UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[x] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended March 31, 1999
------------------------------------------------------
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from to
333-06609-01
Commission file number 333-06609-02
SPRINT SPECTRUM L.P.
SPRINT SPECTRUM FINANCE CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 48-1165245
DELAWARE 43-1746537
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification Nos.)
4900 Main Street, Kansas City, Missouri 64112
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (816) 559-1000
---------------------
Securities registered pursuant to Section 12(b) and 12(g) of the Act: None
The registrants meet the conditions set forth in General Instruction H (1) (a)
and (b) of Form 10-Q and are therefore filing this Form with the reduced
disclosure format.
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No______
At May 1, 1999 the Sprint Spectrum Finance Corporation had 100 common shares
outstanding.
Documents Incorporated by Reference: None
<PAGE>
<TABLE>
<CAPTION>
Table of Contents
Page
Number
-------------------
SPRINT SPECTRUM L.P.
Part I - Financial Information
Item 1. Financial Statements
Consolidated Statements of Operations for the quarters ended
<S> <C>
March 31, 1999 and 1998 1
Consolidated Balance Sheets as of March 31, 1999 and
December 31, 1998 2
Consolidated Statements of Cash Flows for the quarters ended
March 31, 1999 and 1998 3
Consolidated Statements of Changes in Partners' Capital for the quarter
ended March 31, 1999 4
Condensed Notes to Consolidated Financial Statements 5
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 6
Item 3. Quantitative and Qualitative Disclosures About Market Risk 9
Part II - Other Information
Item 1. Legal Proceedings 9
Item 2. Changes in Securities 9
Item 3. Defaults Upon Senior Securities 9
Item 4. Submission of Matters to a Vote of Security Holders 9
Item 5. Other Information 9
Item 6. Exhibits and Reports on Form 8-K 9
Signature 10
SPRINT SPECTRUM FINANCE CORPORATION
Part I - Financial Information
Item 1. Financial Statements
Balance Sheets 11
Notes to Financial Statements 11
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 11
Item 3. Quantitative and Qualitative Disclosures About Market Risk 11
Part II - Other Information
Item 1. Legal Proceedings 12
Item 2. Changes in Securities 12
Item 3. Defaults Upon Senior Securities 12
Item 4. Submission of Matters to a Vote of Security Holders 12
Item 5. Other Information 12
Item 6. Exhibits and Reports on Form 8-K 12
Signature 13
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Part I.
Item 1.
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) Sprint Spectrum L.P.
(millions)
- -------------------------------------------------------------------------------------------------------------------
Quarters Ended March 31, 1999 1998
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Net Operating Revenues $ 440.0 $ 143.8
- -------------------------------------------------------------------------------------------------------------------
Operating Expenses
Costs of services and products 380.6 168.9
Selling, general and administrative 282.9 224.6
Depreciation and amortization 169.4 114.6
- -------------------------------------------------------------------------------------------------------------------
Total operating expenses 832.9 508.1
- -------------------------------------------------------------------------------------------------------------------
Operating Loss (392.9) (364.3)
Interest expense (116.9) (77.3)
Other income, net 1.6 1.8
- -------------------------------------------------------------------------------------------------------------------
Loss before Extraordinary Item (508.2) (439.8)
Extraordinary item (32.5) -
- -------------------------------------------------------------------------------------------------------------------
Net Loss $ (540.7) $ (439.8)
------------------------------
</TABLE>
See accompanying Condensed Notes to Consolidated Financial Statements.
<PAGE>
<TABLE>
<CAPTION>
CONSOLIDATED BALANCE SHEETS Sprint Spectrum L.P.
