FOOL CONFERENCE CALL SYNOPSIS*
By Debora Tidwell (TMF Debit)

Sprint Corporation
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2330 Shawnee Mission Parkway
Westwood, KS 66205
(913) 624-3000
http://www.sprint.com

UNION CITY, CA (April 30, 1997)/FOOLWIRE/ --- Sprint Corporation released their first quarter 1997 results on April 15th. In the first quarter they once again made solid progress. Operationally their core long distance and local businesses continued to achieve strong volume, revenue, and profit growth. Strategically, they continued to invest in new opportunities which they believe offer attractive returns on invested capital. Their first quarter earnings per share from continuing operations was $0.67 compared to $0.78 in the first quarter a year ago.

EPS COMPONENTS. Their EPS this quarter can be broken down as follows. First, they earned $0.88 per share from their core businesses which was a 5% increase when compared to the $0.84 they achieved a year ago. This increase was offset by per share losses of $0.05 from their emerging businesses segment, $0.12 from Sprint PCS, and $0.04 from Global One. EPS this quarter was also impacted by a 9% increase in weighted average shares and a 190 basis point increase in their effective tax rate. Partially offsetting these factors was an increase in interest income.

MINUTES OF USE GROWTH. In the first quarter their long distance business continued to experience good momentum. The first quarter year-over-year growth in minutes of use was 14%. This is the sixth consecutive quarter that their long distance business has achieved year-over-year double-digit volume growth. Their local exchange operations also continued its strong growth with switched access lines increasing 5.5%. The year over year increase in access minutes of use was 5% for the quarter.

REVENUE DETAILS. Sprint's total revenues for the quarter were $3.62 billion, a 7% increase from a year ago. Long distance reported a year-over-year revenue gain of $171 million or 8.5%. Global One was formed on February 1, 1996. Consequently, their 1996 results reflect one month of the old Sprint International results prior to that contribution. Adjusting for these Global One transfers, long distance revenue growth was nearly 10%. The growth in long distance revenues this quarter is once again primarily a result of strong minute growth and rapid increases in frame relay and Internet platform services.

QUARTER OVERVIEW. They are pleased with their results this quarter in light of the challenges presented by the loss of the IRS 800 business and higher consumer bad debt provisions. Local division revenues were up $74 million or 6%. During the quarter, local service revenues and equipment sales both increased at double-digit rates. This strong growth was partially offset by lower toll revenues and slower access revenue gains which were influenced by heavy storm-related volumes a year ago. Driven by strong affiliate sales, revenues in their product distribution and publishing operations increased by $20 million, a 7% increase.

OPERATING MARGINS. Sprint's operating margin this quarter was 16.7% versus 17% a year ago. The decline is primarily due to higher expenses in their emerging businesses segment which was partially offset by improved margins in their core businesses. Compared to a year ago, the local division had a 120 basis point improvement in operating margin on very good cost control. Their long distance operating margin increased by 20 basis points. Margin expansion in long distance was negatively impacted by the higher consumer bad debt provisions and the IRS 800 losses and was positively impacted by Global One transfers.

OPERATING INCOME. Total operating income of $605 million is a 5% improvement over the year-ago period. Operating income from the core businesses was $638 million, an 11% increase. Emerging businesses incurred an operating loss this quarter of $33 million which compares to a $36 million loss in the fourth quarter. Approximately 2/3 of the losses were for their Sprint Internet Passport service.

INTERNET ACCESS SERVICE AGREEMENTS. During the quarter, Sprint announced several agreements to develop private label Internet access services. These agreements will leverage their Internet access platform which currently consists of more than 230 points of presence (POPs) and can be reached through a local call by more than 85% of the US population. Passport currently has about 100,000 customers.

PCS LICENSES. Early in the first quarter the auction of 10 MHz PCS licenses was completed. Sprint directly acquired licenses for markets which fill in the nationwide coverage of Sprint PCS. These licenses are for markets covering about 70 million people. Their total cost for these licenses was $544 million. The balance due on these licenses, approximately $435 million is scheduled to be paid at the end of April.

INVESTMENTS IN EMERGING BUSINESSES. They expect to spend about $1.5 billion for construction, working capital, and early operational losses in these market areas over the next three years. Expenses associated with these efforts are captured in the emerging businesses segment. The balance of the expenses in emerging businesses reflect Sprint's efforts to enter newly competitive domestic and international markets.

LOCAL EXCHANGE SERVICE. In the US they have applied to compete for local exchange service in 47 states and have received approval in 34 of these states as well as the District of Columbia. Their initial competitive local service offering in California is achieving good acceptance despite severe operational interface shortcomings. They currently have about 4500 residential customers using Sprint local services in San Diego and Santa Barbara. They intend to enter additional local markets in the near future.

