UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q/A
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1995
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 1-4721
SPRINT CORPORATION
(Exact name of registrant as specified in its charter)
KANSAS 48-0457967
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
P.O. Box 11315, Kansas City, Missouri 64112
(Address of principal executive offices)
(913) 624-3000
(Registrant's telephone number, including area code)
(Former name, former address and former fiscal year, if changed
since last report)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements
for the past 90 days.
Yes X No
SHARES OF COMMON STOCK OUTSTANDING AT June 30, 1995 - 348,639,522
SPRINT CORPORATION
FORM 10-Q/A FOR THE QUARTER ENDED JUNE 30, 1995
Explanation for amended filing:
To correct the year designations on balance sheet column headings from
June 30, 1994 and December 31, 1995 to June 30, 1995 and December 31,
1994, respectively.
This is the only change.
The following information is resubmitted:
Part I - Financial Information
Item 1. Financial Statements
Consolidated Balance Sheets
Consolidated Statements of Income
Consolidated Statements of Cash Flows
Consolidated Statements of Common Stock and Other
Shareholders' Equity
Condensed Notes to Consolidated Financial
Statements
Signatures
PART 1.
Item 1.
SPRINT CORPORATION
CONSOLIDATED BALANCE SHEETS
(In Millions)
As of As of
June 30, December 31,
1995 1994
(Unaudited)
Assets
Current assets
Cash and equivalents $ 286.9 $ 123.3
Accounts receivable, net of allowance
for doubtful accounts of $178.2
million ($128.9 million in 1994) 1,517.1 1,469.8
Inventories 191.2 215.8
Deferred income taxes 62.3 54.2
Prepaid expenses 166.4 144.5
Other 181.1 180.9
Total current assets 2,405.0 2,188.5
Investments in equity securities 218.9 177.6
Property, plant and equipment
Long distance communications services 6,383.1 6,056.3
Local communications services 12,212.8 11,827.4
Cellular and wireless communications
services 993.0 818.5
Other 500.5 498.6
20,089.4 19,200.8
Less accumulated depreciation 8,927.0 8,322.2
11,162.4 10,878.6
Investments in affiliates 1,379.9 500.3
Excess of cost over net assets acquired 694.7 706.7
Other assets 463.7 492.0
$ 16,324.6 $ 14,943.7
See accompanying condensed Notes to Consolidated Financial
Statements.
PART 1.
Item 1.
SPRINT CORPORATION
CONSOLIDATED BALANCE SHEETS (continued)
(In Millions)
As of As of
June 30, December 31,
1995 1994
(Unaudited)
Liabilities and shareholders' equity
Current liabilities
Current maturities of long-term debt $ 273.6 $ 332.4
Accounts payable 915.1 1,072.2
Accrued interconnection costs 548.6 527.6
Accrued taxes 270.2 268.5
Advance billings 168.9 167.6
Other 668.4 686.3
Total current liabilities 2,844.8 3,054.6
Long-term debt 5,791.8 4,604.8
Deferred credits and other liabilities
Deferred income taxes and investment tax
credits 1,256.7 1,266.4
Postretirement and other benefit
obligations 877.9 850.3
Other 672.3 605.7
2,806.9 2,722.4
Redeemable preferred stock 34.7 37.1
Common stock and other shareholders'
equity
Common stock, par value $2.50 per share,
authorized 500.0 million shares, issued
348.6 million (348.6 million in 1994)
and outstanding 348.6 million (348.3
million in 1994) 871.6 871.4
Capital in excess of par or stated value 943.5 942.9
Retained earnings 3,017.5 2,730.9
Other 13.8 (20.4)
4,846.4 4,524.8
$ 16,324.6 $ 14,943.7
See accompanying condensed Notes to Consolidated Financial
Statements.
PART I.
Item 1.
SPRINT CORPORATION
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(In Millions, Except Per Share Data)
Three Months Ended Six Months Ended
June 30, June 30,
1995 1994 1995 1994
Net operating revenues $ 3,365.6 $ 3,150.4 $ 6,637.1 $ 6,183.6
Operating expenses
Costs of services and
products 1,673.4 1,574.4 3,313.3 3,102.8
Selling, general and
administrative 799.7 752.8 1,568.4 1,477.0
Depreciation and
amortization 387.0 366.4 773.8 718.7
Total operating expenses 2,860.1 2,693.6 5,655.5 5,298.5
Operating income 505.5 456.8 981.6 885.1
Interest expense (100.0) (100.0) (199.2) (201.1)
Other income (expense),
net (14.5) (9.3) (35.0) 19.9
Income before income
taxes 391.0 347.5 747.4 703.9
Income tax provision (145.3) (127.9) (277.4) (256.9)
Net income 245.7 219.6 470.0 447.0
Preferred stock
dividends (0.6) (0.7) (1.3) (1.4)
Earnings applicable to
common stock $ 245.1 $ 218.9 $ 468.7 $ 445.6
Earnings per common
share $ 0.70 $ 0.63 $ 1.34 $ 1.28
Weighted average number
of common shares 350.2 347.6 349.6 347.1
Dividends per common
share $ 0.25 $ 0.25 $ 0.50 $ 0.50
See accompanying condensed Notes to Consolidated Financial
Statements.
