UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934

For the quarterly period ended MARCH 31, 1997
---------------------------------

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934

For the transition period from to
----------------------- -----------------------

333-06609-01
Commission file number 333-06609-02
----------------------------------------------------------

SPRINT SPECTRUM L.P.
SPRINT SPECTRUM FINANCE CORPORATION
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)

DELAWARE 48-1165245
DELAWARE 43-1746537
- --------------------------------------------- -------------------
(State or other jurisdiction of incorporation (IRS Employer
or organization) Identification No.)

4900 Main Street, Kansas City, Missouri, 64112
- --------------------------------------------------------------------------------
(Address of principal executive offices)

(816) 559-1000
- --------------------------------------------------------------------------------
(Registrant's telephone number, including area code)

- --------------------------------------------------------------------------------
(Former name, former address and former fiscal year,
if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.

Yes X No

As of May 1, 1997, Sprint Spectrum Finance Corporation had Common Stock
outstanding of 100 shares.

SPRINT SPECTRUM L.P.
SPRINT SPECTRUM FINANCE CORPORATION
FORM 10-Q FOR THE QUARTER ENDED MARCH 31, 1997

INDEX

Page
Number
----------

Part I - Financial Information...................................... 1 - 11

Item 1a. Financial Statements - Sprint Spectrum L.P........... 1 - 3

Consolidated Condensed Balance Sheets...................... 1

Consolidated Condensed Statements of Operations............ 2

Consolidated Condensed Statements of Cash Flows............ 3

Notes to Consolidated Condensed Financial Statements....... 4 - 7

Item 1b. Financial Statements - Sprint Spectrum Finance
Corporation................................................ 8 - 10

Condensed Balance Sheets................................... 8

Condensed Statements of Operations......................... 9

Condensed Statements of Cash Flows......................... 10

Notes to Condensed Financial Statements.................... 11

Item 2a. Management's Discussion and Analysis of Financial
Condition and Results of Operations - Sprint Spectrum L.P.. 12 - 16

Item 2b. Management's Discussion and Analysis of Financial
Condition and Results of Operations - Sprint Spectrum
Finance Corporation........................................ 17

Part II - Other Information

Item 1. Legal Proceedings..................................... 18

Item 2. Changes in Securities................................. 18

Item 3. Defaults On Senior Securities......................... 18

Item 4. Submission of Matters to a Vote of Security Holders... 18

Item 5. Other Information..................................... 18

Item 6. Exhibits and Reports on Form 8-K...................... 18 - 19

Signature............................................ 20 - 21

Exhibits

PART I.
Item 1a.
SPRINT SPECTRUM L.P.
(A Development Stage Enterprise)
CONSOLIDATED CONDENSED BALANCE SHEETS
(In Thousands)

March 31, December 31,
1997 1996
------------------------------------------
(Unaudited)
ASSETS

CURRENT ASSETS:

Cash and cash equivalents......................................... $ 70,317 $ 49,988
Accounts receivable, net.......................................... 7,183 3,310
Receivable from affiliates........................................ 6,810 14,021
Inventory......................................................... 129,627 72,414
Prepaid expenses and other assets................................. 23,263 14,260
----------------- ---------------
Total current assets............................................ 237,200 153,993

INVESTMENT IN PCS LICENSES, net...................................... 2,122,867 2,122,908

PROPERTY, PLANT AND EQUIPMENT, net................................... 2,062,711 1,408,680

MICROWAVE RELOCATION COSTS, net...................................... 176,715 135,802

OTHER ASSETS, net.................................................... 87,672 77,383

----------------- ---------------
TOTAL ASSETS......................................................... $ 4,687,165 $ 3,898,766
================= ===============

LIABILITIES AND PARTNERS' CAPITAL

CURRENT LIABILITIES:
Accounts payable.................................................. $ 138,032 $ 196,146
Payable to affiliates............................................. 4,204 5,626
Accrued expenses.................................................. 84,419 59,200
Current maturities of long-term debt.............................. 5,051 5,049
----------------- ---------------
Total current liabilities....................................... 231,706 266,021

LONG-TERM COMPENSATION OBLIGATION.................................... 15,786 11,356

CONSTRUCTION OBLIGATIONS............................................. 1,077,903 714,934

LONG-TERM DEBT....................................................... 1,324,162 686,192

COMMITMENTS AND CONTINGENCIES

LIMITED PARTNER INTEREST IN CONSOLIDATED
SUBSIDIARY........................................................ 5,000 5,000

PARTNERS' CAPITAL AND ACCUMULATED DEFICIT:
Partners' capital................................................. 2,773,793 2,767,564
Deficit accumulated during the development stage.................. (741,185) (552,301)
----------------- ---------------
Total partners' capital......................................... 2,032,608 2,215,263

----------------- ---------------
TOTAL LIABILITIES AND PARTNERS' CAPITAL.............................. $ 4,687,165 $ 3,898,766
================= ===============

