SPRINT CORP, 10-Q, 1999-11-15

SPRINT CORP
10-Q, 1999-11-15
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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934

For the quarterly period ended September 30, 1999
-------------------------------------------------

[ ] 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) (Zip Code)

Registrant's telephone number, including area code (913) 624-3000
----------------------------

------------------------------------------------------------------------------
(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 these shorter period that the registrant was
required to file these reports), and (2) has been subject to these filing
requirements for the past 90 days.

Yes X No

COMMON SHARES OUTSTANDING AT SEPTEMBER 30, 1999:
FON COMMON STOCK 785,205,312
PCS COMMON STOCK 430,943,414
CLASS A COMMON STOCK 86,236,036

<PAGE>

TABLE OF CONTENTS
Page
Reference
Part I - Financial Information

<S> <C>
Item 1. Financial Statements 1

Item 2. Management's Discussion and Analysis of Financial Condition and Results of
Operations 1

Item 3. Quantitative and Qualitative Disclosures About Market Risk 1

Part II - Other Information

Item 1. Legal Proceedings 2

Item 2. Changes in Securities 2

Item 3. Defaults Upon Senior Securities 2

Item 4. Submission of Matters to a Vote of Security Holders 3

Item 5. Other Information 3

Item 6. Exhibits and Reports on Form 8-K 3

Signature 5

Exhibits

ANNEX I
SPRINT CORPORATION

Consolidated Financial Information
Consolidated Statements of Operations I-1
Consolidated Statements of Comprehensive Income (Loss) I-3
Consolidated Balance Sheets I-4
Consolidated Statements of Cash Flows I-6
Consolidated Statement of Shareholders' Equity I-7
Condensed Notes to Consolidated Financial Statements I-8

Management's Discussion and Analysis of Financial Condition and Results of Operations I-13

ANNEX II
SPRINT FON GROUP

Combined Financial Information
Combined Statements of Operations II-1
Combined Statements of Comprehensive Income II-2
Combined Balance Sheets II-3
Combined Statements of Cash Flows II-4
Condensed Notes to Combined Financial Statements II-5

Management's Discussion and Analysis of Financial Condition and Results of Operations II-10

ANNEX III
SPRINT PCS GROUP

Combined Financial Information
Combined Statements of Operations III-1
Combined Balance Sheets III-2
Combined Statements of Cash Flows III-3
Condensed Notes to Combined Financial Statements III-4

Management's Discussion and Analysis of Financial Condition and Results of Operations III-7

</TABLE>

<PAGE>

Part I. - Financial Information

Item 1. Financial Statements

For information required by Item 1, refer to the Sprint Corporation
consolidated financial statements filed as part of this document in
Annex I, the Sprint FON Group combined financial statements filed as
part of this document in Annex II and the Sprint PCS Group combined
financial statements filed as part of this document in Annex III.

Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations

For information required by Item 2, refer to the "Sprint Corporation
Management's Discussion and Analysis of Financial Condition and Results
of Operations" filed as part of this document in Annex I, the "Sprint
FON Group Management's Discussion and Analysis of Financial Condition
and Results of Operations" filed as part of this document in Annex II
and the "Sprint PCS Group Management's Discussion and Analysis of
Financial Condition and Results of Operations" filed as part of this
document in Annex III.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Sprint's exposure to market risk through derivative financial
instruments and other financial instruments, such as investments in
marketable securities and long-term debt, is not material. There have
been no material changes in market risk since year-end 1998.

<PAGE>

PART II. - Other Information

Item 1. Legal Proceedings

Seven purported class action suits were filed by shareholders in
connection with the proposed merger of Sprint Corporation ("Sprint")
into MCI WorldCom, Inc. The suits allege that Sprint's directors
breached their fiduciary duties, and certain other duties, to
shareholders by entering into the Agreement and Plan of Merger with MCI
WorldCom, Inc. and seek various relief, including injunction of the
merger, requiring Sprint to conduct an auction for the sale of the
company and awarding compensatory damages and costs.

The following six lawsuits were filed in Johnson County, Kansas
District Court:

Miller, et al. v. Sprint Corporation, William T. Esrey, Ronald T.
LeMay, Dubose Ausley, Michel Bon, Harold S. Hook, Linda Koch
Lorimer, Charles E. Rice and Ron Sommer, filed October 5, 1999.

Michael Feder, et al. v. Sprint Corporation, Louis W. Smith,
Ronald T. LeMay, Irvine O. Hockaday, Jr., Michael [sic] Bon, Dr.
Ron Somner [sic], Dubose Ausley, Linda Koch Lorimer, William T.
Esrey, Warren L. Batts, Harold S. Hook, Stewart Turley and
Charles E. Rice, filed October 5, 1999.

Artemis Tsekouras, et al. v. Sprint Corporation, Louis W. Smith,
Ronald T. LeMay, Irvine O. Hockaday Jr., Michael [sic] Bon, Dr.
Ron Somner [sic], Dubose Ausley, Linda Koch Lorimer, William T.
Esrey, Warren L. Batts, Harold S. Hook, Stewart Turley and
Charles E. Rice, filed October 4, 1999.

Selma Kaiser, et al. v. Sprint Corporation, William T. Esrey,
Ronald T. LeMay, Dubose Ausley, Michel Bon, Harold S. Hook, Linda
Koch Lorimer, Charles E. Rice and Ron Sommer, filed October 7,
1999.

Cohen v. William T. Esrey, Ronald T. LeMay, Warren L. Batts,
Irvine O. Hockaday, Jr., Harold S. Hook, Charles E. Rice, Linda
Koch Lorimer, Stewart Turley, Dubose Ausley, Michael [sic] Bon,
Ron Sommer and Sprint Corporation, filed on October 5, 1999.

Kane v. William T. Esrey, Ronald T. LeMay, Warren L. Batts,
Irvine O. Hockaday, Jr., Harold S. Hook, Charles E. Rice, Linda
Koch Lorimer, Stewart Turley, Dubose Ausley, Michael [sic] Bon,
Ron Sommer and Sprint Corporation, filed October 5, 1999.

The following suit was filed in the Supreme Court of the State of New
York:

Seinfeld v. William T. Esrey, Warren L. Batts, Irvine O.
Hockaday, Jr., Ronald T. LeMay, Harold S. Hook, Charles E. Rice,
Linda Koch Lorimer, Stewart Turley, Dubose Ausley, Michel Bon,
Ron Sommer and Sprint Corporation, filed October 4, 1999.

Item 2. Changes in Securities

In September, 1999, Sprint issued an aggregate of 750,000 shares of
Series 3 FON Stock and 290,000 shares of Series 3 PCS stock that were
not registered under the Securities Act of 1933, as amended, to France
Telecom S.A. ("FT") and Deutsche Telekom AG ("DT") for an aggregate of
$42.5 million. These shares were purchased by FT and DT in order to
maintain their aggregate voting power at 20% of Sprint's outstanding
voting power.

The sale of shares to FT and DT was exempt from the registration
requirements of the Securities Act pursuant to Section 4(2) of the
Securities Act. No solicitation was made to sell such shares to the
public and all material information regarding Sprint was available to
FT and DT. FT and DT are accredited investors having sufficient
knowledge and experience in financial and business matters necessary to
evaluate the merits and risks of their investment. FT and DT were
informed that the transactions were being effected without registration
under the Securities Act and that the shares acquired could not be
resold without registration under the Securities Act unless the sale is
effected pursuant to an exemption from the registration requirements of
the Securities Act.

Item 3. Defaults Upon Senior Securities

There were no reportable events during the quarter ended September 30,
1999.

<PAGE>

Item 4. Submission of Matters to a Vote of Security Holders

There were no reportable events during the quarter ended September 30,
1999.

Item 5. Other Information

Ratio of Earnings to Fixed Charges

Sprint's earnings, as adjusted, were inadequate to cover fixed charges
by $290 million in the 1999 third quarter and $728 million for the 1999
year-to-date period. Sprint's ratio of earnings to fixed charges was
2.19 for the 1998 third quarter and 2.20 for the 1998 year-to-date
period. The ratios were computed by dividing fixed charges into the sum
of earnings, after certain adjustments, and fixed charges. Earnings
include income from continuing operations before taxes, plus equity in
the net losses of less-than-50%-owned entities, less capitalized
interest. Fixed charges include (a) interest on all debt of continuing
operations, including amortization of debt issuance costs, (b) the
interest component of operating rents, and (c) the pre-tax cost of
subsidiary preferred stock dividends.

Item 6. Exhibits and Reports on Form 8-K

(a) The following exhibits are filed as part of this report:

(2) Agreement and Plan of Merger:

(a) Agreement and Plan of Merger dated as of October 4,
1999 between MCI WorldCom, Inc. and Sprint Corporation
(filed as Exhibit 2 to Sprint Corporation Current
Report on Form 8-K dated October 5, 1999 and
incorporated herein by reference).

(3) Articles of Incorporation and Bylaws:

(a) Articles of Incorporation, as amended (filed as Exhibit
4A to Post-Effective Amendment No. 2 to Sprint
Corporation's Registration Statement on Form S-3 (No.
33-58488) and incorporated herein by reference).

(b) Bylaws, as amended (filed as Exhibit 4C to
Post-Effective Amendment No. 2 to Sprint Corporation's
Registration Statement on Form S-3 (No. 33-58488) and
incorporated herein by reference).

(4) Instruments defining the Rights of Sprint's Equity Security
Holders:

(a) The rights of Sprint's equity security holders are
defined in the Fifth, Sixth, Seventh and Eighth
Articles of Sprint's Articles of Incorporation. See
Exhibit 3(a).

(b) Rights Agreement dated as of November 23, 1998, between
Sprint Corporation and UMB Bank, n.a. (filed as Exhibit
4.1 to Amendment No. 1 to Sprint Corporation's
Registration Statement on Form 8-A relating to Sprint's
PCS Group Rights, filed November 25, 1998, and
incorporated herein by reference).

(c) Amended and Restated Standstill Agreement dated
November 23, 1998, by and among Sprint Corporation,
France Telecom S.A. and Deutsche Telekom AG (filed as
Exhibit 4E to Post-Effective Amendment No. 2 to Sprint
Corporation's Registration Statement on Form S-3 (No.
33-58488) and incorporated herein by reference).

<PAGE>

(10) Material Agreements:

(a) 364-Day Credit Agreement, dated as of August 6, 1999,
among Sprint Corporation and Sprint Capital
Corporation, as Borrowers, and the Initial Lenders
named therein, as Initial Lenders named therein, as
Initial Lenders, and Citibank, N.A., as Administrative
Agent, and Salomon Smith Barney Inc., as Book Manager
and Arranger, and Morgan Guaranty Trust Company of New
York, as Syndication Agent, and Bank of America
National Trust and Savings Association and The Chase
Manhattan Bank, as Documentation Agents (filed as
Exhibit 99-B to Sprint Corporation Current Report on
Form 8-K dated October 20, 1999 and incorporated by
reference).

(10) Executive Compensation Plans and Arrangements:

(b) 1990 Restricted Stock Plan, as amended.

(d) Amended and Restated Centel Directors Deferred
Compensation Plan.

(e) 1990 Stock Option Plan, as amended.

(12) Computation of Ratio of Earnings to Fixed Charges

(27) Financial Data Schedule

(a) September 30, 1999

(b) Reports on Form 8-K

Sprint filed a Current Report on Form 8-K dated July 21, 1999, in
which it included selected financial data to reflect the effects
of the 1999 second quarter two-for-one stock split of the FON
Common Stock on FON Group earnings and dividends per share.

Sprint filed a Current Report on Form 8-K dated October 5, 1999,
in which it reported that it had entered into a definitive merger
agreement with MCI WorldCom, Inc.

Sprint filed a Current Report on Form 8-K dated October 20, 1999,
in which it reported that it had announced third quarter 1999
results in both its FON Group and its PCS Group. Sprint also
reported that seven purported class action lawsuits had been
filed by shareholders in connection with the proposed merger of
Sprint into MCI WorldCom, Inc.

The news release regarding third quarter 1999 results, which was
included as an Exhibit to the Current Report dated October 20,
1999, included the following financial information:

Sprint FON Group Combined Statements of Income
Sprint FON Group Selected Operating Results
Sprint FON Group Condensed Combined Balance Sheets
Sprint FON Group Condensed Combined Cash Flow Information
Sprint PCS Group Combined Statements of Operations
Sprint PCS Group Condensed Combined Balance Sheets
Sprint PCS Group Condensed Combined Cash Flow Information
Sprint Corporation Condensed Consolidated Balance Sheets
Sprint Corporation Condensed Consolidated Cash Flow Information

<PAGE>

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: November 12, 1999

<PAGE>

EXHIBIT EXHIBIT INDEX
NUMBER

(2) Agreement and Plan of Merger:

(3) Articles of Incorporation and Bylaws:

(b) Bylaws, as amended (filed as Exhibit 4C to
Post-Effective Amendment No. 2 to Sprint Corporation's
Registration Statement on Form S-3 (No. 33-58488) and
incorporated herein by reference).

(4) Instruments defining the Rights of Sprint's Equity Security
Holders:

(a) The rights of Sprint's equity security holders are
defined in the Fifth, Sixth, Seventh and Eighth
Articles of Sprint's Articles of Incorporation. See
Exhibit 3(a).

<PAGE>

(10) Material Agreements:

(10) Executive Compensation Plans and Arrangements:

(b) 1990 Restricted Stock Plan, as amended.

(d) Amended and Restated Centel Directors Deferred
Compensation Plan.

(e) 1990 Stock Option Plan, as amended.

(12) Computation of Ratio of Earnings to Fixed Charges

(27) Financial Data Schedule

(a) September 30, 1999

Exhibit 10(b)

1990 RESTRICTED STOCK PLAN
(as amended June 9, 1992, August 10, 1993, December 13, 1994,
February 18, 1995, August 8, 1995, December 12, 1995,
August 12, 1996, February 11, 1997, October 13, 1998, and November 23, 1998,
February 9, 1999, and May 13, 1999)

Section 1. Establishment.

Pursuant to the Sprint Long-Term Stock Incentive Program (the
"Program"), Sprint Corporation, a Kansas corporation (the "Company"),
hereby establishes a restricted stock plan to be named the 1990 Restricted
Stock Plan (the "Plan").

Section 2. Purpose.

The purpose of the Plan is to aid the Company and its subsidiaries in
competing with other enterprises for the services of new key personnel
needed to help ensure their continued development. The Plan will also help
the Company and its subsidiaries retain key personnel.

Section 3. Administration.

The Plan shall be administered by the organization and Compensation
Committee (the "Compensation Committee") of the Board of Directors of the
Company. Members of the Compensation Committee shall be Disinterested
Persons as defined in the Program. The Compensation Committee shall hold
its meetings at such times and places as it may determine. A majority of
the Compensation Committee shall constitute a quorum and the acts of a
majority of the members present at any meeting at which a quorum is present,
or acts approved in writing by a majority of the Compensation Committee,
shall be deemed the acts of the Compensation Committee. The Compensation
Committee may delegate to the Chief Executive Officer of the Company
(the "CEO") the right to grant awards of restricted stock to employees of
the Company and its subsidiaries who are not officers or directors of
the Company and to cancel or suspend such awards. The CEO may not make
awards of restricted stock to any one individual in excess of 30,000
shares of FON Stock nor 7,500 shares of PCS Stock and may not make awards
of restricted stock aggregating in excess of 100,000 shares of FON Stock
nor 25,000 shares of PCS Stock between meetings of the Compensation
Committee. The awards made by the CEO shall be reported to the
Compensation Committee at each of its meetings.

The Company shall issue shares of restricted stock under the Plan in
accordance with determinations made by the Compensation Committee or the
CEO pursuant to the provisions of the Plan and the Program. The Compensation
Committee from time to time may adopt (and thereafter amend and rescind)
such rules and regulations for carrying out the Plan and take such action
in the administration of the Plan, not inconsistent with the provisions of
the Plan and the Program, as it shall deem proper. Except as set forth in
Section 6(a) hereof, the Compensation Committee may accelerate the time or
times at which restrictions lapse and may waive any forfeiture of restricted
stock. The interpretation and construction of any provisions of the Plan by
the Compensation Committee shall, unless otherwise determined by the Board
of Directors of the Company, be final and conclusive. No member of the
Board of Directors or the

<PAGE>

Compensation Committee shall be liable for any action or determination
made in good faith with respect to the Plan or any grant under it.

Section 4. Total Number of Shares Subject to Grant1.

The maximum number of shares of FON Stock that may be issued under the
Plan shall not exceed 713,276, and the maximum number of shares of PCS Stock
that may be issued under the Plan shall not exceed 178,319, in both cases
subject to adjustment as provided in Section 7 hereof. The shares issued
under the Plan may be either treasury shares or authorized but unissued
shares, as the Board of Directors from time to time may determine. The
maximum number of shares of common stock which may be issued in any calendar
year, together with shares of common stock subject to other awards under
the Program, shall not exceed the limits set forth in Section 4(a) of the
Program.

In the event that any outstanding shares of restricted stock under
the Plan are forfeited for any reason, such shares of common stock may
again be subject to grant under the Plan.

Section 5. Eligibility.

Restricted stock shall be granted only to key employees of the Company
or its subsidiaries, including new hires. No grants shall be made by the
CEO to any individual who is an officer or director of the Company or who
will be proposed to be elected as an officer or director at the next meeting
of the Board of Directors or Stockholders of the Company. The Compensation
Committee or the CEO will, in its discretion, determine the key employees
to be granted restricted stock, the time or times at which restricted stock
shall be granted, the number of shares to be granted and the duration of
restrictions on the shares granted. In making such determination, the
Compensation Committee and the CEO may take into consideration the value
of the services rendered or to be rendered by the respective individuals,
their present and potential contributions to the success of the Company and
its affiliates and such other factors which the Compensation Committee
or the CEO may deem relevant in accomplishing the purposes of the Plan.

No restricted stock may be granted to any individual who immediately
after the grant owns directly or indirectly stock possessing more than five
percent (5%) of the total combined voting power or value of all classes of
stock of the Company or any subsidiary. No person shall be eligible to
receive a larger number of shares of restricted stock than is recommended
for such individual by the Compensation Committee or the CEO.

_______________________________
1 These numbers reflect the number of shares authorized for issuance
under the Plan immediately after the recapitalization of Sprint's Common
Stock into FON Stock and PCS Stock on November 23, 1998. The number of
shares of FON Stock has also been doubled to reflect the 2-1 split of
FON Stock on May 13, 1999. These numbers should be increased by the
number of shares of FON Stock and PCS Stock that were awarded before the
recapitalization that become forfeited.

<PAGE>

Section 6. Terms and Conditions of Grants.

Each grant under the Plan shall be evidenced by an Agreement in such
form not inconsistent with the Plan as the Compensation Committee or the CEO
shall determine; provided that the substance of the following terms and
conditions be included therein:

(a) Duration of Restrictions. The restrictions on restricted stock
shall lapse at such time or times as determined by the Compensation
Committee or the CEO; provided, however, that no restricted stock
shall become free of restrictions prior to the first anniversary
date of the granting of the restricted stock. At any time
on or before the 13th calendar month preceding the date on which
restrictions on shares of restricted stock would otherwise lapse,
the grantee may elect to extend the period of restriction on
all but not a portion of such shares by six months or any multiple
of six months. Unless the Compensation Committee specifies
otherwise with respect to a particular grant of restricted stock,
restrictions on restricted stock outstanding at least one year
shall lapse upon a Change in Control (as defined in the 1990
Stock Option Plan or any successor plan).

(b) Nontransferable. The employee who receives restricted stock
(the "Grantee") may not sell, transfer, assign, pledge or otherwise
encumber or dispose of shares of restricted stock until such
time as all restrictions on such stock have lapsed except: (i)
to the Company in payment of the exercise price of a stock
option issued by the Company under any employee stock option
plan adopted by the Company that provides for payment of the
exercise price in the form of restricted stock, provided that
such payment is made in accordance with the terms of such plan;
or (ii) to a trust of which the Grantee, the Grantee's spouse,
or descendants of the Grantee are the primary beneficiaries and
which is a grantor trust treated as owned by the Grantee under
Subchapter J of the Internal Revenue Code, upon the following
terms:

(A) the Company receives, prior to such transfer, a true
copy of the trust agreement and an opinion from Grantee's counsel
(1) that the trust will be treated as a grantor trust owned by
the Grantee under Subchapter J of the Internal Revenue Code at
all times until the restrictions on such stock lapse or the stock
is forfeited under the terms of its grant, (2) that the terms of
the trust provide that upon the forfeiture of the restricted
stock under the terms of its grant or the earlier termination of
the trust for whatever reason, ownership of the restricted stock
shall revert to the Grantee or to the Company, (3) that the
trustee of such trust may not, prior to the lapsing of
restrictions on such stock, sell, transfer, assign, pledge, or
otherwise encumber or dispose of shares of restricted stock
except to the Company or to the Grantee, subject to the
restrictions provided for in this Plan, and (4) that, until the
restrictions lapse, the trustee is not authorized to incur
liabilities on behalf of the trust, other than to the
beneficiaries of the trust; and

<PAGE>

(B) the Grantee and the trustee of the trust shall execute
stock powers in blank to be held in the custody of the Company; and

(C) the Corporate Secretary of the Company may, in his
discretion, enforce the foregoing transfer restrictions by
maintaining physical custody of the certificate or certificates
representing such shares of restricted stock, by placing a
restrictive legend on such certificates, by requiring the Grantee
and the trustee to execute other documents as a pre-condition to
such transfer, or otherwise.

(c) Termination of Employment. If, before the restrictions on shares
of restricted stock lapse, the Grantee ceases to be employed by
the Company or a subsidiary of the Company for any reason
(other than death, disability, or involuntary termination without
cause), the shares of restricted stock that continue to be
restricted shall be forfeited and the Grantee or his representative
shall sign any document and take any other action required to
assign said restricted shares back to the Company. If the
Grantee ceases to be employed by reason of the grantee's death,
total disability, or involuntary termination without cause,
restrictions on the restricted stock shall lapse as of the
grantee's termination date and the Company shall release
restrictions on the restricted shares as soon as practicable
thereafter. For purposes of this Plan, unless the Committee
determines otherwise at the time of grant, an employee who
becomes employed by Global One. (together with its subsidiaries,
an "Affiliated Entity"), shall not, except with respect to
incentive stock options, be considered to have terminated
employment with the Company or a subsidiary of the Company until
his employment is terminated with all Affiliated Entities without
becoming employed by the Company or its subsidiaries.

(d) Consideration. Each Grantee shall, as consideration for the
grant of restricted stock, agree in writing to remain in the
employ of the Company or of one of its subsidiaries, at the
pleasure of the Company or of such subsidiary, for the period
of time until the restrictions on the restricted stock lapse.
Nothing contained in the Plan or in any Agreement shall confer
upon any Grantee any right with respect to continuance of
employment by the Company or its subsidiaries, nor interfere
in any way with the right of the Company or its subsidiaries to
terminate the Grantee's employment or change the Grantee's
compensation at any time.

(e) Interest in Competitor. In the event that any Grantee, without
the consent of the Compensation Committee, renders services to,
or owns any interest in (other than any nonsubstantial interest,
as determined by the Compensation Committee) any business that is
in competition with the Company or with any business in which
the Company has a substantial interest, as determined by the
Compensation Committee, any restricted stock shall automatically
be forfeited. The decision of the Compensation Committee on any
such matters shall be final and binding upon all concerned.

<PAGE>

(f) Rights as Stockholder. Except as set forth in the Plan, a
Grantee will have all rights of a stockholder with respect to
shares of restricted stock, including the right to vote the shares
of stock and the right to dividends on the stock. The shares of
restricted stock will be registered in the name of the Grantee
and the certificates evidencing such shares shall bear an
appropriate legend referring to the terms, conditions and
restrictions applicable to the award and shall be held in escrow
by the Company. The Grantee shall execute a stock power or
powers assigning the shares of restricted stock back to the
Company, which stock powers shall be held in escrow by the
Company and used only in the event of the forfeiture of any of
the shares of restricted stock. A certificate evidencing
unrestricted shares of common stock shall be issued to the Grantee
promptly after the restrictions lapse on any restricted shares.

(g) Stock Withholding Election. When taxes are withheld upon the
lapse of restrictions on restricted stock (the date on which
such restrictions lapse hereinafter referred to as the "Tax
Date"), the Grantee may elect to make payment for the withholding
of federal, state and local taxes, including Social Security and
Medicare ("FICA") taxes, up to the Grantee's marginal tax rate,
by one or both of the following methods:

(i) delivering part or all of the payment in previously-
owned shares of the same class as the restricted shares (which
shall be valued at fair market, as defined herein, on the Tax
Date) which shares, if acquired from the Company, must have been
held for at least six months; or

(ii) requesting the Company to withhold from those shares
that would otherwise be received upon the lapse of restrictions,
a number of shares having a fair market value (as defined herein)
on the Tax Date equal to the amount to be withheld. The amount
of tax withholding to be satisfied by withholding shares is limited
to the minimum amount of taxes, including FICA taxes, required to
be withheld under federal, state and local law.

Any fractional share amount and any additional withholding not
paid by the withholding or surrender of shares must be paid in
cash. If no timely election is made, cash must be delivered
to satisfy all tax withholding requirements.

Section 7. Change in Stock, Adjustments, Etc.

In the event that the outstanding shares of common stock of the Company
are hereafter increased or decreased or changed into or exchanged for a
different number of shares or kind of shares or other securities of the
Company or of another corporation, by reason of reorganization, merger,
consolidation, recapitalization, reclassification, stock split-up,
combination of shares, or a dividend payable in capital stock, outstanding
shares of restricted stock shall be created the same as other outstanding
shares of common stock and appropriate adjustment shall be made by the
Compensation Committee in the number

<PAGE>

and kind of shares that may be granted under the Plan and that may be
granted by the CEO under the Plan.

The grant of restricted stock pursuant to the Plan shall not affect
in any way the right or power of the Company to make adjustments,
reclassifications, reorganizations or changes of its capital or business
structure or to merge or to consolidate or to dissolve, liquidate, or sell
or transfer all or any part of its business or assets.

Section 8. Duration, Amendment and Termination.

The Board of Directors of the Company may at any time terminate the
Plan or make such amendments thereof as it shall deem advisable and in
the best interests of the Company; provided, however, that no such
termination or amendment shall, without the consent of the individual
to whom any restricted stock shall theretofore have been granted, affect
or impair the rights of such individual with respect to such restricted
stock; and provided further, that any such amendment shall be consistent
with the provisions of the Program, as it may be amended from time to time.

No restricted stock shall be granted under the Plan after April 15,
2007.

Section 9. Effectiveness of Plan.

This Plan shall be effective as of February 17, 1990.

Section 10. Date of Granting of Restricted Stock.

The granting of restricted stock pursuant to the Plan shall take place
on the date the Compensation Committee or the CEO decides to grant the
restricted stock. As soon as practicable but no later than twenty (20) days
after the granting of the restricted stock, the Company shall notify the
employee of the grant and, within sixty (60) days of the granting of the
restricted stock, the Company shall submit to the employee an Agreement duly
executed by and on behalf of the Company, and a stock power or powers with
respect to the restricted stock, with the request that the employee execute
the Agreement and stock powers within sixty (60) days after the mailing by
the Company of the notice to the employee. The employee shall execute the
written Agreement and stock powers within said 60-day period.

Exhibit 10(c)

Directors' Deferred Fee Plan
(as amended through August 10, 1999)

ARTICLE I
PURPOSE

The purpose of the Sprint Corporation Directors'
Deferred Fee Plan (hereinafter referred to as the
"Plan") is to provide funds upon termination of service
or death for Directors (and their Beneficiaries) of
Sprint Corporation. It is intended that the Plan will
aid in retaining and attracting Directors of
exceptional ability by providing such Directors with a
means to supplement their standard of living.

ARTICLE II
DEFINITIONS

For the purposes of this Plan, the following words and
phrases shall have the meanings indicated, unless the
context clearly indicates otherwise:

2.1 Account Transfer Request. "Account Transfer
Request" means a written notice, in a form prescribed
by the Company, by a Participant to transfer all or any
portion of one Deferred Benefit Account to another
Deferred Benefit Account as provided for in paragraph
6.7.

2.2 Amendment of Payment Election Form. "Amendment of
Payment Election Form" means a written notice, in a
form prescribed by the Company, filed with the Company
by a Participant to change the manner in which such
Participant's Deferral Benefits are to be paid.

2.3 Beneficiary. "Beneficiary" means the person,
persons, or entity designated by the Participant, as
provided in Article VIII, to receive any benefits
payable under the Plan. Any Participant Beneficiary
Designation shall be made in a written instrument filed
with the Company and shall become effective only when
received, accepted, and acknowledged in writing by the
Company.

2.4 Board "Board" means the Board of Directors of the
Company.

2.5 Committee. "Committee" means the Organization,
Compensation and Nominating Committee of the Board.

2.6 Company. "Company" means Sprint Corporation, or
any successor thereto.

<PAGE>

2.7 Deferral Benefit. "Deferral Benefit" means the
benefit payable to a Participant on the Participant's
death or termination of service as a Director, as
calculated in Article VII hereof.

2.8 Deferred Benefit Account. "Deferred Benefit
Account" means the accounts maintained on the books of
account of the Company for each Participant pursuant to
Article VI. Separate Deferred Benefit Accounts shall
be maintained for each Participant. More than one
Deferred Benefit Account shall be maintained for each
Participant to reflect (a) separate deferral elections
made pursuant to separately executed Participation
Agreements, (b) Account A, Account B, Account D,
Account AA, Account BB, and Account DD elections made
by each Participant in each such Participation
Agreement, and (c) One Time Grants.

A Participant's Deferred Benefit Account shall be used
solely as a device for the measurement and
determination of the amounts to be paid to the
Participant or the Participant's Beneficiary pursuant
to this Plan. A Participant's Deferred Benefit Account
shall not constitute or be treated as a trust fund of
any kind.

2.9 Determination Date. "Determination Date" means
the date on which the amount of a Participant's
Deferred Benefit Account is determined as provided in
Article VI hereof. The last day of each calendar month
shall be a Determination Date.

2.10 Director. "Director" means a member of the Board
of Directors of the Company who is not an employee of
the Company or its subsidiaries.

2.11 Fee. "Fee" means any cash compensation paid to a
Director for his services as a Director other than a
distribution under this Plan.

2.12 FON Share Unit. "FON Share Unit" means a measure
of participation under the Plan having a value based on
the market value of one share of FON Common Stock,
Series 1, of the Company.

2.13 Interest Yield. "Interest Yield" means, with
respect to any calendar month, (a) in the case of
balances in Account AA, three percentage points over
the composite yield on Moody's Seasoned Corporate Bond
Yield Index for the preceding calendar month as
determined from Moody's Bond Record published by
Moody's Investors Services, Inc. (or any successor
thereto), or, if such monthly yield is no longer
published, a substantially similar average selected by
the Company, and (b) in the case of balances in Account
A, the greater of (i) the prime rate in effect at
Citibank, N.A., at the opening of business on the

<PAGE>

first business day of the month, or if said bank, for any
reason, no longer publishes its prime rate, the prime
rate similarly determined of another major bank
selected by the Company and (ii) six percent per annum.

2.14 New Director. "New Director" means a Director who
had not accumulated at least five years of service as a
Director as of December 10, 1996 and any Director who
is first elected after such date. Each New Director is
entitled to a One Time Grant.

2.15 One Time Grant, "One Time Grant" means a one time
grant to New Directors of FON Share Units credited
into Account B and PCS Share Units credited into
Account D. The number of FON Share Units and the
number of PCS Share Units to be granted to each New
Director are determined by the Committee.

2.16 Participant. "Participant" means any New Director
and any Director who elects to participate by filing a
Participation Agreement as provided in Article IV.

2.17 Participation Agreement. "Participation
Agreement" means the agreement, in a form prescribed by
the Company, filed by a Participant before the
beginning of the period in which the Participant's
Fees are to be deferred pursuant to the Plan. A new
Participation Agreement shall be filed by the
Participant for each separate Fee deferral election.

2.18 PCS Share Unit. "PCS Share Unit" means a measure
of participation under the Plan having a value based on
the market value of a share of PCS Common Stock, Series
1, of the Company.

2.19 Plan. "Plan" means the Sprint Corporation
Directors' Deferred Fee Plan as set forth in this
document. This Plan is the successor to, and comprises
an amendment and revision of, the United
Telecommunications, Inc., 1985 Directors' Deferred Fee
Plan adopted February 12, 1985.

2.20 Plan Administrator. "Plan Administrator" means
the person appointed by the Company to represent the
Company in the administration of this Plan.

2.21 Plan Year. "Plan Year" means a twelve-month
period commencing May 1st and ending the following
April 30th. The first Plan Year commenced May 1,
1985.

2.22 Recapitalization Date. "Recapitalization Date"
means November 23, 1998.

<PAGE>

2.23 Share Units. "Share Units" means the Share Units
credited to Accounts B and BB prior to the
recapitalization of the Company's Common Stock on the
Recapitalization Date.

2.24 Spouse. "Spouse" means a Participant's wife or
husband who was lawfully married to the Participant
upon the Participant's death or severance from service.

2.25 Transition Date. "Transition Date" means May 1,
1990.

ARTICLE III
ADMINISTRATION

3.1 Plan Administrator; Company and Committee;
Duties. This Plan shall be administered by the Plan
Administrator. Decisions of the Plan Administrator may
be reviewed by the Company through the Committee.
Members of the Committee may be Participants under this
Plan. The Company shall also have the authority to
make, amend interpret, and enforce all appropriate
rules and regulations for the administration of this
Plan and decide or resolve any and all questions
including interpretations of this Plan as may arise in
connection with the Plan.

3.2 Binding Effect of Decisions. The decision or
action of the Company in respect to any question aris
ing out of or in connection with the administration,
interpretation, and application of the Plan and the
rules and regulations promulgated hereunder shall be
final and conclusive and binding upon all persons
having any interest in the Plan unless a written appeal
is received by the Company within sixty days of the
disputed action. The appeal will be reviewed by the
Committee, and its decision shall be final, conclusive,
and binding on the Participant and on all persons
claiming by, through, or under the Participant.

