SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) February 22, 2000
SPRINT CORPORATION
(Exact name of Registrant as specified in its charter)
Kansas 1-04721 48-0457967
(State of (Commission (I.R.S. Employer
Incorporation) File Number) Identification No.)
2330 Shawnee Mission Parkway, Westwood, Kansas 66205
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (913) 624-3000
(Former name or former address, if changed since last report)
P. O. Box 11315, Kansas City, Missouri 64112
(Mailing address of principal executive offices)
<PAGE>
Item 2. Acquisition or Disposition of Assets
On February 22, 2000, Sprint Corporation (Sprint) completed the sale of its
interest in the Global One joint venture for a price of $1.127 billion. Global
One also repaid all loans made to it by Sprint in the aggregate principal amount
of $276 million. The amount of the consideration was derived through arms'
length negotiations.
The disposition was completed through the transfer of Sprint's equity interests
in the various Global One entities to Atlas Telecommunications, S.A., a joint
venture of Deutsche Telekom and France Telecom. Deutsche Telekom and France
Telecom continue to hold a combined approximate 20% voting interest in Sprint
and continue to have representatives on Sprint's board of directors.
Item 7. Financial Statements and Exhibits.
(b) Pro Forma Financial Information
Sprint Corporation Unaudited Pro Forma Consolidated
Financial Statements.
(c) Exhibits
2A Master Transfer Agreement dated January 21, 2000,
between and among France Telecom, Deutsche Telekom
AG, NAB Nordamerika Beteiligungs Holding GmbH, Atlas
Telecommunications, S.A., Sprint Corporation, Sprint
Global Venture, Inc. and the JV Entities set forth
on Schedule II thereto (filed as Exhibit 2 to Sprint
Corporation Current Report on Form 8-K dated January
26, 2000 and incorporated herein by reference).
2B Amendment No. 1 to Master Transfer Agreement, dated
February 22, 2000.
<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, hereunto duly authorized.
SPRINT CORPORATION
Date: March 6, 2000 By: /s/ Michael T. Hyde
Michael T. Hyde
Assistant Secretary
<PAGE>
The following unaudited financial statements set forth the pro forma
consolidated balance sheet of Sprint Corporation as if the sale of the interest
in Global One had been consummated on September 30, 1999. The pro forma
statements of operations for the year ended December 31, 1998 and for the
nine-month period ended September 30, 1999 are presented as if the sale had been
consummated at January 1, 1998. These statements of operations do not include
any impact of the gain on the sale.
The unaudited pro forma consolidated financial statements are not necessarily
indicative of the results of operations which would have been reported had the
sale taken place during those periods or which may be reported in the future.
The statements should be read in conjunction with the respective historical
statements and notes thereto of Sprint Corporation. In future public filings,
historical statements will be restated to reflect Sprint's interest in Global
One as a discontinued operation in accordance with Accounting Principles Board
Opinion No. 30.
<TABLE>
<CAPTION>
PRO FORMA CONSOLIDATED BALANCE SHEETS (Unaudited) Sprint Corporation
(millions)
- ------------------------------------------------------------------------------------------------------------------------------------
Pro Forma
September 30, Pro Forma September 30,
1999 Adjustments 1999
- ------------------------------------------------------------------------------------------------------------------------------------
Assets
Current assets
<S> <C> <C> <C>
Cash and equivalents $ 426 $ 1,072 (A) $ 1,498
Accounts receivable, net of allowance for doubtful accounts of $251 3,298 3,298
Inventories 694 694
Prepaid expenses 340 340
Income tax receivable 338 338
Investments in equity securities 339 339
Other 154 154
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Total current assets 5,589 1,072 6,661
Investments in equity securities 46 46
Property, plant and equipment
FON Group 27,121 27,121
PCS Group 8,572 8,572
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Total property, plant and equipment 35,693 - 35,693
Accumulated depreciation (14,917) (14,917)
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Net property, plant and equipment 20,776 - 20,776
Investments in and advances to affiliates 747 (282) (B) 465
Intangible assets
Goodwill 5,654 5,654
PCS licenses 3,062 3,062
Other 1,493 1,493
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Total intangible assets 10,209 - 10,209
Accumulated amortization (616) (616)
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Net intangible assets 9,593 - 9,593
Other assets 1,233 1,233
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Total $ 37,984 $ 790 $ 38,774
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(A) Represents the net after-tax cash proceeds on the sale of the interest in
Global One and repayment of advances to Global One.