See notes to condensed consolidated financial statements

PART I.
Item 1a.
SPRINT SPECTRUM L.P.
(A Development Stage Enterprise)
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS (UNAUDITED)
(In Thousands)

Cumulative
Period from
October 24,
1994 (date of
inception) to
Three Months Ended March 31, March 31,
1997 1996 1997
- ---------------------------------------------------------- -------------- -------------- -----------------

OPERATING REVENUES:

Service.............................................. $ 783 $ - $ 816
Equipment............................................ 8,684 - 12,826
-------------- -------------- -----------------

Total operating revenues......................... 9,467 - 13,642

OPERATING EXPENSES:
Cost of service...................................... 22,405 5 44,333
Cost of equipment.................................... 26,409 - 40,557
Selling.............................................. 12,639 63 51,129
General and administrative........................... 104,446 30,656 446,256
Depreciation and amortization........................ 34,382 254 45,906
-------------- -------------- -----------------

Total operating expenses......................... 200,281 30,978 628,181

LOSS FROM OPERATIONS........................... (190,814) (30,978) (614,539)

OTHER INCOME (EXPENSE):
Interest income.................................... 902 - 9,523
Interest expense................................... (94) (358) (643)
Other income ...................................... 1,122 143 2,964
Equity in loss of unconsolidated partnership - (36,232) (138,490)

-------------- -------------- ----------------

Total other income (expense)..................... 1,930 (36,447) (126,646)

-------------- -------------- -----------------
NET LOSS....................................... $ (188,884) $ (67,425) $ (741,185)
============== ============== =================

See notes to condensed consolidated financial statements

Part I.
Item 1a.
SPRINT SPECTRUM L.P.
(A Development Stage Enterprise)
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)
(In Thousands)

Cumulative
Period from
October 24,
Three Months Ended 1994 (date of
March 31, inception) to
----------------------------- March 31,
1997 1996 1997
- ---------------------------------------------------------------------------------------------------------------

CASH FLOWS FROM OPERATING ACTIVITIES:

Net loss $ (188,884) $ (67,425) $ (741,185)
Adjustments to reconcile net loss to net cash provided
by (used in) operating activities:
Equity in loss of unconsolidated partnership......... - 36,232 138,490
Depreciation and amortization....................... 34,382 254 45,906
Amortization of debt discount and issuance costs..... 10,959 - 24,967
Loss on disposal of non-network equipment............ - - 31
Changes in assets and liabilities:
Receivables....................................... 3,338 (1,289) (13,993)
Inventory......................................... (57,213) - (129,627)
Prepaid expenses and other assets................. (1,482) (38) (23,278)
Accounts payable and accrued expenses............. (30,317) 47,453 230,655
Long-term compensation obligation................. 4,430 2,391 15,786
------------ ------------- ---------------
Net cash provided by (used in) operating activities....... (224,787) 17,578 (452,248)

CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures...................................... (335,908) (44,486) (1,051,971)
Microwave relocation costs................................ (28,179) - (151,533)
Purchase of PCS licenses.................................. - - (2,124,594)
Investment in unconsolidated partnership.................. - - (131,752)
Loan to unconsolidated partnership........................ - (83,000) (172,655)
------------ ------------- ---------------
Net cash used in investing activities..................... (364,087) (127,486) (3,632,505)

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from long-term debt and vendor financing......... 629,214 - 1,303,415
Payments on long-term debt................................ (11) - (35)
Debt issuance costs....................................... (20,000) - (91,791)
Limited partner interest in consolidated subsidiary....... - - 5,000
Borrowings from affiliates................................ - - 5,000
Partner capital contributions............................. - 111,904 2,966,315
Dividends paid............................................ - - (32,834)
------------ ------------- ---------------
Net cash provided by financing activities................. 609,203 111,904 4,155,070

------------ ------------- ---------------
INCREASE IN CASH AND CASH EQUIVALENTS..................... 20,329 1,996 70,317

CASH AND CASH EQUIVALENTS, Beginning of period............ 49,988 1,123 -

------------ ------------- ---------------
CASH AND CASH EQUIVALENTS, End of period.................. $ 70,317 $ 3,119 $ 70,317
============ ============= ===============

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Interest paid, net of amount capitalized.................... $ 25 $ - $ 348

NON-CASH INVESTING ACTIVITIES:
- - A PCS license covering the Omaha MTA and valued at $6,229 was contributed
to the Company by Cox Communications during the three months ended
March 31, 1997

- - Capital expenditures and microwave relocation costs of
$364,087 and $1,203,504 for the three months and cumulative
period ended March 31, 1997 are net of construction obligations
of $362,969 and $1,077,903, respectively, to be financed

See notes to condensed consolidated financial statements

PART I.
Item 1a.

