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): October 22, 1996
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 ("SNET") announced today that third quarter net income
for 1996 was $46 million compared with $41 million for the same period
last year. Earnings per share for the quarter were up 9 percent to $0.70
from $0.64 in the third quarter of 1995. Consolidated revenues and sales
for the third quarter were up 5 percent to $488 million.
SNET and The Woodbury Telephone Company ("Woodbury") also announced
today that they have reached an agreement in principle under which SNET
will acquire the remaining 63.5% of outstanding Woodbury commmon shares
not currently owned by SNET for an aggregate consideration of about $30.0
million. Under terms of the agreement, common shareholders of Woodbury
would exchange each outstanding Woodbury common share for an amount of
SNET common shares having a market value of $43.00 at the closing of the
transaction, subject to certain conditions. The transaction, which is
expected to qualify as a tax-free exchange under the Internal Revenue
Code, is expected to close by mid-1997.
The agreement is subject to the approval of the shareholders of Woodbury,
as well as the approvals of the Connecticut Department of Public Utility
Control, the Federal Communications Commission and the U.S. Department of
Justice.
The news releases providing these announcements are filed as exhibits
hereto and are incorporated herein by reference.
Item 7. Financial Statements, Pro forma Financial
Information and Exhibits.
Exhibit 20.1 News release issued October 22, 1996 announcing SNET third
quarter earnings.
Exhibit 20.2 News release issued October 22, 1996 announcing the
proposed acquisition of Woodbury by SNET.
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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: October 22, 1996 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
20.1 News release issued October 22, 1996 announcing SNET third
quarter earnings.
20.2 News release issued October 22, 1996 announcing the proposed
acquisition of Woodbury by SNET.
SNET News Release
227 Church Street
New Haven, Connecticut 06510
October 22, 1996
Analysts contact: Jim Magrone
(203) 771-4662
SNET ANNOUNCES EARNINGS PER SHARE GROWTH
OF 9 PERCENT FOR THE THIRD QUARTER
Southern New England Telecommunications Corporation
(SNET) -- (NYSE: SNG) -- announced today that third
quarter net income for 1996 was $46 million compared
with $41 million for the same period last year.
Earnings per share for the quarter were up 9 percent to
$0.70 from $0.64 in the third quarter of 1995.
"This is our 11th consecutive quarter of improved
earnings," said Daniel J. Miglio, SNET chairman and
chief executive officer.
He added, "In the most competitive telecommunications
market in the U.S., we are playing good defense and
good offense. Robust, profitable growth in our
interstate/international long-distance services
continued in the third quarter. We also launched
an Internet access service, which is proving to be quite
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popular. And we are entering new markets. We were
recently granted the nation's first, statewide cable-
television franchise and will be launching our
exciting, competitive product line early next year.
"Even as we move ahead with local competition, which
is continuing to unfold rapidly in Connecticut, I am
pleased that the 8th Circuit Court of Appeals granted
SNET along with the entire industry last week an
important partial stay of the FCC's Interconnection
Order. We took the industry lead on this issue, and
the result is that we will not be bound by unfair
national pricing guidelines while our appeal of the FCC
order is considered," he added.
Consolidated revenues and sales for the third
quarter were up 5 percent to $488 million. Wireline
revenues rose 5 percent to $394 million. Revenues more
than doubled from interstate and international long-
distance, while instate toll revenues declined 6 percent
because of discounted pricing plans and increasing
competition. Local-service revenues grew 5 percent,
reflecting a more than 4 percent increase in access
lines with strong growth in business services and
continued strong growth in second residential lines as
well as vertical services. In addition, access revenues
were up 3 percent. Wireless revenues increased 17
percent to $57 million on growth in the customer base of
29 percent. Information and Entertainment revenues were
flat at $46 million.
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Consolidated operating expenses were up 6 percent.
Wireline expenses increased 11 percent or $24 million,
reflecting strong demand, higher expenses to serve our
expanding interstate and international long-distance
customer base and increased marketing. Wireless
expenses declined as we successfully stemmed wireless
fraud. Further, there were transition costs in the
third quarter last year related to the July 1995
cellular acquisitions. Information and Entertainment
expenses were down in 1996, compared with 1995 when the
company was on the verge of expanding its video-dial-
tone trial, which was subsequently curtailed in favor
of a broad, statewide cable franchise.
Depreciation and amortization expenses were
relatively flat. Interest expense declined slightly.