PART I.
Item 1.
SPRINT CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(In Millions)
Six Months Ended
June 30,
1995 1994
Operating activities
Net income $ 470.0 $ 447.0
Adjustments to reconcile net income to net
cash provided by operating activities
Depreciation and amortization 773.8 718.7
Deferred income taxes and investment tax
credits (8.9) 44.8
Gain on sale of investment -- (34.7)
Changes in operating assets and liabilities
Accounts receivable, net (47.3) (140.0)
Inventories and other current assets 2.5 (18.6)
Accounts payable, accrued expenses and other
current liabilities (146.8) (8.5)
Noncurrent assets and liabilities, net 106.6 69.6
Other, net 1.5 41.6
Net cash provided by operating activities 1,151.4 1,119.9
Investing activities
Capital expenditures (1,068.5) (848.0)
Proceeds from sale of investment in equity
securities -- 117.7
Investments in affiliates (890.1) (14.3)
Distributions from affiliates 30.4 15.0
Other, net (0.8) (16.6)
Net cash used by investing activities (1,929.0) (746.2)
Financing activities
Proceeds from long-term debt 209.8 100.2
Retirements of long-term debt (226.2) (380.3)
Net increase in notes payable and commercial
paper 1,144.6 73.5
Proceeds from common stock issued 3.2 28.7
Proceeds from employees stock purchase
installments -- 10.5
Dividends paid (175.6) (172.0)
Other, net (14.6) 10.3
Net cash provided (used) by financing
activities 941.2 (329.1)
Increase in cash and equivalents 163.6 44.6
Cash and equivalents at beginning of period 123.3 76.8
Cash and equivalents at end of period $ 286.9 $ 121.4
Supplemental cash flows information
Cash paid for interest $ 201.1 $ 218.1
Cash paid for income taxes $ 284.6 $ 224.9
Noncash financing activities
Common stock contributed to employee
savings plans, at market $ -- $ 26.3
See accompanying condensed Notes to Consolidated Financial
Statements.
PART I.
Item 1.
SPRINT CORPORATION
CONSOLIDATED STATEMENTS OF COMMON STOCK AND
OTHER SHAREHOLDERS' EQUITY (UNAUDITED)
(In Millions)
Six Months Ended June 30, 1995
Capital in
Excess of
Par or
Common Stated Retained
Stock Value Earnings Other Total
Balance as of January
1, 1995 (348.6
million shares issued
and 348.3 million
shares outstanding) $871.4 $942.9 $ 2,730.9 $(20.4) $4,524.8
Net income -- -- 470.0 -- 470.0
Common stock
dividends -- -- (174.3) -- (174.3)
Preferred stock
dividends -- -- (1.3) -- (1.3)
Common stock issued 0.2 2.0 -- -- 2.2
Change in unrealized
holding gains on
investments in equity
securities, net -- -- -- 26.5 26.5
Other, net -- (1.4) (7.8) 7.7 (1.5)
Balance as of June 30,
1995 (348.6 million
shares issued and
348.6 million shares
outstanding) $871.6 $943.5 $ 3,017.5 $ 13.8 $4,846.4
See accompanying condensed Notes to Consolidated Financial
Statements.
PART I.
Item 1.
SPRINT CORPORATION
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
June 30, 1995 and 1994
The information contained in this Form 10-Q for the three and six
month interim periods ended June 30, 1995 and 1994 has been
prepared in accordance with instructions to Form 10-Q and Rule 1001
of Regulation S-X. In the opinion of management, all adjustments
considered necessary, consisting only of normal recurring accruals,
to present fairly the consolidated financial position, results of
operations, and cash flows for such interim periods have been made.
Certain information and footnote disclosures normally included in
consolidated financial statements prepared in accordance with
generally accepted accounting principles have been condensed or
omitted. The results of operations for the six months ended June
30, 1995 are not necessarily indicative of the operating results
that may be expected for the year ended December 31, 1995.
1. Accounting Policies
Basis of Consolidation
The accompanying consolidated financial statements include the
accounts of Sprint Corporation and its wholly-owned and majority
owned subsidiaries (Sprint). Investments in affiliates which
represent 50 percent or less ownership are accounted for using the
equity method.
