-----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, EYk0LerOaZmBmzj4GVgk+AqFFdW1XHTRAm7Pqj/R77cZJ5b6bAHU2kX92Flp5otX HaBGFYN6Rf/wMVzAe6zEjQ== 0000950103-02-001026.txt : 20021022 0000950103-02-001026.hdr.sgml : 20021022 20021022154035 ACCESSION NUMBER: 0000950103-02-001026 CONFORMED SUBMISSION TYPE: SC TO-I/A PUBLIC DOCUMENT COUNT: 2 FILED AS OF DATE: 20021022 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: SC TO-I/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-32542 FILM NUMBER: 02795078 BUSINESS ADDRESS: STREET 1: 295 NORTH MAPLE AVENUE CITY: BASKING RIDGE STATE: NJ ZIP: 07920 BUSINESS PHONE: 9082214000 MAIL ADDRESS: STREET 1: 295 NORTH MAPLE AVENUE CITY: BASKING RIDGE 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: TELEPHONE COMMUNICATIONS (NO RADIO TELEPHONE) [4813] IRS NUMBER: 134924710 STATE OF INCORPORATION: NY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC TO-I/A BUSINESS ADDRESS: STREET 1: 295 NORTH MAPLE AVENUE CITY: BASKING RIDGE STATE: NJ ZIP: 07920 BUSINESS PHONE: 9082214000 MAIL ADDRESS: STREET 1: 295 NORTH MAPLE AVENUE CITY: BASKING RIDGE STATE: NJ ZIP: 07920 FORMER COMPANY: FORMER CONFORMED NAME: AMERICAN TELEPHONE & TELEGRAPH CO DATE OF NAME CHANGE: 19920703 SC TO-I/A 1 oct2202_toia4.txt As filed with the Securities and Exchange Commission on October 22, 2002 Registration No. 005-32542 ================================================================================ UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 -------------------------------------- SCHEDULE TO (RULE 13e-4) TENDER OFFER STATEMENT UNDER SECTION 13(e)(1) OF THE SECURITIES EXCHANGE ACT OF 1934 (Amendment No. 4) -------------------------------- AT&T CORP. (Name of Subject Company (Issuer) and Filing Person (Offeror)) -------------------------------- CERTAIN OPTIONS TO PURCHASE COMMON STOCK, PAR VALUE $1.00 PER SHARE (Title of Class of Securities) -------------------------------- 001957109 (CUSIP Number of Class of Securities) (UNDERLYING COMMON STOCK) -------------------------------- ROBERT S. FEIT VICE PRESIDENT - LAW AND CORPORATE SECRETARY AT&T CORP. 295 NORTH MAPLE AVE. BASKING RIDGE, NEW JERSEY 07920 TELEPHONE: (908) 221-2000 (Name, Address, and Telephone Number of Person Authorized to Receive Notices and Communications on Behalf of Filing Persons) COPIES TO: JEAN M. MCLOUGHLIN, ESQ. DAVIS POLK & WARDWELL 1600 EL CAMINO REAL MENLO PARK, CA 94025 TELEPHONE: (650) 752-2000 Fax: (650) 752-2111 CALCULATION OF FILING FEE - ------------------------------------------------------------------------------- TRANSACTION VALUATION* AMOUNT OF FILING FEE - ------------------------------------------------------------------------------- $243,518,190 $22,403.67 - ------------------------------------------------------------------------------- - --------------- * Calculated solely for purposes of determining the filing fee. This amount assumes that options to purchase 116,677,796 shares of common stock of the AT&T Corp. will be exchanged pursuant to this offer. The amount of the filing fee, calculated in accordance with Section 13(e)(3) of the Securities Exchange Act of 1934, as amended, and Rule 0-11(b) thereunder, equals the transaction value multiplied by $92.00 per million. [ ] Check the box if any part of the fee is offset as provided by Rule 0-11(a)(2) and identify the filing with which the offsetting fee was previously paid. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. Amount Previously Paid: Not applicable. Form or Registration No.: Not applicable Filing party: Not applicable. Date filed: Not applicable. [ ] Check the box if the filing relates solely to preliminary communications made before the commencement of a tender offer. Check the appropriate boxes below to designate any transactions to which the statement relates: [ ] third party tender offer subject to rule 14d-1. [X] issuer tender offer subject to Rule 13e-4. [ ] going-private transaction subject to Rule 13e-3. [ ] amendment to Schedule 13D under Rule 13d-2. Check the following box if the filing is a final amendment reporting the results of the tender offer. [ ] - -------------------------------------------------------------------------------- INTRODUCTORY STATEMENT This Amendment No. 4 amends and supplements