1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 11-K
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934 [FEE REQUIRED]
For the fiscal year ended December 31, 2000
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 [NO FEE REQUIRED]
For the transition period from _____ to _____
Commission file number 1-1105
LIBERTY MEDIA 401(k) SAVINGS PLAN
---------------------------------
(Full title of the Plan)
AT&T CORP.
----------------------------------------------------
(Issuer of the securities held pursuant to the Plan)
9197 S. Peoria
Englewood, Colorado 80112
-------------------------------------------
(Address of its principal executive office)
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REQUIRED INFORMATION
Financial Statements: Page No.
--------
Independent Auditors' Report 1
Statements of Net Assets Available
for Participant Benefits,
December 31, 2000 and 1999 2
Statement of Changes in Net Assets
Available for Participant Benefits,
Year ended December 31, 2000 3
Statement of Changes in Net Assets
Available for Participant Benefits,
Period from inception (March 2, 1999) to
December 31, 1999 4
Notes to Financial Statements,
December 31, 2000 5
Schedule 1 - Schedule of Assets
Held for Investment Purposes, December 31, 2000 9
Schedule 2 - Reportable Transactions, Year ended
December 31, 2000 10
Exhibit -
23-Consent of KPMG LLP
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
members of the Plan Committee have duly caused this annual report to be signed
on its behalf by the undersigned hereunto duly authorized.
LIBERTY MEDIA 401(k) SAVINGS PLAN
(Name of Plan)
By /s/ Gary S. Howard
------------------------------
Gary S. Howard
Member of Plan Committee
June 29, 2001
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Independent Auditors' Report
The Plan Committee
Liberty Media 401(k) Savings Plan:
We have audited the accompanying statements of net assets available for
participant benefits of the Liberty Media 401(k) Savings Plan as of December 31,
2000 and 1999, and the related statements of changes in net assets available for
participant benefits for the year ended December 31, 2000 and the period from
inception (March 2, 1999) to December 31, 1999. These financial statements are
the responsibility of the Plan's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for participant benefits of the
Liberty Media 401(k) Savings Plan as of December 31, 2000 and 1999, and the
changes in net assets available for participant benefits for the year ended
December 31, 2000 and the period from inception (March 2, 1999) to December 31,
1999 in conformity with accounting principles generally accepted in the United
States of America.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of assets held
for investment purposes and reportable transactions are presented for the
purpose of additional analysis and are not a required part of the basic
financial statements but are supplementary information required by the
Department of Labor's Rules and Regulations for Reporting and Disclosure under
the Employee Retirement Income Security Act of 1974. These supplemental
schedules are the responsibility of the Plan's management. The supplemental
schedules have been subjected to the auditing procedures applied in the audit of
the basic financial statements and, in our opinion, are fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.
KPMG LLP
Denver, Colorado
June 25, 2001
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LIBERTY MEDIA 401(k) SAVINGS PLAN
Statements of Net Assets Available
for Participant Benefits
December 31, 2000 and 1999
Assets 2000 1999
------- -------
amounts in thousands
Investments, at fair value:
AT&T Corp. common stock (note 1):
AT&T Common Stock Fund $ 6,497 19,083
AT&T Class A Liberty Media Group Common Stock Fund 29,661 56,653
------- -------
36,158 75,736
------- -------
Mutual Funds:
Janus Worldwide 1,445 829
Fidelity Magellan 2,421 1,835
Fidelity Equity Income 2,955 2,314
Fidelity Investment Grade Bond 1,389 895
Fidelity Retirement Money Market 450 78
------- -------
8,660 5,951
------- -------
Participant loans (note 4) 10 28
------- -------
Net assets available for participant benefits $44,828 81,715
======= =======
See accompanying notes to financial statements.
