Exhibit 99.2
Sprint Corporation
SUMMARY INFORMATION - FINANCIAL STATEMENT RESTATEMENT
During a review of internal controls related to its capital assets, Sprint
identified, in the 2004 third quarter, a calculation error that had resulted,
since 1999, in the overstatement of interest capitalized during the construction
of its Wireless capital assets, with a corresponding understatement of interest
expense. The error subsequently resulted in an overstatement of depreciation
expense after the associated capital assets were placed in service. While the
effects of this calculation error are not material to any previously reported
period, Sprint has corrected this calculation error by restating previously
issued financial statements. Additionally, during the fourth quarter of 2003,
Sprint recorded an adjustment related to an understatement of its long term
disability liability. While the impact on prior years' annual financial
statements was fully disclosed and determined not to be material, Sprint has
also restated its previously issued financial statements to apply this
adjustment to the appropriate pre-2003 periods.
Sprint will file amendments to its filings with the Securities and Exchange
Commission to reflect the impacts of the restatements on its previously issued
audited annual and unaudited interim financial statements and related
disclosures.
The impacts of these restatements are summarized below (in millions,
except per share information):
Statement of Operations Data:
For the Quarter Ended June 30, 2004
----------------------------------------------------------
Previously As
Reported Adjustment Restated
----------------------------------------------------------
Operating income (loss) $ 707 $ 11 $ 718
Interest expense 310 6 316
Income (loss) from continuing operations 233 3 236
Net income (loss) 233 3 236
Diluted earnings (loss) per common share 0.16 - 0.16
Basic earnings (loss) per common share 0.16 - 0.16
For the Quarter Ended March 31, 2004
---------------------------------------------------------
Previously As
Reported Adjustment Restated
---------------------------------------------------------
Operating income (loss) $ 714 $ 10 $ 724
Interest expense 320 6 326
Income (loss) from continuing operations 222 3 225
Net income (loss) 222 3 225
Diluted earnings (loss) per common share(1) 0.15 0.01 0.16
Basic earnings (loss) per common share(1) 0.15 0.01 0.16
For the Quarter Ended December 31, 2003
---------------------------------------------------------
Previously As
Reported Adjustment Restated
---------------------------------------------------------
Operating income (loss) $ 325 $ 122 $ 447
Interest expense 322 8 330
Income (loss) from continuing operations 35 72 107
Net income (loss) 38 72 110
Diluted earnings (loss) per common share(1) 0.03 0.05 0.08
Basic earnings (loss) per common share(1) 0.03 0.05 0.08
For the Quarter Ended September 30, 2003
---------------------------------------------------------
Previously As
Reported Adjustment Restated
---------------------------------------------------------
Operating income (loss) $ (438) $ 8 $ (430)
Interest expense 335 6 341
Income (loss) from continuing operations (497) 1 (496)
Net income (loss) (498) 1 (497)
Diluted earnings (loss) per common share(1) (0.35) - (0.35)
Basic earnings (loss) per common share(1) (0.35) - (0.35)
1
Sprint Corporation
SUMMARY INFORMATION - FINANCIAL STATEMENT RESTATEMENT (continued)
Statement of Operations Data (continued):
For the Quarter Ended June 30, 2003
---------------------------------------------------------
Previously As
Reported Adjustment Restated
---------------------------------------------------------
Operating income (loss) $ 370 $ 8 $ 378
Interest expense 351 7 358
Income (loss) from continuing operations (2) - (2)
Net income (loss) 7 - 7
Diluted earnings (loss) per common share(1) - - -
Basic earnings (loss) per common share(1) - - -
For the Quarter Ended March 31, 2003
---------------------------------------------------------
Previously As
Reported Adjustment Restated
---------------------------------------------------------
Operating income (loss) $ 604 $ 8 $ 612
Interest expense 366 6 372
Income (loss) from continuing operations 97 2 99
Net income (loss) 1,668 2 1,670
Diluted earnings (loss) per common share(1) 1.18 - 1.18
Basic earnings (loss) per common share(1) 1.18 - 1.18
For the Year Ended December 31, 2003
---------------------------------------------------------
Previously As
Reported Adjustment Restated
---------------------------------------------------------
Operating income (loss) $ 861 $ 146 $ 1,007
Interest expense 1,374 27 1,401
Income (loss) from continuing operations (367) 75 (292)
Net income (loss) 1,215 75 1,290
Diluted earnings (loss) per common share(1) 0.85 0.06 0.91
Basic earnings (loss) per common share(1) 0.85 0.06 0.91
For the Year Ended December 31, 2002
---------------------------------------------------------
Previously As
Reported Adjustment Restated
---------------------------------------------------------
Operating income (loss) $ 2,100 $ (4) $ 2,096
Interest expense 1,406 28 1,434
Income (loss) from continuing operations 471 (20) 451
Net income (loss) 630 (20) 610
Diluted earnings (loss) per common share(1) 0.44 (0.01) 0.43
Basic earnings (loss) per common share(1) 0.45 (0.02) 0.43
For the Year Ended December 31, 2001
---------------------------------------------------------
Previously As
Reported Adjustment Restated
---------------------------------------------------------
Operating income (loss) $ (901) $ (9) $ (910)
Interest expense 1,180 64 1,244
Income (loss) from continuing operations (1,553) (46) (1,599)
Net income (loss) (1,401) (46) (1,447)
Diluted earnings (loss) per common share(1) (1.02) (0.03) (1.05)
Basic earnings (loss) per common share(1) (1.02) (0.03) (1.05)
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Sprint Corporation
SUMMARY INFORMATION - FINANCIAL STATEMENT RESTATEMENT (continued)
Statement of Operations Data (continued):
(1) On April 23, 2004 Sprint recombined its two tracking stocks. Each share of
PCS common stock automatically converted into 0.5 shares of FON common
stock. All per share amounts have been restated to reflect the
recombination of the FON common stock and PCS common stock as of the
earliest period presented at an identical conversion ratio (0.5). The
conversion ratio was also applied to dilutive PCS securities (mainly stock
options, ESPP, convertible preferred stock and restricted stock units) to
determine diluted weighted average shares on a consolidated basis.
