AT&T Sets Date for Wireless Spin-Off

AT&T Corp.’s Board of Directors Friday voted to spin off AT&T Wireless as a
separate independent company on July 9, 2001.

The company will redeem AT&T Wireless tracking shares and convert them into
AT&T Wireless common stock on a one-for-one basis. The board also decided to
issue a dividend of AT&T Wireless common stock to AT&T common stock
shareholders of record on June 22. The dividend will be payable concurrently
with the redemption.

The company said the special dividend will allow it to distribute the 1.16
billion shares of AT&T Wireless held by AT&T and allow it to complete the
spin off. However, AT&T plans to hold onto about $3 billion of AT&T Wireless
common stock for later disposition.

The company will distribute 1/3 of a share of AT&T Wireless for each AT&T
common share outstanding, with the final ratio determined by the actual
number of AT&T shares outstanding on the record date and the exact number of
AT&T Wireless shares retained. AT&T said it currently has about 3.45 billion
common shares outstanding.

After the tracking shares are exchanged and the AT&T Wireless shares
distributed, AT&T shareholders will hold about 63 percent of AT&T Wireless’
outstanding shares of common stock. The company sold more than $20 billion
of AT&T Wireless tracking shares and tracking share equivalents to new
investors as part of a public offering in April 2000 and to NTT DoCoMo in
January 2001. Those shares, representing about 30 percent of the outstanding
AT&T Wireless common stock shares, will also be redeemed.

The company said shareholders will receive whole shares of AT&T Wireless and
cash payments for fractional shares. AT&T obtained a ruling from the IRS
that the dividend to shareholders and the redemption of the tracking stock
will qualify as tax-free for tax purposes, except in the case of cash
exchanged for fractional shares.

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