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 23, 1997
THE SOUTHERN NEW ENGLAND TELEPHONE COMPANY
(Exact name of registrant as specified in its charter)
Connecticut 1-6654 06-0542646
(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.
Southern New England Telecommunications Corporation, parent of the
registrant, announced today that third quarter net income for 1997 was
$49.1 million or $0.74 per share compared with last year's third quarter
net income of $45.8 million or $0.70 per share.
Consolidated revenues and sales for the third quarter were up 4.4 percent
to $509.7 million.
The news release providing the announcement is filed as an exhibit
hereto and is incorporated herein by reference.
Item 7. Financial Statements, Pro forma Financial
Information and Exhibits.
Exhibit 20. News release issued October 23, 1997.
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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.
THE SOUTHERN NEW ENGLAND
TELEPHONE COMPANY
Dated: October 23, 1997 By: /s/Madelyn M. DeMatteo
Madelyn M. Dematteo
Secretary
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THE SOUTHERN NEW ENGLAND TELEPHONE COMPANY
FORM 8-K
EXHIBIT INDEX
Exhibit
Number
20 News release issued October 23, 1997.
SNET News Release
227 Church Street
New Haven, Connecticut 06510
October 23, 1997
For more information contact: Kevin Moore
(203) 771-2136
SNET ANNOUNCES EARNINGS PER SHARE UP
6 PERCENT FOR THE THIRD QUARTER
Southern New England Telecommunications Corporation (SNET) -
- - (NYSE: SNG) -- announced today that its third quarter net
income was $49.1 million or $0.74 per share compared with
last year's third quarter net income of $45.8 million or
$0.70 per share.
Daniel J. Miglio, SNET's chairman and chief executive
officer, said, "Third quarter earnings were very solid,
especially considering our absorption of competitive
impacts, regulatory mandates, Year 2000 expenses and start-up
costs for our new cable-TV business.
"Our interstate/international long-distance business has
captured 40 percent of the market, reflecting the fact that
we were just rated number one among mainstream customers in
a national J.D. Power survey. Our wireless margins continue
to improve. SNET americast, now 7-months old, has market
share ranging from approximately 20 percent to 40 percent in
the towns where we have been marketing for 90 days or more.
We are demonstrating that we know how to serve our customers
better than anyone else in the dynamic market for
information, communications and entertainment services."
Revenues
Consolidated revenues and sales for the third quarter were
up 4.4 percent to $509.7 million. Wireline revenues rose
7.4 percent to $423.2 million with revenues from the
company's interstate/international long-distance business up
27 percent on an almost identical percentage increase in
customers. In-state toll revenues declined 12.7 percent,
continuing to reflect the full impact of 1+ competition,
which was introduced during 1996. Access-line growth
continued to be strong, up 5.2 percent, including the
addition of about 21,000 lines from SNET's newest
subsidiary, Woodbury Telephone. This, along with higher
revenues from vertical telephone services like caller ID,
call blocking and missed-call dialing contributed to a 5.3
percent rise in local-service revenues. Network-access
revenues rose 10.7 percent on growth from in-state and
interstate minutes of use.
Wireless revenues were up 2.8 percent to $58.3 million.
The company's base increased 16.3 percent.
Information and Entertainment revenues grew 2.8 percent
to $47.3 million.
Expenses
Consolidated operating and maintenance expenses for the
third quarter were up 2 percent to $301.3 million.
Wireline expenses rose 6.1 percent or $15 million
with the majority of that going to support the
healthy growth in SNET's interstate/international
long-distance business. In addition, approximately
$3 million was spent during the quarter on computer
reprogramming for the Year 2000.
Wireless expenses dropped 15.5 percent or $6.9
million primarily because of successful programs to
reduce fraud and bad debt.
Information and Entertainment expenses rose 62.5
percent or $10 million largely to support the
rollout of SNET americast and, to a lesser extent,
to support continuing growth in SNET Internet,
which now serves over 74,000 customers.
Depreciation and amortization expenses were up 7.3
percent for the third quarter due to higher levels of
property, plant and equipment. Interest expense was up
2.3 percent or $0.5 million.
In the third quarter, the company absorbed approximately
$13 million from various regulatory decisions, including
an FCC-mandated access-charge reduction, requirements of
the Federal Telecommunications Act and SNET's planned
wholesale/retail restructure.
SNET is the leading information, communications and
entertainment company in Connecticut, offering a full
range of wireline products including SNET All Distance[R]
service as well as wireless voice and data services,
Internet access and cable TV. The company is building
I-SNET[R], a statewide broadband information superhighway.
In the latest J.D. Power national customer satisfaction
survey, SNET was rated the number-one, long-distance
company in America among mainstream users.
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SNET
Preliminary Summary of Consolidated Results
For the Three Months Ended September 30, 1997
(Dollars in Millions Except Per Share Amounts)
(Unaudited)
For the 3 Months Ended Percent
September 30, Change
1997 1996
INCOME STATEMENT
Revenues and Sales $509.7 $488.2 4.4%
Costs and Expenses:
Operating and maintenance 301.3 295.3 2.0%
Depreciation
and amortization 95.0 88.5 7.3%
Taxes other than income 14.2 13.9 2.2%
Total Costs and Expenses 410.5 397.7 3.2%
Operating Income 99.2 90.5 9.6%
Interest expense 22.4 21.9 2.3%
Other income, net 1.7 .4
Income Before Income Taxes 78.5 69.0 13.8%
Income taxes 29.4 23.2 26.7%
Net Income $49.1 $45.8 7.2%
Weighted Average Common Shares
Outstanding (thousands) 66,481 65,606 1.3%
Earnings per share $0.74 $0.70 5.7%
STATISTICS
Access Lines in Service
(thousands) 2,257 2,145 5.2%
Interstate Minutes of Use
(millions) 2,097 1,985 5.6%
SNET
Preliminary Summary of Consolidated Results
For the Nine Months Ended September 30, 1997
(Dollars in Millions Except Per Share Amounts)
(Unaudited)
For the 9 Months Ended Percent
September 30, Change
1997 1996
INCOME STATEMENT
Revenues and Sales $1,494.0 $1,450.0 3.0%
Costs and Expenses:
Operating and maintenance 878.2 849.9 3.3%
Depreciation
and amortization 281.0 265.9 5.7%
Taxes other than income 40.7 41.4 (1.7%)
Total Costs and Expenses 1,199.9 1,157.2 3.7%
Operating Income 294.1 292.8 .4%
Interest expense 67.5 67.2 .4%
Other income, net 5.7 6.2 (8.1%)
Income Before Income Taxes 232.3 231.8 .2%
Income taxes 87.1 83.3 4.6%
Income Before
Extraordinary Charge 145.2 148.5 (2.2%)
Extraordinary Charge,
Net of Tax (3.7) -
Net Income $141.5 $148.5 (4.7%)
Weighted Average Common Shares
Outstanding (thousands) 66,110 65,539 .9%
EARNINGS PER SHARE
Income Before
Extraordinary Charge $2.20 $2.27 (3.1%)
Extraordinary Charge,
Net of Tax (0.06) -
Net Income $2.14 $2.27 (5.7%)
STATISTICS
Access Lines in Service
(thousands) 2,257 2,145 5.2%
Interstate Minutes of Use
(millions) 6,198 5,890 5.2%
