<PAGE>
PROSPECTUS SUPPLEMENT [LOGO]
(To Prospectus Dated July 7, 1992)
3,900,000 DECS-SM-
(DEBT EXCHANGEABLE FOR COMMON STOCK-SM-)
SPRINT CORPORATION
8 1/4% EXCHANGEABLE NOTES DUE MARCH 31, 2000
(SUBJECT TO EXCHANGE INTO SHARES OF COMMON STOCK, PAR VALUE $1.00 PER SHARE, OF
SOUTHERN NEW ENGLAND TELECOMMUNICATIONS CORPORATION)
The principal amount of each of the 8 1/4% Exchangeable Notes Due March 31, 2000
(each, a "DECS"), of Sprint Corporation (the "Company") being offered hereby
will be $31.875 (the last sale price of the common stock, par value $1.00 per
share (the "SNET Common Stock"), of Southern New England Telecommunications
Corporation ("SNET") on March 20, 1995, as reported on the New York Stock
Exchange Composite Tape) (the "Initial Price"). The DECS will mature on March
31, 2000. Interest on the DECS, at the rate of 8 1/4% of the principal amount
per annum, is payable quarterly on March 31, June 30, September 30 and December
31, beginning June 30, 1995. DECS are not subject to redemption or any sinking
fund prior to maturity.
At maturity (including as a result of acceleration or otherwise), the principal
amount of each DECS will be mandatorily exchanged by the Company into a number
of shares of SNET Common Stock (or, at the Company's option, cash with an equal
value) at the Exchange Rate (as defined herein). The Exchange Rate is equal to,
subject to certain adjustments, (a) if the Maturity Price per share of SNET
Common Stock is greater than or equal to $36.75 per share of SNET Common Stock,
0.86735 shares of SNET Common Stock per DECS, (b) if the Maturity Price is less
than $36.75 but is greater than the Initial Price, a fractional share of SNET
Common Stock per DECS so that the value thereof at the Maturity Price equals the
Initial Price and (c) if the Maturity Price is less than or equal to the Initial
Price, one share of SNET Common Stock per DECS. The "Maturity Price" means the
average Closing Price (as defined herein) per share of SNET Common Stock on the
20 Trading Days (as defined herein) immediately prior to (but not including) the
date of maturity. Accordingly, holders of the DECS will not necessarily receive
an amount equal to the principal amount thereof. The DECS will be an unsecured
obligation of the Company ranking PARI PASSU with all of its other unsecured and
unsubordinated indebtedness. See "Description of the DECS".
For a discussion of certain United States federal income tax consequences for
holders of DECS, see "Certain United States Federal Income Tax Considerations".
SNET is not affiliated with the Company and has no obligations with respect to
the DECS. See "Special Considerations Relating to DECS--No Affiliation Between
the Company and SNET".
"DECS" and "Debt Exchangeable for Common Stock" are service marks of Salomon
Brothers Inc.
The SNET Common Stock is listed on the New York Stock Exchange ("NYSE") under
the symbol "SNG". The DECS have been approved for listing on the NYSE under the
symbol "FXN".
PROSPECTIVE INVESTORS ARE ADVISED TO CONSIDER CAREFULLY THE INFORMATION
CONTAINED UNDER "SPECIAL CONSIDERATIONS RELATING TO DECS".
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
PRICE TO UNDERWRITING PROCEEDS TO
PUBLIC (1) DISCOUNT COMPANY (1)(2)
<S> <C> <C> <C>
Per DECS...................... $31.875 $0.95 $30.925
Total (3)..................... $124,312,500 $3,705,000 $120,607,500
<FN>
(1) Plus accrued interest, if any, from March 27, 1995 to the date of delivery.
(2) Before deducting expenses payable by the Company, estimated to be $150,000.
(3) The Company has granted the Underwriters an option, exercisable within 30
days from the date hereof, to purchase up to an additional 442,729 DECS at
the Price to Public, less Underwriting Discount, for the purpose of
covering over-allotments, if any. If the Underwriters exercise such option
in full, the total Price to Public, Underwriting Discount, and Proceeds to
Company will be $138,424,487, $4,125,593 and $134,298,894, respectively.
See "Plan of Distribution".
</TABLE>
The DECS are offered subject to receipt and acceptance by the Underwriters, to
prior sales and to the Underwriters' right to reject any order in whole or in
part and to withdraw, cancel or modify the offer without notice. It is expected
that delivery of the DECS will be made at the office of Salomon Brothers Inc,
Seven World Trade Center, New York, New York, or through the facilities of The
Depository Trust Company, on or about March 27, 1995.
SALOMON BROTHERS INC
LEHMAN BROTHERS
SMITH BARNEY INC.
The date of this Prospectus Supplement is March 20, 1995.
<PAGE>
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE DECS AND THE
SNET COMMON STOCK AT LEVELS ABOVE THOSE WHICH MIGHT OTHERWISE PREVAIL IN THE
OPEN MARKET. SUCH TRANSACTIONS MAY BE EFFECTED ON THE NYSE, IN THE OVER-
THE-COUNTER MARKET OR OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY BE
DISCONTINUED AT ANY TIME.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company's Annual Report on Form 10-K for the year ended December 31,
1994, which has been filed by the Company with the Securities and Exchange
Commission (the "Commission") pursuant to the Securities Exchange Act of 1934
(the "Exchange Act") (File No. 1-4721), is hereby incorporated by reference in
and made a part of this Prospectus Supplement.
All documents filed by the Company pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date of this Prospectus Supplement
and prior to the termination of the offering of the DECS shall be deemed to be
incorporated by reference into this Prospectus Supplement and to be a part
hereof from the date of filing of such documents. Any statement contained in a
document incorporated or deemed to be incorporated by reference herein shall be
deemed to be modified or superseded for purposes of this Prospectus Supplement
to the extent that a statement contained herein or in any other subsequently
filed document which also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus Supplement.
Any person receiving a copy of this Prospectus Supplement may obtain without
charge, upon written or oral request, a copy of any of the documents
incorporated by reference herein, except for the exhibits to such documents
(unless such exhibits are specifically incorporated by reference into such
documents). Requests should be addressed to Sprint Corporation, P.O. Box 11315,
Kansas City, Missouri 64112, Attention: Secretary. Telephone requests may be
directed to (913) 624-3344.
S-2
<PAGE>
SPECIAL CONSIDERATIONS RELATING TO DECS
DECS are novel and innovative securities. Accordingly, the NYSE requires its
members and member organizations to sell DECS only to investors whose accounts
have been specifically approved for trading equity-linked securities, consistent
with NYSE rules for the general diligence of accounts.
As described in more detail below, the trading price of the DECS may vary
considerably prior to maturity (including by acceleration or otherwise,
"Maturity") due to, among other things, fluctuations in the price of SNET Common
Stock and other events that are difficult to predict and beyond the Company's
control.
COMPARISON TO OTHER DEBT SECURITIES
The terms of the DECS differ from those of ordinary debt securities in that
the amount that a holder of the DECS will receive upon mandatory exchange of the
principal amount thereof at Maturity is not fixed, but is based on the price of
the SNET Common Stock as specified in the Exchange Rate (as defined under
"Description of the DECS"). There can be no assurance that such amount
receivable by such holder upon exchange at Maturity will be equal to or greater
than the principal amount of the DECS. For example, if the Maturity Price of the
SNET Common Stock is less than the Initial Price, such amount receivable upon
exchange will be less than the principal amount paid for the DECS, in which case
an investment in DECS would result in a loss.
In addition, the opportunity for equity appreciation afforded by an
investment in the DECS is less than the opportunity for equity appreciation
afforded by an investment in the SNET Common Stock because the amount receivable
by holders of DECS upon exchange at Maturity will only exceed the principal
amount of such DECS if the Maturity Price exceeds the Threshold Appreciation
Price (as defined under "Description of the DECS"), which represents an
appreciation of 15.3% of the Initial Price. Moreover, holders of the DECS will
only be entitled to receive upon exchange at Maturity 86.735% of any
appreciation of the value of SNET Common Stock in excess of the Threshold
Appreciation Price. Because the price of the SNET Common Stock is subject to
market fluctuations, the value of the SNET Common Stock (or, at the option of
the Company, the amount of cash) received by a holder of DECS upon exchange at
Maturity, determined as described herein, may be more or less than the principal
amount of the DECS.
RELATIONSHIP OF THE DECS AND SNET COMMON STOCK
The market price of DECS at any time is affected primarily by changes in the
price of SNET Common Stock. As indicated in "Price Range and Dividend History of
SNET Common Stock" herein, the price of SNET Common Stock has been volatile
during certain recent periods and may exhibit more or less volatility during the
term of the DECS.
It is impossible to predict whether the price of SNET Common Stock will rise
or fall. Trading prices of SNET Common Stock will be influenced by SNET's
operational results and by complex and interrelated political, economic,
financial and other factors that can affect the capital markets generally, the
stock exchanges or quotation systems on which SNET Common Stock is traded and
the market segment of which SNET is a part. Trading prices of SNET Common Stock
also may be influenced if the Company or other persons hereafter issue
securities with terms similar to those of the DECS or if the Company otherwise
transfers shares of SNET Common Stock owned by the Company. As of March 17,
1995, the Company and a wholly owned subsidiary of the Company held an aggregate
of 4,362,998 shares of SNET Common Stock, 3,900,000 shares (4,342,729 shares if
the Underwriters' over-allotment option is exercised in full) of which the
Company may deliver to holders of the DECS at Maturity.
DILUTION OF SNET COMMON STOCK
The amount that holders of the DECS are entitled to receive upon the
mandatory exchange at Maturity is subject to adjustment for certain events
arising from stock splits and combinations, stock dividends and certain other
actions of SNET that modify its capital structure. See "Description of the
DECS--Dilution Adjustments". Such amount to be received by such holders upon
exchange at Maturity may not be adjusted for other events, such as offerings of
SNET Common Stock for cash or in
S-3
<PAGE>
connection with acquisitions, that may adversely affect the price of SNET Common
Stock and, because of the relationship of such amount to be received upon
exchange to the price of SNET Common Stock, such other events may adversely
affect the trading price of the DECS. See "Southern New England
Telecommunications Corporation". There can be no assurance that SNET will not
make offerings of SNET Common Stock or take such other action in the future or
as to the amount of such offerings, if any. In addition, until such time, if
any, as the Company shall deliver shares of SNET Common Stock to holders of the
DECS at Maturity thereof, holders of the DECS will not be entitled to any rights
with respect to SNET Common Stock (including without limitation voting rights
and the rights to receive any dividends or other distributions in respect
thereof).
NO AFFILIATION BETWEEN THE COMPANY AND SNET
The Company has no affiliation with SNET other than its stock ownership and
contractual relationships in the ordinary course of business and, therefore, has
no greater access to information relating to SNET than any other shareholder.
Although the Company has no reason to believe the information concerning SNET
included herein is not reliable, neither the Company nor the Underwriters
warrants that there have not occurred events, not yet publicly disclosed by
SNET, which would affect either the accuracy or the completeness of the
information concerning SNET included herein. As of March 17, 1995, the Company
and a wholly owned subsidiary of the Company held an aggregate of 4,362,998
shares, or approximately 6.8% (based upon information contained in, and subject
to the assumptions set forth in, documents filed by SNET with the Commission) of
the total outstanding shares of SNET Common Stock, with sole voting and
investment power over all such shares.
Although the Company has no knowledge that any of the events described in
the preceding subsection not heretofore publicly disclosed by SNET are currently
being contemplated by SNET or of any event that would have a material adverse
effect on SNET or on the price of SNET Common Stock, such events are beyond the
Company's ability to control and are difficult to predict.
SNET has no obligations with respect to the DECS, including any obligation
to take the needs of the Company or of holders of the DECS into consideration
for any reason. SNET will not receive any of the proceeds of the offering of the
DECS made hereby and is not responsible for, and has not participated in, the
determination or calculation of the amount receivable by holders of the DECS at
Maturity. SNET is not involved with the administration or trading of the DECS
and has no obligations with respect to the amount receivable by holders of the
DECS at Maturity.
POSSIBLE ILLIQUIDITY OF THE SECONDARY MARKET
It is not possible to predict how the DECS will trade in the secondary
market or whether such market will be liquid or illiquid. DECS are novel and
innovative securities and there is currently no secondary market for the DECS.
The Underwriters currently intend, but are not obligated, to make a market in
the DECS. There can be no assurance that a secondary market will develop or, if
a secondary market does develop, that it will provide the holders of the DECS
with liquidity of investment or that it will continue for the life of the DECS.
