JANUARY 15, 2001

              BREAK-UP PLAY

              AT&T is worth appreciably more than its current stock price of $24, based
              on a break-up analysis by Merrill Lynch analyst Adam Quinton. He pegs the
              company's value at over $33 a share. Opportunity?

               Consumer Services 
                                                            
               Estimated 2001 EBITDA (blns) 
                                                     $5.2 
               EBITDA Multiple 
                                                     2.5x 
               Consumer Services Value (blns) 
                                                     $13.1 
               Value Per AT&T Share 
                                                     $3.35 
               Business Services 
               Estimated 2001 EBITDA (blns) 
                                                     $9.2 
               EBITDA Multiple 
                                                     5.5x 
               Business Services Value (blns) 
                                                     $50.8 
               Value Per AT&T Share 
                                                    $12.99 
               AT&T Wireless 
               AT&T share holding (mlns)* 
                                                     1,810 
               AT&T Wireless (AWE) price 
                                                    $24.50 
               Wireless Value (blns) 
                                                    $44.10 
               AWE Value Per AT&T Share 
                                                    $11.30 
               AT&T Broadband 
               Estimated 2001 EBITDA (blns) 
                                                     $3.0 
               EBITDA Multiple (blns) 
                                                     15.0x 
               Broadband Value (blns) 
                                                     $44.3 
               Value Per AT&T Share 
                                                    $11.34 
                 
                 

               Other Assets & 
                                           Total 
                                                    Value Per 
               Interests 
                                       Value (blns) 
                                                  AT&T Share 
               Concert 
                                            $9.4 
                                                       $2.41 
               Japan Telecom 
                                             0.6 
                                                        0.17 
               Excite@Home Interest 
                                             0.6 
                                                        0.17 
               AT&T Canada 
                                             0.8 
                                                        0.19 
               Rogers Cantel 
                                             0.3 
                                                        0.09 
               Comcast 
                                             5.1 
                                                        1.30 
               Cablevision 
                                             4.1 
                                                        1.05 
               AT&T Latin America 
                                             0.3 
                                                        0.08 
               Vodafone 
                                             5.0 
                                                        1.27 
               Time Warner Entertainment 
                                            11.3 
                                                        2.89 
               Road Runner 
                                             0.5 
                                                        0.13 
               Microsoft 
                                             1.8 
                                                        0.47 
               Total Value of 
               Other Assets & Interests 
                                           $39.8 
                                                      $10.22 
               Total Enterprise Value (blns) 
                                          $192.1 
                                                       49.25 
               Less: Debt** 
                                            57.9 
                                                       14.80 
               Equity Value (blns) 
                                          $134.2 
                                                            
               Less: Liberty Media liability 
                                             0.8 
                                                        0.20 
               Less: @Home liability 
                                             2.7 
                                                        0.70 
               Adjusted Equity Value (blns) 
                                          $130.7 
                                                            
               Sum-of-the-Parts 
               Value Per AT&T Share 
                                           33.55 
                                                            
               *Excludes 178 million shares being sold to NTT DoCoMo 
               **Less $3.68 as a result of proceeds expected from the NTT DoCoMo
               transaction. 
               Source: Merrill Lynch