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     September 30, 2003
                               --------------------------
                                       OR

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

For the transition period from                     to
                              --------------------    --------------------------
Commission file number               1-04721
                       ---------------------------------------------------------
                               SPRINT CORPORATION
--------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)


                KANSAS                                48-0457967
---------------------------------------  ---------------------------------------
       (State or other jurisdiction of             (IRS Employer
       incorporation or organization)              Identification No.)


               P.O. Box 7997, Shawnee Mission, Kansas 66207-0997
--------------------------------------------------------------------------------
              (Address of principal executive offices) (Zip Code)


Registrant's telephone number, including area code       (913) 624-3000
                                                    ----------------------------

--------------------------------------------------------------------------------
 (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 these reports), and (2) has been subject to these filing
requirements for the past 90 days.

Yes    X          No
   -----------      -------
Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act).

Yes    X          No
   -----------      -------

                            COMMON SHARES OUTSTANDING AT October 31, 2003:
                                FON COMMON STOCK     903,949,604
                                PCS COMMON STOCK:
                                 Series 1            847,630,317
                                 Series 2            187,445,330
                                CLASS A COMMON STOCK  43,118,018







                                                                   1
TABLE OF CONTENTS
                                                                                                        Page
                                                                                                     Reference
Part I - Financial Information

               
             Item 1.  Financial Statements

                      Consolidated Financial Statements (including Consolidating Information)
                      Consolidated Statements of Operations                                              1
                      Consolidated Statements of Comprehensive Income (Loss)                             5
                      Consolidated Balance Sheets                                                        9
                      Consolidated Statements of Cash Flows                                              13
                      Consolidated Statement of Shareholders' Equity                                     15
                      Condensed Notes to Consolidated Financial Statements                               17

             Item 2.  Management's Discussion and Analysis of Financial Condition and
                        Results of Operations                                                            35

             Item 3.  Quantitative and Qualitative Disclosures about Market Risk                         55

             Item 4.  Controls and Procedures                                                            56

Part II - Other Information

             Item 1.  Legal Proceedings                                                                  57

             Item 2.  Changes in Securities                                                              57

             Item 3.  Defaults Upon Senior Securities                                                    58

             Item 4.  Submission of Matters to a Vote of Security Holders                                58

             Item 5.  Other Information                                                                  58

             Item 6.  Exhibits and Reports on Form 8-K                                                   58

Signature                                                                                                60


Exhibits

(12)     Computation of Ratios of Earnings to Fixed Charges

(31)      (a)  Certification  of  Chief  Executive  Officer  Pursuant  to
               Securities Exchange Act of 1934 Rule 13a-14(a)

          (b)  Certification  of Chief Financial  Officer Pursuant to Securities
               Exchange Act of 1934 Rule 13a-14(a)

(32)      (a)  Certification of Chief Executive Officer Pursuant to 18 U.S.C.
               Section 1350, As Adopted Pursuant to Section 906 of the
               Sarbanes-Oxley Act of 2002

          (b)  Certification  of Chief Financial  Officer  Pursuant to 18 U.S.C.
               Section  1350,  As  Adopted   Pursuant  to  Section  906  of  the
               Sarbanes-Oxley Act of 2002






















                                                                                                                             Part I.
                                                                                                                             Item 1.


CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
                                                                                           Sprint Corporation
                                                                                     -------------------------------
(millions, except per share data)                                                             Consolidated
--------------------------------------------- --- ------------- -- -------------- -- ------------- --- -------------
Quarters Ended September 30,                                                             2003              2002
--------------------------------------------- --- ------------- -- -------------- -- ------------- --- -------------

                                                                                             
Net Operating Revenues                                                            $      6,714     $       6,798
--------------------------------------------- --- ------------- -- -------------- -- ------------- --- -------------

Operating Expenses
   Costs of services and products                                                        3,034             2,995
   Selling, general and administrative                                                   1,644             1,900
   Depreciation and amortization                                                         1,251             1,258
   Restructuring and asset impairments                                                   1,223               121
--------------------------------------------- --- ------------- -- -------------- -- ------------- --- -------------

