UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549
                                    FORM 10-Q

          ..X.. QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

                         SECURITIES EXCHANGE ACT OF 1934

                For the quarterly period ended June 30, 2000

                                       OR

           ..... TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934

          For the transition period from _____________to _____________


                          Commission file number 1-1105


                                   AT&T CORP.

A New York                                                       I.R.S. Employer
Corporation                                                      No. 13-4924710

            32 Avenue of the Americas, New York, New York 10013-2412

                       Telephone - Area Code 212-387-5400

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days. Yes ..X No ...

At July 31, 2000, the following shares of stock were outstanding:

         AT&T common stock -  3,756,102,185  shares AT&T  Wireless  Group common
         stock - 360,000,000  shares  Liberty Media Group Class A common stock -
         2,373,148,192  shares  Liberty  Media  Group  Class  B  common  stock -
         206,234,452 shares


<PAGE>

                                                         AT&T Form 10-Q - Part I

                         PART I - FINANCIAL INFORMATION
                          AT&T CORP. AND SUBSIDIARIES
                       CONSOLIDATED STATEMENTS OF INCOME
                 (Dollars in Millions Except Per Share Amounts)
                                   (Unaudited)

                                              For the Three        For the Six
                                              Months Ended         Months Ended
                                                June 30,             June 30,
                                             2000      1999      2000      1999

Revenue                                   $16,221   $15,752   $32,122   $29,869

Operating Expenses

Access and other connection                 3,617     3,668     7,205     7,400
Costs of services and products              4,116     3,835     8,031     6,728
Selling, general and administrative         3,110     3,461     6,399     6,618
Depreciation and other amortization         1,697     1,546     3,263     2,850
Amortization of goodwill, franchise
  costs and other purchased intangibles       414       358       782       542
Net restructuring and other charges             -       (29)      773       702
Total operating expenses                   12,954    12,839    26,453    24,840

Operating income                            3,267     2,913     5,669     5,029

Equity earnings (losses) from Liberty
  Media Group                                 267      (543)    1,209      (601)
Other income (expense)                        119       (40)      415       121
Interest expense                              623       493     1,212       695
Income before income taxes                  3,030     1,837     6,081     3,854
Provision for income taxes                    996       792     1,364     1,791

Net income                                $ 2,034   $ 1,045   $ 4,717   $ 2,063

AT&T Common Stock Group:
Earnings per share:
  Basic                                   $  0.54   $  0.50   $  1.08   $  0.90
  Diluted                                 $  0.53   $  0.49   $  1.07   $  0.88
Dividends declared                        $  0.22   $  0.22   $  0.44   $  0.44

AT&T Wireless Group:
Earnings per share:
  Basic and diluted                       $  0.06   $     -   $  0.06   $     -

Liberty Media Group:
Earnings (loss) per share:
  Basic and diluted                       $  0.10   $ (0.21)  $  0.47   $ (0.24)

                 See Notes to Consolidated Financial Statements
<PAGE>

                                                         AT&T Form 10-Q - Part I

                           AT&T CORP. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                   (Dollars in Millions Except Share Amounts)
                                   (Unaudited)

                                                         June 30,   December 31,
                                                           2000        1999
ASSETS

Cash and cash equivalents                              $    426    $  1,024

Receivables, less allowances of $1,335 and $1,281        11,988      10,453

Deferred income taxes                                     1,351       1,287

Other current assets                                      1,118       1,120

TOTAL CURRENT ASSETS                                     14,883      13,884

Property, plant and equipment, net of accumulated
  depreciation of $29,801 and $30,057                    46,557      39,618

Franchise costs, net of accumulated amortization
  of $1,104 and $697                                     51,467      32,693

Licensing costs, net of accumulated amortization
  of $1,614 and $1,491                                    9,994       8,548

Goodwill, net of accumulated amortization of
  $507 and $363                                          23,417       7,445

Investment in Liberty Media Group and related
  receivables, net                                       39,295      38,460

Other investments and related advances                   48,032      19,366

Prepaid pension costs                                     2,785       2,464

Other assets                                              7,134       6,928

TOTAL ASSETS                                           $243,564    $169,406

                                   (CONTINUED)


<PAGE>

                                                         AT&T Form 10-Q - Part I

                           AT&T CORP. AND SUBSIDIARIES
                     CONSOLIDATED BALANCE SHEETS (CONTINUED)
                   (Dollars in Millions Except Share Amounts)
                                   (Unaudited)

                                                        June 30,   December 31,
                                                           2000        1999
LIABILITIES

Accounts payable                                       $  6,815    $  6,771
Payroll and benefit-related liabilities                   2,360       2,651
Debt maturing within one year                            25,735      12,633
Dividends payable                                           826         703
Other current liabilities                                 6,928       5,449
TOTAL CURRENT LIABILITIES                                42,664      28,207

Long-term debt                                           31,986      23,217
Long-term benefit-related liabilities                     3,979       3,964
Deferred income taxes                                    41,655      24,199
Other long-term liabilities and deferred credits          4,839       3,801
TOTAL LIABILITIES                                       125,123      83,388

Minority Interest                                         3,573       2,391

Company-Obligated Convertible Quarterly Income
  Preferred Securities of Subsidiary Trust Holding
  Solely Subordinated Debt Securities of AT&T             4,705       4,700

SHAREOWNERS' EQUITY Common Stock:
AT&T Common Stock, $1 par value,  authorized
  6,000,000,000  shares;  issued and outstanding
  3,755,183,978 shares (net of 297,622,645
  treasury shares) at June 30, 2000, and
  3,196,436,757 shares (net of 287,866,419
  treasury shares) at December 31, 1999                   3,755       3,196
AT&T Wireless Group Common Stock, $1 par value,
  authorized 6,000,000,000 shares; issued and
  outstanding 360,000,000 shares at June 30, 2000           360           -
Liberty Media Group Class A Common Stock,
  $1 par value, authorized 4,000,000,000 shares;
  issued  and  outstanding  2,374,272,992  shares
  (net of 47,103,908 treasury shares) at June 30, 2000,
  and 2,313,557,460 shares at December 31, 1999           2,374       2,314
Liberty Media Group Class B Common Stock,
  $1 par value,  authorized  400,000,000 shares;
  issued and outstanding  206,234,452 shares
  (net of 10,607,776 treasury shares) at June 30, 2000,
  and 216,842,228 shares at December 31, 1999               206         217
Additional paid-in capital                               90,031      59,526
Guaranteed ESOP obligation                                    -         (17)
Retained earnings                                         8,549       6,712
Accumulated other comprehensive income                    4,888       6,979
TOTAL SHAREOWNERS' EQUITY                               110,163      78,927

TOTAL LIABILITIES & SHAREOWNERS' EQUITY                $243,564    $169,406

                 See Notes to Consolidated Financial Statements
<PAGE>
                                                         AT&T Form 10-Q - Part I
                           AT&T CORP. AND SUBSIDIARIES
            CONSOLIDATED STATEMENTS OF CHANGES IN SHAREOWNERS' EQUITY
                   (Dollars in Millions Except Share Amounts)
                                   (Unaudited)
                                                   For the Six
                                                   Months Ended
                                                    June 30,
                                                 2000       1999
AT&T Common Shares
  Balance at beginning of year                $ 3,196    $ 2,630
  Shares issued (acquired), net:
    Under employee plans                           (1)         1
    For acquisitions                              610        565
    Other*                                        (50)         -
Balance at end of period                        3,755      3,196

AT&T Wireless Group Common Stock
  Balance at beginning of year                      -          -
  Shares issued                                   360          -
Balance at end of period                          360          -

Liberty Media Group Class A Common Stock
  Balance at beginning of year                  2,314          -
  Shares issued, net:
    For acquisitions                               60      2,280
    Other                                           -         33
Balance at end of period                        2,374      2,313

Liberty Media Group Class B Common Stock
  Balance at beginning of year                    217          -
  Shares issued (acquired), net:
    For acquisitions                                -        220
    Other                                         (11)        (3)
Balance at end of period                          206        217

Additional Paid-In Capital
  Balance at beginning of year                 59,526     15,195
  Shares issued (acquired), net:
    Under employee plans                          (24)        36
    For acquisitions                           23,014     42,374
    Other*                                     (2,620)       324
  Proceeds in excess of par value from
    issuance of AT&T Wireless common stock      9,926          -
  Common stock warrants issued                      -        306
  Gain on issuance of common stock
    by affiliates                                 103        510
  Other                                           106         89
Balance at end of period                       90,031     58,834

Guaranteed ESOP Obligation
  Balance at beginning of year                    (17)       (44)
  Amortization                                     17         13
Balance at end of period                            -        (31)

Retained Earnings
  Balance at beginning of year                  6,712      7,800
  Net income                                    4,717      2,063
  Dividends declared                           (1,519)    (1,401)
  Treasury shares issued at less than cost     (1,361)    (1,469)
Balance at end of period                        8,549      6,993

                                   (CONTINUED)
<PAGE>

                                                         AT&T Form 10-Q - Part I

                           AT&T CORP. AND SUBSIDIARIES
      CONSOLIDATED STATEMENTS OF CHANGES IN SHAREOWNERS' EQUITY (CONTINUED)
                   (Dollars in Millions Except Share Amounts)
                                   (Unaudited)


                                                   For the Six
                                                   Months Ended
                                                    June 30,
                                                 2000       1999
Accumulated Other Comprehensive Income
  Balance at beginning of year                  6,979        (59)
  Other comprehensive income                   (2,091)     2,025
Balance at end of period                        4,888      1,966

Total Shareowners' Equity                    $110,163    $73,488

Summary of Total Comprehensive Income:
Net income                                   $  4,717    $ 2,063
Net foreign currency translation
 adjustment (net of taxes of $100 and $(23))      141        (43)
Net revaluation of investments (net of
 taxes of $(676) and $1,351)                   (2,232)     2,068
Total Comprehensive Income                   $  2,626    $ 4,088

* Activity in 2000 represents AT&T stock received from Cox Communications, Inc.,
in exchange for an entity owning certain cable systems and other assets.

  Other  comprehensive  income in the first half of 2000 included  Liberty Media
Group's  foreign  currency  translation  adjustments  totaling  $(118),  net  of
applicable  taxes,  and revaluation of Liberty Media Group's  available-for-sale
securities  totaling  $36,  net of  applicable  taxes,  partially  offset by the
recognition of previously  unrecognized available for sale securities of $1,479,
net of applicable taxes.

  Other  comprehensive  income in 1999 included  Liberty  Media Group's  foreign
currency  translation  adjustments  totaling $(43), net of applicable taxes, and
revaluation  of Liberty Media  Group's  available-for-sale  securities  totaling
$2,012, net of applicable taxes.

  AT&T accounts for treasury  stock as retired  stock,  and as of June 30, 2000,
had 298 million  treasury  shares of which 225 million shares were owned by AT&T
Broadband  subsidiaries  and 70 million  shares  related to the purchase of AT&T
shares previously owned by Liberty Media Group.

  We have 100 million  authorized  shares of preferred stock at $1 par value. No
preferred stock is currently issued or outstanding.

                 See Notes to Consolidated Financial Statements

<PAGE>
                                                         AT&T Form 10-Q - Part I
                           AT&T CORP. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                              (Dollars in Millions)
                                   (Unaudited)
                                                   For the Six
                                                   Months Ended
                                                     June 30,
                                                  2000      1999
Operating Activities
Net income                                     $ 4,717   $ 2,063
Adjustments to reconcile net income to net
  cash provided by operating activities:
   Gains on sales of businesses and
     investments                                  (849)     (371)
   Net restructuring and other charges             648       778
   Depreciation and amortization                 4,045     3,392
   Provision for uncollectibles                    625       733
   Net equity (earnings) losses from Liberty
     Media Group                                (1,209)      601
   Net losses from other equity investments        601       397
   Increase in accounts receivable              (1,854)   (1,462)
   Decrease in accounts payable                    (70)     (488)
   Net change in other operating assets
     and liabilities                              (969)   (1,761)
   Other adjustments                              (385)     (527)
Net cash provided by operating activities        5,300     3,355

Investing Activities
  Capital expenditures and other additions      (7,069)   (5,129)
  Proceeds from sale or disposal of
    property, plant and equipment                  543       162
  (Increase) decrease in other receivables        (977)        6
  Net (acquisitions) dispositions of licenses     (105)        5
  Equity investment distributions and sales        711       439
  Equity investment contributions and
    purchases                                   (1,096)   (6,054)
  Acquisitions of businesses including
    cash acquired                              (18,846)   (5,763)
  Other investing activities, net                  (28)      (56)
Net cash used in investing activities          (26,867)  (16,390)

Financing Activities
  Proceeds from long-term debt issuances           739     7,948
  Retirements of long-term debt                 (1,061)   (1,643)
  Issuance of convertible securities                 -     4,694
  Issuance of AT&T Wireless Group common stock  10,286        -
  Net acquisition of treasury shares              (539)   (4,320)
  Dividends paid on common stock                (1,396)   (1,306)
  Increase in short-term borrowings, net        13,087     4,506
  Other financing activities, net                 (147)      414
Net cash provided by financing activities       20,969    10,293

Net decrease in cash and cash equivalents         (598)   (2,742)

Cash and cash equivalents at beginning of year   1,024     3,160

Cash and cash equivalents at end of period     $   426   $   418

                 See Notes to Consolidated Financial Statements
<PAGE>

                                                         AT&T Form 10-Q - Part I

                           AT&T CORP. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 (Dollars in Millions Except Per Share Amounts)
                                   (Unaudited)

(a)           BASIS OF PRESENTATION
              The consolidated  financial  statements have been prepared by AT&T
              Corp.  (AT&T)  pursuant  to  the  rules  and  regulations  of  the
              Securities  and Exchange  Commission  (SEC) and, in the opinion of
              management, include all adjustments necessary for a fair statement
              of the consolidated results of operations,  financial position and
              cash flows for each period presented. The consolidated results for
              interim periods are not necessarily  indicative of results for the
              full year.  These financial  results should be read in conjunction
              with AT&T's Form 10-K for the year ended December 31, 1999,  filed
              on March 27,  2000,  which  include the  financial  statements  of
              Liberty Media Group for the year ended  December 31, 1999,  AT&T's
              Form 10-Q for the quarter  ended March 31, 2000,  (which  includes
              the  financial  results of Liberty  Media  Group for this  period,
              attached as an exhibit  thereto) and the  financial  statements of
              Liberty  Media Group and AT&T  Wireless  Group for the quarter and
              year-to-date  periods  ended June 30,  2000,  included as Exhibits
              99.1 and 99.2, respectively, to this AT&T quarterly report on Form
              10-Q.

              During the second quarter,  AT&T created a new class of stock when
              it completed an initial  public  offering of 360 million shares of
              AT&T Wireless Group tracking stock at a price of $29.50 per share.
              This stock is designed to track the performance of AT&T's wireless
              services  business  and  represented  a  15.6%  interest  in  that
              business.  AT&T  retained  the  remaining  84.4%  interest in AT&T
              Wireless Group. In addition to AT&T Wireless Group tracking stock,
              AT&T has two other  classes of stock,  Liberty  Media  Group (LMG)
              tracking stock and AT&T common stock. Liberty Media Group tracking
              stock is  intended  to reflect the  performance  of Liberty  Media
              Group. AT&T common stock is intended to reflect the performance of
              all other  businesses  of AT&T,  referred to as AT&T Common  Stock
              Group, including AT&T's retained interest in AT&T Wireless Group.

