Is this filing from AT&T Inc., and does it contain its full 1998 annual report?

No. The filing is from SBC Communications Inc., not AT&T Inc. It is Amendment No. 1 to SBC's 1998 Form 10-K, filed June 29, 1999, and it adds only exhibits: an accountant's report on Pacific Telesis Group and Form 11-K reports for two employee savings plans. It does not include SBC's consolidated financial statements, business overview, or management discussion.

Why did the SBC Savings Plan's net assets more than double in 1998?

The main driver was a $2.51 billion transfer of assets from the Pacific Telesis Group Supplemental Retirement and Savings Plan, effective July 1, 1998, after SBC's merger with Pacific Telesis. Investment appreciation of about $1.44 billion and employee and employer contributions also contributed. Distributions to participants of $228.8 million partly offset these additions.

What does the filing reveal about SBC's stock performance in 1998?

The plan data implies strong returns on SBC stock. The SBC Shares Fund's unit value rose from $13.64 to $19.90, about 46%, and the ESOP unit value rose from $1.76 to $3.93. The plans also recorded net appreciation of about $1.44 billion in the Savings Plan and $613 million in the Savings and Security Plan. These figures come from employee plan records, not from SBC's audited consolidated financials.

How concentrated are these employee plans in SBC common stock?

Heavily. Most of the Savings Plan's roughly $6.1 billion in net assets is SBC stock, held through the ESOP and the SBC Shares Fund. The Savings and Security Plan also holds most of its $2.2 billion in SBC stock. Investors should weigh this concentration in relation to the company's overall equity exposure and employee retirement risk.

AT&T INC. 10-K Filed Jun 29, 1999

01—Abstract

Summary

Summary of the 10-K/A filed June 29, 1999. Cited figures are marked; the original filing is the authoritative source.

This filing is not an AT&T Inc. 10-K.

It is Amendment No. 1 to the 1998 Form 10-K of SBC Communications Inc. (Commission file no. 1-8610), filed June 29, 1999. Its only purpose is to add Exhibits 99-a through 99-c: an accountant's report on Pacific Telesis Group's 1996 financials and the Form 11-K annual reports for two SBC employee savings plans, the SBC Savings Plan and the SBC Savings and Security Plan. It contains no consolidated income statement, balance sheet, segment data, or management discussion of SBC's operations, so it offers little for evaluating the company as an investment.

The employee plan data shows substantial growth in 1998. The SBC Savings Plan's net assets available for benefits rose from $2.23 billion to $6.13 billion^a, driven largely by a $2.51 billion transfer from the Pacific Telesis Group Supplemental Retirement and Savings Plan, effective July 1, 1998, after SBC's April 1997 merger with Pacific Telesis. The SBC Savings and Security Plan's net assets rose from $1.60 billion to $2.24 billion.

Within the SBC Savings Plan, the SBC Shares Fund's unit value increased from $13.64 to $19.90^b, about 46%, and the ESOP unit value increased from $1.76 to $3.93. These gains reflect the strength of SBC common stock during 1998, and the plans hold large stakes in it: about $2.05 billion in the SBC Shares Fund and $1.56 billion in the Savings Plan's ESOP, plus roughly $0.79 billion across the Savings and Security Plan's ESOP and SBC Shares Fund. Investors seeking SBC's financial results, guidance, or risk factors should consult the original full 10-K for fiscal 1998.

The filing also has a date and identity issue. The request describes it as an AT&T Inc. (ticker T) filing, but the document is signed by SBC Communications' CFO, Donald E.

Kiernan, and the registrant is SBC Communications Inc., based in San Antonio, Texas. Analysis should be attributed to SBC Communications, not AT&T.

02—Key points

Key Highlights

Document identity: This is Amendment No. 1 (Form 10-K/A) to SBC Communications Inc.'s 1998 Form 10-K, filed June 29, 1999. It is not an AT&T Inc. filing, and it adds only exhibits, not a full annual report.
Scope: The exhibits are the audit report for Pacific Telesis Group's 1996 statements and the Form 11-K plan reports for the SBC Savings Plan and the SBC Savings and Security Plan. No consolidated SBC financial statements are included.
SBC Savings Plan net assets grew from $2.23 billion to $6.13 billion in 1998, mainly from a $2.51 billion transfer of assets from the Pacific Telesis plan after the July 1, 1998 merger of plans.
SBC Savings and Security Plan net assets rose from $1.60 billion to $2.24 billion in 1998, with the ESOP and SBC Shares Fund holding most of the company stock.
The SBC Shares Fund unit value rose about 46% in 1998, from $13.64 to $19.90, reflecting strong performance in SBC common stock during the year.
Employee stock is a large plan exposure: the Savings Plan holds about $2.05 billion in SBC shares through the SBC Shares Fund and about $1.56 billion through its ESOP, and the Savings and Security Plan's ESOP and SBC Shares Fund together hold about $1.8 billion in SBC shares, according to the plan statements.
Auditor: Ernst & Young LLP (San Antonio) issued unqualified opinions on both plans' 1998 and 1997 statements, dated June 24, 1999. PricewaterhouseCoopers LLP's report on Pacific Telesis' 1996 statements is also included.

03—Questions

Frequently Asked Questions

Is this filing from AT&T Inc., and does it contain its full 1998 annual report?
No. The filing is from SBC Communications Inc., not AT&T Inc. It is Amendment No. 1 to SBC's 1998 Form 10-K, filed June 29, 1999, and it adds only exhibits: an accountant's report on Pacific Telesis Group and Form 11-K reports for two employee savings plans. It does not include SBC's consolidated financial statements, business overview, or management discussion.
Why did the SBC Savings Plan's net assets more than double in 1998?
The main driver was a $2.51 billion transfer of assets from the Pacific Telesis Group Supplemental Retirement and Savings Plan, effective July 1, 1998, after SBC's merger with Pacific Telesis. Investment appreciation of about $1.44 billion and employee and employer contributions also contributed. Distributions to participants of $228.8 million partly offset these additions.
What does the filing reveal about SBC's stock performance in 1998?
The plan data implies strong returns on SBC stock. The SBC Shares Fund's unit value rose from $13.64 to $19.90, about 46%, and the ESOP unit value rose from $1.76 to $3.93. The plans also recorded net appreciation of about $1.44 billion in the Savings Plan and $613 million in the Savings and Security Plan. These figures come from employee plan records, not from SBC's audited consolidated financials.
How concentrated are these employee plans in SBC common stock?
Heavily. Most of the Savings Plan's roughly $6.1 billion in net assets is SBC stock, held through the ESOP and the SBC Shares Fund. The Savings and Security Plan also holds most of its $2.2 billion in SBC stock. Investors should weigh this concentration in relation to the company's overall equity exposure and employee retirement risk.

04—Continue

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