ARTICLE IV
PARTICIPATION

4.1 Participation. Participation in the Plan shall be
limited to New Directors and Directors, under age 70,
who elect to participate in the Plan by filing a
Participation Agreement with the Company. Except as
provided below, an initial Participation Agreement
must be filed no later than the March 31st immediately
preceding the Plan Year in which the Participant's
participation under the agreement will commence, and
the election to

<PAGE>

participate shall be effective on the
first day of the Plan Year following receipt by the
Company of a properly completed and executed
Participation Agreement; provided, however, that if
March 31st falls on a Saturday, Sunday or holiday, the
filing date for the Participation Agreement shall be no
later than the next business day after March 31st.
With respect to an individual becoming a Director
during a Plan Year who thereby becomes eligible to
participate in the Plan, an initial Participation
Agreement may be filed within 30 days of the Company's
notification to the Director of the Director's
eligibility to participate, and such election to
participate shall be effective on the first day of the
month following the Company's receipt thereof, except
that elections not received by the Company before the
15th day of any calendar month shall be effective no
earlier than the first day of the second month
following the month of receipt.

4.2 Amount of Deferral and Length of Participation. A
Participant may elect in any Participation Agreement to
defer up to 100% of the Fees that are expected at the
time of election to be earned in the Plan Year for
which the Participation Agreement relates and all
subsequent Plan Years until changed by the
Participant's filing of a new Participant Agreement,
provided, the minimum amount of Fees that may be
deferred shall, in each case, be $5,000 per year or
100% of Fees payable, whichever is less.

(a) The deferral percentage in each Participation
Agreement shall be applied to the Participant's
Fees as they are payable during the period of
election.

(b) A Participant's election to defer Fees shall be
irrevocable upon the filing of the respective
Participation Agreement; provided, however, that
the deferral of Fees under any Participation
Agreement may be suspended or amended as provided
in paragraphs 7.3 or 9.1.

If a Participant desires to change the percentage of
Fees deferred or desires to cease deferring Fees, the
Participant must file a new Participation Agreement.
Such new Participation Agreement must be filed no later
than the March 31st immediately preceding the Plan Year
in which the new Participation Agreement is to take
effect, or if March 31st falls on a Saturday, Sunday or
holiday, the next business day after March 31st. The
new Participation Agreement shall be effective as to
Fees paid in Plan Years beginning after the last day of
the Plan Year in which the agreement is filed with the
Company. Any previously filed Participation

<PAGE>

Agreement will no longer apply to the deferral of fees.
Only one Participation Agreement will be in effect for new
deferrals in each Plan Year. In the event a Participant
elects to defer Fees pursuant to a new Participation
Agreement, the new election shall be treated as an
arrangement for which a separate Deferred Benefit
Account shall be maintained and separate Deferral
Benefits shall be payable.

ARTICLE V
DEFERRED FEES

5.1 Elective Deferred Fees. The amount of Fees that a
Participant elects to defer in the Participation
Agreement executed by the Participant, with respect to
each Plan Year of participation in the Plan, shall be
credited by the Company to the Participant's Deferred
Benefit Account throughout each Plan Year as the
Participant is paid. The amount credited to a
Participant's Deferred Benefit Account shall equal the
amount deferred, except to the extent that the Company
is required to withhold any taxes or other amounts
related to the Participant's deferred fees pursuant to
any federal, state or local law. In the event
withholding is required, the amount required to be
withheld shall first be taken from the Participant's
fees that have not been deferred. If these fees are
not sufficient to meet the withholding obligation, the
remainder will be taken from the amount deferred.

5.2 Vesting of Deferred Benefit Account. Participants
shall be 100% vested in their Deferred Benefit
Accounts, except for the Account B and Account D
resulting from a One Time Grant. The FON Share Units
and PCS Share Units granted as part of a One Time Grant
will vest at the rate of 50% on the fifth anniversary
of the Participant's election as a Director and 10% per
year on the sixth through tenth anniversaries of such
election. The FON Share Units and PCS Share Units
resulting from dividend credits on such FON Share Units
and PCS Share Units will vest at the same time as such
FON Share Units and PCS Share Units vest. Any FON
Share Units and PCS Share Units that have not vested at
the time of the Participant's termination of service as
a Director shall be forfeited.

<PAGE>

ARTICLE VI
DEFERRED BENEFIT ACCOUNT

6.1 Determination of Account. Each Participant's
Deferred Benefit Account, as of each Determination
Date, shall consist of the balance of the Participant's
Deferred Benefit Account as of the immediately
preceding Determination Date plus the Participant's
elective deferred Fees withheld since the immediately
preceding Determination Date pursuant to paragraph 5.1
and plus amounts credited to the Participant's Deferred
Benefit Account pursuant to paragraphs 6.4 and 6.5.
The Deferred Benefit Account of each Participant shall
be reduced by the amount of all distributions, if any,
made from such Deferred Benefit Account since the
preceding Determination Date.

6.2 Type of Deferral. A Participant may elect to have
any portion of the amount deferred credited to Account
A (fixed income return), to Account B (FON Share Units)
or to Account D (PCS Share Units). The initial
election shall be made by a properly executed
Participation Agreement. An election to change the
apportionment of deferred amounts between Accounts A, B
and D may be made by a Participant filing with the Plan
Administrator a revised Participation Agreement
indicating such change on or before March 31 of each
calendar year. The revised Participation Agreement
shall be deemed a continuation of the initial
Participation Agreement to which it relates. The
revised Participation Agreement shall be effective for
Plan Years beginning after the date it is filed.

Deferrals in such Plan Years shall be credited in
accordance with the election of the revised
Participation Agreement.

6.3 Creation of Accounts AA, BB, D, and DD.

(a) Accounts AA and BB. As of the start of business
on the Transition Date, all amounts standing to
the credit of each Participant in Account A were
transferred to an Account AA. As of the start of
business on the Transition Date, amounts standing
to the credit of each Participant in Account B
that were attributable to prior transfers from
Account A into Account B were transferred to an
Account BB. The amount of such transfers was an
amount equal to the sum of the dollar amount of
all transfers from Account A to Account B during
the period beginning on the effective date
of the Participation Agreement and ending
on the Transition Date.

<PAGE>

For all purposes of this Plan, except as otherwise noted
in this Plan, Account AA shall be treated in the same
manner as Account A, and Account BB shall be treated in
the same manner as Account B.

(b) Accounts D and DD. As of the Recapitalization
Date, there was credited to an Account D and DD,
created for each Participant having a positive
balance in an Account B or BB with respect to any
Plan Year, a number of PCS Share Units determined
as follows:

(1) one-half of a PCS Share Unit in Account D
for each Share Unit in Account B for such
Participant for such Plan Year as of the
Recapitalization Date; and

(2) one-half of a PCS Share Unit in Account DD
for each Share Unit in Account BB for such
Participant for such Plan Year as of the
Recapitalization Date.

6.4 Maintenance of Accounts A and AA. As of each
Determination Date, the Participant's Deferred Benefit
Accounts A and AA shall be increased by the amount of
interest earned since the preceding Determination Date
based on the Interest Yield. Interest shall be
credited on the average of the balances of the Deferred
Benefit Account on the Determination Date (before
crediting the interest) and on the last preceding
Determination Date, but after the Deferred Benefit
Account has been adjusted for any contributions or
distributions to be credited or deducted for each such
day.

6.5 Maintenance of Share Unit Accounts.
Accounts B and BB and Accounts D and DD shall maintain
balances in FON Share Units and PCS Share Units,
respectively.

(a) Maintenance of Accounts B and BB.

(1) Conversion of Share Units into FON Share Units.
As of the Recapitalization Date, each Share Unit in
Accounts B and BB was converted into a FON Share Unit.

(2) Conversion between Dollar Amounts and FON
Share Units in Accounts B and BB. When an
amount is to be added to a Participant's
Deferred Benefit Accounts B or BB, it shall
be converted into FON Share Units, or
fractions thereof, by dividing the amount to
be credited by the closing

<PAGE>

price of the FON
Common Stock, Series 1, as reported by the
New York Stock Exchange on the last trading
day on or before the Determination Date.
When a number of FON Share Units is to be
subtracted from a Participant's Deferred
Benefit Accounts B or BB, such number of FON
Share Units shall be converted into a dollar
amount by multiplying such number of FON
Share Units by the closing price of the FON
Common Stock, Series 1, as reported by the
New York Stock Exchange on the last trading
day on or before the Determination Date.

(3) Dividends on FON Share Units. When a
dividend is declared and paid by the Company
on its FON Common Stock, Series 1, an amount
shall be credited to the Participant's
Accounts B and BB as though the same dividend
had been paid on the FON Share Units in such
accounts as of the Determination Date
immediately preceding the declaration of the
dividend, and such amount shall be converted
to FON Share Units. Such amount shall be
valued as of the Determination Date
immediately preceding the declaration of the
dividend.

(4) Effect of Recapitalization. In the event of
a stock dividend, stock split, or other
corporate reorganization involving the FON
Common Stock, Series 1, the Company shall
make equitable adjustment to a Participant's
Accounts B and BB as may be necessary to give
effect to such change in the Company's
capital structure.

(5) Conversion of FON Share Units to Dollars on
Distribution. FON Share Units in Accounts B
and BB shall be converted to an equivalent
dollar amount before any distribution thereof
to a Participant pursuant to Article VII.
For purposes of distribution, the value of a
FON Share Unit shall be the average closing
price of the FON Common Stock, Series 1, on
the New York Stock Exchange on the last
trading day of each of (i) the 12 calendar
months immediately preceding the date of
distribution or (ii) the smaller number of
calendar months (including part of a month)
elapsed from the Recapitalization Date to
such distribution. If a Participant elects
payment in other than a

<PAGE>

lump sum, Share Units
shall be so converted to a dollar amount with
respect to each payment made in the
distribution. During the period of
distribution, dividends and other equitable
adjustments shall be credited to the
Participant's Accounts B and BB in
accordance with paragraphs 6.5(a)(3) and
6.5(a)(4).

(b) Maintenance of Accounts D and DD.

(1) Conversion between Dollar Amounts and PCS
Share Units in Accounts D and DD. When an
amount is to be added to a Participant's
Deferred Benefit Accounts D or DD, it shall
be converted into PCS Share Units, or
fractions thereof, by dividing the amount to
be credited by the closing price of the PCS
Common Stock, Series 1, as reported by the
New York Stock Exchange on the last trading
day on or before the Determination Date.
When a number of PCS Share Units is to be
subtracted from a Participant's Deferred
Benefit Accounts D or DD, such number of PCS
Share Units shall be converted into a dollar
amount by multiplying such number of PCS
Share Units by the closing price of the PCS
Common Stock, Series 1, as reported by the
New York Stock Exchange on the last trading
day on or before the Determination Date.

(2) Dividends on PCS Share Units. When a
dividend is declared and paid by the Company
on its PCS Common Stock, Series 1, an amount
shall be credited to the Participant's
Accounts D and DD as though the same dividend
had been paid on the PCS Share Units in such
accounts as of the Determination Date
immediately preceding the declaration of the
dividend, and such amount shall be converted
to PCS Share Units. Such amount shall be
valued as of the Determination Date
immediately preceding the declaration of the
dividend.

(3) Effect of Recapitalization. In the event of
a stock dividend, stock split, or other
corporate reorganization involving the PCS
Common Stock, Series 1, the Company shall
make equitable adjustment to a Participant's
Accounts D and DD as may be necessary to give
effect to such change in the Company's
capital structure.

<PAGE>

(4) Conversion of PCS Share Units to Dollars on
Distribution. PCS Share Units in Accounts D
and DD shall be converted to an equivalent
dollar amount before any distribution thereof
to a Participant pursuant to Article VII.
For purposes of distribution, the value of a
PCS Share Unit shall be the average closing
price of the PCS Common Stock, Series 1, on
the New York Stock Exchange on the last
trading day of each of (i) the 12 calendar
months immediately preceding the date of
distribution or (ii) the smaller number of
calendar months (including part of a month)
elapsed from the Recapitalization Date to
such distribution. If a Participant elects
payment in other than a lump sum, PCS Share
Units shall be so converted to a dollar
amount with respect to each payment made in
the distribution. During the period of
distribution, dividends and other equitable
adjustments shall be credited to the
Participant's Accounts D, and DD in
accordance with paragraphs 6.5(b)(2) and
6.5(b)(3).

6.6 Statement of Accounts. The Company shall submit
to each Participant, within 120 days after the close of
each Plan Year, a statement in such form as the Company
deems desirable, setting forth the balance to the
credit of such Participant in the Participant's
Deferred Benefit Accounts A and AA, B and BB, and D and
DD, in each case as of the last day of the preceding
Plan Year.

6.7 Transfer Between Accounts. Within the limitations
of this paragraph 6.7, a Participant may elect, by
executing an Account Transfer Request: (1) to transfer
all or any portion of the Participant's Account A to
Account B or Account D, (2) to transfer all or any
portion of the Participant's Account B to Account A or
Account D, (3) to transfer all or any portion of the
Participant's Account D to Account A or Account B, (4)
to transfer all or any portion of the Participant's
Account AA to Account BB or Account DD, (5) to transfer
all or any portion of his Account BB to Account AA or
Account DD, and (6) to transfer all or any portion of
his Account DD to Account AA or Account BB. Such
election shall be effective on the last day of the
calendar month in which the Plan Administrator receives
the Participant's executed Account Transfer Request.
Transfers may not be made more than four times in any
Plan Year, and no such transfer may be made unless a
period of at least three months shall have elapsed from
the effective date of the most recent such

<PAGE>

transfer (whether it occurred in the current Plan Year or not)
to the effective date of the current transfer. No part
of the Account B or the Account D resulting from a One
Time Grant may be transferred to any other account.

ARTICLE VII
BENEFITS

7.1 Termination of Service as Director. Subject to
paragraph 7.4 below, upon any termination of service of
the Participant for reasons other than the
Participant's death, the Company shall pay to the
Participant a Deferral Benefit equal to the amount of
the Participant's Deferred Benefit Account determined
under paragraph 6.1 thereof, but excluding any unvested
FON Share Units or PCS Share Units.

7.2 Death. If a Participant dies after the
commencement of payments of the Participant's Deferral
Benefit, the Participant's Beneficiary shall continue
to receive the remaining balance of the Participant's
Deferred Benefit Account in accordance with the Partici
pant's election pursuant to paragraph 7.4.

If a Participant dies before any payments of a Deferral
Benefit, the amounts to which the Participant's
Beneficiary is entitled shall be determined as follows:

(a) Accounts A, B, BB, D, and DD shall be the Deferred
Benefit Account values thereof excluding any
unvested FON Share Units or PCS Share Units, and

(b) Account AA shall be the greater of (i) the
Deferred Benefit Account value thereof and (ii)
ten times the amount of the elected annual fee
deferral allocated to Account AA pursuant to the
Participation Agreement as revised on the date of
the Participant's death, subject to such
conditions relating to the Participant's health as
the Company may impose.

The Deferral Benefit shall be payable as provided for
in paragraph 7.4.

If a Participant's Beneficiary dies before payments of
the Participant's Deferral Benefit are complete,
payments will continue to be made to the estate of the
beneficiary in accordance with the Participant's
election pursuant to paragraph 7.4.

<PAGE>

The Deferral Benefit provided above shall be in lieu of
all other benefits under this Plan.

7.3 Suspension of Participation; Failure to Continue
Participation. The Committee, in its sole discretion,
may suspend the deferral of a Participant's Fees upon
the advanced written request of a Participant on
account of financial hardship suffered by that
Participant. A Participant must file any request for
suspension on or before the 15th day preceding the
regular payment date on which the suspension is to take
effect. The Committee, in its sole discretion, shall
determine the amount, if any, that will not be deferred
by the Participant as a result of the financial
hardship. The suspension of any deferrals under this
paragraph shall not affect amounts deferred with
respect to periods before the effective date of the
suspension. A Participant whose deferrals are
suspended may not execute a subsequent Participation
Agreement that would take effect before the beginning
of the third Plan Year following the close of the Plan
Year in which the suspension first took effect.

7.4 Form of Benefit Payment

(a) Upon the happening of an event described in
paragraphs 7.1 or 7.2 above, the Company shall pay
to the Participant or the Participant's
Beneficiary the amount specified therein in one of
the following forms as elected by the Participant
in the Participation Agreement filed by the
Participant:

(1) a lump sum payment at a time designated in
the Participation Agreement but no later than
the Company's mandatory termination date for
Directors.

(2) with respect to balances in Accounts A and
AA, an annual payment of a fixed amount that
shall amortize the Deferred Benefit Account
balance in equal annual payments of principal
and interest over a period from 2 to 20
years. For purposes of determining the
amount of the annual payment, the assumed
rate of interest on Accounts A and AA shall
be the average of the applicable Interest
Yield as of each Determination Date for the
60 months preceding the initial annual
installment payment.

(3) with respect to balances in Accounts B and
BB, an annual payment over a period from 2 to
20 years. Each payment shall be the value,
as determined pursuant to paragraph

<PAGE>

6.5(a)(5), of the number of FON Share Units
equal to (i) the number of FON Share Units in
the accounts on the Determination Date
immediately following the event described in
paragraphs 7.1 or 7.2, divided by (ii) the
number of annual installments elected.

During the period that a Participant is
receiving a distribution from Account B or
BB, FON Share Unit dividends will be added to
the Accounts in accordance with subparagraph
6.5(a)(3). Such FON Share Unit dividends
shall be valued in the same manner as
previously described, and the value of all
such FON Share Units accruing after a
distribution from Accounts B or BB is made
shall be paid to the Participant with the
next distribution from the account.

(4) With respect to balances in Accounts D and
DD, an annual payment over a period from 2 to
20 years. Each payment shall be the value,
as determined pursuant to paragraph
6.5(b)(4), of the number of PCS Share Units
equal to (i) the number of PCS Share Units
in the accounts on the Determination Date
immediately following the event described in
paragraphs 7.1 or 7.2, divided by (ii) the
number of annual installments elected.

During the period that a Participant is
receiving a distribution from Account D or
DD, PCS Share Unit dividends will be added to
the Accounts in accordance with subparagraph
6.5(b)(2) hereof. Such PCS Share Unit
dividends shall be valued in the same manner
as previously described, and the value of all
such PCS Share Units accruing after a
distribution from Accounts D or DD is made
shall be paid to the Participant with the
next distribution from the account.

(b) A Participant may change the form in which the
Participant's benefits shall be paid by filing an
Amendment of Payment Election Form indicating such
change at least 13 months before the date upon
which the initial payment to be made is
determined. No such Amendment of Payment Election
Form shall change the amount elected to be
deferred in the Participation Agreement to which
it relates, nor the time elected for commencement
of benefit payments.

<PAGE>

(c) In the absence of a Participant's election under
subparagraph 7.4(a), benefits shall be paid in the
form specified in subparagraphs 7.4(a)(2),
7.4(a)(3), and 7.4(a)(4) over a 15 year period.

7.5 Withholding; Payroll Taxes. To the extent
required by the law in effect at the time payments are
made, the Company shall withhold from payments made
hereunder any taxes required to be withheld from a
Director's fees for the federal or any state or local
government.

7.6 Commencement of Payments. Unless otherwise
provided, payments under this Plan shall begin within
60 days following receipt of notice by the Company of
an event that entitles a Participant (or a Beneficiary)
to payments under this Plan, or at such earlier date as
may be determined by the Company pursuant to the terms
of the Plan. All payments shall be made as of the
first day of the month.

ARTICLE VIII
BENEFICIARY DESIGNATION

8.1 Beneficiary Designation. Each Participant shall
have the right, at any time, to designate any person or
persons as the Participant's Beneficiary or
Beneficiaries (both principal as well as contingent) to
whom payment under this Plan shall be paid in the event
of the Participant's death before complete
distribution to the Participant of the benefits due
the Participant under the Plan.

8.2 Amendments. Any Beneficiary Designation may be
changed by a Participant by the written filing of such
change on a form prescribed by the Company. The filing
of a new Beneficiary Designation form will cancel all
Beneficiary Designations previously filed.

8.3 No Beneficiary Designation. If a Participant
fails to designate a Beneficiary as provided above, or
if all designated Beneficiaries predecease the
Participant, then the Participant's designated
Beneficiary shall be deemed to be the person or persons
surviving the Participant in the first of the following
classes in which there is a survivor, share and share
alike:

(a) The surviving Spouse;

(b) The Participant's children, except that if any of
the children predecease the Participant but leave
issue surviving, then such issue shall take by
right of representation the share their parent
would have taken if living;

<PAGE>

8.4 Effect of Payment. The payment to the
Participant's Beneficiary or the Beneficiaries' estate
shall completely discharge the Company's obligations
relating to the Participant under this Plan.

ARTICLE IX
AMENDMENT AND TERMINATION OF PLAN

9.1 Amendment. The Board may at any time amend the
Plan in whole or in part; provided, however, that no
amendment shall be effective to decrease or restrict
any Deferred Benefit Account at the time of such
amendment.

9.2 Right to Terminate. The Board may at any time
terminate the Plan with respect to new elections to
defer if, in its judgment, the continuance of the Plan,
the tax, accounting, or other effects thereof, or
potential payments thereunder would not be in the best
interests of the Company. The Board may also terminate
the Plan in its entirety at any time, and upon any such
termination, each Participant (a) who is then receiving
a Deferral Benefit shall be paid in a lump sum, or over
such period of time as determined by the Company, the
then remaining balance in the Participant's Deferred
Benefit Account, and (b) who has not received a
Deferral Benefit shall be paid in a lump sum, or over
such period of time as determined by the Company, the
balance in the Participant's Deferred Benefit Account.

ARTICLE X
MISCELLANEOUS

10.1 Unsecured General Creditor. Participants and
their Beneficiaries shall have no legal or equitable
rights, claims, or interests in any property or assets
of the Company or its subsidiaries, nor shall they be
Beneficiaries of, or have any rights, claims, or
interests in any life insurance policies, annuity
contracts or the proceeds therefrom owned or that may
be acquired by the Company ("Policies"). Such Policies
or other assets of the Company and its subsidiaries
shall not be held under any trust for the benefit of
Participants or their Beneficiaries or held in any way
as collateral security for the fulfilling of the
obligations of the Company under this Plan. Any and
all of such assets and Policies shall be and remain the
general, unpledged, unrestricted assets of the Company and

<PAGE>

its subsidiaries. The Company's obligation under
the Plan shall be merely that of an unfunded and
unsecured promise of the Company to pay money in the
future.

10.2 Nonassignability. Neither a Participant nor any
other person shall have any right to commute, sell,
assign, transfer, pledge, anticipate, mortgage or
otherwise encumber, transfer, hypothecate or convey in
advance of actual receipt the amounts, if any, payable
hereunder, or any part thereof, which are, and all
rights to which are, expressly declared to be
unassignable and non-transferable. No part of the
amounts payable shall, before actual payment, be
subject to seizure or sequestration for the payment of
any debts, judgments, alimony, or separate maintenance
owed by a Participant or any other person, nor be
transferable by operation of law in the event of a
Participant's or any other person's bankruptcy or
insolvency.

10.3 Not a Contract of Service. The terms and
conditions of this Plan shall not be deemed to
constitute a contract of service between the Company
and the Participant, and the Participant (or the
Participant's Beneficiary) shall have no rights against
the Company except as may otherwise be specifically
provided herein. Moreover, nothing in this Plan shall
be deemed to give a Participant the right to be
retained as a Director.

10.4 Protective Provisions. A Participant will
cooperate with the Company by furnishing any and all
information requested by the Company, in order to
facilitate the payment of benefits hereunder, by taking
such physical examinations as the Company may deem
necessary, and by taking such other action as may be
requested by the Company.

10.5 Applicable Law. The Plan, and any Participation
Agreement related thereto, shall be governed by the
laws of the State of Kansas, without regard to the
principles of conflicts of law.

Exhibit 10(d)

CENTEL DIRECTORS DEFERRED COMPENSATION PLAN

Amended and Restated

as of August 12, 1999

SECTION 1. Plan. Centel Corporation, a Kansas corpora-

tion, hereby establishes this "Centel Directors Deferred

Compensation Plan".

SECTION 2. Definitions. The following words have the

respective meanings stated below unless a different meaning

is plainly required by the context:

(a) "Beneficiary" means any person other than a

Director who is entitled to receive distributions under

this Plan pursuant to Section 5.

(b) "Board" means the Board of Directors of the

Company.

administers this Plan as provided in Section 8.

(d) "Common Stock account" means the account that

was credited with Units prior to the reclassification

of Sprint Common Stock into FON Common Stock and PCS

Common Stock on November 23, 1998.

(e) "Company" means Centel Corporation, a Kansas

corporation, and its successors.

(f) Prior to March 9, 1993, "Director" means an

individual who is (1) serving as a member of a Board or

who has been nominated to serve as a member of a Board

and (2) receives compensation for such service other

<PAGE>

than as employee of the Company or a Subsidiary.

Beginning March 9, 1993, "Director" means an individual

serving as a member of the Board of Directors of Sprint

who was a Director of the Company on March 8, 1993.

(g) "FON Common Stock" means shares of FON Common

Stock, Series 1, of Sprint, par value $2.00 per share.

(h) "FON Unit" means the equivalent under this

Plan of one share of FON Common Stock.

(i) "Market Value" of FON Common Stock or PCS

Common Stock on any date means the closing price of the

FON Common Stock or PCS Common Stock, as the case may

be, on that day on the Composite Transactions Tape, as

subsequently reported in The Wall Street Journal, or,

if no sale of such stock shall have been made on that

date, such closing price on the next preceding date on

which there was a sale.

(j) "PCS Common Stock" means shares of PCS Common

Stock, Series 1, of Sprint, par value $1.00 per share.

(k) "PCS Unit" means the equivalent under this

Plan of one share of PCS Common Stock.

(l) "Plan" means the plan set forth in this

instrument, and known as the "Centel Directors Deferred

Compensation Plan".

(m) "Sprint" means Sprint Corporation, a Kansas

corporation, and its successors.

(n) "Sprint Common Stock" means the common stock

of Sprint, par value $2.50 per share, prior to its

<PAGE>
3

recapitalization into FON Common Stock and PCS Common

Stock on November 23, 1998. Each share of Sprint

Common Stock was reclassified into one share of FON

Common Stock and one-half of a share of PCS Common

Stock.

(o) "Subsidiary" means any corporation fifty

percent or more of the voting stock of which is owned,

directly or indirectly, by the Company.

(p) "Unit" means the equivalent under this Plan

of one share of Sprint Common Stock, prior to the

reclassification of such common stock into FON Common

Stock and PCS Common Stock on November 23, 1998.

(q) "Value" of a FON Unit on any date means the

Market Value on such date of one share of FON Common

Stock. "Value" of a PCS Unit on any date means the

Market Value on such date of one share of PCS Common

Stock.

(r) "360 Common Stock account" means the account

that was credited with units representing the common

stock of Alltel Corporation before the remaining

balance was transferred into the FON Tracking Stock

Account and the PCS Tracking Stock account on November

30, 1999. The percentage of the 360 Common Stock

account transferred to each account was based on the

relative prices and trading volumes of FON Common Stock

and PCS Common Stock for a period of time following the

reclassification of the Sprint Common Stock.

<PAGE>

SECTION 3. Participation. Beginning March 9, 1993, no

new deferrals of compensation may be made under this Plan.

All amounts deferred and accrued under this Plan will be

unsecured liabilities of the Company or a Subsidiary and

will not be funded with any specific assets of the Company

or any Subsidiary.

SECTION 4. Accounts.

(a) Prime rate account. Interest equivalents

will be credited on the balance in a Director's prime

rate account at the end of each calendar quarter that

ends before the commencement of distribution of the

Director's prime rate account pursuant to Section 5(b),

Section 5(c), Section 5(d) or Section 5(f), whichever

occurs first, and (1) at the end of the month in which

the Director's termination of service as a Director

("Termination") occurs if such month is not the last

month in a quarter and if distribution is made

following such Termination pursuant to Section 5(c), or

(2) as of the Common Distribution Date (as defined in

Section 5(b)) if distribution does not commence until

after the Common Distribution Date. For the purpose of

crediting interest, (1) interest will be computed at

the prime rate of interest in effect at Citicorp, N.A.,

New York, New York during such period, and (2) the

balance accrued in a Director's prime rate account

during any period will be the average of the balances

<PAGE>

in the Director's account at the beginning of each

month during the period.

(b) FON Tracking Stock account. FON Units were

credited to each Director's FON Tracking Stock account

at the rate of one FON Unit for each Unit credited to

such Director's Common Stock account at the close of

business on November 23, 1998, to reflect the

reclassification of the Sprint Common Stock. FON Units

were credited to each Director's FON Tracking Stock

account as of November 30, 1998, in an amount

representing 90.17144% of the balance in such

Director's 360 Common Stock account as of that date.

The FON Units credited to each Director's FON Tracking

Stock Account as of the close of business on May 13,

1999, were doubled to reflect the two-for-one stock

split of the FON Common Stock. On each record date for

determination of shareowners entitled to receive a

dividend on the outstanding shares of FON Common Stock,

there will be credited to each FON Tracking Stock

account that number of additional FON Units equal to

the number of shares (and fraction of a share to the

nearest one-hundredth) of FON Common Stock which could

have been purchased at the Market Value of FON Common

Stock on that date with the amount, if paid in cash, or

the value, if paid in property (other than shares of

FON Common Stock), of the dividend to be paid on a

number (to the nearest one-hundredth) of shares of FON

<PAGE>

Common Stock equal to the number of FON Units (to the

nearest one-hundredth) in that account on such record

date. Upon Termination, the Director's FON Tracking

Stock account will be transferred into the Director's

prime rate account as follows: (1) the FON Tracking

Stock account will be valued (the "FON Account Value")

at the Market Value of the FON Common Stock on the last

day of business in the month that the Termination

occurs; (2) an amount equal to the FON Account Value

will be credited to the prime rate account; and (3)

interest equivalents will be credited on the balance in

the prime rate account pursuant to the terms specified

in Section 4(a).

credited to each Director's PCS Tracking Stock account

at the rate of one-half of a PCS Unit for each Unit

credited to such Director's Common Stock account at the

close of business on November 23, 1998, to reflect the

reclassification of Sprint Common Stock. PCS Units

were credited to each Director's PCS Tracking Stock

account as of November 30, 1998, in an amount

representing 9.82856% of the balance in such Director's

360 Common Stock account as of that date. On each

record date for determination of shareowners entitled

to receive a dividend on the outstanding shares of PCS

Common Stock, there will be credited to each PCS

Tracking Stock account that number of additional PCS

<PAGE>

Units equal to the number of shares (and fraction of a

share to the nearest one-hundredth) of PCS Common Stock

which could have been purchased at the Market Value of

PCS Common Stock on that date with the amount, if paid

in cash, or the value, if paid in property (other than

shares of PCS Common Stock), of the dividend to be paid

on a number (to the nearest one-hundredth) of shares of

PCS Common Stock equal to the number of PCS Units (to

the nearest one-hundredth) in that account on such

record date. Upon Termination, the Director's PCS

Tracking Stock account will be transferred into the

Director's prime rate account as follows: (1) the PCS

Tracking Stock account will be valued (the "PCS Account

Value") at the Market Value of PCS Common Stock on the

last day of business in the month that the Termination

occurs; (2) an amount equal to the PCS Account Value

will be credited to the prime rate account; and (3)

interest equivalents will be credited on the balance in

the prime rate account pursuant to the terms specified

in Section 4(a).

(d) Transfers between Accounts. Within the

limitations of this Section 4(d), a Director may elect,

by executing and filing with the Company an Account

Transfer Request, to (1) transfer all or any portion of

his or her PCS Tracking Stock account to his or her

prime rate account or to his or her FON Tracking Stock

account, (2) transfer all or any portion of his or her

<PAGE>

FON Tracking Stock account to his or her prime rate

account or to his or her PCS Tracking Stock account, or

(3) transfer all or any portion of his or her prime

rate account to his or her FON Tracking Stock account

or to his or her PCS Tracking Stock account. Such

election shall be effective on the last day of the

calendar month in which the Company receives the

executed Account Transfer Request. The value of FON

Units or PCS Units being transferred shall be

determined by multiplying the number of FON Units or

PCS Units being transferred (to the nearest one-

hundredth) by the Market Value of one share of FON

Common Stock or PCS Tracking Stock, as the case may be,

on the effective date of the transfer. If the transfer

is being made from the FON Tracking Stock account or

the prime rate account to the PCS Tracking Stock

account, the value of the FON Units being transferred

as above determined or the amount being transferred

from the prime rate account will be divided by the

Market Value of one share of the PCS Common Stock on

the effective date of transfer to determine the number

of PCS Units (to the nearest one-hundredth) to be

credited to the PCS Tracking Stock account. If the

transfer is being made from the PCS Tracking Stock

account or the prime rate account to the FON Tracking

Stock account, the value of the PCS Units being

transferred as above determined or the amount being

<PAGE>

transferred from the prime rate account will be divided

by the Market Value of one share of the FON Common

Stock on the effective date of transfer to determine

the number of FON Units (to the nearest one-hundredth)

to be credited to the FON Tracking Stock account.

SECTION 5. Distributions.

(a) Except as provided in Section 5(b), the

timing and manner of each distribution to a Director

under the Plan shall be made pursuant to such

Director's Valid Election, as defined in the following

sentence. A "Valid Election" means an election by the

Director which (i) is irrevocable except as provided in

Section 5(g), (ii) is made in writing pursuant to such

rules as the Committee may determine, and (iii)

provides for a distribution pursuant to paragraphs (c)

or (d).

(b) If a Director does not submit a Valid

Election, upon the Director's Termination, the amount

accrued in the Director's prime rate account will be

distributed to the Director in a lump sum as soon as

practicable after January 31 of the calendar year

following the calendar year in which the Director's

Termination occurs (such January 31 is referred to

herein as the "Common Distribution Date").