SPRINT SPECTRUM L.P.
(A Development Stage Enterprise)
Notes to Consolidated Condensed Financial Statements (Unaudited)

The information contained in this Form 10-Q for the three-month interim periods
ended March 31, 1997 and 1996 and the cumulative period from October 24, 1994
(date of inception) to March 31, 1997 has been prepared in accordance with
instructions to Form 10-Q and Rule 10-01 of Regulation S-X. In the opinion of
management, all adjustments considered necessary, consisting only of normal
recurring accruals, to present fairly the consolidated financial position,
results of operations, and cash flows for such interim periods have been made.

Certain information and footnote disclosures normally included in consolidated
financial statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted. The results of operations for the
three months ended March 31, 1997 are not necessarily indicative of the
operating results that may be expected for the year ended December 31, 1997.

1. Organization

Sprint Spectrum L.P. (the "Company") is a limited partnership formed in Delaware
on March 28, 1995, by Sprint Spectrum Holding Company, L.P. ("Holdings") and
MinorCo, L.P. ("MinorCo") both of which were formed by Sprint Enterprises, L.P.,
TCI Spectrum Holdings, Inc. (formerly known as TCI Telephony Services, Inc., as
successor to TCI Network Services), Cox Telephony Partnership and Comcast
Telephony Services (together the "Partners"). The Company was formed pursuant to
a reorganization of the operations of an existing partnership, WirelessCo, L.P.
("WirelessCo") which transferred certain operating functions to Holdings. The
Partners are subsidiaries of Sprint Corporation ("Sprint"), Tele-Communications,
Inc. ("TCI"), Comcast Corporation ("Comcast") and Cox Communications, Inc.
("Cox", and together with Sprint, TCI and Comcast, the "Parents"), respectively.
The Company and certain other affiliated partnerships offer services as Sprint
PCS.

The Partners of the Company have the following ownership interests as of March
31, 1997 and 1996:

Sprint Spectrum Holding Company, L.P. (general partner)....greater than 99%
MinorCo, L.P. (limited partner)................................less than 1%

The Company is consolidated with its subsidiaries, WirelessCo, L.P.
("WirelessCo"), Sprint Spectrum Equipment Company, L.P. ("EquipmentCo"), Sprint
Spectrum Realty Company, L.P. ("RealtyCo") and Sprint Spectrum Finance
Corporation ("FinCo"). WirelessCo was formed on October 24, 1994 to invest in
and hold the PCS licenses. On May 15, 1996, EquipmentCo and RealtyCo were
organized for the purpose of holding PCS network-related real estate interests
and assets. On May 20, 1996, FinCo, was also formed to be a co-obligor of the
senior notes and senior discount notes.

Development Stage Company - The Company and its subsidiaries are development
stage enterprises. The success of the Company's development is dependent on a
number of business factors, including securing financing to complete network
construction and fund initial operations, successfully deploying the PCS network
and attaining profitable levels of market demand for Company products and
services.

2. Summary of Significant Accounting Policies

Basis of Presentation - Prior to July 1, 1996, substantially all wireless
operations of the Company and subsidiaries and Holdings and subsidiaries were
conducted at Holdings and substantially all operating assets and liabilities,
with the exception of the interest in an unconsolidated subsidiary and the
ownership interest in PCS licenses, were held at Holdings. As of July 1, 1996,
Holdings transferred these net assets, and assigned agreements related to the
wireless operations to which it was a party to Sprint Spectrum L.P., EquipmentCo
and RealtyCo (the "Reorganization").

For purposes of these consolidated condensed financial statements, these
transactions have been treated as transactions between entities under common
control and accounted for in a manner similar to a pooling of interest ("As
Reorganized"). The Company, as used in these financial statements, includes the
pooled operations of Holdings through June 30, 1996. Accordingly, for periods
prior to July 1, 1996, Sprint Spectrum L.P.'s historical financial statements
have been restated to reflect those operations of Holdings that were transferred
on July 1, 1996 on a pooled basis. Information as of June 30, 1996 with respect
to the financial position and results of operations of the separate operations
pooled herein is as follows (in thousands):

Sprint
Spectrum L.P. Holdings Combined

Total Assets................................ $ 2,268,805 $ 2,561,328 $ 2,561,328

Partners' Capital & Accumulated Deficit..... 2,258,426 2,469,529 2,472,384

Net Loss.................................... (81,278) (158,195) (158,195)

Revenue Recognition - Operating revenues for PCS services are recognized as
service is rendered. Operating revenues for equipment sales are recognized at
the time the equipment is sold to a customer or an unaffiliated agent.

Accounts Receivable - Accounts receivable are net of an allowance for doubtful
accounts of approximately $1.2 million and $202,000 at March 31, 1997 and
December 31, 1996, respectively.

