariffs
that are presumed lawful on one day's notice, and was free of other regulations
and reporting requirements that apply only to dominant carriers.
In addition, in further recognition of competitive developments, on
October 31, 1996, the FCC issued an order, to be effective in late 1997,
prohibiting AT&T and other non-dominant carriers from filing tariffs for their
domestic interstate services. Accordingly, carriers will be required to use
contracts and other commercial arrangements to establish the terms of service
with customers. In February 1997, the United States Court of Appeals for the
District of Columbia ordered a stay of the effectiveness of the FCC'c order.
Argument is expected to be heard later this year.
AT&T remains subject to the statutory requirements of Title II of the
Communications Act. AT&T must offer service under rates, terms and conditions
that are just, reasonable and not unreasonably discriminatory, it is subject to
the FCC's complaint process, and it must give notice to the FCC and affected
customers prior to discontinuance, reduction, or impairment of service. AT&T has
also made certain commitments that address concerns that had been raised with
regard to the potential impact of declaring AT&T to be non-dominant, including a
three-year rate assurance for low income and low usage residential users and a
three-year limit on, and 5 days advance notice for, rate increases on 800
directory assistance and analog private line services.
AT&T's international private line services have been classified as
non-dominant for several years. AT&T's switched international services have
become subject to increased competition, similar to its domestic services and on
May 9, 1996, the FCC adopted an order reclassifying AT&T as a non-dominant
carrier for such services. AT&T has made certain voluntary commitments that
address issues raised in that proceeding, including commitments: (i) to maintain
its annual average revenue per minute for international residential calls at or
below the 1995 level through May 9, 1999, and in the event of a significant
change that substantially raises AT&T's costs, to provide the FCC five business
days notice prior to implementing rate increases that would raise the annual
average revenue per minute for such calls above the 1995 level; and (ii) to
maintain certain discount calling plans providing at least a 15% discount off
basic pricing schedules until May 9, 1999. AT&T also made voluntary commitments
relating to its operation of international cable facilities, its negotiation of
settlement agreements with foreign carriers and its relationship with foreign
partners.
In addition to the matters described above with respect to the
Telecommunications Act, state public service commissions or similar authorities
having regulatory power over intrastate rates, lines and services and other
matters regulate AT&T's local and intrastate communications services. The system
of regulation used in many states is rate-of-return regulation. In recent years,
many states have adopted different systems of regulation, such as: complete
removal of rate-of-return regulation, pricing flexibility rules, price caps, and
incentive regulation.
COMPETITION
AT&T currently faces significant competition in the communication and
information services industry and expects that the level of competition will
continue to increase. As competitive, regulatory and technological changes
occur, including those occasioned by the enactment of the Telecommunications
Act, AT&T anticipates that new and different competitors will enter and expand
their position in the communications services markets. These may include
entrants from other segments of the communication and information services
industry or global competitors seeking to expand their market opportunities.
Many such new competitors are likely to enter with a strong market presence,
well recognized names and pre-existing direct customer relationships.
The Telecommunications Act has already begun to intensify the
competitive environment. Anticipating changes in the industry, non-RBOC LECs,
which are not required to implement the Telecommunications Act's competitive
checklist prior to offering long distance in their home markets, have begun
integrating their local service offerings with long distance offerings in
advance of AT&T being able to offer combined local and long distance service in
these areas. If such non-RBOC LECs continue to offer combined services without
offering reasonable terms of interconnection and service elements at competitive
rates, AT&T's revenues and earnings in these service regions will be adversely
affected.
Similarly, to the extent that the RBOCs obtain in-region interLATA
authority before the Telecommunications Act's checklist of conditions have been
fully or satisfactorily implemented and adequate facilities-based local exchange
competition exists, there is a substantial risk that AT&T and other
interexchange service providers would be at a disadvantage to the RBOCs in
providing both local service and combined service packages. Furthermore, the
previously announced merger of British Telecommunications PLC and MCI
Communications Corp. will create a large, well-capitalized competitor for AT&T's
offerings, domestically as well as internationally, with substantial financial,
technical, marketing and other resources and a large worldwide installed base of
customers.
Furthermore, in February 1997, a General Agreement on Trade in Services
(the "GATS") was reached under the World Trade Organization. The GATS, which
will become effective January 1, 1998, is designed to open each country's
domestic telecommunications markets to foreign competitors. The GATS, and future
trade agreements, may accelerate the entrance into the U.S. market of foreign
telecommunications providers, certain of whom are likely to possess dominant
home market positions in which there is not effective competition. The GATS may
also permit AT&T's entrance into other markets as only a small number of
countries refused to eliminate their foreign ownership restrictions.
