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.



Apr 17, 2001, 01:00 ET from Sprint

    KANSAS CITY, Mo., April 17 /PRNewswire/ -- 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.
     (Photo:  http://www.newscom.com/cgi-bin/prnh/20001013/SPRINTLOGO )
     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.
     -- 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
 PalmTM 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.
     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.
     -- 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.
     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; 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.
 
 
                                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
     Operating expenses
     Costs of services and products                   2,105             1,948
     Selling, general and administrative              1,135             1,153
     Depreciation and amortization                      586               545
     Total operating expenses                         3,826             3,646
     Operating income                                   532               758
     Interest expense                                   (27)              (39)
     Other income, net (a)                                5                 7
     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 (a)                           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
 
 
      (a) 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 from continuing operations
          by $17 million or $0.02 per share.
 
 
                                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
     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
     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.
 
 
                                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
     Total current assets                             4,354             4,512
     Property, plant and equipment
     Global markets division                         13,143            12,512
     Local division                                  17,136            16,835
     Other                                            1,758             1,651
     Total property, plant and equipment             32,037            30,998
     Accumulated depreciation                       (15,677)          (15,165)
     Net property, plant and equipment               16,360            15,833
     Net intangible assets                            1,200             1,204
     Other                                            2,115             2,100
 
     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
 
     Total                                          $24,029           $23,649
 
 
 
                                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)
     Net cash provided by operating
      activities                                        616             1,023
 
     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                -
     Net cash used by continuing
      operations                                     (1,153)           (1,816)
     Proceeds from the sale of Global One                -              1,403
     Net cash used by investing activities           (1,153)             (413)
 
     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
 
 
                                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
     Total operating expenses                         2,333             1,822
 
     Operating loss                                    (282)             (602)
 
     Interest expense                                  (285)             (220)
     Other income (expense), net (a)                    (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 (a)                                      $(0.40)           $(0.54)
     Diluted and basic weighted average
      common shares                                   977.9             956.3
 
 
      (a) 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
 
 
 
                                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 long-term debt             $678              $244
     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
 
 
 
                                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
 
 
 
                                 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
 
 
 
                                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
 
 
 
                                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
 
 
 
                                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
     Net cash used by continuing
      operations                                     (1,785)           (1,459)
     Proceeds from the sale of Global One                 -             1,403
     Net cash used by investing activities           (1,785)              (56)
 
     Financing Activities
         Increase (Decrease) in debt, net             1,365              (751)
         Dividends paid                                (109)             (109)
         Other, net                                      29               116
     Net cash provided (used) by financing
      activities                                      1,285              (744)
 
     Increase (Decrease) in cash and
      equivalents                                       (59)              130
 
     Cash and equivalents at beginning of
      period                                            239               120
 
     Cash and equivalents at end of period             $180              $250
 
 

SOURCE Sprint
    KANSAS CITY, Mo., April 17 /PRNewswire/ -- 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.
     (Photo:  http://www.newscom.com/cgi-bin/prnh/20001013/SPRINTLOGO )
     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.
     -- 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
 PalmTM 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.
     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.
     -- 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.
     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; 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.
 
 
                                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
     Operating expenses
     Costs of services and products                   2,105             1,948
     Selling, general and administrative              1,135             1,153
     Depreciation and amortization                      586               545
     Total operating expenses                         3,826             3,646
     Operating income                                   532               758
     Interest expense                                   (27)              (39)
     Other income, net (a)                                5                 7
     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 (a)                           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
 
 
      (a) 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 from continuing operations
          by $17 million or $0.02 per share.
 
 
                                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
     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
     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.
 
 
                                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
     Total current assets                             4,354             4,512
     Property, plant and equipment
     Global markets division                         13,143            12,512
     Local division                                  17,136            16,835
     Other                                            1,758             1,651
     Total property, plant and equipment             32,037            30,998
     Accumulated depreciation                       (15,677)          (15,165)
     Net property, plant and equipment               16,360            15,833
     Net intangible assets                            1,200             1,204
     Other                                            2,115             2,100
 
     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
 
     Total                                          $24,029           $23,649
 
 
 
                                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)
     Net cash provided by operating
      activities                                        616             1,023
 
     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                -
     Net cash used by continuing
      operations                                     (1,153)           (1,816)
     Proceeds from the sale of Global One                -              1,403
     Net cash used by investing activities           (1,153)             (413)
 
     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
 
 
                                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
     Total operating expenses                         2,333             1,822
 
     Operating loss                                    (282)             (602)
 
     Interest expense                                  (285)             (220)
     Other income (expense), net (a)                    (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 (a)                                      $(0.40)           $(0.54)
     Diluted and basic weighted average
      common shares                                   977.9             956.3
 
 
      (a) 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
 
 
 
                                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 long-term debt             $678              $244
     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
 
 
 
                                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
 
 
 
                                 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
 
 
 
                                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
 
 
 
                                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
 
 
 
                                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
     Net cash used by continuing
      operations                                     (1,785)           (1,459)
     Proceeds from the sale of Global One                 -             1,403
     Net cash used by investing activities           (1,785)              (56)
 
     Financing Activities
         Increase (Decrease) in debt, net             1,365              (751)
         Dividends paid                                (109)             (109)
         Other, net                                      29               116
     Net cash provided (used) by financing
      activities                                      1,285              (744)
 
     Increase (Decrease) in cash and
      equivalents                                       (59)              130
 
     Cash and equivalents at beginning of
      period                                            239               120
 
     Cash and equivalents at end of period             $180              $250
 
 SOURCE  Sprint