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): January 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 announced its fourth quarter earnings today including the
fact that it discontinued use of Statement of Financial Accounting Standards
(SFAS) No. 71, "Accounting for the Effects of Certain Types of Regulation."
The change in accounting is effective January 1, 1996. Consequently, for
1995 the registrant is taking a non-cash, extraordinary before-tax charge of
approximately $1,203 million or $687 million after taxes or $10.59 per share.
This results in a net loss for the fourth quarter and the year.
SFAS 71 specifies accounting standards required for public utilities and
certain other regulated companies. The registrant is discontinuing the use of
these standards and adopting an accounting methodology for financial reporting
purposes that is more appropriate for a competitive environment. The
registrant is currently facing a significant increase in telecommunications
competition in Connecticut brought about by legislative and regulatory policy
changes. The main purpose of the non-cash, extraordinary charge is to
recognize depreciation reserve deficiencies.
Consolidated earnings from continuing operations for the fourth quarter
before the extraordinary charge were $41 million or $0.62 per share. With
the extraordinary charge, the net loss for the quarter was $(646) million or
$(9.92) per share. This compares with fourth-quarter 1994 net income of $42
million or $.65 per share. The current quarter's figures also reflect
expected dilution of $0.14 per share from the cellular acquisitions completed
in July. Consolidated revenues and sales for the fourth quarter were up
8 percent to $471 million.
For 1995, the registrant's earnings from continuing operations, before
the extraordinary charge and with the exclusion of one-time items announced
previously in the second quarter, were $2.72 per share compared with $2.77
per share for 1994. With the extraordinary charge and the one-time items,
the registrant recorded a net loss for 1995 of $(518) million or $(7.99) per
share. The 1995 figures also reflect dilution of $0.29 per share from the
cellular acquisitions. Net income for 1994 was $178 million.
Consolidated revenues and sales for 1995 were up 7 percent to $1,839
million. Wireline revenues were up 4.5 percent. Interstate and
international toll revenues grew four-fold from $10 million to $42 million
for 1995, and access lines increased about 3 percent. Wireless revenues,
at $170 million, were up 45 percent, reflecting strong customer growth and
the cellular acquisitions. In-state toll revenues decreased because of
price reductions and competition. Information and Entertainment revenues
were flat at $181 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 January 22, 1996.
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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: January 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 News release issued January 22, 1996.