File No. 1-8610 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ------------------------- FORM 11-K ANNUAL REPORT ------------------------- Pursuant to Section 15(d) of the Securities Exchange Act of 1934 For the fiscal year ended December 31, 2003 Commission File Number l-8610 --------------------------------------------------- SBC SAVINGS AND SECURITY PLAN --------------------------------------------------- SBC COMMUNICATIONS INC. 175 E. Houston, San Antonio, Texas 78205 Financial Statements, Supplemental Schedules and Exhibit
Table of Contents Page Report of Independent Registered Public Accounting Firm......................................................... 1 Financial Statements: Statements of Net Assets Available for Benefits as of December 31, 2003 and 2002....................... 2 Statement of Changes in Net Assets Available for Benefits for the Year Ended December 31, 2003........................................................................... 3 Notes to Financial Statements.......................................................................... 4 Supplemental Schedules: 2003 Form 5500 Line 4a - Schedule of Delinquent Participant Contributions.............................. 8 Schedule H, Line 4i - Schedule of Assets (Held at End of Year)......................................... 9 Schedule H, Line 4j - Schedule of Reportable Transactions...............................................15 Exhibit: 23 - Consent of Independent Registered Public Accounting Firm REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM SBC Communications Inc., Plan Administrator for SBC Savings and Security Plan We have audited the accompanying statements of net assets available for benefits of SBC Savings and Security Plan as of December 31, 2003 and 2002, and the related statement of changes in net assets available for benefits for the year ended December 31, 2003. These financial statements are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for benefits at December 31, 2003 and 2002, and the changes in its net assets available for benefits for the year ended December 31, 2003, in conformity with U.S. generally accepted accounting principles. Our audits were performed for the purpose of forming an opinion on the financial statements taken as a whole. The accompanying supplemental schedules of assets (held at end of year) as of December 31, 2003, delinquent participant contributions and reportable transactions for the year then ended are presented for purposes of additional analysis and are not a required part of the financial statements but are supplementary information required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. These supplemental schedules are the responsibility of the Plan's management. The supplemental schedules have been subjected to auditing procedures applied in our audits of the financial statements, and in our opinion, are fairly stated in all material respects in relation to the financial statements taken as a whole. /s/ ERNST & YOUNG LLP San Antonio, Texas June 21, 2004 SBC SAVINGS AND SECURITY PLAN STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS (Dollars in Thousands) December 31, --------------------------------------- 2003 2002 --------------- ---------------- ASSETS Investments (See Note 3) $ 4,732,060 $ 4,471,815 Dividends and interest receivable 31 65 Receivable for investments sold 603 55 Contributions receivable - 45 --------------- ---------------- Total Assets 4,732,694 4,471,980 --------------- ---------------- LIABILITIES Administrative expenses payable 2,025 526 Payable for investments purchased 3,305 3,241 Excess Contribution 29 - --------------- ---------------- Total Liabilities 5,359 3,767 --------------- ---------------- Net Assets Available for Benefits $ 4,727,335 $ 4,468,213 =============== ================ See Notes to Financial Statements. SBC SAVINGS AND SECURITY PLAN STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS FOR THE YEAR ENDED DECEMBER 31, 2003 (Dollars in Thousands) Net Assets Available for Benefits, December 31, 2002 $ 4,468,213 Additions to Net Assets: Contributions: Participant contributions 287,614 Employer contributions 155,455 --------------- 443,069 Investment Income: Net appreciation in value of investments 95,766 Dividends on SBC common shares 132,958 Interest 51,914 --------------- 280,638 --------------- Total Net Additions 723,707 --------------- Deductions from Net Assets: Administrative expenses 8,246 Distributions 456,337 Transfer to other plan (See Note 1) 2 --------------- Total Deductions 464,585 --------------- Net Assets Available for Benefits, December 31, 2003 $ 4,727,335 =============== See Notes to Financial Statements. SBC SAVINGS AND SECURITY PLAN NOTES TO FINANCIAL STATEMENTS (Dollars in Thousands) 1. Plan Description - The SBC Savings and Security Plan (Plan) was established by SBC Communications Inc. (SBC or the Company) to provide a convenient way for eligible employees to save for retirement on a regular and long-term basis. The majority of eligible employees are represented by the Communications Workers of America. The following description of the Plan provides only general information. The Plan has detailed provisions covering participant eligibility, participant allotments from pay, participant withdrawals, participant loans, employer contributions and related vesting of contributions and Plan expenses. The Plan text and prospectus include complete descriptions of these and other Plan provisions. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA). In 2000, SBC entered into the Cingular Wireless (Cingular) joint venture agreement with BellSouth Corporation. As a result of this agreement, certain SBC employees were leased to Cingular. In December 2001 these employees became Cingular employees. During 2003 the Plan transferred approximately $2 to State Street Bank and Trust related to those former employees who became employees of Cingular. Participants can invest their contributions in one or more of the following funds in five dollar or 1% increments: the SBC Shares Fund, the Bond Fund, the Large Cap Stock Fund, the Interest Income Fund, the Asset Allocation Fund, the Global Equity Fund, the Mid and Small Cap Stock Fund and the International Stock Fund. Company matching contributions are made solely in the form of shares of SBC's common stock held in an Employee Stock Ownership Plan (ESOP) which is a separate investment account of this Plan. Dividends on shares in the SBC Shares Fund and the ESOP can either be reinvested in the SBC Shares Fund on a quarterly basis, or paid into a separate fund known as a Dividend Fund Account (DFA) for distribution at the end of the year. At the end of the year, dividends held in the DFA are paid out to the participant. Interest earned on dividends held in the DFA will be paid into the SBC Shares Fund. During 2003, Plan participants elected to receive $25,525 in dividend distributions. This amount is included in distributions on the statement of changes in net assets. Although it has not expressed any intent to do so, SBC has the right under the Plan to discontinue its contributions at any time and to terminate the Plan subject to the provisions of ERISA. In the event that the Plan is terminated, subject to the conditions set forth by ERISA, the account balances of all participants shall be 100% vested. 