Investment in PCS Licenses and Other Intangibles - During 1994 and 1995, the
Federal Communications Commission ("FCC") auctioned PCS licenses in specific
geographic service areas. The FCC grants licenses for terms of up to ten years,
and generally grants renewals if the licensee has complied with its license
obligations. The Company believes it has and will continue to meet all
requirements necessary to secure renewal of its PCS licenses. The Company has
also incurred costs associated with microwave relocation in the construction of
the PCS network. Amortization of PCS licenses and microwave relocation costs
will commence as each service area becomes operational, over estimated useful
lives of 40 years. Accumulated amortization for PCS licenses and microwave
relocation costs totaled approximately $9.0 million and $1.7 million as of March
31, 1997 and December 31, 1996, respectively. Interest expense capitalized
pertaining to the acquisition of the PCS licenses has been included in Property,
plant and equipment.

Capitalized Interest - Interest costs associated with the construction of
capital assets incurred during the period of construction are capitalized. The
total capitalized as of March 31, 1997 and December 31, 1996 was approximately
$64,709,000 and $30,461,000, respectively.

Major Customer - The Company markets its products through multiple distribution
channels, including Company-owned retail stores and third-party retail outlets.
Sales to one third-party retail customer exceeded 10% of Equipment revenue in
the consolidated condensed statement of operations for the three months ended
March 31, 1997.

Income Taxes - The Company has not provided for federal or state income taxes
since such taxes are the responsibility of the individual Partners.

Use of Estimates - The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those estimates.

Paging Services - The Company has commenced paging services pursuant to
agreements with Paging Network Equipment Company ("PageNet") and Sprint
Communications Company, L.P. ("Sprint Communications"). For the three months
ended March 31, 1997 and 1996, Sprint Communications received agency fees of
approximately $3.3 million and $8,000, respectively.

Reclassifications - Certain reclassifications have been made to the 1996
financial statements to conform with the 1997 financial statement presentation.

3. Long-Term Debt and Borrowing Arrangements

The long-term debt of the Company as of March 31, 1997 and December 31, 1996 is
summarized as follows (in thousands):

March 31, December 31,
1997 1996
------------------- -----------------

11% Senior Notes due in 2006 $ 250,000 $ 250,000
12 1/2% Senior Discount Notes due in 2006, net of
unamortized discount of $205,732 and $214,501 at
March 31, 1997 and December 31, 1996, respectively 294,268 285,499
Credit facility - term loans 300,000 150,000
Credit facility - revolving credit 200,000 -
Vendor financing 279,214 -
Note payable to affiliate due in 1997 5,000 5,000
Other 731 742
------------------- -----------------

Total debt 1,329,213 691,241
Less current maturities 5,051 5,049
------------------- -----------------

Long-term debt $ 1,324,162 $ 686,192
=================== =================

Bank Credit Facility - The Company entered into an agreement with The Chase
Manhattan Bank ("Chase") as agent for a group of lenders for a $2 billion bank
credit facility dated October 2, 1996. The proceeds of this facility are to be
used to finance working capital needs, subscriber acquisition costs, capital
expenditures and other general Company purposes.

The facility consists of a revolving credit commitment of $1.7 billion and a
$300 million term loan commitment. As of March 31, 1997, the term loans bear a
weighted average interest rate of 8.12%. The amount available under the total
revolving credit commitment will be increased upon the achievement of certain
financial and operating conditions as defined in the agreement. As of March 31,
1997, $200 million had been drawn at a weighted average interest rate of 8.22%
and $250 million remained available. Commitment fees for the revolving portion
of the agreement are payable quarterly based on average unused revolving
commitments. Subsequent to March 31, 1997, the Company borrowed an additional
$40 million under the revolving credit facility.

Vendor Financing - As of October 2, 1996, the Company entered into financing
agreements with Northern Telecom, Inc. ("Nortel") and Lucent Technologies, Inc.
("Lucent" and together with Nortel, the "Vendors") for multiple drawdown term
loan facilities totaling $1.3 billion and $1.8 billion, respectively. The
proceeds of such facilities are to be used to finance the purchase of goods and
services provided by the Vendors.

Nortel has committed to provide financing in two phases. During the first phase,
Nortel will finance up to $800 million. Under the second phase, Nortel will
finance up to an additional $500 million upon the achievement of certain
operating and financial conditions. As of March 31, 1997, $5 million had been
borrowed at an interest rate of 8.73% with $755 million remaining available
under the first phase. In addition, the Company paid $20 million in origination
fees upon the initial draw down under the first phase and will be obligated to
pay additional origination fees on the date of the initial draw down loan under
the second phase. Subsequent to March 31, 1997, the Company borrowed an
additional $90.9 million under the Nortel facility.

Lucent has committed to financing up to $1.5 billion through December 31, 1997,
and up to an aggregate of $1.8 billion thereafter. The Company pays a facility
fee on the daily amount of loans outstanding under the agreement, payable
quarterly. The Lucent agreement terminates June 30, 2001. As of March 31, 1997,
the Company had borrowed approximately $274 million under the Lucent facility at
a weighted average interest rate of 8.72%. Subsequent to March 31, 1997, the
Company borrowed an additional $32.7 million under the Lucent facility.

