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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): April 17, 2001
Sprint Corporation
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(Exact name of registrant as specified in its charter)
Kansas 1-04721 48-0457967
------------------------ ------------------------ -----------------------------------------
(State of incorporation) (Commission File Number) (IRS Employer Identification No.)
2330 Shawnee Mission Parkway
Westwood, Kansas 66205
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (913) 624-3000
Not Applicable
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(Former name or former address, if changed since last report)
P.O. Box 11315, Kansas City, Missouri 64112
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(Mailing address of principal executive offices)
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Item 5. Other Events
1. Press Release. On April 17, 2001, the registrant ("Sprint") announced
its first quarter results for the quarter ending March 31, 2001. The press
release was as follows:
SPRINT ANNOUNCES FIRST QUARTER RESULTS
EDITOR'S NOTE: In the second quarter of 2000, the local division transferred a
customer service operation to the PCS Group. Additionally, in the third quarter
of 2000, Sprint changed its transfer pricing for certain transactions between
the local division and the directory publishing business, which mainly had the
effect of reducing local division revenues. The discussion of the local
division's results assumes both events occurred at the beginning of 2000.
The Sprint FON Group (NYSE: FON) is comprised of Sprint's Global Markets
segment, Local Telecommunications Division and product distribution and
directory publishing businesses.
The Sprint PCS Group (NYSE: PCS) consists of Sprint's mobile PCS operations.
KANSAS CITY, Mo., - April 17, 2001 - Sprint today announced record first quarter
consolidated revenues of $6.28 billion, an increase of 14 percent from $5.53
billion a year ago. The PCS Group continued to lead the industry in subscriber
growth during the quarter and improved its performance in all key metrics
including average revenue per user, cost to acquire and cash cost per customer
compared to a year ago, and it reported very strong growth in operating cash
flow as measured by EBITDA. In the quarter, the FON Group had continued strong
success with bundled sales offerings, launched several new IP initiatives and
progressed on its goal of becoming a leading provider of broadband services.
First quarter diluted earnings per share from the FON Group's continuing
operations were 36 cents, including a 1 cent non-recurring gain from investing
activities.
"Sprint continues to build on the foundation for growth we described late last
year," said William T. Esrey, chairman and chief executive officer. "We have
shifted our focus and our resources from a predominantly wireline voice business
to higher-growth areas of data, wireless and broadband services where we expect
to see significant dividends in the years to come."
SPRINT PCS GROUP HIGHLIGHTS
The PCS Group recorded its 11th consecutive industry-leading quarter of customer
growth adding approximately 875,000 customers, which included 826,000 direct
customers and 49,000 resale customers. In the quarter the PCS Group sold 14,000
customers to an affiliate. Combined quarterly direct and resale customer
additions, normalized for transfers, was similar to the year ago period.
The PCS Group operates the nation's largest 100 percent digital, 100 percent PCS
wireless network, which now covers a population of nearly 228 million, including
affiliates, or more than 80 percent of the U.S. population.
. Monthly average revenue per user (ARPU) for the quarter was $60, a 6 percent
increase from $57 a year ago.
2
. Net operating revenues increased 68 percent to $2.05 billion in the first
quarter from $1.22 billion a year ago.
. Operating cash flows (EBITDA) were $253 million for the quarter, a $434
million increase from a year ago.
. Sprint PCS continued to lead the wireless industry in the number of Wireless
Web users on its Internet-ready phones and devices. In the first quarter
2001, data usage increased by 30 percent sequentially and six-fold from a
year ago.
. Sprint PCS increased its business customer base by 73 percent compared to a
year ago. Fueling this strong growth was the Sprint PCS Wireless Web for
Business, a full suite of wireless products and services offering clear,
wireless access to enterprise content and applications, including corporate
e-mail via Internet-ready Sprint PCS Phones.
. Capital expenditures were $655 million for the quarter, reflecting continued
capacity expansion, and increased coverage for the company's PCS wireless
network and development of new service capabilities.
"In each quarter for close to three years now, Sprint PCS has led the wireless
industry in net subscriber additions and in providing the best clarity,
coverage, connectivity and value for customers," Esrey said. "With CDMA
technology in 100 percent of our network, Sprint PCS is ideally positioned for
the future, and offers the most cost-efficient path to third-generation (3G)
technology. Within the next two years, high-speed 3G data rates promise to
alter the way people traditionally use wireless services, and will allow Sprint
PCS customers to take advantage of advanced mobile applications."