(B) Represents the elimination of the interest in and advances to Global One.
</TABLE>
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<TABLE>
<CAPTION>
PRO FORMA CONSOLIDATED BALANCE SHEETS (continued) (Unaudited) Sprint Corporation
(millions, except per share data)
- ------------------------------------------------------------------------------------------------------------------------------------
Pro Forma
September 30, Pro Forma September 30,
1999 Adjustments 1999
- ------------------------------------------------------------------------------------------------------------------------------------
Liabilities and Shareholders' Equity
Current liabilities
<S> <C> <C> <C>
Current maturities of long-term debt $ 1,005 $ 1,005
Accounts payable 1,511 1,511
Construction obligations 936 936
Accrued interconnection costs 723 723
Accrued taxes 225 225
Advance billings 304 304
Other 1,614 1,614
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Total current liabilities 6,318 - 6,318
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Long-term debt and capital lease obligations 14,376 14,376
Deferred credits and other liabilities
Deferred income taxes and investment tax credits 1,905 $ 9 (C) 1,914
Postretirement and other benefit obligations 1,056 1,056
Other 563 563
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Total deferred credits and other liabilities 3,524 9 3,533
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
and 1/2 PCS share) 216 216
FON, par value $2.00 per share, 4,200.0 shares authorized, 787.5 shares
issued and 785.2 shares outstanding 1,575 1,575
PCS, par value $1.00 per share, 2,350.0 shares authorized, 905.1 shares
issued and 905.1 shares outstanding 905 905
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 8,407 8,407
Retained earnings 2,549 781 (D) 3,330
Treasury stock, at cost, FON - 2.3 shares, PCS - 0.0 shares (181) (181)
Accumulated other comprehensive income 47 47
Other 1 1
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Total shareholders' equity 13,766 781 14,547
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Total $ 37,984 $ 790 $ 38,774
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(C) Represents the deferred tax impact on the sale of the interest in Global One.
(D) Represents the net after-tax gain on the sale of the interest in Global One.
</TABLE>
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<TABLE>
<CAPTION>
PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) Sprint Corporation
(millions, except per share data)
- ------------------------------------------------------------------------------------------------------------------------------------
Pro Forma Pro Forma
Year-to-Date Year-to-Date Year Ended Year Ended
September 30, Pro Forma September 30, December 31, Pro Forma December 31,
1999 Adjustments 1999 1998 Adjustments 1998
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net Operating Revenues $ 14,756 $ 14,756 $ 17,134 $ 17,134
Operating Expenses
Costs of services and products 7,326 7,326 8,787 8,787
Selling, general and administrative 4,881 4,881 5,273 5,273
Depreciation and amortization 2,675 2,675 2,705 2,705
Acquired in-process research and development costs - - 179 179
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Total operating expenses 14,882 14,882 16,944 16,944
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Operating Income (Loss) (126) (126) 190 190
Interest expense (613) (613) (728) (728)
Equity in loss of Global One (195) $195 (E) - (186) $186 (E) -
Other partners' loss in Sprint PCS - - 1,251 1,251
Minority interest 20 20 145 145
Other income, net 52 (3)(F) 49 170 (4)(F) 166
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Income (Loss) before income taxes and
extraordinary items (862) 192 (670) 842 182 1,024
Income taxes 238 (46) 192 (392) (58) (450)
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Income (Loss) before Extraordinary Items (624) 146 (478) 450 124 574
Extraordinary items, net (21) (21) (36) (36)
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Net Income (Loss) $ (645) $ 146 $ (499) 414 124 538
----------------------------------------
----------------------------------------
Preferred stock dividends paid (2) (2)
----------------------------------------
Earnings applicable to common stock $ 412 $ 124 $ 536
----------------------------------------
----------------------------------------
(E) Represents the elimination of the equity in loss of Global One.