In addition to the matters referred to above, various other factors,
including market acceptance, start-up and ongoing costs associated with the
provision of new services and local conditions and obstacles, could adversely
affect the timing and success of AT&T's entrance into the local exchange
services market and AT&T's ability to offer combined service packages that
include local service. In addition, the simultaneous entrance of numerous new
competitors for interexchange and combined service packages is likely to
adversely affect AT&T's long distance revenues and could adversely affect
earnings.
AT&T's other industry segment, the financial services industry, is also
highly competitive. Participants in the industry compete through price
(including the ability to control costs), risk management, innovation and
customer service. Principal cost factors include the cost of funds, the cost of
selling to or acquiring new end-user customers and vendors, and the cost of
managing portfolios (including, for example, billing, collection, credit risk
management and residual management).
FORWARD LOOKING STATEMENTS
Except for the historical statements and discussions contained herein,
statements contained in this Report on Form 10-K constitute "forward looking
statements" within the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934. Any Form 10-K, Annual Report
to Shareowners, Form 10-Q or Form 8-K of AT&T may include forward looking
statements. In addition, other written or oral statements which constitute
forward looking statements have been made and may in the future be made by or on
behalf of AT&T, including statements concerning future operating performance,
AT&T's share of new and existing markets, AT&T's short- and long-term revenue
and earnings growth rates, and general industry growth rates and AT&T's
performance relative thereto. These forward looking statements rely on a number
of assumptions concerning future events, including the adoption and
implementation of balanced and effective rules and regulations by the FCC and
the state public regulatory agencies, and AT&T's ability to achieve a
significant market penetration in new markets. These forward looking statements
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. These factors include, but are not limited to:
- - the efficacy of the Implementing Rules and other rules and regulations to be
adopted by the FCC to implement the provisions of the Telecommunications Act;
- - the outcome of negotiations with LECs and state regulatory arbitrations and
approvals with respect to interconnection agreements; the timing of receipt of
and the conditions that attach to, certification to provide local service in
each state; and the ability to purchase unbundled network elements or
wholesale services from LECs at a price sufficient to permit the profitable
offering of local exchange service at competitive rates;
- - success and market acceptance for new offerings, including local service;
start-up costs associated with entering new markets, including advertising and
promotional efforts; successful deployment of new systems and applications to
support new offerings; and local conditions and obstacles;
- - competitive pressures, including pricing pressures, technological developments
and the ability to offer combined service packages that include local service;
the extent and pace at which different competitive environments develop for
each segment of the telecommunications industry; the extent at and duration
for which competitors from each segment of the telecommunications industry are
able to offer combined or full service packages prior to AT&T being able to;
and the degree to which AT&T experiences material competitive impacts to its
traditional service offerings prior to achieving adequate local service entry;
- - the availability, terms and deployment of capital; and the ability to achieve
cost savings; and
- - general economic conditions, government and regulatory policies, and business
conditions in the communications industry.
Readers are cautioned not to put undue reliance on such forward looking
statements. For a more detailed description of these and additional
uncertainties and other factors that could cause actual results to differ
materially from such forward looking statements, see "Results of Operations",
"Financial Condition", "Regulatory and Legislative Developments", and
"Competition" included in or incorporated by reference into this Form 10-K. As
described elsewhere in this Form 10-K, these uncertainties and factors could
adversely affect the timing and success of AT&T's entrance into the local
exchange services market and AT&T's ability to offer combined service packages
that include local service, thereby adversely affecting AT&T's future revenues
and earnings. 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.
SEGMENT, OPERATING REVENUE AND RESEARCH AND DEVELOPMENT EXPENSE
INFORMATION
For information about the Company's industry segments, see Note 12 to
the Consolidated Financial Statements. For information about the Company's
research and development expense, see Note 4 to the Consolidated Financial
Statements. For information about the consolidated operating revenues
contributed by the Company's major classes of products and services, see the
revenue tables and descriptions on pages 21 through 23 and Consolidated
Statements of Income on page 30 of the Company's annual report to security
holders for the year ended December 31, 1996. All such information is
incorporated herein by reference pursuant to General Instruction G(2).
EMPLOYEE RELATIONS
At December 31, 1996 AT&T employed approximately 130,000 persons in its
operations, approximately 124,000 of whom are located domestically. About 41% of
the domestically located employees of AT&T are represented by unions. Of those
so represented, about 96% are represented by the Communications Workers of
America ("CWA"), which is affiliated with the AFL-CIO; about 4% by the
International Brotherhood of Electrical Workers ("IBEW"), which is also
affiliated with the AFL-CIO. In addition, there is a very small remainder of
domestic employees represented by other unions. Labor agreements with most of
these unions extend through May 1998.