OPERATING CASH FLOWS. Quarterly operating cash flows reached a new milestone this quarter as they passed the billion dollar mark for the first time. Total operating cash flows from their core businesses improved from $967 million to $1.05 billion, an increase of 8%. Long distance cash flows improved 10% from a year ago, while cash flows in the local division grew by 7%. Annualized operating cash flows of $4.2 billion in their core businesses equates to $9.63 per share. Despite their consistent track record of growing cash flows, their stock price is currently at a multiple of less than five times. For the twelve months ending in March, the improvement in economic value added in their core businesses was approximately $100 million. The absolute EVA generated in their core businesses over the last twelve months was approximately $400 million. Improvement in EVA continues to be driven by increased operating margins and higher asset turns.

GLOBAL ONE AND SPRINT PCS JOINT VENTURES. Global One revenues were approximately $0.25 billion during the quarter. Their portion of operating losses from Global One was $24 million this quarter which, on an after-tax basis, diluted earnings by $0.04 per share. Since the beginning of the year, Sprint PCS has launches service in 19 additional markets. Initiation of service in these markets, most of which were open in the past several weeks, brings the total markets served to 30. Sprint PCS is expected to begin providing service in the balance of its markets over the next several months. At that time POP coverage is expected to approach 60%. In the first quarter, their share of Sprint PCS operating losses amounted to $86 million which had an after-tax impact of $0.12 per share.

CAPITAL EXPENDITURES. The increased expenditures in the first quarter include higher cost of marketing and customer service as well as depreciation and amortization expenses in the markets where service has been initiated. Capital expenditures for the quarter were $600 million. First quarter capital expenditures by division were $321 million in their local division and $223 million in the long distance division. Total capital expenditures for local and long distance are expected to be about $2.5 billion in 1997. Capital expenditures in their emerging businesses were approximately $48 million in the first quarter, with about 2/3 of this due to the PCS license payments. In the first quarter they contributed $16 million to the Sprint PCS partnership. They currently expect equity contributions in Sprint PCS will be between $350-500 million in 1997.

LOCAL DIVISION

The local division kicked off 1997 with strong growth in access lines, revenues, and operating income. They are positioning themselves favorably for the competitive environment ahead by providing excellent customer service, by growing their portfolio of services, and by improving the cost effectiveness of their operations. The business organization is stepping up the sales of local long distance and data services in one package and their consumer group continues to have success growing the sales of customer premises equipment and vertical network services through promotions and package offerings.

ACCESS LINE GROWTH. Access line growth continues to be strong with 5.5% growth over 1996. In the first quarter they installed 117,000 new access lines to end the quarter with more than 7.2 million. The division has more than 5.2 million residential access lines, a 4.1% increase over the first quarter of 1996 and 2 million business lines, a 9.3% increase over the first quarter of 1996. Their Nevada and Florida properties continue to see particularly strong growth, with year-over-year access line growth rates reaching 10.9% and 5.9% respectively.

REVENUES. This underlying strength in demand translates directly to revenues. In the first quarter they reported total revenues of $1.3 billion, a 6% increase over revenues of $1.2 billion reported in the first quarter of 1996. They continue to experience strong growth in local services revenue, which increased 11% over the first quarter of 1996. This growth is a product of their strong primary and secondary access line gains, high acceptance of vertical network services, and usage sensitive offerings for services such as return call and repeat dial. For the quarter, revenue from vertical network services was up over 38% from the same quarter a year ago. This local services revenue growth was also boosted by the expansion of extended area calling plans. Strong growth in equipment sales also contributed to their first quarter revenue growth. Both the consumer and business markets are experiencing double-digit growth in equipment sales at 43% and 26% respectively over the first quarter of last year.

ACCESS MINUTES OF USE. Access minutes of use grew 5.3% over the year-ago quarter. This is below their normal growth primarily due to unusually high long distance calling volumes in the first quarter of 1996 generated by severe storms in several parts of the country. Normalized minutes of use growth would have been about 9% for the first quarter of this year if the effects of the storms last year were removed. As a consequence of this relatively slower growth in minutes and considering two state access rate reductions, they recorded a 4% increase in access revenues over the first quarter last year.

SERVICE REVENUES IMPACTED BY UTLD CLOSING. Total service revenues continue to decline due to lower volumes caused by the closing of United Telephone Long Distance, the local division's reseller of long distance services, and also due to competition in their intra-LATA toll markets and the shifting of some toll to extended area local calling plans. In the first quarter, toll services revenues were $22 million below the first quarter of 1996. Over half of this decline is attributable to the closing of UTLD which occurred in the fourth quarter last year. This closing will continue to impact Sprint's year-over-year comparisons throughout 1997. Note, however, that many UTLD customers are now Sprint long distance customers.