              The earnings  attributable  to AT&T Wireless Group represent 15.6%
              of the  earnings  from  April 27,  2000,  the date of the  initial
              public offering,  through June 30, 2000. The remaining earnings of
              AT&T's  wireless  services  business  are included in the earnings
              attributable to AT&T Common Stock Group.  Similarly,  the earnings
              or losses  related to LMG are excluded from earnings  available to
              AT&T Common Stock Group.

              The  Board  of  Directors  of  Liberty  Media  Group   declared  a
              two-for-one  stock split of Liberty  Media Group  tracking  stock,
              paid on June 9, 2000. At the AT&T Corp.  annual meeting on May 24,
              2000,  shareowners approved an amendment to increase the number of
              authorized  shares of Class A Liberty Media Stock from 2.5 billion
              to 4 billion,  and to increase the number of Class B Liberty Media
              Stock from 250 million to 400 million. All references to number of
              shares and per share  information  for Liberty  Media Group in the
              consolidated  financial  statements  have been adjusted to reflect
              the stock split on a retroactive basis.
<PAGE>

                                                         AT&T Form 10-Q - Part I

              We have reclassified  certain prior period amounts to conform with
              our current presentation.


(b)           MERGERS

              MERGER WITH MEDIAONE GROUP, INC. (MEDIAONE)
              On June 15, 2000,  AT&T completed a merger with MediaOne in a cash
              and stock transaction valued at approximately $56 billion.  In the
              aggregate,  each share of MediaOne  stock received 0.95 of a share
              of AT&T common stock and $36.27 per share in cash,  consisting  of
              $30.85 per share as stipulated  in the merger  agreement and $5.42
              per share based on AT&T's stock price  preceding  the merger being
              below  a  predetermined  amount.  AT&T  issued  approximately  606
              million shares of common stock, of which  approximately 60 million
              were  treasury  shares.  The total shares had an aggregate  market
              value of approximately $21 billion. In addition, the cash payments
              totaled  approximately $24 billion and AT&T assumed debt and other
              obligations of approximately $11 billion.

              The  merger  was  accounted  for  under  the  purchase  method  of
              accounting, accordingly the results of MediaOne have been included
              in the financial results of AT&T since the date of acquisition.

              The operating results of MediaOne, which are part of our Broadband
              segment,  have  been  included  in the  accompanying  consolidated
              financial  statements at their  preliminary fair value at June 15,
              2000.  Approximately  $19  billion  of the  purchase  price of $56
              billion  was  attributed  to  agreements   with  local   franchise
              authorities  that allow access to homes in our  broadband  service
              areas   ("franchise   costs")   and  is  being   amortized   on  a
              straight-line  basis  over  40  years.  Also  included  in the $56
              billion  purchase price was  approximately  $28 billion related to
              nonconsolidated investments,  including investments in Time Warner
              Entertainment and Vodaphone Group,  plc,  approximately $6 billion
              related  to  property,  plant  and  equipment,  approximately  $10
              billion  attributable  to  MediaOne  debt,  and  approximately  $1
              billion of minority  interest  in Centaur  Funding.  The  purchase
              resulted in  preliminary  goodwill of $16 billion,  which is being
              amortized  on a  straight-line  basis  over 40 years.  We may make
              refinements  to the  allocation  of the  purchase  price in future
              periods as the related fair value appraisals of certain assets and
              liabilities are finalized.

<PAGE>

                                                         AT&T Form 10-Q - Part I

              MERGER WITH TELE-COMMUNICATIONS, INC. (TCI)
              In March 1999,  AT&T  completed a merger  with TCI,  renamed  AT&T
              Broadband  (Broadband),  in an  all-stock  transaction  valued  at
              approximately $52 billion.  The merger was accounted for under the
              purchase  method of accounting  and,  accordingly,  the results of
              Broadband  have been included  with the financial  results of AT&T
              since the acquisition.

              In connection  with the closing,  AT&T issued a separate  tracking
              stock  designed to reflect  the  economic  performance  of Liberty
              Media  Group  (LMG),   TCI's  former  programming  and  technology
              investment business.

              AT&T does not have a controlling  financial interest for financial
              accounting  purposes in LMG;  therefore,  our investment in LMG is
              accounted  for  under  the  equity  method  in  the   accompanying
              consolidated financial statements. The amounts attributable to LMG
              are  reflected as separate line items  "Equity  earnings  (losses)
              from Liberty Media Group" and  "Investment  in Liberty Media Group
              and related  receivables,  net," in the accompanying  consolidated
              financial statements.

              PRO FORMA RESULTS
              Following is a summary of the pro forma  results of AT&T as if the
              mergers  with  MediaOne  and TCI had closed  effective  January 1,
              1999:

                                                                 (Unaudited)
              Shares in millions

              For the Six Months Ended June 30,                 2000      1999
              Revenue                                        $33,447   $32,137
              Net income                                       5,543     1,892

              Weighted-average AT&T common shares              3,774     3,759
              Weighted-average AT&T common shares
               and potential common shares                     3,849     3,868
              Weighted-average AT&T Wireless Group shares        360         -
              Weighted-average Liberty Media Group Shares      2,570     2,500

              AT&T Common Stock Group earnings per common
              share:
                Basic                                        $  1.14   $  0.72
                Diluted                                      $  1.12   $  0.71

              AT&T Wireless Group earnings per common share:
                Basic and diluted                            $  0.06   $     -

              Liberty Media Group earnings (loss) per
              common share:
                Basic and diluted                            $  0.47   $ (0.33)

              Pro forma data may not be  indicative  of the  results  that would
              have been  obtained  had these  events  actually  occurred  at the
              beginning  of the  periods  presented,  nor does it intend to be a
              projection of future results.
<PAGE>
                                                         AT&T Form 10-Q - Part I

(c)           NET RESTRUCTURING AND OTHER CHARGES
              During the second quarter of 1999, we recorded  restructuring  and
              other charges that netted to a pretax  benefit of $29. The benefit
              included a $68 net gain  primarily  related to the exit of certain
              joint  ventures that would have  competed with Concert,  our joint
              venture with British  Telecommunications  plc (BT).  Also included
              was an $11 gain from the  settlement of pension  obligations  from
              AT&T's   voluntary   retirement   incentive   program.   Partially
              offsetting  these  gains  was a $50  pretax  charge  related  to a
              contribution  agreement  entered  into  by  Broadband  to  satisfy
              certain  liabilities of  Phoenixstar,  Inc.  (formerly  PrimeStar,
              Inc.).

              Net  restructuring and other charges for the six months ended June
              30, 2000, totaled $773. The charge included restructuring and exit
              costs of $682 relating to actions  across  several of our business
              units.  These  actions  were  primarily  driven  by the  company's
              continuing efforts to streamline operations and reduce costs by $2
              billion by the end of the year.  Also  recorded  in the six months
              ended  June 30,  2000,  was a $91 charge  related to the  mandated
              disposition of AT&T  Communications  (U.K.) Ltd., which would have
              competed directly with Concert.

              The charge included cash  termination  benefits of $458 associated
              with  the  involuntary   separation  of  about  6,200   employees.
              Approximately   one-half  of  the   individuals   were  management
              employees and one-half were nonmanagement  employees.  Over 35% of
              the affected  employees  have left their  positions as of June 30,
              2000,  and the remaining  employees  will leave the company in the
              second half of the year.

              We  also  recorded  $62  of  network  lease  and  other   contract
              termination  costs  associated with penalties  incurred as part of
              notifying vendors of the termination of these contracts during the
              first quarter of 2000.

              The  following  table  displays  the  activity and balances of the
              restructuring  reserve  account from January 1, 2000,  to June 30,
              2000:

                                  Jan. 1,                               June 30,
                                   2000                                  2000
              Type of Cost        Balance    Additions    Deductions    Balance
              Employee
                separations        $150       $458         $(258)        $350
              Facility closings     239          -           (35)         204
              Other                  21         62           (17)          66
              Total                $410       $520         $(310)        $620

              Deductions  reflect  cash  payments  of $253  related to  employee
              separations  and noncash  utilization  of $57. The cash outlay was
              primarily funded through cash from operations. Noncash utilization
              included deferred severance primarily related to executives.

<PAGE>
                                                         AT&T Form 10-Q - Part I

              Also included in  restructuring  and exit costs for the six months
              ended  June  30,  2000,  was  $144 of  benefit  curtailment  costs
              associated with employee  separations as part of these exit plans.
              We also recorded an asset impairment  charge of $18 related to the
              write-down of unrecoverable  assets in certain businesses in which
              the carrying value is no longer supported by future cash flows.

              As a  result  of our  merger  with  MediaOne  and as  part  of our
              objective to benefit from the synergies  created by the merger, we
              will record further  charges for exit and separation  plans in the
              second half of the year.

              Net  restructuring and other charges for the six months ended June
              30, 1999,  totaled $702. The charge  included a pretax  in-process
              research  and  development  charge  of  $594  related  to the  TCI
              acquisition,  a $128  pretax net charge  primarily  related to the
              exit of certain joint  ventures that would have competed  directly
              with Concert and a $50 pretax  charge  related to the  Phoenixstar
              agreement  noted above.  These charges were partially  offset by a
              $70 pretax gain related to the  settlement of pension  obligations
              for former  employees  who accepted  AT&T's  voluntary  retirement
              incentive program offer.

(d)           EARNINGS PER COMMON SHARE AND POTENTIAL COMMON SHARE
              Earnings  (losses)  attributable to the different  classes of AT&T
              common stocks is as follows:

                                              For the Three        For the Six
                                              Months Ended         Months Ended
                                                June 30,             June 30,
                                             2000      1999      2000      1999
              AT&T Common Stock Group      $1,745    $1,588    $3,486    $2,664
              AT&T Wireless Group              22         -        22         -
              Liberty Media Group             267      (543)    1,209      (601)
              Net income                   $2,034    $1,045    $4,717    $2,063

              Basic earnings per share (EPS) for AT&T Common Stock Group for the
              three and  six-month  periods  ended June 30, 2000 and 1999,  were
              computed by dividing  earnings  attributable  to AT&T Common Stock
              Group  shareowners by the  weighted-average  number of AT&T common
              shares outstanding during the period.

              Diluted EPS for AT&T Common  Stock Group was  computed by dividing
              earnings  attributable  to AT&T Common  Stock  Group  shareowners,
              adjusted for the conversion of securities, by the weighted-average
              number of AT&T common shares and dilutive  potential common shares
              outstanding  during  the  period,   assuming   conversion  of  the
              potential common shares at the beginning of the periods presented.
              Shares   issuable   upon   conversion   of   preferred   stock  of
              subsidiaries,

<PAGE>

                                                         AT&T Form 10-Q - Part I

              convertible  debt  securities of a  subsidiary,  stock options and
              other  performance  awards  have  been  included  in  the  diluted
              calculation  of  weighted-average  shares to the  extent  that the
              assumed  issuance  of such  shares  would have been  dilutive,  as
              illustrated  below.  The convertible  quarterly  income  preferred
              securities   were   antidilutive   and  were   excluded  from  the
              computation of diluted EPS. The dividends on these securities have
              an after-tax impact to quarterly  earnings of  approximately  $40.
              Assuming the conversion of these  securities,  the dividends would
              no  longer  be  included  as a  reduction  to net  income  and the
              securities would convert into 66.667 million shares of AT&T common
              stock.

              A  reconciliation  of the income and share  components for diluted
              EPS  calculations  with  respect to AT&T Common  Stock Group is as
              follows:

                                                 For the Three     For the Six
                                                 Months Ended      Months Ended
                                                   June 30,          June 30,
                                                2000      1999    2000      1999
              AT&T Common Stock Group:
              Income available                $1,745    $1,588  $3,486    $2,664
              Income impact of assumed
                conversion of preferred
                stock of subsidiary                8        10      16        10
              Income available adjusted
                for conversion of
                securities                    $1,753    $1,598  $3,502    $2,674

              Shares in millions
              Weighted-average common
                shares                         3,253     3,189   3,219     2,970
              Stock options                       21        38      26        40
              Preferred stock of subsidiary       40        40      40        25
              Convertible debt securities
                of subsidiary                      -         -       -         3
              Weighted-average common shares
                and potential common shares    3,314     3,267   3,285     3,038

              Basic EPS for AT&T Wireless  Group for the period from the date of
              the initial public offering through June 30, 2000, was computed by
              dividing  the  income   attributable   to  AT&T   Wireless   Group
              shareowners by the  weighted-average  number of shares outstanding
              of  AT&T  Wireless  Group  of 360  million.  Potentially  dilutive
              securities  consisted of  approximately  70 million stock options,
              which were antidilutive at June 30, 2000.

              Basic EPS for LMG was  computed by dividing  the  earnings  (loss)
              attributable to LMG shareowners by the weighted-average  number of
              shares outstanding of LMG of 2,576 million and 2,528 million,  for
              the three months ended June 30, 2000 and 1999,  respectively,  and
              2,570  million and 2,500 million for the six months ended June 30,
              2000  and  from the date of  acquisition  through  June 30,  1999,
              respectively.

<PAGE>
                                                         AT&T Form 10-Q - Part I

              Potentially  dilutive  securities,  including  fixed and nonvested
              performance awards and stock options,  have not been factored into
              the dilutive  calculations because past history has indicated that
              these  contracts  are  generally  settled  in cash.  There were 95
              million and 108 million of these potentially  dilutive  securities
              outstanding at June 30, 2000 and 1999,  respectively.  The diluted
              earnings per share calculation for the second quarter of 2000 does
              include approximately one million warrants outstanding at June 30,
              2000, which were assumed in a recent acquisition.  Since LMG had a
              loss in the quarter and  year-to-date  periods of 1999, the impact
              of any potential shares would have been antidilutive.

(e)           RELATED PARTY TRANSACTIONS
              AT&T has various  related  party  transactions  with  Concert as a
              result of the closure of the global venture in early January.

              Included in revenue in the three and six-month  periods ended June
              30, 2000, are $284 and $550,  respectively,  for services provided
              to Concert.

              Included in access and other connection expenses for the three and
              six-month  periods  ended June 30, 2000,  are charges from Concert
              representing costs incurred on our behalf to connect calls made to
              foreign  countries  (international  settlements) and costs paid by
              AT&T to Concert for distributing  Concert  products  totaling $581
              and $1,160, respectively.

              During the first  quarter of 2000,  AT&T  loaned  $1.0  billion to
              Concert which is included within  investments and related advances
              in the accompanying  consolidated balance sheets.  Interest income
              of $17 and $30 was recognized for the three and six-month  periods
              ended June 30, 2000, respectively.

