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, 2000
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OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from to
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Commission file number 1-04721
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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 such 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
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COMMON SHARES OUTSTANDING AT OCTOBER 31, 2000:
FON COMMON STOCK 798,060,266
PCS COMMON STOCK 932,301,835
CLASS A COMMON STOCK 86,236,036
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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 2
Item 5. Other Information 2
Item 6. Exhibits and Reports on Form 8-K 2
Signature 4
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-12
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-9
ANNEX III
SPRINT PCS GROUP
Combined Financial Information
Combined Statements of Operations III-1
Combined Statements of Comprehensive Loss III-2
Combined Balance Sheets III-3
Combined Statements of Cash Flows III-4
Condensed Notes to Combined Financial Statements III-5
Management's Discussion and Analysis of Financial Condition and Results of Operations III-8
</TABLE>
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Part I. - Financial Information
Item 1. Financial Statements
The information required by Item 1 is incorporated by reference from
Annex I, Annex II and Annex III included herein.
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
The information required by Item 2 is incorporated by reference from
Annex I, Annex II and Annex III included herein.
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 1999.
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PART II. - Other Information
Item 1. Legal Proceedings
The two purported class action suits filed in the Supreme Court of New
York by shareholders in connection with the proposed merger of Sprint
into WorldCom, Inc. (reported in Sprint's Annual Report on Form 10-K
for the year ended December 31, 1999) have been dismissed without
prejudice, the last one in September 2000.
Item 2. Changes in Securities
There were no reportable events during the quarter ended September 30,
2000.
Item 3. Defaults Upon Senior Securities
There were no reportable events during the quarter ended September 30,
2000.
Item 4. Submission of Matters to a Vote of Security Holders
There were no reportable events during the quarter ended September 30,
2000.
Item 5. Other Information
Ratio of Earnings to Fixed Charges
Sprint's ratio of earnings to fixed charges was 1.30 for the 2000
third quarter. Sprint's earnings, as adjusted, were inadequate to
cover fixed charges by $63 million in the 2000 year-to-date period,
$278 million in the 1999 third quarter and $693 million for the 1999
year-to-date period. The ratio was computed by dividing fixed charges
into the sum of earnings, after certain adjustments, and fixed
charges. Earnings include income (loss) from continuing operations
before income taxes, plus equity in the net losses of
less-than-50%-owned entities, less capitalized interest. Fixed charges
include interest on all debt of continuing operations, including
amortization of debt issuance costs and the interest component of
operating rents.
Item 6. Exhibits and Reports on Form 8-K
(a) The following exhibits are filed as part of this report:
(3) Articles of Incorporation and Bylaws:
(a) Articles of Incorporation, as amended (filed as Exhibit 3(a)
to Sprint Corporation Quarterly Report on Form 10-Q for the
quarter ended March 31, 2000 and incorporated herein by
reference).
(b) Bylaws, as amended (filed as Exhibit 3(b) to Sprint
Corporation Quarterly Report on Form 10-Q for the quarter
ended March 31, 2000 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), as amended by the 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 in Schedule II thereto (filed as Exhibit
2 to Sprint Corporation's Current Report on Form 8-K dated
January 26, 2000 and incorporated herein by reference).
(d) Tracking Stock Policies of Sprint Corporation (filed as
Exhibit 4D to Post-Effective Amendment No. 2 to Sprint
Corporation's Registration Statement on Form S-3 (No.
33-58488) and incorporated herein by reference).
(10) Material Agreements:
(a) 364-Day Credit Agreement, dated as of August 4, 2000, among
Sprint Corporation and Sprint Capital Corporation, as
Borrowers, and the 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, N.A. and The Chase Manhattan
Bank, as Documentation Agents.
(10) Executive Compensation Plans and Arrangements:
(b) 1990 Stock Option Plan, as amended.
(c) Management Incentive Stock Option Plan, as amended.
(d) 1997 Long-Term Stock Incentive Program, as amended.
(e) Employment and Post-Retirement Consulting Agreement between
Sprint Corporation and William T. Esrey.
(f) Temporary Annex A to the 1990 Restricted Stock Plan. The
1990 Restricted Stock Plan, as amended, is filed as Exhibit
10(h) to Sprint Corporation Annual Report on Form 10-K for
the year ended December 31, 1999 and incorporated herein by
reference.
(g) Special Incentive Plan.
(h) Form of Contingency Employment Agreements between Sprint
Corporation and certain of its executive officers.
(12) Computation of Ratio of Earnings to Fixed Charges
(27) Financial Data Schedule
(a) September 30, 2000
(b) Reports on Form 8-K
Sprint filed a Current Report on Form 8-K dated July 13, 2000, in
which it reported that it and WorldCom, Inc. had announced that the
boards of directors of both companies had acted to terminate their
merger agreement.
Sprint filed a Current Report on Form 8-K dated October 17, 2000, in
which it reported that it had announced that its Board of Directors
had approved a proposal to offer employees a choice to cancel certain
stock options granted to them in 2000 in exchange for new options, to
be granted six months and one day from the date the old options are
cancelled, to purchase an equal number of the same class of shares.
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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
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(Registrant)
By /s/ John P. Meyer
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John P. Meyer
Senior Vice President -- Controller
Principal Accounting Officer
Dated: November 13, 2000
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EXHIBIT EXHIBIT INDEX
NUMBER
(3) Articles of Incorporation and Bylaws:
(a) Articles of Incorporation, as amended (filed as Exhibit 3(a)
to Sprint Corporation Quarterly Report on Form 10-Q for the
quarter ended March 31, 2000 and incorporated herein by
reference).
(b) Bylaws, as amended (filed as Exhibit 3(b) to Sprint
Corporation Quarterly Report on Form 10-Q for the quarter
ended March 31, 2000 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), as amended by the 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 in Schedule II thereto (filed as Exhibit
2 to Sprint Corporation's Current Report on Form 8-K dated
January 26, 2000 and incorporated herein by reference).
(d) Tracking Stock Policies of Sprint Corporation (filed as
Exhibit 4D to Post-Effective Amendment No. 2 to Sprint
Corporation's Registration Statement on Form S-3 (No.
33-58488) and incorporated herein by reference).
(10) Material Agreements:
(a) 364-Day Credit Agreement, dated as of August 4, 2000, among
Sprint Corporation and Sprint Capital Corporation, as
Borrowers, and the 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, N.A. and The Chase Manhattan
Bank, as Documentation Agents.
(10) Executive Compensation Plans and Arrangements:
(b) 1990 Stock Option Plan, as amended.
(c) Management Incentive Stock Option Plan, as amended.
(d) 1997 Long-Term Stock Incentive Program, as amended.
(e) Employment and Post-Retirement Consulting Agreement between
Sprint Corporation and William T. Esrey.
(f) Temporary Annex A to the 1990 Restricted Stock Plan. The
1990 Restricted Stock Plan, as amended, is filed as Exhibit
10(h) to Sprint Corporation Annual Report on Form 10-K for
the year ended December 31, 1999 and incorporated herein by
reference.
(g) Special Incentive Plan.
(h) Form of Contingency Employment Agreements between Sprint
Corporation and certain of its executive officers.
(12) Computation of Ratio of Earnings to Fixed Charges
(27) Financial Data Schedule
(a) September 30, 2000