(millions)
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
March 31, December 31,
1999 1998
- --------------------------------------------------------------------------------------------------------------------
(Unaudited)
Assets
Current assets
<S> <C> <C>
Cash and equivalents $ 41.4 $ 70.4
Accounts receivable, net of allowance for doubtful
accounts of $20.9 and $15.8 253.0 225.6
Affiliate receivable 156.9 247.8
Inventories 120.3 91.7
Prepaid expenses and other assets 56.5 26.9
- --------------------------------------------------------------------------------------------------------------------
Total current assets 628.1 662.4
Property, plant and equipment
Network equipment 3,204.5 2,936.9
Buildings and leasehold improvements 777.2 757.6
Construction work in progress 679.1 618.6
Other 287.2 258.8
- --------------------------------------------------------------------------------------------------------------------
Total property, plant and equipment 4,948.0 4,571.9
Accumulated depreciation (921.3) (772.2)
- --------------------------------------------------------------------------------------------------------------------
Net property, plant and equipment 4,026.7 3,799.7
Intangible assets
PCS licenses 2,130.2 2,130.2
Microwave relocation costs 311.7 298.6
- --------------------------------------------------------------------------------------------------------------------
Total intangible assets 2,441.9 2,428.8
Accumulated amortization (125.3) (110.2)
- --------------------------------------------------------------------------------------------------------------------
Net intangible assets 2,316.6 2,318.6
Other assets 61.6 45.1
- --------------------------------------------------------------------------------------------------------------------
Total $ 7,033.0 $ 6,825.8
-------------------------------------------
Liabilities and Partners' Capital
Current liabilities
Current maturities of long-term debt $ 5.1 $ 5.1
Accounts payable 440.3 351.3
Advances from Sprint 1,490.8 235.0
Construction obligations 635.4 592.7
Accrued payroll 210.1 107.2
Accrued advertising 32.2 84.2
Accrued interest 139.8 77.8
Accrued expenses and other current liabilities 277.6 186.1
- --------------------------------------------------------------------------------------------------------------------
Total current liabilities 3,231.3 1,639.4
- --------------------------------------------------------------------------------------------------------------------
Long-term debt 4,574.3 5,414.1
Other noncurrent liabilities 58.3 79.9
Partners' capital and accumulated deficit:
Partners' capital 3,707.7 3,690.3
Accumulated deficit (4,538.6) (3,997.9)
- --------------------------------------------------------------------------------------------------------------------
Total partners' capital and accumulated deficit (830.9) (307.6)
- --------------------------------------------------------------------------------------------------------------------
Total $ 7,033.0 $ 6,825.8
-------------------------------------------
</TABLE>
See accompanying Condensed Notes to Consolidated Financial Statements.
<PAGE>
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) Sprint Spectrum L.P.
(millions)
- ------------------------------------------------------------------ ----------------- ----------------- ----------------
Quarters Ended March 31, 1999 1998
- ------------------------------------------------------------------ ----------------- ----------------- ----------------
Operating Activities
<S> <C> <C>
Net loss $ (540.7) $ (439.8)
Adjustments to reconcile net loss to net cash provided (used) by
operating activities:
Depreciation and amortization 169.4 114.6
Extraordinary item 32.5 -
Amortization of debt discount and issuance costs 14.1 13.1
Changes in assets and liabilities:
Receivables 63.5 63.7
Inventories and other current assets (53.1) (4.6)
Accounts payable and accrued expenses 336.1 (332.1)
Other, net (55.9) 12.3
- ------------------------------------------------------------------ --- ------------- --- ------------- -- -------------
Net cash used by operating activities (34.1) (572.8)
- ------------------------------------------------------------------ --- ------------- --- ------------- -- -------------
Investing Activities
Capital expenditures (381.3) (278.0)
Microwave relocation costs (18.4) (7.9)
- ------------------------------------------------------------------ --- ------------- --- ------------- -- -------------
Net cash used by investing activities (399.7) (285.9)
- ------------------------------------------------------------------ --- ------------- --- ------------- -- -------------
Financing Activities
Proceeds from long-term debt 844.0 859.0
Payments on long-term debt (1,695.0) (1.7)
Advances from Sprint 1,255.8 -
- ------------------------------------------------------------------ --- ------------- --- ------------- -- -------------
Net cash provided by financing activities 404.8 857.3
- ------------------------------------------------------------------ --- ------------- --- ------------- -- -------------
Decrease in Cash and Equivalents (29.0) (1.4)
Cash and Equivalents at Beginning of Period 70.4 67.2
- ------------------------------------------------------------------ --- ------------- --- ------------- -- -------------
Cash and Equivalents at End of Period $ 41.4 $ 65.8
--- ------------- -- -------------
</TABLE>
See accompanying Condensed Notes to Consolidated Financial Statements.