              Included in accounts  receivable and accounts  payable at June 30,
              2000, are $1,064 and $1,138, respectively, related to transactions
              with Concert.

(f)           LONG-TERM DEBT

              EXCHANGEABLE NOTES

              During  1999 and 1998,  MediaOne  issued  debt  (the  Exchangeable
              Notes) which is mandatorily  redeemable at MediaOne's  option into
              (i) Vodafone American Depository Receipts (ADRs) held by MediaOne,
              (ii)  the cash  equivalent,  or  (iii) a  combination  of cash and
              Vodafone ADRs. The maturity value of the Exchangeable Notes varies
              based upon the fair market value of a Vodafone ADR.

<PAGE>
                                                         AT&T Form 10-Q - Part I

              Following is a summary of the  Exchangeable  Notes  outstanding by
              year of issue:

                                                       Year of Issue

              EXCHANGEABLE NOTES                   1999             1998
              Proceeds                           $1,129           $1,686
              Interest Rate                        7.0%            6.25%
              Maturity Date                    Nov. 15, 2002    Aug. 15, 2001
              Carrying Value                     $2,664           $1,085


              The  redemption  formula  for the  1999  Exchangeable  Notes is as
              follows:

              (a)     If the fair market value of a Vodafone ADR is greater than
                      or  equal  to  $51.2563, each  1999  Exchangeable  Note is
                      equivalent to 0.8475 of a Vodafone ADR;

              (b)     If the fair market value of a Vodafone ADR is less than or
                      equal  to  $43.4375,  each   1999  Exchangeable  Note   is
                      equivalent to one Vodafone ADR; or

              (c)     If the fair market  value of  a Vodafone ADR  is less than
                      $51.2563  but greater  than $43.4375 per share,  each 1999
                      Exchangeable  Note  is  equivalent  to  a  fraction  of  a
                      Vodafone  ADR equal to (i)  $43.4375  divided  by (ii) the
                      fair market value of one Vodafone ADR.

              The number of Vodafone  ADRs to be  exchanged at maturity for each
              1998  Exchangeable  Note will be based upon a redemption  value of
              $9.00 in cash plus 2 1/2 times the fair market value of a Vodafone
              ADR (the Maturity Price), as follows:

              (a)     If the  Maturity Price is greater than or equal  to $71.75
                      per share, each  1998 Exchangeable  Note is equivalent  to
                      0.8101 of the Maturity Price;

              (b)     If the Maturity Price is less than or equal to $58.125 per
                      share, each  1998 Exchangeable  Note is equivalent  to the
                      Maturity Price; or

              (c)     If the  Maturity Price is  less than $71.75 per  share but
                      greater than  $58.125  per share, each  1998  Exchangeable
                      Note is equivalent to $58.125.

<PAGE>
                                                         AT&T Form 10-Q - Part I


              The  Exchangeable  Notes are being  accounted  for as indexed debt
              instruments since the maturity value of the Exchangeable  Notes is
              dependent  upon the fair market value of the  underlying  Vodafone
              ADRs. For the 1999 debt issuance,  the market risk of a decline in
              value of Vodafone ADRs below $43.4375 per share on 26.0 million of
              the  148.3  million  Vodafone  ADRs  held  by  MediaOne  has  been
              eliminated. In addition,  MediaOne has limited the market gains it
              may earn to 15.25% of the fair market  value in excess of $51.2563
              per  share  on 26.0  million  Vodafone  ADRs.  For the  1998  debt
              issuance,  the market risk of a decline in value of Vodafone  ADRs
              below  $19.65  per  share on 72.5  million  of the  148.3  million
              Vodafone ADRs held by MediaOne has been  eliminated.  In addition,
              MediaOne has limited the market gains it may earn to approximately
              19% of the fair market value in excess of $25.10 per share on 72.5
              million Vodafone ADRs.

              Since  the  Vodafone  ADRs  are a  cost  method  investment  being
              accounted for as  "available-for-sale"  securities under Statement
              of Financial  Accounting Standards (SFAS) No. 115, "Accounting for
              Certain Investments in Debt and Equity Securities," changes in the
              maturity  value of the  Exchangeable  Notes are being  recorded as
              unrealized gains or losses, net of tax, within other comprehensive
              income as a component of shareowners' equity.

              The  Exchangeable  Notes are  unsecured  obligations  of MediaOne,
              ranking  equally in right of payment with all other  unsecured and
              unsubordinated obligations of MediaOne.

              FLOATING RATE DEBT

              Two subsidiaries of MediaOne, MediaOne SPC IV and MediaOne SPC VI,
              entered into a series of purchased and written options on Vodafone
              ADRs  contributed  to them by MediaOne  and issued  floating  rate
              debt. The carrying value of debt outstanding at June 30, 2000, was
              $1,739,  which pays  interest  at  three-month  London  Inter-Bank
              Offering  Rate  (LIBOR)  plus  0.5%.  This debt  matures  in equal
              quarterly  installments  beginning in 2003 and ending in 2005. The
              assets of  MediaOne  SPC IV,  which  are  primarily  29.1  million
              Vodafone ADRs, are only available to pay the creditors of MediaOne
              SPC IV.  Likewise,  the  assets  of  MediaOne  SPC VI,  which  are
              primarily  18.0 million  Vodafone  ADRs, are only available to pay
              the creditors of MediaOne SPC VI.

<PAGE>
                                                         AT&T Form 10-Q - Part I

              SUBSIDIARY-OBLIGATED  MANDATORILY  REDEEMABLE PREFERRED SECURITIES
              OF SUBSIDIARY  TRUSTS HOLDING SOLELY  SUBORDINATED DEBT SECURITIES
              OF AN AT&T SUBSIDIARY

              Certain  subsidiary  trusts of MediaOne (the MediaOne  Trusts) had
              preferred securities outstanding at June 30, 2000, as follows:

                                             Interest   Maturity   Carrying
              Subsidiary Trust                 Rate       Date      Amount
              MediaOne Financing I             7.96%      2025      $   30
              MediaOne Financing II            8.25%      2036          28
              MediaOne Finance I               9.30%      2025         267
              MediaOne Finance II              9.50%      2036         215
              MediaOne Finance III             9.04%      2038         503

              Total                                                 $1,043

              The MediaOne Trusts exist for the exclusive purpose of issuing the
              Trust Preferred Securities and investing the proceeds thereof into
              Subordinated  Deferrable  Interest  Notes (the  Subordinated  Debt
              Securities)  of  MediaOne  Group  Funding,   Inc,  a  wholly-owned
              subsidiary of MediaOne.  The Subordinated Debt Securities have the
              same  interest  rate  and  maturity  date as the  Trust  Preferred
              Securities to which they relate.  The Subordinated Debt Securities
              are fully and unconditionally  guaranteed by MediaOne.  All of the
              Subordinated  Debt  Securities  are  redeemable by MediaOne  Group
              Funding,  Inc.  or MediaOne  at a  redemption  price of $25.00 per
              security, plus accrued and unpaid interest. Upon redemption of the
              Subordinated Debt Securities,  the Trust Preferred Securities will
              be mandatorily  redeemable,  at a price of $25.00 per share,  plus
              accrued and unpaid distributions. The 9.30% and 7.96% Subordinated
              Debt Securities are redeemable after September 11, 2000. The 9.50%
              and  8.25%  Subordinated  Debt  Securities  are  redeemable  after
              October 29,  2001.  The 9.04%  Subordinated  Debt  Securities  are
              redeemable after October 28, 2003. The Trust Preferred  Securities
              are   recorded   within   long-term   debt  in  the   accompanying
              consolidated balance sheets.

(g)           FINANCIAL INSTRUMENTS

              COLLARS
              Two subsidiaries of MediaOne, MediaOne SPC IV and MediaOne SPC VI,
              entered   into  a  series  of   purchased   and  written   options
              (collectively the collars) on Vodafone ADRs contributed to them by
              MediaOne  and issued  floating  rate debt.  The collars  have been
              designated  and  are  effective  as a  hedge  of the  market  risk
              associated  with the  investment in Vodafone ADRs. The collars are
              therefore  carried at intrinsic  value,  with unrealized  gains or
              losses,  net of tax,  being  recorded  within other  comprehensive
              income as a component of  shareowners'  equity,  together with any
              change in the fair value of the Vodafone ADRs.

<PAGE>
                                                         AT&T Form 10-Q - Part I


              At the  expiration of the MediaOne SPC IV collar,  we will receive
              cash  if  the  market  value  of  a  Vodafone  ADR  is  less  than
              approximately $34.00 per share,  effectively  eliminating downside
              risk on the stock  below  $34.00  per  share.  Conversely,  if the
              market  value of a  Vodafone  ADR is  greater  than  approximately
              $49.00 per share,  we will be required to pay cash,  which will be
              offset by the corresponding  increase in the value of the Vodafone
              ADR. This collar expires quarterly beginning in 2003 and ending in
              2005.

              At the  expiration of the MediaOne SPC VI collar,  we will receive
              cash  if  the  market  value  of  a  Vodafone  ADR  is  less  than
              approximately $40.00 per share,  effectively  eliminating downside
              risk on the stock  below  $40.00  per  share.  Conversely,  if the
              market  value of a  Vodafone  ADR is  greater  than  approximately
              $58.00 per share,  we will be required to pay cash,  which will be
              offset by the corresponding  increase in the value of the Vodafone
              ADR. This collar expires quarterly beginning in 2003 and ending in
              2005.

              INTEREST RATE SWAPS
              In  connection  with the floating rate debt issued by MediaOne SPC
              IV and VI,  interest  rate  swaps  were  entered  into to swap the
              floating  rate debt to fixed rate debt.  The  interest  rate swaps
              have the same maturities as the debt and mature in equal quarterly
              installments  beginning  in 2003  and  ending  in  2005.  MediaOne
              prepaid  the  fixed  interest   payments   pursuant  to  the  swap
              agreements;  the costs of which were deferred and are amortized as
              adjustments to the interest  expense over the term of the debt. As
              a result of the swaps and related  amortization,  MediaOne expects
              to have a fixed  effective  interest rate of 5.91% on the MediaOne
              SPC IV debt and 6.02% on the MediaOne SPC VI debt. The unamortized
              prepaid  interest rate swap balance was  approximately  $475 as of
              June 30, 2000.

              LETTERS OF CREDIT
              At June 30, 2000,  we had letters of credit of $685.  The increase
              from December 31, 1999, was primarily related to letters of credit
              to support  subsidiary  debt as well as letters of credit MediaOne
              had entered into prior to the merger.

<PAGE>

                                                         AT&T Form 10-Q - Part I

(h)           MINORITY INTEREST IN CENTAUR FUNDING CORPORATION
              Centaur Funding Corporation  (Centaur),  a subsidiary of MediaOne,
              issued  three   series  of   preferred   shares  prior  to  AT&T's
              acquisition  of  MediaOne.  Centaur was created for the  principal
              purpose of raising  capital  through  the  issuance  of  preferred
              shares and investing  those proceeds into notes issued by MediaOne
              SPC II, a subsidiary of MediaOne.  Principal and interest payments
              from the notes are  expected to be Centaur's  principal  source of
              funds to make  dividend and  redemption  payments on the preferred
              shares. In addition,  the dividend and certain redemption payments
              on the  preferred  shares will be  determined  by reference to the
              dividend  and  redemption  activity  of  the  preferred  stock  of
              AirTouch  Communications,  Inc.  (ATI Shares) held by MediaOne SPC
              II.  Payments on the preferred  shares are neither  guaranteed nor
              secured by MediaOne or AT&T.  The assets of MediaOne SPC II, which
              includes the ATI shares,  are only  available to pay the creditors
              of MediaOne SPC II.

              These  securities  remained  outstanding  at  June  30,  2000,  as
              follows:

                               Dividend Rate    Maturity Date    Carrying Amount

              Series A         Variable         None             $  100
              Series B         9.08%            4/21/2020           926
              Series C         None             4/21/2020           110
              Total                                              $1,136

              The Auction Market Preference Shares, Series A, have a liquidation
              value  of $250  thousand  per  share  and  dividends  are  payable
              quarterly  when  declared by Centaur's  Board of Directors  out of
              funds legally available.

              The  9.08%  Cumulative   Preference  Shares,   Series  B,  have  a
              liquidation  value of $1  thousand  per  share and  dividends  are
              payable  quarterly in arrears when declared by Centaur's  Board of
              Directors out of funds legally available.  In addition,  dividends
              may be declared  and paid only to the extent that  dividends  have
              been declared and paid on the ATI shares.

              The Preference  Shares,  Series C, have a liquidation  value of $1
              thousand per share at maturity.  The value of the Series C will be
              accreted  to  reach  its  liquidation  value  upon  maturity.  The
              preferred  shares issued by Centaur are recorded  within  Minority
              Interest in the accompanying consolidated balance sheets.

<PAGE>
                                                         AT&T Form 10-Q - Part I

(i)           GUARANTEE OF PREFERRED SECURITIES
              TCI Securities:
              Prior  to  the   consummation  of  the  TCI  merger,   TCI  issued
              mandatorily  redeemable  preferred  securities  through subsidiary
              trusts  that  held  subordinated  debt  securities  of  TCI.  AT&T
              provides a full and  unconditional  guarantee  on the  outstanding
              securities issued by TCI Communications Financing I, II and IV. At
              June 30,  2000,  $1,247  of the  guaranteed  redeemable  preferred
              securities  remained  outstanding.  Following  is a summary of the
              results of TCI which have been included in the  financial  results
              of AT&T for each corresponding  period.  The summarized  financial
              information  includes  transactions with AT&T that were eliminated
              in consolidation.

                                       For the Six        For the Four
                                       Months Ended       Months Ended
                                       June 30, 2000      June 30, 1999

              Revenue                    $ 3,100            $ 1,985
              Operating loss                  22                785
              Net income (loss)              527             (1,770)

                                           As of             As of
                                          June 30,        December 31,
                                            2000               1999
              Current assets             $   546            $   468
              Noncurrent assets           91,096             93,798
              Current liabilities          2,399              2,814
              Noncurrent liabilities      38,645             37,853
              Minority interests           2,170              2,175


              MediaOne Securities:
              Prior to the consummation of the MediaOne merger,  MediaOne issued
              mandatorily   redeemable   exchangeable   notes  and   mandatorily
              redeemable  preferred  securities  through  subsidiary trusts that
              held subordinated debt securities of MediaOne.  Subsequent to June
              30,  2000,  AT&T  provided a full and  unconditional  guarantee on
              these outstanding securities issued by MediaOne. At June 30, 2000,
              $4,792 of the

<PAGE>
                                                         AT&T Form 10-Q - Part I

              guaranteed securities remained outstanding. Following is a summary
              of the  results  of  MediaOne  which  have  been  included  in the
              financial  results of AT&T since the date of  acquisition  on June
              15,  2000.   The   summarized   financial   information   includes
              transactions with AT&T that were eliminated in consolidation.