In the quarter, Sprint announced its aggressive schedule to bring high speed,
third-generation services to customers. By mid-2002, Sprint's 3G services are
projected to double voice capacity on the PCS nationwide network and increase
data speeds tenfold from 14.4 kbps to speeds up to 144 kbps.
During the quarter, Sprint PCS also announced a strategic alliance with Palm,
Inc., to market and sell wireless solutions for handheld computers using the
Palm OS(R) platform. The agreement represents the first CDMA solution for
Palm(TM) handheld computers enabling access to real-time information on the
Sprint PCS nationwide network.
Also in the first quarter, Sprint PCS Voice Command, the first nationwide,
network-based voice-activated dialing and information service, made its
commercial debut. By using their voices, customers can dial a number, look up
directory names, modify address book entries and perform various speech-enabled,
voice-independent functions while using any Sprint PCS Phone.
3
Additionally, in the first quarter of 2001, Sprint PCS announced:
. The nationwide availability of the Sprint PCS 5000 Phone by Sanyo, a compact
handset featuring the first full-color screen on a mobile phone marketed in
the United States. The large, color display enhances the Sprint PCS Wireless
Web experience - making it easier to read e-mail messages and make menu
selections. Up to 20 digital color photos of family, friends, or business
associates can be downloaded, then synchronized with phone book entries,
providing an onscreen "Photo Caller ID" for select incoming calls.
. Further expansion of the Sprint PCS Wireless Web service, with the addition
of several new content partners including: Biztravel.com, which provides
users with the ability to book airline, car rental and hotel reservations via
their Sprint PCS Internet-ready phones; washingtonpost.com, allowing access
to leading national and political news coverage; and Wau.com, the first
wireless portal that keeps the Spanish-speaking community in touch with
Mexico and Latin America.
SPRINT FON GROUP HIGHLIGHTS
. First quarter revenues of $4.36 billion declined 1 percent compared to $4.40
billion in the same period a year ago.
. First quarter diluted earnings per share from continuing operations were 36
cents compared to 50 cents a year ago. Earnings per share included non-
recurring gains from investing activities of 1 cent in the first quarter of
2001 and 2 cents in the first quarter of 2000.
. Net income was $315 million in the quarter compared to $445 million a year
ago, excluding a $675 million, or 75 cents a share, gain from the sale of
Sprint's investment in Global One.
. FON Group operating income in the quarter decreased 30 percent to $532
million from $758 million a year ago.
. Operating cash flows in the quarter were $1.12 billion, down 14 percent from
$1.30 billion in the first quarter a year ago.
Local Telecommunications Division
. Revenues were up 4 percent for the quarter to $1.55 billion from $1.50
billion a year ago.
. Operating income rose 4 percent in the quarter to $438 million from $420
million a year ago.
. Voice grade equivalent lines grew over 22 percent from the first quarter a
year ago. The number of access lines increased 2.2 percent during the same
period.
. Operating cash flows in the quarter increased 3 percent to $719 million from
$698 million in the previous first quarter.
Global Markets
. Revenues in the Global Markets segment for the quarter were down 2 percent
from a year ago due to lower long distance voice revenues and reduced sales
of network management services and customer premise equipment. These declines
were partially offset by growth in Internet Protocol (IP) and enterprise data
services. First quarter revenues were $2.57 billion compared to $2.63 billion
a year ago.
. Operating income declined in the quarter due to lower long distance margins
and increased dilution from Sprint ION(R) and broadband fixed wireless
activities. First quarter operating income was $25 million compared to $265
million a year ago.
4
. Operating cash flows in the first quarter were $327 million compared to $530
million a year ago.
. Long distance calling volumes rose 21 percent for the quarter compared to
last year.
Product Distribution and Directory Publishing
. Revenues increased 7 percent in the quarter to $494 million from $461 million
a year ago, with non-affiliated revenues increasing 2 percent in the same
period.
. Operating income increased 16 percent to $78 million in the first quarter
from $67 million a year ago.
"As we continue to execute against our domestic Internet strategy, expand
internationally, grow our broadband footprint, and develop the next-generation
of data products and services, I am confident about the FON Group's ability to
perform in today's highly-competitive marketplace," Esrey said.