Certain amounts included under Construction Obligations on the consolidated
condensed balance sheets may be financed under the Vendor Financing agreements.

Part I.
Item 1b.

SPRINT SPECTRUM FINANCE CORPORATION
(A wholly-owned subsidiary of Sprint Spectrum L.P.)
CONDENSED BALANCE SHEETS

March 31, December 31,
1997 1996
- --------------------------------------------------------------------------------
(Unaudited)
ASSETS

Receivable from parent $ 100 $ 100

----------- --------------
TOTAL ASSETS $ 100 $ 100
=========== ==============

STOCKHOLDER'S EQUITY

Common stock, $1.00 par value;
1,000 shares authorized;
100 shares issued and outstanding $ 100 $ 100

----------- --------------
TOTAL STOCKHOLDER'S EQUITY $ 100 $ 100
=========== ==============

See notes to condensed financial statements

Part I.
Item 1b.

SPRINT SPECTRUM FINANCE CORPORATION
(A wholly-owned subsidiary of Sprint Spectrum L.P.)
CONDENSED STATEMENTS OF OPERATIONS (UNAUDITED)

Period from
May 21, 1996
Three Months (date of inception)
Ended to March 31,
March 31, 1997 1997
--------------- --------------------

Operating Revenues................... $ - $ -

Operating Expenses................... - -
-------------- --------------------

Net Loss............................. $ - $ -
============== ====================

See notes to condensed financial statements

Part I.
Item 1b.

SPRINT SPECTRUM FINANCE CORPORATION
(A wholly-owned subsidiary of Sprint Spectrum L.P.)
CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)

From date
Three Months of inception
Ended to March 31,
March 31, 1997 1997
---------------- -------------

CASH FLOWS FROM OPERATING ACTIVITIES:
Adjustments to reconcile net income to net
cash used in operating activities:
Net income............................ $ - $ -
Changes in assets and liabilities:
Receivables........................ - (100)
---------------- -------------

Net cash used in operating activities - (100)

CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of common stock................... - 100
---------------- -------------

Net cash provided by financing activities - 100

---------------- -------------

INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS......................... - -

CASH AND CASH EQUIVALENTS, Beginning
of Period............................. - -

---------------- -------------
CASH AND CASH EQUIVALENTS, End of Period.... $ - $ -
================ =============

See notes to condensed financial statements

Part I.
Item 1b.

SPRINT SPECTRUM FINANCE CORPORATION
(A wholly-owned subsidiary of Sprint Spectrum L.P.)
NOTES TO CONDENSED FINANCIAL STATEMENTS

The information contained in this Form 10-Q for the three-month interim period
ended March 31, 1997 and the cumulative period from May 21, 1996 (date of
inception) to March 31, 1997 has been prepared in accordance with instructions
to Form 10-Q and Rule 10-01 of Regulation S-X. In the opinion of management, all
adjustments considered necessary, consisting only of normal recurring accruals,
to present fairly the consolidated financial position, results of operations,
and cash flows for such interim periods have been made.

Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted. The results of operations for the three months
ended March 31, 1997 are not necessarily indicative of the operating results
that may be expected for the year ended December 31, 1997.

1. ORGANIZATION

Sprint Spectrum Finance Corporation ("FinCo"), a Delaware corporation, was
formed on May 21, 1996 and is a wholly-owned subsidiary of Sprint Spectrum L.P.
(the "Partnership"). FinCo was formed to be a co-obligor of $250 million in
Senior Notes and $500 million in Senior Discount Notes.

The Partnership contributed $100 to FinCo on May 21, 1996 in exchange for 100
shares of common stock.

PART I.
Item 2a.

SPRINT SPECTRUM L.P.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis should be read in conjunction with Sprint
Spectrum L.P.'s consolidated condensed financial statements and notes thereto.
The term "Company" refers to Sprint Spectrum L.P. and its direct and indirect
subsidiaries, including FinCo, WirelessCo, RealtyCo and EquipmentCo. As of July
1, 1996, Holdings transferred substantially all operating assets and liabilities
to the Company. The Sprint Spectrum financial information as presented includes
the pooled operations of Holdings through June 30, 1996.

The Company includes certain estimates, projections and other forward-looking
statements in its reports as well as in presentations to analysts and others and
in other material disseminated to the public. There can be no assurances of
future performance and actual results may differ materially from those in the
forward-looking statements. Factors which could cause actual results to differ
materially from estimates or projections contained in forward-looking statements
include:

- the effects of vigorous competition in the markets in which the
Company will operate;
- the cost of entering new markets necessary to provide services;
- the impact of any unusual items resulting from ongoing
evaluations of the Company's business strategies;
- the effects of unanticipated delays or problems with the development of
technologies and systems used by the Company;
- requirements imposed on the Company and its competitors by the Federal
Communications Commission ("FCC") and state regulatory commissions
under the Telecommunications Act of 1996;
- the possibility of one or more of the markets in which the Company will
compete being impacted by variations in political, economic or other
factors over which the Company has no control; and
- unexpected results in litigation.