the Tender Offer Statement on Schedule TO relating to our offer to exchange certain options for restricted stock units or cash upon the terms and subject to the conditions in the Offer to Exchange dated September 16, 2002. ITEM 12. EXHIBITS. Item 12 is hereby amended and supplemented to add the following exhibit: (a)(1)(I) Text of communication to employees SIGNATURE After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. /s/ Robert S. Feit -------------------- Name: Robert S. Feit Title: Vice President - Law and Corporate Secretary Date: October 22, 2002 INDEX TO EXHIBITS EXHIBIT NO. DESCRIPTION OF EXHIBIT (a)(1)(I) Text of communication to employees EX-99.A1I 3 oct2202_ex99-a1i.txt EXHIBIT (a)(1)(I) [Text of communication to employees] October 22, 2002 AT&T Stock Option Participant In connection with AT&T's Offer to Exchange Outstanding Options for Restricted Stock Units and Cash (the "Offer"), enclosed you will find the following additional material to consider in deciding whether to participate in the Offer: Third Quarter Earnings Announcement On October 22, 2002, AT&T announced its earnings for the quarter ended September 30, 2002, as set forth in the enclosed material. Amended Schedule A Schedule A to the Offer to Exchange has been updated to reflect transactions by our executive officers and directors since the commencement of the Offer. Please remember that the Offer expires at 11:59 p.m. (ET) on Tuesday, October 29, 2002. News Release FOR RELEASE TUESDAY, OCTOBER 22, 2002 AT&T Earns 6 Cents Per Diluted Share from Continuing Operations, Excluding Other Income Reported Earnings are 5 Cents Per Diluted Share from Continuing Operations on Revenue of $12 Billion BEDMINSTER, N.J. -- AT&T (NYSE: T) today announced third-quarter earnings of $0.06 per diluted share from continuing operations, excluding other income. In the same quarter last year, AT&T reported a loss of $0.02 on the same basis. As previously reported, on January 1, 2002, AT&T adopted Statement of Financial Accounting Standards No. 142, which eliminated amortization of goodwill and franchise costs. The amortization of these items in the third quarter of 2001 reduced reported earnings from continuing operations by $0.11 per diluted share. On a reported basis, the company earned $0.05 per diluted share from continuing operations, compared with a loss of $0.69 in the year-ago quarter. Revenue for the quarter was $12.0 billion, a decline of 8.3 percent from the year-ago quarter on a reported basis and a decline of 7.4 percent on a pro forma basis. Pro forma revenue adjusts for significant cable dispositions and the deconsolidation of Excite@Home. The quarter's lower revenue was primarily due to continued declines in long distance voice services, partially offset by growth at AT&T Broadband in telephony, high-speed data and digital video, and growth areas of AT&T Business, primarily data/Internet protocol (IP)/managed services. "We had a good third quarter and posted solid results as we remained focused on executing the operational basics of our business," said AT&T Chairman and CEO C. Michael Armstrong. "Following the spinoff of AT&T Broadband and its merger with Comcast, AT&T will be well positioned for the future with a top-notch leadership team, a world-class network, a sound financial structure and a wealth of opportunity in the marketplace," Armstrong said. Following the anticipated spinoff of AT&T Broadband later this quarter, the primary business of AT&T will be communications services, provided by the AT&T Business and AT&T Consumer units. "Our communications services units made a solid showing in the quarter, reflecting our focus on the fundamentals of operating strong voice and data businesses and seizing growth opportunities," said David Dorman, AT&T chairman- and CEO-elect. "AT&T Business rededicated itself to executing in the marketplace and meeting customer needs across its product portfolio, and AT&T Consumer accelerated its local service momentum, entering two more states and increasing its 'any distance' customer count by 24 percent over the previous quarter," Dorman said. Unit Highlights Note: all comparisons are third quarter 2002 vs. third quarter 2001 unless otherwise noted AT&T Business o Revenue $6.7 