Application will be made to list the DECS on the NYSE. However, there can be
no assurance that, if so listed on the NYSE, the DECS will not later be delisted
or that trading in the DECS on the NYSE will not be suspended. In the event of
the delisting or suspension of trading on such exchange, the Company will apply
for listing of the DECS on another national securities exchange or for quotation
on another trading market. If the DECS are not listed or traded on any
securities exchange or trading market, or if trading of the DECS is suspended,
pricing information for the DECS may be difficult to obtain, and the liquidity
of the DECS may be adversely affected.
S-4
<PAGE>
SPRINT CORPORATION
The Company, incorporated in 1938 under the laws of Kansas, is a holding
company with subsidiaries in several telecommunications markets. The Long
Distance Communications Services Division is the nation's third largest long
distance telephone company, providing domestic and international long distance
voice, video and data communications services. The Local Communications Services
Division consists principally of 21 telephone operating companies serving
approximately 6.4 million access lines in 19 states. The Cellular and Wireless
Communications Services Division operates cellular systems in 87 metropolitan
and rural service areas in 14 states and has ownership interests in 53 other
markets. The Company also owns subsidiaries ("Product Distribution and Directory
Publishing") engaged primarily in the distribution of telecommunications
products and the marketing and publishing of telephone directories. The mailing
address of the Company's principal executive offices is P.O. Box 11315, Kansas
City, Missouri 64112, and its telephone number is (913) 624-3000.
As a holding company, all of whose operations are conducted through
subsidiaries, the Company relies on interest and dividend income and other
payments from its subsidiaries to supply the funds necessary to meet its
obligations, including its obligation to pay the principal of (and premium, if
any) and interest on the Debt Securities (as defined in the Prospectus). The
indentures and financing agreements of certain of the Company's subsidiaries
contain various provisions restricting the payment to the Company of cash
dividends on their common stock. As of December 31, 1994, $792 million of the
$1.8 billion of retained earnings of those subsidiaries was so restricted. The
flow of cash in the form of advances between the Company and its subsidiaries is
generally not restricted. Any right of the Company or the holders of the DECS,
when exercising their rights under the DECS, to participate in the assets of any
of the Company's subsidiaries upon the latter's liquidation or recapitalization
will be subject to claims of the subsidiary's creditors and preferred
stockholders, if any. The Company has the ability to borrow directly or through
any of its subsidiaries, and the amounts of indebtedness or preferred stock of
the Company or its subsidiaries may fluctuate significantly from time to time.
LONG DISTANCE COMMUNICATIONS SERVICES DIVISION
The Company's Long Distance Communications Services Division, which provides
long distance voice, video and data communications services domestically and
internationally, owns and operates a nationwide all-digital communications
network using state-of-the-art fiber-optic and electronic technology. The Long
Distance Communications Services Division makes the Company the third largest
long distance telephone company in the United States, behind AT&T and MCI,
generating net operating revenues in 1994 of over $6.8 billion. For the year
ended December 31, 1994, the Long Distance Communications Services Division
accounted for approximately 53% of the Company's consolidated net operating
revenues.
LOCAL COMMUNICATIONS SERVICES DIVISION
The Local Communications Services Division consists of 21 local exchange
companies serving approximately 6.4 million access lines in 19 states. In
addition to furnishing local exchange service, these companies provide long
distance service within specified geographical areas and access by other
carriers to the companies' local exchange facilities. For the year ended
December 31, 1994, the Local Communications Services Division accounted for
approximately 33% of the Company's consolidated net operating revenues.
CELLULAR AND WIRELESS COMMUNICATIONS SERVICES DIVISION
The Cellular and Wireless Communications Services Division consists
primarily of Sprint Cellular Company (formerly Centel Cellular) and its
subsidiaries. The Cellular and Wireless Communications Services Division makes
the Company the eighth largest cellular company in the U.S., serving markets in
14 states and a combined population (POPs) of more than 20 million, after
adjustments for proportional ownership interests. The Cellular and Wireless
Communications Services Division has operating control of systems in 87 markets
and a minority interest in another 53 markets. Approximately 50% of the
S-5
<PAGE>
Company's local telephone customers are in markets served by the Cellular and
Wireless Communications Services Division. In 1994, the division had net
operating revenues of $702 million, up 51% from 1993, and at year end served
over 1 million customers, which represents a 59% increase over the prior year.
PRODUCT DISTRIBUTION AND DIRECTORY PUBLISHING
Product Distribution and Directory Publishing consists of North Supply
Company, a wholesale distributor of telecommunications, security and alarm, and
electrical products, and Sprint Publishing & Advertising, Inc., a publisher of
telephone directories.
RECENT DEVELOPMENTS
JOINT VENTURE WITH CABLE TELEVISION COMPANIES
On October 25, 1994, the Company, Tele-Communications Inc. ("TCI"), Comcast
Corporation ("Comcast") and Cox Communications, Inc. ("Cox") announced the
formation of a venture that will provide wireless communications services and
local telephone services on a broad geographic basis within the United States.
The joint venture will be owned 40% by the Company, 30% by TCI and 15% each by
Comcast and Cox. The parties have signed definitive agreements and created
partnerships that are bidding for Personal Communications Services (PCS)
licenses that are being auctioned by the Federal Communications Commission. The
parties also have entered into a joint venture formation agreement that provides
the basis upon which they are developing agreements for their local telephone
activities.
GLOBAL PARTNERSHIP WITH DEUTSCHE BUNDESPOST TELEKOM AND FRANCE TELECOM
On June 14, 1994, the Company announced in a press release that it had
entered into a Memorandum of Understanding (the "MOU") with Deutsche Bundespost
Telekom ("Deutsche Telekom") and France Telecom to form a global partnership
which would offer telecommunications services to business, consumer and carrier
markets worldwide. The MOU provided that Deutsche Telekom and France Telecom
together would purchase approximately 85.8 million shares of a new class of the
Company's stock in two installments for a total of approximately $4 billion. As
part of the transaction, Deutsche Telekom and France Telecom would be entitled
to representation on the Company's board. This representation would be based on
their actual percentage ownership interest, with a minimum of two directors
serving on the Company's board so long as the two companies own at least 10
percent of the outstanding common stock of the Company, subject to the approval
of the NYSE. The formation of the partnership and the acquisition of the
Company's stock are subject to conditions, including the negotiation and
execution of definitive agreements. The terms of these definitive agreements,
including terms relating to the financial investment by Deutsche Telekom and
France Telecom, could differ in material respects from those in the MOU. Also,
there can be no assurance that definitive agreements will be reached. Other
contingencies to the transaction include the approval by the Company's board of
directors and its shareholders, approval by the governing bodies of Deutsche
Telekom and France Telecom, and governmental and regulatory approvals.
CENTEL MERGER
The merger of Centel Corporation ("Centel") into a newly-formed,
wholly-owned subsidiary of the Company pursuant to the Agreement and Plan of
Merger, dated as of May 27, 1992, closed and became effective on March 9, 1993.
S-6
<PAGE>
SOUTHERN NEW ENGLAND TELECOMMUNICATIONS CORPORATION
According to publicly available documents, Southern New England
Telecommunications Corporation ("SNET"), a Connecticut corporation, is a holding
company engaged primarily in the business of furnishing telecommunications
services in the State of Connecticut, most of which are subject to regulation.
These telecommunications services include (i) local and intrastate toll
telephone services, (ii) exchange access service, which links equipment on
customers' premises to the facilities of interstate carriers, and (iii) other
services, such as digital transmission of data and transmission of radio and
television programs, packet switched data network and private line services.
SNET also provides wholesale and retail cellular telephone services. In
addition, through its directory publishing operations, SNET publishes and
distributes telephone directories throughout Connecticut and certain adjacent
communities. SNET is subject to the informational reporting requirements of the
Exchange Act. Accordingly, SNET files reports, proxy statements and other
information with the Commission. Copies of SNET's registration statements,
reports, proxy statements and other information may be inspected and copied at
certain offices of the Commission at the addresses listed under "Available
Information" in the Prospectus and also are available from SNET upon written
request to: SNET, 227 Church Street, New Haven, Connecticut 06510, Attention:
James Magrone, Director--Investor Relations. Telephone requests for such
information may be directed to: (203) 771-4662.
THIS PROSPECTUS SUPPLEMENT RELATES ONLY TO THE DECS OFFERED HEREBY AND DOES
NOT RELATE TO THE SNET COMMON STOCK. ALL DISCLOSURES CONTAINED IN THIS
PROSPECTUS SUPPLEMENT REGARDING SNET ARE DERIVED FROM THE PUBLICLY AVAILABLE
DOCUMENTS DESCRIBED IN THE PRECEDING PARAGRAPH. NEITHER THE COMPANY NOR ANY OF
THE UNDERWRITERS HAS PARTICIPATED IN THE PREPARATION OF SUCH DOCUMENTS. THERE
CAN BE NO ASSURANCE THAT ALL EVENTS OCCURRING PRIOR TO THE DATE HEREOF
(INCLUDING EVENTS THAT WOULD AFFECT THE ACCURACY OR COMPLETENESS OF THE PUBLICLY
AVAILABLE DOCUMENTS DESCRIBED IN THE PRECEDING PARAGRAPH) THAT WOULD AFFECT THE
TRADING PRICE OF SNET COMMON STOCK HAVE BEEN PUBLICLY DISCLOSED. BECAUSE THE
PRINCIPAL AMOUNT OF THE DECS PAYABLE AT MATURITY IS RELATED TO THE TRADING PRICE
OF SNET COMMON STOCK, SUCH EVENTS, IF ANY, COULD ALSO AFFECT THE TRADING PRICE
OF THE DECS.
S-7
<PAGE>
PRICE RANGE AND DIVIDEND HISTORY
OF SNET COMMON STOCK
SNET Common Stock is listed on the NYSE under the symbol "SNG". The
following table sets forth the high and low sales prices of the SNET Common
Stock as reported on the NYSE Composite Tape and the cash dividends per share of
SNET Common Stock.
<TABLE>
<CAPTION>
DIVIDENDS
PERIOD HIGH LOW PER SHARE
- -------------------------------------------------- ------- ------- ---------
<S> <C> <C> <C>
1993
First Quarter................................... $37 $33 3/4 $ 0.44
Second Quarter.................................. 38 3/8 33 5/8 0.44
Third Quarter................................... 37 1/8 34 0.44
Fourth Quarter.................................. 38 1/8 33 7/8 0.44
1994
First Quarter................................... 36 1/4 28 5/8 0.44
Second Quarter.................................. 33 3/4 28 5/8 0.44
Third Quarter................................... 34 3/4 30 1/4 0.44
Fourth Quarter.................................. 35 3/4 32 1/8 0.44
1995
First Quarter (through March 17, 1995).......... 34 1/2 32 --
</TABLE>
For a recent closing price of the SNET Common Stock, see the cover page of
this Prospectus Supplement.
The Company makes no representation as to the amount of dividends, if any,
that SNET will pay in the future. In any event, holders of DECS will not be
entitled to receive any dividends that may be payable on SNET Common Stock until
such time as the Company, if it so elects, delivers SNET Common Stock at
Maturity of the DECS, and then only with respect to dividends having a record
date on or after the date of delivery of such SNET Common Stock. See
"Description of the DECS".
USE OF PROCEEDS
The net proceeds to be received by the Company from sales of the DECS will
be used for general corporate purposes.
S-8
<PAGE>
SUMMARY CONSOLIDATED FINANCIAL DATA OF THE COMPANY
This summary of the consolidated financial data of the Company is qualified
in its entirety by the detailed information and financial statements
incorporated herein by reference. See "Incorporation of Certain Documents by
Reference" in this Prospectus Supplement.