General

The Company is a development stage enterprise formed for the purpose of
establishing a nationwide personal communications service ("PCS") wireless
telecommunications network. The Company acquired PCS licenses in the FCC's A
Block and B Block PCS auction, which concluded in March 1995, to provide service
to 29 major trading areas ("MTAs") covering 150.3 million Pops. Additionally,
Cox contributed to the Company, effective February 6, 1997, a PCS license for
the Omaha MTA covering 1.7 million Pops. The Company has also affiliated and
expects to continue to affiliate with other PCS providers. Pursuant to
affiliation agreements, each affiliated PCS service provider will use the
Sprint(R) (a registered trademark of Sprint Communications Company, L.P.) brand
name. Holdings owns a 49% limited partnership interest in American PCS, L.P.
("APC"), which indirectly owns a PCS license for, and operates a broadband GSM
(global system for mobile communications) PCS system in, the Washington
D.C./Baltimore MTA. APC has affiliated with the Company and is marketing its
products and services under the Sprint brand name. Holdings also owns a 49%
limited partnership interest in Cox Communications PCS, L.P. ("Cox PCS"), a
partnership that owns a PCS license for the Los Angeles-San Diego MTA covering
21.5 million Pops. Cox, which previously owned this license, contributed the

license to Cox PCS on March 31, 1997 and will manage and control Cox PCS. The
Company signed an affiliation agreement with Cox PCS on December 31, 1996.

The Company also expects to provide various services to PhillieCo, L.P.
("PhillieCo"), a limited partnership organized by and among subsidiaries of
Sprint, TCI and Cox that owns a PCS license for the Philadelphia MTA covering
9.1 million Pops. In addition, SprintCom, Inc. ("SprintCom"), an affiliate of
Sprint, participated in the FCC's D and E Block auction which ended January 14,
1997, and was awarded licenses for 139 of 493 Basic Trading Areas ("BTAs")
covering 70 million Pops, all of which are geographic areas not covered by the
Company's owned PCS licenses or licenses owned by PhillieCo, APC or Cox PCS. The
Company is in the process of negotiating an agreement with SprintCom to build
out the network infrastructure in certain BTA markets where SprintCom was
awarded PCS licenses. In accordance with an agreement among the Partners and the
Amended and Restated Agreement of Limited Partnership of MajorCo, L.P. (renamed
Sprint Spectrum Holding Company , L.P.) dated January 31, 1996 (the "Partnership
Agreement"), SprintCom is required to offer to enter into an affiliation
agreement with Holdings with respect to such BTA licenses pursuant to which
SprintCom's systems in such areas would be included in the Company's national
PCS network, although no assurance can be given that SprintCom and Holdings will
enter into any such affiliation agreement.

To date, the Company has incurred expenditures in conjunction with PCS license
acquisitions, initial design and construction of the PCS network, engineering,
marketing, administrative and other start up related expenses. The Company
commenced initial commercial operations in certain MTAs for its PCS services
late in the fourth quarter of 1996 and, as a result, has generated minimal
operating revenues. The Company intends to initiate service in portions of most
MTAs during the summer of 1997. Pop coverage at the end of the initial launch
period (approximately the end of the summer of 1997) is expected to reach
approximately 57% of the Pops in all of the Company's license areas with
coverage in the individual license areas ranging from 19% to 90%. The timing of
launch in individual markets will be determined by various factors, principally
zoning and microwave relocation factors, equipment delivery schedules and local
market and competitive considerations. The Company intends to continue to expand
its coverage in its PCS markets in its existing license areas based on actual
market experience, customer demand, and reductions in the cost of technology.
The extent to which the Company is able to generate operating revenue and
earnings is dependent on a number of business factors, including maintaining
existing financing to complete network construction and fund initial operations
and operating losses, successfully deploying the PCS network and attaining
profitable levels of market demand for the Company's products and services.

Liquidity and Capital Resources

The buildout of the Company's PCS network and the marketing and distribution of
the Company's PCS products and services will require substantial capital. The
Company currently estimates that its capital requirements (capital expenditures,
the cost of its existing licenses, working capital, debt service requirements
and anticipated operating losses) for the period from inception through the end
of 1998 (based on the Company's current plans for its network buildout in its
current license areas) will total approximately $8.9 billion (of which
approximately $5.1 billion had been expended as of March 31, 1997). After 1998,
the Company will also require additional capital for coverage expansion, volume-
driven network capacity and other capital expenditures for existing and new
license areas (if any), working capital, debt service requirements and
anticipated further operating losses. Costs associated with the network buildout
include switches, base stations, towers, antennae, radio frequency engineering,
cell site construction and microwave relocation. Management estimates that
capital expenditures associated with the buildout will total approximately $3.9
billion through 1997, including $2.3 billion

through March 31, 1997. Estimated capital expenditures have increased due to
changes in the nature of certain network elements, actual construction
experience to date and additional network capacity requirements. Actual amounts
of the funds required may vary materially from these estimates and additional
funds would be required in the event of significant departures from the current
business plan, unforeseen delays, cost overruns, unanticipated expenses,
regulatory changes, engineering design changes and other technological risks.