<PAGE>
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS' CAPITAL (Unaudited) Sprint Spectrum L.P.
(millions)
- ---------------------------------------------------------------------------------------------------------------------
Partners' Accumulated
Capital Deficit Total
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Beginning 1999 balance $ 3,690.3 $ (3,997.9) $ (307.6)
Net loss - (540.7) (540.7)
Other 17.4 - 17.4
- ---------------------------------------------------------------------------------------------------------------------
March 1999 balance $ 3,707.7 $ (4,538.6) $ (830.9)
----------------------------------------------------
</TABLE>
See accompanying Condensed Notes to Consolidated Financial Statements.
<PAGE>
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Sprint Spectrum L.P.
(Unaudited)
The information in this Form 10-Q has been prepared according to Securities and
Exchange Commission rules and regulations. In our opinion, the consolidated
interim financial statements reflect all adjustments (consisting only of normal
recurring accruals) needed to fairly present Sprint Spectrum L.P.'s consolidated
financial position, results of operations and cash flows.
Certain information and footnote disclosures normally included in consolidated
financial statements prepared according to generally accepted accounting
principles have been condensed or omitted. As a result, you should read these
financial statements along with Sprint Spectrum's 1998 Form 10-K. Operating
results for the 1999 year-to-date period do not necessarily represent the
results that may be expected for the year ending December 31, 1999.
- --------------------------------------------------------------------------------
1. PCS Restructuring
- --------------------------------------------------------------------------------
In November 1998, Sprint Corporation purchased the remaining ownership interests
in Sprint Spectrum Holding Company, L.P. (Holdings)--Sprint Spectrum's general
partner--and MinorCo, L.P.--Sprint Spectrum's limited partner--from
Tele-Communications, Inc., Comcast Corporation and Cox Communications, Inc. At
that time, Sprint created the Sprint PCS Group, which consists of Sprint's
domestic wireless mobile phone services, including Sprint Spectrum.
- --------------------------------------------------------------------------------
2. Basis of Consolidation and Presentation
- --------------------------------------------------------------------------------
The consolidated financial statements include the accounts of Sprint Spectrum
and its subsidiaries.
The consolidated financial statements are prepared using generally accepted
accounting principles. These principles require management to make estimates and
assumptions that affect the reported amounts of assets and liabilities, the
disclosure of contingent assets and liabilities, and the reported amounts of
revenues and expenses. Actual results could differ from those estimates. Sprint
Spectrum is, indirectly, a wholly owned Sprint subsidiary. As a result, earnings
per share information has been omitted.
Certain prior-year amounts have been reclassified to conform to the current-year
presentation. These reclassifications had no effect on the results of operations
or partners' capital as previously reported.
- --------------------------------------------------------------------------------
3. Long-term Debt
- --------------------------------------------------------------------------------
In the 1999 first quarter, Sprint Spectrum terminated its revolving credit
facilities and repaid, prior to scheduled maturities, the related outstanding
balance of $1.7 billion. These facilities had interest rates ranging from 5.6%
to 6.3%. This resulted in a $33 million extraordinary loss. The debt was repaid
with financing provided by Sprint.
In the 1999 first quarter, Sprint Spectrum issued notes payable totaling $844
million to affiliates. The notes mature in 2006 and have interest rates based on
the London Inter-Bank Offered Rate plus 269 basis points.
- --------------------------------------------------------------------------------
4. Litigation, Claims and Assessments
- --------------------------------------------------------------------------------
Various suits arising in the ordinary course of business are pending against
Sprint Spectrum. Management cannot predict the final outcome of these actions
but believes they will not be material to the consolidated financial statements.
