AT&T First-Quarter Reported Revenue Increases 5.4 Percent, Pro Forma Revenue Increases 2.0 Percent

Loss Per Share of 10 Cents on a Reported Basis

EPS, Excluding Other Income and Excite@Home Goodwill Impairment Charge,

Was 6 Cents Per Share



Apr 24, 2001, 01:00 ET from AT&T

    NEW YORK, April 24 /PRNewswire Interactive News Release/ -- AT&T today
 announced first-quarter results for AT&T Group.
     Reported revenue increased $862 million, to approximately $16.76 billion,
 a 5.4 percent increase over the year-ago quarter.  AT&T Group revenue
 increases are primarily due to strong results from Wireless, Broadband and
 Business data/Internet Protocol (IP), partially offset by a decline in
 Consumer and Business long distance voice revenue.  Pro forma revenue, which
 is adjusted for the acquisition of MediaOne, the elimination of per line
 charges, the consolidation of Excite@Home, and closed cable partnerships,
 increased $336 million, or 2.0 percent, over the same period.
     As expected, earnings per share (EPS), excluding other income and a
 goodwill impairment charge, were $0.06 per diluted share in the first quarter,
 a decrease of 82.4 percent compared to the $0.34 per diluted share from the
 year-ago quarter.  On a reported basis, AT&T Common Stock Group lost $0.10 per
 diluted share compared to earnings per diluted share of $0.54 for the first
 quarter of 2000.  The first quarter 2001 loss includes the effect of the
 implementation of Statement of Financial Accounting Standards No. 133, and the
 impact of a $739 million non-cash, goodwill impairment charge related to
 Excite@Home.
     At the end of the quarter, AT&T's net debt level, excluding monetized debt
 of $8.6 billion, was approximately $47.5 billion, a reduction of $8.7 billion
 from year end.  The company said it will continue to work aggressively to
 reduce its total debt by monetizing non-strategic assets and ownership
 interests.
     "Our business, along with others in the industry, continues to feel the
 impact of declines in long distance voice revenue.  At the same time, we're
 focused on managing for profitability, paying down debt and executing on the
 strategic investments we've made in our next generation of end-to-end
 broadband businesses," said Chairman and CEO C. Michael Armstrong.
     "Our growth businesses continue to drive solid revenue gains.  Wireless
 delivered another quarter of strong revenue growth -- more than 46 percent.
 Broadband is growing revenue more than 10 percent by adding new subscribers
 for advanced services while we focus on reducing costs and improving margins.
 Business data services revenue continued to grow at about 20 percent, despite
 pricing pressures.  Consumer generated $4 billion of revenue, sustained its
 industry-leading margins of more than 30 percent, and will benefit from our
 strategic acquisition of digital subscriber line assets this quarter."
 
      1st Quarter at a Glance               1st Quarter Highlights
                           1Q01 Vs 1Q00      Total Revenue            $16.8b
      Business Services
       Revenue            $7.2b   (1.1%)*    Reported EPS             $(0.10)
       Consumer Services
        Revenue           $4.0b  (16.2%)*    Cash EPS, excluding other
                                              income and a goodwill
                                              impairment charge        $0.20
      Wireless Services
       Revenue            $3.2b   46.2%      Total Assets            $207.1b
      Broadband Revenue   $2.5b   10.9%*     Capital expenditures      $3.3b
      EBITDA, excluding
       other income       $4.7b    8.8%
      EBIT, excluding
       other income       $1.8b  (22.8%)
 
      * Pro Forma
 
     HIGHLIGHTS:
 
      -- Cash earnings, excluding other income and a goodwill impairment
         charge, were $0.20 per diluted share in the first quarter.
 
      -- Earnings before interest and taxes (EBIT), excluding other income and
         a goodwill impairment charge, and earnings before interest, taxes and
         depreciation and amortization (EBITDA), excluding other income and a
         goodwill impairment charge, were $1.82 billion and $4.74 billion,
         respectively.
 
      -- Capital expenditures for the first quarter were $3.29 billion.  Most
         of the expenditures were related to Wireless, primarily focused on
         capacity upgrades and improvements to network quality, Business,
         related to data and IP, and Broadband, for the launch of advanced
         services and plant upgrades.
 
     AT&T BUSINESS UNIT HIGHLIGHTS:
      -- AT&T Business reported revenue was $7.17 billion, a decline of 1.2
         percent over the year-ago quarter.  Pro forma revenue declined 1.1
         percent over the year-ago quarter.
 