For the quarter, Sprint's Local Telecommunications Division delivered solid
results, largely driven by increased bundled sales and strong data revenues.
The local division's revenues from data services for the quarter increased 22
percent and accounted for 42 percent of the division's total revenue growth.
At the end of the quarter, more than 23 percent of our local residential
customers subscribed to a bundled service plan, up substantially from less than
14 percent a year ago. Bundled services also contributed to an increased
penetration of Sprint long distance service in the company's local territories.
By the end of the quarter, over 41 percent of local residential customers
subscribed to Sprint long distance, up from 35 percent a year ago.
The local division continued to expand its broadband and data footprint and
increased DSL sales 57 percent over fourth quarter of 2000. DSL was launched in
five new markets during the first quarter: Newton/Clinton, New Jersey; Ft.
Walton Beach, Fla.; Kingsport/Bristol/Johnson City, Tenn; Lebanon/Mason, Ohio;
and Humble/Kingswood, Texas.
During the quarter, the local division added Web capabilities for consumer and
business market customers. Business customers can now report and schedule
repair needs online as well as view and pay their bills. Consumers can browse
our product selections, place orders, report troubles and make payments online.
In Global Markets, the long distance business operating environment was once
again highly competitive. Total voice revenues declined 2 percent in the
quarter compared to a year ago, but increased modestly on a sequential basis.
Business voice revenues continue to be impacted by aggressive market pricing.
In the quarter, Sprint continued to grow current-generation data services,
although these services were impacted by capacity limitations and a slower
economy. During the quarter, overall data revenue grew 6 percent compared to a
year ago.
Internet revenues for the quarter grew 14 percent to $249 million from $218
million last year. To support future Internet revenue growth, Sprint during the
quarter opened over 200,000 square feet of new Sprint E|Solutions Internet
center space in New York, Boston and Kansas City. The company plans to open
additional Internet centers in 8 more markets by the end of 2001. Sprint plans
to operate 18 domestic and a minimum of 2 international Internet centers by the
end of 2002. Each Internet center will offer a variety of services, from
collocation to application support, as well as comprehensive IT professional
services.
5
Sprint's Tier 1 Internet backbone was expanded internationally during the
quarter, with the opening of the first IP node in London in early February.
International expansion is expected to ultimately connect 15 cities in 13 major
European and Asian countries by the end of 2001 and 35 cities in 19 countries by
the end of 2003. The international deployment will provide multinational
companies, ISPs and other communications companies with direct access to
Sprint's data network and broad portfolio of advanced products and services.
During the quarter, Sprint continued to expand its broadband capabilities to
support the rollout of Sprint ION. The company has installed DSL equipment in
more than 1,100 central offices in 45 markets. By the end of 2001, DSL will be
in more than 2,000 central offices in 86 markets, which will enable the company
to reach 18 million households and 3 million business locations across the
country through its Sprint ION products.
The company launched four new Sprint Broadband Direct markets, bringing the
total number of markets with Sprint's fixed wireless capabilities to 14.
Throughout the quarter, Sprint has experienced strong customer demand for the
product and has consistently exceeded sales goals. By the end of March, the
Sprint Broadband Direct customer base had nearly doubled from the fourth quarter
of 2000.
Sprint expanded its Sprint ION portfolio in the first quarter with the
introduction of Sprint ION xt1 -- providing customers with all the benefits of
Sprint ION technology at a lower price point. Sprint also introduced Sprint ION
Home LAN, the first product that delivers on Sprint's broadband home networking
strategy. The product allows broadband customers to turn any phone jack in
their home into a high-speed connection.
Additionally, during the quarter Sprint received top honors in the Yankee
Group's Technologically Advanced Family (TAF) study, outscoring competitors in
performance, improvement and satisfaction. Also during the quarter it was
announced that in 2000, Sprint led the three major long distance communications
carriers with the fewest FCC reportable network outages for the fifth year in a
row. During 2000, Sprint had three reportable outages compared to 27 and nine
experienced by its two primary competitors. An FCC reportable outage is one in
which there are 90,000 blocked calls during an event which lasts one half hour
or more. The milestone underscores Sprint's network as the industry standard,
capable of making millisecond restoration times and fiber cuts and electronic
failures transparent to the customer.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION
This press release includes certain estimates, projections and other forward-
looking statements. 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;
6
. The costs and business risks related to entering new markets necessary to
provide nationwide or global services and providing new services;
. The ability of the PCS Group to continue to grow a significant market
presence;
. The effects of mergers and consolidations within the telecommunications
industry;
. The uncertainties related to Sprint's strategic investments;
. The impact of any unusual items resulting from ongoing evaluations of
Sprint's business strategies;
. Unexpected results of litigation filed against Sprint;
. 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 including the impact of the
Telecommunications Act of 1996, or other external factors over which Sprint
has no control; and
. Other risks referenced from time to time in Sprint's filings with the
Securities and Exchange Commission ("SEC").