<PAGE>

prior to the first day of the calendar year in which

such Director's Termination occurs, distributions shall

be paid under the Plan commencing after the date of the

Director's Termination as follows:

(i) in a lump sum either as soon as practicable

after the Director's Termination or as soon

as practicable after the Common Distribution

Date, as specified in the Valid Election; or

(ii) in equal annual installment payments over a

period from two (2) to twenty (20) years

commencing as soon as practicable after the

Director's Termination or as soon as

practicable after the Common Distribution

Date, as specified in the Valid Election.

For purposes of determining the amount of

each equal annual installment, the assumed

rate of interest shall be the average of the

rates calculated in accordance with Section

4(a) for the 20 quarters preceding the date

on which the distribution commences.

(d) If the Director submits a Valid Election on

or after the first day of the calendar year in which

<PAGE>
11

such Director's Termination occurs but prior to

December 31 of the calendar year in which such

Director's Termination occurs, pursuant to the terms of

such Valid Election distributions shall be paid under

the Plan commencing no earlier than the Common

Distribution Date using one of the following methods:

(i) in a lump sum as soon as practicable after

the Common Distribution Date; or

(ii) in equal annual installment payments over a

period specified in the Valid Election from

two (2) to twenty (20) years commencing as

soon as practicable after the Common

Distribution Date. For purposes of

determining the amount of each equal annual

installment, the assumed rate of interest

shall be the average of the rates calculated

in accordance with Section 4(a) for the 20

quarters preceding the Common Distribution

Date.

(e) All distributions of amounts accrued in a

Director's deferred compensation account will be paid

exclusively in cash.

<PAGE>
12

(f) In the event of a Director's death, any

amounts to which the Director is entitled hereunder

will be distributed to the Beneficiary(ies) entitled

thereto:

(i) if installment payments have commenced

pursuant to Section 5(c)(ii) or Section

5(d)(ii), either (1) as a continuation of

the installment payments, or (2) in a lump

sum equal to the present value of the

remaining installments determined using

the same interest rate assumption used in

calculating the amount of the

installments, as provided in a Valid

Election;

(ii) if no distribution has taken place pursuant to

Section 5(c) or Section 5(d), either (1) in equal annual

installments over a period from two (2) to twenty (20)

years, using the same interest rate assumption set forth in

Section 5(c)(ii) to calculate the amount of each

installment, or (2) in a lump sum, as provided in a Valid

Election; or

<PAGE>
13

(iii) if no provision is made in a Valid Election filed

with the Company or if all of the Beneficiaries designated

by a Director predecease the Director, in a lump sum payment

to the estate of the deceased Director as soon as

practicable following the death of the Director.

(g) Notwithstanding any provision to the contrary

hereunder, at any time, the Director may change a Valid

Election by electing to accelerate the date(s) of

payment specified in such prior election, subject to

the following circumstances:

(i) the Committee in its sole discretion

consents to the change in Valid Election,

and

(ii) the amounts that are subject to such

accelerated payment date(s) shall be

reduced by 6%. Subject to the preceding

sentence, the calculation of the amount of

the accelerated payment(s) and the

calculation of such reduction shall be

made in the sole discretion of the

Committee.

<PAGE>
14

SECTION 6. Anti-Dilution. In the event of any change

in capitalization which affects the FON Common Stock or the

PCS Common Stock, such as a stock dividend, a stock

distribution, a stock split-up or a subdivision or

combination of shares, such adjustments, if any, as the

Board in its discretion deems appropriate to reflect such

change shall be made with respect to the number of FON Units

in each FON Tracking Stock account or the number of PCS

Units in each PCS Tracking Stock account, as the case may

be.

SECTION 7. Beneficiaries.

(a) A Director may, by filing a Beneficiary

Designation with the Company during the Director's

lifetime, designate (1) a Beneficiary or Beneficiaries

to whom distribution of the Director's deferred

compensation accounts will be made in the event of the

Director's death prior to the full receipt of the

Director's interests under this Plan, and (2) the

proportions to be distributed to each such designated

Beneficiary if there be more than one. Any such

designation may be revoked or changed by the Director

at any time and from time to time by filing a new

Beneficiary Designation with the Company. If a

designated Beneficiary dies after the Director but

prior to distribution of all that designated

Beneficiary's proportionate share of the Director's

interest under this Plan, the then remaining balance of

<PAGE>
15

such share will be distributed in a lump sum payment to

the estate of the designated Beneficiary.

(b) If the Company, after reasonable inquiry, is

unable within one year to determine whether any

designated Beneficiary did in fact survive the event

that entitled such Beneficiary to receive distribution

under this Plan, it will be conclusively presumed that

such Beneficiary did in fact die prior to such event.

SECTION 8. Committee. This Plan will be administered

by a Committee consisting of at least three (3) members

appointed by the Board of the Company, who are employees of

Sprint or a subsidiary of Sprint and who do not participate

in this Plan.

Except as otherwise expressly provided in this Plan,

the Committee shall have full power and authority, within

the limits provided by this Plan:

(a) to construe this Plan and make equitable

adjustments for any mistakes or errors made in the

administration of this Plan;

(b) to determine all questions arising in the

administration of this Plan, including the power to

determine the rights of Directors participating in this

Plan and their Beneficiaries and the amount of their

respective interests;

deem reasonably necessary for the proper and efficient

<PAGE>
16

administration of this Plan consistent with its

purposes;

(d) to enforce this Plan in accordance with its

terms and with the rules and regulations adopted by the

Committee; and

(e) to do all other acts which in its judgment are

necessary or desirable for the proper and advantageous

administration of this Plan.

The Committee shall act by the vote or concurrence of a

majority of its members and shall maintain a written record

of its decisions and actions. All decisions and actions of

the Committee pursuant to the provisions of this Plan shall

be final and binding upon all persons affected thereby. No

member of the Committee shall have any personal liability to

anyone, either as such member or as an individual, for

anything done or omitted to be done in good faith in

carrying out the provisions of this Plan.

SECTION 9. Non-Alienation. No right or benefit under

this Plan shall be subject to anticipation, alienation,

sale, assignment, pledge, encumbrance or charge, and any

attempt to anticipate, alienate, sell, assign, pledge,

encumber or charge the same shall be void. No right or

benefit under this Plan shall in any manner be liable for or

subject to the debts, contracts, liabilities or torts of the

person entitled to such benefits except such claims as may

be made by the Company or any Subsidiary.

<PAGE>
17

SECTION 10. Notice. Any notice authorized or required

to be given to the Company under this Plan shall be deemed

given upon delivery in writing, signed by the person giving

the notice, to the Secretary of the Company or such other

officer as may be designated by the Board.

SECTION 11. Plan Modifications. The Board of the

Company may at any time terminate this Plan or may, from

time to time, amend any provision of this Plan in such

manner and to such extent as it may, in its discretion, deem

to be advisable. In the event this Plan is terminated, any

amount remaining in any Director's account will be

distributed in such manner as is determined by the Committee

in its sole discretion.

SECTION 12. Applicable Law. This Plan shall be

governed by the law of the State of Kansas.

Exhibit 10(e)

_______________________________________________________________________

Sprint Corporation

1990 Stock Option Plan

Adopted as a Stock Option Plan under the
1997 Sprint Corporation Long-Term Stock Incentive Program

As Amended and Restated
by the Board Effective
October 18, 1999

_______________________________________________________________________

<PAGE>

Table of Contents

1 Establishment 1

2 Defined Terms 1

3 Purpose 1

4 Administration 1

4.01 Interpretation of the Plan . . . . . . . . . . 1

4.02 Abstention in Certain Cases by Committee Members . . 2

5 Number of Shares Authorized to be Issued 2

6 Grant of Options 3

6.01 Eligibility for Grants . . . . . . . . . . . 3

6.02 Committee Grants . . . . . . . . . . . . . . 3

6.03 Interim Grants . . . . . . . . . . . . . . 3

6.04 Limitation on Discretion of Committee and Authorized
Officers . . . . . . . . . . . . . . . . 4

7 Terms of Options 4

7.01 Standard Terms of Options . . . . . . . . . . 4

7.02 Mandatory Terms of Incentive Stock Options . . . . . 7

7.03 Standard Terms of Incentive Stock Options . . . . . 8

7.04 Stock Option Agreement . . . . . . . . . . . 8

8 Exercise of Options 8

8.01 Notice of Exercise . . . . . . . . . . . . . 9

8.02 Form of Payment of Exercise Price . . . . . . . 9

9 Withholding of Payroll Taxes on Exercise 10

9.01 Obligation to Pay Payroll Taxes . . . . . . . . . 10

9.02 Amount to Be Withheld . . . . . . . . . . . . 11

9.03 Eligibility to Elect Stock Withholding . . . . . . 11

9.04 Manner of Withholding . . . . . . . . . . . . 11

10 Issuance of Shares on Exercise 12

10.01 Generally . . . . . . . . . . . . . . . . 12

10.02 Elective Issuance of Restricted Shares . . . . . . 12

<PAGE>

10.03 Mandatory Issuance of Restricted Shares . . . . . 12

10.04 Issuance of Restricted Shares Not Available to
Transferred Options . . . . . . . . . . . . 13

10.05 Terms of Restricted Shares Issued on Exercise . . . . 13

11 Reload Rights 15

11.01 Grant of Reload Rights on Outstanding Non-Qualified
Options . . . . . . . . . . . . . . . . 15

11.02 Terms of Reload Options . . . . . . . . . . . 15

11.03 Variant Reload Rights . . . . . . . . . . . . 17

12 Change in Stock, Adjustments, Etc 17

13 Amendment and Termination 18

14 Effective Date and Duration of the Plan 18

15 Definitions 18

15.01 1989 Program . . . . . . . . . . . . . . . 18

15.02 1997 Program . . . . . . . . . . . . . . . 18

15.03 Affiliate . . . . . . . . . . . . . . . . 18

15.04 Authorized Officer . . . . . . . . . . . . . 18

15.05 Board . . . . . . . . . . . . . . . . . 18

15.06 Change in Control . . . . . . . . . . . . . 18

15.07 Code . . . . . . . . . . . . . . . . . 19

15.08 Code Section . . . . . . . . . . . . . . . 19

15.09 Committee . . . . . . . . . . . . . . . . 19

15.10 Common Stock . . . . . . . . . . . . . . 19

15.11 Company . . . . . . . . . . . . . . . . . 19

15.12 Corporate Secretary . . . . . . . . . . . . . 20

15.13 Director . . . . . . . . . . . . . . . . 20

15.14 Employee . . . . . . . . . . . . . . . . 20

15.15 Equity Security . . . . . . . . . . . . . . 20

15.16 Exchange Act . . . . . . . . . . . . . . . 20

15.17 Exchange Act Section 16 . . . . . . . . . . . 20

15.18 Executive Officer . . . . . . . . . . . . . 20

15.19 Exercise Date . . . . . . . . . . . . . . 20

15.20 Exercise Price . . . . . . . . . . . . . . 20

15.21 Expiration Date . . . . . . . . . . . . . . 20

ii
<PAGE>

15.22 Fair Market Value . . . . . . . . . . . . . . . 20

15.23 FON Stock . . . . . . . . . . . . . . . . . . 21

15.24 Foreign Reload Option . . . . . . . . . . . . . 21

15.25 Grant Date . . . . . . . . . . . . . . . . . 21

15.26 Grantee . . . . . . . . . . . . . . . . . . . 21

15.27 Incentive Stock Option . . . . . . . . . . . . . 21

15.28 Minimum Withholding Amount . . . . . . . . . . . . 21

15.29 Non-Qualified Option . . . . . . . . . . . . . . 21

15.30 Normal Retirement . . . . . . . . . . . . . . . 21

15.31 Notice of Exercise . . . . . . . . . . . . . . . 21

15.32 Option . . . . . . . . . . . . . . . . . . 22

15.33 Option Class . . . . . . . . . . . . . . . . . 22

15.34 Optionee . . . . . . . . . . . . . . . . . . 22

15.35 Payroll Tax . . . . . . . . . . . . . . . . . 22

15.36 Payroll Taxpayer . . . . . . . . . . . . . . . 22

15.37 PCS Stock . . . . . . . . . . . . . . . . . 22

15.38 Person . . . . . . . . . . . . . . . . . . 22

15.39 Program Adoption Date . . . . . . . . . . . . . 22

15.40 Plan . . . . . . . . . . . . . . . . . . . 22

15.41 Qualified Transferee . . . . . . . . . . . . . . 22

15.42 Qualified Trust . . . . . . . . . . . . . . . . 22

15.43 Reload Option . . . . . . . . . . . . . . . . 23

15.44 Restricted Shares . . . . . . . . . . . . . . . 23

15.45 Retirement . . . . . . . . . . . . . . . . . 23

15.46 Seasoned Shares . . . . . . . . . . . . . . . . 23

15.47 Securities Act . . . . . . . . . . . . . . . . 23

15.48 Strike Price . . . . . . . . . . . . . . . . 23

15.49 Subsidiary . . . . . . . . . . . . . . . . . 23

15.50 Tax Date . . . . . . . . . . . . . . . . . . 24

15.51 Termination Date . . . . . . . . . . . . . . . 24

15.52 Termination for Cause . . . . . . . . . . . . . 24

15.53 Total Disability . . . . . . . . . . . . . . . 24

15.54 Underlying Option . . . . . . . . . . . . . . 24

15.55 Vesting Period . . . . . . . . . . . . . . . . 25

15.56 Withholding Amount . . . . . . . . . . . . . . 25

iii

<PAGE>

Article 1
Establishment

Pursuant to the 1989 Program the Company established a stock option plan named
the 1990 Stock Option Plan (the "Plan") for officers and key employees of the
Company and its subsidiaries. The 1989 Program has been replaced by the 1997
Program, and this Plan is now established pursuant to the 1997 Program.

Article 2
Defined Terms

Capitalized words used throughout this Plan have the meanings assigned
to them parenthetically throughout the Plan or in Article 15.

Article 3
Purpose

The purposes of the Plan are to induce officers and key employees of
the Company or its Subsidiaries who are in a position to contribute
materially to the Company's prosperity to remain with the Company or
its Subsidiaries, to offer them incentives and rewards in recognition
of their share in the Company's progress, to encourage them to
continue to promote the best interests of the Company and its
stockholders, and to allow the Company and its Subsidiaries to
successfully compete with other enterprises in the recruitment of new
officers and key employees.

Article 4
Administration

The Committee shall administer the Plan as set forth in this Section.

4.01. Interpretation of the Plan.

The Committee may from time to time adopt, and thereafter amend or
rescind, such rules and regulations for carrying out the Plan and take
such action in the administration of the Plan, not inconsistent with
the provisions of the Plan and the 1997 Program, as it considers
proper. The interpretation and construction of any provisions of the
Plan by the Committee shall be final. No member of the Board or the
Committee shall be liable for any action or determination made in good
faith with respect to the Plan or any Option granted under it.

The Corporate Secretary shall have the discretion and authority to
establish any and all procedures, forms, and rules of a ministerial
nature that the Corporate Secretary considers necessary or desirable
for the orderly administration of the

<PAGE>

Plan and shall have other administrative responsibilities as set forth
elsewhere in this Plan.

The Committee may designate one or more Employees to hear and resolve
disputes arising under the Plan.

4.02. Abstention in Certain Cases by Committee Members.

If any Committee member's participation in an action to approve the
acquisition or disposition of an Equity Security by an Executive
Officer would prevent the Executive Officer's acquisition or
disposition of the Equity Security from being exempt from the
liability provisions of Exchange Act Section 16, the member shall
abstain from voting on the transaction if doing so would cause the
acquisition or disposition to be exempt.

Article 5
Number of Shares Authorized to be Issued

The number of shares of Common Stock that may be issued upon exercise
of Options granted under the Plan may not exceed 70,200,000 shares of
FON Stock or 32,200,000 shares of PCS Stock, subject to adjustment as
provided in Article 12 hereof. The shares issued under the Plan may
be either treasury shares or authorized but unissued shares.

The number of shares of Common Stock that may be issued upon exercise
of Options granted pursuant to this Plan after April 15, 1997,
together with shares of Common Stock subject to other awards under the
1997 Program, may not exceed the limits set forth in Section 4(a) of
the 1997 Program.

The number of shares of Common Stock that may be issued upon exercise
of Incentive Stock Options granted pursuant to this Plan after April
15, 1997, may not exceed 8,000,000 shares of FON Stock or 2,000,000
shares of PCS Stock.

The shares of Common Stock allocable to the unexercised portion of any
Option that for any reason expires or is forfeited may again be
subject to an Option under the Plan.

2
<PAGE>

Article 6
Grant of Options

6.01. Eligibility for Grants.

The Committee or an Authorized Officer may grant Options under this
Plan to any Grantee who is a Director or Employee of the Company or a
Subsidiary of the Company on the Grant Date of the Option and to whom
the granting of Options and the exercise thereof would not be in
violation of the laws of the jurisdiction, foreign or domestic, having
legal authority over the issuance of Options to, or the exercise
thereof by, Directors or Employees working or residing in such
jurisdiction.

No Incentive Stock Option may be granted to any Grantee who owns
directly or indirectly shares of Common Stock or options to purchase
shares of Common Stock, together possessing more than 10% of the total
combined voting power or value of all classes of stock of the Company
or any of its Subsidiaries.

6.02. Committee Grants.

The Committee shall determine which Directors or Employees among those
eligible shall be granted Options and, with respect to each Option,
shall specify the Option Class and number of shares of Common Stock
subject to the Option. The Committee may designate Grantees, the
Option Class, and the number of shares subject to each Option by any
objectively determinable description. The Committee may also specify
the Grant Date of the Option, the Strike Price, the Expiration Date of
the Option, the rate at which the Option may be exercised, and such
other terms of the Option as the Committee may consider appropriate.
In making its determinations, the Committee shall take into
consideration the value of the services rendered by the Grantees,
their present and potential contribution to the success of the Company
and its Subsidiaries, and such other factors the Committee may
consider relevant in accomplishing the purposes of the Plan.

6.03. Interim Grants.

Between meetings of the Committee, any of the Authorized Officers may
grant an Option to any eligible Employee other than a Director or an
Executive Officer. The number of shares subject to Options granted
pursuant to this Section 6.03 may not exceed a total of 20,000 shares
of all Classes of Common Stock for any single Grantee between any two
meetings of the Committee. An Authorized Officer may make interim
grants of Options in excess of 20,000 shares with the written
concurrence of the chairman of the Committee on or before the Grant
Date.

In making such grants, the Authorized Officer shall specify in a
writing, executed by the Authorized Officer (and the chairman of the
Committee, if the number of shares subject to the Option are in excess
of 20,000) and setting forth the actual date of execution, which
Employees among those eligible shall be granted Options and, with
respect to each Option, shall specify the Option

3
<PAGE>

Class and number of shares of Common Stock subject to the Option. The
Authorized Officer may designate Grantees, the Option Class, and the
number of shares subject to each Option by any objectively
determinable description. The Authorized Officer may also specify the
Grant Date of the Option, the Strike Price, the Expiration Date of the
Option, the rate at which the Option may be exercised, and such other
terms of the Option as the Authorized Officer may consider
appropriate. In making its determinations, the Authorized Officer
shall take into consideration the value of the services rendered by
the Grantees, their present and potential contribution to the success
of the Company and its Subsidiaries, and such other factors the
Authorized Officer may consider relevant in accomplishing the purposes
of the Plan.

The Authorized Officer shall report to the Committee the Grantees and
terms of all Options granted pursuant to this Section 6.03 at the next
meeting of the Committee following such grants.

6.04. Limitation on Discretion of Committee and Authorized Offi-
cers.

Neiher the Committee nor the Authorized Officer may

(i) set the Grant Date of any Option to any date earlier than the
date of the action granting the Option;

(ii) establish the Strike Price of any Option at a price lower than
the greater of (a) the Fair Market Value of one share of the Option
Class of Common Stock on the Grant Date of the Option or (b) the par
value on the Grant Date of the Option Class of the Common Stock; or

(iii) subject more than 6,000,000 shares to Options in the FON Stock
Option Class nor more than 1,500,000 shares to Options in the PCS
Stock Option Class granted to any single Director or Employee in any
calendar year.

Article 7
Terms of Options

7.01. Standard Terms of Options.

Unless the Committee or Authorized Officer specifies otherwise, the
terms set forth in this Section 7.01 shall apply to all Options
granted under this Plan. Any Stock Option Agreement that incorporates
the terms of the Plan by reference shall be deemed to have
incorporated the terms set forth in this Section 7.01 to the extent
that these terms are not in conflict with those explicitly set forth
in the Stock Option Agreement.

(a) Non-Qualified Options. Each Option shall be a Non-Qualified Option.

(b) Grant Date. The Grant Date of each Option shall be the date of
the Committee's or Authorized Officer's action granting the Option.

(c) Strike Price. The Strike Price of each Option shall be the Fair
Market Value of one share of the Option Class of Common Stock on the
Grant Date.

4
<PAGE>

(d) Expiration Date. The Expiration Date of each Option shall be the
close of business on the tenth anniversary of the Option's Grant Date.
The Option shall not be exercisable after its Expiration Date.

(e) Rate of Exercisability. Each Option shall become exercisable with
respect to 25% of the number of shares of the Option Class of Common
Stock subject to the Option on each of the first four anniversaries of
the Grant Date if, on such anniversary date, the Grantee shall have
been continuously employed by or served as a Director of the Company,
a Subsidiary of the Company, or an Affiliate from the Grant Date.

(f) Reload Rights. Each Non-Qualified Option, other than Options
granted pursuant to Reload Rights, shall be granted with Reload
Rights.

(g) Limitations on Transfer. No Option may, during the lifetime of
the Grantee, be transferred, levied, garnished, executed upon,
subjected to a security interest, or assigned to any person other than
the Grantee, except that a Grantee may transfer an Option to a
Qualified Transferee if the transfer is made without payment of
consideration being paid to the Grantee. Documents evidencing the
transfer of any Option and the identity of the Qualified Transferee
shall be in such form as may be required by the Corporate Secretary.
No such Qualified Transferee may dispose of shares issued upon
exercise of an Option, other than to the Company, until such shares
are validly registered or, in the opinion of the Corporate Secretary,
exempt from registration under the Securities Act.

(h) Post-Employment Exercise of Options. Each Option may be exercised
after the Grantee's Termination Date only with respect to the number
of shares of Common Stock that were exercisable on the Grantee's
Termination Date. An Optionee may exercise an Option before its
Expiration Date with respect to those shares during a limited period
beginning on the Grantee's Termination Date and ending

(i) on the fifth anniversary of the Grantee's Termination
Date, if the Grantee's service as Director or employment
terminated by reason of his Retirement or Total Disability;

(ii) on the first anniversary of the Grantee's Termination
Date if the Grantee's employment or service as Director
terminated by reason of his death;

(iii) on the day three months following the Grantee's
Termination Date if the Grantee terminated his employment or
service as Director voluntarily, for a reason other than
Retirement, or involuntarily for a reason not constituting
Termination for Cause.

If a Grantee's employment has been Terminated for Cause, the
Optionee shall forfeit all outstanding Options immediately on
the Grantee's Termination Date.

(i) Acceleration on Termination of Employment for Certain Reasons.

<PAGE>

(1) Death or Total Disability. Each Option shall become
exercisable immediately on the Grantee's Termination Date if
the reason for termination was the Grantee's death or Total
Disability.

(2) Normal Retirement. Each Option shall become exercisable
immediately on the Grantee's Termination Date if (i) the
reason for termination was the Grantee's Normal Retirement
and (ii) the Option's Grant Date was at least one year before
the Grantee's Termination Date.

(j) Acceleration on Change in Control.

(1) Acceleration. Each Option shall become immediately
exercisable in full upon a Change in Control if

(i) the Change in Control occurs at least one year
after the Option's Grant Date and

(ii) the Grantee of the Option has been a Director,
Employee, or an employee of an Affiliate continuously
from the Option's Grant Date to the date of the Change
in Control.

(2) Limitation on Acceleration. If the acceleration of
exercisability under Section 7.01(j)(1), together with all
other payments or benefits contingent on the Change in
Control with the meaning of Code Section 280G, results in any
portion of such payments or benefits not being deductible by
the Company as a result of the application of Code Section
280G, the benefits shall be reduced until the entire amount of
the benefits is deductible. The reduction shall be effected by
the exclusion of grants of options or portions thereof in
reverse chronological order of their respective Grant Dates
from the application of Section 7.01(j)(1) until no portion of
such benefits is rendered non-deductible by application of Code
Section 280G.

(k) Exercise After Death of Optionee. Upon the death of an Optionee,
all Options held by the Optionee on the Optionee's date of death, to
the extent exercisable under their terms, may be exercised by

(i) the executor or administrator of the Optionee's estate,

(ii) the Person or Persons to whom the Optionee's rights under
the Options pass by the Optionee's will or the laws of
descent and distribution, or

(iii) the beneficiary or beneficiaries designated by the
Optionee in accordance with Section 7.01(l).

(l) Designation of Beneficiaries. An Optionee may designate a
beneficiary or beneficiaries to exercise unexpired Options and
to own shares issued upon any such exercise after the Optionee's
death without order of any probate court or otherwise. A
beneficiary so designated may exercise an Option upon presentation
to the Company of evidence satisfactory to the Corporate Secretary
of the beneficiary's identity and the death of the Optionee.

6
<PAGE>

An Optionee may change any beneficiary designation
at any time before his death but may not do so by testamentary
designation in his will or otherwise. Beneficiary designations must
be made in writing on a form provided by the Corporate Secretary.
Beneficiary designations shall become effective on the date that the
form, properly completed, signed, and notarized, is received by the
Corporate Secretary. Any designation of a beneficiary by an Optionee
with respect to any Option shall be canceled upon the transfer of such
Option by the Optionee in accordance with the terms of the Plan.

(m) Agreement to Remain Employed. Each Grantee other than Directors
shall, as consideration for the grant of each Option, agree in the
Stock Option Agreement to remain in the employ of the Company, its
Subsidiaries, or an Affiliate at the pleasure of the Company, such
Subsidiary, or Affiliate for at least one year from the Option's Grant
Date or the earlier termination of the Grantee's employment effected
or approved by the Company, the Subsidiary, or Affiliate. If the
Grantee violates the agreement, the Optionee shall forfeit the Option.

Nothing contained in the Plan or in any Option granted pursuant to the
Plan shall confer upon any Grantee any right to continue employment
with the Company, its Subsidiaries, or Affiliates nor interfere in any
way with the right of the Company, its Subsidiaries, or Affiliates to
terminate the Grantee's employment or change the Grantee's
compensation at any time.

(n) Forfeiture Upon Conflict of Interest. If any Grantee, without the
consent of the Committee, becomes associated with, employed by,
renders services to, or owns any significant interest in any business
that is in competition with the Company, its Subsidiaries, or
Affiliates, any outstanding Option granted to such Grantee shall be
forfeited.

7.02. Mandatory Terms of Incentive Stock Options.

If the Committee or Authorized Officer specifies that an Option is an
Incentive Stock Option, the terms set forth in this Section 7.02 shall
be incorporated into the terms of the Option in preference to any
conflicting terms set forth in Section 7.01. If the Stock Option
Agreement setting forth the terms of any Option contradict the terms
set forth in this Section 7.02, such Option shall be treated as a
Non-Qualified Stock Option, notwithstanding its designation as an
Incentive Stock Option.

(a) Grant Date within 10 Years of Program Adoption. No Incentive
Stock Option may be granted under the Plan after the tenth anniversary
of the Program Adoption Date.

(b) Limitation on Option Term. No Incentive Stock Option may be
exercised after the tenth anniversary of its Grant Date.

(c) Strike Price. No Incentive Stock Option may have a Strike Price
less than the Fair Market Value of one share of the Option Class of
Common Stock on the Grant Date of the Incentive Stock Option.

7
<PAGE>

(d) Non-Transferability. No Incentive Stock Option may be transferred
by the Grantee except by the Grantee's will or the laws of descent and
distribution. An Incentive Stock Option may be exercised during the
Grantee's lifetime only by the Grantee, and after the Grantee's death
only by a beneficiary designated by the Grantee pursuant to the terms
of the Plan, or otherwise by the executor or administrator of the
Grantee's estate or the Person succeeding to the Grantee's interest in
the Incentive Stock Option under the Grantee's will or the applicable
laws of intestacy.

7.03. Standard Terms of Incentive Stock Options.

Unless the Committee or Authorized Officer specifies otherwise in the
action granting the Option, the following terms shall apply to all
Incentive Stock Options granted under the Plan. To the extent the
terms set forth in this Section 7.03 conflict with the standard
terms applicable to Options generally set forth in Section 7.01, the
terms of this section shall control the terms of any Options
designated as Incentive Stock Options at the time of grant.

(a) Maximum Rate of Exercisability. The Fair Market Value on the
Grant Date of the shares of Common Stock subject to any Incentive
Stock Option with respect to which the Incentive Stock Option becomes
exercisable for the first time during any calendar year, together with
the Fair Market Value of shares of Common Stock subject to other
Incentive Stock Options on their respective Grant Dates owned by the
Optionee under all plans of the Company and its Subsidiaries and first
becoming exercisable in the same calendar year, shall not exceed
$100,000 or, if different, the maximum limitation in effect under Code
Section 422 for Incentive Stock Options on the Grant Date of such
Incentive Stock Option. To the extent the terms of the Option permit
the exercise of an Option for more shares than permitted by this
Section 7.03(a), each Option or portion of an Option, in reverse
chronological order of their Grant Dates, shall be treated as Non-
Qualified Options until the remaining Options or portions of Options
meet the limitations set forth in this Section 7.03(a).

(b) Post-Termination Exercise. Any Incentive Stock Option exercised
after the end of the 12-month period beginning on the Grantee's
Termination Date shall, to that extent, be treated as a Non-Qualified
Option.

7.04. Stock Option Agreement.

The terms of each Option shall be set forth in a Stock Option
Agreement executed by the Company and the Grantee. The Stock Option
Agreement must set forth those terms that are not made standard terms
of the Option pursuant to this Plan.

Article 8
Exercise of Options

8.01. Notice of Exercise.

8
<PAGE>

An Optionee may exercise his Option to purchase shares of Common Stock
by written notice to the Corporate Secretary

(i) unambiguously identifying the Option that he is exercising;

(ii) stating the number of shares with respect to which he is
exercising the Option;

(iii) accompanied by payment of the Exercise Price in cash or any
other form permitted by Section 8.02;

(iv) if the Optionee wants to have the shares issued to be registered
jointly with the Optionee's spouse, a statement to that effect;

(v) if the Optionee is electing to have any Payroll Tax withholding
obligation discharged by delivery of Seasoned Shares or withholding
of shares from shares issuable upon the exercise pursuant to Section
9.04, a statement to that effect, and, if the Optionee elects to have
more than the required minimum percentage of Payroll Taxes
withheld, a statement of the percentage to be withheld, not
exceeding, if the Grantee is an Executive Officer, the applicable
marginal tax rate;

(vi) if the Optionee is electing to receive Restricted Shares
pursuant to Section 10.02, a statement of the Vesting Period the
Optionee is electing;

(vii) if the Optionee is delivering or attesting to ownership of
Restricted Shares in payment of the Exercise Price and desires to
elect a more extended Vesting Period pursuant to Section 10.03, a
statement of the extended Vesting Period the Optionee is electing.

The Corporate Secretary may dispense with a written Notice of Exercise
in the case of certain exercises in which he considers a written
Notice of Exercise unnecessary.

The Exercise Date shall be the date on which the Notice of Exercise,
together with the payment of the Exercise Price, is received by the
Corporate Secretary or his designee. The Optionee may not, after the
Exercise Date, change the form of payment of the Exercise Price, the
election regarding stock withholding, or other aspects of the exercise
dependent on the Fair Market Value of the Common Stock.

The Corporate Secretary may condition the exercise of an Option on the
Optionee's filing with the Company a representation in writing that
at the time of such exercise it is the Optionee's then present intent
to hold the shares being purchased for investment and not for resale,
or on the completion of any registration or other qualification of
shares under any state or federal laws or rulings or regulations of
any government regulatory body that the Corporate Secretary may
determine to be necessary or advisable.

8.02. Form of Payment of Exercise Price.

(a) Payment in Cash. Unless the Optionee elects in the Notice of
Exercise to make payment in another form authorized by the Plan,
payment of the

9
<PAGE>

Exercise Price shall be in United States dollars, payable in cash or
by check. The Corporate Secretary may establish procedures to delay
the processing of any Option exercise until any check delivered in
payment of the Exercise Price has cleared, and, if a check fails to
clear, cancel the exercise.

(b) Payment in Shares of Common Stock. On exercise of any Option, the
Optionee may elect in the Notice of Exercise to pay the Exercise Price
by surrender of stock certificates in transferable form representing
Seasoned Shares of the Option Class having an aggregate Fair Market
Value, determined as of the Exercise Date, at least equal to the
Exercise Price.

(c) Payment by Attestation. In lieu of the delivery of physical
certificates, an Optionee may deliver shares in payment of the
Exercise Price by attesting, on a form established by the Corporate
Secretary, to the ownership, either outright or through ownership of a
broker account, of a sufficient number of Seasoned Shares of the
Option Class to pay the Exercise Price. The attestation must be
notarized and signed by the Optionee and any coowners with the
Optionee of the shares with respect to which the attestation is being
made. The form of attestation must be accompanied by any other
documentation the Corporate Secretary considers necessary to evidence
actual ownership of such shares or otherwise preserve the integrity of
the Plan. Shares, the ownership of which is so attested to by the
Optionee, shall be deemed to have been re-issued to the Optionee on
the Exercise Date in partial satisfaction of the Company's obligation
to issue shares of the Option Class of Common Stock pursuant to the
Option exercise to which it relates.