         Business revenue declined primarily due to continued pricing pressures
         in long distance voice, despite a mid-single-digit increase in long
         distance calling volumes.  The pricing pressures resulted in long
         distance voice revenue declining by a low-teen percentage rate,
         compared to the year-ago quarter.  AT&T Business continues to focus
         resources on delivering high-speed data and IP services.  As a result,
         the unit continued to see a revenue shift from voice to higher growth
         products such as data/IP and services.  Among the unit's higher growth
         products are packet services (Frame Relay, ATM and IP), which on a
         combined basis grew approximately 40 percent over the same period last
         year.  AT&T Solutions revenue grew at a mid-teens rate primarily due
         to new outsourcing contracts and add-on business from existing
         clients.
 
         First quarter EBIT margin, excluding other income, increased to 16.5
         percent, but was a 3.8 percentage point decline from the full-year
         2000 margin of 20.3 percent.  The increase reflects lower
         restructuring charges, partially offset by the impact of pricing
         pressure within the long distance voice business as well as the shift
         from higher-margin long distance services to lower-margin growth
         services.  Reported EBIT and EBITDA declined 11.2 percent and 5.4
         percent, respectively, over the year-ago quarter.
 
      -- AT&T Consumer had $4.01 billion in reported revenue for the first
         quarter, a decline of 20.5 percent, over the year-ago quarter.  The
         unit's pro forma revenue decreased 16.2 percent.  The revenue decrease
         was primarily driven by technology substitution of wireless and
         Internet services, continued customer migration to lower-priced
         optional calling plans and prepaid card products, and the effects of
         competition.
 
         First quarter EBIT, excluding other income, decreased 21.4 percent
         over the year-ago quarter.  Reported EBIT and EBITDA declined 20.5
         percent and 20.4 percent, respectively, over the year-ago quarter.
         The decline reflects the impact of lower revenue, partially offset by
         the unit's efforts to manage costs.  The unit's EBIT margin, excluding
         other income, was 32.8 percent.
 
         During the quarter, the company announced that it would acquire
         substantially all of the assets of NorthPoint, a DSL provider, for use
         by AT&T's Business and Consumer units.  The acquisition supports
         Consumer's strategy of delivering residential customers high-speed
         access, local, and long distance service over the same line.  AT&T
         Consumer will begin rolling out the service later this year.  Consumer
         also introduced the AT&T 7/7 Offer, giving consumers unlimited access
         to the Internet via AT&T WorldNet with a 24/7 rate of seven cents a
         minute on state-to-state long distance calls.
 
      -- AT&T Wireless Group earnings are also reported separately and can be
         found at http://www.att.com/wirelessir.
 
         Wireless revenue increased 46.2 percent to $3.21 billion in the first
         quarter compared to the year-ago quarter.  The total revenue increase
         reflects the impact of acquisitions, as well as continued strength in
         mobility revenue driven by strong subscriber growth, which was
         slightly offset by a decline in average revenue per user (ARPU).
 
         Services revenue for the mobility business increased $939 million to
         total $2.93 billion in the first quarter, which represented growth of
         47.2 percent compared with the year-ago period.  Total consolidated
         subscribers were 15.7 million at the end of the first quarter,
         representing a 57.7 percent increase from the prior year, including
         subscribers associated with acquisitions that occurred subsequent to
         the first quarter of 2000.
 
         Total revenue increased 25.7 percent compared to the year-ago quarter
         when adjusted to exclude the impact of the June 2000 acquisition of
         properties in the San Francisco Bay area, as well as the impact of the
         acquisition of properties in the Los Angeles market in December 2000.
 
         Wireless had EBITDA, excluding other income, in the first quarter of
         $717 million, an increase of 78.9 percent from the year-ago period.
 
      -- AT&T Broadband first quarter pro forma revenue, which includes the
         results of MediaOne in both periods and also adjusts for other cable
         transactions, increased 10.9 percent to $2.47 billion year-over-year
         due to increased revenue from video operations, high-speed data and
         broadband telephony.
 
         AT&T Broadband experienced rapid growth of new services as the unit
         added about 700,000 advanced new service revenue-generating units
         (RGUs), which include broadband telephony, high-speed data and digital
         video customers.  This represented an increase of approximately 70
         percent from the year-ago quarter.
 
         The unit improved its presence in major markets by adding about
         153,000 broadband telephony customers, more than twice as many as the
         year-ago quarter. The unit added approximately 340,000 digital video
         customers, a 54.0 percent increase; and about 206,000 high-speed data
         customers, an increase of 57.0 percent over the prior year quarter.
 
         The unit ended the quarter by reaching three major milestones: 700,000
         broadband telephony customers, 3 million digital video customers and a
         total of 5 million RGUs.
 
         Pro forma EBITDA margins, excluding other income, decreased 6.8
         percentage points over the year-ago quarter due to expenses associated
         with the roll out of broadband telephony, higher programming costs and
         increased restructuring charges, offset by revenue growth.  Capital
         expenditures for the unit in the quarter were $807 million, with
         approximately $423 million related to the launch of advanced services
         and $115 million for plant upgrade expenditures.
 
