AT&T Annual Report Says Company is Focused on Unlocking Value

Apr 16, 2001, 01:00 ET from AT&T

    NEW YORK, April 16 /PRNewswire/ -- What are the chances of opening an
 oyster shell and finding four pearls inside?  Not many, unless you are one of
 the 5 million AT&T shareowners who will begin receiving the annual report
 today as part of one of the largest commercial printing and mailing projects
 in the United States.
     The unusual cover photo on AT&T's latest annual report depicts an oyster
 shell cradling a quartet of pearls which represent the four businesses AT&T is
 launching as part of its restructuring plan.  The 2000 annual report gives
 investors a close-up look at AT&T's plan to unlock shareowner value by
 restructuring itself into a family of four businesses, each a leader in its
 own market segment and each represented by its own asset-based or tracking
 stock.  As a cover headline says, "One brand, four gems, new value."
     In the report, Chairman C. Michael Armstrong outlines the changes needed
 to transform AT&T into this quartet of pearls.
     "Early in 1998 we set out to make AT&T a leader in end-to-end broadband
 communications services," Armstrong says. "We recognized three years ago that
 we had to prepare AT&T for a very different future, and we took decisive
 action."
     According to the annual report, in the past three years, AT&T has invested
 more than $100 billion in strategic acquisitions, new technology and network
 capacity for all four businesses and become more competitive by cutting more
 than $4 billion in costs.  But the economic difficulties of the voice long
 distance industry masked double-digit growth in newer segments.
     Armstrong acknowledges the pounding AT&T's stock price took last year,
 along with the other long distance carriers'. "It was tough," he says, "but in
 a painful way it confirmed AT&T's decision to move well beyond long distance
 voice."
     "As long distance declined, we expanded our newer growth businesses by an
 average of 20 percent," Armstrong says.  "As a result, we reduced long
 distance voice from about 80 percent of our revenue in 1997 down to about
 50 percent last year."
     Armstrong notes however that, "Even then, too many investors and analysts
 still thought of AT&T as primarily a long distance company. It was time to
 unlock the value of AT&T's growth businesses."
     The new AT&T annual report profiles each of the four businesses.  They
 are:
 
      -- AT&T Business, a leader in providing corporate customers with
         sophisticated global service:  AT&T Business doubled the volumes on
         its data/IP network in 2000.
 
      -- AT&T Wireless, one of America's fastest growing wireless companies:
         AT&T Wireless is well positioned to introduce the next generation of
         advanced wireless data services.
 
      -- AT&T Broadband, the country's biggest cable TV company: AT&T Broadband
         offers the largest and fastest growing lineup of broadband services,
         such as high-speed Internet access.
 
      -- AT&T Consumer, still number one in the fiercely competitive consumer
         long distance market, has 60 million customers and remains the most
         profitable major carrier.
 
     "Our intent is to provide current AT&T investors with shares designed to
 reflect each of these four powerful businesses.  And this restructuring is
 intended to give our investors the ability to select the parts of AT&T that
 best match their needs," Armstrong says.
     With 2000 revenue increases of 37 percent and more than 10 percent,
 respectively, AT&T Wireless and AT&T Broadband are growth businesses.  AT&T
 Business, with its mix of data and voice services, is considered a combination
 growth and income business. AT&T Consumer's large and profitable (even though
 declining) revenue stream is today an income and dividend investment.
     "We believe our four businesses can better manage shareowner value and
 compete more effectively as publicly-held businesses, each with the focus,
 speed and flexibility to win in its individual market," Armstrong notes.
 "These four businesses share the world-class AT&T brand with all the   quality
 and customer acceptance it represents.  They share a common vision of the
 broadband future, with shared access to the technology that will deliver on
 that vision."
     AT&T's 2001 proxy statement and information about the annual meeting to be
 held May 23 in Cincinnati, are also included in the annual report mailing.
 The proxy statement includes a directors' proposal that would amend the
 corporate charter to allow shareowners to approve mergers and other important
 strategic changes by a simple majority vote, instead of a two-thirds vote.
     In the proxy statement, the company notes that even in its long history,
 two-thirds of its outstanding shares have rarely been voted. The change to the
 simple majority rule used by most companies today would prevent the unvoted
 proxies of many shareowners or a small number of shareowners with special
 interests from frustrating the will of the majority of AT&T's shareowners.
     Registered shareowners can vote their shares for this year's proxy by
 using a toll-free telephone number or via the Internet.  An electronic version
 of the report and proxy are also available through the Internet via AT&T's
 website -- http://www.att.com/ir.
 