ITEM 2. PROPERTIES.
The properties of AT&T consist primarily of plant and equipment used to
provide long distance telecommunications services and administrative office
buildings.
Telecommunications plant and equipment consists of: central office
equipment, including switching and transmission equipment; connecting lines
(cables, wires, poles, conduits, etc.); land and buildings; and miscellaneous
properties (work equipment, furniture, plant under construction, etc.). The
majority of the connecting lines are on or under public roads, highways and
streets and international and territorial waters. The remainder are on or under
private property. AT&T also operates a number of sales offices, customer care
centers, and other facilities, such as research and development laboratories.
AT&T continues to manage the deployment and utilization of its assets
in order to meet its global growth objectives while at the same time ensuring
that these assets are generating economic value added for the shareholder. AT&T
will continue to manage its asset base consistent with globalization
initiatives, marketplace forces, productivity growth and technology change.
A substantial number of the administrative offices of AT&T are in
leased buildings. Substantially all of the important communications facilities
are in buildings owned by AT&T or leased from the regional holding companies
created at divestiture. Many of the smaller facilities are in rented quarters.
Most of the important buildings are on land held in fee, but a few are on land
held under long-term leases.
ITEM 3. LEGAL PROCEEDINGS.
In the normal course of business, AT&T is subject to proceedings,
lawsuits and other claims, including proceedings under government laws and
regulations related to environmental and other matters. Such matters are subject
to many uncertainties and outcomes are not predictable with assurance.
Consequently, AT&T is unable to ascertain the ultimate aggregate amount of
monetary liability or financial impact with respect to these matters at December
31, 1996. While these matters could affect operating results of any one quarter
when resolved in future periods, it is management's opinion that after final
disposition, any monetary liability or financial impact to AT&T beyond that
provided for at year-end would not be material to AT&T's annual consolidated
financial position or results of operations.
On February 14, 1996, Bell Atlantic Corporation and DSC Communications
Corporation filed a complaint against AT&T and Lucent in the United States
District Court for the Eastern District of Texas. The complaint asserted, among
other things, monopolization or attempted monopolization claims concerning
communications transmission equipment, related software and caller
identification services. AT&T filed counterclaims against Bell Atlantic and
Lucent filed counterclaims against DSC Communications. In the first quarter of
1997, Bell Atlantic, DSC Communications, AT&T and Lucent independently reached
separate settlements with plaintiffs pursuant to confidential agreements, which
resolved the claims among the parties. The settlements will have no material
impact on AT&T's financial position or results of operations.
AT&T is also a named party in a number of environmental actions, none
of which are material to the consolidated financial statements or business of
the Company. In addition, pursuant to the Separation and Distribution Agreement
by and among AT&T, Lucent, and NCR, dated as of February 1, 1996 and amended and
restated as of March 29, 1996, Lucent has assumed liability, subject to the
liability sharing provisions of that agreement, for a number of actions in which
AT&T remains a named party. AT&T is working to be released as a party to these
actions, although there can be no assurance that it will be successful in this
regard.
There are three environmental proceedings which are required to be reported
pursuant to Instruction 5.C. of Item 103 of Regulation S-K, all of which are
proceedings for which Lucent has assumed liability, as described above. On July
31, 1991, the United States Environmental Protection Agency Region III issued a
complaint pursuant to Section 3008a of the Resource Conservation and Recovery
Act alleging violations of various waste management regulations at the Company's
Richmond Works, Richmond, Virginia. The complaint seeks a total of $4.2 million
in penalties. In addition, on July 31, 1991, the United States Environmental
Protection Agency filed a civil complaint in the U.S. District Court for the
Southern District of Illinois against the Company and nine other parties seeking
enforcement of its Comprehensive Environmental Response, Compensation and
Liability Act ("CERCLA") Section 106 cleanup order, issued in November 1990 for
the NL Granite City Superfund site, Granite, Illinois, past costs, civil
penalties of $25,000 per day and treble damages related to certain United
States' costs. Finally, during 1994, AT&T Nassau Metals Corporation ("Nassau"),
a wholly owned subsidiary of AT&T, and the New York State Department of
Environmental Conservation ("NYSDEC") were engaged in negotiations over a study
and cleanup of the Nassau plant located on Richmond Valley Road in Staten
Island, New York. During these negotiations, in June 1994, NYSDEC presented
Nassau with a draft consent order which included not only provisions relating to
site investigation and remediation but also a provision for payment of a $3.5
million penalty for alleged violations of hazardous waste management
regulations. No formal proceeding has been commenced by NYSDEC.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY-HOLDERS.