billion, down 1.6 percent o Revenue year-to-date $20.0 billion, down 4.5 percent over same period last year o EBIT, excluding other income, $876 million; EBIT margin on the same basis 13.1 percent vs. 14.5 percent o EBIT, excluding other income year-to-date, $2.64 billion, down 21 percent over same period last year o Long distance voice revenue decline slowed to about 8 percent with a slight volume increase -- reflects steady improvement from the previous quarter decline of approximately 12 percent and first quarter 2002 decline of approximately 19 percent o Data/IP/Managed services grew about 7 percent (about 6 percent, excluding customer premises equipment) o Local voice revenue up approximately 5 percent, driven partly by strong performance of "All-in-One" bundle for retail small business market o Outlook: Expect revenue and EBIT margin, excluding other income, at or marginally better than the favorable end of previously stated ranges of: revenue, 4.5 to 5 percent full-year decline; EBIT margin, excluding other income, 2 to 3 percentage point decline from 2001 margin of 13.3 percent AT&T Consumer o Revenue $2.8 billion, down 25.9 percent due to continued trends of wireless and Internet substitution, competition, and customer migration to lower priced plans and products o Revenue year-to-date $8.8 billion, down 23 percent over same period last year o EBIT, excluding other income, $595 million; EBIT margin on same basis 21.3 percent vs. 33.9 percent o EBIT, excluding other income year-to-date, $2.2 billion, down 42.1 percent over same period last year o Any Distance service offered to about 1.9 million customers in eight states at end of quarter -- a 24 percent sequential growth rate; entered local market in California and New Jersey. By mid-October, had 2 million Any Distance customers. o Outlook: Maintain previously stated revenue and EBIT margin, excluding other income, outlook: Revenue, expect to come in at favorable end of mid-20 percent range decline; EBIT margin, excluding other income, expect high single-digit percentage decline AT&T Communications Services AT&T Communications Services primarily includes AT&T Business Services and AT&T Consumer Services. o Outlook: Not providing fourth quarter EPS outlook due to expected AT&T Broadband spinoff and reverse stock split; anticipate capital expenditures (excluding AT&T Broadband), in the lower end of the previously announced range of $3.8 to $4.2 billion. AT&T Broadband o Revenue $2.5 billion, up 8.2 percent on a pro forma basis, adjusted for significant closed cable dispositions and acquisitions, and up 6.4 percent on a reported basis o Revenue growth driven primarily by advanced services (telephony, high-speed data, digital video) o EBITDA, excluding other income, $569 million; $676 million excluding other income and Comcast merger-related costs o EBITDA margin, excluding other income, 22.3 percent; 26.5 percent excluding other income and Comcast merger-related costs o RGUs 559,000 net additions in the quarter: 285,000 digital video, 172,000 high-speed data, 102,000 telephony additions o Basic video subscribers down about 129,000 primarily due to competition o Outlook: Maintain ranges for full-year revenue and EBITDA, excluding other income: revenue growth rate in low double-digit percentage; EBITDA range, excluding other income, of $2.4 to $2.5 billion 3rd Quarter at a Glance 3rd Quarter Highlights - ----------------------------------------------- --------------------------------------------- 3Q02 % change EPS from continuing operations, $0.06 from 3Q01 excluding other income ------- --------- AT&T revenue $11.96B (7.4%)* Reported EPS from continuing $0.05 operations AT&T Business revenue $6.70B (1.6%) Reported EPS $0.05 AT&T Consumer revenue $2.79B (25.9%) Total Assets $138.0B AT&T Broadband revenue $2.55B 8.2%* Debt, net of cash, monetizations and $29.7B foreign exchange hedges EBITDA, excluding other $3.24B (15.0%) income Reported EBITDA $3.28B NMF** EBIT, excluding other $1.19B (22.3%) income Reported EBIT $1.24B 133.8% Capital expenditures $2.06B 4.6%