      -- Corporate and Other, includes the consolidated results of Excite@Home,
         corporate staff functions and eliminations.  Reported revenue
         increased $54 million in the first quarter to a negative $89 million
         compared to a negative $143 million in the year-ago quarter, primarily
         due to increased revenue from Excite@Home.  Corporate and Other
         EBITDA, excluding other income and a goodwill impairment charge,
         improved $260 million to $73 million, compared with the year-ago
         quarter.
 
     RESTRUCTURING UPDATE:
     In October 2000, AT&T announced a restructuring plan to create a family of
 four businesses, each operating under the AT&T brand and committed to uniform
 standards of quality.  Under the plan, which is expected to be completed in
 2002, each of these four businesses will become publicly held, trading as
 either a common stock or tracking stock.
      On April 11, AT&T announced that the Internal Revenue Service ruled that
 the proposed split off of Liberty Media Corporation, which will own all of the
 assets reflected in the Liberty Media Group, qualifies as tax free for AT&T,
 Liberty Media and their shareowners.  By mid summer of 2001, AT&T plans to
 convert the Liberty Media tracking stock into an asset-based security and
 launch Liberty Media Corporation as an independent, publicly-traded company.
 AT&T said that it needs to complete certain reorganization steps, which
 require some reviews, before the split off can be completed.
     On April 18, AT&T released details of its offer to exchange shares of AT&T
 common stock for shares of AT&T Wireless Group tracking stock.  Following the
 exchange offer and subject to receipt of a favorable tax ruling, the company
 plans to distribute its remaining interest in AT&T Wireless to AT&T common
 shareholders.  AT&T intends, however, to retain up to $3 billion of shares of
 AT&T Wireless for sale, exchange or monetization within six months following
 the split off.  In preparation for the split off, AT&T Wireless has obtained
 independent credit ratings from Moody's, Standard & Poors and Fitch, completed
 a $6.5 billion global note offering, and closed on a $2.5 billion syndicated
 bank facility to provide liquidity support.
     AT&T said it expects to distribute AT&T's Consumer tracking stock to
 shareholders later this year and plans to offer a portion of AT&T Broadband
 tracking stock to the public toward the end of the year, subject to
 shareholder approval, market and financial conditions.
 
     OUTLOOK:
     The company reiterated that it is not able to accurately estimate full-
 year AT&T Group revenue, EBITDA and EPS because of factors associated with its
 restructuring.  For example, the company is currently conducting an exchange
 offer of AT&T shares for AT&T Wireless tracking shares.  The number of AT&T
 shares that will be retired as a result of the exchange is not known, but
 could have a substantial effect on any full-year EPS estimate.  In addition,
 the planned AT&T Wireless split off, the public offering of AT&T Broadband
 tracking stock and the distribution of AT&T Consumer tracking stock will also
 affect EPS.  Factors such as timing, valuation or proceeds from such
 transactions, which cannot be predicted, may also affect the company's
 reported results.
     The company reaffirmed the 2001 guidance ranges it had provided to
 investors in January for its four segments.  AT&T also said it expects AT&T
 Group pro forma revenue growth for the second quarter to be in a range similar
 to growth in the first quarter of 2001, and expects EBITDA, excluding other
 income, to be in the mid-$4 billion range in the second quarter.
     Excluding any impact of the AT&T/AT&T Wireless exchange offer, AT&T said
 it expects second quarter EPS, excluding other income, to be in the range of
 $0.01 to $0.04 and cash EPS, excluding other income, in the range of $0.15 to
 $0.18.
 
     DEFINITIONS:
 
      -- AT&T Group does not include the results of Liberty Media Group (LMG),
         which is tracked as a separate class of stock. Earnings of AT&T Group
         are attributed to either AT&T Common Stock Group or AT&T Wireless
         Group.
 
      -- Cash EPS, excluding other income, refers to earnings per share
         excluding other income, the cumulative effect of accounting changes
         and amortization of franchise costs, goodwill associated with
         acquisitions and other purchase intangibles and equity losses.
 
      -- EBIT refers to earnings before interest, taxes, the cumulative effect
         of accounting changes and dividend requirements on preferred stock.
 
      -- EBIT, excluding other income, refers to EBIT excluding other income
         and pre-tax equity earnings (losses).
 
      -- EBITDA refers to EBIT excluding depreciation and amortization, and
         minority interests other than Excite@Home's minority interest.
 
      -- EBITDA, excluding other income, refers to EBITDA excluding other
         income and pre-tax equity earnings (losses).
 
      -- EPS, excluding other income, refers to earnings per share excluding
         other income, equity earnings (losses) and the cumulative effect of
         accounting changes.
 