(d) Fractional Shares. If an Optionee pays the Exercise Price of an
Option by delivery or attestation of Seasoned Shares, the Company
shall apply to payment of the Exercise Price from the shares delivered
or attested the highest number of whole shares having a Fair Market
Value on the Exercise Date less than or equal to the Exercise Price,
and the Optionee shall be required to pay in cash the Fair Market
Value of the fractional share resulting from truncating the number of
shares to a whole number of shares.

Article 9
Withholding of Payroll Taxes on Exercise

9.01. Obligation to Pay Payroll Taxes.

Any Optionee, Grantee, or other Person (the "Payroll Taxpayer") with
respect to whom the Company or a Subsidiary of the Company has an
obligation under any Payroll Tax law to withhold amounts with respect
to income arising from the exercise of any Option must pay to the
Company or Subsidiary of the Company the Minimum Withholding Amount.

<PAGE>

9.02. Amount to Be Withheld.

The Payroll Taxpayer may elect in the Notice of Exercise or on another
form specified by the Corporate Secretary for such purpose an amount
to be withheld (the "Withholding Amount") with respect to the exercise
of any Option. The Withholding Amount must be greater than or equal
to the Minimum Withholding Amount and, if the Payroll Taxpayer is an
Executive Officer, less than or equal to the Payroll Taxpayer's
combined marginal tax rate for all Payroll Taxes. In the absence of
such an election, the Withholding Amount shall be the Minimum
Withholding Amount.

If all amounts withheld in payment of Payroll taxes are reported to
the appropriate taxing jurisdiction as amounts withheld from the
Payroll Taxpayer, the Company or Subsidiary may, in cases where the
Corporate Secretary considers it necessary, set the Withholding Amount
to an amount in excess of the Minimum Withholding Amount based on
assumptions about the amount required by law to be withheld.

9.03. Eligibility to Elect Stock Withholding.

A Payroll Taxpayer may elect to pay all or part of the Withholding
Amount in shares of the Option Class of Common Stock if the Optionee
pays the Exercise Price by delivering or attesting to ownership of
shares of the Option Class of Common Stock pursuant to Sections
8.02(b) or 8.02(c).

9.04. Manner of Withholding.

If the Payroll Taxpayer is eligible to satisfy his obligation to pay
the Withholding Amount by payment of shares of the Option Class of
the Common Stock pursuant to Section 9.03, he may pay the Withholding
Amount by one or more of the following methods:

(i) delivering Seasoned Shares of the Option Class; or

(ii) directing the Company to withhold from those shares that would
otherwise be received upon exercise of the Option or upon the vesting
of Restricted Shares, shares of the Option Class of the Common Stock
having a Fair Market Value on the Tax Date of no more than the
Minimum Withholding Amount; or

(iii) paying cash to the Company.

If the Payroll Taxpayer is not eligible to elect stock withholding,
the Withholding Amount must be paid entirely in cash. Any portion
of the Withholding Amount that would require withholding or delivery
of a fractional share and any portion of the Withholding Amount not
paid by the withholding or surrender of Common Stock must be paid in
cash.

(a) Limit on Use of Unvested Restricted Shares. If the Option
exercise resulted in the issuance of Restricted Shares and the
Vesting Period with respect to the Restricted Shares has not
ended on or before the Tax Date, method (ii) described in
Section 9.04 shall not be available as a means of

<PAGE>

stock withholding.

(b) Limit with Respect to Transferred Options. If an Option was
transferred by the Grantee or the tax liability resulting from the
exercise of the Option is otherwise not imposed on the Optionee,
method (ii) described in Section 9.04 shall not be available as a
means of stock withholding.

Article 10
Issuance of Shares on Exercise

10.01. Generally.

No Optionee will be considered a holder of any shares of Common Stock
subject to an Option until a stock certificate or certificates for
such shares are issued to the Optionee after an exercise of the Option
under the terms of the Plan. No Optionee shall be entitled to
dividends (ordinary or extraordinary, whether in cash, securities or
other property), distributions, or other rights with respect to the
shares subject to purchase under the Option unless the record date for
any such dividend, distribution, or other right falls on or after the
date the Optionee becomes a record holder of such shares.

All shares of Common Stock issued pursuant to an exercise of an Option
shall be issued in the name of the Optionee, or in the name of the
Optionee and the Optionee's spouse, and shall, except as otherwise
provided in Article 8, be freely transferable by the registered owners
upon issuance.

10.02. Elective Issuance of Restricted Shares.

Certain Optionees, as determined by the Committee, may elect to
receive Restricted Shares upon the exercise of an Option if the
Optionee so states in the Notice of Exercise and has paid the Exercise
Price of the Option by attesting to or by delivering shares of
unrestricted Common Stock pursuant to Sections 8.02(b) or 8.02(c).

If an Optionee elects on exercise of any Option to receive Restricted
Shares, the Company shall issue to the Optionee

(i) a number of unrestricted shares of the Option Class of Common
Stock equal to the number of unrestricted shares the Optionee used
to pay the Exercise Price plus

(ii) all other shares issuable pursuant to the exercise of the Option
as Restricted Shares, having the Vesting Period specified by the
Optionee in the Notice of Exercise and otherwise subject to the
restrictions on transfer and other terms set forth in Section
10.05.

10.03. Mandatory Issuance of Restricted Shares.

Certain Optionees, as determined by the Committee, may in the exercise
of an Option deliver or attest to ownership of Restricted Shares of
the Option Class of Common Stock in payment of the Exercise Price,
notwithstanding restrictions

<PAGE>

on transferability to which such shares are subject. If
an Optionee elects to so pay the Exercise Price of an Option, the
Company shall issue to the Optionee

(i) a number of shares of the Option Class equal to the number of
Restricted Shares used to pay the Exercise Price as Restricted
Shares having a Vesting Period identical to the Vesting Period of
the shares so used in payment of the Exercise Price and

(ii) all other shares of the Option Class issuable pursuant to the
exercise of the Options as Restricted Shares having a Vesting Period
identical to the Vesting Period of the shares so used to pay the
Exercise Price, or if the Optionee elects in the Notice of Exercise,
a Vesting Period extending beyond the end of the Vesting Period of
the shares so used.

10.04. Issuance of Restricted Shares Not Available to Transferred
Options.

Neither the Optionee nor the Grantee of an Option transferred by the
Grantee pursuant to the provisions of this Plan may use Restricted
Shares in payment of the Exercise Price nor elect to receive
Restricted Shares on exercise of the Option.

10.05. Terms of Restricted Shares Issued on Exercise.

Subject to the right of the Optionee to elect the length of the
Vesting Period applicable to Restricted Shares issued pursuant to an
Option exercise under the Plan, all Restricted Shares issued pursuant
to the Plan shall be subject to the terms and conditions set forth in
this Section 10.05.

(a) Restriction on Transfer. An Optionee who receives Restricted
Shares may not sell, transfer, assign, pledge or otherwise encumber or
dispose of the Restricted Shares until the end of the Vesting Period
for such shares, except:

(i) to the Company in payment of the exercise price of a stock
option issued by the Company under any director or employee
stock option plan adopted by the Company that provides for
payment of the exercise price in the form of restricted
stock or

(ii) to a trust that is a Qualified Trust upon the following
terms:

(A) the Company receives, before the transfer, a true
copy of the trust agreement of the Qualified Trust and
an opinion from Optionee's counsel that (1) the
trust will be treated as a grantor trust owned by the
Optionee under Subchapter J of the Code at all times
until the restrictions on such stock lapse or the
stock is forfeited under the terms of their grant, (2)
the terms of the trust provide that upon the
forfeiture of the Restricted Shares under the terms of
its grant or the earlier termination of the trust for
whatever reason, ownership of the Restricted Shares
shall revert to the Optionee or to the Company, (3)
the trustee of such trust may not, prior to the
lapsing of restrictions on such stock, sell, transfer,
assign, pledge, or otherwise encumber or dispose of the

<PAGE>

Restricted Shares except to the Company or to the Optionee,
subject to the restrictions provided for in this Plan, and
(4) until the restrictions lapse, the trustee is not
authorized to incur liabilities on behalf of the
trust, other than to the beneficiaries of the trust;
and

(B) the Corporate Secretary, in his discretion, may
require the Optionee and the trustee to execute
other documents as a precondition to such transfer
to insure enforcement of the terms of the Restricted
Shares or otherwise.

(b) Enforcement of Transfer Restrictions. Unless the Corporate
Secretary establishes alternative procedures, certificates
representing Restricted Shares shall be registered in the name of the
Optionee (or the Qualified Transferee trust in the case of shares
transferred to such a trust pursuant to Section 10.05(a)) and shall be
held by the Company in escrow, together with a stock power assigning
the Restricted Shares back to the Company, to be used only in the
event of the forfeiture of any of the Restricted Shares.

(c) Vesting Period. When an Optionee elects a Vesting Period to apply
to Restricted Shares issued under the Plan, the Optionee shall elect a
Vesting Period ending at least six months and no more than ten years
after the Exercise Date of the Option with respect to which the
Restricted Shares were issued, but in no event may the Optionee elect
a Vesting Period ending before the end of the Vesting Period of any
Restricted Shares used to pay the Exercise Price of the Option
pursuant to Section 10.03.

The Corporate Secretary may establish restrictions on the dates during
the year on which Vesting Periods electable pursuant to this Article
10 may end for the convenient administration of Restricted Shares
issued under the Plan.

At any time on or before the last day of the 13th calendar month that
ends on or before the last day of the Vesting Period for any
Restricted Shares, the Optionee may elect to extend the Vesting Period
on all but not a portion of the Restricted Shares by any multiple of
six months.

(d) Forfeiture and Vesting of Restricted Shares.

(1) Vesting at End of Vesting Period. Any Restricted Shares
not forfeited by the end of the Vesting Period shall vest, and
the Company shall issue a certificate evidencing the shares to
the registered owner thereof promptly after the end of the
Vesting Period.

(2) Restricted Shares Issued Mandatorily. Unless the Committee
determines otherwise, Restricted Shares issued mandatorily
pursuant to the exercise of an Option under Section 10.03 shall
inherit the vesting conditions of the Restricted Shares used
to pay the Exercise Price. If the Restricted Shares used to
pay the Exercise Price would be forfeited upon the Grantee's
termination of service or employment before the

<PAGE>

end of the Vesting Period, the Restricted Shares issued
pursuant to such exercise shall be forfeited; if the
Restricted Shares used to pay the Exercise Price would be
vested upon the Grantee's termination of service or employment
before the end of the Vesting Period, the Restricted Shares
issued pursuant to such exercise shall vest and the Company
shall issue a certificate representing the shares to the regis-
tered owner thereof. Likewise, Restricted Shares issued under
the Plan shall be forfeited or shall vest upon the occurrence
of any other event that would cause the forfeiture or vesting
of the Restricted Shares used to pay the Exercise Price under
Section 10.03.

(3) Restricted Shares Issued Electively. Unless the Committee
determines otherwise, restrictions on Restricted Shares issued
at the election of the Optionee under Section 10.02 shall lapse
if the Grantee terminates his service or employment at any time
before the end of the Vesting Period for the Restricted Shares
if

(i) the Grantee terminated service or employment by
reason of the Grantee's Death or Total Disability,

(ii) the Grantee terminated service or employment by
reason of the Grantee's Normal Retirement, or

(iii) the Grantee's employment was terminated
involuntarily other than as a Termination for Cause,

in which cases, the Company shall issue a certificate
representing the shares to the registered owner thereof;
otherwise the Restricted Shares shall be forfeited.

(e) Acceleration on Change in Control. Unless the Committee
determines otherwise, Restricted Shares issued at the election of the
Optionee under Section 10.02 shall vest on a Change in Control if the
Change in Control occurs at least one year after the Exercise Date on
which the Restricted Shares were issued.

(f) Rights of Grantee in Restricted Stock. The registered owner of
Restricted Shares shall have the right to vote the shares of stock and
to receive dividends or other distributions with respect to the
shares.

Article 11
Reload Rights

11.01. Grant of Reload Rights on Outstanding Non-Qualified Op-
tions.

The Committee may grant Reload Rights with respect to any outstanding
NonQualified Options issued under any stock option plan of the
Company, whether originally granted with Reload Rights or not.

<PAGE>

11.02. Terms of Reload Options.

Any Underlying Option granted Reload Rights shall, unless the
Committee specifies other terms at the time the Reload Rights are
granted, entitle the Grantee to receive a new Option (a "Reload
Option") to purchase shares of the same Option Class as the Underlying
Option upon the Optionee's exercise of the Underlying Option by
delivery or attestation of shares of Common Stock in payment of the
Exercise Price on the terms set forth in this Article 11.

(a) Conditions to the Grant of Reload Options. No Reload Option shall
be granted on the exercise of the Underlying Option unless

(i) a sufficient number of shares remain authorized and not
issued or subject to purchase under outstanding Options
granted under the Plan;

(ii) the Grantee of the Option is a Director or Employee on
the Exercise Date of the Underlying Option;

(iii) the exercise of the Underlying Option is for the purchase
of a number of shares of Common Stock at least equal to the
lesser of (a) 25% of the total number of shares subject to
purchase under the Underlying Option or (b) 100% of the shares
with respect to which the Underlying Option is then
exercisable;

(iv) the Grant Date of the Reload Option would be at least one
year before the Expiration Date of the Underlying Option; and

(v) the Fair Market Value of one share of the Underlying
Option's Option Class on the Exercise Date is greater than or
equal to the Strike Price of the Underlying Option.

(b) Number of Shares Subject to Purchase; Grant Date. Each Reload
Option shall entitle the Optionee to purchase a number of shares equal
to the sum of

(i) the number of shares of the Option Class used to pay the
Exercise Price of the Underlying Option pursuant to Sections
8.02(b) or 8.02(c) on the Exercise Date and

(ii) the number of shares of the Option Class delivered or
withheld in payment of the Withholding Amount pursuant to
Section 9.04.

If the Exercise Date and the Tax Date do not coincide, the Reload
Option shall be issued as two separate Options to purchase the number
of shares set forth in (i) and (ii) above and having Grant Dates on
the Exercise Date and the Tax Date, respectively.

(c) Strike Price. Each Reload Option shall have a Strike Price equal
to the Fair Market Value of one share of the Option Class of the
Common Stock on the Grant Date of the Reload Option.

(d) Expiration Date. Each Reload Option shall have the same
Expiration Date as the Underlying Option.

<PAGE>

(e) No Reload Rights. No Reload Option shall have Reload Rights.

(f) Rate of Exercisability. Each Reload Option shall become
exercisable in full on the first anniversary of the Grant Date of the
Reload Option.

(g) Forfeiture on Disposition of Shares Acquired in Exercise of
Underlying Option. Each Reload Option shall be forfeited if the
Optionee disposes of any of the shares issued on exercise of the
Underlying Option before the date six months after the Exercise Date
to any Person other than the Company in the payment of Payroll Taxes
on exercise of the Underlying Option.

(h) Other Terms and Conditions. Except to the extent in conflict with
the terms set forth in this Article 11, the terms for Options granted
under the Plan as set forth in Section 7.01 shall apply to each Reload
Option.

(i) Terms of Foreign Reload Options. A Foreign Reload Option shall be
subject to the terms and conditions set forth in the plan in which
the underlying reload right was granted.

11.03. Variant Reload Rights.

Any terms of Reload Rights or Reload Options different from those set
forth in this Article 11 must be set forth in the Stock Option
Agreement for the Underlying Option.

Article 12
Change in Stock, Adjustments, Etc

If the outstanding Common Stock of the Company is increased or
decreased or changed into or exchanged for a different number of
shares or kind of shares or other securities of the Company or of
another Person by reason of a reorganization, merger, consolidation,
recapitalization, reclassification, stock split-up, combination of
shares, or a dividend payable in capital stock (including a spinoff),
or otherwise, the Committee shall make an appropriate adjustment to
the number and kind of shares for the purchase of which Options may be
granted under the Plan including the maximum number that may be
granted to any one person.

In addition, the Committee shall make appropriate adjustment to the
number and kind of shares as to which outstanding Options, or portions
thereof then unexercised, shall be exercisable and to the Strike Price
of the Options. Each such adjustment to outstanding Incentive Stock
Options shall be made in such a manner as not to constitute a
modification as defined in Code Section 424. If any outstanding
Options are subject to any conditions affected by the event, the
Committee shall also make appropriate adjustments to such conditions.
Any such adjustments made by the Committee shall be conclusive.

The grant of an Option pursuant to the Plan shall not affect in any
way the right or power of the Company to make adjustments,
reclassifications, reorganizations or changes of its capital or
business structure or to merge or to consolidate or to dissolve,
liquidate, or to sell or transfer all or any part of its business or
assets.

<PAGE>

Article 13
Amendment and Termination

The Board may at any time amend or terminate the Plan as it considers
advisable and in the best interests of the Company, but no such
termination or amendment may

(i) without the consent of the Optionee, adversely affect or impair
the rights of the Optionee under any outstanding Option; or

(ii) be inconsistent with the provisions of the 1997 Program.

Article 14
Effective Date and Duration of the Plan

This Plan was initially effective as of February 17, 1990, and was
continued as a plan under the 1997 Program on the Program Adoption
Date. No Option shall be granted under the Plan after the last
permissible date for the granting of Options under the 1997 Program,
but Options granted before that date may have Expiration Dates that
extend beyond such date.

Article 15
Definitions

15.01. 1989 Program.

"1989 Program" means the Company's Long-Term Stock Incentive Program,
approved by the Company's shareholders on April 18, 1989.

15.02. 1997 Program.

"1997 Program" means the Company's 1997 Long-Term Stock Incentive Pro-
gram, approved by the Company's shareholders on April 15, 1997, as
amended from time to time.

15.03. Affiliate.

"Affiliate" means those Persons, other than Subsidiaries of the
Company, designated from time to time by the Committee as such.

15.04. Authorized Officer.

"Authorized Officer" means the Chief Executive Officer of the Company.

15.05. Board.

"Board" means the board of directors of the Company.

15.06. Change in Control.

"Change in Control" means the occurrence of any of the following
events

<PAGE>

(i) the acquisition of securities of the Company representing 20% or
more of the combined voting power of the Company's then outstanding
securities by any "person" or "group" as such terms are defined in
Sections 13(d) and 14(d) of the Exchange Act, other than

(A) a trustee or other fiduciary holding securities under an
employee benefit plan of the Company;

(B) the Company or a Person (or one of its Subsidiaries)
owned by the stockholders of the Company in substantially the
same proportions as their ownership of the stock of the
Company; or

(ii) at the end of any two-year period, less than a majority of the
directors of the Company are directors

(A) who were directors of the Company at the beginning of the
two-year period or

(B) whose election as director was approved by a vote of
two-thirds of the then directors described in the preceding
clause (A) or this clause (B) by prior election;

(iii) the Company's shareholders approve a merger or consolidation in
which the Company is not the surviving entity, or a liquidation or
dissolution of the Company, or a sale of all or substantially all of
the Company's assets; or

(iv) the acquisition by Deutsche Telekom AG or FranceeTlecom,
individually or collectively, of additional securities of the Company
that would result in their possessing in the aggregate 35% or more of
the combined voting power of the Company's then outstanding
securities.

15.07. Code.

"Code" means the Internal Revenue Code of 1986, as amended, or any
successor statute.

15.08. Code Section.

"Code Section" is a reference to a particular section of the Code, and
includes any successor provision or the same or a successor provision
as renumbered at any time.

15.09. Committee.

"Committee" means the the Organization, Compensation, and Nominating
Committee of the Board.

15.10. Common Stock.

"Common Stock" means any class of the Company's publicly-traded common
stock as the Committee may determine to issue under the Plan,
including the FON Stock and the PCS Stock.

<PAGE>

15.11. Company.

"Company" means Sprint Corporation, a Kansas corporation, or its
successor.

15.12. Corporate Secretary.

"Corporate Secretary" means the secretary of the Company.

15.13. Director.

"Director" means a member of the Board or a member of the board of
directors of a Subsidiary of the Company.

15.14. Employee.

"Employee" means an employee of the Company or a Subsidiary of the
Company.

15.15. Equity Security.

"Equity Security" means an equity security as defined by the Exchange
Act for purposes of Exchange Act Section 16.

15.16. Exchange Act.

"Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time and as interpreted and implemented by the rules and
regulations issued thereunder.

15.17. Exchange Act Section 16.

"Exchange Act Section 16" means section 16 of the Exchange Act.

15.18. Executive Officer.

"Executive Officer" means an officer of the Company that is subject to
the liability provisions of Exchange Act Section 16.

15.19. Exercise Date.

"Exercise Date" has the meaning indicated in Section 8.01.

15.20. Exercise Price.

"Exercise Price" means, with respect to the exercise of an Option, the
Strike Price of the Option multiplied by the number of shares with
respect to which the Option is being exercised.

15.21. Expiration Date.

"Expiration Date" means, with respect to any Option, the last date on
which the Option may be exercised in the absence of an earlier
forfeiture of the Option.

15.22. Fair Market Value.

"Fair Market Value" means, with respect to any class of the Common
Stock on any date, the average of the high and low prices per share of
that class of Common Stock for composite transactions on that date,
unless there was no trading in that class of Common Stock on that
date, in which case, on the most

<PAGE>

recent day before that date on which that class of Common Stock was
traded. The Fair Market Value of shares of Restricted Stock shall be
determined without taking into account any restrictions.

"Fair Market Value" means, with respect to other property, the value
of the property as determined by the Committee.

15.23. FON Stock.

"FON Stock" means the Series 1 FON Stock as described in the Company's
articles of incorporation.

15.24. Foreign Reload Option.

"Foreign Reload Option" means a reload option issued with respect to
an option issued under a plan of Sprint's other than this Plan.

15.25. Grant Date.

"Grant Date" means, with respect to any Option, the date on which the
term of the Option begins, as determined in Article 7 and Article 11.

15.26. Grantee.

"Grantee" means, with respect to any Option, the Director or Employee
to whom the Option was originally granted, notwithstanding any
subsequent transfer of the Option under the terms of the Plan.

15.27. Incentive Stock Option.

"Incentive Stock Option" means an Option designated as such in the
action granting the Option. This Plan's intent is that Incentive
Stock Options meet the requirements of Code Section 422.

15.28. Minimum Withholding Amount.

"Minimum Withholding Amount" means, with respect to any Option
exercise, the amount the employer is required to withhold from the
income of the Payroll Taxpayer under the Payroll Tax laws.

15.29. Non-Qualified Option.

"Non-Qualified Option" means any Option that is not an Incentive Stock
Option.

15.30. Normal Retirement.

"Normal Retirement" means, with respect to any Employee, Retirement at
or later than an age qualifying as "normal retirement" under the
Company's defined benefit pension plan, whether or not the person is
a participant in the plan and, with respect to any Director,
termination of service as a Director at the mandatory retirement age
for members of the Board under its policies, as amended from time to
time, even if the Director serves on the board of a Subsidiary or
Affiliate.

15.31. Notice of Exercise.

<PAGE>

"Notice of Exercise" means the notice by an Optionee of the exercise
of an Option as set forth in Section 8.01.

15.32. Option.

"Option" means the right, set forth in a written agreement between the
Company and an Optionee, authorized by this Plan to acquire a
determinable number of shares of the Option Class of Common Stock at a
determinable price for a determinable period of time and having such
other terms as may be determined by the Committee or Authorized
Officer or as set forth in this Plan.

15.33. Option Class.

"Option Class" means, with respect to any Option, the class of Common
Stock subject to purchase pursuant to the terms of the Option.

15.34. Optionee.

"Optionee" means, with respect to any Option at any particular time,
the holder of the Option at that time.

15.35. Payroll Tax.

"Payroll Tax" means any tax required by an employer to be withheld
from wages paid to its employees, including but not limited to federal
income tax withholding, Social Security and Medicare withholding
taxes, and state and local income tax withholding.

15.36. Payroll Taxpayer.

"Payroll Taxpayer" has the meaning specified in Section 9.01.

15.37. PCS Stock.

"PCS Stock" means the Series 1 PCS Stock as defined in the Company's
articles of incorporation.

15.38. Person.

"Person" means any individual, corporation, partnership, limited
liability company, business trust, or other entity.

15.39. Program Adoption Date.

"Program Adoption Date" means April 15, 1997.

15.40. Plan.

"Plan" means the 1990 Stock Option Plan, the terms of which are set
forth in this document.

15.41. Qualified Transferee.

"Qualified Transferee" means a Qualified Trust.

15.42. Qualified Trust.

"Qualified Trust" means a trust

<PAGE>

(i) that is a grantor trust treated as owned by the Grantee under
Subchapter J of the Code;

(ii) of which the Grantee, the Grantee's spouse, or the Grantee's
descendants by blood, adoption, or marriage, are the sole
beneficiaries; and

(iii) that, by its terms, may not be amended to violate the foregoing
restrictions so long as the trust is an Optionee under this Plan.

15.43. Reload Option.

"Reload Option" means an Option granted upon exercise of an Option having
Reload Rights under the terms and conditions set forth in Article 11

15.44. Restricted Shares.

"Restricted Shares" means shares of Common Stock subject to restrictions on
transfer and the possibility of forfeiture for any period of time.

15.45. Retirement.

"Retirement" means, in the case of an Employee, termination of
employment by an employee who is entitled to receive payment of pension
benefits in accordance with the Sprint Retirement Pension Plan or his
employer's defined benefit pension plan, if any, immediately after
the employee's Termination Date and, in the case of a Director,
termination of service as a Director after five years of service as a Director.

15.46. Seasoned Shares.

"Seasoned Shares" means, with respect to any Person, shares of Common Stock

(i) acquired by such Person from the Company and owned by such
Person for a period of at least six months; or

(ii) acquired by such Person other than from the Company.

15.47. Securities Act.

"Securities Act" means the Securities Act of 1933, as amended from
time to time and as interpreted and implemented by the rules and
regulations issued thereunder.

15.48. Strike Price.

"Strike Price" means, with respect to any Option, the price per share at which
the Optionee is entitled to purchase shares of Common Stock.

15.49. Subsidiary.

"Subsidiary" means, with respect to any Person (the "Controlling Person"),

(i) all Persons (the "Controlled Persons") in whom the Controlling
Person, together with its Subsidiaries, directly owns more than 50% of
the voting rights, and

(ii) all Subsidiaries of the Controlled Persons.

<PAGE>

15.50. Tax Date.

"Tax Date" means, with respect to any Option exercise, the date on which the
shares issued pursuant to the Option exercise become subject to federal income
taxation.

15.51. Termination Date.

"Termination Date" means,

(i) with respect to any Employee, the date on which the Employee
ceases to be employed by the Company, any of its Subsidiaries, or any
Affiliate, and ceases to receive severance benefits under any
applicable plans for the payment of severance benefits by the employing
entity, or

(ii) with respect to any Director, the date on which the Director's service
as a director ends.

15.52. Termination for Cause.

In the case of an Employee, "Termination for Cause" means an
involuntary termination of employment because

(i) the employee has materially breached the Company's Code of Ethics, or
the code of ethics of the employer;

(ii) the employee has materially breached the Sprint Employee
Agreement Regarding Property Rights and Business Practices;

(iii) the employee has engaged in acts or omissions constituting dishonesty,
intentional breach of a fiduciary obligation, or intentional acts of
wrongdoing or misfeasance; or

(iv) the employee has acted intentionally and in bad faith in a
manner that results in a material detriment to the assets, business,
or prospects of the employer.

In determining whether any particular employee was Terminated for
Cause, the characterization of the reason for termination used for
purposes of other employee benefit plans of the Company or other
employer shall apply to this Plan.

In the case of a Director, "Termination for Cause" means removal
for cause from service as a director.

15.53. Total Disability.

"Total Disability" means, in the case of employees, termination of employment
under circumstances that would make the employee eligible to receive benefits
under the employer's long-term disability plan and, in the case of
Directors, termination of service as a Director under circumstances that would
make the Director eligible to receive Social Security disability benefits.

15.54. Underlying Option.

<PAGE>

"Underlying Option" means, with respect to any Reload Option, the Option to
which the Reload Rights were attached and the exercise of which resulted in the
grant of the Reload Option.

15.55. Vesting Period.

"Vesting Period" means, with respect to any Restricted Shares, the
period of time during which the Restricted Shares (i) are subject to
limitations on transfer and (ii) may be divested from the owner upon
failure to meet any applicable conditions to vesting.

15.56. Withholding Amount.

"Withholding Amount" has the meaning specified in Section 9.02.

EXHIBIT (12)
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES (Unaudited) Sprint Corporation

Quarters Ended Year-to-Date
September 30, September 30,
---------------------------------------------------------------
1999 1998 1999 1998
- --------------------------------------------------------------------------------------------------------------------

Earnings
Income (loss) before income
<S> <C> <C> <C> <C>
taxes and extraordinary items $ (349) $ 341 $ (862) $ 1,061
Capitalized interest (35) (52) (93) (121)
Equity in net losses of less
than 50% owned entities 94 63 227 81
- --------------------------------------------------------------------------------------------------------------------

Subtotal (290) 352 (728) 1,021
- --------------------------------------------------------------------------------------------------------------------

Fixed charges
Interest charges 242 241 706 650
Interest factor of operating
rents 81 54 213 201
- --------------------------------------------------------------------------------------------------------------------

Total fixed charges 323 295 919 851
- --------------------------------------------------------------------------------------------------------------------

Earnings, as adjusted $ 33 $ 647 $ 191 $ 1,872
---------------------------------------------------------------

Ratio of earnings to fixed charges(1) - 2.19 - 2.20
---------------------------------------------------------------

Note: The ratio was computed by dividing fixed charges into the sum of
earnings, after certain adjustments, and fixed charges. Earnings
include income from continuing operations before taxes, plus equity in
the net losses of less-than-50% owned entities, less capitalized
interest. Fixed charges include (a) interest on all debt of continuing
operations, including amortization of debt issuance costs, (b) the
interest component of operating rents, and (c) the pre-tax cost of
subsidiary preferred stock dividends.

(1)Earnings, as adjusted, were inadequate to cover fixed charges by $290
million in the 1999 third quarter and $728 million for the 1999
year-to-date period.

</TABLE>

<ARTICLE> 5
<MULTIPLIER> 1,000,000

<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> Dec-31-1999
<PERIOD-END> Sep-30-1999
<CASH> 426
<SECURITIES> 0
<RECEIVABLES> 3,549
<ALLOWANCES> 251
<INVENTORY> 694
<CURRENT-ASSETS> 5,589
<PP&E> 35,693
<DEPRECIATION> 14,917
<TOTAL-ASSETS> 37,984
<CURRENT-LIABILITIES> 6,318
<BONDS> 14,376
0
247
<COMMON> 2,222
<OTHER-SE> 11,297
<TOTAL-LIABILITY-AND-EQUITY> 37,984
<SALES> 0
<TOTAL-REVENUES> 14,756
<CGS> 0
<TOTAL-COSTS> 10,001
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 613
<INCOME-PRETAX> (862)
<INCOME-TAX> (238)
<INCOME-CONTINUING> (624)
<DISCONTINUED> 0
<EXTRAORDINARY> (21)
<CHANGES> 0
<NET-INCOME> (645)
<EPS-BASIC> 0<F1>
<EPS-DILUTED> 0<F1>
<FN>
<F1> FON Group EPS - Basic 1.33
FON Group EPS - Diluted 1.31
PCS Group EPS - Basic (3.97)
PCS Group EPS - Diluted (3.97)
In the 1999 second quarter, Sprint effected a two-for-one stock split of its FON
common stock. New shares were issued June 4, 1999 to shareholders of record on
May 13, 1999. Prior Financial Data Schedules have not been restated for this
stock split.
</FN>

</TABLE>

Annex I

SPRINT CORPORATION
Consolidated Financial Information

<PAGE>

CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) Sprint Corporation
(millions)
- --------------------------------------------- ----------------------------------- ----------------------------------
Quarters Ended Year-to-Date
September 30, September 30,
- --------------------------------------------- ----------------------------------- ----------------------------------
1999 1998 1999 1998
- --------------------------------------------- --- ------------- -- -------------- -- ------------- --- -------------

<S> <C> <C> <C> <C>
Net Operating Revenues $ 5,111 $ 4,335 $ 14,756 $ 12,600
- --------------------------------------------- --- ------------- -- -------------- -- ------------- --- -------------

Operating Expenses
Costs of services and products 2,531 2,166 7,326 6,363
Selling, general and administrative 1,709 1,318 4,881 3,729
Depreciation and amortization 935 703 2,675 1,961
- --------------------------------------------- --- ------------- -- -------------- -- ------------- --- -------------

Total operating expenses 5,175 4,187 14,882 12,053
- --------------------------------------------- --- ------------- -- -------------- -- ------------- --- -------------

Operating Income (Loss) (64) 148 (126) 547

Interest expense (207) (189) (613) (529)
Equity in loss of Global One (71) (33) (195) (120)
Other partners' loss in Sprint PCS - 368 - 1,008
Other income (expense), net (7) 47 72 155
- --------------------------------------------- --- ------------- -- -------------- -- ------------- --- -------------

Income (Loss) before income taxes and
extraordinary items (349) 341 (862) 1,061

Income taxes 93 (102) 238 (400)
- --------------------------------------------- --- ------------- -- -------------- -- ------------- --- -------------

Income (Loss) before Extraordinary Items (256) 239 (624) 661
Extraordinary items, net - - (21) (4)
- --------------------------------------------- --- ------------- -- -------------- -- ------------- --- -------------

Net Income (Loss) $ (256) 239 $ (645) 657
Preferred stock dividends paid --- ------------- - -- ------------- (1)
-- -------------- --- -------------

Earnings applicable to common stock $ 239 $ 656
-- -------------- --- -------------

See accompanying Condensed Notes to Consolidated Financial Statements.
</TABLE>

CONSOLIDATED STATEMENTS OF OPERATIONS (continued) Sprint Corporation
(Unaudited)
(millions, except per share data)
- --------------------------------------------------------------------------------------------------------------------
Quarters Ended September 30, 1999 1999 1998
- --------------------------------------------------------------------------------------------------------------------
-----------------------------------------------
FON PCS Sprint
Common Common Common
Stock Stock Stock
-----------------------------------------------

<S> <C> <C> <C>
Earnings (Loss) Applicable to Common Stock $ 361 $ (619) $ 239
-----------------------------------------------

Diluted Earnings (Loss) per Common Share $ 0.41 $ (1.31) $ 0.54
-----------------------------------------------
Diluted weighted average common shares 886.7 473.3 439.5
-----------------------------------------------

Basic Earnings (Loss) per Common Share $ 0.42 $ (1.31) $ 0.55

-----------------------------------------------
Basic weighted average common shares 869.4 473.3 431.6
-----------------------------------------------

DIVIDENDS PER COMMON SHARE
Sprint common stock N/A N/A $ 0.25
-----------------------------------------------
FON common stock $ 0.125 N/A N/A
-----------------------------------------------
</TABLE>

- --------------------------------------------------------------------------------------------------------------------
Year-to-Date September 30, 1999 1999 1998
- --------------------------------------------------------------------------------------------------------------------
-----------------------------------------------
FON PCS Sprint
Common Common Common Stock
Stock Stock
-----------------------------------------------

<S> <C> <C> <C>
Earnings (Loss) Applicable to Common Stock $ 1,156 $ (1,807) $ 656
-----------------------------------------------

Diluted Earnings (Loss) per Common Share
Income (Loss) before extraordinary items $ 1.31 $ (3.92) $ 1.50
Extraordinary items, net - (0.05) -
- --------------------------------------------------------------------------------------------------------------------

Total $ 1.31 $ (3.97) $ 1.50
-----------------------------------------------
Diluted weighted average common shares 884.3 455.1 438.7
-----------------------------------------------

Basic Earnings (Loss) per Common Share
Income (Loss) before extraordinary items $ 1.33 $ (3.92) $ 1.53
Extraordinary items, net - (0.05) (0.01)
- --------------------------------------------------------------------------------------------------------------------

Total $ 1.33 $ (3.97) $ 1.52

-----------------------------------------------
Basic weighted average common shares 866.4 455.1 430.7
-----------------------------------------------

DIVIDENDS PER COMMON SHARE
Sprint common stock N/A N/A $ 0.75
-----------------------------------------------
FON common stock $ 0.375 N/A N/A
-----------------------------------------------

Note: As discussed in Note 1 of Condensed Notes to Consolidated Financial
Statements, the Recapitalization occurred in November 1998. As a
result, basic and diluted earnings per common share for Sprint common
stock reflects earnings through the Recapitalization date, while basic
and diluted earnings (loss) per common share for FON common stock and
PCS common stock reflects results subsequent to that date. In the 1999
second quarter, Sprint effected a two-for-one stock split of its FON
common stock.