The Company currently has minimal sources of revenue to meet its capital
requirements and has relied upon capital contributions, advances from Holdings,
third party debt and public debt. The Holdings partnership agreement provides
for a planned capital amount to be contributed by the Partners ("Total Mandatory
Contributions"), which represents the sum of $4.2 billion, which includes agreed
upon values attributable to the contributions of certain additional PCS licenses
by a Partner. The Total Mandatory Contributions amount is required to be
contributed in accordance with capital contribution schedule to be set forth in
approved annual budgets if requested by the Holdings partnership board (or by
the Chief Executive Officer of Holdings pursuant to authority to be granted in
each annual budget or such other authority as may be delegated to the Chief
Executive Officer by the Holdings partnership board). The partnership board of
Holdings may request capital contributions to be made in the absence of an
approved budget or more quickly than provided for in an approved budget, but
always subject to the Total Mandatory Contributions limit. The proposed budget
for 1997 has not yet been approved by the partnership board. The Amended and
Restated Capital Contribution Agreement (the "Amended Agreement") was executed
effective October 2, 1996. The Amended Agreement recognized that through
December 31, 1995, approximately $2.2 billion of the Total Mandatory
Contributions had been contributed to Sprint Spectrum L.P., and designates that
approximately $1.0 billion of the balance of the Total Mandatory Contributions
shall be contributed to Sprint Spectrum L.P. As of March 31, 1997, $2.7 billion
had been contributed to Sprint Spectrum. The Company's business plan and the
financial covenants and other terms of the Secured Financing (defined below)
will require such additional equity financing prior to the end of 1998, absent a
new financing source. The $1.0 billion portion of the $4.2 billion not required
to be invested in the Company may be used by Holdings to fund its other
affiliate commitments and make other wireless investments. Amounts budgeted by
the Partners in future years will determine the extent to which the commitments
will actually be utilized.

In October 1996, the Company entered into a credit agreement with The Chase
Manhattan Bank, as administrative agent for a group of lenders, for a $2.0
billion senior secured credit facility (the "Bank Facility"). The proceeds of
the Bank Facility are to be used to finance working capital needs, subscriber
acquisition costs, capital expenditures and other general purposes of the
Company. The Bank Facility consists of a $300 million term loan commitment and a
revolving credit commitment of $1.7 billion. Of the $300 million term facility,
$150 million was drawn down subsequent to closing, and the remaining $150
million was drawn down in January, 1997. As of March 31, 1997, $200 million had
been borrowed and $250 million remained available under the revolving credit
facility. Availability under the Bank Facility will increase subject to the
Company meeting certain performance criteria.

Also in October 1996, the Company entered into credit agreements for up to an
aggregate of $3.1 billion of senior secured multiple drawdown term loan
facilities from two of its network infrastructure equipment vendors. Nortel has
agreed to provide up to $1.3 billion in senior secured loans, and Lucent has
agreed to provide up to $1.8 billion in senior secured loans (together the
"Vendor Financing" and together with the Bank Facility, the "Secured
Financing"). The Company will use the proceeds from the Vendor Financing to fund
the purchase of the equipment and software manufactured by the vendors as well
as substantially all of the construction and ancillary equipment (e.g., towers,
antennae, cable)

required to construct the Company's PCS network. These facilities will serve as
the primary financing mechanism for the buildout of the network.

Borrowings under the Secured Financing are secured by the Company's interest in
WirelessCo, RealtyCo and EquipmentCo and certain other personal and real
property (the "Shared Lien"). The Shared Lien equally and ratably secures the
Bank Facility and the Vendor Financing. The Secured Financing is jointly and
severally guaranteed by WirelessCo, RealtyCo and EquipmentCo and is non-recourse
to the Partners and the Parents.