   Total operating expenses                                                              7,152             6,274
--------------------------------------------- --- ------------- -- -------------- -- ------------- --- -------------

Operating Income (Loss)                                                                   (438)              524

Interest expense                                                                          (335)             (345)
Intergroup interest charge                                                                   -                 -
Premium on early retirement of debt                                                         (2)                -
Other income (expense), net                                                                  4                74
--------------------------------------------- --- ------------- -- -------------- -- ------------- --- -------------

Income (loss) from continuing operations
   before income taxes                                                                    (771)              253
Income tax benefit                                                                         274               224
--------------------------------------------- --- ------------- -- -------------- -- ------------- --- -------------

Income (Loss) from Continuing Operations                                                  (497)              477
Discontinued operation, net                                                                 (1)               42
--------------------------------------------- --- ------------- -- -------------- -- ------------- --- -------------

Net Income (Loss)                                                                         (498)              519

Preferred stock dividends (paid) received                                                   (2)               (1)
--------------------------------------------- --- ------------- -- -------------- -- ------------- --- -------------

Earnings (Loss) Applicable to Common Stock                                        $       (500)    $         518
                                                                                  -- ------------- --- -------------


Diluted Earnings (Loss) per Common Share
    Continuing operations
    Discontinued operation
--------------------------------------------------------------- -- -------------- -- ------------- --- -------------
Total
Diluted weighted average common shares




Basic Earnings (Loss) per Common Share
    Continuing operations
    Discontinued operation
--------------------------------------------------------------- -- -------------- -- ------------- --- -------------
Total
Basic weighted average common shares


DIVIDENDS PER COMMON SHARE




                          See accompanying Condensed Notes to Consolidated Financial Statements (Unaudited).














   Eliminations/Reclassifications                Sprint FON Group                       Sprint PCS Group
-------------------------------------    ----------------------------------     ----------------------------------
          2003              2002                 2003             2002                 2003              2002
----- ------------- --- -------------    --- ------------- -- -------------     -- ------------- --- -------------

                                                                                  
$         (164)     $       (175)        $       3,538     $      3,816         $      3,340     $       3,157
----- ------------- --- -------------    --- ------------- -- -------------     -- ------------- --- -------------


          (164)             (175)                1,570            1,692                1,628             1,478
           (11)               (8)                  855              953                  800               955
             -                 -                   623              670                  628               588
             -                 -                 1,223              126                    -                (5)
----- ------------- --- -------------    --- ------------- -- -------------     -- ------------- --- -------------

          (175)             (183)                4,271            3,441                3,056             3,016
----- ------------- --- -------------    --- ------------- -- -------------     -- ------------- --- -------------

            11                 8                  (733)             375                  284               141

             -                 -                   (55)             (75)                (280)             (270)
             -                 -                    98               82                  (98)              (82)
             -                 -                    (2)               -                    -                 -
           (11)               (8)                   25               17                  (10)               65
----- ------------- --- -------------    --- ------------- -- -------------     -- ------------- --- -------------


             -                 -                  (667)             399                 (104)             (146)
             -                 -                   235               85                   39               139
----- ------------- --- -------------    --- ------------- -- -------------     -- ------------- --- -------------

             -                 -                  (432)             484                  (65)               (7)
             -                 -                    (1)              42                    -                 -
----- ------------- --- -------------    --- ------------- -- -------------     -- ------------- --- -------------

             -                 -                  (433)             526                  (65)               (7)

             -                 -                     2                2                   (4)               (3)
----- ------------- --- -------------    --- ------------- -- -------------     -- ------------- --- -------------

$            -      $          -         $        (431)    $        528         $        (69)    $         (10)
----- ------------- --- -------------    --- ------------- -- -------------     -- ------------- --- -------------



                                         $       (0.48)    $       0.54         $      (0.07)    $       (0.01)
                                                     -             0.05                    -                 -
----- ------------- --- -------------    --- ------------- -- -------------     -- ------------- --- -------------
                                         $       (0.48)    $       0.59         $      (0.07)    $       (0.01)
                                         --- ------------- -- -------------     -- ------------- --- -------------
                                                 903.0            894.6               1,033.1           1,018.6
                                         --- ------------- -- -------------     -- ------------- --- -------------