N/A = Not applicable

See accompanying Condensed Notes to Consolidated Financial Statements.
</TABLE>

<PAGE>

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) Sprint Corporation
(Unaudited)
(millions)

- --------------------------------------------- ----------------------------------- ----------------------------------
Quarters Ended Year-to-Date
September 30, September 30,
- --------------------------------------------- ----------------------------------- ----------------------------------
- --------------------------------------------- ----------------- ----------------- ---------------- -----------------
1999 1998 1999 1998
- --------------------------------------------- ----------------- ----------------- ---------------- -----------------

<S> <C> <C> <C> <C>
Net Income (Loss) $ (256) $ 239 $ (645) $ 657
- --------------------------------------------- --- ------------- -- -------------- -- ------------- --- -------------

Other Comprehensive Income (Loss)

Unrealized holding gains (losses) on
securities (4) 6 - 13
Income taxes 2 (2) - (5)
- --------------------------------------------- --- ------------- -- -------------- -- ------------- --- -------------
Net unrealized holding gains (losses) on
securities during the period (2) 4 - 8
Reclassification adjustment, net of tax - - (57) -
- --------------------------------------------- --- ------------- -- -------------- -- ------------- --- -------------
Total net unrealized holding gains (losses)
on securities (2) 4 (57) 8
Foreign currency translation adjustments - - - (2)
- --------------------------------------------- --- ------------- -- -------------- -- ------------- --- -------------

Total other comprehensive income (loss) (2) 4 (57) 6
- --------------------------------------------- --- ------------- -- -------------- -- ------------- --- -------------

Comprehensive Income (Loss) $ (258) $ 243 $ (702) $ 663
--- ------------- -- -------------- -- ------------- --- -------------

See accompanying Condensed Notes to Consolidated Financial Statements.
</TABLE>

<PAGE>

CONSOLIDATED BALANCE SHEETS Sprint Corporation
(millions)
- -------------------------------------------------------------------------------------------------------------------------
September 30, December 31,
1999 1998
- -------------------------------------------------------------------------------------------------------------------------
(Unaudited)
Assets
Current assets
<S> <C> <C>
Cash and equivalents $ 426 $ 605
Accounts receivable, net of allowance for doubtful accounts of
$251 and $186 3,298 2,690
Inventories 694 477
Prepaid expenses 340 260
Income tax receivable 338 171
Investments in equity securities 339 -
Other 154 184
- -------------------------------------------------------------------------------------------------------------------------
Total current assets 5,589 4,387

Investments in equity securities 46 489

Property, plant and equipment
FON Group 27,121 25,156
PCS Group 8,572 6,988
- -------------------------------------------------------------------------------------------------------------------------
Total property, plant and equipment 35,693 32,144
Accumulated depreciation (14,917) (13,161)
- -------------------------------------------------------------------------------------------------------------------------
Net property, plant and equipment 20,776 18,983

Investments in and advances to affiliates 747 645

Intangible assets
Goodwill 5,654 3,701
PCS licenses 3,062 3,037
Other 1,493 1,137
- -------------------------------------------------------------------------------------------------------------------------
Total intangible assets 10,209 7,875
Accumulated amortization (616) (182)
- -------------------------------------------------------------------------------------------------------------------------
Net intangible assets 9,593 7,693

Other assets 1,233 1,033
- -------------------------------------------------------------------------------------------------------------------------

Total $ 37,984 $ 33,230
-----------------------------------

See accompanying Condensed Notes to Consolidated Financial Statements.
</TABLE>

CONSOLIDATED BALANCE SHEETS (continued) Sprint Corporation
(millions, except per share data)
- -------------------------------------------------------------------------------------------------------------------------
September 30, December 31,
1999 1998
- -------------------------------------------------------------------------------------------------------------------------
(Unaudited)
Liabilities and Shareholders' Equity
Current liabilities
<S> <C> <C>
Current maturities of long-term debt $ 1,005 $ 247
Accounts payable 1,511 1,655
Construction obligations 936 979
Accrued interconnection costs 723 592
Accrued taxes 225 439
Advance billings 304 229
Other 1,614 1,299
- -------------------------------------------------------------------------------------------------------------------------
Total current liabilities 6,318 5,440
- -------------------------------------------------------------------------------------------------------------------------

Long-term debt and capital lease obligations 14,376 11,942

Deferred credits and other liabilities
Deferred income taxes and investment tax credits 1,905 1,830
Postretirement and other benefit obligations 1,056 1,064
Other 563 506
- -------------------------------------------------------------------------------------------------------------------------
Total deferred credits and other liabilities 3,524 3,400

Shareholders' equity
Common stock
Class A, par value $2.50 per share, 200.0 shares authorized, 86.2
shares issued and outstanding (each share represents the right to
one FON share and1/2PCS share) 216 216
FON, par value $2.00 per share, 4,200.0 shares authorized, 787.5 and 350.3
shares issued and 785.2 and 344.5 shares outstanding 1,575 701
PCS, par value $1.00 per share, 2,350.0 shares authorized, 431.0 and 375.4
shares issued and 431.0 and 372.7 shares outstanding 431 375
PCS preferred stock, no par, 0.3 shares authorized, 0.2 shares issued and
outstanding 247 247
Capital in excess of par or stated value 8,881 7,586
Retained earnings 2,549 3,651
Treasury stock, at cost, FON - 2.3 and 5.8 shares, PCS - 0.0 and 2.7 shares (181) (426)
Accumulated other comprehensive income 47 104
Other 1 (6)
- -------------------------------------------------------------------------------------------------------------------------

Total shareholders' equity 13,766 12,448
- -------------------------------------------------------------------------------------------------------------------------

Total $ 37,984 $ 33,230
-----------------------------------

See accompanying Condensed Notes to Consolidated Financial Statements.
</TABLE>

<PAGE>

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) Sprint Corporation
(millions)
- ------------------------------------------------------------------ ----------------- ----------------- ----------------
Year-to-Date September 30, 1999 1998
- ------------------------------------------------------------------ ----------------- ----------------- ----------------

Operating Activities

<S> <C> <C>
Net income (loss) $ (645) $ 657
Adjustments to reconcile net income (loss) to net cash provided
by operating activities:
Equity in net losses of affiliates 244 825
Extraordinary items, net 21 -
Depreciation and amortization 2,675 1,427
Deferred income taxes and investment tax credits 16 21
Changes in assets and liabilities:
Accounts receivable, net (606) (20)
Inventories and other current assets (637) (28)
Accounts payable and other current liabilities 402 553
Noncurrent assets and liabilities, net (95) (69)
Other, net (3) 14
- ------------------------------------------------------------------ --- ------------- --- ------------- -- -------------

Net cash provided by operating activities 1,372 3,380
- ------------------------------------------------------------------ --- ------------- --- ------------- -- -------------

Investing Activities

Capital expenditures (4,035) (2,992)
Investments in and loans to affiliates, net (397) (703)
Purchase of fixed wireless broadband companies, net of cash acquired (271) -
Other, net (81) (14)
- ------------------------------------------------------------------ --- ------------- --- ------------- -- -------------

Net cash used by investing activities (4,784) (3,709)
- ------------------------------------------------------------------ --- ------------- --- ------------- -- -------------

Financing Activities

Proceeds from long-term debt 4,944 946
Payments on long-term debt (2,417) (247)
Proceeds from common stock issued 967 49
Dividends paid (328) (292)
Treasury stock purchased (48) (235)
Other, net 115 54
- ------------------------------------------------------------------ --- ------------- --- ------------- -- -------------

Net cash provided by financing activities 3,233 275
- ------------------------------------------------------------------ --- ------------- --- ------------- -- -------------

Decrease in Cash and Equivalents (179) (54)
Cash and Equivalents at Beginning of Period 605 102
- ------------------------------------------------------------------ --- ------------- --- ------------- -- -------------

Cash and Equivalents at End of Period $ 426 $ 48
--- ------------- -- -------------

See accompanying Condensed Notes to Consolidated Financial Statements.
</TABLE>

<PAGE>

CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY (Unaudited) Sprint Corporation
(millions)
- ----------------------------------------------------------------------------------------------------------------------
Year-to-Date September 30, 1999
- ----------------------------------------------------------------------------------------------------------------------

PCS
Sprint Common Capital
Class A FON and In Excess
Common Common Preferred of Par or Retained Treasury
Stock Stock Stock Stated Earnings Stock Other Total
Value
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Beginning 1999 balance $ 216 $ 701 $ 622 $ 7,586 $ 3,651 $ (426) $ 98 $ 12,448
Net loss - - - - (645) - - (645)
FON common stock dividends - - - - (282) - - (282)
Class A common stock dividends - - - - (43) - - (43)
PCS preferred stock dividends - - - - (5) - - (5)
FON Series 3 common stock issued - 1 - 28 - - - 29
PCS Series 1 common stock issued - - 25 669 - - - 694
PCS Series 2 common stock issued - - 24 1,122 - - - 1,146
PCS Series 3 common stock issued - - 7 175 - - - 182
Two-for-one stock split - 873 - (873) - - - -
Treasury stock purchased - - - - - (48) - (48)
Treasury stock issued - - - - (125) 293 - 168
Tax benefit from stock options
exercised - - - 140 - - - 140
Other, net - - - 34 (2) - (50) (18)
- ----------------------------------------------------------------------------------------------------------------------

September 1999 balance $ 216 $1,575 $ 678 $ 8,881 $ 2,549 $(181) $ 48 $13,766
--------------------------------------------------------------------------------------

Shares Outstanding
- ------------------------------------------------------------------
Beginning 1999 balance 86.2 344.5 372.9
FON Series 3 common stock issued - 0.7 -
PCS Series 1 common stock issued - - 24.9
PCS Series 2 common stock issued - - 24.3
PCS Series 3 common stock issued - - 6.4
Two-for-one stock split - 433.5 -
Treasury stock purchased - (0.6) -
Treasury stock issued - 7.1 2.7
- ------------------------------------------------------------------

September 1999 balance 86.2 785.2 431.2
-------------------------------

See accompanying Condensed Notes to Consolidated Financial Statements.
</TABLE>

<PAGE>

CONDENSED NOTES TO CONSOLIDATED Sprint Corporation
FINANCIAL STATEMENTS (Unaudited)

The information in this Form 10-Q has been prepared according to Securities and
Exchange Commission (SEC) rules and regulations. In our opinion, the
consolidated interim financial statements reflect all adjustments, consisting
only of normal recurring accruals, needed to fairly present Sprint Corporation's
consolidated financial position, results of operations, cash flows and
comprehensive income.

Certain information and footnote disclosures normally included in consolidated
financial statements prepared according to generally accepted accounting
principles have been condensed or omitted. As a result, you should read these
financial statements along with Sprint Corporation's 1998 Form 10-K. Operating
results for the 1999 year-to-date period do not necessarily represent the
results that may be expected for the year ending December 31, 1999.

- --------------------------------------------------------------------------------
1. PCS Restructuring and Recapitalization
- --------------------------------------------------------------------------------

In November 1998, Sprint's shareholders approved the formation of the FON Group
and the PCS Group and the creation of the FON stock and the PCS stock. In
addition, Sprint purchased the remaining ownership interests in Sprint Spectrum
Holding Company, L.P. and PhillieCo, L.P. (together, Sprint PCS), other than a
minority interest in Cox Communications PCS, L.P. (Cox PCS). Sprint acquired
these ownership interests from Tele-Communications, Inc., Comcast Corporation
and Cox Communications, Inc. (the Cable Partners). In exchange, Sprint issued
the Cable Partners special low-vote PCS shares and warrants to acquire
additional PCS shares. Sprint also issued the Cable Partners shares of a new
class of preferred stock convertible into PCS shares. The purchase of the Cable
Partners' interests is referred to as the PCS Restructuring.

Also in November 1998, Sprint reclassified each of its publicly traded common
shares into one share of FON stock and 1/2 share of PCS stock. This
recapitalization was tax-free to shareholders. Each Class A common share owned
by France Telecom S.A. (FT) and Deutsche Telekom AG (DT) was reclassified to
represent an equity interest in the FON Group and the PCS Group that entitles FT
and DT to one share of FON stock and 1/2 share of PCS stock. These transactions
are referred to as the Recapitalization.

In connection with the PCS Restructuring, FT and DT purchased 5.1 million
additional PCS shares to maintain their combined 20% voting power in Sprint.

The PCS stock is intended to reflect the performance of Sprint's domestic
wireless personal communication services (PCS) operations. The FON stock is
intended to reflect the performance of all of Sprint's other operations.

- --------------------------------------------------------------------------------
2. Basis of Consolidation and Presentation
- --------------------------------------------------------------------------------

The consolidated financial statements include the accounts of Sprint and its
wholly owned and majority-owned subsidiaries. Sprint PCS' 1998 results of
operations have been consolidated. The Cable Partners' share of losses through
the PCS Restructuring date has been reflected as "Other partners' loss in Sprint
PCS" in the Consolidated Statements of Operations. Sprint PCS' financial
position has been reflected on a consolidated basis at year-end 1998. Sprint's
1998 year-to-date cash flows reflect the FON Group's operations as well as the
operations of SprintCom, Inc. and Sprint's investment in Sprint PCS.

Investments in entities in which Sprint exercises significant influence, but
does not control, are accounted for using the equity method (see Note 4).

The consolidated financial statements are prepared using generally accepted
accounting principles. These principles require management to make estimates and
assumptions that affect the reported amounts of assets and liabilities, the
disclosure of contingent assets and liabilities, and the reported amounts of
revenues and expenses. Actual results could differ from those estimates.

Certain prior-year amounts have been reclassified to conform to the current-year
presentation. These reclassifications had no effect on the results of operations
or shareholders' equity as previously reported.

<PAGE>

- --------------------------------------------------------------------------------
3. Acquisitions
- --------------------------------------------------------------------------------

In the 1999 third quarter, Sprint closed on its acquisitions of People's Choice
TV Corp. (PCTV) and American Telecasting, Inc. (ATI).

PCTV owns fixed wireless broadband licenses in several major markets in the
Midwest and Southwest. Sprint paid $152 million in cash for the outstanding
common and convertible preferred stock. In addition, Sprint assumed the $334
million par value debt of PCTV, consisting mainly of senior discount notes.
These notes were retired, prior to scheduled maturities, in the 1999 fourth
quarter (see Note 11).

ATI owns fixed wireless broadband licenses in several major markets in the North
Central and Western United States. Sprint paid $171 million in cash for ATI's
outstanding stock. In addition, Sprint assumed the $283 million par value debt
of ATI, consisting mainly of senior discount notes. These notes were retired,
prior to scheduled maturities, in the 1999 fourth quarter (see Note 11).

These acquisitions were accounted for as purchases. As a result, the financial
statements of PCTV and ATI have been consolidated in Sprint's consolidated
financial statements after the acquisition dates. The excess of the purchase
price over the net liabilities acquired was preliminarily allocated to goodwill,
and is being amortized on a straight-line basis over 40 years.

In the 1999 second quarter, Cox Communications, Inc. exercised a put option
requiring Sprint to purchase the remaining 40.8% interest in Cox PCS. Sprint
issued 24.3 million shares of low-vote PCS stock in exchange for this interest.
At that time, the shares were valued at $1.1 billion. Sprint accounted for the
transaction as a purchase. The excess of the purchase price over the fair value
of the net liabilities acquired totaled $1.2 billion and was allocated mainly to
goodwill, which is being amortized over 40 years.

<PAGE>

- --------------------------------------------------------------------------------
4. Investments
- --------------------------------------------------------------------------------

At the end of September 1999, investments accounted for using the equity method
consisted of the FON Group's investments in Global One, EarthLink, Call-Net and
other strategic investments.

In November 1998, Sprint assumed 100% ownership of Sprint PCS; as a result,
Sprint consolidated Sprint PCS' results in 1998. Combined, summarized financial
information (100% basis) of entities, exclusive of Sprint PCS, accounted for
using the equity method was as follows:

Quarters Ended Year-to-Date
September 30, September 30,
----------------------------------- ----------------------------------
1999 1998 1999 1998
- --------------------------------------------- --- ------------- -- -------------- -- ------------- --- -------------
(millions)
Results of operations
<S> <C> <C> <C> <C>
Net operating revenues $ 653 $ 628 $ 1,917 $ 1,680
--- ------------- -- -------------- -- ------------- --- -------------
Operating loss $ (239) $ (150) $ (632) $ (376)
--- ------------- -- -------------- -- ------------- --- -------------
Net loss $ (302) $ (192) $ (852) $ (493)
--- ------------- -- -------------- -- ------------- --- -------------
Sprint's net losses in affiliates $ (95) $ (54) $ (244) $ (140)
--- ------------- -- -------------- -- ------------- --- -------------

</TABLE>

<PAGE>

- --------------------------------------------------------------------------------
5. Income Taxes
- --------------------------------------------------------------------------------

The differences that caused Sprint's effective income tax rates to vary from the
35% federal statutory rate were as follows:

Year-to-Date
September 30,
-------------------------
1999 1998
- -------------------------------------------------------
(millions)
Income tax expense (benefit)
at the federal statutory $ (302) $ 371
rate
Effect of:
State income taxes, net
of federal income tax 11 27
effect
Equity in losses of
foreign joint ventures 35 10
Goodwill amortization 25 -
Other, net (7) (8)
- -------------------------------------------------------

Income tax expense (benefit) $ (238) $ 400
-------------------------

Effective income tax rate 27.6% 37.7%
-------------------------

- --------------------------------------------------------------------------------
6. Long-term Debt and Capital Lease Obligations
- --------------------------------------------------------------------------------

In the 1999 third quarter, Sprint filed a shelf registration statement with the
SEC covering $4.0 billion of senior unsecured debt securities. When issued, the
proceeds will be used mainly to repay debt. Sprint may also use a portion of the
proceeds for general purposes, including working capital requirements,
acquisitions, and new capital investments. Debt resulting from these borrowings
will be allocated to the FON Group or the PCS Group based on their cash
requirements.

In August 1999, Sprint borrowed $250 million from a financial institution. These
borrowings mature in 2002 and have variable interest rates.

In June 1999, Sprint entered into a $1.0 billion financing agreement to sell, on
a continuous basis with recourse, an undivided percentage ownership interest in
a designated pool of its accounts receivable. Subsequent collections of
receivables sold to investors are typically reinvested in new receivables.
Sprint borrowed $500 million under this agreement in the 1999 third quarter.

Proceeds from these borrowings were mainly used for new capital investments and
acquisitions.

In the 1999 second quarter, Sprint issued $3.5 billion of 5-year, 10-year and
20-year senior notes registered with the SEC. These notes have interest rates
ranging from 5.9% to 6.9%. The proceeds were used mainly to repay existing debt.

- --------------------------------------------------------------------------------
7. Stock Split
- --------------------------------------------------------------------------------

In April 1999, Sprint's Board of Directors approved a two-for-one stock split of
Sprint FON stock in the form of a dividend payable in Sprint FON shares. New
shares were issued on June 4, 1999 to shareholders of record on May 13, 1999. A
comparable dividend was paid on the Class A common stock owned by FT and DT. FON
Group earnings per common share, dividends per common share and weighted average
common shares for the prior periods have been restated to reflect the stock
split.

- --------------------------------------------------------------------------------
8. Litigation, Claims and Assessments
- --------------------------------------------------------------------------------

Seven purported class action suits were filed by shareholders in connection with
the proposed merger of Sprint and MCI/WorldCom. The suits allege that Sprint's
directors breached their fiduciary duties, and certain other duties, to
shareholders by entering into the merger agreement with MCI/WorldCom. Management
believes that the plaintiffs' claims are without merit.

Various other suits arising in the ordinary course of business are pending
against Sprint. Management cannot predict the final outcome of these actions but
believes they will not be material to Sprint's consolidated financial
statements.

<PAGE>

- --------------------------------------------------------------------------------
9. Segment Information
- --------------------------------------------------------------------------------

The FON Group operates in five business segments, based on services and
products: the long distance division, the local division, the product
distribution and directory publishing businesses, activities to develop and
deploy Sprint ION(SM) -- Integrated On-Demand Network, and other ventures. See
Note 9 of Sprint FON Group Condensed Notes to Combined Financial Statements for
more information about the FON Group's business segments.

The PCS Group businesses operate in a single segment.

Industry segment financial information was as follows:

- --------------------------------------------------------------------------------------------------------------------
Sprint Sprint Intergroup
Quarters Ended September 30, FON Group PCS Group Eliminations Consolidated
- --------------------------------------------------------------------------------------------------------------------
(millions)
1999
<S> <C> <C> <C> <C>
Net operating revenues $ 4,341 $ 844 $ (74) $ 5,111
Intergroup revenues 70 4 (74) -
Operating income (loss) 726 (790) - (64)

1998
Net operating revenues $ 4,039 $ 320 $ (24) $ 4,335
Intergroup revenues 24 - (24) -
Operating income (loss) 713 (565) - 148
- --------------------------------------------------------------------------------------------------------------------
</TABLE>

- --------------------------------------------------------------------------------------------------------------------
Sprint Sprint Intergroup
Year-to-Date September 30, FON Group PCS Group Eliminations Consolidated
- --------------------------------------------------------------------------------------------------------------------
(millions)
1999
<S> <C> <C> <C> <C>
Net operating revenues $ 12,757 $ 2,184 $ (185) $ 14,756
Intergroup revenues 179 6 (185) -
Operating income (loss) 2,199 (2,325) - (126)

1998
Net operating revenues $ 11,876 $ 788 $ (64) $ 12,600
Intergroup revenues 64 - (64) -
Operating income (loss) 2,088 (1,541) - 547
- --------------------------------------------------------------------------------------------------------------------
</TABLE>

<PAGE>

- --------------------------------------------------------------------------------
10. Supplemental Cash Flows Information
- --------------------------------------------------------------------------------

Sprint's cash paid (received) for interest and income taxes was as follows:
Year-to-Date
September 30,
-------------------------
1999 1998
- -------------------------------------------------------
(millions)
Interest (net of capitalized
interest) $ 449 $ 174
-------------------------
Income taxes $ (15) $ 279
-------------------------

Sprint's noncash activities included the following:

Year-to-Date
September 30,
-------------------------
1999 1998
- -------------------------------------------------------
(millions)
Capital lease obligations $ 86 $ 438
-------------------------
Common stock issued under
employee stock benefit
plans $ 98 $ 82
-------------------------
Tax benefit from stock
options exercised $ 140 $ 38
-------------------------
Common stock issued for Cox
PCS acquisition $ 1,146 $ -
-------------------------
Debt assumed in purchases of
fixed wireless broadband
companies $ 574 $ -
-------------------------

- --------------------------------------------------------------------------------
11. Subsequent Events
- --------------------------------------------------------------------------------

In October 1999, Sprint announced a definitive merger agreement with
MCI/WorldCom. Under the agreement, each share of Sprint FON stock will be
exchanged for $76 of MCI/WorldCom common stock, subject to a collar. In
addition, each share of Sprint PCS stock will be exchanged for one share of a
new WorldCom PCS tracking stock and 0.1547 shares of MCI/WorldCom common stock.
The terms of the WorldCom PCS tracking stock will be equivalent to those of
Sprint PCS stock and will track the performance of the company's PCS business.
The merger is subject to the approvals of Sprint and MCI/WorldCom stockholders
as well as approvals from the Federal Communications Commission, the Justice
Department, various state government bodies and foreign antitrust authorities.
The companies anticipate that the merger will close in the second half of 2000.

In October 1999, Sprint's Board of Directors declared dividends of 12.5 cents
per share on the Sprint FON common and Class A common stock. Dividends will be
paid December 29, 1999.

In October 1999, Sprint closed on its acquisitions of WBS, Videotron USA and
TTI, paying $314 million in cash. These acquisitions were accounted for as
purchases.

In October 1999, Sprint borrowed an additional $400 million under its financing
agreement to sell accounts receivable (see Note 6).

In November 1999, Sprint issued $750 million of 2-year notes registered with the
SEC. These notes have interest rates ranging from 6.4% to 6.5%.

In the 1999 fourth quarter, Sprint retired, prior to scheduled maturities, $613
million of the assumed fixed wireless broadband companies' par value debt with
interest rates ranging from 13.1% to 14.5%.

<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS OF Sprint Corporation
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

- --------------------------------------------------------------------------------
General
- --------------------------------------------------------------------------------

In connection with the PCS Restructuring, FT and DT purchased 5.1 million
additional PCS shares to maintain their combined 20% voting power in Sprint.

The PCS stock is intended to reflect the performance of Sprint's domestic
wireless personal communication services (PCS) operations. These operations are
referred to as the PCS Group.

The FON stock is intended to reflect the performance of all of Sprint's other
operations. These operations are referred to as the FON Group and include the
following:

- - Core businesses
- - Long distance division
- - Local division
- - Product distribution and directory publishing businesses
- - Activities to develop and deploy Sprint ION(SM), Integrated On-Demand
Network
- - Other ventures, including Sprint's investment in Global One.

FON and PCS shareholders are subject to the risks related to all of Sprint's
businesses, assets and liabilities. Owning FON or PCS shares does not represent
a direct legal interest in the assets and liabilities of the Groups. Rather,
shareholders remain invested in Sprint and continue to vote as a single voting
class for Board member elections (other than Class A directors elected by FT and
DT) and most other company matters.

FON Group or PCS Group events affecting Sprint's consolidated statements of
operations and balance sheets could, in turn, affect the other Group's financial
statements or stock price.

Net losses of either Group, and dividends or distributions on, or repurchases
of, PCS stock or FON stock, will reduce Sprint funds legally available for
dividends on both Groups' stock. Sprint does not expect to pay dividends on the
PCS shares in the foreseeable future.

Sprint's "Management's Discussion and Analysis of Financial Condition and
Results of Operations" (MD&A) should be read along with the FON Group's MD&A and
the PCS Group's MD&A.

<PAGE>

- --------------------------------------------------------------------------------
Recent Developments
- --------------------------------------------------------------------------------

In October 1999, Sprint announced a definitive merger agreement with
MCI/WorldCom. Under the agreement, each share of Sprint FON stock will be
exchanged for $76 of MCI/WorldCom common stock, subject to a collar. In
addition, each share of Sprint PCS stock will be exchanged for one share of a
new WorldCom PCS tracking stock and 0.1547 shares of MCI/WorldCom common stock.
The terms of the WorldCom PCS tracking stock will be equivalent to those of
Sprint PCS stock and will track the performance of the company's PCS business.
The merger is subject to the approvals of Sprint and MCI/WorldCom stockholders
as well as approvals from the Federal Communications Commission (FCC), the
Justice Department, various state government bodies and foreign antitrust
authorities. The companies anticipate that the merger will close in the second
half of 2000.

- --------------------------------------------------------------------------------
General Overview of the Sprint FON Group
- --------------------------------------------------------------------------------

Core Businesses

Long Distance Division

The long distance division is the nation's third-largest long distance phone
company. It operates a nationwide, all-digital long distance communications
network using state-of-the-art fiber-optic and electronic technology. The
division mainly provides domestic and international voice, video and data
communications services.

Local Division

The local division consists of regulated local phone companies serving over 7.9
million access lines in 18 states. It provides local phone services, access by
phone customers and other carriers to its local network, sales of
telecommunications equipment, and long distance services within certain regional
calling areas.

Product Distribution and Directory Publishing Businesses

The product distribution business provides wholesale distribution services of
telecommunications products. The directory publishing business publishes and
markets white and yellow page phone directories.

Sprint ION(SM)

Sprint ION extends Sprint's existing advanced network capabilities to the
customer and enables Sprint to provide the network infrastructure to meet
customers' demands for data, Internet, and video. It is also expected to be the
foundation for Sprint to provide new competitive local service.

Other Ventures

The "other ventures" segment includes the FON Group's investment in Global One,
a joint venture with FT and DT; EarthLink Network, Inc., an Internet service
provider; Call-Net, a long distance provider in Canada operating under the
Sprint brand name; and certain other telecommunications investments and
ventures. All of these investments are accounted for on the equity basis.

Beginning in the 1999 third quarter, this segment also includes the on-going
operations, mainly consisting of cable TV service, of Sprint's newly acquired
fixed wireless broadband companies.

- --------------------------------------------------------------------------------
General Overview of the Sprint PCS Group
- --------------------------------------------------------------------------------

The PCS Group includes Sprint's domestic wireless PCS operations. It operates
the only 100% digital PCS wireless network in the United States with licenses to
provide service nationwide using a single frequency and a single technology. At
the end of September 1999, the PCS Group, together with certain affiliates,
operated PCS systems in 290 metropolitan markets, including the 50 largest U.S.
metropolitan areas. The PCS Group has licenses to serve more than 270 million
people in all 50 states, Puerto Rico and the U.S. Virgin Islands. The service
offered by the PCS Group and its affiliates now reaches 180 million people. The
PCS Group provides nationwide service through:

- - operating its own digital network in major U.S. metropolitan areas,
- - affiliating with other companies, mainly in and around smaller U.S.
metropolitan areas,
- - roaming on other providers' analog cellular networks using
dual-band/dual-mode handsets, and
- - roaming on other providers' digital PCS networks that use code division
multiple access.

<PAGE>

- --------------------------------------------------------------------------------
Results of Operations
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>

Consolidated

Total net operating revenues were as follows:

Quarters Ended Year-to-Date
September 30, September 30,
----------------------------------- ----------------------------------
1999 1998 1999 1998
- --------------------------------------------- --- ------------- -- -------------- -- ------------- --- -------------
(millions)
<S> <C> <C> <C> <C>
FON Group $ 4,341 $ 4,039 $ 12,757 $ 11,876
PCS Group 844 320 2,184 788
Intergroup eliminations (74) (24) (185) (64)
- --------------------------------------------- --- ------------- -- -------------- -- ------------- --- -------------
Net operating revenues $ 5,111 $ 4,335 $ 14,756 $ 12,600
--- ------------- -- -------------- -- ------------- --- -------------
</TABLE>

Income (Loss) before extraordinary items was as follows:

Quarters Ended Year-to-Date
September 30, September 30,
----------------------------------- ----------------------------------
1999 1998 1999 1998
- --------------------------------------------- --- ------------- -- -------------- -- ------------- --- -------------
(millions)
<S> <C> <C> <C> <C>
FON Group $ 359 $ 415 $ 1,151 $ 1,135
PCS Group (615) (176) (1,775) (474)
- --------------------------------------------- --- ------------- -- -------------- -- ------------- --- -------------
Income (Loss) before extraordinary items $ (256) $ 239 $ (624) $ 661
--- ------------- -- -------------- -- ------------- --- -------------
</TABLE>

Sprint FON Group

Quarters Ended Year-to-Date
September 30, September 30,
----------------------------------- ----------------------------------
1999 1998 1999 1998
- --------------------------------------------- --- ------------- -- -------------- -- ------------- --- -------------
(millions)
<S> <C> <C> <C> <C>
Net operating revenues $ 4,341 $ 4,039 $ 12,757 $ 11,876
Operating expenses 3,615 3,326 10,558 9,788
- --------------------------------------------- --- ------------- -- -------------- -- ------------- --- -------------
Operating income $ 726 $ 713 $ 2,199 $ 2,088
--- ------------- -- -------------- -- ------------- --- -------------

Operating margin 16.7% 17.7% 17.2% 17.6%
--- ------------- -- -------------- -- ------------- --- -------------

</TABLE>

<PAGE>

Net Operating Revenues

Net operating revenues were $4.3 billion for the 1999 third quarter, an increase
of 7% from $4.0 billion for the same 1998 period. Net operating revenues for the
first nine months in 1999 increased 7% to $12.8 billion from $11.9 billion for
the same 1998 period. These increases mainly reflect growth in the FON Group's
long distance and local divisions.

