Exhibit 99-a
Strong Revenue, Wireless and Data Growth
Power SBC's Second-Quarter Performance
Total revenues rise 9.8 percent; 537,000 wireless customers added;
Diluted EPS of $0.56 versus $0.55 a year ago, before one-time items
SAN ANTONIO, July 20, 2000 - SBC Communications Inc. (NYSE: SBC) today
reported strong second-quarter revenue growth driven by its rapidly expanding
data communications and wireless operations.
Second-quarter revenues grew 9.8 percent to $13.2 billion. Diluted
earnings per share before one-time items were $0.56, compared with $0.55 during
the second quarter of 1999.
Highlights of SBC's second-quarter growth include:
o 38.2 percent growth in data revenues, to $1.8 billion.
o A 537,000 net gain in wireless customers, SBC's best quarter ever.
Domestic wireless subscriber revenues increased 30.6 percent, to $1.6
billion.
o 399,000 total Digital Subscriber Lines (DSL) in service at the end of
the quarter, including a net gain of 198,000 in the second quarter.
This is more than double the total added in the first quarter.
o 15.8 percent growth in equity income from international investments.
"We continue to execute our business plan with passion and purpose,
which is to completely transform SBC and its companies into a data-centric
business capable of becoming the only communications source our customers will
ever need," said Edward E. Whitacre Jr., chairman and CEO.
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"We are very pleased that the areas we invested in to drive growth for
SBC -- data, wireless, international and long distance -- are producing strong
results. We are solidly in the execution phase of our transition," Whitacre
said.
"Long distance is a great example. More than 150,000 people signed up
for long distance in the first eight business days after we launched the
service. Long-distance service allows us to strengthen existing customer
relationships, and it opens the door to more growth in data services as we build
on a brand that our customers know and trust."
In addition to long distance, SBC continues to make good progress in
other strategic areas including the company's wireless joint venture with
BellSouth, and the combination of its Internet operations with those of Prodigy.
"Completing the Prodigy transaction was another significant milestone in
SBC's strategy of becoming the premier provider of data communications and
Internet services - and the nation's leading provider of DSL," Whitacre said.
"Similarly, we're moving ahead rapidly toward completing our wireless joint
venture later this year. The transaction will help make SBC an even stronger
national leader in the wireless voice and data businesses."
"As previously announced, earnings growth this year will reflect
investments in high-growth opportunities, as well as the ongoing integration of
Ameritech," Whitacre said. "Our goal is to deliver double-digit revenue growth
and midteens earnings growth in 2001."
Additional second-quarter highlights:
o Data Services: Demand from business customers remains strong. During the
quarter, dedicated transport revenues increased 35.6 percent to more
than $1 billion, while switched transport and application services/data
communications solutions, which include applications, network
integration services and Internet services, grew 32 percent and 50.5
percent respectively compared with the second quarter of 1999.
Businesses' increasing need for speed, bandwidth, network management and
e-business solutions continued to fuel growth in data services during
the quarter.
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SBC and its Sterling Commerce subsidiary are working together to expand
activity in the business-to-business, small business and online security
segments. DSL growth also was strong as SBC added 198,000 DSL
subscribers compared with 86,000 in the first quarter of this year.
SBC is making good progress with Project Pronto, a $6 billion
investment to give SBC state-of-the-art networks to carry vast amounts
of data, as nearly 15 million customer locations are DSL-capable,
approaching the year-end goal of 18 million.
o Wireless: SBC's record 537,000 net gain of wireless customers during the
second quarter was 70 percent higher than the year-ago period. SBC took
several strong steps during the quarter to spur future wireless growth.
In June, SBC launched its Digital Edge USA(R), national calling plans,
among the country's most competitive nationwide flat-rate wireless
calling plans. SBC also announced that it plans to acquire wireless
systems covering a total population of 7.4 million in Seattle, Spokane,
Austin and other parts of Texas. SBC also is moving quickly to introduce
Wireless Application Protocol (WAP) services that bring wireless
Internet access to customers; the company plans to launch WAP in
California in August. SBC plans to finalize its joint venture with
BellSouth later this year; the joint venture will form a strong new
nationwide wireless competitor with more than 17 million customers.
International: SBC's international holdings continued to deliver strong
growth, driven by solid progress in wireless, wireline and data
services. SBC's international affiliates increased their number of
wireless subscribers 82.8 percent to more than 28.4 million during the
first half of this year, and have increased total revenues 42.5 percent
to $19.3 billion, including SBC's June 1999 investment in Bell Canada.
The outlook for international growth in data communications remains
strong. Pre-tax equity in net income from international investments
totaled $198 million during the second quarter, up nearly 16 percent
from year-ago results.
o Long Distance: SBC on June 30, 2000, won Federal Communications
Commission approval to offer long-distance service in Texas. On July 10,
2000, SBC began offering long-distance service in the $7.7 billion Texas
market through its Southwestern Bell Long Distance subsidiary to more
than 20 million business and residential customers in Texas. Initial
response to SBC's long-distance offering has been outstanding.