      -- Pro forma revenue is adjusted for the acquisition of MediaOne, the
         elimination of per line charges by the Federal Communications
         Commission, the consolidation of At Home Corp. (Excite@Home), and
         closed cable partnerships.
 
     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.
 AT&T currently plans to complete the restructuring as announced, but can
 provide no assurances that all approvals and conditions will be satisfied or
 that events or new opportunities will not cause modifications to the plan or
 the timelines.
     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. These factors include the rate of decline of traditional voice
 long distance services, technology change and substitution, the actions of
 competitors in all segments in setting prices, conditions of excess capacity,
 and rates of implementation of regulatory changes that favor competitors and
 promote remonopolization.
     For a more detailed description of the factors that could cause actual
 results to differ from forecast, 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.
 
     NOTE TO FINANCIAL MEDIA: AT&T and AT&T Wireless executives will discuss
 the company's performance in two-way conference calls for financial analysts
 at 8:00 a.m. ET and 10:00 a.m. ET, respectively.  Reporters are invited to
 listen to the calls.  For the 8:00 a.m. call, U.S., callers should dial 888-
 423-3268 to access the call.  Callers outside the U.S. should dial 612-332-
 0226.  To access the 10:00 a.m. call, U.S. callers should dial 888-428-4478.
 Callers outside the U.S. should dial 612-332-0107.
     In addition, Internet rebroadcasts of the calls will be available on the
 AT&T Web site beginning later today. The Web site address is
 http://www.att.com/ir.
     An audio rebroadcast of the 8:00 a.m. conference call will be available
 beginning at 1:00 p.m. ET on Tuesday, April 24th until midnight on April 27th.
 To access the replay, please visit http://www.att.com/ir, or U.S. callers can
 dial 800-475-6701, access code 575311.  Callers outside the U.S. should dial
 320-365-3844, access code 575311.
     A replay of the 10:00 a.m. call will be available at 2:00 p.m. EDT on
 Tuesday, April 24 until midnight on April 27th.  To access the replay, please
 visit http://www.att.com/wirelessir, or U.S. callers should dial 800-475-6701,
 access code 575314.  Callers outside the U.S. should dial
 320-365-3844, access code 575314.
 
     Note:  The Earnings Commentary will be available at both
 http://www.att.com/ir and http://www.att.com/wirelessir at 7:00 a.m. ET on
 April 24th.
 
                                   AT&T Group
                   Combined Statements of Income (Unaudited)
 
                                                  For the Three   For the Three
                                                   Months Ended   Months Ended
     Dollars in Millions                            March 31,      March 31,
     (except per share amounts)                          2001           2000
 
     Revenue                                          $16,763        $15,901
 
     Operating Expenses
      Costs of services and products                    4,837          3,915
      Access and other connection                       3,286          3,588
      Selling, general and administrative               3,868          3,289
      Depreciation and other amortization               2,141          1,566
      Amortization of goodwill, franchise
       costs and other purchased intangibles              846            368
      Net restructuring and other charges                 808            773
     Total operating expenses                          15,786         13,499
 
     Operating income                                     977          2,402
 
     Other (expense) income                           (2,419)            668
     Interest expense                                     969            589
 
     Income before income taxes, minority
      interest and losses from equity investments     (2,411)          2,481
     Provision for income taxes                         (335)            509
     Minority interest income (expense)                   650           (44)
     Net losses from equity investments                   136            187
     Income before the cumulative
      effect of accounting change                     (1,562)          1,741
     Cumulative effect of accounting
      change- net of tax                                1,370             --
     Dividend requirements of preferred stock, net        181             --
     (Losses) / earnings                               $(373)         $1,741
 
     AT&T Common Stock Group:
     (Losses) earnings                                 $(366)         $1,741
     Weighted-average shares (millions)                 3,805          3,185
     Weighted-average shares and
      potential common shares (millions)*                 N/A          3,256
 
     (Losses) earnings per basic share - before
      cumulative effect of accounting change          $(0.46)          $0.55
     Earnings per basic share - cumulative effect
      of accounting change                               0.36             --
     (Losses) earnings per basic share                $(0.10)          $0.55
 
     (Losses) earnings per diluted share - before
      cumulative effect of accounting change          $(0.46)          $0.54
     Earnings per diluted share - cumulative effect
      of accounting change                               0.36             --
     (Losses) earnings per diluted share              $(0.10)          $0.54
 
     Dividends declared per share                     $0.0375          $0.22
 
     AT&T Wireless Group:
     (Losses)                                            $(7)           $ --
 
     Weighted-average shares (millions)                   363             --
     Weighted-average shares and potential
      common shares (millions)**                          N/A             --
     (Losses) per basic and diluted share             $(0.02)           $ --
 
     * Weighted-average shares assumes dilution from the potential conversion
       of debt and equity securities amd the potential exercise of outstanding
       stock options and other performance awards.
 
