Does this filing contain AT&T's 1998 annual financial results?

No. The filer is SBC Communications Inc., not AT&T Inc. The document is a 10-K/A amendment that only attaches Form 11-K reports for two SNET employee savings plans. It does not include SBC's consolidated income statement, balance sheet, or cash flows. Those appear in SBC's original 1998 Form 10-K and its Exhibit 13 annual report to shareowners.

Why did SBC file this amendment?

The amendment adds Exhibits 99-d and 99-e, the annual reports on Form 11-K for the SNET Bargaining Unit Retirement Savings Plan and the SNET Management Retirement Savings Plan for 1998. These were to be filed as part of the Form 10-K. Two other exhibits, 99-b and 99-c (SBC Savings Plan and SBC Savings and Security Plan 11-Ks), were listed as to be filed by amendment but are not included in this document.

How much SBC stock do these employee plans hold, and why does it matter?

The plans hold SBC shares through an ESOP and a Common Shares Fund. At year-end 1998 the Bargaining Unit plan held about 2.1 million ESOP shares plus about 1.1 million Common Shares Fund shares, and the Management plan held about 3.5 million ESOP shares plus about 1.7 million Common Shares Fund shares. The Master Trust's SBC common stock was valued at about $151.1 million. Because employees direct their own investments, these holdings affect employee retirement wealth and provide some insider-style alignment with shareholders, but they are small relative to SBC's total market capitalization.

What happens to these plans next?

Both plans are expected to merge into the SBC Savings and Security Plan (the Bargaining Unit plan into the SBC Savings and Security Plan, and the Management plan into the SBC Savings Plan) in October 1999. The filing notes the merger as a subsequent event, and it does not indicate any change to plan benefits, the ESOP, or SBC's contributions as a result of the merger.

AT&T INC. 10-K FY1998 Annual Report — Revenue, Net Income, EPS

01—Abstract

Summary

Summary of the 10-K/A filed June 28, 1999. Cited figures are marked; the original filing is the authoritative source.

Important correction: this filing is not an AT&T Inc. (ticker T) annual report.

It is Amendment No. 1 (Form 10-K/A) by SBC Communications Inc. (Commission file No. 1-8610), filed June 28, 1999 for fiscal year 1998. Its sole purpose is to attach two Form 11-K annual reports for employee savings plans inherited from Southern New England Telecommunications Corporation (SNET), which SBC acquired on October 26, 1998. The filing contains no consolidated income statement, balance sheet, cash flow statement, or MD&A for SBC, so it offers no company-level financial performance or valuation data for investors.

The two attached plans are the SNET Bargaining Unit Retirement Savings Plan and the SNET Management Retirement Savings Plan. Both are defined contribution plans, and both are invested heavily in SBC common stock through an ESOP and a Common Shares Fund. The Bargaining Unit plan's net assets rose from $184.1 million to $282.5 million^a in 1998, and the Management plan's rose from $398.7 million to $574.2 million.

Much of that growth came from appreciation in SBC shares, which was $89.5 million^b for the Bargaining Unit plan and $166.3 million for the Management plan. Each SNET share converted into 1.7568 SBC shares in the merger.

For investors, the main points are that the amendment is administrative, that employee retirement plans hold a meaningful block of SBC stock, and that both plans are slated to merge into the SBC Savings and Security Plan in October 1999. The user should obtain SBC's original 1998 Form 10-K, which contains the company's actual financial statements, before drawing investment conclusions.

02—Key points

Key Highlights

Filing type and issuer: Form 10-K/A amendment by SBC Communications Inc. (not AT&T Inc.), fiscal year ended December 31, 1998, signed June 28, 1999 by CFO Donald E. Kiernan.
Purpose: Adds two Form 11-K annual reports (Exhibits 99-d and 99-e) for SNET employee savings plans; no changes to SBC's core financial statements are presented.
SNET Bargaining Unit Retirement Savings Plan net assets grew to $282.5 million at 12/31/1998 from $184.1 million at 12/31/1997, a net increase of $98.5 million.
SNET Management Retirement Savings Plan net assets grew to $574.2 million at 12/31/1998 from $398.7 million at 12/31/1997, a net increase of $175.5 million.
Employer-matching contributions were made in ESOP shares of SBC stock, and SBC common shares were a major asset of both plans, including about 2.1 million ESOP shares in the Bargaining Unit plan and about 3.5 million in the Management plan.
SNET merger terms: each SNET common share converted into 1.7568 shares of SBC common stock in the October 26, 1998 merger.
Subsequent event: both plans are expected to be merged into the SBC Savings and Security Plan (or SBC Savings Plan) in October 1999; the plans' Year 2000 remediation is expected to be substantially complete in 1999 with no significant effect on operations.

03—Questions

Frequently Asked Questions

Does this filing contain AT&T's 1998 annual financial results?
No. The filer is SBC Communications Inc., not AT&T Inc. The document is a 10-K/A amendment that only attaches Form 11-K reports for two SNET employee savings plans. It does not include SBC's consolidated income statement, balance sheet, or cash flows. Those appear in SBC's original 1998 Form 10-K and its Exhibit 13 annual report to shareowners.
Why did SBC file this amendment?
The amendment adds Exhibits 99-d and 99-e, the annual reports on Form 11-K for the SNET Bargaining Unit Retirement Savings Plan and the SNET Management Retirement Savings Plan for 1998. These were to be filed as part of the Form 10-K. Two other exhibits, 99-b and 99-c (SBC Savings Plan and SBC Savings and Security Plan 11-Ks), were listed as to be filed by amendment but are not included in this document.
How much SBC stock do these employee plans hold, and why does it matter?
The plans hold SBC shares through an ESOP and a Common Shares Fund. At year-end 1998 the Bargaining Unit plan held about 2.1 million ESOP shares plus about 1.1 million Common Shares Fund shares, and the Management plan held about 3.5 million ESOP shares plus about 1.7 million Common Shares Fund shares. The Master Trust's SBC common stock was valued at about $151.1 million. Because employees direct their own investments, these holdings affect employee retirement wealth and provide some insider-style alignment with shareholders, but they are small relative to SBC's total market capitalization.
What happens to these plans next?
Both plans are expected to merge into the SBC Savings and Security Plan (the Bargaining Unit plan into the SBC Savings and Security Plan, and the Management plan into the SBC Savings Plan) in October 1999. The filing notes the merger as a subsequent event, and it does not indicate any change to plan benefits, the ESOP, or SBC's contributions as a result of the merger.

04—Continue

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