*Increase (decrease) is calculated on a pro forma basis by adjusting third quarter 2001 revenue for significant cable acquisitions and dispositions closed in 2001 and the deconsolidation of Excite@Home, as applicable, as if these events occurred on January 1, 2001. ** Not a meaningful comparison DEFINITIONS AT&T Group does not include the results of Liberty Media Group, which was tracked as a separate class of stock through August 10, 2001, the split-off date. EBIT refers to earnings before interest, taxes, extraordinary item, cumulative effect of accounting changes, dividend requirements on preferred stock, premium on exchange of AT&T Wireless tracking stock and discontinued operations. EBIT, excluding other income/expense, refers to EBIT, excluding other income/expense, and pretax net losses/earnings related to equity investments. EBITDA refers to EBIT, excluding depreciation and amortization, and pretax minority interest other than Excite@Home's minority interest. EBITDA, excluding other expense/income, refers to EBITDA, excluding other income/expense, and pretax net losses/earnings related to equity investments. EBIT margin refers to EBIT as a percentage of reported revenue. EBITDA margin refers to EBITDA as a percentage of reported revenue. EPS from continuing operations, excluding other income/expense, refers to earnings per share, excluding other income/expense, net losses/earnings related to equity investments, extraordinary item, cumulative effect of accounting changes, dividend requirements on preferred stock, premium on exchange of AT&T Wireless tracking stock and discontinued operations. Pro forma revenue: Third quarter 2001 revenue is adjusted for significant cable acquisitions and dispositions closed in 2001 and the deconsolidation of Excite@Home, as if these events occurred on January 1, 2001. AT&T EPS RECONCILIATION The following table reconciles the reported earnings (loss) from continuing operations per diluted share to earnings (loss) from continuing operations excluding other income (expense) per diluted share: For the three months ended September 30, -------------------------- 2002 2001 ---- ---- Reported earnings (loss) from continuing operations per diluted share $0.05 ($0.69) Less reconciling items: Other income (expense), net(1) (0.01) 0.28 Net (losses) related to equity investments - (0.95) (0.01) (0.67) Earnings per diluted share from continuing operations excluding other income (expense) $0.06 ($0.02) (1) Other income (expense) is income on a pre-tax basis, but an expense on an after-tax basis in the third quarter of 2002 due to the taxes associated with the impairment charges recorded on certain leveraged leases of aircraft ($0.2 billion pre-tax). The nature of leveraged leases and the anticipated loss on those leases caused a limited tax benefit. The foregoing 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. Readers 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 is presented solely to provide additional information to further understand the results of AT&T. SCHEDULE A INFORMATION ABOUT AT&T'S DIRECTORS AND EXECUTIVE OFFICERS The following table sets forth the directors and executive officers of AT&T, together with the total number of outstanding stock options (vested and unvested) to purchase AT&T common stock held by each such director and executive officer as of October 22, 2002. As of such date, our executive officers and directors as a group beneficially held options to purchase a total of 24,553,271 shares of our common stock. Name Positions and Offices Held Outstanding Options - ---- -------------------------- ------------------- C. Michael Armstrong Chairman and Chief Executive Officer 4,915,403 J. Michael Cook Director 21,225 Kenneth T. Derr Director 21,226 David W. Dorman President and Director 3,449,239 M. Kathryn Eickhoff Director 21,226 George M. C. Fisher Director 21,226 Frank C. Herringer Director 21,000 Amos B. Hostetter, Jr. Director 21,226 Shirley A. Jackson Director 21,225 Jon C. Madonna* Director 15,000 Donald F. McHenry Director 21,226 Charles H. Noski Vice Chairman 2,559,320 Louis A. Simpson Director 21,226 Michael I. Sovern Director 21,226 Sanford I. Weill Director 21,226 Tony L. White Director 21,000 Betsy J. Bernard President (Elect) 2,584,501 James W. Cicconi Executive Vice President 1,286,776 Nicholas S. Cyprus Vice President and Controller 365,355 Mirian Graddick-Weir Executive Vice President 860,988 Thomas W. Horton Senior Executive Vice President and CFO 1,005,000 Frank Ianna Executive Vice President 2,616,111 Richard J. Martin Executive Vice President 634,418 John C. Petrillo Executive Vice President 1,697,655 John Polumbo* President - AT&T Consumer Services 605,200 William T. Schleyer President and CEO - AT&T Broadband 1,302,800 Constance K. Weaver* Executive Vice President 401,247