The words "estimate," "project," "intend," "expect," "believe" and similar
expressions are intended to identify forward-looking statements. You should not
place undue reliance on forward-looking statements, which speak only as of the
date of this press release. Sprint is not obligated to publicly release any
revisions to forward-looking statements to reflect events after the date of this
press release or unforeseen events. Sprint provides a detailed discussion of
risk factors in periodic SEC filings and you are encouraged to review these
filings.
Sprint is a world-class global communications company - at the forefront of
integrating wireline and wireless communications services. Sprint is a large
carrier of Internet traffic and a leader in broadband communications. The
company built and operates the United States' first nationwide all-digital,
fiber-optic network and provides a portfolio of advanced data communications
services. It operates the largest 100-percent digital, 100-percent nationwide
PCS wireless network in the United States, already serving the majority of the
nation's metropolitan areas including more than 4,000 cities and communities
across the country. Sprint has $23 billion in annual revenues and serves more
than 23 million business and residential customers.
7
Sprint Corporation
FON GROUP
COMBINED STATEMENTS OF OPERATIONS (unaudited)
(millions, except per share data)
Quarters Ended
March 31,
-------------------------
2001 2000
-------------------------
Net operating revenues $4,358 $4,404
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Operating expenses
Costs of services and products 2,105 1,948
Selling, general and administrative 1,135 1,153
Depreciation and amortization 586 545
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Total operating expenses 3,826 3,646
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Operating income 532 758
Interest expense (27) (39)
Other income, net /(1)/ 5 7
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Income from continuing operations before income taxes 510 726
Income taxes (194) (281)
----------------------------------------------------------------------------------------------------
Income from continuing operations 316 445
Discontinued operation, net - 675
Extraordinary items, net (1) -
Cumulative effect of change in accounting principle, net - (2)
----------------------------------------------------------------------------------------------------
Net income 315 1,118
Preferred stock dividends received 2 2
----------------------------------------------------------------------------------------------------
Earnings applicable to common stock $ 317 $1,120
=========================
Diluted earnings per common share
Income from continuing operations - recurring $ 0.35 $ 0.48
Non-recurring items /(1)/ 0.01 0.02
----------------------------------------------------------------------------------------------------
Income from continuing operations 0.36 0.50
Discontinued operation - 0.75
----------------------------------------------------------------------------------------------------
Total $ 0.36 $ 1.25
====== ======
Diluted weighted average common shares outstanding 887.4 894.7
====== ======
Basic earnings per common share $ 0.36 $ 1.28
====== ======
(1) In the 2001 first quarter, the FON Group recorded net gains on investment
activities of $14 million which increased income from continuing operations
by $9 million or $0.01 per share. In the 2000 first quarter, the FON Group
recorded net gains on investment activities of $26 million which increased
income from continuing operations by $17 million or $0.02 per share.