No matter was submitted to a vote of security holders in the fourth quarter
of the fiscal year covered by this report.
Executive Officers of the Registrant
(as of March 28, 1997)
Became AT&T Executive
Name Age Officer On
- ---------------- --- ---------------------
Robert E. Allen* . . .62 Chairman of the Board and Chief
Executive Officer . . . . . . . 9-86
Harry S. Bennett . . .52 Vice President & General Manager,
AT&T Local Services Division . 3-97
Harold W. Burlingame .56 Executive Vice President, Human .
Resources . . . . . . . . . . . 9-86
Steven W. Hooper . . .44 President & Chief Executive
Officer - AT&T Wireless
Services . . . . . . . . . . . 3-97
Frank Ianna . . . . .47 Vice President & General Manager,
Network & Computing Services &
AT&T Chief Quality Officer . . 3-97
Marilyn Laurie . . . .57 Executive Vice President, Brand
Strategy & Marketing 2-87
Communications . . . . . . . .
Gail J. McGovern . . .44 Executive Vice President,
Consumer Markets Division . . . 1-96
Victor E. Millar . . .61 President & Chief Executive
Officer, AT&T Solutions . . . . 3-97
Richard W. Miller . .56 Senior Executive Vice President
and Chief Financial Officer . . 8-93
David C. Nagel . . . .52 President, AT&T Labs . . . . . . 3-97
John Petrillo . . . .47 Executive Vice President,
Strategy & New Service
Innovation and International . 1-96
Ron J. Ponder . . . .53 Executive Vice President,
Operations & Service
Management . . . . . . . . . . 1-96
Richard J. Srednicki .49 President & Chief Executive
Officer, AT&T Universal Card
Services . . . . . . . . . . . 3-97
John R. Walter** . . .50 President and Chief Operating
Officer . . . . . . . . . . . . 11-96
Jeffrey Weitzen . . .40 Executive Vice President,
Business Markets Division . . . 1-97
Paul J. Wondrasch . .53 Senior Vice President,
International . . . . . . . . . 3-97
John D. Zeglis . . . .49 General Counsel and Senior
Executive Vice President,
Policy Development & Operations
Support . . . . . . . . . . . . 9-86
- -----------
*Chairman of the Board of Directors and Chairman of the Executive
and Proxy Committees.
**Member of the Board of Directors.
All of the above executive officers have held high level managerial positions
with AT&T or its affiliates for more than the past five years, except Messrs.
Hooper, Millar, Miller, Nagel, Ponder, Srednicki and Walter. Prior to joining
AT&T in September 1994, at the time of the merger of McCaw Cellular
Communications, Inc. with AT&T, Mr. Hooper was Chief Financial Officer of McCaw
(AT&T Wireless Services, Inc.), from 1993, and held various other positions with
McCaw prior to that time. Prior to joining AT&T in February 1995, Mr. Millar was
with Unisys Corporation, an information services company, serving as President
from 1992. Prior to joining AT&T in August 1993, Mr. Miller was with Wang
Laboratories, Inc., a computer company, from 1989 through 1993, serving as
President and Chief Operating Officer and later as Chairman, President and Chief
Executive Officer. On February 3, 1997, AT&T announced that Mr. Miller was
resigning his position with AT&T. Prior to joining AT&T in April 1996, Mr. Nagel
was with Apple Computer, a computer company, serving as Senior Vice President
from 1995 and General Manager from 1988 through 1995. Prior to joining AT&T in
June 1993, Mr. Ponder was Executive Vice President and Chief Information Officer
for Sprint Corporation, a telecommunications company, from 1991 to 1993. Prior
to joining AT&T in January 1997, Mr. Srednicki was Business Manager of Citibank-
Germany and Country Corporate Officer, Citibank Bankcards from 1990. Prior to
joining AT&T in November 1996, Mr. Walter was Chairman and Chief Executive
Officer of R.R. Donnelley & Sons Company, a financial printer, from 1989 to
1996.
Officers are not elected for a fixed term of office but hold office until
their successors have been elected or such officers resign or retire.
PART II
Items 5. through 8.
The information required by these items is included in pages 20 through 44
and on the outside back cover of the Company's annual report to security holders
for the year ended December 31, 1996. Such information is incorporated herein by
reference, pursuant to General Instruction G(2). The referenced information from
the Company's annual report to security holders has been filed as Exhibit 13 to
this document.
Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure.
There have been no changes in independent accountants and no disagreements
with independent accountants on any matter of accounting principles or
practices, financial statement disclosure, or auditing scope or procedure during
the last two years.
PART III
Items 10. through 13.