* Mr. Madonna was elected to the Board on September 27, 2002, and Ms. Weaver and Mr. Polumbo became executive officers on October 1, 2002. The transactions described herein for each such individual occurred on or after the date of his or her election or appointment, as applicable. Option Grants. Each non-employee member of the Board was granted an option to purchase 3000 shares of our common stock at an exercise price of $12.41 per share on September 27, 2002 (except that Mr. Madonna was granted an option to purchase 9000 shares), and an option to purchase 6000 shares at an exercise price of $12.365 per share on October 15, 2002. On September 19, 2002, the following options were granted at an exercise price of $12.335 per share: Number of Name Number of Options Name Options - ---- ----------------- ---- ------- David W. Dorman 1,365,000 Thomas W. Horton 400,000 Betsy J. Bernard 700,000 Frank Ianna 640,000 James W. Cicconi 437,500 John C. Petrillo 236,250 Nicholas S. Cyprus 87,500 John Polumbo 437,500 Mirian Graddick-Weir 262,500 Constance K. Weaver 125,000 Special Deferral Distribution. AT&T authorized active and former senior managers with vested deferred compensation account balances to make a one-time election to receive a single distribution of AT&T common stock, in exchange for their rights to receive future payments from their deferred accounts under the terms of their existing distribution schedule. This special deferral distribution was to occur on May 16, 2002, but was delayed due to a "standstill" period. The distribution occurred on September 26, 2002. At that time, 90% of the then present value of the future payments from the deferred cash account balances, plus 90% of the then current deferred AT&T share account balances, was distributed in shares of AT&T common stock. The following executive officers received the following distributions: Number of Shares Withheld for Tax Related Cancellation of Name Shares Distributed Purposes Deferred Stock Units - ---- ------------------ -------- -------------------- James W. Cicconi 154,860.92 51,068.92 Nicholas S. Cyprus 73,696 25,396 4,266.31 Mirian Graddick-Weir 198,156.03 68,471.03 Frank Ianna 313,188.64 107,113.64 12,384.56 Richard J. Martin 376,880.09 129,266.09 10,351.72 John C. Petrillo 410,637.26 141,031.26 59,617.01
Other Transactions. The following additional transactions have occurred since September 16, 2002: Number of Name Date Shares* Share Price Transaction - ---- ---- ------- ----------- ----------- J. Michael Cook 10/1/02 1,954 $12.28 Phantom Stock Unit Grant Kenneth T. Derr 10/1/02 1,954 $12.28 Phantom Stock Unit Grant M. Kathryn Eickhoff 10/1/02 916 $12.28 Phantom Stock Unit Grant George M. C. Fisher 10/1/02 2,229 $12.28 Phantom Stock Unit Grant Frank C. Herringer 10/1/02 1,832 $12.28 Phantom Stock Unit Grant Amos B. Hostetter, Jr. 10/1/02 1,954 $12.28 Phantom Stock Unit Grant Shirley A. Jackson 10/1/02 1,954 $12.28 Phantom Stock Unit Grant Donald F. McHenry 10/1/02 916 $12.28 Phantom Stock Unit Grant Charles H. Noski 10/17/02 4,129 $12.53 Restricted Stock Withheld Louis A. Simpson 10/1/02 2,229 $12.28 Phantom Stock Unit Grant Michael I. Sovern 10/1/02 2,229 $12.28 Phantom Stock Unit Grant Sanford I. Weill 10/1/02 916 $12.28 Phantom Stock Unit Grant Tony L. White 10/1/02 1,954 $12.28 Phantom Stock Unit Grant James W. Cicconi 9/27/02 103,792 $12.25 Disposal of Shares Nicholas S. Cyprus 9/27/02 48,300 $12.25 Disposal of Shares Mirian Graddick-Weir 9/27/02 65,000 $12.26 Disposal of Shares 9/27/02 64,685 $12.25 Disposal of Shares Frank Ianna 9/27/02 206,075 $12.25 Disposal of Shares Richard J. Martin 9/27/02 123,807 $12.30 Disposal of Shares 9/27/02 123,807 $12.50 Disposal of Shares John Polumbo 10/8/02 750 $10.96 Disposal of Shares by Spouse
* The number of shares is rounded to the nearest whole share. -----END PRIVACY-ENHANCED MESSAGE-----