                                          For the 15
                                          Days Ended
                                         June 30, 2000
              Revenue                      $  126
              Operating loss                  (43)
              Net loss                        (35)

                                             As of
                                            June 30,
                                              2000

              Current assets               $ 5,840
              Noncurrent assets             68,802
              Current liabilities              980
              Noncurrent liabilities        27,539
              Minority interest              1,156


(j)           SEGMENT REPORTING
              AT&T's  results are  segmented  according to the way we manage our
              business:  Business Services, Consumer Services, Wireless Services
              and Broadband.  Our existing  segments reflect certain  managerial
              changes  since the  publication  of our 1999 annual  results.  All
              prior period  results have been restated to reflect these changes.
              In addition,  2000 results  reflect the  acquisition  of MediaOne,
              included in the Broadband segment, from the June 15, 2000, date of
              acquisition and the impact of assets and businesses contributed to
              Concert, which were included in 1999 results.

              Reflecting the dynamics of our business,  we  continuously  review
              our management model and structure, which may result in additional
              adjustments to our operating segments in the future.

<PAGE>
                                                         AT&T Form 10-Q - Part I

              REVENUE

                                                    Three               Six
                                                 Months Ended       Months Ended
                                                   June 30,           June 30,
                                                2000     1999      2000     1999
              Business services external
                revenue                      $ 6,965  $ 6,571   $13,923  $12,856
              Business services internal
                revenue                          182      193       360      356
              Total business services
                revenue                        7,147    6,764    14,283   13,212
              Consumer services external
                revenue                        4,984    5,479    10,043   10,949
              Wireless services external
                revenue                        2,477    1,878     4,675    3,440
              Broadband external revenue       1,717    1,480     3,274    1,984

              Total reportable segments
                revenue                       16,325   15,601    32,275   29,585

              Corporate and Other
                revenue (a)                     (104)     151      (153)     284
              Total revenue                  $16,221  $15,752   $32,122  $29,869

              (a) Included in Corporate and Other is revenue from  international
              operations  and  ventures,  other  corporate  operations  and  the
              elimination of internal revenue.

              RECONCILIATION  OF EARNINGS  BEFORE  INTEREST  AND TAXES (EBIT) TO
              INCOME BEFORE INCOME TAXES

                                                    Three               Six
                                                 Months Ended       Months Ended
                                                   June 30,           June 30,
                                                2000     1999     2000     1999
              Business services               $1,612   $1,435   $3,137   $3,027
              Consumer services                1,852    1,842    3,571    3,693
              Wireless services                  335      125      446       74
              Broadband                         (542)    (526)    (553)  (1,187)
                Total reportable
                segments' EBIT                 3,257    2,876    6,601    5,607
              Corporate and Other EBIT           129       (3)    (517)    (457)
              Liberty Media Group equity
                earnings (losses)                267     (543)   1,209     (601)
              Interest expense                   623      493    1,212      695
                Total income before
                income taxes                  $3,030   $1,837  $ 6,081   $3,854

<PAGE>
                                                         AT&T Form 10-Q - Part I


              ASSETS

                                                    At June 30,    At Dec. 31,
                                                       2000           1999
              Business services                    $ 32,569       $ 32,010
              Consumer services                       5,301          6,279
              Wireless services                      28,782         23,312
              Broadband                             123,091         56,536
                Total reportable segments           189,743        118,137

              Corporate and Other:
                Other segments                        5,708          3,386
                Prepaid pension costs                 2,785          2,464
                Deferred taxes                        1,142            899
                Other corporate assets                4,891          6,060
              Investment in Liberty Media Group
                and related receivables, net         39,295         38,460

              Total assets                         $243,564       $169,406


(k)           NEW ACCOUNTING PRONOUNCEMENTS
              In June 1998,  the  Financial  Accounting  Standards  Board (FASB)
              issued SFAS No. 133,  "Accounting  for Derivative  Instruments and
              Hedging  Activities."  Among other  provisions,  it requires  that
              entities recognize all derivatives as either assets or liabilities
              in  the   statement  of  financial   position  and  measure  those
              instruments at fair value. Gains and losses resulting from changes
              in the fair values of those  derivatives  would be  accounted  for
              depending  on the use of the  derivative  and whether it qualifies
              for hedge  accounting.  The  effective  date for this standard was
              delayed via the issuance of SFAS No. 137. The  effective  date for
              SFAS No.  133 is now for  fiscal  years  beginning  after June 15,
              2000,  though  earlier  adoption  is  encouraged  and  retroactive
              application is prohibited.  For AT&T, this means that the standard
              must be adopted no later than January 1, 2001.

              In June  2000,  the FASB  issued  SFAS No.  138,  "Accounting  for
              Certain Derivative  Instruments and Certain Hedging Activities" as
              an   amendment   to  SFAS  No.  133.   This   statement   provides
              clarification with regard to certain  implementation  issues under
              SFAS  No.  133 on  specific  types  of  hedges.  We are  currently
              assessing  the impact of SFAS Nos. 133 and 138 on AT&T,  including
              an  assessment  of the  impact  resulting  from  our  merger  with
              MediaOne.

              In December 1999, the  Securities and Exchange  Commission  issued
              Staff  Accounting   Bulletin  No.  101  (SAB  No.  101),  "Revenue
              Recognition in Financial  Statements." The SEC delayed the date by
              which  registrants  must  apply  the  accounting  and  disclosures
              described in SAB No. 101 until the fourth  quarter of 2000. We are
              currently  assessing  the impact of SAB No. 101 on our  results of
              operations.

<PAGE>
                                                         AT&T Form 10-Q - Part I

                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  RESULTS OF OPERATIONS AND FINANCIAL CONDITION

OVERVIEW
AT&T Corporation (AT&T) is among the world's communications  leaders,  providing
voice, data and video telecommunications services to large and small businesses,
consumers and government  agencies.  We provide domestic and international  long
distance, regional, local and wireless communications services, cable television
and Internet communications services. We also provide directory and calling-card
services to support our communications business.

On June 15, 2000, AT&T completed a merger with MediaOne Group,  Inc.  (MediaOne)
in a cash and stock  transaction  valued at  approximately  $56 billion.  In the
aggregate,  each share of MediaOne received 0.95 of a share of AT&T common stock
and $36.27 per share in cash,  consisting  of $30.85 per share as  stipulated in
the merger  agreement and $5.42 per share based on AT&T's stock price  preceding
the merger being below a predetermined  amount.  AT&T issued  approximately  606
million  shares of AT&T common  stock,  of which  approximately  60 million were
treasury  shares.  The merger with MediaOne was accounted for under the purchase
method of accounting,  accordingly  the operating  results of MediaOne have been
included in the accompanying consolidated financial statements since the date of
acquisition.  The results of MediaOne are included within the Broadband segment.
Periods  prior to the  merger  were not  restated  to  include  the  results  of
MediaOne.

On April 27,  2000,  AT&T  completed an initial  public  offering of 360 million
shares of AT&T Wireless  Group tracking  stock.  This stock is designed to track
the economic  performance of AT&T's wireless services business and represented a
15.6% interest in that business.  AT&T retained the remaining  84.4% interest in
AT&T  Wireless  Group.  In  connection  with our first  quarter 1999 merger with
Tele-Communications, Inc., (TCI) renamed AT&T Broadband (Broadband), we issued a
separate  tracking  stock to reflect the economic  performance  of Liberty Media
Group  (LMG),   Broadband's   former   programming  and  technology   investment
businesses.  All other  businesses  of AT&T  comprise  AT&T Common  Stock Group,
including  AT&T's  retained  interest  in  AT&T  Wireless  Group,  the  economic
performance of which is represented by AT&T common stock.

The consolidated  results of AT&T include AT&T Wireless Group in its entirety on
a fully consolidated  basis. We do not have a controlling  financial interest in
Liberty Media Group for financial accounting purposes;  therefore, our ownership
in LMG is reflected as an  investment  accounted  for under the equity method in
the AT&T consolidated financial statements.

<PAGE>
                                                         AT&T Form 10-Q - Part I


Earnings  attributable  to AT&T Wireless Group  represent  15.6% of the earnings
from April 27, 2000, the date of the initial public  offering,  through June 30,
2000. The remaining  earnings of AT&T's wireless  services business are included
in the earnings attributable to AT&T Common Stock Group. Similarly, the earnings
or losses related to LMG are excluded from the earnings available to AT&T Common
Stock Group.

Ownership of shares of AT&T common stock,  AT&T Wireless Group tracking stock or
Liberty Media Group tracking stock does not represent a direct legal interest in
the assets and  liabilities of any of these groups,  but an ownership of AT&T in
total. Each of these shares  represents an interest in the economic  performance
of each of these groups.

On January 5, 2000,  AT&T and  British  Telecommunications,  plc (BT)  announced
financial closure of Concert, their global communications joint venture. Concert
began  operations  as  a  leading  global  telecommunications  company,  serving
multinational  business customers,  international  carriers and Internet service
providers worldwide, providing them with voice, data and Internet services. AT&T
contributed all of its international  gateway-to-gateway assets and the economic
value of approximately 270 multinational  customers. In addition, we contributed
our international settlement business (revenue and expenses) to Concert. Results
for 2000 reflect the impact of these contributions.

The  discussion  and  analysis  that  follows  provides  information  management
believes is relevant to an assessment and  understanding of AT&T's  consolidated
results of operations  and cash flows for the three and six-month  periods ended
June 30, 2000 and 1999, and financial condition as of June 30, 2000 and December
31, 1999.

FORWARD-LOOKING STATEMENTS
Except  for  the  historical   statements  and  discussions   contained  herein,
statements herein constitute "forward-looking  statements" within the meaning of
Section 27A of the  Securities  Act of 1933 and  Section  21E of the  Securities
Exchange  Act  of  1934,  including   statements   concerning  future  operating
performance,  AT&T's  share  of new and  existing  markets,  AT&T's  short-  and
long-term  revenue and earnings growth rates,  and general industry growth rates
and AT&T's performance relative thereto.  These forward-looking  statements rely
on a number of assumptions concerning future events,  including the adoption and
implementation  of balanced and effective  rules and  regulations by the Federal
Communications  Commission (FCC) and the state public regulatory  agencies,  and
AT&T's ability to achieve a significant market penetration in new markets. These
forward-looking  statements are subject to a number of  uncertainties  and other
factors,  many of which are  outside  AT&T's  control  that could  cause  actual
results to differ materially from such statements.  AT&T disclaims any intention
or obligation to update or revise any forward-looking  statements,  whether as a
result of new information, future events or otherwise.

<PAGE>
                                                         AT&T Form 10-Q - Part I

CONSOLIDATED RESULTS OF OPERATIONS

REVENUE

                                        Three Months          Six Months
                                       Ended June 30,       Ended June 30,
                                       2000      1999       2000      1999
Dollars in Millions

Business Services                   $ 7,147   $ 6,764    $14,283   $13,212
Consumer Services                     4,984     5,479     10,043    10,949
Wireless Services                     2,477     1,878      4,675     3,440
Broadband                             1,717     1,480      3,274     1,984
Corporate and Other                    (104)      151       (153)      284
Total revenue                       $16,221   $15,752    $32,122   $29,869

Revenue  increased 3.0% in the second quarter of 2000,  compared with the second
quarter  of  1999.  Revenue  for the  quarter  was  negatively  impacted  by the
formation of Concert, our global venture with BT, and positively impacted by the
acquisition  of  MediaOne.  Revenue  increased  7.5% in the first  half of 2000,
compared with the first half of 1999.  Revenue for the six months was positively
impacted by the acquisitions of TCI, the IBM Global Network (renamed AT&T Global
Network  Services,  or AGNS) and MediaOne,  and was  negatively  impacted by the
formation of Concert.  Normalized revenue, which adjusts for the acquisitions of
MediaOne,  TCI, adjusted for all closed cable  partnerships,  and AGNS,  various
divestments  of   international   businesses,   and  the  impact  of  businesses
contributed  to Concert,  increased 4.5% in the second quarter of 2000, and 5.2%
for the six months ended June 30, 2000,  compared with the respective periods in
1999.  These increases were led by Wireless  Services,  Business  Services,  and
Broadband, partially offset by declines in Consumer Services.

Effective July 1, 2000, the Federal  Communications  Commission (FCC) eliminated
the  per-line  charges  AT&T  pays  for  residential  and  single-line  business
customers.  Since AT&T bills its customers for these charges, the elimination of
the charge will negatively impact revenue in the second half of 2000,  primarily
in the Consumer Services business.

OPERATING EXPENSES

                                        Three Months          Six Months
                                       Ended June 30,       Ended June 30,
                                       2000      1999       2000      1999
Dollars in Millions
Access and other connection          $3,617    $3,668     $7,205    $7,400

Access and other connection  expenses  decreased 1.4% and decreased 2.6% for the
three and six-month periods ended June 30, 2000,  respectively.  Included within
access  and other  connection  expenses  are  costs  paid to  foreign  telephone
companies   to  connect   calls  made  to   foreign   countries   (international
settlements). As result of the commencement of operations of Concert, all of our
international  settlements  are  incurred by Concert.  In  addition,  all of our
foreign billed  revenue is now earned by Concert.  The amount charged by Concert
in 2000 is lower  than  interconnection  expense  incurred  in 1999,  since AT&T
recorded these transactions within revenue and expense,  as applicable.  Concert
bills us a net expense comprised of international  settlement  (interconnection)
expense and foreign billed revenue.  Partially offsetting the decline were costs
incurred related to Concert products that AT&T now sells to its customers.

<PAGE>
                                                         AT&T Form 10-Q - Part I

Also partially  offsetting the decrease were higher access and other  connection
expenses  associated with  connecting  domestic calls on the facilities of other
service providers.  These costs rose primarily due to increased per-line charges
(Primary  Interexchange  Carrier Charges),  Universal Service Fund contributions
and local connectivity charges as well as volume increases,  partially offset by
mandated reductions in per-minute access costs, more efficient network usage and
the sale of ACC International.

Effective  July  1,  2000,  per-line  charges  AT&T  pays  for  residential  and
single-line business customers were eliminated by the FCC.  Accordingly,  access
and other connection charges will decrease in the second half of 2000.

                                        Three Months          Six Months
                                       Ended June 30,       Ended June 30,
                                       2000      1999       2000      1999
Dollars in Millions
Costs of services and products       $4,116    $3,835     $8,031    $6,728

Costs of services and  products  increased  7.3% in the second  quarter of 2000,
compared with the second quarter of 1999, and was impacted by our acquisition of
MediaOne and the formation of Concert in 2000,  as well as our 1999  acquisition
of AGNS.  Excluding  these  items,  costs of  services  and  products  increased
slightly due to higher costs  associated  with our growing  wireless  subscriber
base and  wireless  network  as well as  increased  costs to  support  growth in
outsourcing  contracts.  Also contributing to the increase were higher Broadband
programming  costs  principally  due to rate  increases.  These  increases  were
partially offset by continued cost control initiatives.

Costs of  services  and  products  increased  19.4% in the  first  half of 2000,
compared with the first half of 1999,  largely due to our  acquisitions  of TCI,
MediaOne,  and AGNS, partially offset by the impact of Concert.  Excluding these
items,  costs of services  and products  increased  slightly due to higher costs
associated with our growing  wireless  subscriber base and wireless  network and
increased costs to support growth in outsourcing contracts. These increases were
partially  offset  by  cost  control  initiatives  and  a  lower  provision  for
uncollectible receivables in Consumer and Business Services.

