SBC Communications Partners with Donnelley

HostReview.com
Thursday, July 29, 2004; 12:00 AM

San Antonio, Texas, July 28, 2004 - SBC Communications Inc. (NYSE: SBC) has agreed to sell its interest in a directory publishing business in Illinois and northwest Indiana to R.H. Donnelley Corporation, its partner in these states, for approximately $1.45 billion.

The sale includes SBC's interest in DonTech, a partnership between SBC and Donnelley that is the exclusive sales agent for yellow pages advertising in 129 directories in the two states.

"This is a strategic move to exit a joint venture based on a business model that did not fit with SBC's directory structure and strategy. We prefer complete control over our directory sales and publishing functions," said Jim Callaway, group president-SBC Communications Inc. "The sole-ownership model enables more streamlined, efficient management and helps us deliver the solid results SBC expects from its directory operations."

SBC still values its directory operations, and its strategy is unchanged, Callaway said. The company will continue to publish more than 700 directories in markets throughout its regions and remain an industry leader, with more than $3.7 billion in annual revenue.

In connection with the sale, the purchase price will be partially offset by a $30 million liability owed by SBC, and SBC expects to record a net after-tax gain of approximately $850 million in its third-quarter financial results. The sale, which is subject to review by the U.S. Department of Justice, is expected to close in the third quarter.

Cautionary Language Concerning Forward-Looking Statements
Information set forth in this news release contains financial estimates and other forward-looking statements that are subject to risks and uncertainties, and actual results may differ materially. A discussion of factors that may affect future results is contained in SBC's filings with the Securities and Exchange Commission. SBC disclaims any obligation to update or revise statements contained in this news release based on new information or otherwise.

SBC Communications Inc. is a Fortune 50 company whose subsidiaries, operating under the SBC brand, provide a full range of voice, data, networking, e-business, directory publishing and advertising, and related services to businesses, consumers and other telecommunications providers. SBC holds a 60 percent ownership interest in Cingular Wireless, which serves more than 24 million wireless customers. SBC companies provide high-speed DSL Internet access lines to more American consumers than any other provider and are among the nation's leading providers of Internet services. SBC companies also now offer satellite TV service. Additional information about SBC and SBC products and services is available at www.sbc.com.