<TABLE>
<CAPTION>
AS OF OR FOR THE
YEAR ENDED DECEMBER 31,
-------------------------------------------------------------
1994 1993 1992 1991 1990
----------- ----------- ----------- ---------- ----------
(IN MILLIONS, EXCEPT RATIOS AND PER SHARE DATA)
<S> <C> <C> <C> <C> <C>
Net Operating Revenues:
Long Distance Communications Services........ $ 6,805.1 $ 6,139.2 $ 5,658.2 $ 5,387.6 $ 5,064.7
Local Communications Services................ 4,412.8 4,126.0 3,862.2 3,753.7 3,674.0
Cellular and Wireless Communications
Services.................................... 701.8 464.0 322.2 242.1 182.2
Product Distribution and Directory
Publishing.................................. 1,108.7 945.2 862.9 826.0 810.4
Intercompany Revenues........................ (366.6) (306.6) (285.2) (276.1) (261.5)
----------- ----------- ----------- ---------- ----------
Total Net Operating Revenues............... $ 12,661.8 $ 11,367.8 $ 10,420.3 $ 9,933.3 $ 9,469.8
----------- ----------- ----------- ---------- ----------
----------- ----------- ----------- ---------- ----------
Operating Income: (1)(2)
Long Distance Communications Services........ $ 604.8 $ 455.0 $ 310.6 $ 294.8 $ 148.0
Local Communications Services................ 1,021.9 763.7 839.6 839.6 869.7
Cellular and Wireless Communications
Services.................................... 85.6 21.0 (2.8) (10.8) (25.8)
Product Distribution and Directory Publishing
and Other................................... 75.5 10.9 66.0 62.0 53.4
----------- ----------- ----------- ---------- ----------
Total Operating Income..................... $ 1,787.8 $ 1,250.6 $ 1,213.4 $ 1,185.6 $ 1,045.3
----------- ----------- ----------- ---------- ----------
----------- ----------- ----------- ---------- ----------
Income from Continuing Operations
(1)(2)(3)(4)(5)............................... $ 883.7 $ 480.6 $ 496.1 $ 472.7 $ 351.1
Earnings Applicable to Common Stock............ 888.0 52.1 499.3 516.1 364.3
Earnings Per Common Share From Continuing
Operations (1)(2)(3)(4)(5).................... 2.53 1.39 1.46 1.41 1.06
Total Assets................................... 14,936.3 14,148.9 13,599.6 13,929.8 14,080.6
Long-Term Debt (including current maturities).. 4,937.2 5,094.4 5,442.7 5,571.2 6,082.3
Common Stock and Other Shareholders' Equity.... 4,524.8 3,918.3 3,971.6 3,671.9 3,353.5
Ratio of Earnings to Fixed Charges (6)......... 3.64x 2.32x 2.20x 2.04x 1.79x
<FN>
- ------------------------------
(1) During 1993, nonrecurring charges of $293 million were recorded related to
(a) transaction costs associated with the merger with Centel and the
expenses of integrating and restructuring the operations of the two
companies and (b) a realignment and restructuring within the Long Distance
Communications Services Division. These charges were allocable as follows:
Long Distance Communications Services Division--$45.9 million; Local
Communications Services Division--$190.1 million; Cellular and Wireless
Communications Services Division--$3.2 million; Product Distribution and
Directory Publishing--$2.5 million. Additionally, the Company incurred
$50.8 million of such charges not attributable to its segmental operations.
Such charges reduced consolidated 1993 income from continuing operations by
$193 million ($0.56 per share).
(2) During 1990, nonrecurring charges of $72 million were recorded related to
the Long Distance Communications Services Division. These charges reduced
consolidated 1990 income from continuing operations by $37 million ($0.11
per share).
(3) During 1992 and 1991, gains were recognized related to the sales of certain
local telephone and cellular properties, which increased consolidated 1992
income from continuing operations by $44 million ($0.13 per share) and
consolidated 1991 income from continuing operations by $78 million ($0.23
per share).
(4) During 1994, the Company sold an investment in equity securities, realizing
a gain of $35 million, which increased consolidated 1994 income from
continuing operations by $22 million ($0.06 per share).
(5) During 1993, as a result of the enactment of the Revenue Reconciliation Act
of 1993, the Company was required to adjust its deferred income tax assets
and liabilities to reflect the increased tax rate. Such adjustment reduced
consolidated 1993 income from continuing operations by $13 million ($0.04
per share).
(6) The ratio of earnings to fixed charges has been computed by dividing fixed
charges into the sum of (a) income from continuing operations less
capitalized interest included in income, (b) income taxes and (c) fixed
charges. Fixed charges consist of interest on all indebtedness,
amortization of debt issuance expenses, the interest component of operating
rent and the pre-tax cost of preferred stock dividends of subsidiaries.
Earnings as computed for the ratio of earnings to fixed charges includes
the non-recurring merger, integration and restructuring costs of $293
million recorded in 1993. In the absence of those non-recurring costs, the
ratio of earnings to fixed charges for 1993 would have been 2.83x.
</TABLE>
S-9
<PAGE>
DESCRIPTION OF THE DECS
The following description of the particular terms of the DECS supplements,
and to the extent inconsistent therewith replaces, the description of the
general terms and provisions of Debt Securities set forth in the Prospectus, to
which description reference is hereby made.
GENERAL
The DECS are a series of Debt Securities (as defined in the Prospectus), to
be issued under an indenture dated as of July 1, 1992, as supplemented by the
First Supplemental Indenture, dated as of March 1, 1995 (the indenture dated as
of July 1, 1992, as supplemented from time to time, the "Indenture"), between
the Company and The First National Bank of Chicago, as trustee (the "Trustee").
The DECS will be unsecured and will rank on a parity with all other
unsecured and unsubordinated indebtedness of the Company. The aggregate number
of DECS to be issued will be 3,900,000 plus such additional number of DECS as
may be issued pursuant to the over-allotment option granted by the Company to
the Underwriters (see "Plan of Distribution"). The DECS will mature on March 31,
2000. In the future the Company may issue additional Debt Securities or other
securities with terms similar to those of the DECS.
Each DECS, which will be issued with a principal amount of $31.875, will
bear interest at the annual rate of 8 1/4% of the principal amount per annum (or
$2.6292 per annum) from March 27, 1995, or from the most recent Interest Payment
Date (as defined below) to which interest has been paid or provided for until
the principal amount thereof is exchanged at Maturity pursuant to the terms of
the DECS. Interest on the DECS will be payable quarterly in arrears on March 31,
June 30, September 30 and December 31, commencing June 30, 1995 (each, an
"Interest Payment Date"), to the persons in whose names the DECS are registered
at the close of business on the last day of the calendar month immediately
preceding such Interest Payment Date, provided that interest payable at Maturity
shall be payable to the person to whom the principal is payable. Interest on the
DECS will be computed on the basis of a 360-day year of twelve 30-day months. If
an Interest Payment Date falls on a day that is not a Business Day (as defined
below), the interest payment to be made on such Interest Payment Date will be
made on the next succeeding Business Day with the same force and effect as if
made on such Interest Payment Date, and no additional interest will accrue as a
result of such delayed payment.
At Maturity (including as a result of acceleration or otherwise), the
principal amount of each DECS will be mandatorily exchanged by the Company into
a number of shares of SNET Common Stock at the Exchange Rate (as defined below),
and, accordingly, holders of the DECS will not necessarily receive an amount
equal to the principal amount thereof. The "Exchange Rate" is equal to, subject
to adjustment as a result of certain dilution events (see "--Dilution
Adjustments" below), (a) if the Maturity Price (as defined below) per share of
SNET Common Stock is greater than or equal to $36.75 per share of SNET Common
Stock (the "Threshold Appreciation Price"), 0.86735 shares of SNET Common Stock
per DECS, (b) if the Maturity Price is less than the Threshold Appreciation
Price but is greater than the Initial Price, a fractional share of SNET Common
Stock per DECS so that the value thereof (determined at the Maturity Price) is
equal to the Initial Price and (c) if the Maturity Price is less than or equal
to the Initial Price, one share of SNET Common Stock per DECS. No fractional
shares of SNET Common Stock will be issued at Maturity as provided under
"--Fractional Shares" below. Notwithstanding the foregoing, the Company may at
its option in lieu of delivering shares of SNET Common Stock, deliver cash in an
amount equal to the value of such number of shares of SNET Common Stock at the
Maturity Price. On or prior to the seventh Business Day prior to March 31, 2000,
the Company will notify The Depository Trust Company and the Trustee and publish
a notice in a daily newspaper of national circulation stating whether the
principal amount of each DECS will be exchanged for shares of SNET Common Stock
or cash. If the Company elects to deliver shares of SNET Common Stock, the
shares which are delivered to the holders of the DECS which are not affiliated
with SNET shall be free of any transfer restrictions and the holders of the DECS
will be responsible for the payment of any and all brokerage costs upon the
subsequent sale of such shares.
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<PAGE>
The "Maturity Price" is defined as the average Closing Price per share of
SNET Common Stock on the 20 Trading Days immediately prior to (but not
including) the Maturity date. The "Closing Price" of any security on any date of
determination means the closing sale price (or, if no closing price is reported,
the last reported sale price) of such security on the NYSE on such date or, if
such security is not listed for trading on the NYSE on any such date, as
reported in the composite transactions for the principal United States
securities exchange on which such security is so listed, or if such security is
not so listed on a United States national or regional securities exchange, as
reported by the National Association of Securities Dealers, Inc. Automated
Quotation System, or, if such security is not so reported, the last quoted bid
price for such security in the over-the-counter market as reported by the
National Quotation Bureau or similar organization, or, if such bid price is not
available, the market value of such security on such date as determined by a
nationally recognized independent investment banking firm retained for this
purpose by the Company. A "Trading Day" is defined as a day on which the
security the Closing Price of which is being determined (A) is not suspended
from trading on any national or regional securities exchange or association or
over-the-counter market at the close of business and (B) has traded at least
once on the national or regional securities exchange or association or
over-the-counter market that is the primary market for the trading of such
security. "Business Day" means any day that is not a Saturday, a Sunday or a day
on which the NYSE, banking institutions or trust companies in The City of New
York are authorized or obligated by law or executive order to close.
For illustrative purposes only, the following chart shows the number of
shares of SNET Common Stock or the amount of cash that a holder of DECS would
receive for each DECS at various Maturity Prices. The table assumes that there
will be no adjustments to the Exchange Rate described under "-- Dilution
Adjustments" below. There can be no assurance that the Maturity Price will be
within the range set forth below. Given the Initial Price of $31.875 per DECS
and the Threshold Appreciation Price of $36.75, a DECS holder would receive at
Maturity the following number of shares of SNET Common Stock or amount of cash
(if the Company elects to pay the DECS in cash):
<TABLE>
<CAPTION>
MATURITY PRICE NUMBER OF SHARES
OF SNET OF SNET
COMMON STOCK COMMON STOCK AMOUNT OF CASH
- --------------- ------------------ ----------------
<S> <C> <C>
$ 29.000 1.00000 $ 29.000
31.875 1.00000 31.875
32.000 0.99609 31.875
36.750 0.86735 31.875
40.000 0.86735 34.694
</TABLE>
Interest on the DECS will be payable, and delivery of SNET Common Stock (or,
at the option of the Company, its cash equivalent) in exchange for the DECS at
Maturity will be made upon surrender of such DECS, at the office or agency of
the Company maintained for such purposes; PROVIDED that payment of interest may
be made at the option of the Company by check mailed to the persons in whose
names the DECS are registered at the close of business on February 28, May 31,
August 31 and November 30. See "--Book-Entry System". Initially such office will
be the principal corporate trust office of First Chicago Trust Company of New
York, 14 Wall Street, 8th Fl, New York, NY 10005.
The DECS will be transferable at any time or from time to time at the
aforementioned office. No service charge will be made to the holder for any such
transfer except for any tax or governmental charge incidental thereto.
The Indenture does not contain any restriction on the ability of the Company
to sell all or any portion of the SNET Common Stock held by it or its
subsidiaries, and no such shares of SNET Common Stock will be pledged or
otherwise held in escrow for use at Maturity of the DECS. Consequently, in the
event of a bankruptcy, insolvency or liquidation of the Company or its
subsidiaries, the SNET Common Stock, if any, owned by the Company or its
subsidiaries will be subject to the claims of the creditors of the Company or
its subsidiaries, respectively. In addition, as described herein, the Company
will have the
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<PAGE>
option, exercisable in its sole discretion, to satisfy its obligations pursuant
to the mandatory exchange for the principal amount of each DECS at Maturity by
delivering to holders of the DECS either the specified number of shares of SNET
Common Stock or cash in an amount equal to the value of such number of shares at
the Maturity Price. In the event of such a sale, a holder of the DECS may be
more likely to receive cash in lieu of SNET Common Stock. As a result, there can
be no assurance that the Company will elect at Maturity to deliver SNET Common
Stock or, if it so elects, that it will use all or any portion of its current
holdings of SNET Common Stock to make such delivery. Consequently, holders of
the DECS will not be entitled to any rights with respect to SNET Common Stock
(including without limitation voting rights and rights to receive any dividends
or other distributions in respect thereof) until such time, if any, as the
Company shall have delivered shares of SNET Common Stock to holders of the DECS
at Maturity thereof.