Following are the impacts of the restatements on previously reported
information for the FON Group and the PCS Group:
For the Quarter Ended December 31, 2003
---------------------------------------------------------
Previously As
Reported Adjustment Restated
---------------------------------------------------------
FON Net income (loss) $ 360 $ 66 $ 426
Diluted earnings (loss) per FON common share 0.40 0.07 0.47
Basic earnings (loss) per FON common share 0.40 0.07 0.47
PCS Net income (loss) (322) 6 (316)
Diluted earnings (loss) per PCS common share (0.31) - (0.31)
Basic earnings (loss) per PCS common share (0.31) - (0.31)
For the Quarter Ended September 30, 2003
---------------------------------------------------------
Previously As
Reported Adjustment Restated
---------------------------------------------------------
FON Net income (loss) $ (433) $ - $ (433)
Diluted earnings (loss) per FON common share (0.48) - (0.48)
Basic earnings (loss) per FON common share (0.48) - (0.48)
PCS Net income (loss) (65) 1 (64)
Diluted earnings (loss) per PCS common share (0.07) - (0.07)
Basic earnings (loss) per PCS common share (0.07) - (0.07)
For the Quarter Ended June 30, 2003
---------------------------------------------------------
Previously As
Reported Adjustment Restated
---------------------------------------------------------
FON Net income (loss) $ 99 $ - $ 99
Diluted earnings (loss) per FON common share 0.11 - 0.11
Basic earnings (loss) per FON common share 0.11 - 0.11
PCS Net income (loss) (92) - (92)
Diluted earnings (loss) per PCS common share (0.09) - (0.09)
Basic earnings (loss) per PCS common share (0.09) - (0.09)
For the Quarter Ended March 31, 2003
---------------------------------------------------------
---------------------------------------------------------
Previously As
Reported Adjustment Restated
---------------------------------------------------------
FON Net income (loss) $ 1,850 $ - $ 1,850
Diluted earnings (loss) per FON common share 2.06 - 2.06
Basic earnings (loss) per FON common share 2.07 - 2.07
PCS Net income (loss) (182) 2 (180)
Diluted earnings (loss) per PCS common share (0.18) - (0.18)
Basic earnings (loss) per PCS common share (0.18) - (0.18)
3
Sprint Corporation
SUMMARY INFORMATION - FINANCIAL STATEMENT RESTATEMENT (continued)
Statement of Operations Data (continued):
For the Year Ended December 31, 2003
---------------------------------------------------------
Previously As
Reported Adjustment Restated
---------------------------------------------------------
FON Net income (loss) $ 1,876 $ 66 $ 1,942
Diluted earnings (loss) per FON common share 2.09 0.07 2.16
Basic earnings (loss) per FON common share 2.09 0.07 2.16
PCS Net income (loss) (661) 9 (652)
Diluted earnings (loss) per PCS common share (0.66) 0.01 (0.65)
Basic earnings (loss) per PCS common share (0.66) 0.01 (0.65)
For the Year Ended December 31, 2002
---------------------------------------------------------
Previously As
Reported Adjustment Restated
---------------------------------------------------------
FON Net income (loss) $ 1,208 $ (14) $ 1,194
Diluted earnings (loss) per FON common share 1.36 (0.02) 1.34
Basic earnings (loss) per FON common share 1.36 (0.01) 1.35
PCS Net income (loss) (578) (6) (584)
Diluted earnings (loss) per PCS common share (0.58) (0.01) (0.59)
Basic earnings (loss) per PCS common share (0.58) (0.01) (0.59)
For the Year Ended December 31, 2001
---------------------------------------------------------
Previously As
Reported Adjustment Restated
---------------------------------------------------------
FON Net income (loss) $ (147) $ (14) $ (161)
Diluted earnings (loss) per FON common share (0.16) (0.01) (0.17)
Basic earnings (loss) per FON common share (0.16) (0.01) (0.17)
PCS Net income (loss) (1,254) (32) (1,286)
Diluted earnings (loss) per PCS common share (1.28) (0.03) (1.31)
Basic earnings (loss) per PCS common share (1.28) (0.03) (1.31)
4
Sprint Corporation
SUMMARY INFORMATION - FINANCIAL STATEMENT RESTATEMENT (continued)
Balance Sheet Information:
As of June 30, 2004
---------------------------------------------------------
Previously As
Reported Adjustment Restated
---------------------------------------------------------
Net property, plant and equipment $ 26,345 $ (166) $ 26,179
Deferred income tax liability 2,025 (61) 1,964
Postretirement and other benefit obligations 1,357 - 1,357