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LIBERTY MEDIA 401(k) SAVINGS PLAN
Statement of Changes in Net Assets Available
for Participant Benefits
Year ended December 31, 2000
AT&T
Class A Liberty
Media Group
Participant Common Stock
Directed Funds Fund Total
-------------- --------------- --------
amounts in thousands
Contributions:
Employer $ -- 5,395 5,395
Employee 3,428 1,991 5,419
Rollovers 746 -- 746
-------- -------- --------
4,174 7,386 11,560
-------- -------- --------
Net investment income (loss):
Net depreciation of fair value of
securities (12,618) (30,394) (43,012)
Interest and dividend income 544 -- 544
-------- -------- --------
(12,074) (30,394) (42,468)
-------- -------- --------
Total contributions and net investment loss (7,900) (23,008) (30,908)
Interfund transfers 150 (150) --
Administrative expenses -- (202) (202)
Distributions to participants (2,145) (3,632) (5,777)
-------- -------- --------
Decrease in net assets available for
participant benefits (9,895) (26,992) (36,887)
Net assets available for participant benefits:
Beginning of year 25,062 56,653 81,715
-------- -------- --------
End of year $ 15,167 29,661 44,828
======== ======== ========
See accompanying notes to financial statements.
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LIBERTY MEDIA 401(k) SAVINGS PLAN
Statement of Changes in Net Assets Available
for Participant Benefits
Period from inception (March 2, 1999) to December 31, 1999
AT&T
Class A Liberty
Media Group
Participant Common Stock
Directed Funds Fund Total
-------------- --------------- --------
amounts in thousands
Contributions:
Employer $ -- 3,143 3,143
Employee 2,323 1,006 3,329
Rollovers 275 -- 275
Transfers from other plans (note 4) 1,343 1,251 2,594
Transfers from the TCI 401(k) Stock Plan
(note 2) 32,454 18,010 50,464
-------- -------- --------
36,395 23,410 59,805
-------- -------- --------
Net investment income (loss):
Net appreciation (depreciation) of fair
value of securities (572) 27,368 26,796
Interest and dividend income 268 -- 268
-------- -------- --------
(304) 27,368 27,064
-------- -------- --------
Total contributions and net investment income 36,091 50,778 86,869
Interfund transfers (8,161) 8,161 --
Administrative expenses (67) (16) (83)
Distributions to participants (2,801) (2,270) (5,071)
-------- -------- --------
Increase in net assets available for
participant benefits 25,062 56,653 81,715
Net assets available for participant benefits:
Beginning of period -- -- --
-------- -------- --------
End of period $ 25,062 56,653 81,715
======== ======== ========
See accompanying notes to financial statements.
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LIBERTY MEDIA 401(k) SAVINGS PLAN
Notes to Financial Statements
December 31, 2000
(1) Summary of Significant Accounting Policies
Basis of Presentation
The accompanying financial statements of the Liberty Media 401(k) Savings
Plan (the "Plan") have been prepared on the accrual basis and present the
net assets available for participant benefits and the changes in those net
assets. The sponsor of the Plan is Liberty Media Corporation ("Liberty"),
which is a wholly-owned subsidiary of AT&T Corp.
Trust Fund Managed by Fidelity Management Trust Company ("Trustee")
Under the terms of a trust agreement between the Trustee and the Plan, the
Trustee manages a trust fund on behalf of the Plan and has been granted
authority concerning purchases and sales of investments for the trust fund.
The Trustee may invest up to 100% of the assets of the Plan in employer
securities without regard to any fiduciary requirement to diversify Plan
assets. Additionally, the Plan is allowed to invest in non-employer
securities.
Master Trust
For the period from inception (March 2, 1999) to June 30, 1999 the Plan was
a part of a Master Trust agreement with the TCI 401(k) Stock Plan. The
Master Trust had no duties, obligations, or responsibilities with respect
to the administration of the Plan. The Master Trust maintained separate
accounting to reflect the interest of each participating plan of the Master
Trust. For the period from July 1, 1999 to September 30, 1999 the Plan was
part of a Group Trust agreement with plans sponsored by AT&T Corp.
Effective October 1, 1999, the assets of the Plan were transferred out of
the AT&T Corp. Group Trust into a separate trust for the benefit of the
Plan.
Investments
Investments are reflected in the accompanying financial statements at fair
value. Fair value represents the closing prices for those securities having
readily available market quotations and fair value as determined by the
Trustee with respect to other securities. The stock funds are unitized
funds that are measured in units rather than shares. The unitized stock
funds consist mostly of stock with an insignificant amount of cash or cash
equivalents. The fair values used for the AT&T Common Stock, par value
$1.00 per share and AT&T Class A Liberty Media Group Common Stock, par
value $1.00 per share were $17.25 and $13.56 per share, respectively, at
December 31, 2000; and $50.81 and $56.81 per share, respectively, at
December 31, 1999. The foregoing prices are the closing market prices of
the common stocks on those dates. Changes in market values after the Plan's
year end are not reflected in the accompanying financial statements.
