UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
(Mark One)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934.
For the quarterly period ended June 30, 1997.
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934.
For the transition period from to .
Commission File Number 1-6654
THE SOUTHERN NEW ENGLAND TELEPHONE COMPANY
(Exact name of registrant as specified in its charter)
Connecticut 06-0542646
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
227 Church Street, New Haven, CT 06510
(Address of principal executive offices) (Zip Code)
(203) 771-5200
(Registrant's telephone number,
including area code)
Not applicable
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X. No .
THE REGISTRANT, A WHOLLY OWNED SUBSIDIARY OF SOUTHERN NEW ENGLAND
TELECOMMUNICATIONS CORPORATION, MEETS THE CONDITIONS SET FORTH IN
GENERAL INSTRUCTION H(1) (a) AND (b) OF FORM 10-Q AND IS THEREFORE
FILING THIS FORM WITH REDUCED DISCLOSURE FORMAT PURSUANT TO GENERAL
INSTRUCTION H(2).
- 1 -
Form 10-Q - Part I The Southern New England Telephone Company
PART I - FINANCIAL INFORMATION
The Southern New England Telephone Company ("Telephone Company")
is a wholly-owned telephone operating subsidiary of Southern New
England Telecommunications Corporation ("Corporation") and has
its principal executive offices at 227 Church Street, New Haven,
Connecticut 06510 (telephone number (203) 771-5200).
The condensed financial statements on the following pages have
been prepared pursuant to the rules and regulations of the
Securities and Exchange Commission ("SEC") and, in the opinion of
management, include all adjustments, which are normal and
recurring in nature, necessary for fair presentation for each
period shown. The 1996 financial statements have been
reclassified to conform to the current-year presentation.
Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted
pursuant to such SEC rules and regulations. Management believes
that the disclosures made are adequate to make the information
presented not misleading. Operating results for any interim
periods, or comparisons between interim periods, are not
necessarily indicative of the results that may be expected for
full fiscal years. It is suggested that these financial
statements be read in conjunction with the financial statements
and notes thereto included in the Telephone Company's 1996 Annual
Report on Form 10-K.
- 2 -
Form 10-Q - Part I The Southern New England Telephone Company
CONDENSED STATEMENTS OF INCOME AND RETAINED EARNINGS
(Unaudited)
For the Three For the Six
Months Ended Months Ended
June 30, June 30,
Dollars in Millions 1997 1996 1997 1996
Revenues
Local service $ 167.7 $ 168.5 $ 337.1 $ 333.2
Network access 107.4 97.1 210.0 194.1
Intrastate toll 51.6 64.6 105.0 131.0
Publishing and other 56.4 58.2 114.5 118.5
Total Revenues 383.1 388.4 766.6 776.8
Costs and Expenses
Operating and maintenance 201.6 199.8 404.7 392.5
Depreciation and amortization 79.3 74.9 156.7 149.3
Taxes other than income 11.9 11.8 23.4 24.6
Total Costs and Expenses 292.8 286.5 584.8 566.4
Operating Income 90.3 101.9 181.8 210.4
Interest expense 11.1 11.5 22.3 23.1
Other (expense) income, net (.1) .4 (.3) 1.4
Income Before Income Taxes 79.1 90.8 159.2 188.7
Income taxes 30.8 34.7 62.1 72.9
Income Before Extraordinary Charge 48.3 56.1 97.1 115.8
Extraordinary charge, net of tax - - (3.7) -
Net Income $ 48.3 $ 56.1 $ 93.4 $ 115.8
Retained Earnings, Beginning
of Period $ 97.7 $ 55.9 $ 92.6 $ 31.8
Net income 48.3 56.1 93.4 115.8
Dividends declared to parent (38.0) (39.0) (78.0) (74.6)
Retained Earnings, End
of Period $ 108.0 $ 73.0 $ 108.0 $ 73.0
The accompanying notes are an integral part of these financial statements.