                                        Three Months          Six Months
                                       Ended June 30,       Ended June 30,
                                       2000      1999       2000      1999
Dollars in Millions
Selling, general and administrative  $3,110    $3,461     $6,399    $6,618

Selling,  general and  administrative  (SG&A)  expenses  decreased  10.1% in the
second quarter of 2000,  compared with the second quarter of 1999.  Increases to
second  quarter  2000  SG&A  expenses  as a  result  of the  MediaOne  and  AGNS
acquisitions were essentially  offset by the impact of the formation of Concert.
The  decrease  was  primarily  the result of cost  control  initiatives  such as
headcount reductions, and a larger pension credit in 2000, primarily driven by a
higher pension trust asset base resulting  from  increased  investment  returns.
These decreases were partially offset by an increase in expenses associated with
our growing wireless subscriber base.

<PAGE>
                                                         AT&T Form 10-Q - Part I

SG&A expenses  decreased  3.3% for the six months ended June 30, 2000,  compared
with the same period of 1999.  Excluding the impacts of the TCI, AGNS, and Media
One  acquisitions as well as the formation of Concert,  SG&A expenses  decreased
approximately  6%, compared with the first six months of 1999. This decrease was
primarily  the  result  of  cost  control   initiatives,   including   headcount
reductions,  and a larger pension credit in 2000,  primarily  driven by a higher
pension trust asset base  resulting  from increased  investment  returns.  These
decreases were partially  offset by an increase in expenses  associated with our
growing wireless subscriber base and our other growth businesses.

                                        Three Months          Six Months
                                       Ended June 30,       Ended June 30,
                                       2000      1999       2000      1999
Dollars in Millions
Depreciation and other amortization  $1,697    $1,546     $3,263    $2,850

Depreciation  and  other  amortization  expenses  increased  9.8% in the  second
quarter of 2000,  compared with the second quarter of 1999.  Increases to second
quarter 2000  depreciation  and other  amortization  expenses as a result of the
MediaOne  and AGNS  acquisitions  were  essentially  offset by the impact of the
formation of Concert.  For the first six months of 2000,  depreciation and other
amortization  expenses  increased  14.5%  compared  with the first six months of
1999. Excluding the impact of the TCI, AGNS and MediaOne acquisitions as well as
the formation of Concert, depreciation and other amortization expenses increased
approximately  10% for the six months  ended June 30,  2000.  These  quarter and
year-to-date  increases were due to the increased  asset base resulting from the
continued infrastructure investment.  Capital expenditures were $3.6 billion for
the quarter ended June 30, 2000, bringing  year-to-date  capital expenditures to
$6.5 billion.  We continue to focus the vast majority of our capital spending on
our growth businesses of wireless, broadband, data/IP and local voice.

                                        Three Months          Six Months
                                       Ended June 30,       Ended June 30,
                                       2000      1999       2000      1999
Dollars in Millions
Amortization of goodwill, franchise
  costs and other purchased
  intangibles                          $414      $358       $782      $542

Amortization  of goodwill,  franchise  costs,  and other  purchased  intangibles
increased 15.6% in the second quarter of 2000,  compared with the second quarter
of 1999. The increase was largely  attributable  to the  acquisitions of AGNS in
1999  and  MediaOne  on  June  15,  2000.  In the  first  six  months  of  2000,
amortization  of  goodwill,  franchise  costs  and other  purchased  intangibles
increased 44.2% compared with the first six months of 1999, largely attributable
to the acquisitions of TCI and AGNS in 1999 and MediaOne in 2000.

AT&T  also  has  amortization  of  goodwill   associated  with   nonconsolidated
investments  recorded as a reduction of other income.  This totaled $113 million
and $152  million in the second  quarters  of 2000 and 1999,  respectively,  and
totaled  $233  million  and $192  million  for the first  half of 2000 and 1999,
respectively.

                                        Three Months          Six Months
                                       Ended June 30,       Ended June 30,
                                       2000      1999       2000      1999
Dollars in Millions
Net restructuring and other charges    $  -      $(29)      $773      $702

<PAGE>
                                                         AT&T Form 10-Q - Part I

During the second  quarter of 2000,  no  restructuring  and other  charges  were
recorded.  For the  second  quarter  of 1999,  such  charges  netted to a pretax
benefit of $29  million.  The  benefit  included a $68  million  pretax net gain
primarily related to the exit of certain joint ventures that would have competed
directly  with Concert.  Also  included was an $11 million  pretax gain from the
settlement of pension  obligations  from AT&T's voluntary  retirement  incentive
program offer.  Partially offsetting these gains was a $50 million pretax charge
related to a contribution agreement entered into by Broadband to satisfy certain
liabilities of Phoenixstar, Inc. (formerly Primestar, Inc.).

Net  restructuring  and other  charges for the six months  ended June 30,  2000,
totaled  $773  million,  which had an  approximate  $0.14 impact on earnings per
diluted share. The charge included  restructuring and exit costs of $682 million
relating to actions  across many of our business  units and  includes  severance
costs associated with about 6,200 employees. These actions were primarily driven
by the company's continuing efforts to streamline operations and reduce costs by
$2 billion by the end of the year.  Also  recorded in the six months  ended June
30, 2000, was a $91 million  charge related to the mandated  disposition of AT&T
Communications (U.K.) Ltd. (Comms U.K.), which would have competed directly with
Concert.

In the first half of 2000,  we also  recorded  $62 million of network  lease and
other contract  termination costs associated with penalties  incurred as part of
notifying   vendors  of  the  termination  of  these  contracts.   Additionally,
restructuring and exit costs included $144 million of benefit  curtailment costs
associated  with  employee  separations  as part of these  exit  plans.  We also
recorded an $18 million asset  impairment  charge  related to the  write-down of
unrecoverable  assets in certain  businesses  in which the carrying  value is no
longer supported by future cash flows.

As a result of our merger with  MediaOne and as part of our objective to benefit
from the synergies  created by this merger,  we will record further  charges for
exit and separation plans in the second half of the year.

Net  restructuring  and other  charges for the six months  ended June 30,  1999,
totaled  $702  million,  which had an  approximate  $0.22 impact on earnings per
diluted share. The charge included a pretax in-process  research and development
charge of $594 million related to the TCI acquisition, a $128 million pretax net
charge  primarily  related to the exit of certain joint ventures that would have
competed  directly with Concert and a $50 million  pretax charge  related to the
Phoenixstar  agreement noted above. These charges were partially offset by a $70
million pretax gain related to the settlement of pension  obligations for former
employees who accepted AT&T's voluntary retirement incentive program offer.

The $594  million  in-process  research and  development  charge  reflected  the
estimated fair value of research and development projects at TCI, as of the date
of the acquisition,  which had not yet reached technological feasibility or that
had no  alternative  future  use.  Although  there are  technological  issues to
overcome  to  successfully   complete  the  acquired  in  process  research  and
development,  we believe we are on track for successful completion. The projects
identified  related to  efforts to offer  voice  over  Internet  Protocol  (IP),
product-integration  efforts for advanced set-top devices,  cost-savings efforts
for cable  telephony  implementation  and  in-process  research and  development
related to At Home  Corporation  (Excite@Home).  We expect to test IP  telephony
equipment  for field  deployment,  begin  field  trials  related to our  product
integration efforts for set-top devices,  and test and deploy devices related to
our telephony cost reductions by the end of 2000.

<PAGE>
                                                         AT&T Form 10-Q - Part I

                                        Three Months          Six Months
                                       Ended June 30,       Ended June 30,
                                       2000      1999       2000      1999
Dollars in Millions
Operating Income                     $3,267    $2,913     $5,669    $5,029

Operating  income  increased  12.1% in the second quarter of 2000, and increased
12.7% for the first  half of 2000,  primarily  due to  operational  efficiencies
within  Business  Services  and  Wireless  Services as well as  corporate  staff
functions,  and a higher pension credit in 2000. The  year-to-date  increase was
partially offset by the acquisition of TCI.  Operating income margin  (operating
income as a percent of revenue)  was 20.1% for the second  quarter and 17.6% for
the first half of the year compared with 18.5% and 16.8% in the comparable  1999
periods.

                                        Three Months          Six Months
                                       Ended June 30,       Ended June 30,
                                       2000      1999       2000      1999
Dollars in Millions
Other income (expense)                 $119      $(40)      $415      $121

Other income  (expense)  increased  $159 million in the second  quarter of 2000,
compared  with  the  second   quarter  of  1999.   The  increase  was  primarily
attributable to higher interest income, greater gains on sales of businesses and
investments,  and equity  earnings from Concert.  These increases were partially
offset by greater distributions on quarterly trust preferred  securities,  which
were issued in June of 1999.

Other  income  (expense)  increased  $294  million  for the first  half of 2000,
compared with the first half of 1999. The increase was primarily attributable to
greater gains on sales of businesses and investments, higher interest income and
equity earnings from Concert.  These  increases were partially  offset by higher
losses on other equity investments,  including Excite@Home partially as a result
of  the  inclusion  of a full  six  months  of  results  in  2000,  and  greater
distributions on quarterly trust preferred  securities which were issued in June
of 1999.

                                        Three Months          Six Months
                                       Ended June 30,       Ended June 30,
                                       2000      1999       2000      1999
Dollars in Millions
Earnings before interest and
  taxes (EBIT), excluding LMG        $3,386    $2,873     $6,084    $5,150

EBIT,  excluding LMG, increased 17.8% for the second quarter and increased 18.1%
for the first half of 2000.  The EBIT  growth was  impacted by gains on sales of
businesses and  investments,  our  investments in  Excite@Home  and  Cablevision
Systems Corp.  (Cablevision) and net restructuring and other charges.  Excluding
these  items,  EBIT  increased  21.2%  and  18.5%  for the  second  quarter  and
year-to-date  periods,  respectively.  The  improvement  was  primarily  due  to
operational   efficiencies  which  resulted  in  higher  operating  income,  and
increased other income.

<PAGE>
                                                        AT&T Form 10-Q - Part I

                                        Three Months          Six Months
                                       Ended June 30,       Ended June 30,
                                       2000      1999       2000      1999
Dollars in Millions
Equity earnings (losses) from
  Liberty Media Group                  $267     $(543)    $1,209     $(601)

Equity earnings from Liberty Media Group were $267 million in the second quarter
of 2000,  compared  with losses of $543  million in the  year-ago  quarter.  The
increase was primarily due to a gain associated with the acquisition of Flextech
p.l.c.  (Flextech) by Telewest  Communications  plc  (Telewest)  reflecting  the
difference between the carrying value of LMG's interest in Flextech and the fair
value of the Telewest  securities  received in the merger.  Equity earnings from
LMG for the six months ended June 30, 2000,  were $1,209  million  compared with
losses of $601  million in 1999.  In  addition to the gain  associated  with the
Flextech acquisition, the increase in earnings for the six months ended June 30,
2000,  was also impacted by a gain  associated  with the  acquisition of General
Instrument  Corporation  (General  Instrument)  by  Motorola,   Inc.  (Motorola)
reflecting  the  difference  between  the  carrying  value of LMG's  interest in
General Instrument and the fair value of the Motorola securities received in the
merger.

                                        Three Months          Six Months
                                       Ended June 30,       Ended June 30,
                                       2000      1999       2000      1999
Dollars in Millions
Interest expense                       $623      $493     $1,212      $695

Interest expense increased 25.8% in the second quarter of 2000 compared with the
second  quarter of 1999. The increase was primarily due to a higher average debt
balance as a result of our June 15, 2000, acquisition of MediaOne and due to the
issuance  of $3  billion  in notes in July 1999 and  another $3 billion in March
2000.

Interest  expense  increased  74.2%  for the six  months  ended  June 30,  2000,
compared with the six months ended June 30, 1999. The increase was primarily due
to a higher  average debt balance as a result of our March 1999  acquisition  of
TCI and our June 2000 acquisition of MediaOne.

                                        Three Months          Six Months
                                       Ended June 30,       Ended June 30,
                                       2000      1999       2000      1999
Dollars in Millions
Provision for income taxes             $996      $792     $1,364    $1,791

The provision for income taxes  increased  $204 million in the second quarter of
2000,  compared  with the  second  quarter  of 1999.  The  effective  tax  rate,
excluding  Liberty Media Group,  for the quarter was 36.1%, up from 33.3% in the
second  quarter of 1999.  During the second quarter of 1999, a change in the net
operating loss utilization tax rules resulted in a $75 million  reduction in the
income tax  provision.  Excluding the benefit of this change,  the effective tax
rate in the second quarter of 1999 was 36.4%.

<PAGE>
                                                         AT&T Form 10-Q - Part I

The provision for income taxes for the six months ended June 30, 2000, decreased
$427 million  compared  with the same period in 1999.  The  effective  tax rate,
excluding  Liberty  Media Group,  for the six months  ended June 30,  2000,  was
28.0%,  down from 40.2% for the first six months of 1999.  In 2000 the effective
tax rate was impacted by the exchange with Cox Communications,  Inc. (Cox) of an
entity  owning  certain  cable  systems  and other  assets  for AT&T  stock (Cox
transaction),  which was  tax-free,  and the  benefit  of the  write-off  of the
related  deferred  tax  liability.  During  1999,  AT&T  recorded an  in-process
research and  development  charge which was not tax  deductible.  Excluding  the
impacts of the Cox transaction,  the in-process research and development charge,
and the change in the net operating loss  utilization  tax rules,  the effective
income tax rate was 36.9% for both  six-month  periods  ended June 30,  2000 and
1999.

                                        Three Months          Six Months
                                       Ended June 30,       Ended June 30,
                                       2000      1999       2000      1999

AT&T Common Stock Group earnings
per AT&T common share:
  Basic                               $0.54    $ 0.50      $1.08    $ 0.90
  Diluted                             $0.53    $ 0.49      $1.07    $ 0.88
AT&T Wireless Group earnings per
AT&T common share:
  Basic and diluted                   $0.06         -      $0.06    $    -
Liberty Media Group earnings (loss)
 per share:
  Basic and diluted                   $0.10    $(0.21)     $0.47    $(0.24)


As reported,  diluted EPS  attributable  to AT&T Common Stock Group grew 8.2% to
$0.53 in the second  quarter 2000,  compared with the second  quarter 1999.  The
increase was primarily due to improved  operating  income in the second  quarter
2000, as a result of margin improvements, and higher other income. The increases
were partially  offset by the second quarter 1999 benefit of a change in the net
operating loss utilization tax rules.

As reported,  diluted EPS  attributable to AT&T Common Stock Group grew 21.6% to
$1.07 in the six months ended June 30, 2000,  compared with the six months ended
June 30, 1999. The increase was primarily due to improved  operating  income,  a
lower  provision  for taxes and higher other  income.  These  improvements  were
partially  offset by higher  average shares  outstanding in 2000  reflecting the
impact of shares issued for the TCI and MediaOne acquisitions.