DILUTION ADJUSTMENTS
The Exchange Rate is subject to adjustment if SNET shall (i) pay a stock
dividend or make a distribution with respect to SNET Common Stock in shares of
such stock, (ii) subdivide or split its outstanding shares of SNET Common Stock,
(iii) combine its outstanding shares of SNET Common Stock into a smaller number
of shares, (iv) issue by reclassification of its shares of SNET Common Stock any
shares of common stock of SNET, (v) issue rights or warrants to all holders of
SNET Common Stock entitling them to subscribe for or purchase shares of SNET
Common Stock at a price per share less than the market price of the SNET Common
Stock (other than rights to purchase SNET Common Stock pursuant to a plan for
the reinvestment of dividends or interest) or (vi) pay a dividend or make a
distribution to all holders of SNET Common Stock of evidences of its
indebtedness or other assets (excluding any dividends or distributions referred
to in clause (i) above or any cash dividends other than any Extraordinary Cash
Dividends as defined below) or issue to all holders of SNET Common Stock rights
or warrants to subscribe for or purchase any of its securities (other than those
referred to in clause (v) above). In the case of the events referred to in
clauses (i), (ii), (iii) and (iv) above, the Exchange Rate in effect immediately
prior to such event shall each be adjusted so that the holder of any DECS shall
thereafter be entitled to receive, upon mandatory exchange of the principal
amount of such DECS at Maturity, the number of shares of SNET Common Stock which
such holder would have owned or been entitled to receive immediately following
any event described above had such DECS been exchanged immediately prior to such
event or any record date with respect thereto. In the case of the event referred
to in clause (v) above, the Exchange Rate shall be adjusted by multiplying the
Exchange Rate in effect immediately prior to the date of issuance of the rights
or warrants referred to in clause (v) above, by a fraction, of which the
numerator shall be the number of shares of SNET Common Stock outstanding on the
date of issuance of such rights or warrants, immediately prior to such issuance,
plus the number of additional shares of SNET Common Stock offered for
subscription or purchase pursuant to such rights or warrants, and of which the
denominator shall be the number of shares of SNET Common Stock outstanding on
the date of issuance of such rights or warrants, immediately prior to such
issuance, plus the number of additional shares of SNET Common Stock which the
aggregate offering price of the total number of shares of SNET Common Stock so
offered for subscription or purchase pursuant to such rights or warrants would
purchase at the market price (determined as the average Closing Price per share
of SNET Common Stock on the 20 Trading Days immediately prior to the date such
rights or warrants are issued), which shall be determined by multiplying such
total number of shares by the exercise price of such rights or warrants and
dividing the product so obtained by such market price. To the extent that shares
of SNET Common Stock are not delivered after the expiration of such rights or
warrants, the Exchange Rate shall be readjusted to the Exchange Rate which would
then be in effect had such adjustments for the issuance of such rights or
warrants been made upon the basis of delivery of only the number of shares of
SNET Common Stock actually delivered. In the case of the event referred to in
clause (vi) above, the Exchange Rate shall be adjusted by multiplying the
Exchange Rate in effect on the record date, by a fraction of which the numerator
shall be the market price per share of the SNET Common Stock on the record date
for the determination of stockholders entitled to receive the dividend or
distribution referred to in clause (vi) above (such market price being
determined as the average Closing Price per share of SNET Common Stock on the 20
Trading Days immediately prior to such
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<PAGE>
record date), and of which the denominator shall be such market price per share
of SNET Common Stock less the fair market value (as determined by the Board of
Directors of the Company, whose determination shall be conclusive, and described
in a resolution adopted with respect thereto) as of such record date of the
portion of the assets or evidences of indebtedness so distributed or of such
subscription rights or warrants applicable to one share of SNET Common Stock. An
"Extraordinary Cash Dividend" means, with respect to any one-year period, all
cash dividends on the SNET Common Stock during such period to the extent such
dividends exceed on a per share basis 10% of the average price of the SNET
Common Stock over such period (less any such dividends for which a prior
adjustment to the Exchange Rate was previously made). All adjustments to the
Exchange Rate will be calculated to the nearest 1/10,000th of a share of SNET
Common Stock (or if there is not a nearest 1/10,000th of a share to the next
lower 1/10,000th of a share). No adjustment in the Exchange Rate shall be
required unless such adjustment would require an increase or decrease of at
least one percent therein; PROVIDED, HOWEVER, that any adjustments which by
reason of the foregoing are not required to be made shall be carried forward and
taken into account in any subsequent adjustment.
In the event of (A) any consolidation or merger of SNET, or any surviving
entity or subsequent surviving entity of SNET (a "SNET Successor"), with or into
another entity (other than a merger or consolidation in which SNET is the
continuing corporation and in which the SNET Common Stock outstanding
immediately prior to the merger or consolidation is not exchanged for cash,
securities or other property of SNET or another corporation), (B) any sale,
transfer, lease or conveyance to another corporation of the property of SNET or
any SNET Successor as an entirety or substantially as an entirety, (C) any
statutory exchange of securities of SNET or any SNET Successor with another
corporation (other than in connection with a merger or acquisition) or (D) any
liquidation, dissolution or winding up of SNET or any SNET Successor (any such
event, a "Reorganization Event"), the Exchange Rate used to determine the amount
payable upon exchange at Maturity for each DECS will be adjusted to provide that
each holder of DECS will receive at Maturity cash in an amount equal to (a) if
the Transaction Value (as defined below) is greater than or equal to the
Threshold Appreciation Price, 0.86735 multiplied by the Transaction Value, (b)
if the Transaction Value is less than the Threshold Appreciation Price but
greater than the Initial Price, the Initial Price and (c) if the Transaction
Value is less than or equal to the Initial Price, the Transaction Value.
"Transaction Value" means (i) for any cash received in any such Reorganization
Event, the amount of cash received per share of SNET Common Stock, (ii) for any
property other than cash or securities received in any such Reorganization
Event, an amount equal to the market value at Maturity of such property received
per share of SNET Common Stock as determined by a nationally recognized
independent investment banking firm retained for this purpose by the Company and
(iii) for any securities received in any such Reorganization Event, an amount
equal to the average Closing Price per share of such securities on the 20
Trading Days immediately prior to Maturity multiplied by the number of such
securities received for each share of SNET Common Stock. Notwithstanding the
foregoing, in lieu of delivering cash as provided above, the Company may at its
option deliver an equivalent value of securities or other property received in
such Reorganization Event, determined in accordance with clause (ii) or (iii)
above, as applicable. If the Company elects to deliver securities or other
property, holders of the DECS will be responsible for the payment of any and all
brokerage and other transaction costs upon the sale of such securities or other
property. The kind and amount of securities into which the DECS shall be
exchangeable after consummation of such transaction shall be subject to
adjustment as described in the immediately preceding paragraph following the
date of consummation of such transaction.
The Company is required, within ten Business Days following the occurrence
of an event that requires an adjustment to the Exchange Rate (or if the Company
is not aware of such occurrence, as soon as practicable after becoming so
aware), to provide written notice to the Trustee of the occurrence of such event
and a statement in reasonable detail setting forth the method by which the
adjustment to the Exchange Rate was determined and setting forth the revised
Exchange Rate.
S-13
<PAGE>
FRACTIONAL SHARES
No fractional shares of SNET Common Stock will be issued if the Company
exchanges the DECS for shares of SNET Common Stock. If more than one DECS shall
be surrendered for exchange at one time by the same holder, the number of full
shares of SNET Common Stock which shall be delivered upon exchange, in whole or
in part, as the case may be, shall be computed on the basis of the aggregate
number of DECS so surrendered at maturity. In lieu of any fractional share
otherwise issuable in respect of all DECS of any holder which are exchanged at
Maturity, such holder shall be entitled to receive an amount in cash equal to
the value of such fractional share at the Maturity Price.
REDEMPTION
The DECS are not subject to redemption prior to Maturity.
BOOK-ENTRY SYSTEM
It is expected that the DECS will be issued in the form of one or more
global securities (the "Global Securities") deposited with The Depository Trust
Company (the "Depositary") and registered in the name of a nominee of the
Depositary.
The Depositary has advised the Company and the Underwriters as follows: The
Depositary is a limited-purpose trust company organized under the laws of the
State of New York, a member of the Federal Reserve System, a "clearing
corporation" within the meaning of the New York Uniform Commercial Code and a
"clearing agency" registered pursuant to Section 17A of the Exchange Act. The
Depositary was created to hold securities of persons who have accounts with the
Depositary ("participants") and to facilitate the clearance and settlement of
securities transactions among its participants in such securities through
electronic book-entry changes in accounts of the participants, thereby
eliminating the need for physical movement of certificates. Such participants
include securities brokers and dealers, banks, trust companies and clearing
corporations. Indirect access to the Depositary's book-entry system also is
available to others, such as banks, brokers, dealers and trust companies that
clear through or maintain a custodial relationship with a participant, either
directly or indirectly.
Upon the issuance of a Global Security, the Depositary or its nominee will
credit the respective DECS represented by such Global Security to the accounts
of participants. The accounts to be credited shall be designated by the
Underwriters. Ownership of beneficial interests in the Global Securities will be
limited to participants or persons that may hold interests through participants.
Ownership of beneficial interests by participants in such Global Securities will
be shown on, and the transfer of those ownership interests will be effected only
through, records maintained by the Depositary or its nominee for such Global
Securities. Ownership of beneficial interests in such Global Securities by
persons that hold through participants will be shown on, and the transfer of
that ownership interest within such participant will be effected only through,
records maintained by such participant. The laws of some jurisdictions require
that certain purchasers of securities take physical delivery of such securities
in definitive form. Such limits and such laws may impair the ability to transfer
beneficial interests in a Global Security.
So long as the Depositary for a Global Security, or its nominee, is the
registered owner of such Global Security, such depositary or such nominee, as
the case may be, will be considered the sole owner or holder of the DECS for all
purposes under the Indenture. Except as set forth below, owners of beneficial
interests in such Global Securities will not be entitled to have the DECS
registered in their names, will not receive or be entitled to receive physical
delivery of the DECS in definitive form and will not be considered the owners or
holders thereof under the Indenture.
Payment of principal of and any interest on the DECS registered in the name
of or held by the Depositary or its nominee will be made to the Depositary or
its nominee, as the case may be, as the registered owner or the holder of the
Global Security. None of the Company, the Trustee, any Paying Agent or any
securities registrar for the DECS will have any responsibility or liability for
any aspect of the records relating to or payments made on account of beneficial
ownership interests in a Global Security or for maintaining, supervising or
reviewing any records relating to such beneficial ownership interests.
S-14
<PAGE>
The Company expects that the Depositary, upon receipt of any payment of
principal or interest in respect of a permanent Global Security, will credit
immediately participants' accounts with payments in amounts proportionate to
their respective beneficial interests in the principal amount of such Global
Security as shown on the records of the Depositary. The Company also expects
that payments by participants to owners of beneficial interests in such Global
Security held through such participants will be governed by standing
instructions and customary practices, as is now the case with securities held
for the accounts of customers in bearer form or registered in "street name", and
will be the responsibility of such participants.
A Global Security may not be transferred except as a whole by the Depositary
to a nominee or a successor of the Depositary. If the Depositary is at any time
unwilling or unable to continue as depositary and a successor depositary is not
appointed by the Company within ninety days, the Company will issue DECS in
definitive registered form in exchange for the Global Security representing such
DECS. In addition, the Company may at any time and in its sole discretion
determine not to have any DECS represented by one or more Global Securities and,
in such event, will issue DECS in definitive form in exchange for all of the
Global Securities representing the DECS. Further, if the Company so specifies
with respect to the DECS, an owner of a beneficial interest in a Global Security
representing DECS may, on terms acceptable to the Company and the Depositary for
such Global Security, receive DECS in definitive form. In any such instance, an
owner of a beneficial interest in a Global Security will be entitled to physical
delivery in definitive form of DECS represented by such Global Security equal in
number to that represented by such beneficial interest and to have such DECS
registered in its name.
REGARDING THE TRUSTEE
The Trustee has its principal corporate trust offices at One First National
Plaza, Suite 0286, Chicago, Illinois 60670-0286. The Company has a normal
banking relationship with the Trustee, including the maintenance of an account,
the borrowing of funds under certain credit agreements and the issuing of
commercial paper under several commercial paper programs in which a subsidiary
of the Trustee acts as one of the dealers.
LISTING
The DECS have been approved for listing on the NYSE under the symbol "FXN".