- 3 -
Form 10-Q - Part I The Southern New England Telephone Company
CONDENSED BALANCE SHEETS
Dollars in Millions June 30, 1997 December 31, 1996
(Unaudited)
Assets
Cash and temporary cash investments $ - $ 56.8
Accounts receivable, net of allowance
for uncollectibles of $16.1 and
$18.0, respectively 258.4 270.8
Accounts receivable from affiliates 33.6 11.1
Materials and supplies 20.0 14.3
Prepaid publishing 33.5 35.2
Deferred income taxes and other current assets 72.3 47.1
Total Current Assets 417.8 435.3
Total telephone plant, at cost 4,397.4 4,309.1
Accumulated depreciation (3,026.9) (2,964.5)
Net Telephone Plant 1,370.5 1,344.6
Deferred income taxes and other assets 97.9 77.3
Total Assets $1,886.2 $1,857.2
Liabilities and Shareholder's Equity
Accounts payable and accrued expenses $ 171.8 $ 180.2
Accounts and notes payable to affiliates 101.5 19.5
Advance billings and customer deposits 44.5 42.6
Other current liabilities 126.2 116.8
Total Current Liabilities 444.0 359.1
Long-term debt 666.9 746.9
Other liabilities and deferred credits 136.2 127.5
Total Liabilities 1,247.1 1,233.5
Common Stock; $12.50 par value;
30,428,596 shares issued and
30,385,900 outstanding 380.4 380.4
Proceeds in excess of par value 152.1 152.1
Retained earnings 108.0 92.6
Treasury stock; 42,696 shares, at cost (1.4) (1.4)
Total Shareholder's Equity 639.1 623.7
Total Liabilities and Shareholder's Equity $1,886.2 $1,857.2
The accompanying notes are an integral part of these financial statements.
- 4 -
Form 10-Q - Part I The Southern New England Telephone Company
CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
For the Six Months Ended
June 30,
Dollars in Millions 1997 1996
Operating Activities
Net income $ 93.4 $ 115.8
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization 156.7 149.3
Extraordinary charge, net of tax 3.7 -
Restructuring payments (8.5) (42.6)
Change in operating assets and liabilities, net (55.3) (18.3)
Other, net 10.2 8.8
Net Cash Provided by Operating Activities 200.2 213.0
Investing Activities
Cash expended for capital additions (188.2) (129.3)
Other, net 9.7 1.6
Net Cash Used by Investing Activities (178.5) (127.7)
Financing Activities
Net proceeds of short-term debt from affiliate 80.3 -
Repayment of long-term debt (80.0) -
Cash dividends paid (73.0) (58.6)
Other, net (5.8) -
Net Cash Used by Financing Activities (78.5) (58.6)
(Decrease) increase in Cash and Temporary
Cash Investments (56.8) 26.7
Cash and temporary cash investments at
beginning of period 56.8 70.5
Cash and Temporary Cash Investments at
End of Period $ - $ 97.2
Income Taxes Paid $ 64.5 $ 59.8
Interest Paid, net of amounts capitalized $ 24.9 $ 23.2
The accompanying notes are an integral part of these financial statements.
- 5 -
Form 10-Q - Part I The Southern New England Telephone Company
NOTES TO FINANCIAL STATEMENTS
(Dollars in Millions, Except Per Share Amounts)
(Unaudited)
Note 1: Extraordinary Charge
On February 18, 1997, the Telephone Company redeemed $80.0 of
8.70% medium-term notes due 2031, which were satisfied with cash
and short-term borrowings from the Corporation. The early
extinguishment of debt resulted in an extraordinary charge of
$3.7, net of tax benefits of $2.7.
Note 2: Subsequent Event
On July 31, 1997, the Second Circuit Court of Appeals issued a
decision upholding an August 28, 1995 judgment from the U.S.
District Court finding that the Corporation and the Telephone
Company had violated certain sections of the Fair Labor Standards
Act and were liable for $9.7 in back pay and liquidating damages
plus interest of approximately 5.9% from the date of the District
Court judgment. The Telephone Company and the Corporation are
currently evaluating whether to appeal the Second Circuit decision.
In the second quarter of 1995, the Telephone Company recorded a
liability of $11.0 as its anticipated cost of total damages for
this matter, which was charged to operating and maintenance expense.