     ** Weighted-average shares assumes dilution from the potential conversion
        of AT&T preferred stock.
 
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SOURCE AT&T
    NEW YORK, April 24 /PRNewswire Interactive News Release/ -- AT&T today
 announced first-quarter results for AT&T Group.
     Reported revenue increased $862 million, to approximately $16.76 billion,
 a 5.4 percent increase over the year-ago quarter.  AT&T Group revenue
 increases are primarily due to strong results from Wireless, Broadband and
 Business data/Internet Protocol (IP), partially offset by a decline in
 Consumer and Business long distance voice revenue.  Pro forma revenue, which
 is adjusted for the acquisition of MediaOne, the elimination of per line
 charges, the consolidation of Excite@Home, and closed cable partnerships,
 increased $336 million, or 2.0 percent, over the same period.
     As expected, earnings per share (EPS), excluding other income and a
 goodwill impairment charge, were $0.06 per diluted share in the first quarter,
 a decrease of 82.4 percent compared to the $0.34 per diluted share from the
 year-ago quarter.  On a reported basis, AT&T Common Stock Group lost $0.10 per
 diluted share compared to earnings per diluted share of $0.54 for the first
 quarter of 2000.  The first quarter 2001 loss includes the effect of the
 implementation of Statement of Financial Accounting Standards No. 133, and the
 impact of a $739 million non-cash, goodwill impairment charge related to
 Excite@Home.
     At the end of the quarter, AT&T's net debt level, excluding monetized debt
 of $8.6 billion, was approximately $47.5 billion, a reduction of $8.7 billion
 from year end.  The company said it will continue to work aggressively to
 reduce its total debt by monetizing non-strategic assets and ownership
 interests.
     "Our business, along with others in the industry, continues to feel the
 impact of declines in long distance voice revenue.  At the same time, we're
 focused on managing for profitability, paying down debt and executing on the
 strategic investments we've made in our next generation of end-to-end
 broadband businesses," said Chairman and CEO C. Michael Armstrong.
     "Our growth businesses continue to drive solid revenue gains.  Wireless
 delivered another quarter of strong revenue growth -- more than 46 percent.
 Broadband is growing revenue more than 10 percent by adding new subscribers
 for advanced services while we focus on reducing costs and improving margins.
 Business data services revenue continued to grow at about 20 percent, despite
 pricing pressures.  Consumer generated $4 billion of revenue, sustained its
 industry-leading margins of more than 30 percent, and will benefit from our
 strategic acquisition of digital subscriber line assets this quarter."
 
      1st Quarter at a Glance               1st Quarter Highlights
                           1Q01 Vs 1Q00      Total Revenue            $16.8b
      Business Services
       Revenue            $7.2b   (1.1%)*    Reported EPS             $(0.10)
       Consumer Services
        Revenue           $4.0b  (16.2%)*    Cash EPS, excluding other
                                              income and a goodwill
                                              impairment charge        $0.20
      Wireless Services
       Revenue            $3.2b   46.2%      Total Assets            $207.1b
      Broadband Revenue   $2.5b   10.9%*     Capital expenditures      $3.3b
      EBITDA, excluding
       other income       $4.7b    8.8%
      EBIT, excluding
       other income       $1.8b  (22.8%)
 
      * Pro Forma
 
     HIGHLIGHTS:
 
      -- Cash earnings, excluding other income and a goodwill impairment
         charge, were $0.20 per diluted share in the first quarter.
 
      -- Earnings before interest and taxes (EBIT), excluding other income and
         a goodwill impairment charge, and earnings before interest, taxes and
         depreciation and amortization (EBITDA), excluding other income and a
         goodwill impairment charge, were $1.82 billion and $4.74 billion,
         respectively.
 
      -- Capital expenditures for the first quarter were $3.29 billion.  Most
         of the expenditures were related to Wireless, primarily focused on
         capacity upgrades and improvements to network quality, Business,
         related to data and IP, and Broadband, for the launch of advanced
         services and plant upgrades.
 
     AT&T BUSINESS UNIT HIGHLIGHTS:
      -- AT&T Business reported revenue was $7.17 billion, a decline of 1.2
         percent over the year-ago quarter.  Pro forma revenue declined 1.1
         percent over the year-ago quarter.
 
         Business revenue declined primarily due to continued pricing pressures
         in long distance voice, despite a mid-single-digit increase in long
         distance calling volumes.  The pricing pressures resulted in long
         distance voice revenue declining by a low-teen percentage rate,
         compared to the year-ago quarter.  AT&T Business continues to focus
         resources on delivering high-speed data and IP services.  As a result,
         the unit continued to see a revenue shift from voice to higher growth
         products such as data/IP and services.  Among the unit's higher growth
         products are packet services (Frame Relay, ATM and IP), which on a
         combined basis grew approximately 40 percent over the same period last
         year.  AT&T Solutions revenue grew at a mid-teens rate primarily due
         to new outsourcing contracts and add-on business from existing
         clients.
 