OPERATING INCOME. Operating income for the quarter totalled $368 million which is $36 million or a 10.8% improvement from the first quarter of 1996. They achieved an operating margin of 28% for the quarter compared to 26.8% during the first quarter of 1996. Operating cash flows were $600 million during the quarter, a $41 million or 7.4% increase above the first quarter of 1996.

OPERATING EXPENSES. Their cost trends remain well in hand. In the first quarter, operating expenses were $946 million, up 4% over the first quarter of last year. They are very pleased with the management of operating expenses as they have grown at a pace slower than access line and revenue growth. Annualized revenues per employee were $199,000, which is a 7% improvement over the first quarter last year. Telephone employees per 10,000 access lines also continues to improve, decreasing from 38 in the first quarter last year to 35 this quarter.

CAPITAL EXPENDITURES. Capital expenditures in the local division for the first quarter were $321 million, a 2.3% decrease over the same period in 1996. During the quarter they made substantial progress on interconnection negotiations. To-date they have signed 24 interconnection and resale agreements. They are currently processing orders from 14 CLECs (competitive local exchange carriers). So far they have shifted approximately 8000 lines to CLECs. The majority are for residential lines in Nevada and are resold lines. The local division's goal is to treat the CLECs as valuable customers by providing a high level of quality and responsive service. Successful marketing to these CLEC customers will provide another avenue to recover revenues potentially lost through access reform and facilities based competitive erosion.

PRODUCT DISTRIBUTION & DIRECTORY PUBLISING. Their product distribution and directory publishing businesses continue their solid growth of revenues and operating income. Revenues for the quarter increased 6.9% to $310 million from $290 million in the first quarter of 1996. Operating income showed an increase of 12% to $27 million from $24 million last year. Quarterly operating cash flows increased 11.2% to $29 million, up from $26 million in the first quarter of 1996.

AMERITECH AGREEMENT. On April 8th, they announced an agreement with Ameritech for the sale of approximately 136,000 access lines in a small area of Northwest Chicago and ten nearby suburbs. These exchanges provided them with limited growth opportunities and did not fit the long term strategy of their incumbent local operations. They expect to complete the sale of these properties in the third quarter of this year.

SUMMARY. To sum up, they are pleased with the continued growth of revenues, operating income and particularly their operating margin. They continue to be successful in driving costs out of the business and they are beginning to see the results of their consolidation efforts. Their focus for the second quarter will be to grow revenues through bundled vertical service offerings and increased sales to the business market and they continue to evaluate the newly competitive environment to determine the structure their business should take in the future.

LONG DISTANCE DIVISION

Their long distance division continued to experience good momentum in the first quarter and they continued to grow meaningful market share. They are also beginning to take real marketplace advantage of their numerous strategic initiatives.

RECORD REVENUES. In the first quarter the division reported record revenues of $2.17 billion compared to $2 billion a year ago, an 8.5% increase. Year-over-year volume growth was 14%. Both volume and revenue were impacted by the losses of IRS 800 traffic and planned FTS2000 yield reductions. Revenue was further impacted by higher than anticipated bad debt losses in the consumer market. Excluding government business, year-over-year volume growth for the division was 18%. Net of the Global One adjustment the gap between minute growth and revenue growth this quarter is about 4.5% or approximately the same level as in the fourth quarter. This gap is primarily attributable to competitive conditions in the marketplace.

OPERATING INCOME. In the first quarter they reported operating income of $252 million, a 10.5% increase from the year ago period. The operating margin of 11.6% compares to the 11.4% margin they reported in the first quarter last year and the fourth quarter margin of 11.9% which includes a non-recurring legal charge. The slightly lower sequential margin is primarily due to higher bad debt losses in the consumer market.

BUSINESS MARKET. In their business market some of the drivers of their growth in the first quarter were domestic switched WATs and toll-free volumes which each grew in excess of 30% year-over-year and international traffic which grew over 25%. They continue to experience very small growth in the small/medium business segment with Friday's Free driving their success. During the first quarter they extended the Friday's Free Program to the year 2000 which resulted in customer acquisition growth of 7% over an already strong fourth quarter 1996. Their Callers Plus Reward Program and Personalized Consulting Services from their Business Solutions Center continue to be key factors in maintaining a high level of customer loyalty. Buying growth in the high-end business segment with an 18% increase in the quarter versus the same period last year and 11% compared to the fourth quarter 1996. During the quarter they closed new business agreements with Reynolds & Reynolds, KPMG, Siemens, and Dean Witter. In addition, they recently signed significant add-on business with America Online for IP dial services that will support expansion of their existing network.

