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AT&T ISSUES STATEMENT ON LIABILITY FOR RETIREE HEALTH BENEFITS

 AT&T ISSUES STATEMENT ON LIABILITY FOR RETIREE HEALTH BENEFITS
 BASKING RIDGE, N.J., Dec. 3 /PRNewswire/ -- AT&T (NYSE: T) today provided additional information about its anticipated liability for current and future retiree health benefits. The company said it expected the accumulated liabilities to be between $5.5 billion and $7.5 billion after taxes.
 Under new accounting rules, companies must begin to reflect on their balance sheets expected liabilities for post-employment benefits by the first quarter of 1993. Costs would be accrued, that is, recognized as employees earn retirement benefits. Most companies, including AT&T, currently recognize these expenses as benefit claims are incurred.
 AT&T added that it expects to take a one-time charge for these expenses when it records the liabilities. It is still studying when to reflect the expenses on its books, but anticipates doing so in the first quarter of 1993.
 The company also said that, based on current assumptions, the difference between accruing and the current pay-as-you-go method might result in no additional impact on earnings in future years. At most, the company estimated, earnings would be reduced by approximately $100 million annually. In 1990, AT&T profits were $3.104 billion.
 The company emphasized that the expected charge would not affect its cash flow. Nor would the charge affect its long-term earnings objectives, its ability to pay future dividends, or its plans to invest in research and development and capital expansion programs, AT&T said.
 AT&T joins a number of companies, such as IBM, Ford, Chrysler, General Motors, General Electric, Goodyear and USX, that have disclosed or booked such estimated costs.
 The company has taken several steps to control benefit costs in the future. Among these steps are caps on the company's contribution toward retiree health costs, establishment of separate trusts to pre-fund retiree benefits and, for current employees, the introduction of flexible benefits for managers, providing a managed health-care network for represented employees and sponsoring a variety of health-assessment and health-promotion programs for employees.
 AT&T currently has 325,000 employees and about 140,000 retirees.
 -0- 12/3/91
 /CONTACT: Dick Gray, 908-221-5057, or at home: 908-232-3706, or Maureen Lynch, 908-221-2562, or at home: 908-322-4378, both of AT&T/
 (T) CO: AT&T ST: New Jersey IN: TLS SU:


TS -- NY039 -- 8777 12/03/91 13:02 EST
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Publication:PR Newswire
Date:Dec 3, 1991
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