8
Sprint Corporation
FON GROUP
SELECTED OPERATING RESULTS (unaudited)
(millions)
Quarters Ended
March 31,
-----------------------------
2001 2000
-----------------------------
Global Markets Division
Net operating revenues
Voice $1,736 $1,779
Data 502 474
Internet 249 218
Other 80 156
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Net operating revenues 2,567 2,627
-----------------------------------------------------------------------------------------------
Operating expenses
Costs of services and products 1,489 1,322
Selling, general and administrative 751 775
Depreciation and amortization 302 265
-----------------------------------------------------------------------------------------------
Total operating expenses 2,542 2,362
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Operating income $ 25 $ 265
=============================
Local Division
Net operating revenues
Local service $ 732 $ 696
Network access 505 511
Long distance 186 171
Other 130 151
-----------------------------------------------------------------------------------------------
Net operating revenues 1,553 1,529
-----------------------------------------------------------------------------------------------
Operating expenses
Costs of services and products 496 480
Selling, general and administrative 338 337
Depreciation 281 279
-----------------------------------------------------------------------------------------------
Total operating expenses 1,115 1,096
-----------------------------------------------------------------------------------------------
Operating income $ 438 $ 433
=============================
Product Distribution and Directory Publishing
Net operating revenues $ 494 $ 461
=============================
Operating income $ 78 $ 67
=============================
Unallocated Corporate Operations and
Intercompany Eliminations
Net operating revenues $ (256) $(213)
=============================
Operating income $ (9) $ (7)
=============================
Sprint's FON Group reporting segments are intended to reflect the operating
results of its global markets, local services, and product distribution and
directory publishing businesses. The Global Markets segment includes data
communications services such as Internet, web hosting, collocation, and security
services, as well as domestic and international voice services (except for
consumer services provided to customers within Sprint's local franchise
territories), our integrated communications services, referred to as Sprint ION,
and broadband fixed wireless services. Our local services segment includes local
phone services, access to its local network, consumer long distance services
provided to customers within our local franchise territories, and sales of
telecommunications equipment. The Product Distribution and Directory Publishing
segment provides wholesale distribution services of telecommunications products
and publishes and markets white and yellow page phone directories.
9
Sprint Corporation
FON GROUP
CONDENSED COMBINED BALANCE SHEETS
(millions)
March 31, December 31,
2001 2000
-----------------------------------
(unaudited)
Assets
Current assets
Cash and equivalents $ 60 $ 122
Accounts receivable, net 3,059 3,126
Receivables from the PCS Group 324 361
Inventories 429 434
Other 482 469
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Total current assets 4,354 4,512
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Property, plant and equipment
Global markets division 13,143 12,512
Local division 17,136 16,835
Other 1,758 1,651
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Total property, plant and equipment 32,037 30,998
Accumulated depreciation (15,677) (15,165)
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Net property, plant and equipment 16,360 15,833
---------------------------------------------------------------------------------------------------------------------------
Net intangible assets 1,200 1,204
Other 2,115 2,100
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Total $ 24,029 $ 23,649
===============================
Liabilities and group equity
Current liabilities
Short-term borrowings including current maturities of
long-term debt $ 1,113 $ 1,026
Accounts payable and accrued interconnection costs 1,656 2,145
Other 1,864 1,833
---------------------------------------------------------------------------------------------------------------------------
Total current liabilities 4,633 5,004
Long-term debt and capital lease obligations 4,013 3,482
Deferred income taxes and investment tax credits 1,310 1,276
Other 1,535 1,535
Redeemable preferred stock 9 9
Group equity 12,529 12,343
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Total $ 24,029 $ 23,649
===============================
10
Sprint Corporation
FON GROUP
CONDENSED COMBINED CASH FLOW INFORMATION (unaudited)
(millions)
Quarters Ended
March 31,
---------------------------------
2001 2000
---------------------------------
Operating Activities
Net income $ 315 $ 1,118
Discontinued operation, net - (675)
Depreciation and amortization 586 545
Deferred income taxes 69 238
Changes in assets and liabilites (374) (185)
Other, net 20 (18)
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Net cash provided by operating activities 616 1,023
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Investing Activities
Capital expenditures
Global markets division (650) (350)
Local division (364) (323)
Other (105) (85)
Investments in and loans to affiliates, net (46) (130)
Advances to the PCS Group - (928)
Other, net 12 -
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Net cash used by continuing operations (1,153) (1,816)
Proceeds from the sale of Global One - 1,403
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Net cash used by investing activities (1,153) (413)
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Financing Activities