         First quarter EBIT margin, excluding other income, increased to 16.5
         percent, but was a 3.8 percentage point decline from the full-year
         2000 margin of 20.3 percent.  The increase reflects lower
         restructuring charges, partially offset by the impact of pricing
         pressure within the long distance voice business as well as the shift
         from higher-margin long distance services to lower-margin growth
         services.  Reported EBIT and EBITDA declined 11.2 percent and 5.4
         percent, respectively, over the year-ago quarter.
 
      -- AT&T Consumer had $4.01 billion in reported revenue for the first
         quarter, a decline of 20.5 percent, over the year-ago quarter.  The
         unit's pro forma revenue decreased 16.2 percent.  The revenue decrease
         was primarily driven by technology substitution of wireless and
         Internet services, continued customer migration to lower-priced
         optional calling plans and prepaid card products, and the effects of
         competition.
 
         First quarter EBIT, excluding other income, decreased 21.4 percent
         over the year-ago quarter.  Reported EBIT and EBITDA declined 20.5
         percent and 20.4 percent, respectively, over the year-ago quarter.
         The decline reflects the impact of lower revenue, partially offset by
         the unit's efforts to manage costs.  The unit's EBIT margin, excluding
         other income, was 32.8 percent.
 
         During the quarter, the company announced that it would acquire
         substantially all of the assets of NorthPoint, a DSL provider, for use
         by AT&T's Business and Consumer units.  The acquisition supports
         Consumer's strategy of delivering residential customers high-speed
         access, local, and long distance service over the same line.  AT&T
         Consumer will begin rolling out the service later this year.  Consumer
         also introduced the AT&T 7/7 Offer, giving consumers unlimited access
         to the Internet via AT&T WorldNet with a 24/7 rate of seven cents a
         minute on state-to-state long distance calls.
 
      -- AT&T Wireless Group earnings are also reported separately and can be
         found at http://www.att.com/wirelessir.
 
         Wireless revenue increased 46.2 percent to $3.21 billion in the first
         quarter compared to the year-ago quarter.  The total revenue increase
         reflects the impact of acquisitions, as well as continued strength in
         mobility revenue driven by strong subscriber growth, which was
         slightly offset by a decline in average revenue per user (ARPU).
 
         Services revenue for the mobility business increased $939 million to
         total $2.93 billion in the first quarter, which represented growth of
         47.2 percent compared with the year-ago period.  Total consolidated
         subscribers were 15.7 million at the end of the first quarter,
         representing a 57.7 percent increase from the prior year, including
         subscribers associated with acquisitions that occurred subsequent to
         the first quarter of 2000.
 
         Total revenue increased 25.7 percent compared to the year-ago quarter
         when adjusted to exclude the impact of the June 2000 acquisition of
         properties in the San Francisco Bay area, as well as the impact of the
         acquisition of properties in the Los Angeles market in December 2000.
 
         Wireless had EBITDA, excluding other income, in the first quarter of
         $717 million, an increase of 78.9 percent from the year-ago period.
 
      -- AT&T Broadband first quarter pro forma revenue, which includes the
         results of MediaOne in both periods and also adjusts for other cable
         transactions, increased 10.9 percent to $2.47 billion year-over-year
         due to increased revenue from video operations, high-speed data and
         broadband telephony.
 
         AT&T Broadband experienced rapid growth of new services as the unit
         added about 700,000 advanced new service revenue-generating units
         (RGUs), which include broadband telephony, high-speed data and digital
         video customers.  This represented an increase of approximately 70
         percent from the year-ago quarter.
 
         The unit improved its presence in major markets by adding about
         153,000 broadband telephony customers, more than twice as many as the
         year-ago quarter. The unit added approximately 340,000 digital video
         customers, a 54.0 percent increase; and about 206,000 high-speed data
         customers, an increase of 57.0 percent over the prior year quarter.
 
         The unit ended the quarter by reaching three major milestones: 700,000
         broadband telephony customers, 3 million digital video customers and a
         total of 5 million RGUs.
 
         Pro forma EBITDA margins, excluding other income, decreased 6.8
         percentage points over the year-ago quarter due to expenses associated
         with the roll out of broadband telephony, higher programming costs and
         increased restructuring charges, offset by revenue growth.  Capital
         expenditures for the unit in the quarter were $807 million, with
         approximately $423 million related to the launch of advanced services
         and $115 million for plant upgrade expenditures.
 