2. Accounting Policies - The values of investments are determined as follows: SBC common shares on the basis of the closing price as reported on the New York Stock Exchange; contracts with insurance companies and other financial institutions at principal plus reinvested interest which approximates fair value; common collective trust funds at values obtained from fund managers; and temporary cash investments at cost, which approximates fair value. Purchases and sales of securities are reflected as of the trade date. Dividend income is recognized on the ex-dividend date. Interest earned on investments is recognized on the accrual basis. The accompanying financial statements were prepared in conformity with accounting principles generally accepted in the United States, which require management to make estimates that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.
3. Investments - Investments representing 5% or more of Plan net assets at either December 31, 2003 or 2002 were: 2003 2002 -------------- ------------- Employee Stock Ownership Plan * SBC common shares $ 1,034,075 $ 1,012,278 SBC Shares Fund SBC common shares $ 1,507,927 $ 1,581,928 Large Cap Stock Fund Barclays Global Investors Equity Index Fund F $ 528,101 $ 399,612 * Nonparticipant-directed During 2003, the Plan's investments (including gains and losses on investments bought and sold, as well as held during the year) appreciated (depreciated) in value as follows: Common Stock $ (93,288) Common Collective Trusts 189,054 ------------- Total $ 95,766 ============= The Interest Income Fund consists of contracts with various financial institutions and insurance companies that promise to repay principal plus accrued income at contract maturity, subject to the creditworthiness of the issuer. Interest crediting rates are generally established when the contract is purchased and are periodically reset. For the years ended December 31, 2003 and 2002, the average interest rates earned on these contracts were 4.44% and 5.39%. At December 31, 2003, the fixed crediting interest rates on these contracts ranged from 3.24% to 7.97%. At December 31, 2002, the fixed crediting interest rates on these contracts ranged from 2.83% to 8.00%. No valuation reserves were recorded to adjust contract amounts as of December 31, 2003 or 2002. The Interest Income Fund invests in both guaranteed investment contracts (GICs) and synthetic investment contracts (SICs). SICs differ from GICs in that the assets supporting the SICs are owned by the Plan. A bank or insurance company issues a wrapper contract that allows participant directed transactions to be made at contract value. Wrapper contracts are valued as the difference between the fair value of the supporting assets and the contract value. The assets supporting the GICs and SICs generally consist of high quality fixed income securities with a fair value of $778,091 and $777,862 at December 31, 2003 and 2002. The Plan provides for investments in various investment securities, which in general, are exposed to various risks, such as interest rate, credit, and overall market volatility risks. Due to the level of risk associated with certain investment securities, it is reasonably possible that changes in the values of investment securities will occur in the near term and that such change could materially affect the amounts reported in the statements of net assets available for benefits and participant account balances. 4. Nonparticipant-Directed Investments - Information about the net assets and the significant components of the changes in net assets relating to the nonparticipant-directed investments as of December 31 is as follows: 2003 2002 ------------- ------------- Assets SBC common shares $ 1,034,075 $ 1,012,278 Temporary cash investments 4,069 4,366 Dividends and interest receivable 2 3 Receivable for investments sold 603 55 ------------- ------------- Total Assets 1,038,749 1,016,702 ------------- ------------- Liabilities Administrative expenses payable 430 55 Payable for investments purchased 