                                         $       (0.48)    $       0.54         $      (0.07)    $       (0.01)
                                                     -             0.05                    -                 -
----- ------------- --- -------------    --- ------------- -- -------------     -- ------------- --- -------------
                                         $       (0.48)    $       0.59         $      (0.07)    $       (0.01)
                                         --- ------------- -- -------------     -- ------------- --- -------------
                                                 903.0            892.9               1,033.1           1,018.6
                                         --- ------------- -- -------------     -- ------------- --- -------------


                                         $       0.125     $      0.125         $          -     $           -
                                         --- ------------- -- -------------     -- ------------- --- -------------









CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
                                                                                           Sprint Corporation
                                                                                     -------------------------------
(millions, except per share data)                                                             Consolidated
--------------------------------------------- --- ------------- -- -------------- -- ------------- --- -------------
Year-to-Date September 30,                                                               2003              2002
--------------------------------------------- --- ------------- -- -------------- -- ------------- --- -------------
                                                                                             
Net Operating Revenues                                                            $     19,516     $      20,138
--------------------------------------------- --- ------------- -- -------------- -- ------------- --- -------------

Operating Expenses
   Costs of services and products                                                        8,766             9,246
   Selling, general and administrative                                                   4,894             5,407
   Depreciation and amortization                                                         3,739             3,629
   Restructuring and asset impairments                                                   1,581               144
--------------------------------------------- --- ------------- -- -------------- -- ------------- --- -------------

   Total operating expenses                                                             18,980            18,426
--------------------------------------------- --- ------------- -- -------------- -- ------------- --- -------------

Operating Income (Loss)                                                                    536             1,712

Interest expense                                                                        (1,052)           (1,044)
Intergroup interest charge                                                                   -                 -
Premium on early retirement of debt                                                        (21)                -
Other income (expense), net                                                                (78)             (234)
--------------------------------------------- --- ------------- -- -------------- -- ------------- --- -------------

Income (loss) from continuing operations
   before income taxes                                                                    (615)              434
Income tax benefit (expense)                                                               213                37
--------------------------------------------- --- ------------- -- -------------- -- ------------- --- -------------

Income (Loss) from Continuing Operations                                                  (402)              471
Discontinued operation, net                                                              1,321               120
Cumulative effect of change in
   accounting principles, net                                                              258                 -
--------------------------------------------- --- ------------- -- -------------- -- ------------- --- -------------

Net Income (Loss)                                                                        1,177               591

Preferred stock dividends (paid) received                                                   (5)               (5)
--------------------------------------------- --- ------------- -- -------------- -- ------------- --- -------------

Earnings (Loss) Applicable to Common Stock                                        $      1,172     $         586
                                                                                  -- ------------- --- -------------


Diluted Earnings (Loss) per Common Share
   Continuing operations
   Discontinued operation
   Cumulative effect of change in accounting principle, net
--------------------------------------------------------------- -- -------------- -- ------------- --- -------------
Total
Diluted weighted average common shares




Basic Earnings (Loss) per Common Share
   Continuing operations
   Discontinued operation
   Cumulative effect of change in accounting principle, net
--------------------------------------------------------------- -- -------------- -- ------------- --- -------------
Total
Basic weighted average common shares


DIVIDENDS PER COMMON SHARE



                          See accompanying Condensed Notes to Consolidated Financial Statements (Unaudited).