(F) Represents the elimination of interest income on a loan to Global One.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS (continued) (Unaudited) Sprint Corporation
(millions, except per share data)
- ------------------------------------------------------------------------------------------------------------------------------------
Pro Forma Pro Forma
Year-to-Date Year-to-Date Year Ended Year Ended
September 30, Pro Forma September 30, December 31, Pro Forma December 31,
1999 Adjustments 1999 1998 Adjustments 1998
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FON COMMON STOCK
<S> <C> <C> <C> <C> <C> <C>
Earnings Applicable to Common Stock $ 1,156 $ 146 $ 1,302 $ 118 $ 30 $ 148
-------------------------------------------------------------------------------------------
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Diluted Earnings per Common Share $ 1.31 $ 1.47 $ 0.14 $ 0.17
---------- ---------- --------- ---------
---------- ---------- --------- ---------
Diluted weighted average common shares 884.3 884.3 869.0 869.0
---------- ---------- --------- ---------
---------- ---------- --------- ---------
Basic Earnings per Common Share $ 1.33 $ 1.50 $ 0.14 $ 0.17
---------- ---------- --------- ---------
---------- ---------- --------- ---------
Basic weighted average common shares 866.4 866.4 855.2 855.2
---------- ---------- --------- ---------
---------- ---------- --------- ---------
PCS COMMON STOCK
Loss Applicable to Common Stock $ (1,807) $ - $ (1,807) $ (559) $ - $ (559)
--------------------------------------- ----------------------------------------------
--------------------------------------- ----------------------------------------------
Basic and Diluted Loss per Common Share
Loss before extraordinary items $ (1.96) $ (1.96) $ (0.63) $ (0.63)
Extraordinary items, net (0.03) (0.03) (0.04) (0.04)
----------- ---------- --------- ----------
Total $ (1.99) $ (1.99) $ (0.67) $ (0.67)
----------- ---------- --------- ----------
----------- ---------- --------- ----------
Basic and diluted weighted average
common shares 910.3 910.3 831.6 831.6
----------- ---------- --------- ----------
----------- ---------- --------- ----------
SPRINT COMMON STOCK
Earnings Applicable to Common Stock $ 853 $ 94 $ 947
----------------------------------------------
----------------------------------------------
Diluted Earnings per Common Share
Income before extraordinary items $ 1.96 $ 2.17
Extraordinary items, net (0.01) (0.01)
--------- ----------
Total $ 1.95 $ 2.16
--------- ----------
--------- ----------
Diluted weighted average common shares
438.6 438.6
--------- ----------
--------- ----------
Basic Earnings per Common Share
Income before extraordinary items $ 1.99 $ 2.21
Extraordinary items, net (0.01) (0.01)
--------- ---------
Total $ 1.98 $ 2.20
--------- ---------
--------- ---------
Basic weighted average common shares 430.8 430.8
--------- ----------
--------- ----------
Note: In December 1999, the Sprint Board of Directors authorized a two-for-one stock split of the Sprint PCS common stock in the
form of a stock dividend, which was distributed on February 4, 2000 to PCS stockholders. In the second quarter of 1999, Sprint
effected a two-for-one stock split of its Sprint FON common stock in the form of a stock dividend. As a result, basic and diluted
earnings per common share and weighted-average common shares for Sprint FON common stock and Sprint PCS common stock have been
restated for periods prior to these stock splits.