      -- Corporate and Other, includes the consolidated results of Excite@Home,
         corporate staff functions and eliminations.  Reported revenue
         increased $54 million in the first quarter to a negative $89 million
         compared to a negative $143 million in the year-ago quarter, primarily
         due to increased revenue from Excite@Home.  Corporate and Other
         EBITDA, excluding other income and a goodwill impairment charge,
         improved $260 million to $73 million, compared with the year-ago
         quarter.
 
     RESTRUCTURING UPDATE:
     In October 2000, AT&T announced a restructuring plan to create a family of
 four businesses, each operating under the AT&T brand and committed to uniform
 standards of quality.  Under the plan, which is expected to be completed in
 2002, each of these four businesses will become publicly held, trading as
 either a common stock or tracking stock.
      On April 11, AT&T announced that the Internal Revenue Service ruled that
 the proposed split off of Liberty Media Corporation, which will own all of the
 assets reflected in the Liberty Media Group, qualifies as tax free for AT&T,
 Liberty Media and their shareowners.  By mid summer of 2001, AT&T plans to
 convert the Liberty Media tracking stock into an asset-based security and
 launch Liberty Media Corporation as an independent, publicly-traded company.
 AT&T said that it needs to complete certain reorganization steps, which
 require some reviews, before the split off can be completed.
     On April 18, AT&T released details of its offer to exchange shares of AT&T
 common stock for shares of AT&T Wireless Group tracking stock.  Following the
 exchange offer and subject to receipt of a favorable tax ruling, the company
 plans to distribute its remaining interest in AT&T Wireless to AT&T common
 shareholders.  AT&T intends, however, to retain up to $3 billion of shares of
 AT&T Wireless for sale, exchange or monetization within six months following
 the split off.  In preparation for the split off, AT&T Wireless has obtained
 independent credit ratings from Moody's, Standard & Poors and Fitch, completed
 a $6.5 billion global note offering, and closed on a $2.5 billion syndicated
 bank facility to provide liquidity support.
     AT&T said it expects to distribute AT&T's Consumer tracking stock to
 shareholders later this year and plans to offer a portion of AT&T Broadband
 tracking stock to the public toward the end of the year, subject to
 shareholder approval, market and financial conditions.
 
     OUTLOOK:
     The company reiterated that it is not able to accurately estimate full-
 year AT&T Group revenue, EBITDA and EPS because of factors associated with its
 restructuring.  For example, the company is currently conducting an exchange
 offer of AT&T shares for AT&T Wireless tracking shares.  The number of AT&T
 shares that will be retired as a result of the exchange is not known, but
 could have a substantial effect on any full-year EPS estimate.  In addition,
 the planned AT&T Wireless split off, the public offering of AT&T Broadband
 tracking stock and the distribution of AT&T Consumer tracking stock will also
 affect EPS.  Factors such as timing, valuation or proceeds from such
 transactions, which cannot be predicted, may also affect the company's
 reported results.
     The company reaffirmed the 2001 guidance ranges it had provided to
 investors in January for its four segments.  AT&T also said it expects AT&T
 Group pro forma revenue growth for the second quarter to be in a range similar
 to growth in the first quarter of 2001, and expects EBITDA, excluding other
 income, to be in the mid-$4 billion range in the second quarter.
     Excluding any impact of the AT&T/AT&T Wireless exchange offer, AT&T said
 it expects second quarter EPS, excluding other income, to be in the range of
 $0.01 to $0.04 and cash EPS, excluding other income, in the range of $0.15 to
 $0.18.
 
     DEFINITIONS:
 
      -- AT&T Group does not include the results of Liberty Media Group (LMG),
         which is tracked as a separate class of stock. Earnings of AT&T Group
         are attributed to either AT&T Common Stock Group or AT&T Wireless
         Group.
 
      -- Cash EPS, excluding other income, refers to earnings per share
         excluding other income, the cumulative effect of accounting changes
         and amortization of franchise costs, goodwill associated with
         acquisitions and other purchase intangibles and equity losses.
 
      -- EBIT refers to earnings before interest, taxes, the cumulative effect
         of accounting changes and dividend requirements on preferred stock.
 
      -- EBIT, excluding other income, refers to EBIT excluding other income
         and pre-tax equity earnings (losses).
 
      -- EBITDA refers to EBIT excluding depreciation and amortization, and
         minority interests other than Excite@Home's minority interest.
 
      -- EBITDA, excluding other income, refers to EBITDA excluding other
         income and pre-tax equity earnings (losses).
 
      -- EPS, excluding other income, refers to earnings per share excluding
         other income, equity earnings (losses) and the cumulative effect of
         accounting changes.
 
      -- Pro forma revenue is adjusted for the acquisition of MediaOne, the
         elimination of per line charges by the Federal Communications
         Commission, the consolidation of At Home Corp. (Excite@Home), and
         closed cable partnerships.
 