- 6 -
Form 10-Q - Part I The Southern New England Telephone Company
MANAGEMENT'S DISCUSSION AND ANALYSIS
(Dollars in Millions)
Separation of Wholesale and Retail Organizations
The Corporation is establishing separate wholesale and retail
affiliates, having received approval from the Department of
Public Utility Control ("DPUC") [see Regulatory Matters]. As a
result, the Telephone Company will become an incumbent local
exchange carrier ("ILEC"), providing network services and
functionality to retail providers under the wholesale provisions
of the Federal Telecommunications Act of 1996 ("Act"). The
telecommunications network plant and property will remain with
the Telephone Company to support operations. The Telephone
Company will be treated as a public service company, and will
continue to be subject to regulation.
The separation of wholesale and retail organizations should have
no material effect on the consolidated financial results of the
Corporation. Due to the functional change in the Telephone
Company, however, local service revenues, intrastate toll and
other categories of revenue, along with related expenses, will
be significantly different in the future. Additionally, the
establishment of a separate publishing subsidiary will remove
most publishing revenues and their related expenses from the
Telephone Company.
The following discussion and analysis are meant to give
understanding to the financial condition and results of
operations of the Telephone Company as it is currently
structured. As such, all results and trends discussed are
relevant only until such time as the wholesale, retail and
publishing operations are separated.
Comparison of six months ended June 30, 1997 vs. six months ended
June 30, 1996
Operating Results
Income before extraordinary charge was $97.1 in 1997 compared
with $115.8 in 1996. The reduced results were primarily due to
revenue increases being more than offset by the combination of
revenue decreases in intrastate toll as a result of competition
and higher depreciation expense due to increased investment
in physical plant.
Revenues and Sales
For the Six Months Ended June 30, 1997 1996
Local service $337.1 $333.2
Network access 210.0 194.1
Intrastate toll 105.0 131.0
Publishing and other 114.5 118.5
Total Revenues $766.6 $776.8
Local service revenues, derived from providing local exchange,
advanced calling features and local private line services,
increased $3.9, or 1.2%, in 1997. The increase was due
primarily to continued strong growth of 4.3% in access lines in
service to approximately 2,205,000 lines as of June 30, 1997.
This increase included significant growth in Centrex business
lines and second residential lines. Local service revenues also
increased due to growth in vertical services, primarily
SmartLink[R] advanced calling features, including Caller ID, missed
call dialing, call blocking and call tracing. The increase
- 7 -
Form 10-Q - Part I The Southern New England Telephone Company
MANAGEMENT'S DISCUSSION AND ANALYSIS
(Dollars in Millions)
Comparison of six months ended June 30, 1997 vs. six months ended
June 30, 1996
was tempered by a decrease in public telephone revenues, as a
significant portion of payphone operations were transferred to a
non-regulated affiliate in conjunction with the pay telephone
reclassification and compensation provisions of the Federal
Telecommunications Act of 1996 ("Act") [see Regulatory Matters].
Additionally, there was a decrease in revenues recognized from
wireless carriers, due to a decrease in the generic wireless
tariff in accordance with the Act. Management expects increased
competition to negatively impact local service revenues as other
telecommunications providers offer local service and as the DPUC
mandated balloting process commences in March 1998 [see
Competition].
Network access revenues, generated primarily from interstate and
intrastate services, increased $15.9, or 8.2%. Intrastate access
revenues increased $8.3, or 66.0%, due primarily to an increase
in intrastate minutes of use by competitive providers of
intrastate long-distance service. Interstate access revenues
increased $7.6, or 4.2%, due primarily to growth in interstate
minutes of use of approximately 5% and an increase in access
lines in service, discussed previously. Partially offsetting
the impact of the increase in minutes of use were lower rates
due to discount plans and a decrease in tariff rates in
accordance with the Telephone Company's July 1996 Federal
Communications Commission ("FCC") filing under price cap
regulation.
Intrastate toll revenues, which include primarily revenues from
toll and WATS services, decreased $26.0, or 19.8%. The decrease
was due primarily to a 14.6% reduction in toll message volume,
as well as reduced intrastate toll rates. Lower toll volume was
due primarily to the highly competitive toll market as a result
of full intrastate equal access. The decline in rates was
attributable to customer migration to several discount calling
plans that provide competitive options to business and residence
customers. Increasing competition and the offering of
competitive discount calling plans will continue to place
downward pressure on intrastate toll revenues.
The $4.0 decrease in publishing and other revenues was due
primarily to the discontinuance of the provision of billing
services for a major long-distance carrier. Publishing revenues
remained steady despite an increasingly competitive market.
