July 24, 1995
FOR FURTHER INFORMATION CONTACT: Bill Seekamp
(203) 771-2136
SNET REPORTS SECOND QUARTER NET INCOME UP 5% BEFORE SPECIAL
ITEMS
Southern New England Telecommunications Corporation
(SNET) -- (NYSE: SNG) -- announced today that second quarter
net income for 1995 declined 11 percent to $40 million or
$0.62 per share, compared with $45 million or $0.71 per
share for the same period last year. Second quarter 1995
net income includes the impact of three events: a ($6)
million after-tax or ($0.10) per share charge resulting from
a court ruling on SNET labor practices and other litigation
matters; a ($4) million after-tax or ($0.06) per share
charge for state tax adjustments; and a $2 million after-tax
or $0.04 per share gain on the sale of real estate.
Excluding these three events, second quarter net income
would have been up 5 percent to $48 million or $0.74 per
share.
"This is our sixth consecutive quarter of growth. Our
strategy is to expand in the high-growth businesses of
wireless, long distance, and multimedia while we continue to
control costs," said Daniel J. Miglio, SNET chairman and
chief executive officer. He added, "That strategy is evident
throughout the business, and was reflected at the beginning
of July in our $450 million cellular acquisitions that have
expanded our stake in wireless by 70 percent. These were
our largest acquisitions ever, in one of the fastest growing
segments of the industry."
Consolidated revenues and sales for the second quarter
were up 6 percent to $453 million. Southern New England
Telephone revenue, at $374 million, was essentially flat.
SNET's other businesses had a strong second quarter.
Wireless sales surged 44 percent on a continued strong,
rapid increase of 81 percent in the customer base. In
addition, sales approached $10 million for SNET America, the
company's interstate and international long-distance
subsidiary.
Consolidated operating and maintenance expenses, which
exclude depreciation, were up 12 percent, due primarily to
the charge related to the court ruling on labor practices.
Without that charge, telephone company expenses would have
declined 3 percent. Operating and maintenance expenses
increased 47 percent in SNET's other businesses to support
growth in wireless, long distance, and multimedia.
Higher depreciation rates and increased wireline and
wireless network investment resulted in a 3 percent rise in
depreciation and amortization expense. Interest expense was
even with last year.
SNET is an independent telecommunications company that
offers through its subsidiaries: network and information-
management services and communications systems; instate,
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 June 30, 1995
(in Millions Except Per Share Amounts)
(Unaudited)
For the 3 Months Ended Percent
June 30 Change
1995 1994
INCOME STATEMENT
Revenues and Sales $ 453.0 $ 427.8 6%
Costs and Expenses:
Operating and maintenance 265.8 237.5
Depreciation and amortization 83.6 81.3
Taxes other than income 14.3 14.4
Total Costs and Expenses 363.7 333.2 9%
Operating Income 89.3 94.6 (6)%
Interest 19.0 19.0 -
Income Before Income Taxes 70.3 75.6 (7)%
Income taxes 30.2 30.3 -
Net Income $ 40.1 $ 45.3 (11)%
Weighted Average Common Shares
Outstanding (in thousands) 64,800 64,134 1%
Earnings Per Share $ 0.62 $ 0.71 (13)%
STATISTICS
Access Lines in Service 2,041 1,984 3%
(in thousands)
Interstate Minutes of Use 1,799 1,743 3%
(in thousands)
(Unaudited)
June 30, Dec. 31, Percent
1995 1994 Change
BALANCE SHEET
Common Equity at Period End $ 999.6 $ 952.9 5%
Book Value Per Common Share
at Period End $ 15.42 $ 14.77 4%
SNET
Preliminary Summary of Consolidated Results
For the Six Months Ended June 30, 1995
(in Millions Except Per Share Amounts)
(Unaudited)
For the 6 Months Ended Percent
June 30, Change
1995 1994
INCOME STATEMENT
Revenues and Sales $ 896.1 $ 851.0 5%
Costs and Expenses:
Operating and maintenance 517.4 472.9
Depreciation and amortization 167.0 162.0
Taxes other than income 27.8 28.6
Total Costs and Expenses 712.2 663.5 7%
Operating Income 183.9 187.5 (2)%
Interest 37.0 38.8 (5)%
Income Before Income Taxes 146.9 148.7 (1)%
Income taxes 60.1 59.9 -
Net Income $ 86.8 $ 88.8 (2)%
Weighted Average Common Shares
Outstanding (in thousands) 64,721 64,058 1%
Earnings Per Share $ 1.34 $ 1.39 (4)%
STATISTICS
Access Lines in Service 2,041 1,984 3%
(in thousands)
Interstate Minutes of Use 3,603 3,455 4%
(in thousands)
(Unaudited)
June 30, Dec. 31, Percent
1995 1994 Change
BALANCE SHEET
Common Equity at Period End $ 999.6 $ 952.9 5%
Book Value Per Common Share
at Period End $ 15.42 $ 14.77 4%