   Eliminations/Reclassifications                Sprint FON Group                       Sprint PCS Group
-------------------------------------    ----------------------------------     ----------------------------------
          2003              2002                 2003             2002                 2003              2002
----- ------------- --- -------------    --- ------------- -- -------------     -- ------------- --- -------------
                                                                                  
$         (516)     $       (444)        $      10,649     $     11,559         $      9,383     $       9,023
----- ------------- --- -------------    --- ------------- -- -------------     -- ------------- --- -------------


          (516)             (444)                4,685            5,374                4,597             4,316
           (31)              (24)                2,677            2,875                2,248             2,556
             -                 -                 1,886            1,971                1,853             1,658
             -                 -                 1,571              126                   10                18
----- ------------- --- -------------    --- ------------- -- -------------     -- ------------- --- -------------

          (547)             (468)               10,819           10,346                8,708             8,548
----- ------------- --- -------------    --- ------------- -- -------------     -- ------------- --- -------------

            31                24                  (170)           1,213                  675               475

             -                 -                  (185)            (232)                (867)             (812)
             -                 -                   278              255                 (278)             (255)
             -                 -                   (21)               -                    -                 -
           (31)              (24)                   25             (181)                 (72)              (29)
----- ------------- --- -------------    --- ------------- -- -------------     -- ------------- --- -------------


             -                 -                   (73)           1,055                 (542)             (621)
             -                 -                    10             (261)                 203               298
----- ------------- --- -------------    --- ------------- -- -------------     -- ------------- --- -------------

             -                 -                   (63)             794                 (339)             (323)
             -                 -                 1,321              120                    -                 -

             -                 -                   258                -                    -                 -
----- ------------- --- -------------    --- ------------- -- -------------     -- ------------- --- -------------

             -                 -                 1,516              914                 (339)             (323)

             -                 -                     6                5                  (11)              (10)
----- ------------- --- -------------    --- ------------- -- -------------     -- ------------- --- -------------

$            -      $          -         $       1,522     $        919         $       (350)    $        (333)
----- ------------- --- -------------    --- ------------- -- -------------     -- ------------- --- -------------



                                         $       (0.07)    $       0.89         $     (0.34)     $      (0.33)
                                                  1.47             0.14                    -                 -
                                                  0.29                -                    -                 -
----- ------------- --- -------------    --- ------------- -- -------------     -- ------------- --- -------------
                                         $        1.69     $       1.03         $     (0.34)     $      (0.33)
                                         --- ------------- -- -------------     -- ------------- --- -------------
                                                 899.9            893.2             1,026.6           1,014.2
                                         --- ------------- -- -------------     -- ------------- --- -------------



                                         $       (0.07)    $       0.90         $     (0.34)     $      (0.33)
                                                  1.47             0.13                    -                 -
                                                  0.29                -                    -                 -
----- ------------- --- -------------    --- ------------- -- -------------     -- ------------- --- -------------
                                         $        1.69     $       1.03         $     (0.34)     $      (0.33)
                                         --- ------------- -- -------------     -- ------------- --- -------------
                                                 899.9            891.2             1,026.6           1,014.2
                                         --- ------------- -- -------------     -- ------------- --- -------------


                                         $       0.375     $      0.375         $          -     $           -
                                         --- ------------- -- -------------     -- ------------- --- -------------









CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(Unaudited)                                                                                Sprint Corporation
                                                                                     -------------------------------
(millions)                                                                                   Consolidated
--------------------------------------------- ----------------- ----------------- -- ------------- --- -------------
Quarters Ended September 30,                                                             2003              2002
--------------------------------------------- ----------------- ----------------- -- ------------- --- -------------

                                                                                             
Net Income (Loss)                                                                 $      (498)     $        519
--------------------------------------------- --- ------------- -- -------------- -- ------------- --- -------------

Other Comprehensive Income (Loss)

   Unrealized holding gains (losses) on securities                                          4               (18)
   Income tax benefit (expense)                                                            (2)                7
--------------------------------------------- --- ------------- -- -------------- -- ------------- --- -------------
Net unrealized holding gains (losses) on securities
   during the period                                                                        2               (11)

   Reclassification adjustment for gains on securities
     included in net income (loss)                                                         (3)               (1)
   Income tax expense                                                                       1                 -
------------------------------------------------- ------------- -- -------------- -- ------------- --- -------------
Net reclassification adjustment for gains
   included in net income (loss)                                                           (2)               (1)