Included in EPS for the second quarter are the following items:
 ..Losses of $0.05 in the second  quarter of 2000 and $0.04 in the second quarter
  of 1999  reflecting the earnings  impact of our investments in Excite@Home and
  Cablevision.
 ..Net gains on  sales and other of $0.01 in the second quarter of 2000 and $0.02
  in the second quarter of 1999;
 ..A $0.02  benefit in the second  quarter of 1999 from changes in tax rules with
  respect to the utilization of acquired net operating losses.

<PAGE>
                                                         AT&T Form 10-Q - Part I

Included  in EPS for the first  half of 2000 and 1999 are the  following  items:
 ..Net  restructuring  and other charges of  $0.14 in the first  half of 2000 and
  $0.22 in the first half of 1999;
 ..Losses of  $0.12 in the first half of 2000 and $0.06 in the first half of 1999
  reflecting  the  earnings  impact  of  our  investments  in  Excite@Home   and
  Cablevision;
 ..Net gains on sales and  other of $0.23 in the first  half of 2000 and $0.05 in
  the first half of 1999.
 ..A $0.02  benefit in the second  quarter of 1999 from changes in tax rules with
  respect to the utilization of acquired net operating losses.

The total  impact of the these  items was a decrease to diluted EPS of $0.04 and
$0.03 for the second quarter and first half of 2000,  respectively.  These items
had no  impact to  diluted  EPS for the  second  quarter  of 1999 and  decreased
diluted EPS by $0.21 for the first half of 1999.  We quantify  the impact on our
results of our investments in Excite@Home and Cablevision since these businesses
have financial  information publicly available and their results can be reviewed
independently of AT&T's results.

EPS excluding  these items was $0.57 per diluted share in the second  quarter of
2000, an increase of 16.4%,  or $0.08,  over the comparable  prior year quarter.
EPS  excluding  these items was $1.10 per diluted share for the six months ended
June 30, 2000, compared with $1.09 for the same period in 1999.

EPS for Liberty  Media Group was $0.10 per share for the three months ended June
30,  2000,  compared  with a loss of $0.21 per share for the three  months ended
June 30, 1999.  The increase in EPS for the second quarter of 2000, is primarily
due to a gain associated with the acquisition of Flextech by Telewest reflecting
the difference  between the carrying value of LMG's interest in Flextech and the
fair value of the Telewest  securities  received in the merger.  EPS for Liberty
Media Group was $0.47 per share for the first half of 2000, compared with a loss
of $0.24 per share in 1999. The first half of 2000 results include six months of
Liberty Media Group results  compared with four months in 1999,  reflecting  the
March 1999  acquisition of TCI by AT&T. In addition to the gain  associated with
the Flextech acquisition,  the increase in EPS for the six months ended June 30,
2000,  was also impacted by a gain  associated  with the  acquisition of General
Instrument  Corporation  (General  Instrument)  by  Motorola,   Inc.  (Motorola)
reflecting  the  difference  between  the  carrying  value of LMG's  interest in
General Instrument and the fair value of the Motorola securities received in the
merger.

SEGMENT RESULTS

In support of the  services we provide,  we segment our results by the  business
units that support our primary lines of business:  Business  Services,  Consumer
Services,  Wireless  Services and  Broadband.  A fifth  category,  Corporate and
Other,  includes  corporate staff  functions,  the elimination of  inter-segment
business  as well as the  results  of  international  operations  and  ventures.
Although not a segment, we also discuss the results of LMG.

The discussion of segment results includes  revenue;  earnings,  including other
income,  before  interest and taxes (EBIT);  earnings,  including  other income,
before interest,  taxes,  depreciation and  amortization,  and minority interest
(EBITDA);  total assets;  and capital  additions.  The  discussion of EBITDA for
Wireless  Services and  Broadband  is modified to exclude  other  income.  Total
assets for each segment  include all assets,  except  intercompany  receivables.
Prepaid pension assets and  corporate-owned  or leased real estate are generally

<PAGE>
                                                         AT&T Form 10-Q - Part I

held at the  corporate  level and  therefore  are included in the  Corporate and
Other group. Shared network assets are allocated to the segments and reallocated
each January, based on two years of volumes.  Capital additions for each segment
include capital expenditures for property, plant and equipment,  acquisitions of
licenses, additions to nonconsolidated investments, increases in franchise costs
and additions to internal-use software.

EBIT is the primary  measure used by AT&T's chief  operating  decision makers to
measure  AT&T's  operating  results  and to measure  segment  profitability  and
performance.  AT&T  calculates  EBIT as operating  income plus other income.  In
addition,  management also uses EBITDA as a measure of segment profitability and
performance,  and is  defined as EBIT plus  depreciation  and  amortization  and
minority  interest.  Interest and taxes are not factored into the  profitability
measure used by the chief operating decision makers; therefore, trends for these
items  are  discussed  on a  consolidated  basis.  Management  believes  EBIT is
meaningful to investors  because it is used by AT&T's chief  operating  decision
makers  and  provides a measure  of return on total  capitalization.  We believe
EBITDA is meaningful to investors as a measure of each  segment's  liquidity and
is utilized by our chief operating decision makers. In addition, we believe that
both EBIT and EBITDA allow  investors a means to evaluate the financial  results
of each segment in relation to AT&T.  Our  calculation of EBIT and EBITDA may or
may not be consistent  with the  calculation  of these  measures by other public
companies.  EBIT and EBITDA should not be viewed by investors as an  alternative
to  generally  accepted  accounting  principles  (GAAP)  measures of income as a
measure of performance or to cash flows from operating,  investing and financing
activities  as a measure of  liquidity.  In addition,  EBITDA does not take into
account changes in certain assets and liabilities that can affect cash flow.

Our existing segments reflect certain  managerial  changes since the publication
of our 1999 annual  results.  All prior  period  results  have been  restated to
reflect these changes.

To provide comparability,  we normalize revenue to reflect the impact of certain
1999 and 2000  transactions.  For  example,  when we normalize  for Concert,  we
remove the revenue associated with  businesses/customers  contributed to Concert
from  1999  results.  The  acquisitions  of  TCI,  AGNS,  MediaOne  and  certain
international  divestments are normalized as if those  acquisitions/dispositions
occurred  January 1, 1999.  Finally,  certain  2000  Broadband  cable  swaps are
normalized in 1999 results as if those swaps happened on the corresponding  date
in 1999.

BUSINESS SERVICES
Our Business Services segment offers a variety of global communications services
including long distance, local and data and Internet Protocol (IP) networking to
small and medium-sized  businesses,  large domestic and multinational businesses
and government agencies. Business Services is also a provider of voice, data and
IP transport to service resellers  (wholesale  services).  Also included in this
segment is AT&T  Solutions,  which is composed of the Solutions  outsourcing and
network  management  business unit and the internal AT&T Information  Technology
Services unit.

<PAGE>
                                                         AT&T Form 10-Q - Part I

                                  For the Three        For the Six
                                  Months Ended         Months Ended
                                    June 30,             June 30,
Dollars in Millions             2000       1999      2000       1999
External revenue             $ 6,965     $6,571   $13,923    $12,856
Internal revenue                 182        193       360        356
Total revenue                  7,147      6,764    14,283     13,212

EBIT                           1,612      1,435     3,137      3,027
EBITDA                         2,546      2,269     4,930      4,601

OTHER ITEMS

Capital additions            $ 1,392     $1,669    $2,652     $2,581

                             At June 30,        At December 31,
                                2000                 1999
Total assets                 $32,569              $32,010


REVENUE
Business Services revenue increased $383 million, or 5.7%, in the second quarter
of 2000,  and increased  $1,071  million,  or 8.1%,  for the first six months of
2000, compared with the prior year.  Normalized for the 1999 acquisition of AGNS
and the impact of Concert,  revenue  increased 4.0% and 5.0% for the quarter and
year-to-date  periods,  respectively.  The  increases  for both the  quarter and
year-to-date  periods were driven primarily by growth in data/IP and outsourcing
services, partially offset by a decline in voice services.

Normalized  data/IP  services  revenue  grew at a  mid-teens  rate  for both the
quarter and year-to-date  periods led by continued growth in frame relay, IP and
high-speed  private line  services.  IP services,  which  include AT&T  WorldNet
services and Virtual Private Network Services (VPN), grew  approximately 50% for
both the three and  six-month  periods ended June 30, 2000, as compared with the
same periods in 1999. On a combined basis,  packet  services  (frame relay,  ATM
(Asynchronous  Transfer Mode) and IP) grew nearly 50% for the quarter and nearly
45% for the first half of 2000, compared with the same periods in 1999.

AT&T Solutions outsourcing revenue, normalized for the acquisition of AGNS, grew
23.2% in the second  quarter of 2000, and grew 23.9% for the first six months of
2000,  compared with the same periods in the prior year.  These  increases  were
primarily  due to growth from new  contract  signings and add-on  business  from
existing clients. During the quarter, AT&T Solutions signed four new outsourcing
deals with an aggregate  contract value of  approximately  $600 million over the
life of the contract.

Voice revenue,  normalized  for the impact of Concert and the AGNS  acquisition,
was down  slightly  for both the quarter and  year-to-date  periods,  as pricing
declines outpaced  increases in volumes,  which grew at a low-teens rate for the
quarter and a mid-teens rate for the year.  Business  services revenue continues
to shift to higher growth products such as data/IP and outsourcing, resulting in
a decline in long distance voice revenue as a percent of total revenue.  Revenue
associated with 800 business,  for example,  is shifting from voice to IP as the
e-business industry expands.

As a component of voice revenue,  local revenue grew  approximately  20% and 25%
for the quarter  and  year-to-date  periods,  respectively.  Revenue  growth was
negatively  impacted,  in both the  quarter  and  year-to-date  periods,  by the
settlement of public utility  commission  rulings.  AT&T's  integrated  business

<PAGE>
                                                         AT&T Form 10-Q - Part I

local  operations added 300 thousand access lines in the second quarter bringing
total access lines in service as of June 30, 2000, to almost 2.0 million. During
the quarter, we refined the way we count access lines to more accurately reflect
the total number of lines carrying local AT&T Digital Link traffic  through 4ESS
switches.  On-net buildings totaled 5,913 at June 30, 2000, a 4.7% increase over
June 30, 1999.

EBIT/EBITDA
EBIT  increased  $177  million,  or 12.4%,  in the second  quarter of 2000,  and
increased  $110 million,  or 3.6%, in the first half of 2000,  compared with the
same prior year periods.  EBITDA increased $277 million, or 12.2%, in the second
quarter of 2000, and increased $329 million, or 7.2%, in the first half of 2000,
compared  with the same prior  year  periods.  Excluding  a first  quarter  2000
restructuring  charge of $93 million,  EBIT increased 6.7% and EBITDA  increased
9.2% in the first half of 2000,  compared  with the same  periods  of 1999.  The
quarterly  and  year-to-date  increases  were  primarily  due to revenue  growth
combined with continued cost  reductions,  partially offset by the impact of the
customers  contributed to Concert. The earnings impact of our equity interest in
Concert is reported within Corporate and Other.

OTHER ITEMS
Capital  additions  decreased $277 million,  or 16.6%,  to $1,392 million in the
second  quarter of 2000 compared with the second  quarter of 1999.  The decrease
was primarily  driven by reduced capital  expenditures on plant,  property,  and
equipment  associated with long distance voice services.  However, for the first
half of 2000,  capital  additions  increased  $71  million,  or 2.7%,  to $2,652
million  compared with the first half of 1999. The increase was primarily driven
by additions to plant, property and equipment for our local network and AGNS.

Total assets  increased  $559 million,  or 1.7%, to $32,569  million at June 30,
2000,  compared with December 31, 1999. The increase was primarily  driven by an
increase  in  accounts  receivable  due to  higher  revenue  in our  outsourcing
business and timing of cash  receipts.  In  addition,  increases in internal use
software  contributed to the increase in assets.  These increases were partially
offset  by a  decrease  in plant,  property,  and  equipment  as a result of the
contribution  of assets to Concert  combined with  depreciation  for the period,
offset in part by capital expenditures.

CONSUMER SERVICES
Our Consumer Services segment provides a variety of any-distance  communications
services  including  long  distance,  local toll  (intrastate  calls outside the
immediate local area) and Internet access to residential customers. In addition,
Consumer Services provides transaction services such as prepaid calling-card and
operator-handled  calling  services.  Local  phone  service is also  provided in
certain areas.

<PAGE>
                                                         AT&T Form 10-Q - Part I

                                  For the Three        For the Six
                                  Months Ended         Months Ended
                                    June 30,             June 30,
Dollars in Millions             2000       1999      2000       1999
Revenue                       $4,984     $5,479   $10,043    $10,949
EBIT                           1,852      1,842     3,571      3,693
EBITDA                         1,987      2,029     3,857      4,073

OTHER ITEMS

Capital additions             $   74      $ 120   $   128    $   208

                             At June 30,        At December 31,
                                2000                 1999
Total assets                  $5,301              $ 6,279


REVENUE

Consumer  Services  revenue  decreased  9.0% in the second  quarter of 2000, and
declined  8.3% for the first  half of 2000,  compared  with the same  periods in
1999. Normalized for the impact of Concert, revenue decreased 7.2% in the second
quarter  and  declined  6.4% for the  first  half of the  year as long  distance
calling volumes  continued to decline at a high  single-digit  rate during these
periods.  These results reflect the ongoing  competitive  nature of the consumer
long distance  industry,  which has resulted in pricing  pressures and a loss of
market share.  Also negatively  impacting  revenue was product  substitution and
market migration away from direct dial wireline and calling card services to the
rapidly  growing  wireless  services.  We  expect  competition  to  continue  to
negatively impact Consumer Services revenue.  Also,  revenue growth for Consumer
Services will be negatively impacted by the elimination of per-line charges that
AT&T pays for  residential  customers  since  AT&T  bills  these  charges to its
customers.

EBIT/EBITDA
EBIT was up 0.5%  and  EBITDA  was  down  2.0% in the  second  quarter  of 2000,
compared  with the same  period of 1999.  For the first  half of the year,  EBIT
decreased 3.3% and EBITDA decreased 5.3%, compared with the same period in 1999.
EBIT and EBITDA  continue to be  negatively  impacted by the decline in revenue,
however reflecting our cost control initiatives, EBIT and EBITA margins continue
to  improve.  The EBIT  margin was 37.1% and the EBITDA  margin was 39.9% in the
second  quarter  of 2000,  compared  with an EBIT  margin of 33.6% and an EBITDA
margin  of 37.0%  for the same  period in 1999.  EBIT and  EBITDA  include a $96
million  restructuring  charge  for the first half of 2000,  and  include a $153
million  gain on the sale of Language  Line  Services in the first half of 1999.
Excluding these items,  the EBIT and EBITDA margins improved to 36.5% and 39.4%,
respectively,  for the  first  half of 2000,  compared  with  32.3%  and  35.8%,
respectively,  for the same period in 1999,  due  primarily  to our cost control
initiatives.