3,305 3,241 ------------- ------------- Total Liabilities 3,735 3,296 ------------- ------------- Net Assets Available for Benefits $ 1,035,014 $ 1,013,406 ============= ============= 2003 ------------- Net Assets Available for Benefits, December 31, 2002 $ 1,013,406 Employer contributions 155,455 Interest income 26 Dividends 3 Transfers from other fund(s) 9 Net depreciation in fair value of investments (31,938) Administrative expenses (1,840) Distributions (82,109) Transfers to other fund(s) (17,998) ------------- 21,608 ------------- Net Assets Available for Benefits, December 31, 2003 $ 1,035,014 ============= 5. Tax Status - The Plan has received a determination letter from the Internal Revenue Service dated March 25, 2004, stating that the Plan is qualified under Section 401(a) of the Internal Revenue Code (IRC) and, therefore, the related trust is exempt from taxation. Once qualified, the Plan is required to operate in conformity with the IRC to maintain its qualification. The plan sponsor has indicated that it will take the necessary steps, if any, to maintain the Plan's qualified status. 6. Reconciliation of Financial Statements to Form 5500 - The following is a reconciliation of Net Assets Available for Benefits per the financial statements to the Form 5500 as of December 31: 2003 2002 --------------- -------------- Net Assets Available for Benefits per the financial statements $ 4,727,335 $ 4,468,213 Less: Distribution payable to participants (5,022) (3,670) --------------- -------------- Net Assets Available for Benefits per the Form 5500 $ 4,722,313 $ 4,464,543 =============== ============== The following is a reconciliation of benefits paid to participants per the financial statements to the Form 5500 for the year ended December 31, 2003: 2003 -------------- Distributions to participants per the financial statements $ 456,337 Add: Distributions payable to participants at December 31, 2003 5,022 Less: Distributions payable to participants at December 31, 2002 (3,670) -------------- Distributions to participants per the Form 5500 $ 457,689 ============== Distributions payable to participants are recorded on the Form 5500 for benefit claims that have been processed and approved for payment prior to December 31, but not yet paid as of that date. SBC SAVINGS AND SECURITY PLAN EIN 43-1301883, PLAN NO. 004 2003 Form 5500 Line 4a - Schedule of Delinquent Participant Contributions (Dollars in Thousands) December 31, 2003 Participant Contributions Total that Constitute Nonexempt Prohibited Transferred Late to Plan Transactions $ 3 $ 3 SBC SAVINGS AND SECURITY PLAN EIN 43-1301883, PLAN NO. 004 SCHEDULE H, LINE 4i - SCHEDULE OF ASSETS (HELD AT END OF YEAR) December 31, 2003 (Dollars in Thousands) Description of Current Identity of Issue Investment Cost Value ---------------------------------------------------- ------------------------------ ----------- ------------ Employee Stock Ownership Plan * SBC common shares 39,665,345 shares $ 869,303 $ 1,034,075 * Mellon Trust of New England, N.A. Temporary cash investment 4,069 4,069 ----------- ------------ Total Employee Stock Ownership Plan 873,372 1,038,144 ----------- ------------ SBC Shares Fund * SBC common shares 57,841,475 shares 1,507,927 * Mellon Trust of New England, N. A. Temporary cash investment 14,802 ------------ Total SBC Shares Fund ** 1,522,729 ------------ Bond Fund * Barclays Global Investors Intermediate ------------- Government/Credit Bond Index Fund F 9,400,728 units ** 152,386 ------------- Large Cap Stock Fund ------------ * Barclays Global Investors Equity Index Fund F 34,381,599 units ** 528,101 ------------ Interest Income Fund Bank of America National Association Synthetic contract wrapper #99-086, 4.04% (3,087) Capital Auto Rec Asset Trust Prime Auto 1,028 Capital Auto