Reclassifications adjustment for foreign currency translation
   losses included in net income (loss), net                                                -                (7)

   Unrealized gains (losses) on qualifying cash flow hedges                                (4)                6
   Income tax benefit (expense)                                                             1                (2)
--------------------------------------------------------------- -- -------------- -- ------------- --- -------------
Net unrealized holding gains (losses) on qualifying
   cash flow hedges during the period                                                      (3)                4
--------------------------------------------------------------- -- -------------- -- ------------- --- -------------

Total other comprehensive loss                                                             (3)              (15)
--------------------------------------------- --- ------------- -- -------------- -- ------------- --- -------------

Comprehensive Income (Loss)                                                       $      (501)     $        504
                                                                                  -- ------------- --- -------------



























                          See accompanying Condensed Notes to Consolidated Financial Statements (Unaudited).










   Eliminations/Reclassifications               Sprint FON Group                        Sprint PCS Group
-------------------------------------    ------------------------------- --     ----------------------------------
          2003              2002                 2003             2002                 2003              2002
----- ------------- --- -------------    --- ------------- -- -------------     -- ------------- --- -------------

                                                                                  
$            -      $          -         $       (433)     $       526          $       (65)     $         (7)
----- ------------- --- -------------    --- ------------- -- -------------     -- ------------- --- -------------



             -                 -                    4              (18)                   -                 -
             -                 -                   (2)               7                    -                 -
----- ------------- --- -------------    --- ------------- -- -------------     -- ------------- --- -------------

             -                 -                    2              (11)                   -                 -


             -                 -                   (3)              (1)                   -                 -
             -                 -                    1                -                    -                 -
----- ------------- --- -------------    --- ------------- -- -------------     -- ------------- --- -------------

             -                 -                   (2)              (1)                   -                 -


             -                 -                    -                -                    -                (7)

             -                 -                   (4)               6                    -                 -
             -                 -                    1               (2)                   -                 -
----- ------------- --- -------------    --- ------------- -- -------------     -- ------------- --- -------------

             -                 -                   (3)               4                    -                 -
----- ------------- --- -------------    --- ------------- -- -------------     -- ------------- --- -------------

             -                 -                   (3)              (8)                   -                (7)
----- ------------- --- -------------    --- ------------- -- -------------     -- ------------- --- -------------

$            -      $          -         $       (436)     $       518          $       (65)     $        (14)
----- ------------- --- -------------    --- ------------- -- -------------     -- ------------- --- -------------


































CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(Unaudited)                                                                                Sprint Corporation
                                                                                     -------------------------------
(millions)                                                                                   Consolidated
--------------------------------------------- ----------------- ----------------- -- ------------- --- -------------
Year-to-Date September 30,                                                               2003              2002
--------------------------------------------- ----------------- ----------------- -- ------------- --- -------------

                                                                                             
Net Income (Loss)                                                                 $     1,177      $        591
--------------------------------------------- --- ------------- -- -------------- -- ------------- --- -------------

Other Comprehensive Income (Loss)

   Unrealized holding gains (losses) on securities                                         44               (48)
   Income tax benefit (expense)                                                           (17)               19
--------------------------------------------- --- ------------- -- -------------- -- ------------- --- -------------
Net unrealized holding gains (losses) on securities
   during the period                                                                       27               (29)

   Reclassification adjustment for gains on securities
     included in net income (loss)                                                         (6)               (2)
   Income tax expense                                                                       3                 -
--------------------------------------------------------------- -- -------------- -- ------------- --- -------------
Reclassifications adjustment for gains included in
   net income (loss)                                                                       (3)               (2)

Foreign currency translation adjustments                                                   (1)                3

Reclassifications adjustment for foreign currency translation
   losses included in net income (loss), net                                                -                (7)

   Unrealized gains (losses) on qualifying cash flow hedges                               (34)               34
   Income tax benefit (expense)                                                            13                (8)
--------------------------------------------------------------- -- -------------- -- ------------- --- -------------
Net unrealized gains (losses) on qualifying
   cash flow hedges                                                                       (21)               26
--------------------------------------------- --- ------------- -- -------------- -- ------------- --- -------------

Total other comprehensive income (loss)                                                     2                (9)
--------------------------------------------- --- ------------- -- -------------- -- ------------- --- -------------

Comprehensive Income (Loss)                                                       $     1,179      $        582
                                                                                  -- ------------- --- -------------

























                          See accompanying Condensed Notes to Consolidated Financial Statements (Unaudited).