Information regarding executive officers required by Item 401 of Regulation
S-K is furnished in a separate disclosure in Part I of this report because the
Company did not furnish such information in its definitive proxy statement
prepared in accordance with Schedule 14A.
The other information required by Items 10 through 13 is included in the
Company's definitive proxy statement dated April 1, 1997, the last paragraph on
page 5, the carryover paragraph and first full paragraph on page 6, the second
full paragraph on page 7 through the final footnote on page 12 and the fourth
paragraph on page 37 through page 57. Such information is incorporated herein by
reference, pursuant to General Instruction G(3).
PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K.
(a) Documents filed as a part of the report:
(1) Financial Statements:
Pages
- -----
Report of Management.............................................. *
Report of Independent Accountants................................. *
Statements:
Consolidated Statements of Income........................... *
Consolidated Balance Sheets................................. *
Consolidated Statements of Changes in
Shareowners' Equity....................................... *
Consolidated Statements of Cash Flows....................... *
Notes to Consolidated Financial Statements.................. *
(2) Financial Statement Schedules:
Report of Independent Accountants.......................... 18
Schedules:
II -- Valuation and Qualifying Accounts.................... 19
Separate financial statements of subsidiaries not consolidated and
50 percent or less owned persons are omitted since no such entity
constitutes a "significant subsidiary" pursuant to the provisions of
Regulation S-X, Article 3-9.
(3) Exhibits:
Exhibits identified in parentheses below, on file with the
Securities and Exchange Commission ("SEC"), are incorporated herein
by reference as exhibits hereto.
Exhibit
Number:
(3)a Restated Certificate of Incorporation of the registrant
filed January 10, 1989, Certificate of Correction of the
registrant filed June 8, 1989, Certificate of
Change of the registrant filed March 18, 1992,
Certificate of Amendment of the registrant filed
June 1, 1992, and Certificate of Amendment of the
registrant filed April 20, 1994. (Exhibit 4 to
Registration Statement No. 333-00573).
- ------------
*Incorporated herein by reference to the appropriate portions of the Company's
annual report to security holders for the year ended December 31, 1996. (See
Part II.)
(3)b By-Laws of the registrant, as amended January 15, 1997.
(4) No instrument which defines the rights of holders of
long term debt, of the registrant and all of its
consolidated subsidiaries, is filed herewith pursuant to
Regulation S-K, Item 601(b)(4)(iii)(A). Pursuant to this
regulation, the registrant hereby agrees to furnish a
copy of any such instrument to the SEC upon request.
(10)(i)1 Form of Separation and Distribution Agreement by and
among AT&T Corp., Lucent Technologies Inc. and NCR
Corporation, dated as of February 1, 1996 and amended
and restated as of March 29, 1996.
(10)(i)2 Form of Distribution Agreement, dated as of November 20,
1996, by and between AT&T Corp. and NCR Corporation.
(10)(i)3 Tax Sharing Agreement by and among AT&T Corp., Lucent
Technologies Inc. and NCR Corporation, dated as of
February 1, 1996 and amended and restated as of
March 29, 1996.
(10)(i)4 Employee Benefits Agreement by and between AT&T Corp.
and Lucent Technologies Inc., dated as of February 1,
1996 and amended and restated as of March 29, 1996.
(10)(i)5 Form of Employee Benefits Agreement, dated as of
November 20, 1996, between AT&T Corp. and NCR
Corporation.
(10)(ii)(B)1 General Purchase Agreement between AT&T Corp. and
Lucent Technologies Inc., dated February 1, 1996 and
amended and restated as of March 29, 1996.
(10)(ii)(B)2 Form of Volume Purchase Agreement, dated as of
November 20, 1996, by and between AT&T Corp. and NCR
Corporation.
(10)(iii)(A)1 AT&T Short Term Incentive Plan as amended March, 1994
(Exhibit (10)(iii)(A)1 to Form 10-K for 1994, File No.
1-1105).
(10)(iii)(A)2 AT&T 1987 Long Term Incentive Program as amended July
17, 1989 (Exhibit (10)(iii)(A)2 to Form SE dated March
24, 1993, File No. 1-1105).
(10)(iii)(A)3 AT&T Senior Management Individual Life Insurance Program
dated January 1, 1987 (Exhibit (10)(iii)(A)1 to Form SE,
dated March 25, 1987, File No. 1-1105) and as revised
December 1, 1994 (Exhibit (10)(iii)(A)3 to Form 10-K for
1994, File No. 1-1105).
(10)(iii)(A)4 AT&T Senior Management Long Term Disability and
Survivor Protection Plan, as amended and restated
effective January 1, 1995.