     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.
 AT&T currently plans to complete the restructuring as announced, but can
 provide no assurances that all approvals and conditions will be satisfied or
 that events or new opportunities will not cause modifications to the plan or
 the timelines.
     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. These factors include the rate of decline of traditional voice
 long distance services, technology change and substitution, the actions of
 competitors in all segments in setting prices, conditions of excess capacity,
 and rates of implementation of regulatory changes that favor competitors and
 promote remonopolization.
     For a more detailed description of the factors that could cause actual
 results to differ from forecast, 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.
 
     NOTE TO FINANCIAL MEDIA: AT&T and AT&T Wireless executives will discuss
 the company's performance in two-way conference calls for financial analysts
 at 8:00 a.m. ET and 10:00 a.m. ET, respectively.  Reporters are invited to
 listen to the calls.  For the 8:00 a.m. call, U.S., callers should dial 888-
 423-3268 to access the call.  Callers outside the U.S. should dial 612-332-
 0226.  To access the 10:00 a.m. call, U.S. callers should dial 888-428-4478.
 Callers outside the U.S. should dial 612-332-0107.
     In addition, Internet rebroadcasts of the calls will be available on the
 AT&T Web site beginning later today. The Web site address is
 http://www.att.com/ir.
     An audio rebroadcast of the 8:00 a.m. conference call will be available
 beginning at 1:00 p.m. ET on Tuesday, April 24th until midnight on April 27th.
 To access the replay, please visit http://www.att.com/ir, or U.S. callers can
 dial 800-475-6701, access code 575311.  Callers outside the U.S. should dial
 320-365-3844, access code 575311.
     A replay of the 10:00 a.m. call will be available at 2:00 p.m. EDT on
 Tuesday, April 24 until midnight on April 27th.  To access the replay, please
 visit http://www.att.com/wirelessir, or U.S. callers should dial 800-475-6701,
 access code 575314.  Callers outside the U.S. should dial
 320-365-3844, access code 575314.
 
     Note:  The Earnings Commentary will be available at both
 http://www.att.com/ir and http://www.att.com/wirelessir at 7:00 a.m. ET on
 April 24th.
 
                                   AT&T Group
                   Combined Statements of Income (Unaudited)
 
                                                  For the Three   For the Three
                                                   Months Ended   Months Ended
     Dollars in Millions                            March 31,      March 31,
     (except per share amounts)                          2001           2000
 
     Revenue                                          $16,763        $15,901
 
     Operating Expenses
      Costs of services and products                    4,837          3,915
      Access and other connection                       3,286          3,588
      Selling, general and administrative               3,868          3,289
      Depreciation and other amortization               2,141          1,566
      Amortization of goodwill, franchise
       costs and other purchased intangibles              846            368
      Net restructuring and other charges                 808            773
     Total operating expenses                          15,786         13,499
 
     Operating income                                     977          2,402
 
     Other (expense) income                           (2,419)            668
     Interest expense                                     969            589
 
     Income before income taxes, minority
      interest and losses from equity investments     (2,411)          2,481
     Provision for income taxes                         (335)            509
     Minority interest income (expense)                   650           (44)
     Net losses from equity investments                   136            187
     Income before the cumulative
      effect of accounting change                     (1,562)          1,741
     Cumulative effect of accounting
      change- net of tax                                1,370             --
     Dividend requirements of preferred stock, net        181             --
     (Losses) / earnings                               $(373)         $1,741
 
     AT&T Common Stock Group:
     (Losses) earnings                                 $(366)         $1,741
     Weighted-average shares (millions)                 3,805          3,185
     Weighted-average shares and
      potential common shares (millions)*                 N/A          3,256
 
     (Losses) earnings per basic share - before
      cumulative effect of accounting change          $(0.46)          $0.55
     Earnings per basic share - cumulative effect
      of accounting change                               0.36             --
     (Losses) earnings per basic share                $(0.10)          $0.55
 
     (Losses) earnings per diluted share - before
      cumulative effect of accounting change          $(0.46)          $0.54
     Earnings per diluted share - cumulative effect
      of accounting change                               0.36             --
     (Losses) earnings per diluted share              $(0.10)          $0.54
 
     Dividends declared per share                     $0.0375          $0.22
 
     AT&T Wireless Group:
     (Losses)                                            $(7)           $ --
 
     Weighted-average shares (millions)                   363             --
     Weighted-average shares and potential
      common shares (millions)**                          N/A             --
     (Losses) per basic and diluted share             $(0.02)           $ --
 
     * Weighted-average shares assumes dilution from the potential conversion
       of debt and equity securities amd the potential exercise of outstanding
       stock options and other performance awards.
 
     ** Weighted-average shares assumes dilution from the potential conversion
        of AT&T preferred stock.
 
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