</TABLE>
<PAGE>
EXHIBIT INDEX
Exhibit
Number Description
Page
2A Master Transfer Agreement dated January 21, 2000, between and
among France Telecom, Deutsche Telekom AG, NAB Nordamerika
Beteiligungs Holding GmbH, Atlas Telecommunications, S.A.,
Sprint Corporation, Sprint Global Venture, Inc. and the JV
Entities set forth on Schedule II thereto (filed as Exhibit 2
to Sprint Corporation Current Report on Form 8-K dated January
26, 2000 and incorporated herein by reference).
2B Amendment No. 1 to Master Transfer Agreement, dated
February 22, 2000.
Exhibit 2B
This AMENDMENT NO. 1 TO THE MASTER TRANSFER AGREEMENT (this "Amendment") dated
as of February 22, 2000, between and among France Telecom ("FT"), a societe
anonyme duly organized under the laws of France, Deutsche Telekom AG ("DT"), an
Aktiengesellschaft duly organized under the laws of Germany, NAB Nordamerika
Beteiligungs Holding GmbH ("NAB"), a limited liability company duly organized
under the laws of Germany and a wholly owned subsidiary of DT, Atlas
Telecommunications S.A. ("Atlas"), a societe anonyme duly organized under the
laws of Belgium, Sprint Corporation ("Sprint"), a corporation duly organized
under the laws of Kansas, United States of America, Sprint Global Venture, Inc.
("Sprint Sub"), a corporation duly organized under the laws of Kansas, United
States of America, and the JV Entities set forth on Schedule II of the Master
Transfer Agreement, as defined below (the "JV Entities"). FT, DT, NAB, Atlas,
Sprint, Sprint Sub and the JV Entities are collectively referred to herein as
the "Parties". Capitalized terms used but not defined herein shall have the
meanings assigned to such terms in the Master Transfer Agreement.
W I T N E S S E T H:
WHEREAS, Sprint has agreed to sell, and FT and DT have agreed to purchase,
Sprint's interests in the Joint Venture pursuant to the terms and conditions of
a Master Transfer Agreement, dated as of January 21, 2000 (the "Master Transfer
Agreement"), between and among FT, DT, NAB, Atlas, Sprint, Sprint Sub, and the
JV Entities;
WHEREAS, the closing of the sale of Sprint's interests in the Joint Venture
pursuant to the terms and conditions of the Master Transfer Agreement is taking
place on the date hereof, immediately following the execution and delivery of
this Amendment; and
WHEREAS, pursuant to and in accordance with Section 10.09(a) of the Master
Transfer Agreement, the Parties wish to amend, modify and supplement the Master
Transfer Agreement and the Transition Plan attached thereto as Annex A, as set
forth in this Amendment.
NOW, THEREFORE, in consideration of the rights and obligations contained herein,
and for other good and valuable consideration, the adequacy of which is hereby
acknowledged, the Parties hereto agree as follows:
Section 1. Amendment of Recent Ordinary Course Obligations. As of the date
hereof, the definition of "Recent Ordinary Course Obligations" in Section 1.01
(Certain Defined Terms), shall be amended, by deleting,"(b) Subject Claims
arising between the Signing Date and the Closing Date", and replacing "(c)",
"(d)" and "(e)", with "(b)", "(c)", and "(d)", respectively.
Section 2. Amendment to Schedule for sale of Dedicated Assets. Notwithstanding
anything to the contrary contained in the Master Transfer Agreement or the
Transition Plan, and specifically amending Section 2.07(f) of the Master
Transfer Agreement and Section 10 of the Transition Plan, the Parties hereby
agree to the following amended time schedule with respect to the sale of
dedicated assets by Sprint to the Joint Venture in accordance with Section 10 of
the Transition Plan:
<PAGE>
No later than March 1, 2000 the Joint Venture will notify Sprint in writing
which assets it intends to purchase from the list of assets provided by
Sprint pursuant to Section 10 of the Transition Plan (the "Notification
Date"), and the delivery of and payment for such assets selected shall take
place at a closing to be held at the offices of Shearman & Sterling, 599
Lexington Avenue, New York, New York at 10:00 a.m. on the fifth Business
Day following the Notification Date (subject to any other arrangements that
may need to be made under regulatory considerations), or at such other time
and place as shall be agreed upon by the Parties in writing.