(10)(iii)(A)5 AT&T Senior Management Financial Counseling Program
dated December 29, 1994 (Exhibit (10)(iii)(A)5 to Form
10-K for 1994, File No. 1-1105).
(10)(iii)(A)6 AT&T Deferred Compensation Plan for Non-Employee
Directors, as amended December 15, 1993 (Exhibit (10)
(iii)(A)6 to Form 10-K for 1993, File No. 1-1105).
(10)(iii)(A)7 The AT&T Directors Individual Life Insurance Program
dated January 1, 1987, revised December 1, 1995.
(10)(iii)(A)8 AT&T Plan for Non-Employee Directors' Travel Accident
Insurance (Exhibit (10)(iii)(A)8 to Form 10-K for 1990,
File No. 1-1105).
(10)(iii)(A)9 AT&T Excess Benefit and Compensation Plan, as amended
and restated effective October 1, 1996.
(10)(iii)(A)10 AT&T Non-Qualified Pension Plan, as amended and restated
January 1, 1995.
(10)(iii)(A)11 AT&T Senior Management Incentive Award Deferral Plan,
as amended December 20, 1995.
(10)(iii)(A)12 AT&T Mid-Career Hire Program revised effective January
1, 1988 (Exhibit (10)(iii)(A)4 to Form SE, dated March
25, 1988, File No. 1-1105) including AT&T Mid-Career
Pension Plan, as amended and restated October 1, 1996.
(10)(iii)(A)13 AT&T 1984 Stock Option Plan, as modified December 19,
1984 (Exhibit 10(t) to Form SE, dated February 27,1985,
File No. 0-13247).
(10)(iii)(A)14 Form of Indemnification Contract for Officers and
Directors (Exhibit (10)(iii)(A)6 to Form SE, dated
March 25, 1987, File No. 1-1105).
(10)(iii)(A)15 Pension Plan for AT&T Non-Employee Directors revised
February 20, 1989 (Exhibit (10)(iii)(A)15 to Form 10-K
for 1993, File No. 1-1105).
(10)(iii)(A)16 AT&T Corp. Senior Management Basic Life Insurance
Program, as amended May 17, 1995.
(10)(iii)(A)17 Form of AT&T Benefits Protection Trust Agreement Exhibit
(10)(iii)(A)17 to Form SE, dated March 25, 1992, File
No. 1-1105).
(10)(iii)(A)18 Form of Employment Agreement between AT&T Corp. and
John R. Walter dated October 23, 1996.
(10)(iii)(A)19 Employment Agreement between American Telephone and
Telegraph Company and Richard W. Miller dated August 9,
1993 (Exhibit 10(iii)(A)19 to Form 10-K for 1995, File
No. 1-1105).
(12) Computation of Ratio of Earnings to Fixed Charges.
(13) Specified portions (pages 20 through 44 and the outside
back cover) of the Company's Annual Report to security
holders for the year ended December 31, 1996.
(21) List of subsidiaries of AT&T.
(23) Consent of Coopers & Lybrand L.L.P.
(24) Powers of Attorney executed by officers and directors
who signed this report.
(27) Financial Data Schedule.
AT&T will furnish, without charge, to a security holder upon request
a copy of the annual report to security holders and the proxy statement,
portions of which are incorporated herein by reference thereto. AT&T will
furnish any other exhibit at cost.
(b) Reports on Form 8-K:
During the fourth quarter 1996, Forms 8-K dated October 10, 1996 and
October 28, 1996 were filed pursuant to Item 5 (Other Events).
REPORT OF INDEPENDENT ACCOUNTANTS
To the Shareowners of AT&T Corp.:
Our report on the consolidated financial statements of AT&T Corp. and
subsidiaries has been incorporated by reference in this Form 10-K from page 29
of the 1996 Annual Report to the Shareowners of AT&T Corp. In connection with
our audits of such financial statements, we have also audited the related
consolidated financial statement schedule listed in the index on page 14 of this
Form 10-K.
In our opinion, the consolidated financial statement schedule referred to
above, when considered in relation to the basic financial statements taken as a
whole, presents fairly, in all material respects, the information required to be
included therein.
COOPERS & LYBRAND L.L.P.
1301 Avenue of the Americas
New York, New York
January 22, 1997
Schedule II--Sheet 1
AT&T CORP.
AND ITS CONSOLIDATED SUBSIDIARIES
SCHEDULE II--VALUATION AND QUALIFYING ACCOUNTS
(Millions of Dollars)
- -------------------------------------------------------------------------------------------------------
COL. A COL. B COL.