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<PAGE>
CERTAIN UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS
The following is a summary of certain U.S. federal income tax consequences
that may be relevant to a citizen or resident of the United States, a
corporation, partnership or other entity created or organized under the laws of
the United States, an estate or trust the income of which is subject to U.S.
federal income taxation regardless of its source (any of the foregoing, a "U.S.
person") who is the beneficial owner of a DECS (a "U.S. Holder"). All references
to "holders" (including U.S. Holders) are to beneficial owners of the DECS. This
summary is based on current U.S. federal income tax law and is for general
information only. It is based upon the advice of Cravath, Swaine & Moore, 825
Eighth Avenue, New York, New York 10019.
This summary deals only with holders who are initial holders of the DECS and
who will hold the DECS as capital assets. It does not address tax considerations
applicable to investors that may be subject to special U.S. federal income tax
treatment, such as dealers in securities or persons holding the DECS as a
position in a "straddle" for U.S. federal income tax purposes or as part of a
"synthetic security" or other integrated investment, and does not address the
consequences under state, local or foreign law.
No statutory, judicial or administrative authority directly addresses the
characterization of the DECS or instruments similar to the DECS for U.S. federal
income tax purposes. As a result, significant aspects of the U.S. federal income
tax consequences of an investment in the DECS are not certain. No ruling is
being requested from the Internal Revenue Service (the "IRS") with respect to
the DECS and no assurance can be given that the IRS will agree with the
conclusions expressed herein. ACCORDINGLY, A PROSPECTIVE INVESTOR (INCLUDING A
TAX-EXEMPT INVESTOR) IN THE DECS SHOULD CONSULT ITS TAX ADVISOR IN DETERMINING
THE TAX CONSEQUENCES OF AN INVESTMENT IN THE DECS, INCLUDING THE APPLICATION OF
STATE, LOCAL OR OTHER TAX LAWS AND THE POSSIBLE EFFECTS OF CHANGES IN FEDERAL OR
OTHER TAX LAWS.
Pursuant to the terms of the Indenture, the Company and all holders of the
DECS will be obligated to treat the DECS as a unit (the "Unit") consisting of
(i) an exchange note ("Exchange Note") which is a debt obligation with a fixed
principal amount unconditionally payable at Maturity equal to the principal
amount of the DECS, bearing interest at the stated interest rate on the DECS,
and (ii) a forward purchase contract (the "Purchase Contract") pursuant to which
the holder agrees to use the principal payment due on the Exchange Note to
purchase at Maturity the SNET Common Stock which the holder is entitled to
receive at that time (subject to the Company's right to deliver cash in lieu of
the SNET Common Stock). The Indenture will require that a U.S. Holder include
currently in income payments denominated as interest that are made with respect
to the DECS, in accordance with such holder's method of accounting.
Pursuant to the agreement to treat the DECS as a unit, a holder will be
required to allocate the purchase price of the DECS between the two components
of the Unit (the Exchange Note and the Purchase Contract) on the basis of their
relative fair market values. The purchase price so allocated will generally
constitute the tax basis for each component. Pursuant to the terms of the
Indenture, the Company and the holders agree to allocate the entire purchase
price of the DECS to the Exchange Note. Upon the sale or other disposition of a
DECS, a U.S. Holder generally will be required to allocate the amount realized
between the two components of the DECS on the basis of their then relative fair
market values. A U.S. Holder will recognize gain or loss with respect to each
component equal to the difference between the amount realized on the sale or
other disposition for each such component and the U.S. Holder's tax basis in
such component. Such gain or loss generally will be long-term capital gain or
loss if the U.S. Holder has held the DECS for more than one year at the time of
disposition.
At Maturity, pursuant to the agreement to treat the DECS as a unit, on the
repayment of the Exchange Note, a U.S. Holder will recognize long-term capital
gain or loss equal to any difference between its tax basis and the principal
amount of the Exchange Note. If the Company delivers SNET Common Stock, a U.S.
Holder will recognize no additional gain or loss on the exchange, pursuant to
the Purchase Contract, of the principal payment due on the Exchange Note for the
SNET Common Stock. However, a U.S. Holder will recognize additional gain or loss
(which will be short-term capital gain or loss rather than long-term capital
gain or loss) with respect to cash received in lieu of fractional shares. The
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<PAGE>
amount of such gain or loss recognized by a U.S. Holder will be equal to the
difference between the cash received and the portion of the principal amount of
the Exchange Note allocable to fractional shares. A U.S. Holder will have a tax
basis in such stock equal to the principal amount of the Exchange Note less the
amount of the portion of the principal amount of the Exchange Note allocable to
the fractional shares and will realize capital gain or loss upon the sale or
disposition of such stock. Alternatively, at Maturity, if the Company pays the
DECS in cash, a U.S. Holder will have gain or loss (which might be ordinary
income or loss rather than long term capital gain or loss) equal to the
difference between the principal amount of the Exchange Note and the amount of
cash received from the Company.
Due to the absence of authority as to the proper characterization of the
DECS, no assurance can be given that the IRS will accept or that a court will
uphold the characterization and tax treatment described above. Proposed Treasury
regulations with respect to "contingent payment" debt instruments (the "Proposed
Regulations") would provide for a different tax result under some circumstances
for instruments with characteristics similar to the DECS, but the Proposed
Regulations would be effective only for instruments issued 60 days or more after
publication as final regulations. Under the Proposed Regulations, the amount of
interest included in a holder's taxable income for any year would generally be
determined by projecting the amounts of contingent payments and the yield on the
instrument. Taxable interest income would be measured with reference to the
projected yield, which might be less than or greater than the stated interest
rate under the instrument. In the event that the amount of an actual contingent
payment differed from the projected amount of that payment, the difference would
generally increase or reduce taxable interest income, or create a loss. Because
of their prospective effective date, the Proposed Regulations, if finalized in
their current form, would not apply to the DECS.
Even in the absence of regulations applicable to the DECS, the DECS may be
characterized in a manner that results in tax consequences different from those
reflected in the agreement and described above. Under alternative
characterizations of the DECS, it is possible, for example, that (i) gain may be
treated as ordinary income, instead of capital gain, (ii) a U.S. Holder may be
taxable upon the receipt of SNET Common Stock with a value in excess of the
principal amount of the Exchange Note, rather than upon the sale of such stock,
(iii) all or part of the interest income on the Exchange Note may be treated as
nontaxable, increasing the gain (or decreasing the loss) at Maturity or
disposition of the DECS (or disposition of the SNET Common Stock) or (iv) the
Exchange Notes could be considered as issued at a premium which, if amortized,
would reduce the amount of interest income currently includible in income by a
holder and would increase the taxable gain (or decrease the loss) realized at
Maturity or disposition of the DECS (or disposition of the SNET Common Stock).
The Revenue Reconciliation Act of 1993 added Section 1258 to the Internal
Revenue Code, which may require certain holders of the DECS who have entered
into hedging transactions or offsetting positions with respect to the DECS to
recognize ordinary income rather than capital gain upon the disposition of the
DECS. Holders should consult their tax advisors regarding the applicability of
this legislation to an investment in the DECS.
NON-UNITED STATES PERSONS
In the case of a holder of the DECS that is not a U.S. person, payments made
with respect to the DECS should not be subject to U.S. withholding tax; PROVIDED
that such holder complies with applicable certification requirements. Any
capital gain realized upon the sale or other disposition of the DECS by a holder
that is not a U.S. person will generally not be subject to U.S. federal income
tax if (i) such gain is not effectively connected with a U.S. trade or business
of such holder and (ii) in the case of an individual, such individual is not
present in the United States for 183 days or more in the taxable year of the
sale or other disposition or the gain is not attributable to a fixed place of
business maintained by such individual in the United States.
BACKUP WITHHOLDING AND INFORMATION REPORTING
A holder of the DECS may be subject to information reporting and to backup
withholding at a rate of 31 percent of certain amounts paid to the holder unless
such holder provides proof of an applicable exemption or a correct taxpayer
identification number, and otherwise complies with applicable requirements of
the backup withholding rules.
S-17
<PAGE>
PLAN OF DISTRIBUTION
The Underwriters have severally agreed, subject to the terms and conditions
set forth in the Underwriting Agreement, to purchase from the Company the
aggregate number of DECS set forth opposite their names below:
<TABLE>
<CAPTION>
NUMBER OF
UNDERWRITERS DECS
<S> <C>
Salomon Brothers Inc.................... 931,668
Lehman Brothers Inc..................... 931,666
Smith Barney Inc........................ 931,666
Dillon, Read & Co. Inc.................. 195,000
Goldman, Sachs & Co..................... 195,000
Merrill Lynch, Pierce, Fenner & Smith
Incorporated........................... 195,000
S.G. Warburg & Co. Inc.................. 195,000
Advest, Inc. .......................... 65,000
Fahnestock & Co. Inc.................... 65,000
Kemper Securities, Inc.................. 65,000
Tucker Anthony Incorporated............. 65,000
Wheat, First Securities, Inc............ 65,000
-----------
Total............................... 3,900,000
-----------
-----------
</TABLE>
In the Underwriting Agreement, the several Underwriters have agreed, subject
to the terms and conditions set forth therein, to purchase all of the DECS if
any are purchased.
The Company has been advised that the Underwriters propose to offer the DECS
to the public initially at the offering price set forth on the cover of this
Prospectus Supplement and to certain dealers at such price less a selling
concession of $0.56 per DECS; that the Underwriters may allow, and each such
dealer may reallow, to other dealers a concession not exceeding $0.10 per DECS;
and that, after the initial public offering, such public offering price and such
concession and reallowance may be changed.
The Company has agreed not to offer for sale, sell or otherwise dispose of,
without the prior written consent of the Underwriters, any shares of SNET Common
Stock or any securities convertible into or exchangeable for, or warrants to
acquire, SNET Common Stock for a period of 30 days after the date of this
Prospectus Supplement; provided, however, that such restriction shall not affect
the ability of the Company or its subsidiaries to take any such actions in
connection with the offering of the DECS made hereby or any exchange at Maturity
pursuant to the terms of the DECS.
The Company has granted to the Underwriters an option, exercisable for 30
days from the date of this Prospectus Supplement (or, if such 30th day shall not
be a Business Day, on the next Business Day thereafter), to purchase up to an
additional 442,729 DECS, at the per DECS price to public less the aggregate
underwriting discount set forth on the cover of this Prospectus Supplement. The
Underwriters may exercise such right of purchase only for the purpose of
covering over-allotments, if any, incurred in connection with the sale of DECS
offered hereby. To the extent that the Underwriters exercise such option, each
of the Underwriters will become obligated, subject to certain conditions, to
purchase a number of such additional DECS proportionate to such Underwriter's
initial commitment.
The Company has agreed in the Underwriting Agreement to indemnify the
Underwriters against certain liabilities, including liabilities under the
Securities Act, or contribute to payments the Underwriters may be required to
make in respect thereof.
The Underwriters will reimburse the Company for certain expenses related to
the offering.
S-18
<PAGE>
ERISA MATTERS
The Company, SNET or any of their affiliates may be considered a "party in
interest" or a "disqualified person" with respect to some employee benefit plans
("Plans") that are subject to the Employee Retirement Income Security Act of
1974, as amended ("ERISA"), or section 4975 of the Internal Revenue Code of
1986, as amended (the "Code"). The purchase of DECS by a Plan that is subject to
the fiduciary responsibility provisions of ERISA or the prohibited transaction
provisions of Section 4975 of the Code (including individual retirement
arrangements and other plans described in Section 4975(e)(1) of the Code) and
with respect to which the Company, SNET or any of their affiliates is a "party
in interest" within the meaning of ERISA or a "disqualified person" within the
meaning of Section 4975 of the Code may constitute or result in a prohibited
transaction under ERISA or the Code, unless such DECS are acquired pursuant to
and in accordance with an applicable exemption, such as Prohibited Transaction
Class Exemption ("PTCE") 84-14 (an exemption for certain transactions determined
by an independent qualified professional asset manager), PTCE 91-38 (an
exemption for certain transactions involving bank collective investment funds)
or PTCE 90-1 (an exemption for certain transactions involving insurance company
pooled separate accounts). Any pension or other employee or other employee
benefit plan proposing to acquire DECS should consult with its counsel.
LEGAL OPINIONS
The validity of the DECS will be passed upon for the Company by Don A.
Jensen, Esq., Vice President and Secretary of the Company, and for the
Underwriters by Cravath, Swaine & Moore. Certain tax matters with respect to the
DECS also will be passed upon by Cravath, Swaine & Moore. Cravath, Swaine &
Moore will rely as to all matters of Kansas law upon the opinion of Don A.