Long Distance Division

All major market segments--business, residential and wholesale--contributed to
the increase in net operating revenues in both the 1999 third quarter and
year-to-date periods from the same 1998 periods. These increases mainly reflect
strong data services revenue growth and a 23% increase in calling volumes,
partly offset by a more competitive pricing environment.

Business and data market revenues increased 5% in the 1999 third quarter and 9%
for the 1999 year-to-date period from the same 1998 periods. These increases
mainly reflect growth in data services.

Residential market revenues increased 6% in the 1999 third quarter and
year-to-date periods from the same 1998 periods. These increases reflect strong
volume growth in residential long distance calls, partly offset by lower
domestic and international rates.

<PAGE>

Wholesale market revenues increased 24% in the 1999 third quarter and 14% in the
1999 year-to-date period from the same 1998 periods. These increases reflect
strong minute growth mainly from international calls and increased inbound and
outbound toll-free calls.

Local Division

Local division revenues increased 6% in the 1999 third quarter and year-to-date
periods from the same 1998 periods. These increases mainly reflect customer
access line growth and increased sales of network-based services such as Caller
ID and Call Waiting. Customer access lines increased 5% during the past 12
months. Sales of network-based services increased due to strong demand for
bundled services which combine local service, network-based features and long
distance calling.

Local service revenues grew 8% in the 1999 third quarter and 9% in the 1999
year-to-date period from the same 1998 periods because of customer access line
growth and strong demand for bundled services. Revenue growth also reflects
increased sales of private line services and revenues from maintaining customer
wiring and equipment.

Network access revenues increased 6% in the 1999 third quarter and 4% in the
1999 year-to-date period from the same 1998 periods reflecting an 8% increase in
minutes of use and the implementation of local number portability charges. These
increases were partly offset by FCC-mandated access rate reductions.

Toll service revenues decreased 11% in the 1999 third quarter and 14% in the
1999 year-to-date period from the same 1998 periods, mainly reflecting increased
competition, which is expected to continue, in the intraLATA long distance
market. In addition, toll service areas are shrinking as certain local calling
areas are expanding. The reduced revenues were offset, in part, by increases in
local service revenues due to expanded local calling areas, and by increases in
network access revenues paid by other carriers providing intraLATA long distance
services to the local division's customers. In addition, nearly one-third of the
toll customers the local division has lost have selected Sprint's long distance
division for intraLATA long distance service, which helps mitigate the erosion
of these revenues.

Other revenues increased 5% in the 1999 third quarter and year-to-date periods
from the same 1998 periods reflecting increased revenues from commissions,
telemarketing services and improvements in uncollectibles.

Product Distribution & Directory Publishing Businesses

The product distribution and directory publishing businesses' revenues were flat
in the 1999 third quarter and increased 3% in the 1999 year-to-date period
compared to the same 1998 periods. Nonaffiliated revenues accounted for over
one-half of revenues in both the 1999 and 1998 third quarter and year-to-date
periods. Nonaffiliated revenues increased 10% in the 1999 third quarter compared
to the same 1998 period, but were largely offset by a decrease in product sales
to affiliates. In the 1999 year-to-date period nonaffiliated revenues increased
11% from the same 1998 period, but were only partly offset by a decrease in
product sales to affiliates.

Operating Expenses

The FON Group's operating expenses increased 9% in the 1999 third quarter and 8%
in the 1999 year-to-date period from the same 1998 periods mainly to support
revenue growth.

Long Distance Division

Long distance division operating expenses increased 6% in the 1999 third quarter
and 7% in the 1999 year-to-date period from the same 1998 periods.

Interconnection costs increased reflecting increased calling volumes in 1999,
partly offset by reductions in per-minute costs for both domestic and
international access. The domestic rate reductions were generally due to
FCC-mandated access rate reductions. Lower international per minute costs
reflect continued competition. Sprint expects government deregulation and
competitive pressures to add to the trend of declining unit costs for
international interconnection. The increase in interconnection costs also
reflects growth in non-minute driven revenues.

Operations expense increased in the 1999 third quarter because of an increase in
network costs, due to growth in data services and increases in network equipment
operating leases. Operations expense decreased in the 1999 year-to-date period
because of a decrease in product and service costs due to a decrease in
equipment sales, partly offset by the increased network costs.

<PAGE>

Selling, general and administrative (SG&A) expense increased mainly reflecting
the overall growth of the business as well as increased marketing and promotions
in the first half of 1999 to support products and services, including the
rollout of an airline alliance program which enables customers to earn frequent
flyer miles when they use Sprint's services.

Depreciation and amortization expense increased reflecting an increased asset
base to enhance network reliability, meet increased demand for voice and
data-related services and upgrade capabilities for providing new products and
services.

Local Division

The following local division discussion assumes the sale of exchanges occurred
at the beginning of 1998. See "Net Operating Revenues--Local Division" for more
details.

Local division operating expenses increased 5% in the 1999 third quarter and 6%
for the 1999 year-to-date period from the same 1998 periods. Costs of services
and products increased reflecting customer access line growth, increased
equipment sales and storm related costs.

SG&A was flat as continued emphasis on cost control offset increased marketing
costs to promote new products and services and increased customer service costs
related to customer access line growth.

Depreciation and amortization expense increased reflecting increased capital
expenditures in switching and transport technologies which have shorter asset
lives.

Product Distribution & Directory Publishing Businesses

Operating expenses decreased 1% in the 1999 third quarter and increased 3% in
the 1999 year-to-date period compared to the same 1998 periods. The third
quarter decrease is driven by lower product costs. The year-to-date increase is
a result of staffing demands and increased cost of sales related to sales
growth, partly offset by lower product costs.

Sprint ION(SM)

Other Ventures

In the 1998 year-to-date period, the "other ventures" segment's operating
expenses mainly reflect activities related to offering Internet services. In
June 1998, Sprint completed the strategic alliance to combine its Internet
business with EarthLink. As part of the alliance, EarthLink obtained the Sprint
Internet Passport customers and took over the day-to-day operations of those
services. At the same time, Sprint acquired an equity interest in EarthLink.

<PAGE>

Sprint PCS Group

Quarters Ended Year-to-Date
September 30, September 30,
----------------------------------- ----------------------------------
1999 1998 1999 1998
- --------------------------------------------- --- ------------- -- -------------- -- ------------- --- -------------
(millions)
<S> <C> <C> <C> <C>
Net operating revenues $ 844 $ 320 $ 2,184 $ 788
Operating expenses 1,634 885 4,509 2,329
- --------------------------------------------- --- ------------- -- -------------- -- ------------- --- -------------
Operating loss $ (790) $ (565) $ (2,325) $ (1,541)
--- ------------- -- -------------- -- ------------- --- -------------

</TABLE>

The PCS Group markets its products through multiple distribution channels,
including its own retail stores as well as other retail outlets. Equipment sales
to one retailer, and the related service revenues generated by such sales,
accounted for 29% of net operating revenues in the 1999 third quarter and
year-to-date periods.

Net Operating Revenues

The PCS Group's net operating revenues include subscriber revenues and sales of
handsets and accessory equipment. Subscriber revenues consist of monthly
recurring charges and usage charges. Net operating revenues increased 164% in
the 1999 third quarter and 177% in the 1999 year-to-date period from the same
1998 periods reflecting a 168% increase in the number of customers over the past
12 months. The PCS Group added 720,000 customers in the 1999 third quarter and
ended the quarter with nearly 4.7 million customers in 290 metropolitan markets
nationwide. Average monthly service revenue per user (ARPU) was $54 for the 1999
third quarter compared to $55 for the same 1998 period. ARPU was $54 for the
1999 year-to-date period compared to $57 for the same 1998 period. ARPU has
decreased from prior-year periods due to a wider acceptance of lower-priced,
bundled minute rate plans.

Approximately 18% of net operating revenues were from sales of handsets and
accessories. As part of the PCS Group's marketing plans, handsets are normally
sold at prices below the PCS Group's cost.

Operating Expenses

The PCS Group's costs of services and products mainly includes handset and
accessory costs, interconnection costs, and switch and cell site expenses. These
costs increased 96% in the 1999 third quarter and 107% in the 1999 year-to-date
period from the same 1998 periods reflecting the significant growth in customers
and expanded market coverage, partly offset by a reduction in handset unit
costs.

SG&A expense mainly includes salary and benefits costs as well as marketing
costs to promote products and services. SG&A expense increased 76% in the 1999
third quarter and year-to-date periods from the same 1998 periods reflecting an
expanded workforce to support subscriber growth and increased marketing and
selling costs.

Depreciation and amortization expense consists of depreciation of network assets
and amortization of intangible assets. The intangible assets include goodwill,
PCS licenses, customer base, microwave relocation costs and assembled workforce,
which are being amortized over three to 40 years.

Depreciation and amortization expense increased 85% in the 1999 third quarter
and 107% in the 1999 year-to-date period from the same 1998 periods reflecting
amortization of intangible assets acquired in the PCS Restructuring in the 1998
fourth quarter and in the Cox PCS purchase in the 1999 second quarter. It also
reflects depreciation of the network assets placed in service during 1999 and
1998. On a pro forma basis, assuming the PCS Restructuring occurred at the
beginning of 1998, depreciation and amortization expense would have increased
56% in the 1999 third quarter and 46% in the 1999 year-to-date period from the
same 1998 periods.

<PAGE>

- --------------------------------------------------------------------------------
Nonoperating Items
- --------------------------------------------------------------------------------

Interest Expense

The effective interest rates in the following table reflect interest expense on
long-term debt only. Interest costs on short-term borrowings classified as
long-term debt, deferred compensation plans and customer deposits have been
excluded so as not to distort the effective interest rate on long-term debt.

Effective interest rate on
<S> <C> <C> <C> <C> <C>
long-term debt (1) 6.9% 8.9% 7.1% 8.8%
--- ------------- -- -------------- -- ------------- --- -------------

(1) The effective interest rate on long-term debt for the 1998 third quarter and
year-to-date periods is on a pro forma basis as if Sprint PCS long-term debt
had been included in Sprint's outstanding long-term debt balance during
those periods.
</TABLE>

The decrease in Sprint's effective interest rate for the 1999 third quarter and
year-to-date periods mainly reflects increased borrowings with lower interest
rates.

<PAGE>

Global One

Global One's revenues totaled $252 million in the 1999 third quarter compared to
$278 million for the same 1998 period. Year-to-date revenues were $748 million
in 1999 compared to $801 million for the same period a year ago. Global One
revenues continue to be impacted by regional economic conditions and competitive
pricing pressures.

Sprint recorded losses related to Global One totaling $71 million in the 1999
third quarter and $195 million in the 1999 year-to-date period compared to $33
million and $120 million for the same periods a year ago. Sprint's 1999 third
quarter and year-to-date losses include a $12 million charge for foreign
currency exchange losses. The 1999 year-to-date loss also includes a $27 million
charge for fixed asset write-offs.

Sprint, FT and DT have been in discussions regarding restructuring the ownership
of Global One, although no decisions have been made at this time. On October 4,
1999, Sprint sent to FT and DT a "Notice of Impasse", and can now send a
"Termination Notice" that would trigger the buy/sell provisions contained in the
joint venture agreement. Sprint, however, has informed FT and DT that it will
postpone sending a Termination Notice for the time being while the parties
attempt to reach a negotiated settlement. FT and DT have stated their belief
that the Notice of Impasse was not properly invoked.

Other Partners' Loss in Sprint PCS

Prior to the PCS Restructuring, Sprint's ownership interest in Sprint PCS was
accounted for using the equity method. In 1998, the Cable Partners' share of
losses through the PCS Restructuring date has been reflected as "Other partners'
loss in Sprint PCS" in the Consolidated Statements of Operations.

<PAGE>

Other Income (Expense), Net
<TABLE>
<CAPTION>

Other income (expense) consisted of the following:

Quarters Ended Year-to-Date
September 30, September 30,
----------------------------------- ----------------------------------
1999 1998 1999 1998
- --------------------------------------------- --- ------------- -- -------------- -- ------------- --- -------------
(millions)
<S> <C> <C> <C> <C>
Dividend and interest income $ 7 $ 18 $ 19 $ 54
Minority interest in Cox PCS - 37 20 109
Net gains from equity investments - - 35 -
Other, net (14) (8) (2) (8)
- --------------------------------------------- --- ------------- -- -------------- -- ------------- --- -------------

Total $ (7) $ 47 $ 72 $ 155
--- ------------- -- -------------- -- ------------- --- -------------

</TABLE>

Dividend and interest income for the 1999 and 1998 third quarter and
year-to-date periods reflects interest earned on temporary investments.

Income Taxes

See Note 5 of Condensed Notes to Consolidated Financial Statements for
information about the differences that caused the effective income tax rates to
vary from the statutory federal rate.

Extraordinary Items, Net

In the 1999 first quarter, Sprint terminated some of the PCS Group's revolving
credit facilities and repaid, prior to scheduled maturities, the related
outstanding balance of $1.7 billion. These facilities had interest rates ranging
from 5.6% to 6.3%. This resulted in a $21 million after-tax extraordinary loss
for the PCS Group.

In the 1998 first quarter, Sprint redeemed, prior to scheduled maturities, $115
million of FON Group debt with a 9.25% interest rate. This resulted in a $4
million after-tax extraordinary loss for the FON Group.

<PAGE>

- --------------------------------------------------------------------------------
Financial Condition
- --------------------------------------------------------------------------------

September 30, December 31,
1999 1998
--------------------------------
(millions)
Consolidated assets $ 37,984 $ 33,230
--------------------------------

Net property, plant and equipment increased $1.8 billion in the 1999
year-to-date period reflecting capital expenditures to support the PCS network
buildout and expansion, the core long distance and local network enhancements,
and Sprint ION development and hardware deployment. In addition, net intangible
assets increased $1.9 billion in the 1999 year-to-date period mainly reflecting
the 1999 second quarter acquisition of the remaining interest in Cox PCS and the
third quarter acquisitions of fixed wireless broadband companies. See "Liquidity
and Capital Resources" for more information about changes in Sprint's
Consolidated Balance Sheets.

- --------------------------------------------------------------------------------
Liquidity and Capital Resources
- --------------------------------------------------------------------------------

Consolidated year-to-date 1998 cash flows reflect the FON Group's operations as
well as the operations of SprintCom, Inc. and Sprint's investment in Sprint PCS.

Operating Activities

Year-to-Date
September 30,
-------------------------------
1999 1998
-------------------------------
(millions)
Cash flows provided
by operating $ 1,372 $ 3,380
activities
-------------------------------

Operating cash flows decreased 59% in the 1999 year-to-date period mainly
reflecting increased outflows from working capital for the FON Group as well as
increased operating losses for the PCS Group.

Investing Activities

Year-to-Date
September 30,
-------------------------------
1999 1998
-------------------------------
(millions)
Cash flows used by
investing $ (4,784) $ (3,709)
activities
-------------------------------

The FON Group's capital expenditures totaled $2.5 billion in the 1999
year-to-date period and $2.3 billion for the same period a year ago. Long
distance capital expenditures were incurred mainly to enhance network
reliability, meet increased demand for voice and data-related services and
upgrade capabilities for providing new products and services. The local division
incurred capital expenditures to accommodate access line growth and expand
capabilities for providing enhanced services. Sprint ION capital expenditures
were made for continuing development and hardware deployment. PCS Group capital
expenditures were $1.6 billion in the 1999 year-to-date period and $672 million
for the same 1998 period for SprintCom, Inc. alone. Capital expenditures in both
years were mainly for the continued buildout and expansion of the PCS network.

"Investments in and loans to affiliates, net" consisted of the following:

Year-to-Date
September 30,
-------------------------------
1999 1998
-------------------------------
(millions)
Sprint PCS
Capital contributions $ - $ 194
Loans and advances - 114
- ------------------------------------------------------
- 308
- ------------------------------------------------------

Global One
Capital contributions 292 284
Advances, net (4) (119)
- ------------------------------------------------------
288 165
- ------------------------------------------------------

Other, net 109 230
- ------------------------------------------------------

Total $ 397 $ 703
-------------------------------

In both the 1999 and 1998 year-to-date periods, "Other, net" includes an
investment in EarthLink by the FON Group. Capital contributions to Global One in
the 1999 and 1998 year-to-date periods were mainly used to repay advances and to
fund capital and operating requirements. Amounts for Sprint PCS in 1998 reflect
contributions and advances prior to the PCS Restructuring. These amounts were
used to fund capital and operating requirements.

Investing activities in 1999 also include cash payments for acquisitions of
companies owning fixed wireless broadband licenses.

Financing Activities
Year-to-Date
September 30,
-------------------------------
1999 1998
- ------------------------------------------------------
(millions)
Cash flows provided
by financing $ 3,233 $ 275
activities
-------------------------------

Financing activities in the 1999 year-to-date period reflect net proceeds from
common stock issued of $967 million. They also reflect debt issuances of $4.9
billion partly offset by repayment of existing debt. In the 1998 year-to-date
period, financing activities mainly reflect proceeds from long-term debt
issuances partly offset by repayment of existing debt.

Sprint paid cash dividends of $328 million in the first nine months of 1999 and
$292 million for the same period a year ago.

Capital Requirements

Sprint's 1999 investing activities, mainly consisting of capital expenditures
and investments in affiliates, are expected to require cash of $6.5 to $7.0
billion. FON Group capital expenditures are expected to range between $3.8 and
$4.0 billion. Sprint ION is expected to require $600 to $700 million of this
amount. PCS Group capital expenditures are expected to be between $2.4 and $2.6
billion. Additional funds will be required to fund the PCS Group's expected
operating losses, working capital and debt service requirements. Investments in
affiliates are expected to require cash of $300 to $400 million. Dividend
payments are expected to total $450 million in 1999.

In connection with the PCS Restructuring, Sprint adopted a tax sharing agreement
that provides for the allocation of income taxes between the FON Group and the
PCS Group. Sprint expects the FON Group to continue to make significant payments
to the PCS Group under this agreement because of expected PCS Group operating
losses.

The 1999 acquisitions of companies owning fixed wireless broadband licenses are
expected to require cash of $600 to $700 million for the acquisition of equity.
These acquisitions also involve the assumption of debt of $600 to $700 million.
See Notes 3 and 11 of Condensed Notes to Consolidated Financial Statements.

Liquidity

In February 1999, Sprint completed an offering of Series 1 PCS stock. In this
offering, Sprint sold 24.4 million shares at a price to the public of $28.75 per
share. The net proceeds to Sprint totaled $673 million. In connection with this
offering, FT and DT purchased 6.1 million shares of Series 3 PCS stock. The net
proceeds from the public offering and purchase by FT and DT were attributed to
the PCS Group and were used for the continued buildout of the PCS network and to
fund operating and working capital needs.

In May 1999, Sprint issued $3.5 billion of senior notes registered with the
Securities and Exchange Commission (SEC). The proceeds were used mainly to repay
existing debt. Sprint allocated $3.1 billion of the proceeds to the PCS Group
with the remainder being allocated to the FON Group. In June 1999, Sprint
entered into a $1.0 billion financing agreement to sell, on a continuous basis
with recourse, an undivided percentage ownership interest in a designated pool
of its accounts receivable. Subsequent collections of receivables sold to
investors are typically reinvested in new receivables. Sprint borrowed $500
million under this agreement in the 1999 third quarter. The proceeds were
allocated to the FON Group and mainly used for new capital investments and
acquisitions. Sprint borrowed an additional $400 million under this agreement in
the 1999 fourth quarter.

In July 1999, Sprint filed a shelf registration statement with the SEC covering
$4.0 billion of senior unsecured debt securities. When issued, the proceeds will
be used mainly to repay debt. Sprint may also use a portion of the proceeds for
general purposes, including working capital requirements, acquisitions, and new
capital investments. In the 1999 fourth quarter, Sprint issued $750 million of
these registered securities.

In the 1999 third quarter, Sprint borrowed $250 million of long-term debt from a
financial institution. The proceeds were allocated to the FON Group and mainly
used for new capital investments and acquisitions.

Borrowings during the remainder of 1999 will be allocated to the FON Group or
the PCS Group based on their cash requirements.

Any borrowings Sprint may incur are ultimately limited by certain debt
covenants. Sprint could borrow up to $13.6 billion at the end of September 1999
under the most restrictive of its debt covenants.

- --------------------------------------------------------------------------------
Financial Strategies
- --------------------------------------------------------------------------------

General Hedging Policies

Sprint selectively enters into interest rate swap and cap agreements to manage
its exposure to interest rate changes on its debt. Sprint also enters into
forward contracts and options in foreign currencies to reduce the impact of
changes in foreign exchange rates. Sprint seeks to minimize counterparty credit
risk through stringent credit approval and review processes, the selection of
only the most creditworthy counterparties, continual review and monitoring of
all counterparties, and thorough legal review of contracts. Sprint also controls
exposure to market risk by regularly monitoring changes in foreign exchange and
interest rate positions under normal and stress conditions to ensure they do not
exceed established limits.

<PAGE>

Sprint's derivative transactions are used for hedging purposes only and comply
with Board-approved policies. Senior management receives frequent status updates
of all outstanding derivative positions.

Interest Rate Risk Management

Sprint's interest rate risk management program focuses on minimizing exposure to
interest rate movements, setting an optimal mixture of floating- and fixed-rate
debt, and minimizing liquidity risk. Sprint uses simulation analysis to assess
its interest rate exposure and establish the desired ratio of floating- and
fixed-rate debt. To the extent possible, Sprint manages interest rate exposure
and the floating-to-fixed ratio through its borrowings, but sometimes uses
interest rate swaps and caps to adjust its risk profile.

Foreign Exchange Risk Management

Sprint's foreign exchange risk management program focuses on hedging transaction
exposure to optimize consolidated cash flow. Sprint's main transaction exposure
results from net payments made to overseas telecommunications companies for
completing international calls made by Sprint's domestic customers. The exposure
from these international transactions was not material to the consolidated
financial position, results of operations or cash flows at September 30, 1999.
In addition, foreign currency transaction gains and losses were not material to
Sprint's year-to-date 1999 results of operations. Sprint has not entered into
any significant foreign currency forward contracts or other derivative
instruments to hedge the effects of adverse fluctuations in foreign exchange
rates. As a result, Sprint was not subject to material foreign exchange risk.

- --------------------------------------------------------------------------------
Year 2000 Issue
- --------------------------------------------------------------------------------

The "Year 2000" issue affects Sprint's installed computer systems, network
elements, software applications and other business systems that have
time-sensitive programs that may not properly reflect or recognize the year
2000. Because many computers and computer applications define dates by the last
two digits of the year, "00" may not be properly identified as the year 2000.
This error could result in miscalculations or systems failures. The Year 2000
issue may also affect the systems and applications of Sprint's customers,
vendors, resellers or affiliates.

The FON Group started a program in 1996 to identify and address the Year 2000
issue. It has completed an inventory and Year 2000 assessment of its principal
computer systems, network elements, software applications and other business
systems. The FON Group has also completed the renovation, testing and virtually
all of the deployment of these computer systems, network elements, software
applications and other business systems. Year 2000 testing began in the 1998
third quarter and was completed in September 1999. Additional testing will
continue for the remainder of the year to maintain Year 2000 readiness for all
systems and networks. The FON Group is using both internal and external
resources to identify, correct or reprogram, and test its systems for Year 2000
readiness. It has contacted others with whom it conducts business to receive the
proper warranties and assurances that those third parties, including affiliates,
are or will be Year 2000 compliant.

The PCS Group has completed the inventory, assessment, renovation and testing of
its computer systems, network elements, software applications, products and
other business systems. Additional testing will continue for the remainder of
the year to maintain Year 2000 readiness for all systems and networks.
Substantially all of the PCS Group's software applications and network elements
have met Sprint's Year 2000 Program requirements and have been deployed. The PCS
Group is using both internal and external resources to identify, correct or
reprogram, and test its systems for Year 2000 readiness. It expects Year 2000
compliance for all systems to be achieved in 1999.

The PCS Group has also contacted others with whom it conducts business to
receive the proper warranties and assurances that those third parties, including
affiliates, are or will be Year 2000 compliant. The PCS Group relies on
third-party vendors for a significant portion of its important operating and
computer system functions and is highly dependent on those third-party vendors
to remediate and test network elements, computer systems, software applications
and other business systems. However, the PCS Group has reviewed test results
provided by its vendors to help ensure Year 2000 compliance. In addition, the
PCS Group uses publicly available services that are acquired without contract,
such as global positioning system timing signal, that may be affected by the
Year 2000 issue. While the PCS Group believes these publicly available systems
will be Year 2000 compliant, the PCS Group has no contractual or other right to
force compliance.

The FON Group incurred approximately $255 million from inception through
September 1999 for its Year 2000 remediation program and expects to incur
approximately $10 million through the remainder of 1999. The PCS Group incurred
approximately $40 million from inception through September 1999 for its Year
2000 remediation program and expects to incur approximately $10 million through
the remainder of 1999. These programs are designed to assure the proper
functioning of critical and secondary elements for Year 2000 compliance. When
these programs are fulfilled, Sprint has a high degree of confidence that
elements within its control will function through the upcoming date changes.
However, there is a remaining risk stemming from elements vulnerable to the Year
2000 problem which are beyond Sprint's control. For example, both the FON Group
and the PCS Group interconnect with numerous third party carriers and utilities.
Sprint has taken measures to assure that these third parties will continue to
function through any date related difficulties, but ultimately Sprint does not
have control over their success. Sprint is continuing to focus on identifying
and addressing all aspects of its operations that may be affected by the Year
2000 issue.

Sprint is evaluating events beyond its control that could occur before and after
the arrival of the year 2000. Sprint has reviewed its existing disaster recovery
plans and developed additional contingency and business continuity plans to
prepare for the year 2000. All of these plans were complete at the end of the
third quarter. Sprint will implement, if necessary, appropriate contingency and
business continuity plans to mitigate to the extent possible the effects of any
Year 2000 noncompliance.

Sprint has reviewed the risks related to a worst case scenario that could result
from a Year 2000 related failure. This scenario could result in a temporary
disruption to normal business operations and could impact Sprint's financial
performance. Based upon the work completed to date, Sprint believes that such an
occurrence is unlikely. Nevertheless, certain elements related to the Year 2000
readiness of suppliers, utilities, interconnecting carriers and customers are
beyond Sprint's control and could fail. Sprint does not believe that the failure
of such elements could cause a major breakdown within its normal business
operations.

- --------------------------------------------------------------------------------
Forward-looking Information
- --------------------------------------------------------------------------------

Sprint includes certain estimates, projections and other forward-looking
statements in its reports, in presentations to analysts and others, and in other
publicly available material. Future performance cannot be ensured. Actual
results may differ materially from those in the forward-looking statements. Some
factors that could cause actual results to differ include:

- the effects of vigorous competition in the markets in which Sprint
operates;

- the costs and business risks related to entering and expanding new
markets necessary to provide seamless services and new services;

- the ability of the PCS Group to grow its market presence;

- the risks related to Sprint's investments in Global One and other
joint ventures;

- the impact of any unusual items resulting from ongoing evaluations of
Sprint's business strategies;

- requirements imposed on Sprint or latitude allowed its competitors by
the Federal Communications Commission or state regulatory commissions
under the Telecommunications Act of 1996;

- the effects of mergers and consolidations within the
telecommunications industry;

- unexpected results of litigation filed against Sprint;

- the impact of the Year 2000 issue and any related noncompliance;

- the possibility of one or more of the markets in which Sprint competes
being impacted by changes in political, economic or other factors such
as monetary policy, legal and regulatory changes or other external
factors over which Sprint has no control; and

- the possibility that relationships with customers, governments,
partners and employees may be affected because of uncertainty
surrounding Sprint as a result of its entering into a merger agreement
with MCI/WorldCom.

The words "estimate," "project," "intend," "expect," "believe" and similar
expressions are intended to identify forward-looking statements. Forward-looking
statements are found throughout MD&A. The reader should not place undue reliance
on forward-looking statements, which speak only as of the date of this report.
Sprint is not obligated to publicly release any revisions to forward-looking
statements to reflect events after the date of this report or unforeseen events.

<PAGE>

Annex II

Sprint FON Group
Combined Financial Information

<PAGE>

COMBINED STATEMENTS OF OPERATIONS (Unaudited) Sprint FON Group
(millions, except per share data)
- --------------------------------------------- ----------------------------------- ----------------------------------
Quarters Ended Year-to-Date
September 30, September 30,
- --------------------------------------------- --- ------------- -- -------------- -- ------------- --- -------------
1999 1998 1999 1998
- --------------------------------------------- --- ------------- -- -------------- -- ------------- --- -------------

<S> <C> <C> <C> <C>
Net Operating Revenues $ 4,341 $ 4,039 $ 12,757 $ 11,876
- --------------------------------------------- --- ------------- -- -------------- -- ------------- --- -------------

Operating Expenses
Costs of services and products 2,026 1,895 5,891 5,644
Selling, general and administrative 1,047 941 3,104 2,719
Depreciation and amortization 542 490 1,563 1,425
- --------------------------------------------- --- ------------- -- -------------- -- ------------- --- -------------

Total operating expenses 3,615 3,326 10,558 9,788
- --------------------------------------------- --- ------------- -- -------------- -- ------------- --- -------------

Operating Income 726 713 2,199 2,088

Interest expense, net (38) (75) (132) (227)
Equity in loss of Global One (71) (33) (195) (120)
Other income (expense), net (9) 27 49 89
- --------------------------------------------- --- ------------- -- -------------- -- ------------- --- -------------

Income before income taxes and
extraordinary item 608 632 1,921 1,830

Income taxes (249) (217) (770) (695)
- --------------------------------------------- --- ------------- -- -------------- -- ------------- --- -------------

Income before Extraordinary Item 359 415 1,151 1,135
Extraordinary item, net - - - (4)
- --------------------------------------------- --- ------------- -- -------------- -- ------------- --- -------------

Net Income 359 415 1,151 1,131
Preferred stock dividends received (paid) 2 - 5 (1)
- --------------------------------------------- --- ------------- -- -------------- -- ------------- --- -------------
Earnings applicable to common stock $ 361 $ 415 $ 1,156 $ 1,130
--- ------------- -- -------------- -- ------------- --- -------------

Diluted Earnings per Common Share(1) $ 0.41 $ 0.47 $ 1.31 $ 1.29
--- ------------- -- -------------- -- ------------- --- -------------

Diluted weighted average common shares(1) 886.7 879.0 884.3 877.5
--- ------------- -- -------------- -- ------------- --- -------------

Basic Earnings per Common Share(1) $ 0.42 $ 0.48 $ 1.33 $ 1.31
--- ------------- -- -------------- -- ------------- --- -------------
Basic weighted average common shares(1) 869.4 863.1 866.4 861.5
--- ------------- -- -------------- -- ------------- --- -------------

Dividends per Common Share(1) $ 0.125 $ 0.125 $ 0.375 $ 0.375
--- ------------- -- -------------- -- ------------- --- -------------

(1) Basic and diluted earnings per common share, weighted average common
shares, and dividends per common share for the 1998 third quarter and
year-to-date periods are pro forma and assume the Recapitalization occurred
at the beginning of 1998. In the 1999 second quarter, Sprint effected a
two-for-one stock split of its FON common stock. As a result, 1998 basic
and diluted earnings per common share, weighted average common shares and
dividends per common share have been restated.