Section 3. Counterparts. This Amendment may be executed in two or more
counterparts, each of which shall be deemed to constitute an original, but all
of which together shall constitute one and the same document.
Section 4. Governing Law. This Amendment shall be governed by, and construed in
accordance with the laws of the State of New York (regardless of the laws that
might otherwise govern under applicable principles of conflicts of law).
Section 5. No Third-Party Beneficiaries. This Amendment is for the sole benefit
of the Parties and their respective successors and permitted assigns and nothing
herein, express or implied, is intended to or shall confer upon any other person
any legal or equitable right, benefit or remedy of any nature whatsoever under
or by reason of this Amendment.
2
<PAGE>
IN WITNESS WHEREOF, this Amendment No. 1 to the Master Transfer Agreement
executed on behalf of the Parties by their respective duly authorized officers,
all as of the date first above written.
FRANCE TELECOM
By: /s/ Jacques Champeaux
Name: Jacques Champeaux
Title: Group Executive President Large Business Division
DEUTSCHE TELEKOM AG
By: /s/ Kevin Copp
Name: Kevin Copp
Title: Head of International Legal Affairs
NAB NORDAMERIKA BETEILIGUNGS HOLDING GMBH
By: /s/ Dr. Joachim Peckert
Name: Dr. Joachim Peckert
Title: Managing Director
By: /s/ Heinz Klesing
Name: Heinz Klesing
Title: Managing Director
ATLAS TELECOMMUNICATIONS, S.A.
By: /s/ Bruno Brochier
Name: Bruno Brochier
Title: Co-Chairman and Co-Managing Director
3
<PAGE>
By: /s/ Thomas Zimmer
Name: Thomas Zimmer
Title: Co-Chairman and Co-Managing Director
SPRINT CORPORATION
By: /s/ Tom Gerke
Name: Tom Gerke
Title: Vice President - Law, General Business and
Technology
SPRINT GLOBAL VENTURE, INC.
By: /s/ Tom Gerke
Name: Tom Gerke
Title: Vice President
GLOBAL ONE COMMUNICATIONS, L.L.C.
By: /s/ Michel Huet
Name: Michel Huet
Title: General Proxyholder
GLOBAL ONE COMMUNICATIONS GBN HOLDING, LIMITED
By: /s/ Michel Huet
Name: Michel Huet
Title: Officer
4
<PAGE>
GLOBAL ONE COMMUNICATIONS WORLD OPERATIONS, LIMITED
By: /s/ Michel Huet
Name: Michel Huet
Title: Officer
GLOBAL ONE COMMUNICATIONS WORLD HOLDING, B.V.
By: /s/ Michel Huet
Name: Michel Huet
Title: General Proxyholder
GLOBAL ONE COMMUNICATIONS WORLD SERVICE, B.V.
By: /s/ Michel Huet
Name: Michel Huet
Title: General Proxyholder
GLOBAL ONE COMMUNICATIONS EUROPE, L.L.C.
By: /s/ Michel Huet
Name: Michel HUET
Title: General Proxyholder
GLOBAL ONE COMMUNICATIONS HOLDING, B.V.
By: /s/ Michel Huet
Name: Michel Huet
Title: General Proxyholder
5
<PAGE>
GLOBAL ONE COMMUNICATIONS SERVICE, B.V.
By: /s/ Michel Huet
Name: Michel Huet
Title: General Proxyholder
GLOBAL ONE COMMUNICATIONS OPERATIONS, LIMITED
By: /s/ Michel Huet
Name: Michel Huet
Title: General Proxyholder
6