OTHER ITEMS
Capital additions  declined $46 million,  or 38.4%, to $74 million in the second
quarter of 2000, compared with the second quarter of 1999. For the first half of
2000, capital additions decreased $80 million, or 38.3%, compared with the first
half of 1999.  These  decreases  were  primarily  attributable  to lower capital
expenditures   associated   with  our  consumer  long   distance   business  and
internal-use software.

<PAGE>
                                                         AT&T Form 10-Q - Part I

Total assets  decreased  $978 million,  or 15.6%,  to $5,301 million at June 30,
2000, compared with December 31, 1999,  primarily due to a decrease in property,
plant  and  equipment  as a result  of the  contribution  of  certain  assets to
Concert,  coupled  with  depreciation  expense  during the period.  In addition,
accounts receivable declined as a result of lower revenue.

WIRELESS SERVICES
Our  Wireless  Services  segment  offers  wireless  voice and data  services and
products  to  customers  in our 850  megahertz  (cellular)  and  1900  megahertz
(Personal  Communications  Services,  or PCS)  markets.  Wireless  Services also
includes certain  interests in partnerships and affiliates that provide wireless
services  in the United  States  and  internationally,  aviation  communications
services, and fixed wireless. Fixed wireless provides high-speed Internet access
and  any-distance  voice services using wireless  technology to residential  and
small business customers.

                                     For the Three        For the Six
                                     Months Ended         Months Ended
                                       June 30,             June 30,
Dollars in Millions                 2000       1999      2000       1999
Revenue                          $ 2,477     $1,878   $ 4,675     $3,440
EBIT                                 335        125       446         74
EBITDA excluding other income        508        321       909        505

OTHER ITEMS
Capital additions                $ 1,364     $  670   $ 2,754     $  860

                               At June 30,        At December 31,
                                  2000                 1999
Total assets                    $28,782              $23,312


REVENUE
Wireless Services revenue increased $599 million, or 31.9%, to $2,477 million in
the second quarter of 2000,  compared with the first quarter of 1999,  including
growth in services revenue of 32.7% to $2,240 million.  Revenue increased $1,235
million,  or 35.9%,  to $4,675 million in the first half of 2000,  compared with
the first half of 1999,  including growth in services revenue of 38.3% to $4,232
million.  Total  revenue grew 29.4% for the quarter and 31.1% for the first half
of the year,  adjusted to exclude Vanguard  Cellular  Systems,  Inc., for months
prior  to May  2000  to  correlate  results  with  1999,  due to  the  May  1999
acquisition of Vanguard.  The growth reflects the continued successful execution
of AT&T's  wireless  strategy  of  targeting  and  retaining  specific  customer
segments,  expanding  the  national  wireless  footprint,  focusing  on  digital
service,  and  offering  simple rate plans.  This has resulted in an increase in
consolidated  subscribers  and an increase in average  monthly  revenue per user
(ARPU).  Equipment  revenue grew 25.2% to $237 million in the second  quarter of
2000,  and grew 16.6% to $443 million for the first half of 2000,  compared with
the respective prior year periods.

AT&T continues to experience strong growth in wireless subscribers. Consolidated
subscribers  grew to 11.7 million at June 30, 2000,  representing an increase of
33.8%  over  the  prior  year  quarter,   including  approximately  1.2  million
subscribers associated with the completed acquisitions of our remaining interest
in CMT Partners (which owned wireless  properties in the San Francisco Bay area)

<PAGE>
                                                         AT&T Form 10-Q - Part I

and Wireless One Network, L.P. (which owned wireless properties in northwest and
southwest Florida). Net consolidated wireless subscriber additions in the second
quarter  totaled  532,000,  a 14.2% increase over the prior year quarter.  Total
subscribers,  including  partnership  markets  in  which  AT&T  does  not  own a
controlling interest, were nearly 14 million at the end of the second quarter, a
22.3% increase over the prior year quarter. This includes  approximately 450,000
subscribers  associated  with the  acquisition of American  Cellular in February
2000.  AT&T's average monthly churn rate in the second quarter of 2000, was 2.7%
compared with 2.3% in the second  quarter of 1999, and 2.9% in the first quarter
of  2000.  AT&T's  average  monthly  churn  in the  first  half of 2000 was 2.8%
compared with 2.5% in the first half of 1999.

EBIT/EBITDA EXCLUDING OTHER INCOME
EBIT increased $210 million, or 166.2%, to $335 million in the second quarter of
2000,  and increased $372 million to $446 million in the first half of the year,
compared  with the same prior year  periods.  The  increases  were impacted by a
second  quarter 2000 gain of $95 million on the sale of  Celumovil  and a second
quarter 1999 gain of $88 million on the sale of WOOD-TV.  Excluding these gains,
EBIT  improved  $203 million to $240  million for the quarter and improved  $365
million to $351 million for the first half of the year. The improvement for both
periods  was  primarily  the result of revenue  growth and  expense  leveraging,
primarily  off-network  roaming expenses,  as well as higher other income due to
interest income on the initial public offering  proceeds  attributed to Wireless
Group.  The reduction in  off-network  expenses  reflects  continued  efforts to
migrate more minutes onto AT&T's  wireless  network,  as well as  reductions  in
intercarrier  roaming rates.  These were partially offset by increased  customer
acquisition  and customer care costs, as well as higher  information  technology
costs associated with growth in the subscriber base.

EBITDA,  excluding  other  income,  increased  $187 million,  or 58.5%,  to $508
million in the second quarter of 2000, and increased $404 million,  or 80.1%, to
$909 million for the first six months of the year,  compared with the same prior
year periods.  The improvement  for both periods was primarily  driven by higher
revenue and an improving cost structure.

OTHER ITEMS
In the second  quarter of 2000,  capital  additions  increased  $694  million to
$1,364 million  compared with the same quarter of 1999. For the first six months
of 2000,  capital additions  increased $1,894 million to $2,754 million compared
with the first six months of 1999.  These  increases  were  primarily  driven by
capital  expenditure on capacity  upgrades and  improvements to network quality.
Also  contributing  to the increase in capital  additions was our  investment in
American Cellular in the first quarter of 2000.

Total assets increased $5,470 million,  or 23.5%, to $28,782 million at June 30,
2000,  compared  with  December 31, 1999.  The increase was primarily due to the
acquisition  of our remaining  interest in CMT Partners and our  acquisition  of
Wireless  One Network,  L.P.,  which  resulted in increases to licensing  costs,
goodwill,  property,  plant and  equipment and other  assets.  In addition,  the
increase  in  property,  plant and  equipment  was also the  result  of  capital
expenditures in support of the continued expansion and build out of our wireless
network, partially offset by depreciation expense for the period.

BROADBAND
Our Broadband  segment offers a variety of services  through our cable broadband
network,  including  traditional  analog video and new services  such as digital
video service, high-speed data service and telephony service.

<PAGE>
                                                         AT&T Form 10-Q - Part I

                                  For the Three        For the Six
                                  Months Ended         Months Ended
                                    June 30,             June 30,
Dollars in Millions              2000       1999      2000       1999
Revenue                      $  1,717     $1,480   $ 3,274    $ 1,984
EBIT                             (542)      (526)     (553)    (1,187)
EBITDA excluding other income     389        266       739       (126)

OTHER ITEMS

Capital additions            $    986     $  838   $ 2,330    $ 1,148

                              At June 30,        At December 31,
                                 2000                 1999
Total assets                 $123,091              $56,536

The results for Broadband include MediaOne since June 15, 2000.  Therefore,  the
three months and six months ended June 30, 2000,  include 2 weeks of  operations
for MediaOne,  while the comparable  periods for 1999 do not include any results
of MediaOne.  In addition,  the first half of 2000 includes a full six months of
TCI  results,  while the first  half of 1999  includes  only four  months of TCI
results reflecting the March 1999 acquisition.

REVENUE
Broadband's  revenue increased $237 million, or 15.9%, for the second quarter of
2000, and increased $1,290 million,  or 65.0%, for the six months ended June 30,
2000,  compared with the same periods of last year.  The increase in revenue was
primarily  due  to  the  inclusion  of  MediaOne   results  since  the  date  of
acquisition,  a basic cable rate  increase,  higher  revenue  from new  services
(digital video,  high-speed data and telephony) and higher advertising  revenue.
These increases were partially offset by the impact of net dispositions of cable
properties.  In addition,  revenue for the six months  ended June 30, 2000,  was
impacted by the acquisition of TCI in March of 1999. Revenue, normalized for the
MediaOne  acquisition and adjusted for the net disposition of cable  properties,
increased  10.5% in the second  quarter of 2000 compared with the second quarter
of 1999.  Revenue for the first half of 2000, on this same basis and  normalized
for the TCI  acquisition,  increased  9.4%  compared  with the same  prior  year
period.

Broadband  ended  the  second  quarter  of 2000 with 16.1  million  basic  cable
customers,  passing  approximately  27.9  million  homes,  more than 2.2 million
digital-video  customers,  approximately 689,000 high-speed data customers,  and
provided telephony service to nearly 224,000 customers.

EBIT/EBITDA EXCLUDING OTHER INCOME
EBIT was a deficit of $542 million for the quarter ended June 30, 2000, compared
with a deficit of $526 million in 1999.  Excluding  the impact of our  ownership
interest in Cablevision and Excite@Home in both periods,  certain gains in 2000,
and  restructuring  and other  charges in 1999,  EBIT for the second  quarter of
2000, was a deficit of $194 million, a 16.5% improvement over the same period of
1999. This increase was due to higher revenue,  lower stock appreciation  rights
expense and increased  gains on sales of businesses and  investments,  partially
offset by higher expenses associated with high-speed data and telephony services
as well as increased programming and depreciation  expenses.  In addition,  EBIT
was  negatively  impacted by  MediaOne.  EBIT for the six months  ended June 30,
2000, was a deficit of $553 million compared with a deficit of $1,187 million in
1999.  Excluding  the  impact  of our  ownership  interest  in  Cablevision  and
<PAGE>
                                                         AT&T Form 10-Q - Part I

Excite@Home in both periods,  certain gains in 2000 and  restructuring and other
charges in 2000 and 1999,  EBIT was a deficit of $273 million for the first half
of 2000,  compared  with a deficit of $224 million for the first half 1999.  The
decrease  was  due to  higher  expenses  associated  with  high-speed  data  and
telephony services as well as increased  programming and depreciation  expenses.
Offsetting  these  decreases to EBIT was higher  revenue and increased  gains on
sales of businesses and investments.

EBITDA,  excluding  other income,  for the second  quarter was $389 million,  an
increase of 46.6%  compared with the second quarter of 1999.  EBITDA,  excluding
other income,  for the six months ended June 30, 2000, was $739 million compared
with a deficit of $126 million for the same period of 1999.  Excluding  the 2000
and 1999  restructuring  and other  charges,  EBITDA,  excluding  other  income,
increased  23.4% in the second quarter of 2000, and increased 45.1% in the first
half of 2000.  These  increases are due to higher  revenue and the impact of the
MediaOne  acquisition,  partially  offset by  higher  expenses  associated  with
high-speed data and telephony  services as well as increased  programming costs.
In addition,  EBITDA,  excluding  other income,  was  favorably  impacted in the
second quarter and first half of 2000 by lower stock appreciation rights expense
and by the inclusion of a full six months of TCI, respectively.

OTHER ITEMS
Capital  additions  were $986 million in the second  quarter of 2000, and $2,330
million for the six months ended June 30, 2000,  comprised  primarily of capital
expenditures  directed towards the launch of new services as well as spending on
the upgrade of cable plants.  Capital  additions also included  contributions to
various  nonconsolidated   investments.  The  significant  increase  in  capital
additions in the first half of 2000,  compared with 1999, reflects the timing of
the TCI acquisition in March of 1999.

Total  assets were  $123,091  million at June 30,  2000,  compared  with $56,536
million at December 31, 1999.  The increase is due to the MediaOne  acquisition,
partially offset by decreased investments and franchise costs as a result of the
exchange of certain cable systems and other assets with Cox for AT&T stock,  and
the disposition of our investment in Lenfest.

CORPORATE AND OTHER
This group reflects  corporate  staff  functions and elimination of transactions
between  segments  as  well  as the  results  of  international  operations  and
ventures.

                                  For the Three        For the Six
                                  Months Ended         Months Ended
                                    June 30,             June 30,
Dollars in Millions             2000       1999      2000       1999
Revenue                      $  (104)    $  151   $  (153)     $ 284
EBIT                             129         (3)     (517)      (457)
EBITDA                           248         99      (247)      (266)

OTHER ITEMS
Capital additions            $    87     $  131   $   192      $ 466

                             At June 30,        At December 31,
                                2000                 1999
Total assets                 $14,526              $12,809

<PAGE>
                                                         AT&T Form 10-Q - Part I

REVENUE
Revenue  for  Corporate  and  Other   primarily   includes  the  elimination  of
inter-segment  revenue of  negative  $185  million (a  decrease  of $11  million
compared  with  second  quarter  of 1999)  and  revenue  from our  international
operations and ventures of $70 million (a decline of $264 million  compared with
the second quarter of 1999). The  international  operations and ventures revenue
decrease  was largely due to the revenue  impact of  businesses  contributed  to
Concert  and due to lower  revenue  associated  with the  divestment  of certain
international  businesses.  Corporate  and  Other  revenue,  normalized  for the
divestments of international businesses and for the impact of Concert, increased
7.4% in the second quarter of 2000, compared with the second quarter of 1999.

For the first half of 2000,  revenue for Corporate and Other primarily  included
the elimination of inter-segment revenue of negative $363 million (a decrease of
$2  million  compared  with  the  first  half of  1999)  and  revenue  from  our
international operations and ventures of $184 million (a decline of $440 million
compared with the first half of 1999). The international operations and ventures
revenue  decrease  was largely due to the impact of  businesses  contributed  to
Concert  and due to lower  revenue  associated  with the  divestment  of certain
international  businesses.  Corporate  and  Other  revenue,  normalized  for the
divestments of international businesses and for the impact of Concert, increased
13.1% in the first half of 2000, compared with the first half of 1999.

EBIT/EBITDA
EBIT for  Corporate  and Other  increased  $132  million to $129  million in the
second  quarter of 2000,  compared with the second  quarter of 1999.  EBITDA for
Corporate and Other increased $149 million to $248 million in the second quarter
of 2000 compared with the second  quarter of 1999.  The increases were primarily
due to a larger  pension  credit in 2000  primarily  driven by a higher  pension
trust asset base resulting from increased  investment  returns,  higher interest
income in 2000 and $31 million of earnings from our equity  interest in Concert.
These   increases  were  partially   offset  by  the  second  quarter  1999  net
restructuring  and other  charge  benefits.  In  addition,  EBIT was  negatively
impacted by increased distributions on trust preferred securities.

