SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): January 24, 1995
SOUTHERN NEW ENGLAND TELECOMMUNICATIONS CORPORATION
(Exact name of registrant as specified in its charter)
Connecticut 1-9157 06-1157778
(State or other (Commission (I.R.S. Employer
jurisdiction of File Number) Identification No.)
incorporation)
227 Church Street, New Haven, Connecticut 06510
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (203) 771-5200
Not Applicable
(Former name or former address, if changed since last report)
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Item 5. Other Events.
The registrant announced today that earnings for 1994 were $178 million
or $2.77 per share. This compares with 1993 earnings from continuing
operations of $161 million or $2.53 per share, excluding the 1993
restructuring charge, an extraordinary charge and accounting changes.
With those charges, the registrant recorded a net loss for 1993 of ($318)
million or ($4.99) per share.
Consolidated revenues and sales for 1994 rose 4 percent to $1,717 million.
On January 20, Standard & Poor's ("S&P") lowered its rating on the
registrant's senior unsecured debt to A plus from AA and commercial paper
rating to A-1 from A-1 plus. S&P affirmed its AA senior unsecured rating for
the registrant's wholly-owned subsidiary, The Southern New England Telephone
Company ("Telephone Company"). All ratings were removed from CreditWatch,
where they were placed on November 23, 1994 after the registrant announced
its plans to finance a proposed cellular telephone acquisition with debt.
S&P assigned a negative outlook to all long-term debt ratings expressing
concerns over the registrant's proposed $450 million cellular acquisition,
and the Telephone Company's capital requirements to fund the $4.5 billion
I-SNET fiber-optic network, regulatory uncertainty and rising competitive
pressures.
The news release providing the earnings announcement is filed as an
exhibit hereto and is incorporated herein by reference.
Item 7. Financial Statements, Pro forma Financial
Information and Exhibits.
Ex. 20 News release issued January 24, 1995.
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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.
SOUTHERN NEW ENGLAND
TELECOMMUNICATIONS CORPORATION
Dated: January 25, 1995 By: /s/ Madelyn M. DeMatteo
Madelyn M. DeMatteo
Secretary
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SOUTHERN NEW ENGLAND TELECOMMUNICATIONS CORPORATION
FORM 8-K
EXHIBIT INDEX
Exhibit
Number
20 News release issued January 24, 1995.
SNET
We go beyond the call.
227 Church Street News Release
New Haven, Connecticut 06506
January 24, 1995
FOR FURTHER INFORMATION CONTACT:
Jim Magrone
(203) 771-4662
SNET ANNOUNCES STRONG 1994 EARNINGS
Southern New England Telecommunications Corporation (NYSE:
SNG) announced today that earnings for 1994 were $178 million
or $2.77 per share. This compares with 1993 earnings from
continuing operations of $161 million or $2.53 per share,
excluding the 1993 restructuring charge, an extraordinary
charge, and accounting changes. With those charges, the
company recorded a net loss for 1993 of ($318) million or
($4.99) per share.
"1994 was a watershed year -- a time of pivotal change
for SNET. I am pleased with how far we have progressed in our
transformation from a traditional telephone company to
becoming a premier provider of communication, information, and
entertainment services," said Daniel J. Miglio, SNET chairman
and chief executive officer.
"We delivered four consecutive quarters of strong
earnings in 1994. We're building on our strengths with a
strategy to increase profitability by growing revenues and
cutting costs, by providing customers with unparalleled
service at competitive prices and by expanding into growth
areas where we have a competitive edge. We're expanding our
wireless business, one of the fastest-growing parts of
telecommunications, by acquiring cellular properties that will
increase our coverage area by 70 percent. The growth rate in
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our current wireless business has been awesome: we nearly
doubled the number of customers last year. We have also
initiated promising new businesses in long-distance and in
multimedia where we have been recognized as an industry
leader. We are building an information superhighway that will
reach all our customers in the next 14 years. The steps we
are taking during this time of revolutionary, industry change
are making SNET a successful player in bringing the advantages
of the information age to our customers while we continue to
build value for shareholders," he added.
Consolidated revenues and sales for 1994 rose 4 percent to
$1,717 million. Access lines in service for Southern New
England Telephone grew 2.3 percent versus a 1.4 percent growth
rate in 1993. The telephone company subsidiary also continued
to increase sales of premium services, primarily with such
products as Totalphone[SM] and SNET SmartLink[SM]. Interstate
minutes of use grew 6 percent.
SNET's other subsidiaries had an overall revenue increase
of 19 percent to $243 million led by the wireless business,
where the customer base in 1994 grew from 88,000 to 166,000.
In addition, SNET America, the company's long-distance
subsidiary, had strong revenue and customer growth for the
year.
Consolidated 1994 operating and maintenance expenses,
which excludes depreciation, were up 2 percent. Expenses in
the telephone subsidiary declined approximately $25 million
because of a decrease in employee-related expenses and other
cost-containment efforts. Expenses rose approximately $40
million for the company's other subsidiaries to support growth
in the wireless and long-distance businesses and for the
multimedia trial.
Higher depreciation rates and increased network investment
resulted in a 13 percent rise in depreciation and amortization
expense. Interest expense dropped 18 percent because of
reduced borrowing and savings from previous refinancings.