Rec Asset Trust Prime Auto 2,995 Capital Auto Rec Asset Trust Prime Auto 4,053 Capital Fin Asset Trust Large Equipment Loan 2,585 Chase Manhattan Auto Owner Trust Prime Auto 3,522 Commercial Mortgage Asset Trust Conduit 3,576 Credit Suisse First Boston Conduit 5,335 Federal Home Loan Banks Agency Debenture 8,527 Federal Home Loan Mortgage Company Agency Debenture 1,887 Federal Home Loan Mortgage Company Agency Debenture 4,451 Federal National Mtge Assn Agency Hybrid 2,965 Federal National Mtge Assn Agency CMO 7,479 Federal National Mtge Assn Home Equity Agency 1,888 Federal National Mtge Assn MBS Agency Hybrid 7,427 Fleet Credit Card MT Bank Credit Card 2,006 Household Private lab MT2 Retail Credit Card 5,386 MBNA Master Credit Card Trust Monoline Credit Card 1,700 Nordstrom Pvt Lbl CC MT Retail Credit Card 5,271 Prime Credit Card MT Retail Credit Card 5,359 Residential Funding Mtg Sec Conduit 5,849 TIAA Cref Conduit 2,230 Union Acceptance Corp Sub-Prime Auto 1,468 United States Treasury Treasury Note 16,218 United States Treasury Treasury Note 4,942 WFS Financial Owners Trust Sub-Prime Auto 2,717 Bank of America National Association Cash on Hand 438 ------------ 108,215 CDC Financial Products Inc. 7.00% - 7.01%, 8/29/05 - 10/17/05 8,085 GE Life and Annuity 7.45% 7/7/2004 3,723 JP Morgan Chase Bank Synthetic contract wrapper #426424-T, 3.83% (3,947) Amex Optima CC MT Monoline Credit Card 3,261 CIT Equipment Collateral Small Equipment Lease 6,483 Capital One Master Trust Monoline Credit Card 1,058 Catipillar Fin Asset Trust Large Equipment Loan 846 Chase Credit Card MT Bank Credit Card 3,877 Citibank Credit Card IT Bank Credit Card 2,054 Citibank Credit Card IT Bank Credit Card 5,206 Credit Suisse First Boston Conduit 4,348 Daimler Chrysler NA Hldg Prime Auto 1,951 John Deere Owner Trust Large Equipment Loan 6,930 Federal National Mtge Assn Agency Debenture 20,933 Federal National Mtge Assn Whole Loan Agency CMO 5,113 Federal National Mtge Assn Agency PAC 4,121 Federal Home Loan Mtge Corp Agency PAC 8,206 Federal National Mtge Assn Agency Hybrid 6,972 Ford Auto Owners Trust Prime Auto 3,791 Ford Auto Owners Trust Prime Auto 5,509 Honda Auto Receivables Prime Auto 2,726 Household Private lbl. CC Retail Credit Card 4,309 Lehman Brothers Comm Conduit Mtg Conduit 4,657 National City Auto Rec Trust Prime Auto 2,617 USAA Auto Owner Trust Prime Auto 7,911 United States Treasury Treasury Note 5,014 WFS Financial Owners Trust Sub-Prime Auto 3,867 JP Morgan Chase Cash on hand 1,526 ------------ 119,339 Metropolitan Life Synthetic contract wrapper #28434, 3.5% (1,434) Capital Auto Rec Asset Trust Prime Auto 1,497 Carmax Auto Owner Trust Non Prime Auto 1,285 Citibank Credit Card IT Bank Credit Card 4,081 Chase Manhattan Auto Owns Trust Conduit 3,575 Federal Home Loan Mortgage Co Agency Debenture 5,551 Federal National Mtge Assn Agency Debenture 7,611 Federal National Mtge Assn Agency Mortgage PoolIntex 5,527 Federal National Mtge Assn - ACES Agency CMBS 7,241 Federal National Mtge Assn Whole Loan Agency CMO 2,905 Honda Auto Receivables Prime Auto 2,726 Household Auto Trust Subprime Auto 1,407 MBNA Master Credit Card Trust Monoline Credit Card 1,622 Nissan Auto Owners Trust Prime Auto 8,045 Nomura Asset Securities Corporation Conduit 8,426 Toyota Auto Owners Trust Prime Auto 4,849 Union Acceptance Corp Sub Prime Auto 3,418 United States Treasury Treasury Note 19,768 WFS Financial Owners Trust Sub-Prime Auto 3,867 Metropolitan Life Cash on hand 381 ------------ 92,348 Monumental 7.17% 7/25/2005 5,596 Monumental Synthetic Wrapper Contract MDA00292TR, 4.82% (4,033) Amex Optima CC MT Monoline Credit Card 849 Ameriquest Mtg Securities Inc Home Equity Senior Sub 2,884 Asset Backed Funding Certificates Home Equity Senior Sub 4,295 Bank One Issuance Trust Bank Credit