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More than 150,000 customers signed up for long distance during the eight
business days after the company launched the service. SBC plans to use
its success in Texas to help it enter the long-distance market in 11
more states in the company's traditional service area as part of the
company's goal of one day offering long distance coast-to-coast.
o National Expansion: During the second quarter, SBC accelerated its
efforts to expand into new metropolitan area markets beyond its
traditional regions and opened a multi-purpose national sales and
service center in Tampa to support the initiative. SBC recently
entered its first new markets and targets entry into nine new markets
this year, and a total of 30 new markets by year-end 2001, six months
faster than originally planned. The national expansion will give SBC
a local presence in 50 of the top U.S. markets and is targeted to add
an incremental $1 billion in revenue by 2002.
Results including one-time items
Including one-time items, SBC's reported net income for the second
quarter of 2000 was $1.85 billion, or $0.54 diluted earnings per share, compared
with $1.9 billion, or $0.56 per share, in the year-ago quarter.
Reported net income for the second quarter of 2000 includes the
following one-time items: settlement gains of approximately $80 million
primarily related to employees who terminated employment during 1999, and costs
of approximately $153 million associated with strategic initiatives and
adjustments resulting from the merger integration process with Ameritech.
Cautionary Language Concerning Forward-Looking Statements
Information set forth in this news release contains financial estimates and
other forward-looking statements that are subject to risks and uncertainties. A
discussion of factors that may affect future results is contained in SBC's
filings with the Securities and Exchange Commission. SBC disclaims any
obligation to update or revise statements contained in this news release based
on new information or otherwise.
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SBC Communications Inc. (www.sbc.com) is a global communications leader. Through
its subsidiaries' trusted brands - Southwestern Bell, Ameritech, Pacific Bell,
SBC Telecom, Nevada Bell, SNET and Cellular One - and world-class network, SBC's
subsidiaries provide local and long-distance phone service, wireless and data
communications, paging, high-speed Internet access and messaging, cable and
satellite television, security services and telecommunications equipment, as
well as directory advertising and publishing. In the United States, the company
currently has 61.2 million access lines, 12.2 million wireless customers and is
undertaking a national expansion program that will bring SBC service to an
additional 30 markets. Internationally, SBC has telecommunications investments
in more than 20 countries. With approximately 219,000 employees, SBC is the
13th-largest employer in the U.S., with annual revenues that rank it among the
largest Fortune 500 companies.
For more detailed information on SBC's second-quarter results, visit our website
at http://www.sbc.com/Investor/earnings.html.
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SBC Communications Inc.
Financial Summary and Comparisons
(dollars in millions, except per share amounts)
(unaudited)
-- SECOND-QUARTER RESULTS --
EXCLUDING ONE-TIME ITEMS: 2000 1999 CHANGE
------------------------- ---- ---- ------
Operating revenues $13,212 $12,035 9.8%
Operating expenses $10,097 $8,879 13.7%
Net Income $1,924 $1,910 0.7%
Diluted earnings per share $0.56 $0.55 1.8%
AS REPORTED
Operating revenues $13,211 $12,268 7.7%
Operating expenses $10,213 $9,041 13.0%
Net Income $1,851 $1,938 (4.5)%
Diluted earnings per share $0.54 $0.56 (3.6)%
Weighted average common
shares outstanding (in millions) 3,396 3,411 (0.4)%
Weighted average common shares
outstanding with dilution (in millions) 3,438 3,461 (0.7)%
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SBC Communications Inc.
Financial Summary and Comparisons
(dollars in millions, except per share amounts)
(unaudited)
-- SIX-MONTHS RESULTS --
EXCLUDING ONE-TIME ITEMS: 2000 1999 CHANGE
------------------------- ---- ---- ------
Operating revenues $25,784 $23,636 9.1%
Operating expenses $19,570 $17,545 11.5%
Income before cumulative effect of
accounting change $3,834 $3,617 6.0%
Diluted earnings per share before
cumulative effect of accounting change $1.12 $1.05 6.7%
AS REPORTED
Operating revenues $25,783 $24,080 7.1%
Operating expenses $19,709 $17,802 10.7%
Income before cumulative effect of
accounting change $3,673 $3,711 (1.0)%
Cumulative effect of accounting change,
net of tax 1 - $207 -
Net Income $3,673 $3,918 (6.3)%
Diluted earnings per share before
cumulative effect of accounting change $1.07 $1.07 -
Weighted average common
shares outstanding (in millions) 3,396 3,409 (0.4)%
Weighted average common shares
outstanding with dilution (in millions) 3,435 3,459 (0.7)%
1 Changes in directory accounting at Ameritech Corporation during the first
quarter of 1999.