Increase (Decrease) in debt, net 606 (381)
Dividends paid (105) (105)
Other, net (26) (33)
--------------------------------------------------------------------------------------------------------------------
Net cash provided (used) by financing activities 475 (519)
--------------------------------------------------------------------------------------------------------------------
Increase (Decrease) in cash and equivalents (62) 91
Cash and equivalents at beginning of period 122 104
--------------------------------------------------------------------------------------------------------------------
Cash and equivalents at end of period $ 60 $ 195
=================================
11
Sprint Corporation
PCS GROUP
COMBINED STATEMENTS OF OPERATIONS (unaudited)
(millions, except per share data)
Quarters Ended
March 31,
----------------------------
2001 2000
----------------------------
Net operating revenues $2,051 $1,220
-------------------------------------------------------------------------------------------------------
Operating expenses
Costs of services and products 1,134 894
Selling, general and administrative 664 507
Depreciation 401 289
Amortization 134 132
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Total operating expenses 2,333 1,822
-------------------------------------------------------------------------------------------------------
Operating loss (282) (602)
Interest expense (285) (220)
Other income (expense), net /(1)/ (20) 26
-------------------------------------------------------------------------------------------------------
Loss from continuing operations before income taxes (587) (796)
Income taxes 194 286
-------------------------------------------------------------------------------------------------------
Loss from continuing operations (393) (510)
Extraordinary items, net - (3)
Cumulative effect of change in accounting principle, net 2 -
-------------------------------------------------------------------------------------------------------
Net loss (391) (513)
Preferred stock dividends (4) (4)
-------------------------------------------------------------------------------------------------------
Loss applicable to common stock $ (395) $ (517)
============================
Diluted and basic loss per common share
Diluted and basic loss per common share /(1)/ $(0.40) $(0.54)
====== ======
Diluted and basic weighted average common shares 977.9 956.3
====== ======
(1) Includes a gain on sale of customers and network infrastructure to a PCS
affiliate of $28 million in the 2000 first quarter, which decreased PCS
Group loss from continuing operations by $18 million or $0.02 per share.
12
Sprint Corporation
PCS GROUP
CONDENSED COMBINED BALANCE SHEETS
(millions)
March 31, December 31,
2001 2000
--------------------------------
(unaudited)
Assets
Current assets
Cash and equivalents $ 120 $ 117
Accounts receivable, net 920 902
Current tax benefit receivable from the FON Group 103 26
Inventories 570 515
Other 223 290
----------------------------------------------------------------------------------------------------------
Total current assets 1,936 1,850
Net property, plant and equipment 9,762 9,522
Net intangible assets 7,594 7,734
Other 673 657
----------------------------------------------------------------------------------------------------------
Total $ 19,965 $ 19,763
===============================
Liabilities and group equity
Current liabilities
Short-term borrowings including current maturities of $ 678 $ 244
long-term debt
Accounts payable 458 687
Construction obligations 896 997
Payables to the FON Group 257 296
Other 1,354 1,168
----------------------------------------------------------------------------------------------------------
Total current liabilities 3,643 3,392
Long-term debt and capital lease obligations 14,463 14,136
Deferred income taxes 24 90
Other 271 253
Redeemable preferred stock 526 526
Group equity 1,038 1,366
----------------------------------------------------------------------------------------------------------
Total $ 19,965 $ 19,763
===============================
13
Sprint Corporation
PCS GROUP
CONDENSED COMBINED CASH FLOW INFORMATION (unaudited)
(millions)
Quarters Ended
March 31,
--------------------------------
2001 2000
--------------------------------
Operating Activities
Net loss $ (391) $ (513)
Depreciation and amortization 535 421
Deferred income taxes (79) 60
Changes in assets and liabilities (281) (48)
Other, net 41 (13)
------------------------------------------------------------------------------------------------------------
Net cash used by operating activities (175) (93)
------------------------------------------------------------------------------------------------------------
Investing Activities
Capital expenditures (655) (693)
Other, net 23 122
------------------------------------------------------------------------------------------------------------
Net cash used by investing activities (632) (571)
------------------------------------------------------------------------------------------------------------
Financing Activities
Increase (Decrease) in debt, net 759 (370)
Dividends paid (4) (4)
Advances from the FON Group - 928
Other, net 55 149
------------------------------------------------------------------------------------------------------------
Net cash provided by financing activities 810 703
------------------------------------------------------------------------------------------------------------
Increase in cash and equivalents 3 39
Cash and equivalents at beginning of period 117 16
------------------------------------------------------------------------------------------------------------
Cash and equivalents at end of period $ 120 $ 55
================================
14
Sprint Corporation
PCS GROUP
NET CUSTOMER ADDITIONS (unaudited)
(thousands)
Quarter ended March 31, 2001
-------------------------------------------------------------
