SNET News Release
April 21, 1994
FOR FURTHER INFORMATION CONTACT: Bill Seekamp
(203) 771-2136
(office)
SNET ANNOUNCES FIRST QUARTER RESULTS
FROM OPERATIONS UP 17 PERCENT
ON HIGHER REVENUES AND COST CONTROLS
Southern New England Telecommunications
Corporation (SNET) -- (NYSE: SNG) -- announced
today first quarter net income for 1994 of $0.68
per share compared with a net loss of $2.89 per
share for the same period last year, when the
company adopted new accounting standards. This
resulted in a one-time, non-cash charge in first-
quarter 1993 of $220 million after taxes or $3.47
per share. Income from operations was up 17.2
percent to $0.68 per share versus $0.58 share for
the first quarter last year.
"Seismic change continues apace in our dynamic
industry. We are moving forward aggressively and
becoming more competitive," said Daniel J.
Miglio, chairman and chief executive officer
referring to SNET's reengineering and marketing
efforts. _ We're reengineering to strengthen our
competitive position. Our marketing efforts have
resulted in our entry into the long-distance
business through SNET America, the introduction
of our video-on-demand trial, and our commitment
to invest $4.5 billion in I-SNET, an information
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superhighway that will reach all SNET customers.
This investment will, over the next 15 years,
transform our statewide telecommunications
network and enable us to offer a wealth of
exciting new services," he added.
Consolidated revenues and sales for the first
quarter were up 5.2 percent to $423 million.
Revenue from Southern New England Telephone, the
company's largest subsidiary, increased 4.4
percent in the first quarter to $369 million.
This reflected higher local-service revenue from
rate increases authorized by the Department of
Public Utility Control in July 1993, a 1.8
percent increase in access lines in service, and
continued increases in sales of premium services
like Totalphone[SM]. In-state toll revenue
decreased due to competitive price reductions and
expanded local-calling service that shifted a
portion of toll revenue to local-service
revenues.
Sales from other businesses increased 10
percent led by cellular operations, which were up
44 percent on a growing customer base. Business
systems sales were lower, reflecting our
withdrawal from the PBX market during 1993 in
favor of concentration on SNET's own network-based
centrex services.
Costs and expenses, excluding depreciation,
for the quarter were down 0.6 percent to $250
million. Depreciation and amortization expense
increased 26.9 percent due primarily to higher
depreciation rates authorized by state and federal
regulators. Interest expense declined 16.8
percent because of savings from previous
refinancings and less borrowing.
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Southern New England Telecommunications
Corporation is an independent telecommunications
company that offers through its subsidiaries
network and information-management services and
communications systems; long-distance service;
directory publishing and advertising services;
and cellular mobile phone and paging services.
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SNET
Preliminary Summary of Consolidated Results
For the three months ended March 31, 1994
(in Millions Except Per Share Amounts)
(Unaudited)
For the Three Months Ended Percent
March 31, Change
1994 1993
Revenues and Sales
Local service $ 152.0 $ 131.4
Intrastate toll 79.0 89.4
Network access 86.8 85.8
Publishing 44.7 45.3
Sales and other 60.7 50.4
Total Revenues and Sales 423.2 402.3 5.2%
Costs and Expenses
Operating and maintenance 235.4 234.8
Depreciation and amortization 80.7 63.6
Taxes other than income 14.2 16.4
Total Costs and Expenses 330.3 314.8 4.9%
Income Before Interest, Income
Taxes and Accounting Changes 92.9 87.5 6.2%
Interest 19.8 23.8 (16.8)%
Income Before Income Taxes and
Accounting Changes 73.1 63.7 14.8%
Income taxes 29.6 27.2
Income Before Accounting Changes 43.5 36.5 19.2%
Accounting changes - (220.2)
Consolidated Net Income (Loss) 43.5 (183.7)
Earnings for Per Share Calculation $43.5 $(183.7)
Weighted Average Common Shares
Outstanding (in thousands) 63,982 63,522 .7%
Earnings Per Common Share:
Income Before Accounting Changes .68 .58 17.2%
Cumulative Effect of Accounting
Changes - (3.47)
Earnings Per Common Share $ .68 $ (2.89)
SNET
Preliminary Statistical Information
For the three months ended March 31, 1994
(in Millions Except Per Share Amounts)
For the Three Months Ended Percent
March 31, Change
1994 1993
Access Lines in Service
(in thousands) 1,978 1,945 1.8%
Interstate Minutes of Use 1,712 1,635 4.7%
March 31, December 31, Percent
1994 1993 Change
Common Equity at Period End $877.6 $854.6 2.7%
Book Value Per Common Share
at Period End $13.71 $13.38 2.5%
Debt Ratio at Period End 55.6% 59.9% (7.2)%