- --------------------------------------------------------------------------------
5. Supplemental Cash Flows Information
- --------------------------------------------------------------------------------
Sprint Spectrum's cash paid for interest, net of capitalized interest, totaled
$55 million in the 1999 first quarter and $36 million in the 1998 first quarter.
Noncash activities for Sprint Spectrum included the following:
Quarters Ended
March 31,
----------------------
1999 1998
- -------------------------------------------------------
(millions)
Accrued interest converted to
long-term debt $ - $ 32.0
----------------------
Noncash activity in partners'
capital $ 17.4 $ -
----------------------
<PAGE>
Part I.
Item 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF Sprint Spectrum L.P.
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
- --------------------------------------------------------------------------------
General
- --------------------------------------------------------------------------------
In November 1998, Sprint Corporation purchased the remaining ownership interests
in Sprint Spectrum Holding Company, L.P. (Holdings)--Sprint Spectrum's general
partner--and MinorCo, L.P.--Sprint Spectrum's limited partner--from
Tele-Communications, Inc., Comcast Corporation and Cox Communications, Inc. At
that time, Sprint created the Sprint PCS Group, which consists of Sprint's
domestic wireless mobile phone services, including Sprint Spectrum.
- --------------------------------------------------------------------------------
Forward-Looking Information
- --------------------------------------------------------------------------------
Sprint Spectrum includes certain estimates, projections and other
forward-looking statements in its reports, in presentations to analysts and
others, and in other publicly available material. Future performance cannot be
ensured. Actual results may differ materially from those in the forward-looking
statements. Some factors that could cause actual results to differ include:
- the effects of vigorous competition in the markets in which Sprint
Spectrum operates;
- the costs and business risks related to entering and expanding new
markets necessary to provide nationwide service and new services;
- the ability of Sprint Spectrum to grow its market presence;
- the impact of any unusual items resulting from ongoing evaluations of
Sprint Spectrum's business strategies;
- unexpected results of litigation filed against Sprint Spectrum;
- the impact of the Year 2000 issue and any related noncompliance; and
- the possibility of one or more of the markets in which Sprint Spectrum
competes being impacted by changes in economic or other factors such
as legal and regulatory changes or other external factors over which
Sprint Spectrum has no control.
<PAGE>
- --------------------------------------------------------------------------------
Results of Operations
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Selected Operating Results
---------------------------------------------------------------------
Quarters Ended
March 31, Variance
---------------------------------- -------------------------------
1999 1998 $ %
- ---------------------------------------------- ---------------- ----------------- -- ------------- -----------------
(millions)
<S> <C> <C> <C> <C>
Net operating revenues $ 440.0 $ 143.8 $ 296.2 206.0%
- ---------------------------------------------- -- ------------- -- -------------- -- ------------- -----------------
Operating expenses
Costs of services and products 380.6 168.9 211.7 125.3%
Selling, general and administrative 282.9 224.6 58.3 26.0%
Depreciation and amortization 169.4 114.6 54.8 47.8%
- ---------------------------------------------- -- ------------- -- -------------- -- -------------
Total operating expenses 832.9 508.1 324.8 63.9%
- ---------------------------------------------- -- ------------- -- -------------- -- -------------
Operating loss $ (392.9) $ (364.3) $ (28.6) (7.9)%
-- ------------- -- -------------- -- -------------
Operating loss before depreciation
and amortization $ (223.5) $ (249.7) $ 26.2 10.5%
-- ------------- -- -------------- -- -------------
</TABLE>
<PAGE>
The wireless industry typically generates a significantly higher number of
subscriber additions and handset sales in the fourth quarter of each year versus
the remaining quarters. This is due to the use of retail distribution, which
is dependent on the holiday shopping season; the timing of new products and
service introductions; and aggressive marketing and sales promotions.
Sprint Spectrum markets its products through multiple distribution channels,
including its own retail stores as well as other retail outlets. Equipment sales
to one retailer, and the related service revenues generated by such sales,
accounted for approximately 30% of net operating revenues in the 1999 first
quarter.
