EXHIBIT 8.1
KING & SPALDING
1185 AVENUE OF THE AMERICAS
NEW YORK, NEW YORK 10036-4003
TELEPHONE: 212/556-2100
FACSIMILE: 212/556-2222
September 29, 1998
Sprint Corporation
2330 Shawnee Mission Parkway
Westwood, Kansas 66205
Re: Certain Federal Income Tax Consequences of the Recapitalization of
the Stock of Sprint Corporation
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Ladies and Gentlemen:
We have acted as tax counsel to Sprint Corporation ("Sprint") in
connection with certain transactions contemplated in the Restructuring and
Merger Agreement dated May 26, 1998, by and among Sprint, Tele-Communications,
Inc., Comcast Corporation, Cox Communications, Inc., Sprint Enterprises, L.P.,
TCI Spectrum Holdings, Inc., Comcast Telephony Services, Cox Telephony
Partnership, TCI Philadelphia Holdings, Inc., Comcast Telephony Services, Inc.,
Com Telephony Services, Inc., Cox Telephony Partners, Inc., Cox Communications
Wireless, Inc., SWV One, Inc., SWV Two, Inc., SWV Three. Inc., SWV Four, Inc.,
SWV Five, Inc., SWV Six, Inc. (the "Restructuring Agreement"), in particular the
Recapitalization as defined and described in such agreement. In connection with
the filing with the Securities and Exchange Commission of a registration
statement on Form S-4 (the "Registration Statement") containing a proxy
statement/prospectus (the "Prospectus"), you have requested our opinion
regarding (i) the federal income tax consequences to Sprint and its shareholders
from the Recapitalization, and (ii) the accuracy of the discussion included in
the Prospectus under the caption "Federal Income Tax Consequences."
All terms used herein without definition shall have the respective
meanings specified in the Restructuring Agreement, or if not defined therein the
respective meanings specified in the Amended and Restated Articles of
Incorporation of Sprint (the "Articles of Incorporation") .
191 PEACHTREE STREET 1730 PENNSYLVANIA AVENUE, N.W. 1100 LOUISIANA STREET, SUITE 3300
ATLANTA, GA 30303-1763 WASHINGTON, DC 20006-4706 HOUSTON, TX 77002-5219
TELEPHONE: 404/572-4600 TELEPHONE: 202/737-0500 TELEPHONE: 713/751-3200
FACSIMILE 404/572-5100 FACSIMILE: 202/626-3737 FACSIMILE: 713/751-3290
Sprint Corporation
September 29, 1998
Page 2
INFORMATION RELIED UPON
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In rendering the opinions expressed herein, we have examined such
documents as we have deemed appropriate. Specifically, we have examined, among
other documents, (i) the Restructuring Agreement, (ii) the Policy Statement
Regarding Tracking Stock Matters of the Sprint Board of Directors, (iii) the
Articles of Incorporation, (iv) the Registration Statement, (v) the Tax Sharing
Agreement, and (vi) all pertinent attachments and exhibits to all of the
foregoing (collectively, the "Transaction Documents").
In our examination of the Transaction Documents and in our reliance
upon them in issuing this opinion, we have assumed, with your consent, that all
Transaction Documents submitted to us as photocopies or by telecopy faithfully
reproduce the originals thereof; that the originals are authentic; that all
such Transaction Documents submitted to us have been or will be duly executed
and validly signed (or filed, where applicable) to the extent required in
substantially the same form as they have been provided to us; that the
Recapitalization will be consummated in compliance with the terms of the
Transaction Documents in all material respects; that each executed Transaction
Document will constitute the legal, valid, binding, and enforceable agreement
of the signatory parties; that all representations and statements set forth in
the Transaction Documents are and will remain true, accurate, and complete in
al1 material respects; and that all obligations imposed on, or covenants agreed
to by, the parties pursuant to any of the Transaction Documents have been or
will be performed or satisfied in accordance with their terms in all material
respects.
We also have obtained such additional information, upon which we also
have relied in rendering this opinion, as we have deemed relevant and necessary
through consultations with various representatives of Sprint. Furthermore, we
have obtained a written certificate from an executive officer of Sprint to
verify certain relevant facts that have been represented to us or that we have
been authorized to assume and upon which we have relied in rendering this
opinion. Moreover, you have permitted us to rely on the opinion of Stinson, Mag
& Fizzell, dated May 26, l998 regarding certain corporate law matters and the
reaffirmation dated on or about September 29, 1998. In addition, you have
permitted us to assume that issued and outstanding instruments designated as
the stock of Sprint will be treated under Kansas law as validly issued and
outstanding shares of Sprint stock. You have also permitted us to assume that
the par value of the stock surrendered or deemed surrendered in the
Recapitalization will be allocated among the reclassified stock resulting from
the Recapitalization.