DATA SERVICE. Sprint continues to benefit from its leadership position in the data service arena. ATM, IP, and frame relay revenue this quarter grew significantly over the same time last year. As the dominant provider of Internet backbone services, they have approximately a 50% marketshare position in the ISP sub-market and provide service to several hundred ISPs.

RESIDENTIAL MARKET. Their Sprint Sense product continues to experience strong acceptance and new acquisitions were well ahead of last year's first quarter. However, their residential volumes and revenues this quarter experienced more modest growth. This is due to a combination of increased competition, higher bad debt losses, and an exceptionally strong first quarter last year. Their higher bad debt experience appears to be a reflection of financially overextended consumers and the economy as a whole. They have taken steps to ensure that their credit extensions are sound and, at this time, they do not expect this to become a wider problem. During the quarter their consumer group began to advertise and offer a wide array of services and allow households to bundle multiple Sprint brand services which include long distance, paging, Internet access, and Sprint PCS services. Based on early experience, they believe this approach will be very successful both in attracting new customers and in retaining existing customers.

CALLING/PREPAID CARDS. Sprint calling card and prepaid calling card services once again generated strong growth during the quarter. In the first quarter they celebrated the issuance of their 100-millionth prepaid calling card and have sustained clear leadership in this market sector.

DISTRIBUTION CHANNELS. A major focus of the consumer market this quarter was on extending the reach of the brand via new distribution channels. Their key successes include a new contract with TMSI granting them exclusive access to the US Postal Services New Movers Direct Mail Program. This opens a new channel for Sprint to reach a potential 19 million households. In addition, Radio Shack launched its first Sprint store-within-a-store in the Pittsburgh area. Finally, they signed a joint venture agreement with TelMex to market services to the US Hispanic community.

WHOLESALE GROUP. Their wholesale group once again had a terrific quarter with year-over-year growth in volume and revenues each up more than 35%. They are competing very successfully for traditional reseller business, winning several new accounts and gaining increasing commitments from existing customers. Agreements signed this quarter represent some of their largest wholesale wins ever. They are currently providing wireless and out-of-region traffic for four RBOCs (regional Bell operating companies). These agreements also include provisions for Sprint to carry in-region traffic commencing with regulatory approval.

COSTS. Interconnection costs as a percentage of revenue were 46.4% this quarter versus 44.6% a year ago and 45.6% in the fourth quarter. This increase was primarily due to international traffic growth, more competitive pricing, and higher consumer receivables allowances. Operation costs grew moderately but as a percent of revenue declined to 12.7% of revenues compared to 13% in last year's first quarter. Some of this improvement is related to the Global One transfer. Operations costs increased as a percent of revenue when compared to 12.3% in the fourth quarter. This increase was primarily due to increased levels of equipment sales and pay phone commissions. SG&A as a percent of revenue was 21.7% this quarter compared to 23.4% they reported a year ago and 25.3% in the fourth quarter. This improved efficiency is due to continued cost control and business process improvement efforts. One specific example can be found in their customer service centers where their unit cost per service call declined by 17% when compared to the first quarter last year.

SUMMARY. They are pleased with their performance in the first quarter. Their results are gratifying as they were achieved against a more difficult operating environment and, for Sprint, against more difficult year-over-year comparisons. Despite these challenges, they continue to grow at rates that are a multiple of their two main competitors. In 1997 they will further build on this momentum as they more fully integrate packages of communication products with addition of Sprint PCS and competitive local service offerings. Coupled with their Radio Shack alliance where several thousand stores nationwide will sell the full array of Sprint branded products and services, they are confident they will continue to grow a profitable market share.

CURRENT OPERATING ENVIRONMENT. First, in their long distance business, they continue to believe that double-digit volume, revenue, and operating income growth for the full year are achievable. They currently expect that their second quarter volume and revenue comparisons will improve from first quarter levels. Their local business will be challenged to sustain the operating margins they achieved in the first quarter. However, consolidation activity during the balance of this year is expected to yield substantial cost savings. They currently expect that their CLEC business will be slow to develop in 1997, given many outstanding interoperational issues. Their PCS related losses were below expectations as they enter the new year. However, they believe these losses will ramp up over the balance of the year. Finally, their full-year Global One related losses are currently expected to be materially below 1996 levels.

* A Fool conference call synopsis represents an effort to highlight the salient points of a conference call and should not be taken as an authoritative accounting or transcription of the entire event. Note: Statements made by a company other than historical information may constitute forward-looking statements for which the company can claim protection under the Safe Harbor Act. Please consult the company's filings with the SEC for information on risk factors which might cause actual results to differ materially from the information contained in these forward-looking statements.