Costs and Expenses
For the Six Months Ended June 30, 1997 1996
Operating costs $404.7 $392.5
Depreciation and amortization 156.7 149.3
Taxes other than income 23.4 24.6
Total Costs and Expenses $584.8 $566.4
Operating costs - Operating costs consist primarily of employee-
related expenses, including wages and benefits. Cost of services
and general and administrative expenses, including marketing,
represent the remaining portion of these expenses. Total
operating costs increased $12.2, or 3.1%, including approximately
$6 of reprogramming costs associated with the recognition of the year
2000. The remainder of the increase was due primarily to higher
employee-related expenses, mainly as a result of continuing higher
service demands. Additionally, licensed software fees for network switching
- 8 -
Form 10-Q - Part I The Southern New England Telephone Company
MANAGEMENT'S DISCUSSION AND ANALYSIS
(Dollars in Millions)
Comparison of six months ended June 30, 1997 vs. six months ended
June 30, 1996
increased. These increases were offset partially by a decrease
in expenses related to the provision of public telephone
service, as a significant portion of payphone operations was
transferred to a non-regulated affiliate in conjunction with the
pay telephone reclassification and compensation provisions of
the Act [see Regulatory Matters].
Depreciation and amortization - Depreciation and amortization
expense increased $7.4, or 5.0%, due primarily to an increase in
the average depreciable telecommunications property, plant and
equipment.
Taxes other than income - The 4.9% decrease in taxes other than
income was due primarily to savings in property taxes as a
result of the continuing reduction of overall corporate space.
Interest Expense and Other (Expense) Income, net
For the Six Months Ended June 30, 1997 1996
Interest expense $22.3 $23.1
Other (expense) income, net $ (.3) $ 1.4
Interest expense decreased $.8, or 3.5%, due primarily to
savings from the February 18, 1997 redemption of $80.0 of medium-
term notes with an interest rate of 8.70%, offset partially by a
decrease in the amount of interest which was capitalized. The
decrease in other (expense) income, net was due primarily to a
decrease in interest income from the Corporation, as the
Telephone Company's cash balance was used to satisfy the
previously mentioned redemption.
Income Taxes
For the Six Months Ended June 30, 1997 1996
Income taxes $62.1 $72.9
The combined federal and state effective tax rate for the six
months ended June 30, 1997 was 39.0% compared with 38.6% for the
same period in 1996. The decrease in income taxes was primarily
due to a corresponding decrease in income before income taxes.
Extraordinary Charge
For the Six Months Ended June 30, 1997 1996
Extraordinary charge, net of tax $(3.7) -
On February 18, 1997, the Telephone Company redeemed $80.0 of
8.70% medium-term notes due 2031. The early extinguishment of
debt resulted in an extraordinary charge of $3.7 after-tax.
- 9 -
Form 10-Q - Part I The Southern New England Telephone Company
MANAGEMENT'S DISCUSSION AND ANALYSIS
(Dollars in Millions)
Comparison of balances as of June 30, 1997 vs. December 31, 1996
The previously discussed redemption of debt led to a decrease of
$80.0 in long-term debt, and was the primary factor in the $56.8
decrease in cash and temporary cash investments.
Accounts receivable from affiliates increased primarily due to
the previously discussed transfer of payphone operations to
an affiliate. The affiliate owes the Telephone Company for the
assets transferred.
Deferred income taxes and other current assets increased
primarily due to an increase in prepaid taxes based on the
timing of payments.
Accounts and notes payable to affiliates increased $82.0 due to
the redemption of debt noted above and additional borrowings
from the Corporation to fund capital expenditures.
Liquidity and Capital Resources
The Telephone Company generated cash flows from operations of
$200.2 during the six months ended June 30, 1997 as compared
with $213.0 during the six months ended June 30, 1996. The
decrease was due primarily to lower net income. Capital
expenditures were the primary use of Telephone Company funds.
On February 18, 1997, the Telephone Company redeemed $80.0 of
8.70% medium-term notes as discussed previously.
Competition
The Telephone Company faces a fully competitive environment with
respect to telecommunications services in Connecticut.
Competitors include interexchange carriers, competitive access
providers and competitive local exchange carriers ("CLEC"). In
the long distance market, competition has intensified since the
full implementation of intrastate equal access.
