1885: New York-based AT&T, initially known as American Telephone & Telegraph Co., is incorporated as a wholly owned subsidiary of the American Bell Telephone Company. It provides long-distance service to local provider American Bell.
Early and mid-1900s: AT&T is legally a sanctioned and regulated monopoly with a stranglehold on almost all communications research, development and engineering.
1970s: Computers, new voice and data techniques, and wireless research begin refining the communications industry.
1974: The U.S. Justice Department files an antitrust case against AT&T, which the government claims has unfairly limited competition in long-distance service and phone equipment.
1982: AT&T settles the case by agreeing to divest itself of local operating companies.
1984: AT&T, the most widely held stock in the United States, gets broken into a new AT&T and seven independent regional telephone companies, or "Baby Bells."
1995: AT&T CEO Robert Allen says in a news conference, "It has become clear to me that for AT&T's business to take advantage of the incredible growth opportunities...it has to separate into smaller and more focused businesses." Result: the spinoff of Lucent Technologies and computer manufacturer NCR.
April 5, 1996: Lucent debuts on Wall Street, where its stock climbs 15 percent to $30 a share.
1996: Congress passes legislation to make it easier for carriers to compete with local phone monopolies. The Internet fuels demand for second and third phone lines, prompting Baby Bells to buy more equipment from Lucent and other gear providers.
Fiscal 1997: With demand for gear from competing phone companies, Lucent sales gain 13 percent.
Fall 1997: Time magazine lauds CEO Richard McGinn, who was in charge of Lucent's spinoff from AT&T, as a "smart, quick-thinking former history major who has turned Lucent into a telecommunications heavyweight and one of the biggest success stories of the 1990s."
Fiscal 1998: Revenue climbs 20 percent, while earnings jump 49 percent--an unheard-of leap for an Old Economy spinoff. Lucent outpaces overall revenue growth of 14 percent to 17 percent for the telecom-gear sector and steals market share from Motorola and Nortel Networks.
December 1998: Lucent shares are up eightfold from the IPO price, well ahead of the S&P 500.
Second quarter of 1999: Lucent announces a revenue increase of 6 percent for its first quarter of 1999, less than the anticipated 17 percent to 22 percent. Although earnings increased 26 percent, investors drive down shares 7 percent.
July 1999: Rising Lucent superstar Carly Fiorina resigns to become CEO of Hewlett-Packard.
1999: New competitors wrangle for Lucent's best customers, the phone companies. Cisco Systems targets Lucent clients. Start-ups specializing in optical networking court Internet carriers and other communications companies.
January 2000: After beating Wall Street expectations for 15 straight quarters, Lucent misses first-quarter earnings by 18 cents per share and reports a $1 billion drop in sales.
Winter 2000: Almost 90 percent of Lucent's $75 price per share is based on expectations of future profits--a percentage similar to those of dot-com start-ups where growth potential was large, but one that's unheard of for a former monopoly already making multibillion-dollar profits. The average Fortune 1,000 company has a future growth value (FGV) of 50 percent.
Fall 2000: After a long campaign by Lucent to reduce its dependence on former parent AT&T, analysts say the spinoff is booking too many foundering start-ups and extending financing to ailing phone companies. The company increases its reserves for bad debt. Lucent extends $6.7 billion in credit throughout fiscal 2000.
October 2000: Board members ax McGinn and replace him with former Chairman and CEO Henry Schacht. Schacht tells employees in a letter that "our issues are execution and focus, and they are fixable," but warns that job cuts will be forthcoming. He calls 2001 a "rebuilding year."
Fiscal fourth quarter of 2000: Lucent blames credit for "revenue recognition" problems, reducing revenue by $125 million after a sales team improperly extended credit to a customer and another $74 million after sales reps offered credit orally. It wipes away $452 million after distributors failed to resell or install equipment and another $28 million for shipping an incomplete system.
February 2001: Lucent secures $4.5 billion in loans to fund its business and avoid seeing its credit drop to junk status. The company restates fourth-quarter earnings and lays off 10,000 workers.
Feb. 21, 2001: Shareholders lambaste executives at their annual meeting in Orlando, Fla., in part for losing $395 million in the first quarter. "Since we're in Orlando, I would say Mickey or Goofy could have run this company better last year than our current board of directors," a shareholder gripes.
April 2001: Rumors of bankruptcy became so pervasive that the company refutes them with a press release.
May 6, 2001: Lucent CFO Deborah Hopkins resigns after one year, replaced by Frank D'Amelio, a 21-year AT&T and Bell Labs veteran.
May 14, 2001: Fortune says Lucent's directors comprise one of "America's worst boards" in the magazine's annual scathe-fest. "The board hasn't taken nearly enough blame for fiddling while Lucent burned in 2000, sending more than $200 billion in market value up in flames...The board itself is overpaid (directors get a $ 100,000 annual retainer, twice as much as that of Nortel's board and three times as much as Cisco's), overripe (only one director is under 60), clubbish (it has just six members, five less than the average S&P 500 firm), and staggered."
May 29, 2001: Lucent and Alcatel executives call off a potential merger of the two giants, a deal that was initially expected to be worth more than $32 billion.