C COL. D COL. E
- -------------------------------------------------------------------------------------------------------
Balance at
Charged to Balance
Beginning Costs
and at End
Description of Period
Expenses Deductions(a) of Period
- -------------------------------------------------------------------------------------------------------
Year 1996
Allowances for doubtful accounts (b) ..... $1,287
$2,443 $2,342 $1,388
Reserves related to business
restructuring, including force
and facility consolidation (c) ..........$2,098 $
- -- $ 710 $1,388
Deferred tax asset valuation allowance ... $ 129 $
39 $ 2 $ 166
Year 1995
Allowances for doubtful accounts (b) ..... $1,023
$2,272 $2,008 $1,287
Reserves related to business
restructuring, including force
and facility consolidation (c) ......... $ 699
$1,718 $ 319 $2,098
Deferred tax asset valuation allowance ... $ 36 $
109 $ 16 $ 129
<FN>
The Notes on Sheet 2 are an integral part of this Schedule.
</FN>
Schedule II--Sheet 2
AT&T CORP.
AND ITS CONSOLIDATED SUBSIDIARIES
SCHEDULE II--VALUATION AND QUALIFYING ACCOUNTS
(Millions of Dollars)
- -------------------------------------------------------------------------------------------------------
COL. A COL. B COL.
C COL. D COL. E
- -------------------------------------------------------------------------------------------------------
Balance at
Charged to Balance
Beginning Costs
and at End
Description of Period
Expenses Deductions(a) of Period
- -------------------------------------------------------------------------------------------------------
Year 1994
Allowances for doubtful accounts (b) ..... $ 889
$1,697 $1,563 $1,023
Reserves related to business
restructuring, including force
and facility consolidation (c) ......... $ 952 $
22 $ 275 $ 699
Deferred tax asset valuation allowance ... $ 43 $
3 $ 10 $ 36
<FN>
- ------------
(a) Amounts written off as uncollectible, net of recoveries.
(b) Includes allowances for doubtful accounts on long-term
receivables of $52,
$35 and $32 in 1996, 1995 and 1994, respectively
(included in Finance
receivables in the Consolidated Balance Sheets).
(c) Included primarily in Other current liabilities and in
Other long-term
liabilities and deferred credits in the Consolidated Balance
Sheets.
</FN>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
/s/ M. J. Wasser
------------------------------------
By: M. J. Wasser
Vice President - Law and
Secretary
March 28, 1997
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the date indicated.
Principal Executive Officers: #
#
Robert E. Allen Chairman #
of the Board and #
Chief Executive #
Officer #
#
John R. Walter President, Chief #
Operating Officer #
and Director #
#
Principal Financial Officer: #
#
Richard W. Miller Senior Executive #
Vice President and#
Chief Financial #
Officer #
#
Principal Accounting Officer: #
#
Maureen B. Tart Vice President ## By M. J.
Wasser
and Controller #
(attorney-in-fact)*
#
Directors: #
# March 28, 1997
Kenneth T. Derr #
M. Kathryn Eickhoff #
Walter Y. Elisha #
Ralph S. Larsen #
Donald F. McHenry #
Michael I. Sovern #
Joseph D. Williams #
Thomas H. Wyman #
Exhibit Index
Exhibit
Number:
(3)a Restated Certificate of Incorporation of
the registrant
filed January 10, 1989, Certificate of
Correction of the
registrant filed June 8, 1989,
Certificate of
Change of the registrant filed
March 18, 1992,
Certificate of Amendment of the
registrant filed
June 1, 1992, and Certificate of
Amendment of the
registrant filed April 20, 1994.
(Exhibit 4 to
Registration Statement No. 333-00573).
(3)b By-Laws of the registrant, as amended
January 15, 1997.
(4) No instrument which defines the rights of
holders of long
term debt, of the registrant and all of
its consolidated
subsidiaries, is filed herewith pursuant
to Regulation
S-K, Item 601(b)(4)(iii)(A). Pursuant to
this regulation,
the registrant hereby agrees to furnish
a copy of any
such instrument to the SEC upon request.
(10)(i)1 Form of Separation and Distribution
Agreement by and
among AT&T Corp., Lucent Technologies
Inc. and NCR
Corporation, dated as of February 1, 1996
and amended and
restated as of March 29, 1996.
(10)(i)2 Form of Distribution Agreement, dated as
of November 20,
1996, by and between AT&T Corp. and NCR
Corporation.
(10)(i)3 Tax Sharing Agreement by and among AT&T
Corp., Lucent
Technologies Inc. and NCR Corporation,
dated as of
February 1, 1996 and amended and restated
as of March 29,
1996.
(10)(i)4 Employee Benefits Agreement by and between
AT&T Corp. and
Lucent Technologies Inc., dated as of
February 1, 1996
and amended and restated as of March 29,
1996.