SNET is a Connecticut-based telecommunications
company reaching beyond its traditional borders to
offer wireline, wireless and information and
entertainment services, including
local, national and international calling; mobile
communications; and publishing, information and
advertising. The company is building I-SNET,
Connecticut's broadband, information superhighway to
serve all its customers.
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SNET
Preliminary Summary of Consolidated Results
For the Three Months Ended September 30, 1996
(Dollars in Millions Except Per Share Amounts)
(Unaudited)
For the 3 Months Ended Percent
September 30, Change
1996 1995
INCOME STATEMENT
Revenues and Sales $488.2 $464.9 5%
Costs and Expenses:
Operating and maintenance 295.3 278.5 6%
Depreciation
and amortization 88.5 88.3
Taxes other than income 13.9 14.7 (5%)
Total Costs and Expenses 397.7 381.5 4%
Operating Income 90.5 83.4 9%
Interest 21.9 24.3 (10%)
Other Income, Net .4 5.5
Income Before Income Taxes 69.0 64.6 7%
Income taxes 23.2 23.3
Net Income $45.8 $41.3 11%
Weighted Average Common Shares
Outstanding (thousands) 65,606 64,957 1%
Earnings Per Share $0.70 $0.64 9%
STATISTICS
Access Lines in Service
(thousands) 2,145 2,056 4%
Interstate Minutes of Use
(millions) 1,985 1,817 9%
SNET
Preliminary Summary of Consolidated Results
For the Nine Months Ended September 30, 1996
(Dollars in Millions Except Per Share Amounts)
(Unaudited)
For the 9 Months Ended Percent
September 30, Change
1996 1995
INCOME STATEMENT
Revenues and Sales $1,450.0 $1,352.8 7%
Costs and Expenses:
Operating and maintenance 849.9 791.9 7%
Depreciation
and amortization 265.9 255.3 4%
Taxes other than income 41.4 42.5 (3%)
Total Costs and Expenses 1,157.2 1,089.7 6%
Operating Income 292.8 263.1 11%
Interest 67.2 61.3 10%
Other Income, Net 6.2 9.7
Income Before Income Taxes 231.8 211.5 10%
Income taxes 83.3 83.4
Net Income $148.5 $128.1 16%
Weighted Average Common Shares
Outstanding (thousands) 65,539 64,800 1%
Earnings Per Share * $2.27 $1.98 15%
STATISTICS
Access Lines in Service
(thousands) 2,145 2,056 4%
Interstate Minutes of Use
(millions) 5,890 5,420 9%
* Excluding 1995 special items announced previously, earnings
per share would have increased 8.1% from $2.10 in 1995.
SNET
Preliminary Summary of Consolidated Results
For the Three Months Ended September 30, 1996
(Dollars in Millions)
(Unaudited)
For the 3 Months Ended Percent
September 30, Change
1996 1995
REVENUES AND SALES
Wireline
Local Service $170.5 $161.8 5%
Network Access 94.4 91.8 3%
Intrastate Toll 62.1 66.4 (6%)
Interstate and
International Toll 28.9 12.0 141%
Premium Services and
Equipment Sales 26.9 26.2 3%
Other 11.1 18.1 (39%)
Total Wireline 393.9 376.3 5%
Wireless
Cellular 55.2 46.5 19%
Paging 1.5 1.9 (21%)
Total Wireless 56.7 48.4 17%
Information and Entertainment 46.0 45.6 1%
Other * (8.4) (5.4)
Total Revenues and Sales $488.2 $464.9 5%
OPERATING EARNINGS (EBITDA)
Wireline $135.7 $140.7 (4%)
Wireless 11.2 (4.5)
Information and Entertainment 30.0 24.3 23%
Other * 2.1 11.2
Total Operating Earnings $179.0 $171.7 4%
* Includes Real Estate and Holding Company
operations and eliminations.