See accompanying Condensed Notes to Combined Financial Statements.
</TABLE>

COMBINED STATEMENTS OF COMPREHENSIVE INCOME Sprint FON Group
(Unaudited)
(millions)

<S> <C> <C> <C> <C>
Net Income $ 359 $ 415 $ 1,151 $ 1,131
- --------------------------------------------- --- ------------- -- -------------- -- ------------- --- -------------

Other Comprehensive Income (Loss)

Unrealized holding gains (losses) on
securities (9) (1) (11) 13
Income taxes 3 - 4 (5)
- --------------------------------------------- --- ------------- -- -------------- -- ------------- --- -------------
Net unrealized holding gains (losses) on
securities during the period (6) (1) (7) 8
Reclassification adjustment, net of tax - - (57) -
- --------------------------------------------- --- ------------- -- -------------- -- ------------- --- -------------
Total net unrealized holding gains (losses)
on securities (6) (1) (64) 8
Foreign currency translation adjustments - - - (2)
- --------------------------------------------- --- ------------- -- -------------- -- ------------- --- -------------

Total other comprehensive income (loss) (6) (1) (64) 6
- --------------------------------------------- --- ------------- -- -------------- -- ------------- --- -------------

Comprehensive Income $ 353 $ 414 $ 1,087 $ 1,137
--- ------------- -- -------------- -- ------------- --- -------------

See accompanying Condensed Notes to Combined Financial Statements.
</TABLE>

<PAGE>

COMBINED BALANCE SHEETS Sprint FON Group
(millions)
- -------------------------------------------------------------------------------------------------------------------------
September 30, December 31,
1999 1998
- -------------------------------------------------------------------------------------------------------------------------
(Unaudited)
Assets
Current assets
<S> <C> <C>
Cash and equivalents $ 410 $ 432
Accounts receivable, net of allowance for doubtful accounts
of $212 and $175 2,753 2,384
Inventories 387 350
Prepaid expenses 248 199
Receivables from the PCS Group 406 236
Investments in equity securities 337 -
Other 155 168
- -------------------------------------------------------------------------------------------------------------------------
Total current assets 4,696 3,769

Investments in equity securities 43 489

Property, plant and equipment
Long distance division 9,551 9,241
Local division 15,697 14,858
Other 1,873 1,057
- -------------------------------------------------------------------------------------------------------------------------
Total property, plant and equipment 27,121 25,156
Accumulated depreciation (13,670) (12,692)
- -------------------------------------------------------------------------------------------------------------------------
Net property, plant and equipment 13,451 12,464

Investments in and loans to the PCS Group 448 656
Investments in and advances to other affiliates 747 645
Other assets 2,053 978
- -------------------------------------------------------------------------------------------------------------------------

Total $ 21,438 $ 19,001
-----------------------------------

Liabilities and Group Equity
Current liabilities
Current maturities of long-term debt $ 827 $ 33
Accounts payable 1,003 1,284
Accrued interconnection costs 723 592
Accrued taxes 116 346
Advance billings 304 229
Other 1,009 809
- -------------------------------------------------------------------------------------------------------------------------
Total current liabilities 3,982 3,293

Long-term debt and capital lease obligations 4,892 4,409

Deferred credits and other liabilities
Deferred income taxes and investment tax credits 965 828
Postretirement and other benefit obligations 1,056 1,064
Other 448 383
- -------------------------------------------------------------------------------------------------------------------------
Total deferred credits and other liabilities 2,469 2,275

Group equity 10,095 9,024
- -------------------------------------------------------------------------------------------------------------------------

Total $ 21,438 $ 19,001
-----------------------------------

See accompanying Condensed Notes to Combined Financial Statements.
</TABLE>

<PAGE>

COMBINED STATEMENTS OF CASH FLOWS (Unaudited) Sprint FON Group
(millions)
- ------------------------------------------------------------------ ----------------- ----------------- ----------------
Year-to-Date September 30, 1999 1998
- ------------------------------------------------------------------ ----------------- ----------------- ----------------

Operating Activities

<S> <C> <C>
Net income $ 1,151 $ 1,131
Adjustments to reconcile net income to net cash provided by
operating activities:
Equity in net losses of affiliates 244 138
Depreciation and amortization 1,563 1,425
Deferred income taxes and investment tax credits 148 (36)
Changes in assets and liabilities:
Accounts receivable, net (367) (20)
Inventories and other current assets (89) 2
Accounts payable and other current liabilities (231) 107
Payable to the PCS Group for current tax benefits utilized
202 -
Receivables from and payables to the PCS Group, net (306) -
Noncurrent assets and liabilities, net (85) 33
Other, net 15 11
- ------------------------------------------------------------------ --- ------------- --- ------------- -- -------------

Net cash provided by operating activities 2,245 2,791
- ------------------------------------------------------------------ --- ------------- --- ------------- -- -------------

Investing Activities

Capital expenditures (2,467) (2,320)
Repayments from (loans to) Sprint PCS 315 (114)
Investments in and loans to other affiliates, net (397) (395)
Purchase of fixed wireless broadband companies, net of cash acquired (271) -
Advances to the PCS Group - (410)
Equity transfers from the PCS Group, net - 125
Other, net 1 (14)
- ------------------------------------------------------------------ --- ------------- --- ------------- -- -------------

Net cash used by investing activities (2,819) (3,128)
- ------------------------------------------------------------------ --- ------------- --- ------------- -- -------------

Financing Activities

Proceeds from long-term debt 1,536 946
Allocation of long-term debt to the PCS Group (785) -
Payments on long-term debt (34) (240)
Dividends paid (317) (292)
Proceeds from common stock issued 111 49
Treasury stock purchased (48) (235)
Other, net 89 55
- ------------------------------------------------------------------ --- ------------- --- ------------- -- -------------

Net cash provided by financing activities 552 283
- ------------------------------------------------------------------ --- ------------- --- ------------- -- -------------

Decrease in Cash and Equivalents (22) (54)
Cash and Equivalents at Beginning of Period 432 102
- ------------------------------------------------------------------ --- ------------- --- ------------- -- -------------

Cash and Equivalents at End of Period $ 410 $ 48
--- ------------- -- -------------

See accompanying Condensed Notes to Combined Financial Statements.
</TABLE>

<PAGE>

CONDENSED NOTES TO COMBINED Sprint FON Group
FINANCIAL STATEMENTS (Unaudited)

The information in this Form 10-Q has been prepared according to Securities and
Exchange Commission (SEC) rules and regulations. In our opinion, the combined
interim financial statements reflect all adjustments, consisting only of normal
recurring accruals, needed to fairly present the FON Group's combined financial
position, results of operations, cash flows and comprehensive income.

Certain information and footnote disclosures normally included in combined
financial statements prepared according to generally accepted accounting
principles have been condensed or omitted. As a result, you should read these
financial statements along with Sprint Corporation's 1998 Form 10-K. Operating
results for the 1999 year-to-date period do not necessarily represent the
results that may be expected for the year ending December 31, 1999.

In connection with the PCS Restructuring, FT and DT purchased 5.1 million
additional PCS shares to maintain their combined 20% voting power in Sprint.

- --------------------------------------------------------------------------------
2. Basis of Combination and Presentation
- --------------------------------------------------------------------------------

The combined FON Group financial statements, together with the combined PCS
Group financial statements, include all the accounts in Sprint's consolidated
financial statements. The combined financial statements for each Group were
prepared on a basis that management believes is reasonable and proper and
include:

- - the combined historical balance sheets, results of operations and cash
flows for each of the Groups, with all significant intragroup amounts
and transactions eliminated,
- - an allocation of Sprint's debt, including the related effects on results
of operations and cash flows, and
- - an allocation of corporate overhead after the PCS Restructuring date.

The FON Group entities are commonly controlled companies and are wholly owned by
Sprint. Transactions between the PCS Group and the FON Group have not been
eliminated in the combined financial statements of either Group.

The FON Group combined financial statements provide FON shareholders with
financial information about the FON Group operations. Investors in FON stock and
PCS stock are Sprint shareholders and are subject to risks related to all of
Sprint's businesses, assets and liabilities. Sprint retains ownership and
control of the assets and operations of each Group. Financial effects of either
Group that affect Sprint's results of operations or financial condition could
affect the results of operations or financial position of the other Group or the
market price of the other Group's stock. Net losses of either Group, and
dividends or distributions on, or repurchases of, PCS stock or FON stock, will
reduce Sprint funds legally available for dividends on both Groups' stock. As a
result, the FON Group combined financial statements should be read along with
Sprint's consolidated financial statements and the PCS Group's combined
financial statements.

<PAGE>

The FON Group combined financial statements are prepared using generally
accepted accounting principles. These principles require management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities, the disclosure of contingent assets and liabilities, and the
reported amounts of revenues and expenses. Actual results could differ from
those estimates.

Certain prior-year amounts have been reclassified to conform to the current-year
presentation. These reclassifications had no effect on the results of operations
or group equity as previously reported.

- --------------------------------------------------------------------------------
3. Acquisitions
- --------------------------------------------------------------------------------

In the 1999 third quarter, Sprint closed on its acquisitions of People's Choice
TV Corp. (PCTV) and American Telecasting, Inc. (ATI).

- --------------------------------------------------------------------------------
4. Investments
- --------------------------------------------------------------------------------

At the end of September 1999, investments accounted for using the equity method
consisted of the FON Group's investments in Global One, EarthLink, Call-Net and
other strategic investments. Combined, summarized financial information (100%
basis) of these entities accounted for using the equity method was as follows:

Quarters Ended Year-to-Date
September 30, September 30,
----------------------------------- ----------------------------------
1999 1998 1999 1998
- --------------------------------------------- --- ------------- -- -------------- -- ------------- --- -------------
(millions)
Results of operations
<S> <C> <C> <C> <C>
Net operating revenues $ 653 $ 628 $ 1,917 $ 1,680
--- ------------- -- -------------- -- ------------- --- -------------
Operating loss $ (239) $ (150) $ (632) $ (376)
--- ------------- -- -------------- -- ------------- --- -------------
Net loss $ (302) $ (192) $ (852) $ (493)
--- ------------- -- -------------- -- ------------- --- -------------
FON Group's net losses in affiliates $ (95) $ (54) $ (244) $ (140)
--- ------------- -- -------------- -- ------------- --- -------------

</TABLE>

<PAGE>

- --------------------------------------------------------------------------------
5. Income Taxes
- --------------------------------------------------------------------------------

The differences that caused the FON Group's effective income tax rates to vary
from the 35% federal statutory rate were as follows:

Year-to-Date
September 30,
-------------------------
1999 1998
- -------------------------------------------------------
(millions)
Income tax expense at the
federal statutory rate $ 672 $ 640
Effect of:
State income taxes, net
of federal income tax 67 49
effect
Equity in losses of
foreign joint ventures 35 10
Other, net (4) (4)
- -------------------------------------------------------

Income tax expense $ 770 $ 695
-------------------------

Effective income tax rate 40.1% 38.0%
-------------------------

In the 1999 year-to-date period, the FON Group received a net allocation of $751
million of debt from Sprint. This debt was mainly used for new capital
investments and acquisitions.

- --------------------------------------------------------------------------------
7. Group Equity
- --------------------------------------------------------------------------------

Year-to-Date
September 30,
1999
- -------------------------------------------------------
(millions)
Beginning balance $ 9,024
Net income 1,151
Dividends (325)
Equity issued 188
Equity repurchased (48)
Other, net 105
- -------------------------------------------------------

Ending balance $ 10,095
------------------

FON shareholders are subject to all of the risks related to an investment in
Sprint and the FON Group, including the effects of any legal proceedings and
claims against the PCS Group.

<PAGE>

- --------------------------------------------------------------------------------
9. Segment Information
- --------------------------------------------------------------------------------

Industry segment financial information was as follows:

- -----------------------------------------------------------------------------------------------------------------------
Product Corporate
Long Distribution and Sprint
Quarters Ended Distance Local & Sprint Other Elim- FON
September 30, Division Division Directory ION Ventures inations Group
Publishing
- -----------------------------------------------------------------------------------------------------------------------
(millions)
1999
<S> <C> <C> <C> <C> <C> <C> <C>
Net operating revenues $ 2,712 $ 1,416 $ 437 $ - $ 1 $ (225) $ 4,341
Affiliated revenues 64 78 153 - - (225) 70
Operating income (loss) 415 378 64 (110) (7) (14) 726

1998
Net operating revenues $ 2,501 $ 1,349 $ 435 $ - $ - $ (246) $ 4,039
Affiliated revenues 40 54 176 - - (246) 24
Operating income (loss) 344 360 57 (33) (4) (11) 713
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>

- -----------------------------------------------------------------------------------------------------------------------
Product Corporate
Long Distribution and Sprint
Year-to-Date Distance Local & Directory Sprint Other Elim- FON
September 30, Division Division Publishing ION Ventures inations Group
- -----------------------------------------------------------------------------------------------------------------------
(millions)
1999
<S> <C> <C> <C> <C> <C> <C> <C>
Net operating revenues $ 8,010 $ 4,171 $ 1,309 $ - $ 1 $ (734) $ 12,757
Affiliated revenues 178 229 506 - - (734) 179
Operating income (loss) 1,203 1,116 179 (243) (17) (39) 2,199

1998
Net operating revenues $ 7,329 $ 3,988 $ 1,272 $ - $ - $ (713) $ 11,876
Affiliated revenues 80 149 548 - - (713) 64
Operating income (loss) 985 1,080 177 (78) (35) (41) 2,088
- -----------------------------------------------------------------------------------------------------------------------

</TABLE>

<PAGE>

The FON Group's cash paid for interest and income taxes was as follows:
Year-to-Date
September 30,
-------------------------
1999 1998
- -------------------------------------------------------
(millions)
Interest (net of capitalized
interest) $ 171 $ 174
-------------------------
Income taxes $ 658 $ 279
-------------------------

The FON Group's noncash activities included the following:

Year-to-Date
September 30,
-------------------------
1999 1998
- -------------------------------------------------------
(millions)
Noncash activities in group
equity $ 213 $ 120
-------------------------
Debt assumed in purchases of
fixed wireless broadband
companies $ 574 $ -
-------------------------

The FON Group's noncash activities in group equity included common stock issued
under Sprint's employee stock benefit plans and the tax benefit from stock
options exercised.

- --------------------------------------------------------------------------------
11. Subsequent Events
- --------------------------------------------------------------------------------

In October 1999, Sprint announced a definitive merger agreement with
MCI/WorldCom. Under the agreement, each share of Sprint FON stock will be
exchanged for $76 of MCI/WorldCom common stock, subject to a collar. In
addition, each share of Sprint PCS stock will be exchanged for one share of a
new WorldCom PCS tracking stock and 0.1547 shares of MCI/WorldCom common stock.
The terms of the WorldCom PCS tracking stock will be equivalent to those of
Sprint PCS stock and will track the performance of the company's PCS business.
The merger is subject to the approvals of Sprint and MCI/WorldCom stockholders
as well as approvals from the Federal Communications Commission (FCC), the
Justice Department, various state government bodies and foreign antitrust
authorities. The companies anticipate that the merger will close in the second
half of 2000.

In October 1999, Sprint's Board of Directors declared dividends of 12.5 cents
per share on the Sprint FON common and Class A common stock. Dividends will be
paid December 29, 1999.

In October 1999, Sprint closed on its acquisitions of WBS, Videotron USA and
TTI, paying $314 million in cash. These acquisitions were accounted for as
purchases.

<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS Sprint FON Group

- --------------------------------------------------------------------------------
General
- --------------------------------------------------------------------------------

See Sprint's "Management's Discussion and Analysis of Financial Condition and
Results of Operations--General" for a discussion of the PCS Restructuring and
the Recapitalization.

- --------------------------------------------------------------------------------
Recent Developments
- --------------------------------------------------------------------------------

In October 1999, Sprint announced a definitive merger agreement with
MCI/WorldCom. Under the agreement, each share of Sprint FON stock will be
exchanged for $76 of MCI/WorldCom common stock, subject to a collar. In
addition, each share of Sprint PCS stock will be exchanged for one share of a
new WorldCom PCS tracking stock and 0.1547 shares of MCI/WorldCom common stock.
The terms of the WorldCom PCS tracking stock will be equivalent to those of
Sprint PCS stock and will track the performance of the company's PCS business.
The merger is subject to the approvals of Sprint and MCI/WorldCom stockholders
as well as approvals from the Federal Communications Commission (FCC), the
Justice Department, various state government bodies and foreign antitrust
authorities. The companies anticipate that the merger will close in the second
half of 2000.

- --------------------------------------------------------------------------------
Sprint FON Group
- --------------------------------------------------------------------------------

Core Businesses

Long Distance Division

Local Division

Product Distribution and Directory Publishing Businesses

Sprint ION(SM)

Other Ventures

Beginning in the 1999 third quarter, this segment also includes the on-going
operations, mainly consisting of cable TV service, of Sprint's newly acquired
fixed wireless broadband companies.

<PAGE>

- --------------------------------------------------------------------------------
Results of Operations
- --------------------------------------------------------------------------------

Net income was $359 million for the 1999 third quarter compared to $415 million
for the same 1998 period. Net income for the first nine months in 1999 was $1.2
billion compared to $1.1 billion for the same 1998 period. Net income for 1998
includes a $4 million extraordinary charge related to the early extinguishment
of debt.

Core Businesses

The FON Group's core businesses generated improved third quarter and
year-to-date net operating revenues and operating income compared to the same
1998 periods. Core businesses exclude results from Sprint ION and other
ventures. Third quarter and year-to-date 1999 long distance calling volumes
increased 23% from the same 1998 periods. Access lines served by the local
division increased 5% during the past 12 months, excluding the sale of local
exchanges in November 1998 (see "Segmental Results of Operations--Local
Division" for further details.)

- --------------------------------------------------------------------------------
Segmental Results of Operations
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>

Long Distance Division

Selected Operating Results
---------------------------------------------------------------------
Quarters Ended
September 30, Variance
---------------------------------- -------------------------------
1999 1998 $ %
- ---------------------------------------------- ---------------- ----------------- -- ------------- -----------------
(millions)
<S> <C> <C> <C> <C>
Net operating revenues $ 2,712 $ 2,501 $ 211 8.4%
- ---------------------------------------------- -- ------------- -- -------------- -- ------------- -----------------

Operating expenses
Interconnection 1,021 958 63 6.6%
Operations 389 372 17 4.6%
Selling, general and administrative 647 595 52 8.7%
Depreciation and amortization 240 232 8 3.4%
- ---------------------------------------------- -- ------------- -- -------------- -- -------------

Total operating expenses 2,297 2,157 140 6.5%
- ---------------------------------------------- -- ------------- -- -------------- -- -------------

Operating income $ 415 $ 344 $ 71 20.6%
-- ------------- -- -------------- -- -------------

Operating margin 15.3% 13.8%
-- ------------- -- --------------
</TABLE>
<TABLE>
<CAPTION>

Selected Operating Results
---------------------------------------------------------------------
Year-to-Date
September 30, Variance
---------------------------------- -------------------------------
1999 1998 $ %
- ---------------------------------------------- ---------------- ----------------- -- ------------- -----------------
(millions)
<S> <C> <C> <C> <C>
Net operating revenues $ 8,010 $ 7,329 $ 681 9.3%
- ---------------------------------------------- -- ------------- -- -------------- -- ------------- -----------------

Operating expenses
Interconnection 3,066 2,889 177 6.1%
Operations 1,066 1,072 (6) (0.6)%
Selling, general and administrative 1,976 1,723 253 14.7%
Depreciation and amortization 699 660 39 5.9%
- ---------------------------------------------- -- ------------- -- -------------- -- -------------

Total operating expenses 6,807 6,344 463 7.3%
- ---------------------------------------------- -- ------------- -- -------------- -- -------------

Operating income $ 1,203 $ 985 $ 218 22.1%
-- ------------- -- -------------- -- -------------

Operating margin 15.0% 13.4%
-- ------------- -- --------------

</TABLE>

<PAGE>

Net Operating Revenues

Business and Data Market

Business and data market revenues increased 5% in the 1999 third quarter and 9%
for the 1999 year-to-date period from the same 1998 periods. Data services
showed strong growth because of continued demand and an increased use of the
Internet. The year-to-date increase in revenues also reflects strong calling
volumes partly offset by lower rates due to increased competition. The 1999
third quarter volume increases were completely offset by lower rates.

Residential Market

Wholesale Market

Interconnection Costs

Interconnection costs consist of amounts paid to local phone companies, other
domestic service providers and foreign phone companies to complete calls made by
the division's domestic customers. These costs increased 7% in the 1999 third
quarter and 6% in the 1999 year-to-date period from the same 1998 periods
reflecting increased calling volumes in 1999, partly offset by reductions in
per-minute costs for both domestic and international access. The domestic rate
reductions were generally due to FCC-mandated access rate reductions. Lower
international per minute costs reflect continued competition. Sprint expects
government deregulation and competitive pressures to add to the trend of
declining unit costs for international interconnection. The increase in
interconnection costs also reflects growth in non-minute driven revenues.
Interconnection costs were 37.6% of net operating revenues in the 1999 third
quarter and 38.3% in the 1999 year-to-date period compared to 38.3% and 39.4%
for the same periods a year ago.

Operations Expense

Operations expense includes costs to operate and maintain the long distance
network and costs of equipment sales. It also includes costs to provide
operator, public payphone and video teleconferencing services as well as
telecommunications services for the hearing-impaired. Operations expense
increased 5% in the 1999 third quarter from the same 1998 period because of an
increase in network costs due to growth in data services and increases in
network equipment operating leases. Operations expense decreased 1% in the 1999
year-to-date period from the same 1998 period because of a decrease in product
and service costs due to a decrease in equipment sales, partly offset by the
increased network costs. Operations expense was 14.3% of net operating revenues
in the 1999 third quarter and 13.3% in the 1999 year-to-date period compared to
14.9% and 14.6% for the same periods a year ago.

Selling, General and Administrative Expense

Selling, general and administrative (SG&A) expense increased 9% in the 1999
third quarter and 15% in the 1999 year-to-date period from the same 1998
periods. These increases mainly reflect the overall growth of the business as
well as increased marketing and promotions in the first half of 1999 to support
products and services, including the rollout of an airline alliance program
which enables customers to earn frequent flyer miles when they use Sprint's
services. SG&A expense was 23.9% of net operating revenues in the 1999 third
quarter and 24.7% in the 1999 year-to-date period compared to 23.8% and 23.6%
for the same periods a year ago.

Depreciation and Amortization Expense

Depreciation and amortization expense increased 3% in the 1999 third quarter and
6% in the 1999 year-to-date period from the same periods a year ago. These
increases were generally due to an increased asset base to enhance network
reliability, meet increased demand for voice and data-related services and
upgrade capabilities for providing new products and services. Depreciation and
amortization expense was 8.9% of net operating revenues in the 1999 third
quarter and 8.7% in the 1999 year-to-date period compared to 9.2% for the 1998
third quarter and 9.0% for the 1998 year-to-date period.

<PAGE>

Local Division
<TABLE>
<CAPTION>

Selected Operating Results
---------------------------------------------------------------------
Quarters Ended
September 30, Variance
----------------------------------- -------------------------------
1999 1998 $ %
- --------------------------------------------- ----------------- ----------------- -- ------------- -----------------
(millions)
<S> <C> <C> <C> <C>
Net operating revenues $ 1,416 $ 1,349 $ 67 5.0%
- --------------------------------------------- --- ------------- -- -------------- -- -------------

Operating expenses
Costs of services and products 489 459 30 6.5%
Selling, general and administrative 289 291 (2) (0.7)%
Depreciation and amortization 260 239 21 8.8%
- --------------------------------------------- --- ------------- -- -------------- -- -------------

Total operating expenses 1,038 989 49 5.0%
- --------------------------------------------- --- ------------- -- -------------- -- -------------

Operating income $ 378 $ 360 $ 18 5.0%
--- ------------- -- -------------- -- -------------

Operating margin 26.7% 26.7%
--- ------------- -- --------------
</TABLE>
<TABLE>
<CAPTION>

Selected Operating Results
---------------------------------------------------------------------
Year-to-Date
September 30, Variance
----------------------------------- -------------------------------
1999 1998 $ %
- --------------------------------------------- ----------------- ----------------- -- ------------- -----------------
(millions)
<S> <C> <C> <C> <C>
Net operating revenues $ 4,171 $ 3,988 $ 183 4.6%
- --------------------------------------------- --- ------------- -- -------------- -- -------------

Operating expenses
Costs of services and products 1,432 1,349 83 6.2%
Selling, general and administrative 858 851 7 0.8%
Depreciation and amortization 765 708 57 8.1%
- --------------------------------------------- --- ------------- -- -------------- -- -------------

Total operating expenses 3,055 2,908 147 5.1%
- --------------------------------------------- --- ------------- -- -------------- -- -------------

Operating income $ 1,116 $ 1,080 $ 36 3.3%
--- ------------- -- -------------- -- -------------

Operating margin 26.8% 27.1%
--- ------------- -- --------------
</TABLE>

<PAGE>

Sprint sold its remaining 81,000 residential and business access lines in
Illinois in November 1998. For comparative purposes, the following discussion of
local division results assumes the sale occurred at the beginning of 1998.
Adjusting for this sale, operating margin would have been 26.2% for the 1998
third quarter and 26.8% for the 1998 year-to-date period.

Net Operating Revenues

Net operating revenues increased 6% in the 1999 third quarter and year-to-date
periods from the same 1998 periods. These increases mainly reflect customer
access line growth and increased sales of network-based services such as Caller
ID and Call Waiting. Customer access lines increased 5% during the past 12
months. Sales of network-based services increased due to strong demand for
bundled services which combine local service, network-based features and long
distance calling.

Local Service Revenues

Local service revenues, derived from local exchange services, grew 8% in the
1999 third quarter and 9% in the 1999 year-to-date period from the same 1998
periods because of customer access line growth and strong demand for bundled
services. Revenue growth also reflects increased sales of private line services
and revenues from maintaining customer wiring and equipment.

Network Access Revenues

Network access revenues, derived from long distance phone companies using the
local network to complete calls, increased 6% in the 1999 third quarter and 4%
in the 1999 year-to-date period from the same 1998 periods. The 1999 third
quarter and year-to-date revenues reflect an 8% increase in minutes of use and
the implementation of local number portability charges. These increases were
partly offset by FCC-mandated access rate reductions.

Toll Service Revenues

Toll service revenues are mainly derived from providing long distance services
within specified regional calling areas, or LATAs, that are beyond the local
calling area. These revenues decreased 11% in the 1999 third quarter and 14% in
the 1999 year-to-date period from the same 1998 periods, mainly reflecting
increased competition, which is expected to continue, in the intraLATA long
distance market. In addition, toll service areas are shrinking as certain local
calling areas are expanding. The reduced revenues were offset, in part, by
increases in local service revenues due to expanded local calling areas, and by
increases in network access revenues paid by other carriers providing intraLATA
long distance services to the local division's customers. In addition, nearly
one-third of the toll customers the local division has lost have selected
Sprint's long distance division for intraLATA long distance service, which helps
mitigate the erosion of these revenues.

Other Revenues

Costs of Services and Products

Costs of services and products includes costs to operate and maintain the local
network and costs of equipment sales. This expense increased 7% in the 1999
third quarter and year-to-date periods compared to the same 1998 periods
reflecting customer access line growth, increased equipment sales and storm
related costs. Costs of services and products was 34.5% of net operating
revenues in the 1999 third quarter and 34.3% in the 1999 year-to-date period
compared to 34.1% and 33.8% for the same periods a year ago.

Selling, General and Administrative Expense

SG&A expense was flat in the 1999 third quarter and year-to-date periods
compared to the same 1998 periods. These results were mainly due to increased
marketing costs to promote new products and services and increased customer
service costs related to customer access line growth, offset by continued
emphasis on cost control. SG&A expense was 20.4% of net operating revenues in
the 1999 third quarter and 20.6% in the 1999 year-to-date period compared to
21.8% and 21.5% for the same periods a year ago.

Depreciation and Amortization Expense

Depreciation and amortization expense increased 9% in the 1999 third quarter and
8% in the 1999 year-to-date period compared to the same 1998 periods, mainly
because of increased capital expenditures in switching and transport
technologies which have shorter asset lives. Depreciation and amortization
expense was 18.4% of net operating revenues in the 1999 third quarter and 18.3%
in the 1999 year-to-date period compared to 17.9% for the same periods a year
ago.

<PAGE>

Product Distribution and Directory Publishing Businesses
<TABLE>
<CAPTION>

Selected Operating Results
---------------------------------------------------------------------
Quarters Ended
September 30, Variance
----------------------------------- -------------------------------
1999 1998 $ %
- --------------------------------------------- ----------------- ----------------- -- ------------- -----------------
(millions)
<S> <C> <C> <C> <C>
Net operating revenues $ 437 $ 435 $ 2 0.5%
- --------------------------------------------- --- ------------- -- -------------- -- -------------

Operating expenses
Costs of services and products 338 344 (6) (1.7)%
Selling, general and administrative 31 29 2 6.9%
Depreciation and amortization 4 5 (1) (20.0)%
- --------------------------------------------- --- ------------- -- -------------- -- -------------

Total operating expenses 373 378 (5) (1.3)%
- --------------------------------------------- --- ------------- -- -------------- -- -------------

Operating income $ 64 $ 57 $ 7 12.3%
--- ------------- -- -------------- -- -------------

Operating margin 14.6% 13.1%
--- ------------- -- --------------
</TABLE>
<TABLE>
<CAPTION>

Selected Operating Results
---------------------------------------------------------------------
Year-to-Date
September 30, Variance
----------------------------------- -------------------------------
1999 1998 $ %
- --------------------------------------------- ----------------- ----------------- -- ------------- -----------------
(millions)
<S> <C> <C> <C> <C>
Net operating revenues $ 1,309 $ 1,272 $ 37 2.9%
- --------------------------------------------- --- ------------- -- -------------- -- -------------

Operating expenses
Costs of services and products 1,023 1,005 18 1.8%
Selling, general and administrative 94 81 13 16.0%
Depreciation and amortization 13 9 4 44.4%
- --------------------------------------------- --- ------------- -- -------------- -- -------------

Total operating expenses 1,130 1,095 35 3.2%
- --------------------------------------------- --- ------------- -- -------------- -- -------------

Operating income $ 179 $ 177 $ 2 1.1%
--- ------------- -- -------------- -- -------------

Operating margin 13.7% 13.9%
--- ------------- -- --------------
</TABLE>

Net operating revenues were flat in the 1999 third quarter and increased 3% in
the 1999 year-to-date period compared to the same 1998 periods. Nonaffiliated
revenues accounted for over one-half of revenues in both the 1999 and 1998 third
quarter and year-to-date periods. Nonaffiliated revenues increased 10% in the
1999 third quarter compared to the same 1998 period, but were largely offset by
a decrease in product sales to affiliates. In the 1999 year-to-date period
nonaffiliated revenues increased 11% from the same 1998 period, but were only
partly offset by a decrease in product sales to affiliates.

<PAGE>

Sprint ION(SM)
<TABLE>
<CAPTION>

Operating expenses for Sprint ION in the 1999 third quarter and year-to-date
periods reflect continued development and deployment activities including costs
for network research and testing, systems and operations development, product
development, and advertising to increase public awareness. Depreciation and
amortization totaled $11 million in the 1999 third quarter and $24 million in
the 1999 year-to-date period compared to $1 million and $3 million for the same
periods a year ago.

Other Ventures
<TABLE>
<CAPTION>

Quarters Ended Year-to-Date
September 30, September 30,
----------------------------------- ----------------------------------
1999 1998 1999 1998
- --------------------------------------------- --- ------------- -- -------------- -- ------------- --- -------------
(millions)
<S> <C> <C> <C> <C>
Net operating revenues $ 1 $ - $ 1 $ -
--- ------------- -- -------------- -- ------------- --- -------------
Total operating expenses $ 8 $ 4 $ 18 $ 35
--- ------------- -- -------------- -- ------------- --- -------------
Operating loss $ (7) $ (4) $ (17) $ (35)
--- ------------- -- -------------- -- ------------- --- -------------

Equity in losses of affiliates $ (107) $ (55) $ (262) $ (153)
--- ------------- -- -------------- -- ------------- --- -------------
</TABLE>

Operating expenses in the 1998 year-to-date period mainly relate to the FON
Group's offering of Internet services. In June 1998, the FON Group completed the
strategic alliance to combine its Internet business with EarthLink. As part of
the alliance, EarthLink obtained the FON Group's Sprint Internet Passport
customers and took over the day-to-day operations of those services. At the same
time, the FON Group acquired an equity interest in EarthLink. As a result, after
June 1998, the FON Group's share of EarthLink's losses has been reflected in
"Equity in losses of affiliates" above.

<PAGE>

- --------------------------------------------------------------------------------
Nonoperating Items
- --------------------------------------------------------------------------------

Interest Expense, Net

The effective interest rates in the following table reflect interest expense on
long-term debt only. Interest costs on short-term borrowings classified as
long-term debt, intergroup borrowings, deferred compensation plans and customer
deposits have been excluded so as not to distort the effective interest rate on
long-term debt.

<S> <C> <C> <C> <C>
Effective interest rate on long-term debt 7.7% 8.2% 7.9% 8.1%
--- ------------- -- -------------- -- ------------- --- -------------
</TABLE>

Effective with the PCS Restructuring, interest expense on borrowings incurred by
Sprint and allocated to the PCS Group is based on rates the PCS Group would be
able to obtain from third parties as a direct or indirect wholly owned Sprint
subsidiary, but without the benefit of any guaranty by Sprint or any member of
the FON Group. The difference between Sprint's actual interest rates and the
rates charged to the PCS Group is reflected as a reduction in the FON Group's
interest expense. These reductions, which totaled $45 million in the 1999 third
quarter and $112 million in the 1999 year-to-date period, have also been
excluded in computing the effective interest rates above. The decrease in the
FON Group's effective interest rates for the 1999 third quarter and year-to-date
periods mainly reflects increased borrowings with lower interest rates.

Other Income (Expense), Net
<TABLE>
<CAPTION>

Other income (expense) consisted of the following:

Total $ (9) $ 27 $ 49 $ 89
--- ------------- -- -------------- -- ------------- --- -------------

</TABLE>

Dividend and interest income for the 1999 and 1998 third quarter and
year-to-date periods reflects interest earned on temporary investments. For the
1998 periods, it also reflects interest earned on loans to unconsolidated
affiliates.

Income Taxes

See Note 5 of Condensed Notes to Combined Financial Statements for information
about the differences that caused the effective income tax rates to vary from
the statutory federal rate.

Extraordinary Item, Net

In the 1998 first quarter, Sprint redeemed, prior to scheduled maturities, $115
million of FON Group debt with a 9.25% interest rate. This resulted in a $4
million after-tax extraordinary loss.

<PAGE>

- --------------------------------------------------------------------------------
Financial Condition
- --------------------------------------------------------------------------------

September 30, December 31,
1999 1998
- ------------------------------------------------------
(millions)
Combined assets $ 21,438 $ 19,001
--------------------------------

See "Liquidity and Capital Resources" for information about changes in the
Combined Balance Sheets.

- --------------------------------------------------------------------------------
Liquidity and Capital Resources
- --------------------------------------------------------------------------------

Operating Activities

Year-to-Date
September 30,
-------------------------------
1999 1998
- ------------------------------------------------------
(millions)
Cash flows provided
by operating
activities $ 2,245 $ 2,791
-------------------------------

The decrease in 1999 operating cash flows mainly reflects increased outflows
from working capital, partly offset by improved operating results in the FON
Group's core businesses.

Investing Activities

Year-to-Date
September 30,
-------------------------------
1999 1998
- ------------------------------------------------------
(millions)
Cash flows used by
investing
activities $ (2,819) $ (3,128)
-------------------------------

Capital expenditures, which are the FON Group's largest investing activity,
totaled $2.5 billion in the 1999 year-to-date period compared to $2.3 billion
for the same period a year ago. Long distance capital expenditures were incurred
mainly to enhance network reliability, meet increased demand for voice and
data-related services and upgrade capabilities for providing new products and
services. The local division incurred capital expenditures to accommodate access
line growth and expand capabilities for providing enhanced services. In
addition, capital expenditures increased $268 million in the 1999 year-to-date
period from the same 1998 period due to Sprint ION development and hardware
deployment.