Card 9,203 CIT Equipment Collateral Small Equipment Lease 1,621 Capital Auto Recovery Asset Trust Prime Auto 2,055 Capital One Auto Sub Prime Auto 1,758 Carmax Auto Owner Trust Nonprime Auto 3,213 Discover Card Master Trust Bank Credit Card 7,504 Federal National Mtge Assn Agency CMBS 5,348 Federal National Mtge Assn Grantor Trust Home Equity Agency 5,082 Federal National Mtge Assn MBS Home Equity Agency 6,155 Federal Home Loan Mtge Corp Home Equity Agency 3,026 Federal National Mtge Assn Whole Loan Home Equity Agency 10,613 Federal National Mtge Assn Whole Loan Home Equity Agency 6,161 Ford Auto Owners Trust Prime Auto 2,582 Home Ownership Funding Step Down 1,505 Home Ownership Funding Step Down 1,255 Honda Auto Receivables Prime Auto 1,956 Honda Auto Receivables Prime Auto 1,322 Household Auto Trust Subprime Auto 266 MBNA Master Trust Monoline Credit Card 4,272 Pinnacle CBO Ltd Asset Backed 1,614 KEYCORP Conduit 2,201 Res Asset Mtg Products Home Equity Agency 4,115 Residential Asset Sec Home Equity Monoline 3,697 Sears Credit Account Trust Retail Credit Card 84 United States Treasury Treasury Note 8,148 Vanderbilt Mortgage Finance Mfg HsgSrSub 2,376 WFS Financial Owners Trust Sub Prime Auto 1,811 Monumental Cash on hand 877 ------------ 103,815 New York Life Insurance Company 5.28% 2/2/2004 17,502 ------------ Prudential Insurance Company 6.02%-7.48% 9/7/04-11/30/05 21,980 Rabobank Nederland Synthetic contract wrapper SBC-060201, 3.24% (521) Chase Manhattan Auto Owner Trust Prime Auto 6,951 Federal Home Loan Mtge Corp Agency Hybrid 8,116 Federal Home Loan Mtge Company Agency Debenture 8,882 Federal National Mtge Assn Whole Loan Home Equity Agency 8,286 Federal National Mtge Assn Whole Loan Home Equity Agency 6,238 Federal National Mtge Assn Agency Hybrid 3,023 GMACC Commercial Mtg Securities Conduit 7,825 Saxon Asset Securities Trust Home Equity Senior Sub 2,869 United States Treasury Treasury Note 10,029 United States Treasury Treasury Note 7,907 Rabobank Nederland Cash on hand 201 ------------ 69,806 Security Life of Denver 7.39% 10/4/2004 7,431 State Street Bank Synthetic Contract Wrapper 99039, 4.93% (4,262) Amex. Optima CC MT Monoline Credit Card 5,101 Amex. Optima CC MT Monoline Credit Card 3,090 Bank One Issuance Trust Bank Credit Card 9,969 Capital One Master Trust Monoline Credit Card 6,346 Capital One Auto Subprime Auto 2,026 Chase Manhattan Auto Owns Trust Prime Auto 2,072 Citibank Credit Card MT Bank Credit Card 4,216 Commercial Mtg Acceptance Corp Conduit 3,004 Delta Funding HEL Trust Home Equity Monoline 1,587 Federal Home Loan Mtge Corp Agency Hybrid 651 Federal Home Loan Mtge Corp Agency Debenture 1,110 Federal National Mtg Assn Home Equity Agency 3,166 Federal Home Loan Mtge Corp Home Equity Agency 3,299 Federal National Mtge Assn Whole Loan Agency CMO 7,894 Federal National Mtge Assn Whole Loan Home Equity Agency 7,529 Federal Home Loan Mtge Corp Agency PAC 15,980 Federal Home Loan Mtge Corp Agency PAC 7,166 Federal National Mtge Assn Agency Hybrid 16,176 Honda Auto Receivables Prime Auto 106 MBNA Master Trust Monoline Credit Card 3,771 MBNA Master Trust Monoline Credit Card 1,601 MBNA Master Trust Monoline Credit Card 2,136 Nissan Auto Owners Trust Prime Auto 3,271 KEYCORP Conduit 4,401 Sears Credit Account Trust Retail Credit Card 179 United States Treasury Treasury Note 2,006 State Street Bank Cash on Hand 594 ------------