Jensen. As of January 31, 1995, Don A. Jensen was the record and beneficial
owner of 19,982 shares of Common Stock of the Company and held options to
purchase 33,993 shares of Common Stock of the Company.
EXPERTS
The consolidated financial statements of the Company incorporated by
reference in the Company's Annual Report (Form 10-K) for the year ended December
31, 1994, have been audited by Ernst & Young LLP, independent auditors, as set
forth in their report thereon included therein and incorporated herein by
reference which, as to 1992, is based in part on the report of Arthur Andersen
LLP, independent auditors. Such consolidated financial statements are
incorporated herein by reference in reliance upon such reports given upon the
authority of such firms as experts in accounting and auditing.
S-19
<PAGE>
PROSPECTUS
SPRINT CORPORATION
Debt Securities
and/or
Warrants to Purchase Debt Securities
-----------
Sprint Corporation (the "Company") may offer from time to time up to
$500,000,000 aggregate principal amount (or net proceeds in the case of
securities issued at an original issue discount), or the equivalent thereof in
other currencies or currency units, of its unsecured senior debt securities
("Debt Securities") and/or warrants to purchase Debt Securities ("Warrants").
The Debt Securities and/or Warrants (collectively, the "Offered Securities") may
be offered as separate series, in amounts, at prices and on terms to be
determined at the time of sale. Debt Securities may be offered alone or with
Warrants (which may or may not be detachable from such Debt Securities) and
Warrants may be offered alone, all as set forth in supplements to this
Prospectus ("Prospectus Supplements"). If any Warrants are issued, Debt
Securities will be issuable upon exercise of such Warrants. The Offered
Securities may be sold to or through underwriters for public offering pursuant
to terms of offering fixed at the time of sale. In addition, Offered Securities
may be sold by the Company to other purchasers directly or through agents. See
"Plan of Distribution."
The specific designation, aggregate principal amount, initial public
offering price, denominations (which may be in United States dollars or any
other currency or currency unit), maturity, interest rate (which may be fixed or
variable) and time of payment of interest, if any, purchase price, any terms for
redemption at the option of the Company or the holder, any terms for sinking
fund payments or other terms of the Debt Securities, the duration, offering
price, exercise price, detachability and other terms of any Warrants, and the
names of the underwriters or agents, if any, and the compensation of such
underwriters or agents in connection with the sale of Offered Securities will be
set forth in the Prospectus Supplement, together with the terms of offering of
the Offered Securities. Any underwriters, dealers, or agents participating in
the offering may be deemed "underwriters" within the meaning of the Securities
Act of 1933.
--------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY
STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
--------------
THE DATE OF THIS PROSPECTUS IS JULY 7, 1992
<PAGE>
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE SECURITIES
OFFERED HEREBY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN
MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
--------------
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934 (the "Exchange Act") and in accordance therewith files
reports, proxy statements and other information with the Securities and Exchange
Commission (the "Commission"). Reports, proxy statements and other information
filed by the Company can be inspected and copied at the public reference
facilities maintained by the Commission at Room 1024, 450 Fifth Street, N.W.,
Washington, D.C. 20549, and at the following Regional Offices of the Commission:
Room 1400, 75 Park Place, New York, New York 10007 and Suite 1400, Northwestern
Atrium Center, 500 West Madison Street, Chicago, Illinois 60661. Copies of such
material can be obtained from the Public Reference Section of the Commission at
450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates. Such
reports, proxy statements and other information concerning the Company may also
be inspected at the offices of the New York Stock Exchange, 20 Broad Street, New
York, New York 10005, the Midwest Stock Exchange, 440 South LaSalle Street,
Chicago, Illinois 60605, and the Pacific Stock Exchange, 301 Pine Street, San
Francisco, California 94104, on which exchanges the common stock of the Company
is listed.
This Prospectus does not contain all information set forth in the
Registration Statement on Form S-3 and Exhibits thereto which the Company has
filed with the Commission, certain portions of which have been omitted pursuant
to the Rules and Regulations of the Commission, and to which reference is hereby
made for further information with respect to the Company and the Offered
Securities.
INFORMATION INCORPORATED BY REFERENCE
The Company hereby incorporates into this Prospectus by reference the
following documents (File
No. 1-4721) filed with the Commission:
(i) the Company's Annual Report on Form 10-K for the year ended December
31, 1991;
(ii) the Company's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1992; and
(iii) the Company's Current Reports on Form 8-K dated May 27, 1992 and
June 15, 1992.
All documents filed by the Company pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act after the date of this Prospectus and prior to the
termination of the offering of the securities covered by this Prospectus shall
be deemed to be incorporated by reference in this Prospectus and to be a part
hereof from the dates of filing of such documents. Any statement contained in a
document incorporated or deemed to be incorporated by reference herein shall be
deemed to be modified or superseded for purposes of this Prospectus to the
extent that a statement contained herein or in any other subsequently filed
document which also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any statement so modified or superseded
shall not be deemed, except as so modified or superseded, to constitute a part
of this Prospectus.
The Company will furnish without charge to each person to whom this
Prospectus is delivered, upon the written or oral request of such person, a copy
of any or all of the information incorporated by reference in the Registration
Statement of which this Prospectus is a part, other than exhibits to such
information unless specifically incorporated in such information. Written
requests should be addressed to: Sprint Corporation, P.O. Box 11315, Kansas
City, Missouri 64112; Attention: Secretary. Telephone requests may be directed
to (913) 624-3344.
2
<PAGE>
SPRINT CORPORATION
The Company, incorporated in 1938 under the laws of Kansas, is a holding
company with subsidiaries in several telecommunications markets. The
Long-Distance Communications Services Division provides domestic and
international long-distance voice and data communications services and consists
principally of Sprint Communications Company L.P. (the "Limited Partnership"),
the nation's third largest long-distance telephone company, and Sprint
International Incorporated ("Sprint International"). The Local Communications
Services Division consists principally of 16 telephone operating companies
serving approximately 3,000 communities in 17 states. The Company also owns
subsidiaries ("Complementary Businesses") engaged primarily in distribution of
telecommunications products and the marketing and publishing of telephone
directories. The mailing address of the Company's principal executive offices is
P.O. Box 11315, Kansas City, Missouri 64112, and its telephone number is (913)
624-3000.
As a holding company, all of whose operations are conducted through
subsidiaries, the Company relies on interest and dividend income and other
payments from its subsidiaries to supply the funds necessary to meet its
obligations, including its obligation to pay the principal of (and premium, if
any) and interest on the Debt Securities. The indentures and financing
agreements of certain of the Company's subsidiaries contain various provisions
restricting the payment to the Company of cash dividends on their common stock.
As of December 31, 1991, $752 million of the $1.6 billion of retained earnings
of those subsidiaries was so restricted. The flow of cash in the form of
advances between the Company and its subsidiaries is generally not restricted.
Any right of the Company or the holders of the Offered Securities, when
exercising their rights under the Offered Securities, to participate in the
assets of any of the Company's subsidiaries upon the latter's liquidation or
recapitalization will be subject to claims of that subsidiary's creditors and
preferred stockholders, if any. The Company has the ability to borrow directly
or through any of its subsidiaries, and the amounts of indebtedness or preferred
stock of the Company or its subsidiaries may fluctuate significantly from time
to time.
LONG-DISTANCE COMMUNICATIONS SERVICES DIVISION
The Company's Long-Distance Communications Services Division consists
principally of the Limited Partnership, which owns and operates a nationwide
all-digital communications network utilizing state-of-the-art fiber-optic and
electronic technology, and Sprint International, which provides voice and data
services internationally. For the year ended December 31, 1991, the
Long-Distance Communications Services Division accounted for approximately 61%
of the Company's consolidated net operating revenues.
LOCAL COMMUNICATIONS SERVICES DIVISION
The Local Communications Services Division consists of 16 local exchange
companies serving approximately 4 million access lines and 3,000 communities in
17 states. In addition to furnishing local exchange service, these companies
provide long-distance service within specified geographical areas and access by
other carriers to the companies' local exchange facilities. For the year ended
December 31, 1991, the Local Communications Services Division accounted for
approximately 32% of the Company's consolidated net operating revenues.
COMPLEMENTARY BUSINESSES
The primary companies within Complementary Businesses are North Supply
Company, a wholesale distributor of telecommunications, security and alarm, and
electrical products, and Sprint Publishing & Advertising, Inc., a publisher of
telephone directories.
PROPOSED MERGER WITH CENTEL CORPORATION
On May 27, 1992, the Company entered into an Agreement and Plan of Merger
(the "Agreement") with Centel Corporation, a Kansas corporation ("Centel"),
providing for the merger of a newly-formed, wholly-owned subsidiary of the
Company with and into Centel. Pursuant to the Agreement, each share of Centel's
common stock will be converted into 1.37 shares of the common stock of the
Company by virtue of the merger. After the merger, Centel stockholders will own
approximately 35 percent of the outstanding common stock of the Company. The
Agreement has been approved by the boards of directors of Centel and the Company
and is subject to approval of the stockholders of both companies and various
regulatory agencies and to certain other conditions as specified in the
Agreement.
3
<PAGE>
USE OF PROCEEDS
The net proceeds from the sale of the Offered Securities will be used for
general corporate purposes, including the funding of maturing long-term debt
obligations and working capital requirements. $200 million principal amount of
the Company's 8.25% Senior Notes mature on August 15, 1992, $100 million
principal amount of the Company's 9.75% Senior Notes mature on January 15, 1993,
and a sinking fund payment of approximately $66.7 million is due in December,
1992 on the Company's 8.9% Subordinated Notes due December 1, 1993.
SELECTED FINANCIAL INFORMATION
The following summary is qualified in its entirety by the detailed
information and financial statements included in the documents incorporated in
this Prospectus by reference. See "Information Incorporated by Reference."
<TABLE>
<CAPTION>
FOR THE YEARS ENDED DECEMBER 31,
--------------------------------------------------------
1991 1990 1989 1988 1987
--------- --------- --------- --------- ------------
(MILLIONS OF DOLLARS)
<S> <C> <C> <C> <C> <C>
Net Operating Revenues:
Long-Distance Communications Services(1)................... $ 5,387.6 $ 5,064.7 $ 4,323.6 $ 3,405.4
Local Communications Services.............................. 2,811.7 2,709.9 2,637.0 2,509.7 $ 2,388.9
Complementary Businesses................................... 826.0 807.4 762.1 698.6 628.0
Intercompany Revenues...................................... (245.6) (236.9) (173.7) (120.7) (81.8)
--------- --------- --------- --------- ------------
Total Net Operating Revenues..................... 8,779.7 8,345.1 7,549.0 6,493.0 2,935.1
--------- --------- --------- --------- ------------
Operating Expenses:
Long-Distance Communications Services(1)(2)................ 5,092.8 4,916.7 4,097.0 3,791.5
Local Communications Services.............................. 2,156.2 2,059.7 2,001.3 1,912.9 1,752.3
Complementary Businesses................................... 764.0 751.3 714.4 656.5 585.3
Intercompany Expenses...................................... (245.6) (236.9) (173.7) (120.7) (81.8)
--------- --------- --------- --------- ------------
Total Operating Expenses......................... 7,767.4 7,490.8 6,639.0 6,240.2 2,255.8
--------- --------- --------- --------- ------------
Operating Income(2).......................................... $ 1,012.3 $ 854.3 $ 910.0 $ 252.8 $ 679.3
--------- --------- --------- --------- ------------
--------- --------- --------- --------- ------------
Earnings (Loss) Applicable to Common Stock(1)(2)(3)(4)....... $ 364.9 $ 306.0 $ 359.9 $ 505.6 $ (55.0)
--------- --------- --------- --------- ------------
--------- --------- --------- --------- ------------
Ratio of Earnings to Fixed Charges(5)........................ 2.05 1.89 2.10 1.29 0.56 (6)
--------- --------- --------- --------- ------------
--------- --------- --------- --------- ------------
<FN>
- ------------------------------
(1) During 1987, the Company accounted for its investment in the Limited
Partnership, which was then owned equally by the Company and GTE
Corporation ("GTE") and included Sprint International, using the equity
method of accounting. Consolidation of the Limited Partnership commenced in
1988 as a result of the Company's assumption of management control of the
Limited Partnership and continued as its percentage ownership of the
Limited Partnership increased in 1989 to 80.1 percent. GTE's ownership
interest in the Limited Partnership subsequent to 1987 is reflected as
minority interest.