In accordance with industry practice, revenues and related net
income of non-regulated operations attributable to transactions
with Sprint's regulated local exchange telephone companies have not
been eliminated in the accompanying consolidated financial
statements. Intercompany revenues of such entities amounted to $74
million and $85 million for the three months ended June 30, 1995
and 1994, respectively, and $145 million and $150 million for the
six months ended June 30, 1995 and 1994, respectively.
All other significant intercompany transactions have been
eliminated.
Classification of Operations
The long distance communications services division provides
domestic voice, video, and data communications services across
certain specified geographical boundaries, as well as international
long distance communications services. The terms under which the
division offers its services to the public are subject to different
levels of state and federal regulation, but rates are generally not
subject to rate-base regulation.
The local communications services division consists principally of
the operations of Sprint's regulated telephone companies which
provide local exchange services, access by telephone customers and
other carriers to local exchange facilities and long distance
services within specified geographical areas.
The cellular and wireless communications services division consists
of wholly-owned and majority-owned interests in partnerships and
corporations operating cellular and wireless communications
properties in various metropolitan and rural service area markets.
The product distribution and directory publishing businesses
include the wholesale distribution of telecommunications products
and the publishing and marketing of white and yellow page telephone
directories.
Reclassifications
Certain amounts previously reported for prior periods have been
reclassified to conform to the current period presentation in the
accompanying consolidated financial statements. Such
reclassifications had no effect on the results of operations or
shareholders' equity as previously reported.
2. Investments in Equity Securities
Investments in equity securities are classified as available for
sale and reported at fair value (estimated based on quoted market
prices). As of June 30, 1995 and December 31, 1994, the cost of
such investments was $109 million, with gross unrealized holding
gains of $110 million and $69 million, respectively, reflected as
additions to other shareholders' equity, net of related income
taxes.
During the six months ended June 30, 1994, Sprint sold an
investment in equity securities, realizing a gain of $35 million,
which increased net income by $22 million ($0.06 per share).
3. Long-Term Debt
Long-term debt increased $1.19 billion as of June 30, 1995 compared
to December 31, 1994 primarily reflecting borrowings to support
commitments associated with the Sprint Telecommunications Venture.
This increase in borrowings was primarily comprised of notes
payable and commercial paper which are classified as long-term debt
due to Sprint's intent and ability to refinance such borrowings on
a long-term basis.
4. Income Taxes
The differences which cause the effective income tax rate to vary
from the statutory federal income tax rate of 35 percent for the
six months ended June 30, 1995 and 1994, respectively, are as
follows (in millions):
Six Months Ended June 30,
1995 1994
Income tax provision at the statutory rate $ 261.6 $ 246.4
Effect of:
Investment tax credits included in income (7.6) (11.2)
State income taxes, net of federal income
tax effect 27.0 27.4
Other, net (3.6) (5.7)
Income tax provision $ 277.4 $ 256.9
Effective income tax rate 37.1% 36.5%
5. Contingencies
Litigation, Claims and Assessments
Following announcement in 1992 of Sprint's merger agreement with
Centel Corporation (Centel), class action suits were filed against
Centel and certain of its officers and directors in federal and
state courts. The state suits have been dismissed, while the
federal suits have been consolidated into a single action which
seeks damages for alleged violations of securities laws. In
January 1995, a purported class action suit was filed against
Centel's financial advisors in state court in New York in
connection with the Sprint/Centel merger. Sprint may have
indemnification obligations to the financial advisors in connection
with this suit. Various other suits arising in the ordinary course
of business are pending against Sprint. Management cannot predict
the ultimate outcome of these actions but believes they will not
result in a material effect on Sprint's consolidated financial statements.
Accounts Receivable Sold with Recourse
Under an agreement available through December 1995, Sprint may sell
on a continuous basis, with recourse, up to $600 million of
undivided interests in a designated pool of its accounts
receivable. Subsequent collections of receivables sold to
investors are typically reinvested in the pool. Sprint is required
to repurchase the designated pool of accounts receivable only upon
the occurrence of specified events involving non-collectibility of
accounts. As of June 30, 1995, Sprint had not been required to
repurchase receivables under this recourse provision. Because
Sprint retains credit losses associated with its accounts
receivable, any exposure related to this retention is estimated in
conjunction with Sprint's calculation of its reserve for
uncollectible accounts. On an annual basis, subject to the
approval of the investors, Sprint may extend the agreement for an
additional year. Receivables sold that remained uncollected as of
June 30, 1995 aggregated $600 million.
6. Subsequent Event
In August 1995, Sprint's board of directors declared a common stock
dividend of $0.25 per share payable on September 29, 1995.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
SPRINT CORPORATION
(Registrant)
By /s/ John P. Meyer
John P. Meyer
Senior Vice President -- Controller
Principal Accounting Officer
Dated: August 14, 1995