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For the fourth quarter of 1994, earnings were $42 million
or $0.65 per share. For 1993, earnings from continuing
operations before the extraordinary charge and without the
restructuring charge, were $35 million or $0.55 per share.
The net loss for fourth-quarter 1993 including these charges
was ($224) million, or ($3.51) per share.
Fourth-quarter 1994 revenues and sales were up 2 percent
to $436 million, compared with $427 million for the same
quarter in 1993. Operating and maintenance expenses dropped 2
percent to $249 million for the fourth quarter, compared with
$253 million for the same period in 1993. Telephone company
expenses for the quarter were down approximately $16 million,
and the company's other subsidiaries had an increase of $12
million. Depreciation and amortization expense rose 7 percent
over the fourth quarter of 1993. Interest expense was down 22
percent for the quarter.
SNET is an independent telecommunications company that
offers through its subsidiaries network and information-
management services and communications systems; in-state,
national, and international long-distance communications
services; directory publishing and advertising services; and
cellular mobile phone and paging services. SNET is building I-
SNET, Connecticut's broadband, information superhighway to
serve all its customers.
###
SNET
Preliminary Summary of Consolidated Results
For the Three Months Ended December 31
(in Millions Except Per Share Amounts)
(Unaudited)
For the 3 Months Ended Percent
December 31, Change
1994 1993
INCOME STATEMENT
Revenues and Sales $436.4 $426.5 2%
Costs and Expenses:
Operating and maintenance 248.9 253.3 (2)%
Provision for restructuring - 355.0
Depreciation and amortization 85.0 79.5 7%
Taxes other than income 13.7 15.3
Total Costs and Expenses 347.6 703.1
Operating Income (Loss) 88.8 (276.6)
Interest 17.7 22.6 (22)%
Income (Loss) from Continuing
Operations Before
Income Taxes 71.1 (299.2)
Income taxes (benefit) 29.5 (129.5)
Income (Loss) from
Continuing Operations 41.6 (169.7)
Discontinued operations - (10.3)
Income (Loss)Before
Extraordinary Charge 41.6 (180.0)
Extraordinary charge - (44.0)
Net Income (Loss) $ 41.6 $(224.0)
Weighted Average Common Shares
Outstanding (in thousands) 64,444 63,854
Earnings(Loss)Per Common Share:
Income (Loss) from
Continuing Operations $ .65 $ (2.66)
Discontinued operations - (.16)
Income (Loss) Before
Extraordinary Charge .65 (2.82)
Extraordinary charge - (.69)
Earnings (Loss) Per
Common Share $ .65 $ (3.51)
SNET
Preliminary Summary of Consolidated Results
For the Three Months Ended December 31
(in Millions Except Per Share Amounts)
(Unaudited)
For the 3 Months Ended Percent
December 31, Change
1994 1993
STATISTICS
Access Lines in Service 2,009 1,964 2%
Interstate Minutes of Use 1,760 1,654 6%
Dec. 31, Dec. 31,
1994 1993
BALANCE SHEET
Common Equity at Period End $952.8 $854.6
Book Value Per Common Share
at Period End $ 14.77 $ 13.38
Debt Ratio at Period End 51.0% 59.9%
SNET
Preliminary Summary of Consolidated Results
For the Years Ended December 31
(in Millions Except Per Share Amounts)
For the Years Ended Percent
December 31, Change
1994 1993
INCOME STATEMENT
Revenues and Sales $1,717.0 $1,653.6 4%
Costs and Expenses:
Operating and maintenance 957.8 943.3 2%
Provision for restructuring - 355.0
Depreciation and amortization 328.6 291.1 13%
Taxes other than income 56.2 60.6
Total Costs and Expenses 1,342.6 1,650.0
Operating Income 374.4 3.6
Interest 74.9 91.4 (18)%
Income (Loss) from Continuing
Operations Before
Income Taxes 299.5 (87.8)
Income taxes (benefit) 121.9 (44.2)
Income (Loss) from
Continuing Operations 177.6 (43.6)
Discontinued operations - (10.3)
Income (Loss) Before
Extraordinary Charge and
Accounting Changes 177.6 (53.9)
Extraordinary charge - (44.0)
Accounting changes - (220.2)
Consolidated Net Income(Loss) $ 177.6 $ (318.1)
Weighted Average Common Shares
Outstanding (in thousands) 64,209 63,692
Earnings(Loss)Per Common Share:
Income (Loss) from
Continuing Operations $ 2.77 $ (.68)
Discontinued operations - (.16)
Income (Loss) Before
Extraordinary Charge and
Accounting Changes 2.77 (.84)
Extraordinary charge - (.69)
Accounting changes - (3.46)
Earnings (Loss) Per
Common Share $ 2.77 $ (4.99)
Preliminary Summary of Consolidated Results
For the Years Ended December 31
(in Millions Except Per Share Amounts)
For the Years Ended Percent
December 31, Change
1994 1993
STATISTICS
Access Lines in Service 2,009 1,964 2%
Interstate Minutes of Use 6,917 6,522 6%
Dec. 31, Dec. 31,
1994 1993
BALANCE SHEET
Common Equity at Period End $ 952.8 $ 854.6
Book Value Per Common Share
at Period End $ 14.77 $ 13.38
Debt Ratio at Period End 51.0% 59.9%
