The increase in the numbe of shares sought by American Telephone & Telegraph Co. was reported inaccurately in Thursday's Business & Finance Section. AT&T has asked its shareholders for a 33 percent increase in authorized common stock, from 900 million to 1.2 billion shares.
American Telephone & Telegraph Co. will have to work out a special agreement with the Internal Revenue Service when it is forced to spin off its 22 local operating companies to make sure the local firms are not suddenly burdened with a billion-dollar tax bill, AT&T's annual report revealed yesterday.
In addition, AT&T asked shareholders in its proxy statement to approve a 33 percent increase in authorized common stock, from 900,000 shares to 1.2 million. "The directors believe the increase in the authorized number of common shares will provide the flexibility needed to meet financing requirements in the years immediately ahead," the proxy statement said in urging stockholders to vote for the increase. The annual meeting will be held April 21 in Baltimore.
In a footnote to its financial statement, AT&T said an agreement with IRS will have to be drawn up to make sure the local companies' need for cash would not increase dramatically, possibly leading to higher local rates.
Otherwise, local concerns would have to pay in one lump sum the billion dollars in taxes that they had been deferring--according to equipment depreciation schedules--in their purchase of telephone equipment from Western Electric Co.