SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Form 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report: April 17, 2001
AT&T CORP.
A New York Commission File I.R.S. Employer
Corporation No. 1-1105 No. 13-4924710
32 Avenue of the Americas, New York, New York 10013-2412
Telephone Number (212) 387-5400
Form 8-K
AT&T Corp.
April 17, 2001
Item 5. Other Events.
On April 17, 2001, At Home Corporation (Excite@Home) issued a press release
announcing that, due to recent acceleration in the weakness of the market for
online advertising and marketing services, it expects to report significantly
lower revenues, greater operating losses and more rapid use of cash than
previously forecasted for the balance of 2001. As a result, an impairment charge
associated with their media business will be recorded in the first quarter
results of Excite@Home. Since AT&T Corp. owns approximately 23% of the
outstanding shares of capital stock of Excite@Home, AT&T will record an
impairment charge in its first quarter results, in the range of $740 million to
$780 million, which will have a net income impact, after minority elimination,
in the range of $280 million to $320 million. After giving effect to the charge,
AT&T's carrying value of Excite@Home will be in the range of approximately $450
million to $490 million.
In light of the weaker financial outlook, Excite@Home announced it is
taking several immediate measures to conserve cash and raise additional funds.
These measures include adopting a revised operating plan with lower expenses and
the execution of a non-binding Letter of Agreement with AT&T under which AT&T
may provide Excite@Home with $75 million to $85 million in connection with the
restructuring of the backbone fiber agreement between the companies and with a
joint initiative to maintain and improve current network performance levels. In
addition, Excite@Home said it may negotiate additional debt and/or equity
financing from third parties, and continue efforts to focus its resources around
its broadband franchise through the potential sale or restructuring of its media
operations not directly supporting the broadband strategy. If Excite@Home does
not achieve its targeted expense reductions or other stated initiatives and
raise at least $75 million to $80 million by June 30, 2001, there would be a
material adverse impact on their operations and liquidity.
Form 8-K
AT&T Corp.
April 17, 2001
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
AT&T CORP.
/s/ Marilyn J. Wasser
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By: Marilyn J. Wasser
Vice President and Secretary
April 19, 2001