Total shareholders' equity 13,527 (105) 13,422
As of March 31, 2004
---------------------------------------------------------
Previously As
Reported Adjustment Restated
---------------------------------------------------------
Net property, plant and equipment $ 26,641 $ (171) $ 26,470
Deferred income tax liability 1,904 (63) 1,841
Postretirement and other benefit obligations 1,313 - 1,313
Total shareholders' equity 13,404 (108) 13,296
As of December 31, 2003
---------------------------------------------------------
Previously As
Reported Adjustment Restated
---------------------------------------------------------
Net property, plant and equipment $ 27,276 $ (175) $ 27,101
Deferred income tax liability 1,789 (64) 1,725
Postretirement and other benefit obligations 1,572 - 1,572
Total shareholders' equity 13,224 (111) 13,113
As of December 31, 2002
---------------------------------------------------------
Previously As
Reported Adjustment Restated
---------------------------------------------------------
Net property, plant and equipment $ 28,745 $ (180) $ 28,565
Deferred income tax liability 2,025 (108) 1,917
Postretirement and other benefit obligations 1,712 114 1,826
Total shareholders' equity 12,294 (186) 12,108
As of December 31, 2001
---------------------------------------------------------
Previously As
Reported Adjustment Restated
---------------------------------------------------------
Net property, plant and equipment $ 28,960 $ (174) $ 28,786
Deferred income tax liability 1,586 (96) 1,490
Postretirement and other benefit obligations 940 88 1,028
Total shareholders' equity 12,616 (166) 12,450
5
Sprint Corporation
SUMMARY INFORMATION - FINANCIAL STATEMENT RESTATEMENT (continued)
Statement of Cash Flows Data:
For the Six Months Ended June 30, 2004
---------------------------------------------------------
Previously As
Reported Adjustment Restated
---------------------------------------------------------
Net cash provided by operating activities of continuing operations $ 2,946 $ (12) $ 2,934
Capital expenditures 1,688 (12) 1,676
For the Three Months Ended March 31, 2004
---------------------------------------------------------
Previously As
Reported Adjustment Restated
---------------------------------------------------------
Net cash provided by operating activities of continuing operations $ 1,044 $ (6) $ 1,038
Capital expenditures 689 (6) 683
For the Year Ended December 31, 2003
---------------------------------------------------------
Previously As
Reported Adjustment Restated
---------------------------------------------------------
Net cash provided by operating activities of continuing operations $ 6,542 $ (27) $ 6,515
Capital expenditures 3,824 (27) 3,797
For the Nine Months Ended September 30, 2003
---------------------------------------------------------
Previously As
Reported Adjustment Restated
---------------------------------------------------------
Net cash provided by operating activities of continuing operations $ 4,379 $ (19) $ 4,360
Capital expenditures 2,352 (19) 2,333
For the Six Months Ended June 30, 2003
---------------------------------------------------------
Previously As
Reported Adjustment Restated
---------------------------------------------------------
Net cash provided by operating activities of continuing operations $ 2,968 $ (13) $ 2,955
Capital expenditures 1,492 (13) 1,479
For the Three Months Ended March 31, 2003
---------------------------------------------------------
Previously As
Reported Adjustment Restated
---------------------------------------------------------
Net cash provided by operating activities of continuing operations $ 1,058 $ (6) $ 1,052
Capital expenditures 547 (6) 541
For the Year Ended December 31, 2002
---------------------------------------------------------
Previously As
Reported Adjustment Restated
---------------------------------------------------------
Net cash provided by operating activities of continuing operations $ 6,206 $ (28) $ 6,178
Capital expenditures 4,849 (28) 4,821
For the Year Ended December 31, 2001
---------------------------------------------------------
Previously As
Reported Adjustment Restated
---------------------------------------------------------
Net cash provided by operating activities of continuing operations $ 4,563 $ (64) $ 4,499
Capital expenditures 9,046 (64) 8,982
6