Net Operating Revenues
Net operating revenues include subscriber revenues (including monthly recurring
charges and usage charges), roaming revenues and sales of handsets and accessory
equipment. Net operating revenues increased 206% from the same 1998 period
reflecting the launch of new markets and the addition of new customers in 1998.
Sprint Spectrum, together with certain affiliates, added approximately 763,000
customers in the 1999 first quarter and had nearly 3.4 million customers in more
than 280 markets nationwide at the end of March 1999.
Approximately 23% of the 1999 first quarter net operating revenues, and 20% of
the 1998 first quarter net operating revenues, were from sales of handsets and
accessories. As part of Sprint Spectrum's marketing plans, handsets are normally
sold at prices below Sprint Spectrum's cost.
Operating Expenses
Costs of services and products mainly includes handset and accessory costs,
interconnection costs, and switch and cell site expenses. These costs increased
125% in the 1999 first quarter reflecting the significant growth in customers
and the expanded market coverage, offset by a reduction in handset unit costs.
Selling, general and administrative (SG&A) expense mainly includes marketing
costs to promote products and services, as well as salary and benefit costs.
SG&A expense increased 26% reflecting increased marketing and advertising costs
and labor costs to support the growth in subscriber activity.
Depreciation and amortization expense consists of depreciation of network assets
and amortization of intangible assets. The intangible assets include PCS
licenses and microwave relocation costs. Depreciation and amortization expense
increased 48% reflecting the increase in network assets placed in service after
the 1998 first quarter.
- --------------------------------------------------------------------------------
Extraordinary Item
- --------------------------------------------------------------------------------
In the 1999 first quarter, Sprint Spectrum terminated its revolving credit
facilities and repaid, prior to scheduled maturities, the related outstanding
balance of $1.7 billion. These facilities had interest rates ranging from 5.6%
to 6.3%. This resulted in a $33 million extraordinary loss. The debt was repaid
with financing provided by Sprint.
- --------------------------------------------------------------------------------
Liquidity and Capital Resources
- --------------------------------------------------------------------------------
Sprint Spectrum's liquidity and capital resources are managed by Sprint. Sprint
funds the Sprint PCS Group's (including Sprint Spectrum's) operating losses,
working capital and debt service requirements.
- --------------------------------------------------------------------------------
Year 2000 Issue
- --------------------------------------------------------------------------------
The "Year 2000" issue affects Sprint Spectrum's installed computer systems,
network elements, software applications, and other business systems that have
time-sensitive programs that may not properly reflect or recognize the year
2000. Because many computers and computer applications define dates by the last
two digits of the year, "00" may not be properly identified as the year 2000.
This error could result in miscalculations or system failures. The Year 2000
issue may also affect the systems and applications of Sprint Spectrum's
customers, vendors, resellers or affiliates.
Sprint Spectrum has completed an inventory and assessment of its computer
systems, network elements, software applications, products and other business
systems. Testing began in the 1999 first quarter and is forecasted to be
completed by year-end. Sprint Spectrum is using both internal and external
resources to identify, correct or reprogram, and test its systems for Year 2000
compliance. It expects Year 2000 compliance for these critical systems to be
achieved in 1999.
Sprint Spectrum is also contacting others with whom it conducts business to
receive the appropriate warranties and assurances that those third parties are
or will be Year 2000 compliant. Sprint Spectrum relies on third-party vendors
for a significant portion of its important operating and computer system
functions and is highly dependent on those third-party vendors to remediate and
test network elements, computer systems, software applications and other
business systems. However, Sprint Spectrum is reviewing test results provided by
its vendors to help ensure Year 2000 compliance. In addition, Sprint Spectrum
uses publicly available services that are acquired without contract, such as
global positioning system timing signal, that may be affected by the Year 2000
issue. While Sprint Spectrum believes these pubicly available systems will be
Year 2000 compliant, it has no contractual or other right to force compliance.
Sprint Spectrum incurred approximately $15 million through March 1999 and
expects to incur approximately $35 million throughout the remainder of 1999 for
its Year 2000 remediation program. This program is designed to assure the proper
functioning of critical and secondary elements for Year 2000 compliance. When
the program is fulfilled, Sprint Spectrum has a high degree of confidence that
elements within its control will function through the upcoming date changes.