EBIT for Corporate  and Other  declined $60 million to a deficit of $517 million
for the six months ended June 30, 2000,  compared with the six months ended June
30, 1999.  EBITDA for Corporate  and Other  improved $19 million to a deficit of
$247  million  for the six months  ended June 30,  2000,  compared  with the six
months  ended June 30, 1999.  Excluding  net  restructuring  charges in 2000 and
1999,  EBIT  increased  $450  million to $51 million and EBITDA  increased  $529
million to $321 million.  The  improvement was primarily due to a larger pension
credit in 2000  primarily  driven by a higher pension trust asset base resulting
from increased  investment returns,  higher interest income in 2000, earnings of
$66 million from our equity  interest in Concert,  cost control  initiatives and
gains in 2000 on the sale of miscellaneous investments.  These improvements were
partially offset by distributions on trust preferred securities.

OTHER ITEMS
Capital additions for corporate and other declined $44 million, or 33.4%, to $87
million,  in the second quarter of 2000, compared with the same quarter of 1999.
For the first six months of 2000,  capital additions  declined $274 million,  or
58.8%, to $192 million  compared with the first six months of 1999. This decline
reflects  decreased  investment in  international  nonconsolidated  subsidiaries
primarily as a result of the  disposition of certain  non-strategic  investments
during 1999.

<PAGE>
                                                         AT&T Form 10-Q - Part I

Total assets  increased $1,717 million during the first half of 2000, to $14,526
million  primarily  due to our  investment  in  Concert,  including  the  assets
contributed by Business Services and Consumer Services.

LIBERTY MEDIA GROUP RESULTS
Liberty  Media Group (LMG)  produces,  acquires and  distributes  entertainment,
educational and informational programming services through all available formats
and  media.  LMG is  also  engaged  in  electronic  retailing  services,  direct
marketing  services,   advertising  sales  relating  to  programming   services,
infomercials and transaction  processing.  Equity earnings (losses) from Liberty
Media Group were $267 million for the three months ended June 30, 2000, and were
$(543) million in the comparable 1999 period.  Equity earnings (losses) from LMG
were $1,209 million for the first half of 2000, compared with $(601) million for
the period from the date of acquisition  through June 30, 1999.  These increases
are primarily due to gains associated with the acquisition of companies that LMG
has an investment in. The gains  represent the  difference  between the carrying
value of LMG's interest in the acquired company and the fair value of securities
received in the merger. In particular,  Flextech was acquired by Telewest in the
second quarter of 2000 and General  Instruments  was acquired by Motorola in the
first quarter of 2000.

LIQUIDITY

                                                             For the Six
                                                             Months Ended
                                                               June 30,
Dollars in Millions                                         2000        1999
CASH FLOWS:
  Provided by operating activities                      $  5,300    $  3,355
  Used in investing activities                           (26,867)    (16,390)
  Provided by financing activities                        20,969      10,293

EBITDA                                                  $ 10,505    $  8,748

Net cash provided by operating activities increased $1,945 million for the first
six months  ended  June 30,  2000,  compared  with the prior  year  period.  The
increase was primarily driven by a decrease in cash tax payments  resulting from
the first  quarter  1999 tax  payment on the gain on the 1998 sale of  Universal
Card  Services  Inc.  and  an  increase  in   operational   earnings   excluding
depreciation and amortization, partially offset by higher accounts receivable.

Net cash used by investing  activities  for the first half of 2000  increased by
$10,477 million compared with the first half of 1999. The increase was primarily
driven by the  increased  acquisitions  in 2000,  particularly  MediaOne and CMT
Partners,  and increased capital expenditures in 2000 primarily  attributable to
growth in Wireless and Broadband,  partially  offset by the contribution of $5.5
billion of cash to LMG in 1999.

During  the  first  half of 2000,  net cash  provided  by  financing  activities
increased by $10,676 million  compared with the first half of 1999. The increase
was primarily due to higher  proceeds  from  issuance of  short-term  debt,  the
proceeds from the initial  public  offering of AT&T Wireless  Group shares and a
decrease in the  purchase of treasury  stock.  These  increases  were  partially
offset by lower proceeds from the issuance of long-term debt and the issuance of
redeemable  securities  in 1999.  At June 30,  2000,  we had  $25.7  billion  in
short-term  notes  outstanding,  the majority of which was commercial  paper and
debt with an  original  maturity  of one year or less.  We expect to finance the
repayment of this  short-term  debt through a  combination  of other  short-term
borrowings and our long-term borrowing capacity.

<PAGE>
                                                         AT&T Form 10-Q - Part I

Earnings,  including other income,  before  interest,  taxes,  depreciation  and
amortization,  and  minority  interest  (EBITDA)  is a measure of our ability to
generate  cash flow and  should  be  considered  in  addition  to,  but not as a
substitute for, other measures of financial  performance  reported in accordance
with generally accepted  accounting  principles.  EBITDA was $10,505 million for
the first  half of the year,  an  increase  of 20.1% over the first half of last
year.  The  EBITDA  growth  was  impacted  by gains on sales of  businesses  and
investments,   our   investments  in  Excite@Home   and   Cablevision   and  net
restructuring and other charges.  Excluding these items, EBITDA increased $1,920
million,  or 20.6%,  over the first  half of last year to $11,243  million.  The
improvement  was primarily due to  operational  efficiencies  which  resulted in
higher operating income, and increased other income.

EURO CONVERSION
On January 1, 1999,  certain  members of the European  Union  established  fixed
conversion  rates between their  existing  currencies  and the European  Union's
currency (Euro).  The transition period is anticipated to extend between January
1, 1999,  and July 1, 2002.  We have  assessed the impact of the  conversion  on
information-technology  systems,  currency  exchange rate risk,  derivatives and
other financial instruments,  continuity of material contracts as well as income
tax and accounting issues. We do not expect the conversion during the transition
period to have a material impact on our consolidated financial statements.

FINANCIAL CONDITION
Total assets increased  $74,158  million,  or 43.8%, to $243,564 million at June
30, 2000,  compared with  December 31, 1999,  primarily due to the impact of the
MediaOne  acquisition.  Other significant activity included AT&T's investment in
Concert,  consisting of $1.7 billion of property, plant and equipment and a loan
of $1.0 billion; increased accounts receivable attributable to transactions with
Concert; and an increase in licenses resulting from wireless acquisitions.

Total liabilities  increased  $41,735 million,  or 50.0%, to $125,123 million at
June 30, 2000,  compared with December 31, 1999,  primarily due to the impact of
the MediaOne acquisition. In addition, $7.7 billion of commercial paper and $5.5
billion of one-year notes were issued in the first half of the year.

Total  shareowners'  equity  increased  $31,236  million,  or 39.6%, to $110,163
million at June 30, 2000,  compared  with  December  31, 1999.  The increase was
primarily  driven  by the  issuance  of  AT&T  common  stock  for  the  MediaOne
acquisition as well the issuance of the AT&T Wireless Group tracking stock which
generated $10.3 billion in net proceeds.

The ratio of total debt to total capital,  excluding LMG, (debt divided by total
debt and equity of AT&T,  excluding  LMG) was 43.3% at June 30,  2000,  compared
with 44.3% at December 31, 1999. The equity portion of this calculation includes
the  convertible  quarterly  trust  preferred  securities.  The  improvement was
primarily driven by a higher equity base associated with the MediaOne merger and
the AT&T Wireless Group initial public  offering,  largely offset by an increase
in  borrowings  primarily  associated  with the  MediaOne  merger as well as the
issuance of commercial  paper and notes during the first half of 2000.  Included
in debt is approximately  $5.5 billion of notes,  which are exchangeable into or
collateralized  by Vodafone ADRs we own.  Excluding this debt, the ratio of debt
to total capital at June 30, 2000, was 40.8%.

RISK MANAGEMENT
We are exposed to market risk from changes in interest,  foreign exchange rates,
and  equity  prices.  On a limited  basis we use  certain  derivative  financial

<PAGE>
                                                         AT&T Form 10-Q - Part I

instruments,   including  interest  rate  swaps,  options,  forwards  and  other
derivative contracts to manage these risks. We do not use financial  instruments
for trading or  speculative  purposes.  All  financial  instruments  are used in
accordance with board-approved policies.

Assuming a 10% downward shift in interest rates at June 30, 2000, the fair value
of unhedged debt would have increased by approximately $1.1 billion.

NEW ACCOUNTING PRONOUNCEMENTS
In June 1998, the Financial  Accounting  Standards Board (FASB) issued Statement
of Financial  Accounting  Standard  (SFAS) No. 133,  "Accounting  for Derivative
Instruments and Hedging  Activities."  Among other provisions,  it requires that
entities  recognize  all  derivatives  as either  assets or  liabilities  in the
statement of financial  position and measure  those  instruments  at fair value.
Gains and losses resulting from changes in the fair values of those  derivatives
would be accounted  for  depending on the use of the  derivative  and whether it
qualifies for hedge accounting. The effective date for this standard was delayed
via the issuance of SFAS No. 137. The effective date for SFAS No. 133 is now for
fiscal  years  beginning  after  June  15,  2000,  though  earlier  adoption  is
encouraged and retroactive application is prohibited.  For AT&T, this means that
the standard must be adopted no later than January 1, 2001.

In June 2000, the FASB issued SFAS No. 138,  "Accounting for Certain  Derivative
Instruments  and Certain  Hedging  Activities"  as an amendment to SFAS No. 133.
This  statement  provides  clarification  with regard to certain  implementation
issues  under  SFAS No.  133 on  specific  types  of  hedges.  We are  currently
assessing  the impact of SFAS Nos. 133 and 138 on AT&T,  including an assessment
of the impact resulting from our merger with MediaOne.

In December 1999, the Securities and Exchange Commission issued Staff Accounting
Bulletin No. 101 (SAB No. 101), "Revenue  Recognition in Financial  Statements."
The SEC  delayed the date by which  registrants  must apply the  accounting  and
disclosures  described in SAB No. 101 until the fourth  quarter of 2000.  We are
currently assessing the impact of SAB No. 101 on our results of operations.

<PAGE>
                                                        AT&T Form 10-Q - Part II

                           PART II - OTHER INFORMATION

Item 4.  Submission of Matters to a Vote of Security-Holders.

(a)      The  annual meeting of the  shareholders of the registrant was  held on
         May 24, 2000.

(b)      Election of Directors*
                                                  Votes
                                                (Millions)
      Nominee                             For               Withheld

C. Michael Armstrong                     2,643                 31
Kenneth T. Derr                          2,643                 31
M. Kathryn Eickhoff                      2,643                 31
Walter Y. Elisha                         2,642                 32
George M. C. Fisher                      2,643                 31
Donald V. Fites                          2,641                 32
Amos B. Hostetter                        2,644                 30
Ralph S. Larsen                          2,644                 30
John C. Malone                           2,643                 31
Donald F. McHenry                        2,642                 32
Michael I. Sovern                        2,641                 32
Sanford I. Weill                         2,642                 32
John D. Zeglis                           2,643                 31

(c)      Holders  of  common shares  voted  at  this  meeting on  the  following
         matters, which were set forth in the registrant's proxy statement dated
         March 27, 2000.

(i)      Ratification of Auditors
                                     For         Against         Abstain

Ratification of the firm            2,651            9              13
of PricewaterhouseCoopers         (99.65%)       (.35%)
as the independent auditors
to audit the registrant's
financial statements for
the year 2000.(*)

(ii)     Directors  Proposals that the  Shareholders approve an  increase in the
         number of authorized common shares.(**)

                                     For         Against         Abstain

AT&T and Liberty Media Combined     2,465          188              20
                                  (74.42%)      (5.68%)          (.61%)

Liberty Media as a separate class    139            3             .09
                                  (83.71%)      (1.96%)          (.05%)
 *Percentages  are based on the total  common  shares  voted.  Approval  of this
proposal required a majority of the common shares voted.
 **Percentages  are  based  on  total  number   of   outstanding  common shares.
Approval of  this proposal  required  a majority of (i)  the  outstanding common
shares  of  AT&T  Common Stock  and  Liberty  Media Group  Class A  and  Class B
Tracking  Stock voting on  a  combined basis  as  well as (ii)  the  outstanding
shares of Liberty Media Group Class A and Class B Tracking Stock voting together
as a single class.

<PAGE>
                                                        AT&T Form 10-Q - Part II



(iii)    Shareholder Proposals

                                              Broker
                               For     Against     Abstain    Non-Votes

That the Company adopt         115       1,921         105          534
a position of political      (5.63%)    (94.37%)
non-partisanship.(*)


That the Company discontinue   153       1,943          45          534
all bonuses and severance    (7.29%)    (92.71%)
contracts. (*)


That the Company create         63       1,971         106          534
a Stockholder Matching       (3.09%)    (96.91%)
Gift Program.(*)


That the Company freeze        155       1,918          67          534
executive pay during         (7.47%)    (92.53%)
periods of significant
downsizing.(*)

That the Company prepare       111       1,960          69          534
a report outlining financial (5.36%)    (94.64%)
benefits received from
government sources.(*)

That the Company provide        58       2,003          79          534
each Director with a         (2.80%)    (97.20%)
resident analyst.(*)

That the Company develop       172       1,900          68          534
employee satisfaction        (8.32%)    (91.68%)
standards that determine
executive compensation.(*)

*Percentages  are based on the  total  common  shares  voted.
 Approval  of this  proposal required a majority of the common shares voted.


<PAGE>

                                                        AT&T Form 10-Q - Part II


Item 6. Exhibits and Reports on Form 8-K.

(a)           Exhibits

              Exhibit Number

              12       Computation of Ratio of Earnings to Fixed Charges

              27       Financial Data Schedule

              99.1     Liberty  Media Group financial  results for the three and
                       six-month periods ended June 30, 2000 and 1999
              99.2     AT&T  Wireless Group  financial results and  Management's
                       Discussion  and  Analysis for  the  three  and  six-month
                       periods ended June 30, 2000 and 1999

              99.3     AT&T Wireless Group combined statements of operations and
                       combined  balance  sheets  for  the  three-month  periods
                       ended March 30, 2000 and 1999

(b)           Reports on Form 8-K

              Form 8-K dated April 24, 2000 was filed  pursuant to Item 5 (Other
              Events)  and  Item  7  (Financial   Statements  and   Exhibits) on
              April 24, 2000. Form 8-K dated May 2, 2000 was filed  pursuant  to
              Item 5 and Item 7 on May 5, 2000.  Form   8-K dated June 15,  2000
              was filed  pursuant  to Item 5 and Item 7 on June 15, 2000.


<PAGE>
                                                        AT&T Form 10-Q - Part II




                                   SIGNATURES

Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.

                                   AT&T Corp.



                                   /s/  N. S. Cyprus
                                   ------------------------------
                                   By:  N. S. Cyprus
                                        Vice President and Controller
                                       (Principal Accounting Officer)



Date: August 14, 2000



<PAGE>

                                                                  AT&T Form 10-Q



                                  Exhibit Index

Exhibit
Number

12                          Computation of Ratio of Earnings to Fixed Charges

27                          Financial Data Schedule

99.1                        Liberty Media Group financial results for the three
                            and six-month periods ended June 30, 2000 and 1999

99.2                        AT&T Wireless Group financial results and
                            Management's Discussion and Analysis for the three
                            and six-month periods ended June 30, 2000 and 1999

99.3                        AT&T Wireless Group combined statements of
                            operations and combined balance sheets for the three
                            month periods ended March 30, 2000 and 1999