(10)(i)5 Form of Employee Benefits Agreement, dated
as of November
20, 1996, between AT&T Corp. and NCR
Corporation.
(10)(ii)(B)1 General Purchase Agreement by and between
AT&T Corp. and
Lucent Technologies Inc., dated
February 1, 1996 and
amended and restated as of March 29, 1996.
(10)(ii)(B)2 Form of Volume Purchase Agreement, dated
as of November
20, 1996, by and between AT&T Corp. and NCR
Corporation.
(10)(iii)(A)1 AT&T Short Term Incentive Plan as
amended March, 1994
(Exhibit (10)(iii)(A)1 to Form 10-K for
1994, File No.
1-1105).
(10)(iii)(A)2 AT&T 1987 Long Term Incentive Program as
amended July 17,
1989 (Exhibit (10)(iii)(A)2 to Form SE
dated March 24,
1993, File No. 1-1105).
(10)(iii)(A)3 AT&T Senior Management Individual Life
Insurance Program
dated January 1, 1987 (Exhibit
(10)(iii)(A)1 to Form SE,
dated March 25, 1987, File No. 1-1105)
and as revised
December 1, 1994 (Exhibit (10)(iii)(A)3 to
Form 10-K for
1994, File No. 1-1105).
(10)(iii)(A)4 AT&T Senior Management Long Term
Disability and
Survivor Protection Plan, as amended
and restated
effective January 1, 1995.
(10)(iii)(A)5 AT&T Senior Management Financial Counseling
Program dated
December 29, 1994 (Exhibit (10)(iii)(A)5 to
Form 10-K for
1994, File No. 1-1105).
(10)(iii)(A)6 AT&T Deferred Compensation Plan
for Non-Employee
Directors, as amended December 15,
1993(Exhibit (10)(iii)
(A)6 to Form 10-K for 1993, File No.
1-1105).
(10)(iii)(A)7 The AT&T Directors Individual Life
Insurance Program
dated January 1, 1987, revised December 1,
1995.
(10)(iii)(A)8 AT&T Plan for Non-Employee Directors'
Travel Accident
Insurance (Exhibit (10)(iii)(A)8 to Form
10-K for 1990,
File No. 1-1105).
(10)(iii)(A)9 AT&T Excess Benefit and Compensation Plan,
as amended and
restated effective October 1, 1996.
(10)(iii)(A)10 AT&T Non-Qualified Pension Plan, as
amended and restated
January 1, 1995.
(10)(iii)(A)11 AT&T Senior Management Incentive Award
Deferral Plan, as
amended December 20, 1995.
(10)(iii)(A)12 AT&T Mid-Career Hire Program revised
effective January 1,
1988 (Exhibit (10)(iii)(A)4 to Form SE,
dated March 25,
1988, File No. 1-1105) including AT&T
Mid-Career Pension
Plan, as amended and restated October 1,
1996.
(10)(iii)(A)13 AT&T 1984 Stock Option Plan, as
modified December 19,
1984 (Exhibit 10(t) to Form SE, dated
February 27,1985,
File No. 0-13247).
(10)(iii)(A)14 Form of Indemnification Contract for
Officers and
Directors (Exhibit (10)(iii)(A)6 to Form
SE, dated March
25, 1987, File No. 1-1105).
(10)(iii)(A)15 Pension Plan for AT&T Non-Employee
Directors revised
February 20, 1989 (Exhibit (10)(iii)(A)15
to Form 10-K
for 1993, File No. 1-1105).
(10)(iii)(A)16 AT&T Corp. Senior Management Basic
Life Insurance
Program, as amended May 17, 1995.
(10)(iii)(A)17 Form of AT&T Benefits Protection Trust
Agreement (Exhibit
(10)(iii)(A)17 to Form SE, dated March 25,
1992, File No.
1-1105).
(10)(iii)(A)18 Form of Employment Agreement between AT&T
Corp. and John
R. Walter dated October 23, 1996.
(10)(iii)(A)19 Employment Agreement between American
Telephone and
Telegraph Company and Richard W. Miller
dated August 9,
1993 (Exhibit 10(iii)(A)19 to Form 10-K
for 1995, File
No. 1-1105).
(12) Computation of Ratio of Earnings to Fixed
Charges.
(13) Specified portions (pages 20 through 44
and the outside
back cover) of the Company's Annual
Report to security
holders for the year ended December 31,
1996.
(21) List of subsidiaries of AT&T.
(23) Consent of Coopers & Lybrand L.L.P.
(24) Powers of Attorney executed by officers and
directors who
signed this report.
(27) Financial Data Schedule.