However, two risks remain: (1) the risk to Sprint Spectrum if the Year 2000
program is not fulfilled, and (2) the risk stemming from elements vulnerable to
the Year 2000 problem which are beyond Sprint Spectrum's control.
With regards to the first risk, if the Year 2000 program is not fulfilled in a
timely manner by Sprint Spectrum, its affiliates or any significant third party,
the Year 2000 issue could have a material adverse effect on Sprint Spectrum's
operations. Sprint Spectrum is focusing on identifying and addressing all
aspects of its operations that may be affected by the Year 2000 issue.
With regards to the second risk, Sprint Spectrum is evaluating events beyond its
control that could occur prior to and after the arrival of the year 2000. Sprint
Spectrum is reviewing its existing disaster recovery plans and developing
additional contingency and business continuity plans to prepare for the year
2000. Most of these plans are scheduled to be completed in the second quarter.
Sprint Spectrum will implement, if necessary, appropriate contingency and
business continuity plans to mitigate to the extent possible the effects of any
Year 2000 noncompliance.
Sprint Spectrum has begun to review the risks associated with a worst case
scenario, which could result from a Year 2000 related failure. This scenario
could result in a temporary disruption to normal business operations and impact
Sprint Spectrum's financial performance. Based upon the work completed to date,
Sprint Spectrum believes that such an occurrence is unlikely. Nevertheless,
certain elements related to the Year 2000 readiness of suppliers, utilities,
interconnecting carriers and customers are beyond Sprint Spectrum's control and
could fail. At this point, Sprint Spectrum does not believe that the failure of
such elements could cause a major breakdown within its normal operations.
<PAGE>
Part I.
Item 3.
QUANTITATIVE AND QUALITATIVE DISCLOSURES Sprint Spectrum L.P.
ABOUT MARKET RISK
Omitted under the provisions of General Instruction H.
Part II.
Other Information
Item 1. Legal Proceedings
There were no reportable events during the quarter ended March 31, 1999.
Item 2. Changes in Securities
Omitted under the provisions of General Instruction H.
Item 3. Defaults Upon Senior Securities
Omitted under the provisions of General Instruction H.
Item 4. Submission of Matters to a Vote of Security Holders
Omitted under the provisions of General Instruction H.
Item 5. Other Information
There were no reportable events during the quarter ended March 31, 1999.
Item 6. Exhibits and Reports on Form 8-K
(a) The following exhibits are filed as part of this report:
(3.1) Certificate of Limited Partnership of Sprint Spectrum L.P.
(incorporated by reference to Exhibit 3.2 to Sprint Spectrum's
Form S-1 Registration Statement, Registration No. 333-06609,
filed on June 21, 1996).
(3.2) Agreement of Limited Partnership of MajorCo Sub, L.P. (renamed
Sprint Spectrum L.P.), dated as of March 28, 1995, among
MajorCo, L.P. (renamed Sprint Spectrum Holding Company, L.P.)
and MinorCo, L.P. (incorporated by reference to Exhibit 3.6 to
Sprint Spectrum's Form S-1 Registration Statement,
Registration No. 333-06609, filed on June 21, 1996).
(27) Financial Data Schedule
(a) March 31, 1999
(b) Reports on Form 8-K
No reports on Form 8-K were filed during the quarter ended March 31,
1999.
<PAGE>
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.
SPRINT SPECTRUM L.P.
----------------------------------------------------------
(Registrant)
/s/ William J. Gunter
----------------------------------------------------------
William J. Gunter
Chief Financial Officer
Principal Financial Officer
Date: May 13, 1999
<PAGE>
<TABLE>
<CAPTION>
Part I.
Item 1.