In August 1996, Sprint Spectrum L.P. and FinCo issued $250 million aggregate
principal amount of the 11% Senior Notes and $500 million aggregate principal
amount at maturity of 12 1/2% Senior Discount Notes (together, the "Notes"). The
Senior Discount Notes were issued at a discount to their aggregate principal
amount at maturity and generated proceeds of approximately $273 million. Cash
interest on the Senior Notes will accrue at a rate of 11% per annum and is
payable semi-annually in arrears on each February 15 and August 15, commencing
February 15, 1997. Cash interest will not accrue or be payable on the Senior
Discount Notes prior to August 15, 2001. Thereafter, cash interest on the Senior
Discount Notes will accrue at a rate of 12 1/2% per annum and will be payable
semi-annually in arrears on each February 15 and August 15, commencing February
15, 2002. FinCo was formed solely to be a co- obligor of the Notes. FinCo has
only nominal assets and no operations or revenues, and Sprint Spectrum L.P. will
be responsible for payment of the Notes. On August 15, 2001, Sprint Spectrum
L.P. will be required to redeem an amount equal to $384.772 per $1,000 principal
amount at maturity of each Senior Discount Note then outstanding ($192 million
in aggregate principal amount at maturity, assuming all of the Senior Discount
Notes remain outstanding at such date). The proceeds of approximately $509
million from the issuance of the Notes (net of approximately $14 million of
underwriting discounts, commissions, and offering expenses) were used to fund
capital expenditures, including the buildout of the nationwide PCS network, to
fund working capital requirements, to fund operating losses and for other
partnership purposes. Sprint purchased, and continues to hold, approximately
$183 million principal amount at maturity of the Senior Discount Notes.

Sources of funding for the Company's further financing requirements may include
additional vendor financing, public offerings or private placements of equity
and/or debt securities, commercial bank loans and/or capital contributions from
Holdings or the Partners. There can be no assurance that any additional
financing can be obtained on a timely basis and on terms acceptable to the
Company and within limitations contained in the Notes, the agreements governing
the Secured Financing and any new financing arrangements. Failure to obtain any
such financing could result in the delay or abandonment of the Company's
development and expansion plans and expenditures or the failure to meet
regulatory requirements. It also could impair the Company's ability to meet its
debt service requirements and could have a material adverse effect on its
business.

For the year-to-date period ended March 31, 1997, the Company used cash of $225
million in operating activities, which consisted of the operating loss of $189
million, an increase in inventory of $57 million and decreases in payables,
accrued expenses and long-term accruals of $26 million. Cash used in investing
activities totaled $364 million, consisting of capital expenditures and
microwave relocation costs.

Results of Operations

For the Three Months Ended March 31, 1997

The Company commenced initial commercial operations for its PCS services in
certain MTAs late in the fourth quarter of 1996 and, as a result, has generated
minimal operating revenues. The negative gross profit from equipment sales
results from the Company's subsidy of handsets. Cost of service consists
principally of switch and cell site expenses, including site rental, utilities
and access charges. Prior to service launch, such costs are incurred during the
network buildout and testing phases. As markets launch, the costs are incurred
to provide service in the related markets.

Selling expenses increased to $12.6 million for the three months ended March 31,
1997 compared to the three months ended March 31, 1996 due to costs incurred in
preparation of and during the initial commercial service launch in various
markets. Such costs include participation with Sprint in an NFL sponsorship,
development and production expenses associated with advertisements in various
media (i.e., television, radio, print), and the development of printed brochures
to promote the Company's products and services.

General and administrative expenses increased from $30.7 million for the three
months ended March 31, 1996 to $104.4 million for the three months ended March
31, 1997 due principally to increases in salary and related benefits, computer
equipment and related expenses and professional and consulting fees. Salaries
and benefits and computer equipment and related expenses increased due to an
increase in employee headcount. Professional and consulting fees increased due
to the use of consultants and other experts to assist with the continuing
development and enhancement of the Company's sophisticated information systems,
continued rollout and tailoring of training programs for the Company's sales
force, and various other projects.

Depreciation and amortization expense increased from $0.3 million for the three
months ended March 31, 1996 to $34.4 million for the three months ended March
31, 1997 as certain network equipment has been placed in service and
amortization of PCS licenses and microwave relocation costs in the launched
markets commenced.

For the Three Months Ended March 31, 1996

The Company incurred a loss of $67 million for the three months ended March 31,
1996, which includes equity in loss of an unconsolidated subsidiary of $36
million. There was no amortization of licenses during the period as PCS service
had not been launched commercially.

PART I.
Item 2b.

SPRINT SPECTRUM FINANCE CORPORATION
(A Wholly-Owned Subsidiary of Sprint Spectrum L.P.)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

General

Sprint Spectrum Finance Corporation ("FinCo"), a Delaware corporation, was
formed on May 21, 1996 and is a wholly-owned subsidiary of Sprint Spectrum L.P.
FinCo has nominal assets, does not conduct any operations and was formed to be a
co-obligor of the securities issued by the Company. Certain institutional
investors who might otherwise be limited in their ability to invest in
securities issued by partnerships by reasons of the legal investment laws in
their states of organization or their charter documents, may be able to invest
in the Company's securities because FinCo is a co-obligor. Accordingly, a
discussion of the results of operations, liquidity and capital resources of
FinCo are not presented. See FinCo's notes to financial statements for a
discussion of the securities with respect to which FinCo is serving as
co-obligor.

PART II.
Other Information

Item 1. Legal Proceedings.