(continued)
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LIBERTY MEDIA 401(k) SAVINGS PLAN
Notes to Financial Statements
Securities and investment transactions are accounted for on the trade date.
Distributions are priced at fair value and are accounted for when shares
are transferred by the Trustee to participants. The cost basis of such
shares distributed is determined using the "first-in, first-out" method.
Dividend income is recorded on the ex-dividend date. Income from other
investments is recorded as earned on an accrual basis.
Income Taxes
The Internal Revenue Services has determined and informed Liberty by a
letter dated March 1, 2001, that the Plan and related trust are designed in
accordance with applicable sections of the Internal Revenue Code ("IRC").
Once qualified, the Plan is required to operate in conformity with the IRC
to maintain its qualification. The Plan administrator is not aware of any
course of action or series of events that have occurred that might
adversely affect the Plan's qualified status.
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of additions and deductions
during the reporting period. Actual results could differ significantly from
those estimates.
Plan Expenses
Any employer contribution amounts forfeited may be used to pay plan
expenses. Any additional administrative expenses of the Plan are paid by
Liberty.
New Accounting Pronouncements
In June 1998, the Financial Accounting Standards Board issued SFAS No. 133,
"Accounting for Derivative Instruments and Hedging Activities" ("SFAS No.
133"). SFAS No. 133 requires that an entity recognize all derivatives and
measure those instruments at fair value.
SFAS No. 133 is effective for fiscal years beginning after June 15, 2000.
Pursuant to SFAS No. 137, the Plan is required to adopt SFAS No. 133
effective January 1, 2001. Management has determined that the impact of
SFAS No. 133 on the Plan financial statements is expected to be immaterial.
(2) Description of the Plan
The following description of the Plan is provided for general information
purposes only. Participants should refer to the plan document for more
complete information.
(continued)
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LIBERTY MEDIA 401(k) SAVINGS PLAN
Notes to Financial Statements
Effective March 2, 1999 the Plan was created as a spin-off of the TCI
401(k) Stock Plan. The Plan is a defined contribution plan sponsored by
Liberty, which enables participating employees to receive an interest in
Liberty and its parent and to receive benefits upon retirement. Employees
who are at least 18 years of age and have worked at least three consecutive
months are eligible to participate in the Plan. Participants may contribute
up to 10% of their compensation, as defined, to the Plan. Liberty makes
matching contributions equal to 100% of participant contributions, up to a
maximum match of 10% of compensation. Employer contributions are made to
the AT&T Class A Liberty Media Group Common Stock Fund. Employee
contributions may be made to any investments in the Plan, including the
AT&T Class A Liberty Media Group Common Stock Fund. Liberty reserves the
right to change the matching contribution amount at any time.
Forfeitures (due to participants' withdrawal prior to full vesting) are
first used to pay Plan expenses, with any excess used to reduce Liberty's
future matching contributions. Forfeitures aggregated $285,000 and $255,000
during 2000 and 1999, respectively. Unused forfeitures aggregated $140,000
and $222,000 at December 31, 2000 and 1999, respectively. Participant
contributions are always fully vested.
As of December 31, 2000, the Plan has seven investment options including
five mutual funds and two unitized stock funds: a money market mutual fund,
a growth and income mutual fund, a diversified growth mutual fund, an
income mutual fund, a growth fund that invests globally, a Liberty Media
Group Common Stock Fund, and an AT&T Common Stock Fund. Plan participants
may change investment options and contribution percentages on a daily
basis. Distributions and other withdrawals are processed on a daily basis.
Additionally, participants acquire a vested right in employer matching
contributions as follows:
Vesting
Years of service percentage
---------------- ----------
Less than 1 0%
1 year 33%
2 years 66%
3 years 100%
Although Liberty has not expressed an intent to terminate the Plan, it may
do so at any time. The Plan provides for full and immediate vesting of all
participant rights upon termination of the Plan.