Sprint Spectrum Finance Corporation
- --------------------------------------------------------------------------------------------------------------------
BALANCE SHEETS (Unaudited)
March 31, December 31,
1999 1998
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Liabilities and Shareholder's Equity
Payable to Sprint Spectrum $ 1,497 $ 1,497
-------------------------------
Shareholder's equity
Common stock, $1.00 par value; 1,000 shares authorized;
100 shares issued and outstanding 100 100
Accumulated deficit (1,597) (1,597)
-------------------------------
Total shareholder's equity (1,497) (1,497)
-------------------------------
Total $ - $ -
-------------------------------
</TABLE>
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (Unaudited)
Sprint Spectrum Finance Corporation, a wholly owned subsidiary of Sprint
Spectrum L.P., was formed to be a co-obligor of certain securities issued by
Sprint Spectrum. FinCo has nominal assets and did not conduct any operations
during the 1999 and 1998 first quarters. As a result, the Statements of
Operations and Statements of Cash Flows have been omitted.
PART I.
Item 2.
- --------------------------------------------------------------------------------
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Sprint Spectrum Finance Corporation had no operations during the 1999 and 1998
first quarters.
PART I.
Item 3.
- --------------------------------------------------------------------------------
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Omitted under the provisions of General Instruction H.
<PAGE>
PART II.
Other Information
Item 1. Legal Proceedings
There were no reportable events during the quarter ended March 31, 1999.
Item 2. Changes in Securities
Omitted under the provisions of General Instruction H.
Item 3. Defaults Upon Senior Securities
Omitted under the provisions of General Instruction H.
Item 4. Submission of Matters to a Vote of Security Holders
Omitted under the provisions of General Instruction H.
Item 5. Other Information
There were no reportable events during the quarter ended March 31, 1999.
Item 6. Exhibits and Reports on Form 8-K
(a) The following exhibits are filed as part of this report:
(3.1) Certificate of Incorporation of Sprint Spectrum Finance
Corporation (incorporated by reference to Exhibit 3.3 to
Sprint Spectrum's Form S-1 Registration Statement,
Registration No. 333-06609, filed on June 21, 1996).
(3.2) Bylaws of Sprint Spectrum Finance Corporation (incorporated
by reference to Exhibit 3.4 to Sprint Spectrum's Form S-1
Registration Statement, Registration No. 333-06609, filed on
June 21, 1996).
(27) Financial Data Schedule
(a) March 31, 1999
(b) Reports on Form 8-K
No reports on Form 8-K were filed during the quarter ended March 31,
1999.
<PAGE>
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.
SPRINT SPECTRUM FINANCE CORPORATION
----------------------------------------------------------
(Registrant)
/s/ William J. Gunter
----------------------------------------------------------
William J. Gunter
Vice President, Treasurer and Director
Principal Financial Officer
Date: May 13, 1999
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0001015551
<NAME> Sprint Spectrum L.P.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> Dec-31-1999
<PERIOD-END> Mar-31-1999
<CASH> 41,400
<SECURITIES> 0
<RECEIVABLES> 273,900
<ALLOWANCES> 20,900
<INVENTORY> 120,300
<CURRENT-ASSETS> 628,100
<PP&E> 4,948,000
<DEPRECIATION> 921,300
<TOTAL-ASSETS> 7,033,000
<CURRENT-LIABILITIES> 3,231,300
<BONDS> 4,574,300
0
0
<COMMON> 0
<OTHER-SE> (830,900)
<TOTAL-LIABILITY-AND-EQUITY> 7,033,000
<SALES> 0
<TOTAL-REVENUES> 440,000
<CGS> 0
<TOTAL-COSTS> 550,000
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 116,900
<INCOME-PRETAX> (508,200)
<INCOME-TAX> 0
<INCOME-CONTINUING> (508,200)
<DISCONTINUED> 0
<EXTRAORDINARY> (32,500)
<CHANGES> 0
<NET-INCOME> (540,700)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0001017358
<NAME> Sprint Spectrum Finance Corporation
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> Dec-31-1999
<PERIOD-END> Mar-31-1999
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 0
<CURRENT-LIABILITIES> 1,497
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> (1,497)
<TOTAL-LIABILITY-AND-EQUITY> 0
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 0
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