(2) During 1990, the Company recorded $72 million of non-recurring charges
related to the Long-Distance Division. These charges, which reduced the
Long-Distance Division's operating income, primarily related to a
realignment of the Long-Distance Division workforce, a write-off of certain
non-productive network and administrative assets, and settlements of an
intellectual property dispute and a commercial dispute related to shared
facilities. After the effects of minority interest and income taxes, these
charges reduced the Company's consolidated 1990 net income by $37 million.
During 1988, the Company recorded a $195 million charge related to the
Long-Distance Division. This charge, which reduced the Long-Distance
Division's operating income, related primarily to the final disposition of
the Long-Distance Division's interim analog-microwave network. After the
effects of minority interest and income taxes, this charge reduced the
Company's consolidated 1988 net income by $64 millon.
(3) During 1987, the Company recorded its share of $350 million of charges
recorded by the Long-Distance Division. These charges related to a
write-down of the Long-Distance Division's interim analog-microwave network
and to an increase in the Long-Distance Division's provision for
uncollectible accounts receivable. After the effects of income taxes, these
charges reduced the Company's consolidated 1987 net income by $109 million.
(4) During 1988, the Company sold United TeleSpectrum, Inc., a wholly-owned
subsidiary providing cellular telephone and paging services. The Company
recorded a net gain from discontinued operations of $367 million (net of
related income taxes of $260 million) primarily as a result of this sale.
(5) The ratios of earnings to fixed charges have been computed by dividing
fixed charges into the sum of (a) income (loss) from continuing operations
less capitalized interest included in income, (b) income taxes and (c)
fixed charges. Fixed charges consist of interest on all indebtedness
(including amortization of debt issuance expenses), the interest component
of operating rents and the pre-tax cost of preferred stock dividends of
subsidiaries.
(6) Earnings as computed for the ratio of earnings to fixed charges were
inadequate to cover fixed charges for the year ended December 31, 1987. The
amount of the coverage deficiency was $144.6 million. In the absence of the
non-recurring charge referred to in (3) above, the ratio of earnings to
fixed charges in 1987 would have been 1.09.
</TABLE>
4
<PAGE>
DESCRIPTION OF DEBT SECURITIES
The Debt Securities are to be issued under an Indenture, dated as of July 1,
1992 (the "Indenture"), between the Company and The First National Bank of
Chicago, as Trustee (the "Trustee"), a copy of which is filed as an exhibit to
the Registration Statement of which this Prospectus forms a part. The following
summaries of certain provisions of the Indenture do not purport to be complete
and are subject to, and are qualified in their entirety by reference to, all
provisions of the Indenture, including the definitions therein of certain terms.
Wherever particular provisions or defined terms of the Indenture are referred
to, such provisions or defined terms are incorporated herein by reference.
GENERAL
The Indenture does not limit the amount of indebtedness that may be issued
thereunder (such indebtedness issued under the Indenture being referred to in
this Description of Debt Securities as the "Securities"). The Indenture provides
that Securities may be issued from time to time in one or more series. The
Securities will be unsecured obligations of the Company.
The title, amount, maturity, interest rate, terms for redemption, terms for
sinking fund payments, and other specific terms of the series of Securities
comprising the Debt Securities, including (i) the currency of payment of
principal of (premium, if any) and interest on the Debt Securities, which may be
United States dollars or any other currency or currency unit, and (ii) any index
used to determine the amount of payments of principal of (premium, if any) and
interest on the Debt Securities, shall be set forth or summarized in the
Prospectus Supplement.
Unless otherwise indicated in the Prospectus Supplement, principal of
(premium, if any) and interest, if any, on the Debt Securities will be payable,
and transfers of the Debt Securities will be registrable, at the Corporate Trust
Office of the Trustee at One First National Plaza, Chicago, Illinois,
60670-0126, provided that at the option of the Company payment of interest may
be made by check mailed to the address of the Person entitled thereto as it
appears in the Security Register. (Sections 202, 301, 305, and 1002)
Unless otherwise indicated in the Prospectus Supplement, the Debt Securities
will be issued only in fully registered form without coupons in denominations of
$1,000 or any integral multiple thereof. (Section 302) No service charge will be
made for any registration of transfer or exchange of Debt Securities, but the
Company may require payment of a sum sufficient to cover any tax or other
governmental charge payable in connection therewith. (Section 305)
Securities may be issued under the Indenture as Original Issue Discount
Securities to be offered and sold at a substantial discount below the stated
principal amount. Federal income tax consequences and other special
considerations applicable to such Original Issue Discount Securities will be
described in the Prospectus Supplement relating thereto.
RESTRICTIVE COVENANTS
Unless otherwise indicated in the Prospectus Supplement, under the
Indenture, the Company may not create, incur, assume or guarantee any Senior
Funded Debt (except for refundings) unless (immediately after giving effect
thereto) Senior Funded Debt of the Company plus all Funded Debt of Restricted
Subsidiaries and the higher of the par or stated value of Preferred Stock of
Restricted Subsidiaries, determined on a consolidated basis, does not exceed 65%
of Consolidated Capitalization. "Senior Funded Debt" is defined as any Funded
Debt, including the Securities, other than Subordinated Funded Debt.
"Consolidated Capitalization" is defined as Funded Debt, par or stated value of
outstanding Capital Stock, capital in excess of par or stated value, retained
earnings, deferred taxes and deferred investment tax credits of the Company and
its Restricted Subsidiaries determined on a consolidated basis. (Section 1009)
"Unrestricted Subsidiaries" are those Subsidiaries which are designated as
Unrestricted Subsidiaries by the Board of Directors from time to time pursuant
to the Indenture, except that all Subsidiaries which are Regulated Public
Utilities must be Restricted Subsidiaries.
Unless otherwise indicated in the Prospectus Supplement, the Company may not
create, assume or suffer to exist any mortgage, pledge, encumbrance, lien or
charge of any kind upon any of its property or assets, now owned or hereafter
acquired, without making effective provision whereby the Outstanding Securities
shall be secured by such mortgage, pledge, encumbrance, lien or charge equally
and ratably with
5
<PAGE>
any and all other obligations and indebtedness thereby secured, with certain
specified exceptions, unless (after giving effect to the creation of the Secured
Funded Debt) the Secured Funded Debt of the Company does not exceed 5% of
Consolidated Capitalization. (Section 1008)
Unless otherwise indicated in the Prospectus Supplement, the covenants
contained in the Indenture and the Securities would not necessarily afford
Holders protection in the event of a highly leveraged or other transaction
involving the Company that may adversely affect Holders.
EVENTS OF DEFAULT
The following are Events of Default under the Indenture with respect to
Securities of any series: (a) failure to pay principal of or premium, if any, on
any Security of that series at maturity; (b) failure to pay any interest on any
Security of that series when due, continued for 30 days; (c) failure to deposit
any sinking fund payment, when due, in respect of any Security of that series;
(d) failure to perform any other covenant or warranty of the Company in the
Indenture (other than a covenant included in the Indenture solely for the
benefit of series of Securities other than that series), continued for 60 days
after written notice as provided in the Indenture; (e) default resulting in
acceleration of more than $25,000,000 in aggregate principal amount of any
indebtedness for money borrowed by the Company under the terms of the instrument
under which such indebtedness is issued or secured, if such indebtedness is not
discharged or such acceleration is not annulled within 10 days after written
notice as provided in the Indenture; (f) certain events of bankruptcy,
insolvency or reorganization; and (g) any other Event of Default provided with
respect to Securities of that series. (Section 501) If an Event of Default with
respect to Securities of any series at the time Outstanding occurs and is
continuing, either the Trustee or the Holders of at least 25% in principal
amount of the Outstanding Securities of that series may declare the principal
amount (or, if any of the Securities of that series are Original Issue Discount
Securities, such portion of the principal amount as may be specified in the
terms of that series) of all the Securities of that series to be due and payable
immediately by written notice as provided in the Indenture. At any time after a
declaration of acceleration with respect to Securities of any series has been
made and before a judgment or decree for payment of the money due based on
acceleration has been obtained, the Holders of a majority in principal amount of
the Outstanding Securities of that series may, under certain circumstances,
rescind and annul such acceleration. (Section 502)
The Indenture provides that the Trustee will be under no obligation, subject
to the duty of the Trustee during default to act with the required standard of
care, to exercise any of its rights or powers under the Indenture at the request
or direction of any of the Holders, unless such Holders shall have offered to
the Trustee reasonable indemnity. (Sections 601, 603) Subject to such provisions
for indemnification of the Trustee, the Holders of a majority in principal
amount of the Outstanding Securities of any series will have the right to direct
the time, method and place of conducting any proceeding for any remedy available
to the Trustee, or exercising any trust or power conferred on the Trustee, with
respect to the Securities of that series. (Section 512)
The Company will be required to furnish to the Trustee annually a statement
as to the performance by the Company of certain of its obligations under the
Indenture and as to any default in such performance. (Section 1004)
MODIFICATION AND WAIVER
Modifications and amendments of the Indenture may be made by the Company and
the Trustee, some of which require the consent of the Holders of a majority in
principal amount of the Outstanding Securities of each series affected by such
modification or amendment; PROVIDED, HOWEVER, that no such modification or
amendment may, without the consent of the Holder of each Outstanding Security
affected thereby, (a) change the Stated Maturity of the principal of, or any
instalment of principal of or interest on, any Security, (b) reduce the
principal amount of, or the premium (if any) or interest on, any Security, (c)
reduce the amount of principal of an Original Issue Discount Security payable
upon acceleration of the Maturity thereof, (d) change the place or currency of
payment of principal of, or premium (if any) or interest on, any Security, (e)
impair the right to institute suit for the enforcement of any payment on or with
respect to any Security or (f) reduce the percentage in principal amount of
Outstanding Securities of any series, the consent of whose Holders is required
for modification or amendment of the Indenture or for waiver of compliance with
certain provisions of the Indenture or for waiver of certain defaults. (Section
902)
6
<PAGE>
The Holders of a majority in principal amount of the Outstanding Securities
of any series may on behalf of the Holders of all Securities of that series
waive, insofar as that series is concerned, compliance by the Company with
certain restrictive provisions of the Indenture. (Section 1010) The Holders of a
majority in principal amount of the Outstanding Securities of any series may on
behalf of the Holders of all Securities of that series waive any past default
under the Indenture with respect to that series, except a default in the payment
of the principal of (or premium, if any) or interest on any Security of that
series or in respect of a covenant or provision which under the Indenture cannot
be modified or amended without the consent of the Holder of each Outstanding
Security of that series affected. (Section 513)
CONSOLIDATION, MERGER AND SALE OF ASSETS
The Company, without the consent of any Holders of Outstanding Securities,
may consolidate with or merge with or into, or transfer or lease its properties
and assets substantially as an entirety to, any corporation, partnership or
trust or may acquire or lease the assets of any Person, provided that the
corporation, partnership or trust formed by such consolidation or into which the
Company is merged or which acquires or leases the assets of the Company
substantially as an entirety is organized under the laws of any United States
jurisdiction and assumes the Company's obligations on the Securities and under
the Indenture, that after giving effect to the transaction no Event of Default,
and no event which, after notice or lapse of time or both, would become an Event
of Default, shall have happened and be continuing, and that certain other
conditions are met. (Article Eight)
DEFEASANCE
The Prospectus Supplement will state if any defeasance provision will apply
to the Debt Securities.
The Indenture provides, if such provision is made applicable to the
Securities of any series pursuant to Section 301 of the Indenture, that the
Company may elect either (A) to defease and be discharged from any and all
obligations with respect to such Securities (except for the obligations relating
to the rights of Holders of Outstanding Securities to receive, solely from the
trust fund described below, payments in respect of the principal of (premium, if
any) and interest on Securities when due as set forth in Section 1304, to
register the transfer or exchange of such Securities, to replace temporary or
mutilated, destroyed, lost or stolen Securities, to maintain an office or agency
in respect of the Securities, to hold moneys for payment in trust and to
compensate, reimburse and indemnify the Trustee) ("defeasance") or (B) to be
released from its obligations with respect to such Securities under Sections
501(5), 1009 and 1008 of the Indenture (being the cross-default provision
described in clause (e) under "Events of Default" and the restrictions described
in the first and second paragraphs under "Restrictive Covenants", respectively)
("covenant defeasance"), upon the deposit with the Trustee (or other qualifying
trustee), in trust for such purpose, of money and/or U.S. Government Obligations
which through the payment of principal and interest in accordance with their
terms will provide money in an amount sufficient to pay the principal of (and
premium, if any) and interest on such Securities, and any mandatory sinking fund
or analogous payments thereon, on the scheduled due dates therefor. Such a trust
may be established only if, among other things, the Company has delivered to the
Trustee an opinion of counsel (as specified in the Indenture) to the effect that
the Holders of such Securities will not recognize income, gain or loss for
Federal income tax purposes as a result of such defeasance or covenant
defeasance and will be subject to Federal income tax on the same amounts, in the
same manner and at the same times as would have been the case if such defeasance
or covenant defeasance had not occurred. Such opinion, in the case of defeasance
under clause (A) above, must refer to and be based upon a ruling of the Internal
Revenue Service or a change in applicable Federal income tax law occurring after
the date of the Indenture. The Prospectus Supplement may further describe the
provisions, if any, permitting such defeasance or covenant defeasance with
respect to the Securities of a particular series. (Article Thirteen)
REGARDING THE TRUSTEE
The Company has a normal business banking relationship with the Trustee,
including the maintenance of an account and the borrowing of funds under an
Amended and Restated Credit Agreement, dated as of September 26, 1989, among the
Company, Citibank, N.A. as agent and certain other banks including the Trustee.