(continued)
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LIBERTY MEDIA 401(k) SAVINGS PLAN
Notes to Financial Statements
(3) Investments
The fair value of individual investments that represent 5% or more of the
Plan's net assets at December 31, 2000 and 1999 are as follows:
Investment Fair value at
---------- December 31,
--------------------------
2000 1999
-------- ------
amounts in thousands
AT&T Common Stock Fund $ 6,497 19,083
AT&T Liberty Media Group Class A Common Stock Fund 29,661 56,653
Fidelity Magellan 2,421 1,835
Fidelity Equity Income 2,955 2,314
(4) Transfers from Other Plans
During 1999, transfers to the Plan from other plans aggregated $2,594,000.
On November 30, 1999, the DMX 401(k) Plan was transferred into the Plan.
Transfers from the DMX 401(k) Plan aggregated $1,017,000. The transfers
from the DMX 401(k) Plan included approximately $28,000 in participant
loans, which were grandfathered into the Plan.
On July 1, 1999, certain participants of the United Artist Entertainment
("UAE") Employee Stock Ownership Plan ("ESOP") were transferred into the
Plan. Transfers from the UAE ESOP aggregated $1,577,000.
(5) Subsequent Events
Subsequent to December 31, 2000, AT&T Corp. announced the spin-off of the
Liberty Media Group and the AT&T Wireless Group ("Wireless") into separate
public companies. In connection with the Wireless spin-off, which has been
set for July 9, 2001, holders of AT&T common stock, including participants
in the Plan, will receive .3218 of a share of Wireless stock for each share
of AT&T common stock owned. In connection with the Liberty spin-off, which
has been set for August 10, 2001, holders of AT&T Liberty Media Group
common stock, including participants in the Plan, will receive one share of
newly authorized Liberty Media Corporation common stock for each share of
AT&T Liberty Media Group common stock owned.
Effective May 25, 2001 and as a result of a merger transaction between a
subsidiary of Liberty and an unaffiliated third party, a partial plan
termination occurred. In connection therewith, employees of such
subsidiary, who were active participants in the Plan (the "Subsidiary
Employees"), were terminated from the Plan, and a separate retirement plan
(the "Subsidiary Plan") was formed for the employees of the subsidiary. The
Subsidiary Employees became fully vested in their employer contributions
upon their termination from the Plan. Liberty anticipates that the
Subsidiary Employees' account balances will be transferred to the
Subsidiary Plan during 2001 or 2002.
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Schedule 1
LIBERTY MEDIA 401(k) SAVINGS PLAN
Schedule of Assets Held for Investment Purposes
December 31, 2000
(amounts in thousands)
Identity of Description of investment Current
issuer including par value value
----------- ------------------------- -------
Janus Janus Worldwide $ 1,445
AT&T Corp.* AT&T Common Stock, par value $1.00 per share 6,497
AT&T Corp.* AT&T Class A Liberty Media Group Common Stock,
par value $1.00 per share (historical cost basis -
$16,717) 29,661
Fidelity Fidelity Magellan 2,421
Fidelity Fidelity Equity Income 2,955
Fidelity Fidelity Investment Grade Bond 1,389
Fidelity Fidelity Retirement Money Market 450
Participant loans Interest rates ranging from 9.75% to 10% 10
------------
$ 44,828
============
* Denotes party-in-interest
See accompanying independent auditors' report.
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Schedule 2
LIBERTY MEDIA 401(k) SAVINGS PLAN
Schedule of Reportable Transactions
Year Ended December 31, 2000
(amounts in thousands)
Identity of Description Purchase Selling Cost of Net gain
party involved of asset Price Price Asset or (loss)
-------------- -------------------------------- ----------- ------- ------- ---------
AT&T Corp. * AT&T Class A Liberty Media Group $ 4,813 -- 4,813 --
Common Stock, par value
$1.00 per share
AT&T Corp. * AT&T Class A Liberty Media Group $ -- 2,396 14,186 (11,790)
Common Stock, par value
$1.00 per share
Note: All purchases and sales of the securities noted above are included, as we
cannot distinguish between participant directed and non-participant
directed purchases and sales.
* Denotes party-in-interest
See accompanying independent auditors' report.
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EXHIBIT INDEX
Shown below is the exhibit which is filed as a part of this Report -
23-Consent of KPMG LLP