SNET
Preliminary Summary of Consolidated Results
For the Nine Months Ended September 30, 1996
(Dollars in Millions)
(Unaudited)
For the 9 Months Ended Percent
September 30, Change
1996 1995
REVENUES AND SALES
Wireline
Local Service $503.7 $479.2 5%
Network Access 288.5 276.3 4%
Intrastate Toll 193.1 202.0 (4%)
Interstate and
International Toll 71.3 28.1 154%
Premium Services and
Equipment Sales 77.1 80.2 (4%)
Other 37.9 43.9 (14%)
Total Wireline 1,171.6 1,109.7 6%
Wireless
Cellular 156.0 110.8 41%
Paging 4.5 10.7 (58%)
Total Wireless 160.5 121.5 32%
Information and Entertainment 138.1 135.7 2%
Other * (20.2) (14.1)
Total Revenues and Sales $1,450.0 $1,352.8 7%
OPERATING EARNINGS (EBITDA)
Wireline $436.6 $416.9 5%
Wireless 23.4 (6.3)
Information and Entertainment 85.0 78.0 9%
Other * 13.7 29.8
Total Operating Earnings $558.7 $518.4 8%
* Includes Real Estate and Holding Company
operations and eliminations.
SNET
Preliminary Operating and Financial Statistics
(Unaudited)
Percent
At September 30, Change
1996 1995
Access Lines in Service
(thousands) 2,145 2,056 4%
Second Access Lines in Service
(thousands) 91 71 28%
Interstate & International Toll
Billed Telephone Numbers
(thousands) 616 240 157%
Cellular Subscribers 368,277 285,604 29%
Telephone Company
Wireline Employees 8,264 8,385 (1%)
Total Employees 9,511 9,718 (2%)
Shareholders' Equity
(millions) $440.8 $1,019.7 (57%)
Common Shares Outstanding
(thousands) 65,510 64,947 1%
Debt Outstanding (millions):
Short-term $187.3 $191.6 (2%)
Long-term $1,169.7 $1,182.5 (1%)
SNET
Preliminary Operating and Financial Statistics
(Unaudited)
For the 3 Months Ended Percent
September 30, Change
1996 1995
Minutes of Use (millions):
Interstate Access 1,985 1,817 9%
Intrastate Access 248 182 36%
Intrastate Message Volume (thousands):
Toll 97,559 99,274 (2%)
WATS 19,035 17,993 6%
Weighted Average Common Shares
Outstanding (thousands) 65,606 64,957 1%
For the 9 Months Ended Percent
September 30, Change
1996 1995
Minutes of Use (millions):
Interstate Access 5,890 5,420 9%
Intrastate Access 698 486 44%
Intrastate Message Volume (thousands):
Toll 302,084 295,364 2%
WATS 57,524 55,257 4%
Weighted Average Common Shares
Outstanding (thousands) 65,539 64,800 1%
SNET News Release
227 Church Street
New Haven, Connecticut 06510
October 22, 1996
For more information, please contact:
Kevin Moore Don Porter
SNET Woodbury Telephone
(203) 771-2136 (203) 262-0202
SNET To Acquire Remaining Woodbury Telephone Shares
Southern New England Telecommunications Corporation (SNET) --
(NYSE: SNG) -- and The Woodbury Telephone Company --
(NASDAQ OTC: WBTL) -- announced today that they have
reached an agreement in principle under which SNET will
acquire the remaining 63.5% of outstanding Woodbury
Telephone common shares not currently owned by SNET for an
aggregate consideration of about $30.0 million. As a
result, Woodbury Telephone will become a wholly-owned
subsidiary of SNET.
Under the terms of the agreement, common shareholders
of Woodbury Telephone would exchange each outstanding
Woodbury common share for an amount of SNET common shares
having a market value of $43.00 at the closing of the
transaction, subject to certain conditions. The transaction,
which is expected to qualify as a tax-free exchange under
the Internal Revenue Code, is expected to close by mid-1997.
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The agreement is subject to the approval of the
shareholders of Woodbury Telephone, as well as the approvals
of the Connecticut Department of Public Utility Control, the
Federal Communications Commission, and the U.S. Department
of Justice.
The Woodbury Telephone Company, a Connecticut
corporation, is the primary provider of local telephone
service in major portions of the Connecticut towns of
Woodbury, Southbury and Bethlehem, as well as smaller
portions of the towns of Oxford and Roxbury. As of year end
1995, Woodbury Telephone had annual revenues of $12.6
million; EBITDA (cash flow) of $6.6 million; net income of
$1.8 million; and about 19,000 access lines in service.
Woodbury Telephone also maintains a small ownership interest
in Springwich Cellular Limited Partnership, of which SNET
owns 98.6%.
SNET is a Connecticut-based telecommunications company
reaching beyond its traditional borders to offer wireline,
wireless and information and entertainment services,
including local, national and international calling; mobile
communications; and publishing, information and advertising.
The company is building I-SNET, Connecticut's broadband,
information superhighway to serve all its customers.
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