Local service competition is expected to grow significantly,
particularly with the DPUC mandated balloting process commencing
in March 1998 (see "State Regulatory Initiatives"). Although the
financial impact cannot be predicted at this time, based on
existing state and federal regulations, the Telephone Company
expects that many competitors will resell the Telephone Company's
network and that increased network access revenues will offset a
significant portion of local service revenues lost to
competition.
- 10 -
Form 10-Q - Part I The Southern New England Telephone Company
MANAGEMENT'S DISCUSSION AND ANALYSIS
(Dollars in Millions)
Regulatory Matters
Federal Regulatory Initiatives
On July 18, 1997, the Eighth Circuit Court of Appeals ("Court")
issued a decision on the appeal of the FCC's First Report and
Order. The decision was consistent with the stay issued in
October 1996, which delayed the effectiveness of the pricing
provisions and the rule allowing competitors to "pick and choose"
isolated terms out of negotiated interconnection agreements. The
decision struck down key provisions of the Order by vacating the
Order's pricing and "pick and choose" rules and certain terms
under which potential competitors can lease portions of the
Telephone Company's network. Other provisions, such as the
requirement to unbundle operating support systems, operator
services and vertical switching features, were upheld by the
Court. The Court's decision overall is a strong endorsement of
Congress' intention that the states, not the FCC, play a primary
role in implementing local telecommunications competition. The
decision will allow the Corporation to implement local
competition on the course mapped by the DPUC and the state
legislature.
In May 1997, the FCC issued three major orders. The FCC released
its Report and Order on Universal Service on May 8, 1997. The
Order revised the current universal service programs which ensure
availability of local exchange service to low income customers
and high cost areas. It also establishes new federal support for
telecommunications services provided to schools, libraries, and
rural healthcare facilities. The federal universal service
mechanisms are to be funded, beginning January 1, 1998, by an
assessment on the end user revenues of all telecommunications
service providers. Funding for the revised programs supporting
high cost and low income areas will be from interstate end user
revenues, while funding for the new federal support services
provided to schools, libraries, and rural healthcare facilities
will come from both interstate and intrastate end user revenues.
The Order is currently on appeal in the Fifth Circuit Court of
Appeals. The Telephone Company has filed to intervene in the
appeal.
On May 16, 1997, the FCC released its First Report and Order
regarding access charge reform. This Order mandates changes to
the way the Telephone Company recovers interstate access charges
from interstate toll providers, including SNET America, Inc.
Specifically, the Order establishes flat-rated per line access
charges and reduces usage based charges. This Order establishes
a prescriptive mechanism to ensure that interstate access charges
will be driven toward the levels that competition would be
expected to produce. Management expects this order to pressure
earnings in the second half of 1997 and forward, but is currently
unable to quantify the impact. The Order is currently on
appeal in the 8th Circuit Court of Appeals. The Telephone
Company has intervened in the appeal. The FCC is also expected to
release a Pricing Flexibility Order in the Fall of 1997. This
order will establish a market-based approach to pricing.
On May 21, 1997, the FCC released its Price Cap Order revising
its price cap plan for regulating ILECs. This Order establishes
a single productivity factor of 6.5% and eliminates the sharing
requirements of the prior rules. The Telephone Company filed its
1997 annual interstate access price cap revisions in April 1997
and filed its proposed rate changes on June 16, 1997 for effect
July 1, 1997. These filings adjusted interstate access rates for
an experienced rate of inflation, the FCC's new productivity
target and exogenous cost changes. The FCC also required all
price cap ILECs, including the Telephone Company, to adjust their
Price Cap Indices, effective July 1, 1997, to reflect the 6.5%
productivity factor retroactively for the 1996-1997 tariff year.
The filings are anticipated to decrease interstate network
- 11 -
Form 10-Q - Part I The Southern New England Telephone Company
MANAGEMENT'S DISCUSSION AND ANALYSIS
(Dollars in Millions)
access revenues by approximately $28 for the period July 1, 1997
to June 30, 1998. The Company expects that this decrease
will be partially offset by increased demand. The Order is
currently on appeal in the District of Columbia Circuit Court
of Appeals. The Telephone Company has intervened in the appeal.