Cash flows for the 1999 year-to-date period also include the repayment of loans
made to Sprint PCS prior to the PCS Restructuring. In the 1998 year-to-date
period, the FON Group made advances to the PCS Group and loans to Sprint PCS to
fund capital and operating requirements. Equity transfers from the PCS Group
were mainly for the current tax benefits used by the FON Group. "Investments in
and loans to other affiliates, net" consisted of the following:

Year-to-Date
September 30,
-------------------------------
1999 1998
- ------------------------------------------------------
(millions)
Global One
Capital contributions $ 292 $ 284
Advances, net (4) (119)
- ------------------------------------------------------
288 165
- ------------------------------------------------------

Other, net 109 230
- ------------------------------------------------------

Total $ 397 $ 395
-------------------------------

Investing activities in 1999 also include cash payments for acquisitions of
companies owning fixed wireless broadband licenses.

Financing Activities

Year-to-Date
September 30,
-------------------------------
1999 1998
- ------------------------------------------------------
(millions)
Cash flows provided
by financing
activities $ 552 $ 283
-------------------------------

Financing activities in the 1999 year-to-date period mainly reflect proceeds
from debt issuances of $1.5 billion offset by net debt allocated to the PCS
Group of $785 million. Financing activities for the 1998 year-to-date period
mainly reflect long-term borrowings partly offset by payments on existing debt.

The FON Group paid cash dividends of $317 million in the first nine months of
1999 compared to $292 million for the same period a year ago.

<PAGE>

Capital Requirements

The FON Group's 1999 investing activities, mainly consisting of capital
expenditures and investments in affiliates, are expected to require cash of $4.1
to $4.4 billion. FON Group capital expenditures are expected to range between
$3.8 and $4.0 billion in 1999. The long distance and local divisions will
require the majority of this total. Sprint ION is expected to require $600 to
$700 million for capital expenditures in 1999. Investments in affiliates are
expected to require cash of $300 to $400 million. Dividend payments are expected
to total $440 million.

In connection with the PCS Restructuring, Sprint adopted a tax sharing agreement
that provides for the allocation of income taxes between the FON Group and the
PCS Group. Sprint expects the FON Group to continue to make significant payments
to the PCS Group under the tax sharing agreement because of expected PCS Group
operating losses.

The 1999 acquisitions of companies owning fixed wireless broadband licenses are
expected to require cash of $600 to $700 million for the acquisition of equity.
These acquisitions also involve the assumption of debt of $600 to $700 million.
See Notes 3 and 11 of Sprint FON Group Condensed Notes to Combined Financial
Statements.

Liquidity

See Sprint's "Management's Discussion and Analysis of Financial Condition and
Results of Operations--Liquidity" for a discussion of liquidity.

- --------------------------------------------------------------------------------
Financial Strategies
- --------------------------------------------------------------------------------

Financial strategies are determined by Sprint on a centralized basis. See
Sprint's "Management's Discussion and Analysis of Financial Condition and
Results of Operations--Financial Strategies."

- --------------------------------------------------------------------------------
Year 2000 Issue
- --------------------------------------------------------------------------------

The "Year 2000" issue affects the FON Group's installed computer systems,
network elements, software applications and other business systems that have
time-sensitive programs that may not properly reflect or recognize the year
2000. Because many computers and computer applications define dates by the last
two digits of the year, "00" may not be properly identified as the year 2000.
This error could result in miscalculations or system failures. The Year 2000
issue may also affect the systems and applications of the FON Group's customers,
vendors, resellers or affiliates.

The FON Group started a program in 1996 to identify and address the Year 2000
issue. It has completed an inventory and Year 2000 assessment of its principal
computer systems, network elements, software applications and other business
systems. The FON Group has also completed the renovation, testing and virtually
all of the deployment of these computer systems, network elements, software
applications and other business systems. Year 2000 testing began in the 1998
third quarter and was completed in September, 1999. Additional testing will
continue for the remainder of the year to maintain Year 2000 readiness for all
systems and networks. The FON Group is using both internal and external sources
to identify, correct or reprogram, and test its systems for Year 2000 readiness.
It has contacted others with whom it conducts business to receive the proper
warranties and assurances that those third parties, including affiliates, are or
will be Year 2000 compliant.

The FON Group incurred approximately $255 million from inception through
September 1999 for its Year 2000 remediation program and expects to incur
approximately $10 million through the remainder of 1999. This program is
designed to assure the proper functioning of critical and secondary elements for
Year 2000 compliance. When this program is fulfilled, the FON Group has a high
degree of confidence that elements within its control will function through the
upcoming date changes. However, there is a remaining risk stemming from elements
vulnerable to the Year 2000 problem which are beyond the FON Group's control.
For example, the FON Group interconnects with numerous third party carriers and
utilities. The FON Group has taken measures to assure that these third parties
will continue to function through any date related difficulties, but ultimately
the FON Group does not have control over their success. The FON Group is
continuing to focus on identifying and addressing all aspects of its operations
that may be affected by the Year 2000 issue.

<PAGE>

The FON Group is evaluating events beyond its control that could occur before
and after the arrival of the year 2000. The FON Group has reviewed its existing
disaster recovery plans and developed additional contingency and business
continuity plans to prepare for the year 2000. All of these plans were complete
at the end of the third quarter. The FON Group will implement, if necessary,
appropriate contingency and business continuity plans to mitigate to the extent
possible the effects of any Year 2000 noncompliance.

The FON Group has reviewed the risks related to a worst case scenario that could
result from a Year 2000 related failure. This scenario could result in a
temporary disruption to normal business operations and could impact the FON
Group's financial performance. Based upon the work completed to date, the FON
Group believes that such an occurrence is unlikely. Nevertheless, certain
elements related to the Year 2000 readiness of suppliers, utilities,
interconnecting carriers and customers are beyond the FON Group's control and
could fail. The FON Group does not believe that the failure of such elements
could cause a major breakdown within its normal operations.

- --------------------------------------------------------------------------------
Forward-looking Information
- --------------------------------------------------------------------------------

See Sprint's "Management's Discussion and Analysis of Financial Condition and
Results of Operations--Forward-looking Information" for a discussion of
forward-looking information.

<PAGE>

Annex III

Sprint PCS Group
Combined Financial Information

<PAGE>

COMBINED STATEMENTS OF OPERATIONS (Unaudited) Sprint PCS Group
(millions, except per share data)
- --------------------------------------------- ----------------------------------- ----------------------------------
Quarters Ended Year-to-Date
September 30, September 30,
- --------------------------------------------- ----------------------------------- ----------------------------------
1999 1998 1999 1998
- --------------------------------------------- --- ------------- -- -------------- -- ------------- --- -------------

<S> <C> <C> <C> <C>
Net Operating Revenues $ 844 $ 320 $ 2,184 $ 788
- --------------------------------------------- --- ------------- -- -------------- -- ------------- --- -------------

Operating Expenses
Costs of services and products 579 295 1,620 783
Selling, general and administrative 662 377 1,777 1,010
Depreciation and amortization 393 213 1,112 536
- --------------------------------------------- --- ------------- -- -------------- -- ------------- --- -------------

Total operating expenses 1,634 885 4,509 2,329
- --------------------------------------------- --- ------------- -- -------------- -- ------------- --- -------------

Operating Loss (790) (565) (2,325) (1,541)

Interest expense (176) (135) (497) (358)
Other partners' loss in Sprint PCS - 368 - 1,008
Other income, net 9 41 39 122
- --------------------------------------------- --- ------------- -- -------------- -- ------------- --- -------------

Loss before income taxes and extraordinary
item (957) (291) (2,783) (769)

Income taxes 342 115 1,008 295
- --------------------------------------------- --- ------------- -- -------------- -- ------------- --- -------------

Loss before Extraordinary Item (615) (176) (1,775) (474)
Extraordinary item, net - - (21) -
- --------------------------------------------- --- ------------- -- -------------- -- ------------- --- -------------

Net Loss (615) $ (176) (1,796) $ (474)
-- -------------- --- -------------
Preferred stock dividends paid (4) (11)
- --------------------------------------------- --- ------------- -- -------------
Loss applicable to common stock $ (619) $ (1,807)
--- ------------- -- -------------

Basic and Diluted Loss per Common
Share(1)
Loss before extraordinary item $ (1.31) $ (1.04) $ (3.92) $ (2.99)
Extraordinary item, net - - (0.05) -
- --------------------------------------------- --- ------------- -- -------------- -- ------------- --- -------------
Total $ (1.31) $ (1.04) $ (3.97) $ (2.99)
--- ------------- -- -------------- -- ------------- --- -------------

Basic and diluted weighted average common
shares(1) 473.3 415.8 455.1 415.8
--- ------------- -- -------------- -- ------------- --- -------------

(1) Basic and diluted loss per common share and weighted average common shares
for the 1998 third quarter and year-to-date periods are pro forma and
assume the PCS Restructuring, Recapitalization and Top-up occurred at the
beginning of 1998. The 1998 fourth quarter write-off of $179 million of
acquired in-process research and development is excluded. These pro forma
amounts are for comparative purposes only and do not necessarily represent
what actual results of operations would have been had the transactions
occurred at the beginning of 1998, nor do they indicate the results of
future operations.

See accompanying Condensed Notes to Combined Financial Statements.
</TABLE>

COMBINED BALANCE SHEETS Sprint PCS Group
(millions)
- -------------------------------------------------------------------------------------------------------------------------
September 30, December 31,
1999 1998
- -------------------------------------------------------------------------------------------------------------------------
(Unaudited)
Assets
Current assets
<S> <C> <C>
Cash and equivalents $ 16 $ 173
Accounts receivable, net of allowance for doubtful
accounts of $39 and $11 545 306
Inventories 307 127
Current tax benefit receivable from the FON Group 372 170
Prepaids and other current assets 93 79
- -------------------------------------------------------------------------------------------------------------------------
Total current assets 1,333 855

Property, plant and equipment
Network equipment 5,590 3,999
Construction work in progress 1,317 1,607
Buildings and leasehold improvements 1,186 1,026
Other 479 356
- -------------------------------------------------------------------------------------------------------------------------
Total property, plant and equipment 8,572 6,988
Accumulated depreciation (1,221) (453)
- -------------------------------------------------------------------------------------------------------------------------
Net property, plant and equipment 7,351 6,535

Intangible assets
Goodwill 4,524 3,313
PCS licenses 3,062 3,037
Customer base 726 681
Microwave relocation costs 403 355
Other 55 45
- -------------------------------------------------------------------------------------------------------------------------
Total intangible assets 8,770 7,431
Accumulated amortization (420) (93)
- -------------------------------------------------------------------------------------------------------------------------
Net intangible assets 8,350 7,338

Other assets 426 410
- -------------------------------------------------------------------------------------------------------------------------

Total $ 17,460 $ 15,138
-----------------------------------

Liabilities and Group Equity
Current liabilities
Current maturities of long-term debt $ 178 $ 348
Accounts payable 508 371
Construction obligations 936 979
Accrued taxes 143 93
Accrued interest 235 92
Payables to the FON Group 406 101
Accrued expenses and other current liabilities 396 416
- -------------------------------------------------------------------------------------------------------------------------
Total current liabilities 2,802 2,400

Long-term debt and capital lease obligations 9,630 7,847

Deferred credits and other liabilities
Deferred income taxes 948 1,013
Other 114 123
- -------------------------------------------------------------------------------------------------------------------------
Total deferred credits and other liabilities 1,062 1,136

Group equity 3,966 3,755
- -------------------------------------------------------------------------------------------------------------------------

Total $ 17,460 $ 15,138
-----------------------------------

See accompanying Condensed Notes to Combined Financial Statements.
</TABLE>

COMBINED STATEMENTS OF CASH FLOWS (Unaudited) Sprint PCS Group
(millions)
- ------------------------------------------------------------------ ----------------- ----------------- ----------------
Year-to-Date September 30, 1999 1998
- ------------------------------------------------------------------ ----------------- ----------------- ----------------

Operating Activities

<S> <C> <C>
Net loss $ (1,796) $ (474)
Adjustments to reconcile net loss to net cash provided (used) by
operating activities:
Equity in net losses of affiliates - 687
Depreciation and amortization 1,112 2
Deferred income taxes (130) 57
Extraordinary item, net 21 -
Current tax benefit used by the FON Group - (352)
Changes in assets and liabilities:
Accounts receivable, net (239) -
Inventories and other current assets (210) (30)
Accounts payable and other current liabilities 304 446
Receivable from the FON Group for current tax benefits
utilized (202) -
Receivables from and payables to the FON Group, net 306 -
Noncurrent assets and liabilities, net (9) (102)
Other, net 14 2
- ------------------------------------------------------------------ --- ------------- --- ------------- -- -------------
Net cash provided (used) by operating activities (829) 236
- ------------------------------------------------------------------ --- ------------- --- ------------- -- -------------

Investing Activities

Capital expenditures (1,580) (672)
Other, net (82) (194)
- ------------------------------------------------------------------ --- ------------- --- ------------- -- -------------
Net cash used by investing activities (1,662) (866)
- ------------------------------------------------------------------ --- ------------- --- ------------- -- -------------

Financing Activities

Proceeds from long-term debt 4,193 -
Payments on long-term debt (2,698) (7)
Dividends paid (11) -
Proceeds from PCS common stock issued 856 -
Advances from the FON Group - 410
Equity transfers to the FON Group, net - (125)
Current tax benefit used by the FON Group - 352
Other, net (6) -
- ------------------------------------------------------------------ --- ------------- --- ------------- -- -------------
Net cash provided by financing activities 2,334 630
- ------------------------------------------------------------------ --- ------------- --- ------------- -- -------------

Decrease in Cash and Equivalents (157) -
Cash and Equivalents at Beginning of Period 173 -
- ------------------------------------------------------------------ --- ------------- --- ------------- -- -------------

Cash and Equivalents at End of Period $ 16 $ -
--- ------------- -- -------------

See accompanying Condensed Notes to Combined Financial Statements.
</TABLE>

<PAGE>

CONDENSED NOTES TO COMBINED FINANCIAL Sprint PCS Group
STATEMENTS (Unaudited)

The information in this Form 10-Q has been prepared according to Securities and
Exchange Commission (SEC) rules and regulations. In our opinion, the combined
interim financial statements reflect all adjustments, consisting only of normal
recurring accruals, needed to fairly present the PCS Group's combined financial
position, results of operations and cash flows.

In connection with the PCS Restructuring, FT and DT purchased 5.1 million
additional PCS shares to maintain their combined 20% voting power in Sprint. The
purchase of these additional shares by FT and DT is referred to as the Top-up.

The combined PCS Group financial statements, together with the combined FON
Group financial statements, include all the accounts in Sprint's consolidated
financial statements. The combined financial statements for each Group were
prepared on a basis that management believes is reasonable and proper and
include:

- - the combined historical balance sheets, results of operations and cash
flows for each of the Groups, with all significant intragroup amounts
and transactions eliminated,
- - an allocation of Sprint's debt, including the related effects on
results of operations and cash flows, and
- - an allocation of corporate overhead after the PCS Restructuring date.

The PCS Group entities are commonly controlled companies and are wholly owned by
Sprint. Transactions between the PCS Group and the FON Group have not been
eliminated in the combined financial statements of either Group.

The PCS Group combined financial statements provide PCS shareholders with
financial information about the PCS Group operations. Investors in FON stock and
PCS stock are Sprint shareholders and are subject to risks related to all of
Sprint's businesses, assets and liabilities. Sprint retains ownership and
control of the assets and operations of each Group. Financial effects of either
Group that affect Sprint's results of operations or financial condition could
affect the results of operations or financial position of the other Group or the
market price of the other Group's stock. Net losses of either Group, and
dividends or distributions on, or repurchases of, PCS stock or FON stock, will
reduce Sprint funds legally available for dividends on both Groups' stock. As a
result, the PCS Group combined financial statements should be read along with
Sprint's consolidated financial statements and the FON Group's combined
financial statements.

Sprint PCS' 1998 results of operations have been consolidated. The Cable
Partners' share of losses through the PCS Restructuring date has been reflected
as "Other partners' loss in Sprint PCS" in the Combined Statements of
Operations. Sprint PCS' financial position has been reflected on a consolidated
basis at year-end 1998. The PCS Group's 1998 year-to-date cash flows reflect the
operations of SprintCom, Inc. and Sprint's investment in Sprint PCS.

The PCS Group combined financial statements are prepared using generally
accepted accounting principles. These principles require management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities, the disclosure of contingent assets and liabilities, and the
reported amounts of revenues and expenses. Actual results could differ from
those estimates.

- --------------------------------------------------------------------------------
3. Acquisition of Cox PCS
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------
4. Income Taxes
- --------------------------------------------------------------------------------

The differences that caused the PCS Group's effective income tax rates to vary
from the 35% federal statutory rate were as follows:

Year-to-Date
September 30,
-------------------------
1999 1998
- -------------------------------------------------------
(millions)
Income tax benefit at the
federal statutory rate $ 974 $ 269
Effect of:
State income taxes, net
of federal income tax 56 22
effect
Goodwill amortization (25) -
Other, net 3 4
- -------------------------------------------------------

Income tax benefit $ 1,008 $ 295
-------------------------

Effective income tax rate 36.2% 38.4%
-------------------------

- --------------------------------------------------------------------------------
5. Long-term Debt and Capital Lease Obligations
- --------------------------------------------------------------------------------

In the 1999 year-to-date period, Sprint allocated $4.2 billion of debt to the
PCS Group consisting mainly of senior notes with 5-year, 10-year, 20-year and
30-year maturities. These notes have interest rates ranging from 7.6% to 9.0%,
which are based on rates the PCS Group would have been able to obtain from third
parties as a direct or indirect wholly owned Sprint subsidiary, but without the
benefit of any guaranty by Sprint or any member of the FON Group.

In the 1999 year-to-date period, the PCS Group repaid $2.7 billion of its
revolving credit facilities and other borrowings. These borrowings were repaid
with the long-term financing provided by Sprint.

- --------------------------------------------------------------------------------
6. Group Equity
- --------------------------------------------------------------------------------

Year-to-Date
September 30,
1999
- -------------------------------------------------------
(millions)
Beginning balance $ 3,755
Net loss (1,796)
Common stock issued 2,022
Other, net (15)
- -------------------------------------------------------

Ending balance $ 3,966
------------------

- --------------------------------------------------------------------------------
7. Litigation, Claims and Assessments
- --------------------------------------------------------------------------------

PCS shareholders are subject to all of the risks related to an investment in
Sprint and the PCS Group, including the effects of any legal proceedings and
claims against the FON Group.

- --------------------------------------------------------------------------------
8. Supplemental Cash Flows Information
- --------------------------------------------------------------------------------

The PCS Group's cash paid (received) for interest and income taxes was as
follows:
Year-to-Date
September 30,
-------------------------
1999 1998
- -------------------------------------------------------
(millions)
Interest (net of capitalized
interest) $ 278 $ -
-------------------------
Income taxes $ (673) $ -
-------------------------

The PCS Group's noncash activities included the following:
Year-to-Date
September 30,
-------------------------
1999 1998
- -------------------------------------------------------
(millions)
Capital lease obligations $ 86 $ 438
-------------------------
Noncash activity in group
equity $ 25 $ -
-------------------------
Common stock issued for Cox
PCS acquisition $ 1,146 $ -
-------------------------

- --------------------------------------------------------------------------------
9. Subsequent Event
- --------------------------------------------------------------------------------

<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS OF Sprint PCS Group
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

- --------------------------------------------------------------------------------
General
- --------------------------------------------------------------------------------

See Sprint's "Management's Discussion and Analysis of Financial Condition and
Results of Operations--General" for a discussion of the PCS Restructuring and
the Recapitalization.

- --------------------------------------------------------------------------------
Recent Developments
- --------------------------------------------------------------------------------

In October 1999, Sprint announced a definitive merger agreement with
MCI/WorldCom. Under the agreement, each share of Sprint FON stock will be
exchanged for $76 of MCI/WorldCom common stock, subject to a collar. In
addition, each share of Sprint PCS stock will be exchanged for one share of a
new WorldCom PCS tracking stock and 0.1547 shares of MCI/WorldCom common stock.
The terms of the WorldCom PCS tracking stock will be equivalent to those of
Sprint PCS stock and will track the performance of the company's PCS business.
The merger is subject to the approvals of Sprint and MCI/WorldCom stockholders
as well as approvals from the Federal Communications Commission (FCC), the
Justice Department, various state government bodies and foreign antitrust
authorities. The companies anticipate that the merger will close in the second
half of 2000.

- --------------------------------------------------------------------------------
Sprint PCS Group
- --------------------------------------------------------------------------------

The PCS Group includes Sprint's domestic wireless personal communication
services (PCS) operations. It operates the only 100% digital PCS wireless
network in the United States with licenses to provide service nationwide using a
single frequency and a single technology. At the end of September 1999, the PCS
Group, together with certain affiliates, operated PCS systems in 290
metropolitan markets, including the 50 largest U.S. metropolitan areas. The PCS
Group has licenses to serve more than 270 million people in all 50 states,
Puerto Rico and the U.S. Virgin Islands. The service offered by the PCS Group
and its affiliates now reaches 180 million people. The PCS Group provides
nationwide service through:

The wireless industry typically generates a significantly higher number of
subscriber additions and handset sales in the fourth quarter of each year
compared to the remaining quarters. This is due to the use of retail
distribution, which is dependent on the holiday shopping season; the timing of
new products and service introductions; and aggressive marketing and sales
promotions.

- -------------------------------------------------------------------------------------------------------------------
Results of Operations
- -------------------------------------------------------------------------------------------------------------------

Selected Operating Results
---------------------------------------------------------------------
Quarters Ended
September 30, Variance
---------------------------------- -------------------------------
1999 1998 $ %
- ---------------------------------------------- ---------------- ----------------- -- ------------- -----------------
(millions)
<S> <C> <C> <C> <C>
Net operating revenues $ 844 $ 320 $ 524 163.8%
- ---------------------------------------------- -- ------------- -- -------------- -- -------------

Operating expenses
Costs of services and products 579 295 284 96.3%
Selling, general and administrative 662 377 285 75.6%
Depreciation and amortization 393 213 180 84.5%
- ---------------------------------------------- -- ------------- -- -------------- -- -------------

Total operating expenses 1,634 885 749 84.6%
- ---------------------------------------------- -- ------------- -- -------------- -- -------------

Operating loss $ (790) $ (565) $ (225) (39.8)%
-- ------------- -- -------------- -- -------------

Operating loss before depreciation and
amortization $ (397) $ (352) $ (45) (12.8)%
-- ------------- -- -------------- -- -------------
</TABLE>

Selected Operating Results
---------------------------------------------------------------------
Year-to-Date
September 30, Variance
---------------------------------- -------------------------------
1999 1998 $ %
- ---------------------------------------------- ---------------- ----------------- -- ------------- -----------------
(millions)
<S> <C> <C> <C> <C>
Net operating revenues $ 2,184 $ 788 $ 1,396 177.2%
- ---------------------------------------------- -- ------------- -- -------------- -- -------------

Operating expenses
Costs of services and products 1,620 783 837 106.9%
Selling, general and administrative 1,777 1,010 767 75.9%
Depreciation and amortization 1,112 536 576 107.5%
- ---------------------------------------------- -- ------------- -- -------------- -- -------------

Total operating expenses 4,509 2,329 2,180 93.6%
- ---------------------------------------------- -- ------------- -- -------------- -- -------------

Operating loss $ (2,325) $ (1,541) $ (784) (50.9)%
-- ------------- -- -------------- -- -------------

Operating loss before depreciation and
amortization $ (1,213) $ (1,005) $ (208) (20.7)%
-- ------------- -- -------------- -- -------------
</TABLE>

Net Operating Revenues

Net operating revenues include subscriber revenues and sales of handsets and
accessory equipment. Subscriber revenues consist of monthly recurring charges
and usage charges. Net operating revenues increased 164% in the 1999 third
quarter and 177% in the 1999 year-to-date period from the same 1998 periods
reflecting a 168% increase in the number of customers over the past 12 months.
The PCS Group added 720,000 customers in the 1999 third quarter and ended the
quarter with nearly 4.7 million customers in 290 metropolitan markets
nationwide. Average monthly service revenue per user (ARPU) was $54 for the 1999
third quarter compared to $55 for the same 1998 period. ARPU was $54 for the
1999 year-to-date period compared to $57 for the same 1998 period. ARPU has
decreased from prior-year periods due to a wider acceptance of lower-priced,
bundled minute rate plans.

<PAGE>

Customer churn rates have improved from the 1998 third quarter and are currently
in the mid-3% range. However, the churn rate in the 1999 third quarter increased
from the first half of 1999. As a result, the PCS Group has implemented several
initiatives designed to improve customer retention.

Approximately 18% of net operating revenues were from sales of handsets and
accessories. As part of the PCS Group's marketing plans, handsets are normally
sold at prices below the PCS Group's cost.

Operating Expenses

Costs of services and products mainly includes handset and accessory costs,
interconnection costs, and switch and cell site expenses. These costs increased
96% in the 1999 third quarter and 107% in the 1999 year-to-date period from the
same 1998 periods reflecting the significant growth in customers and expanded
market coverage, partly offset by a reduction in handset unit costs.

Selling, general and administrative (SG&A) expense mainly includes salary and
benefits costs as well as marketing costs to promote products and services. SG&A
expense increased 76% in the 1999 third quarter and year-to-date periods from
the same 1998 periods reflecting an expanded workforce to support subscriber
growth and increased marketing and selling costs.

Acquisition costs per gross customer addition, including equipment subsidies,
have improved from 1998 to the mid-$400 range in 1999. Lower handset unit costs
and scale benefits from greater customer additions have contributed to the
improvement.

Cash costs per user decreased more than 30% in the 1999 third quarter and more
than 35% in the 1999 year-to-date period from the same 1998 periods. The
improvements reflect good expense management and scale benefits of the increased
customer base.

Depreciation and amortization expense consists mainly of depreciation of network
assets and amortization of intangible assets. The intangible assets include
goodwill, PCS licenses, customer base, microwave relocation costs and assembled
workforce, which are being amortized over three to 40 years.

<PAGE>

- --------------------------------------------------------------------------------
Nonoperating Items
- --------------------------------------------------------------------------------

Interest Expense

The effective interest rates in the following table reflect interest expense on
long-term debt only. Interest costs on short-term borrowings classified as
long-term debt and intergroup borrowings have been excluded so as not to distort
the effective interest rate on long-term debt.

(1) The effective interest rate on long-term debt for the 1998 third quarter
and year-to-date periods is on a pro forma basis as if Sprint PCS long-term
debt had been included in the PCS Group's outstanding long-term debt
balance during those periods.
</TABLE>

The decrease in the PCS Group's effective interest rate for the 1999 third
quarter and year-to-date periods mainly reflects increased borrowings with lower
interest rates.

Effective with the PCS Restructuring, interest expense on borrowings incurred by
Sprint and allocated to the PCS Group is based on rates the PCS Group would be
able to obtain from third parties as a direct or indirect wholly owned Sprint
subsidiary, but without the benefit of any guaranty by Sprint or any member of
the FON Group. Interest expense of the PCS Group includes $45 million in the
1999 third quarter and $112 million in the 1999 year-to-date period resulting
from the difference between Sprint's actual interest rates and the rates charged
to the PCS Group. These costs are reflected in the effective interest rates
above.

Other Partners' Loss in Sprint PCS

Prior to the PCS Restructuring, the PCS Group's ownership interest in Sprint PCS
was accounted for using the equity method. In 1998, the Cable Partners' share of
losses through the PCS Restructuring date has been reflected as "Other partners'
loss in Sprint PCS" in the Combined Statements of Operations.

Other Income, Net

Other income mainly includes minority interest in Cox PCS of $20 million for the
1999 year-to-date period compared with $109 million for the same period a year
ago. There is no minority interest in the 1999 third quarter compared to $37
million for the same period a year ago.

Income Taxes

See Note 4 of Condensed Notes to Combined Financial Statements for the
differences that caused the effective income tax rates to vary from the
statutory federal rate.

Extraordinary Item, Net

- --------------------------------------------------------------------------------
Financial Condition
- --------------------------------------------------------------------------------

September 30, December 31,
1999 1998
- ------------------------------------------------------
(millions)
Combined assets $ 17,460 $ 15,138
--------------------------------

Net intangible assets increased $1.0 billion since year-end mainly reflecting
the 1999 second quarter acquisition of the remaining interest in Cox PCS partly
offset by year-to-date amortization.

Net property, plant and equipment increased $816 million since year-end mainly
reflecting capital expenditures to support the PCS network buildout and
expansion, partly offset by year-to-date depreciation.

In connection with the PCS Restructuring, Sprint adopted a tax sharing agreement
that provides for the allocation of income taxes between the FON Group and the
PCS Group. The current tax benefit receivable from the FON Group increased $202
million reflecting the PCS Group's 1999 year-to-date current income tax benefit
recognized, offset by payments from the FON Group during the period.

Accounts receivable increased $239 million since year-end reflecting strong
customer and revenue growth. Inventories increased $180 million since year-end
in anticipation of strong fourth quarter sales.

- --------------------------------------------------------------------------------
Liquidity and Capital Resources
- --------------------------------------------------------------------------------

The PCS Group's year-to-date 1998 cash flows reflect the operations of
SprintCom, Inc. and Sprint's investment in Sprint PCS and therefore are not
comparable.

Operating Activities

Year-to-Date
September 30,
-------------------------------
1999 1998
- ------------------------------------------------------
(millions)
Cash flows provided
(used) by
operating
activities $ (829) $ 236
-------------------------------

Operating cash flows decreased $1.1 billion in the 1999 year-to-date period
primarily reflecting increased operating losses for the PCS Group.

Investing Activities

Capital expenditures, which are the PCS Group's largest investing activity,
totaled $1.6 billion in the 1999 year-to-date period, compared to $672 million
for the same 1998 period for SprintCom, Inc. alone. Capital expenditures in both
years were mainly for the buildout and expansion of the PCS network.

<PAGE>

Financing Activities

In the 1999 year-to-date period, financing activities reflect proceeds from
long-term debt used mainly to repay existing debt and to fund capital
expenditures and operating requirements. In addition, the PCS Group received
$856 million of net proceeds from PCS common stock issuances. Financing
activities for the 1998 year-to-date period reflect advances from and equity
transfers to the FON Group as well as current tax benefits used by the FON
Group.

Capital Requirements

The PCS Group's 1999 investing activities, mainly consisting of capital
expenditures, are expected to be between $2.4 and $2.6 billion. Additional funds
will be required to fund expected operating losses, working capital and debt
service requirements of the PCS Group.

PCS preferred stock dividend payments are expected to total $15 million in 1999,
including payments to the FON Group for its preferred intergroup interest.

Liquidity

See Sprint's "Management's Discussion and Analysis of Financial Condition and
Results of Operations--Liquidity" for a discussion of liquidity.

- --------------------------------------------------------------------------------
Financial Strategies
- --------------------------------------------------------------------------------

Financial strategies are determined by Sprint on a centralized basis. See
Sprint's "Management's Discussion and Analysis of Financial Condition and
Results of Operations--Financial Strategies."

- --------------------------------------------------------------------------------
Year 2000 Issue
- --------------------------------------------------------------------------------

The "Year 2000" issue affects the PCS Group's installed computer systems,
network elements, software applications, and other business systems that have
time-sensitive programs that may not properly reflect or recognize the year
2000. Because many computers and computer applications define dates by the last
two digits of the year, "00" may not be properly identified as the year 2000.
This error could result in miscalculations or system failures. The Year 2000
issue may also affect the systems and applications of the PCS Group's customers,
vendors, resellers or affiliates.

The PCS Group has also contacted others with whom it conducts business to
receive the proper warranties and assurances that those third parties, including
affiliates, are or will be Year 2000 compliant. The PCS Group relies on
third-party vendors for a significant portion of its important operating and
computer system functions and is highly dependent on those third-party vendors
to remediate and test network elements, computer systems, software applications
and other business systems. However, the PCS Group has reviewed test results
provided by its vendors to help ensure Year 2000 compliance. In addition, the
PCS Group uses publicly available services that are acquired without contract,
such as global positioning system timing signal, that may be affected by the
Year 2000 issue. While the PCS Group believes these publicly available systems
will be Year 2000 compliant, it has no contractual or other right to force
compliance.

The PCS Group incurred approximately $40 million from inception through
September 1999 for its Year 2000 remediation program and expects to incur
approximately $10 million through the remainder of 1999. This program is
designed to assure the proper functioning of critical and secondary elements for
Year 2000 compliance. When this program is fulfilled, the PCS Group has a high
degree of confidence that elements within its control will function through the
upcoming date changes. However, there is a remaining risk stemming from elements
vulnerable to the Year 2000 problem which are beyond the PCS Group's control.
For example, the PCS Group interconnects with numerous third party carriers and
utilities. The PCS Group has taken measures to assure that these third parties
will continue to function through any date related difficulties, but ultimately
the PCS Group does not have control over their success. The PCS Group is
continuing to focus on identifying and addressing all aspects of its operations
that may be affected by the Year 2000 issue.

<PAGE>

The PCS Group is evaluating events beyond its control that could occur before
and after the arrival of the year 2000. The PCS Group has reviewed its existing
disaster recovery plans and developed additional contingency and business
continuity plans to prepare for the year 2000. All of these plans were complete
at the end of the third quarter. The PCS Group will implement, if necessary,
appropriate contingency and business continuity plans to mitigate to the extent
possible the effects of any Year 2000 noncompliance.

The PCS Group has reviewed the risks related to a worst case scenario that could
result from a Year 2000 related failure. This scenario could result in a
temporary disruption to normal business operations and could impact the PCS
Group's financial performance. Based upon the work completed to date, the PCS
Group believes that such an occurrence is unlikely. Nevertheless, certain
elements related to the Year 2000 readiness of suppliers, utilities,
interconnecting carriers and customers are beyond the PCS Group's control and
could fail. At this point, the PCS Group does not believe that the failure of
such elements could cause a major breakdown within its normal operations.

- --------------------------------------------------------------------------------
Forward-looking Information
- --------------------------------------------------------------------------------

See Sprint's "Management's Discussion and Analysis of Financial Condition and
Results of Operations--Forward-looking Information" for a discussion of
forward-looking information.