7
<PAGE>
DESCRIPTION OF WARRANTS
The Company may issue Warrants for the purchase of Debt Securities. Warrants
may be issued independently or together with any Debt Securities offered by any
Prospectus Supplement and may be attached to or separate from such Debt
Securities. The Warrants are to be issued under Warrant Agreements (the "Warrant
Agreements") to be entered into between the Company and The First National Bank
of Chicago, as Warrant Agent (the "Warrant Agent"), all as set forth in the
Prospectus Supplement relating to the particular issue of Warrants and shall be
evidenced by Warrant Certificates (the "Warrant Certificates"). The Warrant
Agent will act solely as an agent of the Company in connection with the Warrant
Certificates and will not assume any obligation or relationship of agency or
trust for or with any holders of Warrant Certificates or beneficial owners of
Warrants. Copies of the forms of Warrant Agreement, including the form of
Warrant Certificates, are filed as an exhibit to the Registration Statement. The
following summaries of certain provisions of the forms of Warrant Agreement and
Warrant Certificate do not purport to be complete and are subject to, and are
qualified in their entirety by reference to, all the provisions of the Warrant
Agreement and the Warrant Certificate.
GENERAL
If Warrants are offered, the Prospectus Supplement will describe the terms
of the Warrants, including the following: (a) the offering price; (b) the
currency or currency units for which Warrants may be purchased; (c) the
designation, aggregate principal amount, currency of denomination and payment
and terms of the Debt Securities purchasable upon exercise of the Warrants; (d)
if applicable, the designation and terms of the Debt Securities with which the
Warrants are issued and the number of Warrants issued with each such Debt
Security; (e) if applicable, the date on and after which the Warrants and the
related Debt Securities will be separately transferable; (f) the principal
amount of Debt Securities purchasable upon exercise of one Warrant and the price
at and the currency in which such principal amount of Debt Securities may be
purchased upon such exercise; (g) the date on which the right to exercise the
Warrants shall commence and the date (the "Expiration Date") on which such right
shall expire; (h) Federal income tax consequences; and (i) any other terms of
the Warrants.
Warrant Certificates will be issued only in fully Registered form and may be
exchanged for new Warrant Certificates of different denominations, may be
presented for registration of transfer, and may be exercised at the corporate
trust office of the Warrant Agent or any other office indicated in the
Prospectus Supplement describing the terms of the Warrants. Prior to the
exercise of their Warrants, holders of Warrants will not have any of the rights
of holders of the Debt Securities purchasable upon such exercise, including the
right to receive payments of principal of (premium, if any) or interest, if any,
on the Debt Securities purchasable upon such exercise or to enforce covenants in
the Indenture.
EXERCISE OF WARRANTS
Each Warrant will entitle the holder to purchase for cash such principal
amount of Debt Securities at such exercise price as shall in each case be set
forth in, or calculable from, the Prospectus Supplement relating to the
Warrants. Warrants may be exercised at any time up to 5:00 P.M. New York time on
the Expiration Date set forth in the Prospectus Supplement relating to such
Warrants. After the close of business on the Expiration Date (or such later date
to which such Expiration Date may be extended by the Company), unexercised
Warrants will become void.
Warrants may be exercised by delivery to the Warrant Agent of payment as
provided in the Prospectus Supplement of the amount required to purchase the
Debt Securities purchasable upon such exercise together with certain information
set forth on the reverse side of the Warrant Certificate. Warrants will be
deemed to have been exercised upon receipt by the Warrant Agent of the exercise
price, subject to the receipt within five business days of the Warrant
Certificate evidencing such Warrants. Upon receipt of such payment and the
Warrant Certificate properly completed and duly executed at the corporate trust
office of the Warrant Agent or any other office indicated in the Prospectus
Supplement, the Company will, as soon as practicable, issue and deliver the Debt
Securities purchasable upon such exercise. If fewer than all of the Warrants
represented by such Warrant Certificate are exercised, a new Warrant Certificate
will be issued for the remaining amount of Warrants.
8
<PAGE>
MODIFICATIONS
The Warrant Agreement may be amended by the Company and the Warrant Agent,
without the consent of the holder of any Warrant Certificate, for the purpose of
curing any ambiguity, or of curing, correcting or supplementing any defective
provision contained therein, or making such provisions in regard to matters or
questions arising under the Warrant Agreement as the Company may deem necessary
or desirable; provided that such action shall not adversely affect the interest
of the holders of Warrant Certificates in any material respect. The Company and
the Warrant Agent also may modify or amend the Warrant Agreement and the terms
of the Warrants, with the consent of the beneficial owners of not less than a
majority in number of the then outstanding unexercised Warrants affected,
provided that no such modification or amendment that increases the exercise
price, shortens the period of time during which the Warrants may be exercised or
otherwise materially and adversely affects the exercise rights of the owners of
the Warrants or reduces the number of Warrants the consent of whose owners is
required for modification or amendment of the Warrant Agreement or the terms of
the Warrants may be made without the consent of the owners affected thereby.
(Section 603)
MERGER, CONSOLIDATION, SALE OR OTHER DISPOSITIONS
Under the Warrant Agreement, the Company may, to the extent permitted in the
Indenture, consolidate with, or sell or convey all or substantially all of its
assets to, or merge with or into, any other corporation, partnership or trust.
If at any time there shall be a merger, consolidation, sale, transfer,
conveyance or other disposition of substantially all of the assets of the
Company, the successor or assuming corporation shall succeed to and be
substituted for the Company, with the same effect as if it had been named in the
Warrant Agreement and in the Warrants as the Company. The Company shall
thereupon be relieved of any further obligation under the Warrant Agreement or
under the Warrants. (Sections 601 and 602)
VALIDITY OF THE OFFERED SECURITIES
The validity of the Offered Securities will be passed upon for the Company
by Don A. Jensen, Esq. and Michael T. Hyde, Esq., Vice President and Secretary,
and Assistant Secretary of the Company, respectively, and for any underwriters
by Sullivan & Cromwell, 125 Broad Street, New York, New York. Sullivan &
Cromwell will rely as to all matters of Kansas law upon the opinion of Messrs.
Jensen and Hyde. Each of Messrs. Jensen and Hyde is currently the beneficial
owner of Common Stock of the Company with a market value in excess of $250,000.
EXPERTS
The consolidated financial statements and related schedules of Sprint
Corporation for the year ended December 31, 1991, appearing or incorporated by
reference in the Company's Annual Report (Form 10-K), have been audited by Ernst
& Young, independent auditors, as set forth in their report thereon included or
incorporated by reference therein and incorporated herein by reference. Such
consolidated financial statements and schedules are incorporated herein by
reference in reliance upon such report given upon the authority of such firm as
experts in accounting and auditing.
The consolidated financial statements of Centel Corporation have been
audited by Arthur Andersen & Co., independent public accountants, as indicated
in their reports with respect thereto, and are included in the Company's report
on Form 8-K, dated June 15, 1992, and incorporated herein by reference. Such
consolidated financial statements are so incorporated by reference in reliance
upon such report given upon the authority of such firm as experts in accounting
and auditing.
PLAN OF DISTRIBUTION
The Company may offer the Offered Securities to or through underwriters,
through agents or directly to other purchasers. Debt Securities may be offered
alone or with Warrants (which may or may not be detachable from such Debt
Securities) and Warrants may be offered alone, all as set forth in the
Prospectus Supplement or Prospectus Supplements relating thereto. If any
Warrants are issued, Debt Securities will be issuable upon exercise of such
Warrants.
9
<PAGE>
The distribution of the Offered Securities may be effected from time to time
in one or more transactions at a fixed price or prices, which may be changed, at
market prices prevailing at the time of sale, at prices related to such market
prices or at negotiated prices.
In connection with the sale of the Offered Securities, underwriters or
agents may receive compensation from the Company or from purchasers of Offered
Securities for whom they may act as agents in the form of discounts, concessions
or commissions. Underwriters, agents and dealers participating in the
distribution of the Offered Securities may be deemed to be underwriters, and any
discounts or commissions received by them from the Company and any profit on the
resale of the Offered Securities by them may be deemed to be underwriting
discounts and commissions, under the Securities Act of 1933 (the "Securities
Act").
The Offered Securities will be a new issue of Securities with no established
trading market. Underwriters and agents to whom Offered Securities are sold by
the Company for public offering and sale may make a market in such Offered
Securities, but such underwriters and agents will not be obligated to do so and
may discontinue any market making at any time without notice. No assurance can
be given as to the liquidity of the trading market for the Offered Securities.
Pursuant to agreements which may be entered into between the Company and any
underwriters or agents named in the Prospectus Supplement, such underwriters or
agents may be entitled to indemnification by the Company against certain
liabilities, including liabilities under the Securities Act.
If so indicated in the Prospectus Supplement, the Company will authorize
underwriters or other persons acting as agents for the Company to solicit offers
by certain institutions to purchase the Offered Securities from the Company
pursuant to contracts providing for payment and delivery on a future date.
Institutions with which such contracts may be made include commercial and
savings banks, insurance companies, pension funds, investment companies,
educational and charitable institutions and others, but in all cases such
institutions must be approved by the Company. The obligations of any purchaser
under any such contract will be subject to the condition that the purchase of
the Offered Securities shall not at the time of delivery be prohibited by the
laws of any jurisdiction to which such purchaser is subject. Underwriters and
such other persons will not have any responsibility in respect of the validity
or performance of such contracts.
10
<PAGE>
NO DEALER, SALESPERSON OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS SUPPLEMENT AND THE PROSPECTUS IN CONNECTION WITH THE OFFER CONTAINED
HEREIN AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE
RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR THE UNDERWRITERS.
NEITHER THE DELIVERY OF THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS NOR ANY
SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT
THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATES AS OF
WHICH INFORMATION IS GIVEN IN THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS.
THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS DO NOT CONSTITUTE AN OFFER OR
SOLICITATION BY ANYONE IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION
IS NOT AUTHORIZED OR IN WHICH THE PERSON MAKING SUCH OFFER OR SOLICITATION IS
NOT QUALIFIED TO DO SO OR TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH
OFFER OR SOLICITATION.
-------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
---------
<S> <C>
PROSPECTUS SUPPLEMENT
Incorporation of Certain Documents by
Reference.................................... S-2
Special Considerations Relating to DECS....... S-3
Sprint Corporation............................ S-5
Southern New England Telecommunications
Corporation.................................. S-7
Price Range and Dividend History of SNET
Common Stock................................. S-8
Use of Proceeds............................... S-8
Summary Consolidated Financial Data of the
Company...................................... S-9
Description of the DECS....................... S-10
Certain United States Federal Income Tax
Considerations............................... S-16
Plan of Distribution.......................... S-18
ERISA Matters................................. S-19
Legal Opinions................................ S-19
Experts....................................... S-19
PROSPECTUS
Available Information......................... 2
Information Incorporated by Reference......... 2
Sprint Corporation............................ 3
Proposed Merger with Centel Corporation....... 3
Use of Proceeds............................... 4
Selected Financial Information................ 4
Description of Debt Securities................ 5
Description of Warrants....................... 8
Validity of the Offered Securities............ 9
Experts....................................... 9
Plan of Distribution.......................... 9
</TABLE>
3,900,000 DECS-SM-
(DEBT EXCHANGEABLE FOR
COMMON STOCK-SM-)
SPRINT CORPORATION
8 1/4% EXCHANGEABLE NOTES
DUE MARCH 31, 2000
[LOGO]
SALOMON BROTHERS INC
LEHMAN BROTHERS
SMITH BARNEY INC.
PROSPECTUS SUPPLEMENT
DATED MARCH 20, 1995