      Logo: http://www.att.com/identity/library/
 
 

SOURCE AT&T
    NEW YORK, April 16 /PRNewswire/ -- What are the chances of opening an
 oyster shell and finding four pearls inside?  Not many, unless you are one of
 the 5 million AT&T shareowners who will begin receiving the annual report
 today as part of one of the largest commercial printing and mailing projects
 in the United States.
     The unusual cover photo on AT&T's latest annual report depicts an oyster
 shell cradling a quartet of pearls which represent the four businesses AT&T is
 launching as part of its restructuring plan.  The 2000 annual report gives
 investors a close-up look at AT&T's plan to unlock shareowner value by
 restructuring itself into a family of four businesses, each a leader in its
 own market segment and each represented by its own asset-based or tracking
 stock.  As a cover headline says, "One brand, four gems, new value."
     In the report, Chairman C. Michael Armstrong outlines the changes needed
 to transform AT&T into this quartet of pearls.
     "Early in 1998 we set out to make AT&T a leader in end-to-end broadband
 communications services," Armstrong says. "We recognized three years ago that
 we had to prepare AT&T for a very different future, and we took decisive
 action."
     According to the annual report, in the past three years, AT&T has invested
 more than $100 billion in strategic acquisitions, new technology and network
 capacity for all four businesses and become more competitive by cutting more
 than $4 billion in costs.  But the economic difficulties of the voice long
 distance industry masked double-digit growth in newer segments.
     Armstrong acknowledges the pounding AT&T's stock price took last year,
 along with the other long distance carriers'. "It was tough," he says, "but in
 a painful way it confirmed AT&T's decision to move well beyond long distance
 voice."
     "As long distance declined, we expanded our newer growth businesses by an
 average of 20 percent," Armstrong says.  "As a result, we reduced long
 distance voice from about 80 percent of our revenue in 1997 down to about
 50 percent last year."
     Armstrong notes however that, "Even then, too many investors and analysts
 still thought of AT&T as primarily a long distance company. It was time to
 unlock the value of AT&T's growth businesses."
     The new AT&T annual report profiles each of the four businesses.  They
 are:
 
      -- AT&T Business, a leader in providing corporate customers with
         sophisticated global service:  AT&T Business doubled the volumes on
         its data/IP network in 2000.
 
      -- AT&T Wireless, one of America's fastest growing wireless companies:
         AT&T Wireless is well positioned to introduce the next generation of
         advanced wireless data services.
 
      -- AT&T Broadband, the country's biggest cable TV company: AT&T Broadband
         offers the largest and fastest growing lineup of broadband services,
         such as high-speed Internet access.
 
      -- AT&T Consumer, still number one in the fiercely competitive consumer
         long distance market, has 60 million customers and remains the most
         profitable major carrier.
 
     "Our intent is to provide current AT&T investors with shares designed to
 reflect each of these four powerful businesses.  And this restructuring is
 intended to give our investors the ability to select the parts of AT&T that
 best match their needs," Armstrong says.
     With 2000 revenue increases of 37 percent and more than 10 percent,
 respectively, AT&T Wireless and AT&T Broadband are growth businesses.  AT&T
 Business, with its mix of data and voice services, is considered a combination
 growth and income business. AT&T Consumer's large and profitable (even though
 declining) revenue stream is today an income and dividend investment.
     "We believe our four businesses can better manage shareowner value and
 compete more effectively as publicly-held businesses, each with the focus,
 speed and flexibility to win in its individual market," Armstrong notes.
 "These four businesses share the world-class AT&T brand with all the   quality
 and customer acceptance it represents.  They share a common vision of the
 broadband future, with shared access to the technology that will deliver on
 that vision."
     AT&T's 2001 proxy statement and information about the annual meeting to be
 held May 23 in Cincinnati, are also included in the annual report mailing.
 The proxy statement includes a directors' proposal that would amend the
 corporate charter to allow shareowners to approve mergers and other important
 strategic changes by a simple majority vote, instead of a two-thirds vote.
     In the proxy statement, the company notes that even in its long history,
 two-thirds of its outstanding shares have rarely been voted. The change to the
 simple majority rule used by most companies today would prevent the unvoted
 proxies of many shareowners or a small number of shareowners with special
 interests from frustrating the will of the majority of AT&T's shareowners.
     Registered shareowners can vote their shares for this year's proxy by
 using a toll-free telephone number or via the Internet.  An electronic version
 of the report and proxy are also available through the Internet via AT&T's
 website -- http://www.att.com/ir.
 
      Logo: http://www.att.com/identity/library/
 
 SOURCE  AT&T

RELATED LINKS

http://www.alphasoftware.com