In accordance with the Act, the FCC requires ILECs, including the
Telephone Company, to implement a long term solution for
portability of telephone numbers. The Telephone Company is
required to construct and operate a system that will permit end
user customers to retain their telephone numbers when they elect
a different carrier for local service. The system is to be
operational in mid-1998 for a large percentage of the Telephone
Company's access lines. The FCC, however, has not yet decided on
a method for the Telephone Company to recover the investment and
operating costs relating to the number portability system. Until
such decision on recovery is made, management is not able to
estimate the financial impact on the Telephone Company.
On September 20, 1996, the FCC released its Report and Order on
the Implementation of the Pay Telephone Reclassification and
Compensation Provisions of the Telecommunication Act of 1996.
The order eliminates existing regulatory constraints which
inhibited competition in the payphone marketplace; establishes a
transition period for competitive pricing to further develop in
the marketplace; establishes mechanisms for the full and fair
compensation for all calls to payphone providers; eliminates all
subsidies which currently exist in interstate access rates;
orders that pay telephone investment be removed from the ILECOs
interstate ratebase; and reclassifies pay telephone instruments
as customer premise equipment. Under the order, all ILECs,
including the Telephone Company, were required to unbundle
payphone instruments and file tariffs on payphone service lines
by January 15, 1997 and make them available on a non-discriminatory
basis to Payphone Service Providers by April 15, 1997. The
Telephone Company has filed with the FCC the necessary revisions
to its interstate access charges and has filed with the DPUC new
retail and wholesale Pay Telephone Access Line Service offerings
in accordance with the FCC's order.
State Regulatory Initiatives
On June 25, 1997, the DPUC issued a final decision allowing the
Corporation to establish separate wholesale and retail affiliates
[see Separation of Wholesale and Retail Organizations]. As part
of the decision, the DPUC mandated that the ILEC's Connecticut
customers must choose their local exchange provider via a
balloting process to commence in March 1998. Customers who do
not choose a carrier will be assigned a CLEC based on the
proportion of votes in a local service area. The balloting
process, as well as the changes associated with the restructure,
are expected to be completed by July 1, 1998. The specific
details of the balloting process will be addressed in further
technical discussions among the participants and the DPUC.
In compliance with the Federal Telecommunications Act of 1996,
the Telephone Company has filed with the DPUC numerous cost
studies supporting its proposed wholesale (i.e., resale) and
unbundled rates for interconnection services. On March 24, 1997,
the DPUC issued a final decision setting a uniform 17.8% discount
rate off the Telephone Company's retail prices for
telecommunications services sold to CLECs. On April 23, 1997,
the DPUC issued a final decision addressing the proposal for
allocation of HFC costs to video and telephony and the Telephone
Company's costs and rates associated with unbundled loops, ports,
multiplexing, and inter-wire center transport. In this decision,
the DPUC agreed to the Telephone Company's proposed 50/50
allocation for video and telephony. In addition, the DPUC
- 12 -
Form 10-Q - Parts I & II The Southern New England Telephone Company
MANAGEMENT'S DISCUSSION AND ANALYSIS
(Dollars in Millions)
approved the cost studies based on Total Service Long Run
Incremental Cost (TSLRIC). The Telephone Company submitted a
revised tariff for unbundled loops, ports, multiplexing, and
inter-wire center transport reflecting the findings in the
decision.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
There were no material developments in the second
quarter of 1997.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibit
(27) Financial Data Schedule
(b) Reports on Form 8-K
On April 23, 1997, the Telephone Company filed a report
on Form 8-K, dated April 23, 1997, announcing the
Corporation's financial results for the first quarter of
1997.
On June 25, 1997, the Telephone Company filed a report
on Form 8-K, dated June 25, 1997 regarding the DPUC's
final decision allowing the Corporation to structure its
wireline business as separate retail and wholesale
subsidiaries.
On July 24, 1997, the Telephone Company filed a report
on Form 8-K, dated July 24, 1997, announcing the
Corporation's financial results for the second quarter
of 1997.
- 13 -
Form 10-Q - Part II The Southern New England Telephone Company
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
August 7, 1997
/s/ Donald R. Shassian
Donald R. Shassian
Senior Vice President and Chief Financial Officer
- 14 -
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THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
2ND QUARTER 1997 FORM 10-Q OF THE SOUTHERN NEW ENGLAND TELEPHONE
COMPANY AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
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