Sprint Corporation
September 29, 1998
Page 3
OPINION
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Based on the foregoing, it is our opinion that:
(1) the Recapitalization will constitute a recapitalization within the
meaning of Section 368(a)(1)(E) of the Internal Revenue Code of 1986 (the
"Code");
(2) any outstanding stock which is designated as common stock of Sprint in
the Articles of Incorporation will constitute voting stock of Sprint for
federal income tax purposes;
(3) except with respect to cash paid in lieu of fractional shares, if any,
the holders of such stock of Sprint will not recognize income, gain or loss in
and as a result of the Recapitalization;
(4) such stock of Sprint received in the Recapitalization will not
constitute Section 306 stock within the meaning of Section 306(c) of the Code;
(5) holders of Existing Common Stock will take a tax basis in the FON
Stock and PCS Stock equal to the tax basis prior to the Recapitalization in the
Existing Common Stock (reduced by the amount allocable to any fractional share
interest for which cash is received), with such tax basis being allocated among
the FON Stock and PCS Stock in proportion to their relative fair market values
at the time of the Recapitalization;
(6) cash received in lieu of fractional shares will result in the
recognition of gain or loss equal to the difference, if any, between the
stockholder's basis in the fractional shares and the amount of cash received;
(7) a stockholder's holding period for shares of PCS Stock and FON Stock
received in the Recapitalization will include such stockholder's holding period
for the shares of Existing Common Stock surrendered therefor; and
(8) the discussion contained in the Prospectus under the caption "Federal
Income Tax Consequences" constitutes an accurate summary of the material United
States federal income tax consequences of the Recapitalization.
The opinions expressed herein are not applicable to stockholders who, for
federal income tax purposes, are subject to special tax treatment, such as,
without limitation, insurance companies, corporations subject to the alternative
minimum tax, banks, dealers in securities or tax-exempt organizations, persons
that hold Existing Common Stock as part of straddle, hedging or conversion
transactions, persons whose functional currency is not the U.S. dollar, or to
stockholders who acquired their stock pursuant to the exercise of employee stock
options or otherwise as compensation, or, stockholders of Sprint who do not hold
their shares of Sprint as capital assets within the meaning of Section 1221 of
the Code.
The opinions expressed herein are based upon existing statutory,
regulatory, administrative, and judicial authority in effect as of the date of
this letter, any of which may be changed at any time with retroactive effect.
Further, our opinions are based solely on the documents that we have examined
the additional information that we have obtained, and the
Sprint Corporation
September 29, 1998
Page 4
representations referred to herein that we have assumed with your consent to be
true, accurate, and complete on the date hereof. Our opinions cannot be relied
upon if any of the material facts contained in such documents or any such
additional information is, or later becomes, materially inaccurate or if any of
the representations referred to herein is, or later becomes, materially
inaccurate.
Our opinions represent our legal judgment, have no official status of
any kind, and are not binding upon the Internal Revenue Service or any court. In
this regard we note that no existing authority directly addresses the federal
income tax classification of multiple classes of stock of a single corporation,
each of which is intended to relate to and to track the economic performance of
separate businesses owned and operated (directly or indirectly) by the issuing
corporation. Moreover, the current policy of the Internal Revenue Service is to
refuse to issue private letter rulings as to the federal income tax
classification of stock such as FON Stock and PCS Stock.
Finally, our opinion is limited to the tax matters specifically
addressed herein. We have not been asked to address, nor have we addressed, any
other tax consequences of the Recapitalization or other transactions described
in the Restructuring Agreement, including, hut not limited to, any state, local,
or foreign tax consequences.
This letter is furnished by us as counsel to Sprint solely in
connection with the Recapitalization and is for the benefit of Sprint and may
not be relied upon for any other purpose without our express written consent. We
hereby consent, however, to the filing of this opinion as an exhibit to the
Registration Statement and to reference of our name under the caption "Federal
Income Tax Consequences" in the Prospectus. In giving such consent, we do not
thereby admit that we are included within the category of persons whose consent
is required under Section 7 of the Securities Act of 1933 or rules and
regulations promulgated thereunder.
Very truly yours,
/s/ King & Spalding
KING & SPALDING