SunAmerica Life Insurance Company 7.14%-7.97% 1/2/04-9/22/05 10,722 UBS AG Synthetic Contract Wrapper 5029, 3.24% (1,413) Americredit Auto Rec Subprime Auto 3,104 Capital One Auto Subprime Auto 2,532 Chase Credit Card MT Bank Credit Card 2,692 Chase Funding Mtg Loan Asset-Back Home Equity Senior Sub 4,269 Commercial Mtg Pass-Thru Cert Conduit 7,821 Federal Home Loan Mortgage Corporation Agency Hybrid 551 Federal Home Loan Banks Agency Debenture 10,032 Federal National Mtge Assn Home Equity Agency 3,166 Federal National Mtge Assn Home Equity Agency 3,078 Federal National Mtge Assn Whole Loan Home Equity Agency 3,629 Federal National Mtge Assn Whole Loan Home Equity Agency 6,196 Federal Home Loan Mtge Corp Agency PAC 8,225 Morgan Stanley Capital I Conduit 7,757 Res Asset Mtg Products Home Equity Agency 3,086 TIAA Real Estate CDO Ltd Conduit 1,673 United States Treasury Treasury Note 4,264 United States Treasury Treasury Note 1,065 USB AG Cash on hand 1,205 ------------ 72,932 * Mellon Trust of New England, N.A. Temporary cash investment 25,874 ------------ Total Interest Income Fund ** 781,553 ------------ Asset Allocation Fund * Barclays Global Investors U.S. Tactical Asset ------------ Fund F 13,688,570 units ** 228,188 ------------ Global Equity Fund * Barclays Global Investors U.S. Equity Market Fund F 2,012,571 units 55,426 * Barclays Global Investors EAFE Equity Index Fund F 974,589 units 17,241 ------------ Total Global Equity Fund ** 72,667 ------------ Mid and Small Cap Stock Fund ------------ ------------ Extended Equity Market Fund F 6,019,806 units ** 101,675 ------------ International Fund * Barclays Global Investors U.S. Equity Market ------------ Fund F 1,013,473 units ** 17,928 ------------
Loan Fund ------------ * Loans to Plan Participants 5.00% - 5.25% ** 288,689 ------------ TOTAL $ 4,732,060 ============ * Party-in-Interest. ** Participant-directed investment, cost not required. *** Synthetic Insurance Contracts, no stated maturity. SBC SAVINGS AND SECURITY PLAN EIN 43-1301883, PLAN NO. 004 SCHEDULE H, LINE 4j - SCHEDULE OF REPORTABLE TRANSACTIONS December 31, 2003 (Dollars in Thousands) Current Value Identity of Description of Purchase Price Selling Cost of of Asset on Net Gain Party Involved Asset Price Asset Transaction Date (Loss) -------------------------------- ------------------------------ ---------------- ----------- --------------- ----------------- ---------------- Category (iii) - Series of Transactions in Excess of 5 Percent of Plan Assets *SBC Communications Inc. SBC Communications Inc. common stock $ 150,482 $ - $150,482 $ 150,482 $ - *SBC Communications Inc. SBC Communications Inc. common stock - 82,107 69,392 82,107 12,715 *Mellon Trust of New England, Pooled Employee Funds Daily N. A. Liquidity Fund 194,222 - 194,222 194,222 - *Mellon Trust of New England, Pooled Employee Funds Daily N. A. Liquidity Fund - 194,494 194,494 194,494 - * All transactions were purchased and sold on the market. There were no Category (i), (ii) or (iv) reportable transactions during the year ended December 31, 2003. SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the Plan Administrator for the Plan has duly caused this annual report to be signed by the undersigned thereunto duly authorized. SBC SAVINGS AND SECURITY PLAN By SBC Communications Inc., Plan Administrator for the Foregoing Plan By /s/ Karen E. Jennings ------------------------------------------ Karen E. Jennings Senior Executive Vice President - Human Resources and Communications Date: June 23, 2004 EXHIBIT INDEX Exhibit identified below, Exhibit 23 is filed herein as an exhibit hereto. Exhibit Number 23 Consent of Independent Registered Public Accounting Firm EX 23 Form 11-K for 2003 File No. l-8610 Consent of Independent Registered Public Accounting Firm We consent to the incorporation by reference in the Registration Statement (Form S-8, No. 333-101433) pertaining to SBC Savings and Security Plan of our report dated June 21, 2004, with respect to the financial statements and supplemental schedules of SBC Savings and Security Plan included in this Annual Report (Form 11-K) for the year ended December 31, 2003. /s/ ERNST & YOUNG LLP San Antonio, Texas June 21, 2004