Direct Resale Affiliate Total
------- ------ --------- -----
Operational net additions 826 49 234 1,109
Purchases (Sales), net (14) - 14 -
------------------------------------------------------------------------------------------------------------------------
Reported net additions 812 49 248 1,109
-------------------------------------------------------------
Ending customers - March 31, 2000 6,554 77 327 6,958
-------------------------------------------------------------
Ending customers - December 31, 2000 9,543 310 809 10,662
-------------------------------------------------------------
Ending customers - March 31, 2001 10,355 359 1,057 11,771
-------------------------------------------------------------
15
Sprint Corporation
CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)
(millions)
Quarters Ended
March 31,
-------------------------
2001 2000
-------------------------
Net operating revenues $6,280 $5,529
-----------------------------------------------------------------------------------------------------
Operating expenses
Costs of services and products 3,110 2,747
Selling, general and administrative 1,799 1,660
Depreciation 981 817
Amortization 140 149
-----------------------------------------------------------------------------------------------------
Total operating expenses 6,030 5,373
-----------------------------------------------------------------------------------------------------
Operating income 250 156
Interest expense (307) (254)
Other income (loss), net (20) 28
-----------------------------------------------------------------------------------------------------
Loss from continuing operations before income taxes (77) (70)
Income taxes - 5
-----------------------------------------------------------------------------------------------------
Loss from continuing operations (77) (65)
Discontinued operation, net - 675
Extraordinary items, net (1) (3)
Cumulative effect of change in accounting principles, net 2 (2)
-----------------------------------------------------------------------------------------------------
Net income (loss) $ (76) $ 605
=========================
16
Sprint Corporation
CONDENSED CONSOLIDATED BALANCE SHEETS
(millions)
March 31, December 31,
2001 2000
------------------------------------
(unaudited)
Assets
Current assets
Cash and equivalents $ 180 $ 239
Accounts receivable, net 3,979 4,028
Inventories 999 949
Other 707 757
------------------------------------------------------------------------------------------------------------------------
Total current assets 5,865 5,973
Net property, plant and equipment 26,079 25,316
Net intangible assets 8,794 8,938
Other 2,408 2,374
------------------------------------------------------------------------------------------------------------------------
Total $43,146 $42,601
====================================
Liabilities and shareholders' equity
Current liabilities
Short-term borrowings including current maturities of long-term debt $ 1,724 $ 1,205
Accounts payable and accrued interconnection costs 2,114 2,832
Construction obligations 896 997
Other 3,072 2,934
------------------------------------------------------------------------------------------------------------------------
Total current liabilities 7,806 7,968
Long-term debt and capital lease obligations 18,368 17,514
Deferred taxes and investment tax credits 1,330 1,360
Other 1,807 1,787
Redeemable preferred stock 256 256
Common stock and other shareholders' equity
Common stock
Class A 216 216
FON 1,599 1,598
PCS 936 933
Other shareholders' equity 10,828 10,969
------------------------------------------------------------------------------------------------------------------------
Total shareholders' equity 13,579 13,716
------------------------------------------------------------------------------------------------------------------------
Total $43,146 $42,601
====================================
17
Sprint Corporation
CONDENSED CONSOLIDATED CASH FLOW INFORMATION (unaudited)
(millions)
Quarters Ended
March 31,
----------------------------
2001 2000
----------------------------
Operating Activities
Net income (loss) $ (76) $ 605
Discontinued operation, net - (675)
Depreciation and amortization 1,121 966
Deferred income taxes (10) 298
Changes in assets and liabilities (655) (233)
Other, net 61 (31)
----------------------------------------------------------------------------------------------------------
Net cash provided by operating activities 441 930
----------------------------------------------------------------------------------------------------------
Investing Activities
Capital expenditures
FON Group (1,119) (758)
PCS Group (655) (693)
Investments in and loans to affiliates, net (46) (130)
Other, net 35 122
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Net cash used by continuing operations (1,785) (1,459)
Proceeds from the sale of Global One - 1,403
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Net cash used by investing activities (1,785) (56)
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Financing Activities
Increase (Decrease) in debt, net 1,365 (751)
Dividends paid (109) (109)
Other, net 29 116
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Net cash provided (used) by financing activities 1,285 (744)
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Increase (Decrease) in cash and equivalents (59) 130
Cash and equivalents at beginning of period 239 120
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Cash and equivalents at end of period $ 180 $ 250
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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 hereunto duly authorized.
Dated: April 23, 2001 SPRINT CORPORATION
By: /s/ MICHAEL T. HYDE
-------------------------------
Name: Michael T. Hyde
Title: Assistant Secretary
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