   Eliminations/Reclassifications               Sprint FON Group                        Sprint PCS Group
-------------------------------------    ----------------------------------     ----------------------------------
          2003              2002                 2003             2002                 2003              2002
----- ------------- --- -------------    --- ------------- -- -------------     -- ------------- --- -------------

                                                                                  
$            -      $          -         $      1,516      $       914          $      (339)     $       (323)
----- ------------- --- -------------    --- ------------- -- -------------     -- ------------- --- -------------



             -                 -                   44              (48)                   -                 -
             -                 -                  (17)              19                    -                 -
----- ------------- --- -------------    --- ------------- -- -------------     -- ------------- --- -------------

             -                 -                   27              (29)                   -                 -


             -                 -                   (6)              (2)                   -                 -
             -                 -                    3                -                    -                 -
----- ------------- --- -------------    --- ------------- -- -------------     -- ------------- --- -------------

             -                 -                   (3)              (2)                   -                 -

             -                 -                   (1)              (2)                   -                 5


             -                 -                    -                -                    -                (7)

             -                 -                  (34)              34                    -                 -
             -                 -                   13               (8)                   -                 -
----- ------------- --- -------------    --- ------------- -- -------------     -- ------------- --- -------------

             -                 -                  (21)              26                    -                 -
----- ------------- --- -------------    --- ------------- -- -------------     -- ------------- --- -------------

             -                 -                    2               (7)                   -                (2)
----- ------------- --- -------------    --- ------------- -- -------------     -- ------------- --- -------------

$            -      $          -         $      1,518      $       907          $      (339)     $       (325)
----- ------------- --- -------------    --- ------------- -- -------------     -- ------------- --- -------------




































CONSOLIDATED BALANCE SHEETS
                                                                                              Sprint Corporation
                                                                                      -----------------------------------
(millions)                                                                                       Consolidated
-------------------------------------------------------------------------------------------------------------------------
                                                                                       September 30,     December 31,
                                                                                            2003             2002
-------------------------------------------------------------------------------------------------------------------------
                                                                                        (Unaudited)
Assets
     Current assets
                                                                                                   
       Cash and equivalents                                                            $        2,601    $        1,035
       Accounts receivable, net of consolidated allowance for doubtful accounts of
          $284 and $414                                                                         2,907             2,951
       Inventories                                                                                582               682
       Deferred tax asset                                                                          16               806
       Current tax benefit receivable from the FON Group                                            -                 -
       Prepaid expenses                                                                           327               360
       Intergroup receivable                                                                        -                 -
       Other                                                                                      210               244
-------------------------------------------------------------------------------------------------------------------------
       Total current assets                                                                     6,643             6,078

     Assets of discontinued operation                                                               -               391

     Property, plant and equipment
       FON Group                                                                               35,220            35,055
       PCS Group                                                                               18,306            16,978
-------------------------------------------------------------------------------------------------------------------------
       Total property, plant and equipment                                                     53,526            52,033
       Accumulated depreciation                                                               (26,139)          (23,288)
-------------------------------------------------------------------------------------------------------------------------
       Net property, plant and equipment                                                       27,387            28,745

     Investments in and advances to affiliates                                                     30                73

     Intangibles
        Goodwill                                                                                4,401             4,401
        Spectrum licenses                                                                       3,393             4,620
        Other intangibles                                                                          29                26
-------------------------------------------------------------------------------------------------------------------------
        Total intangibles                                                                       7,823             9,047
        Accumulated amortization                                                                   (3)               (2)
-------------------------------------------------------------------------------------------------------------------------
        Net intangibles                                                                         7,820             9,045

     Other assets                                                                               1,016               961
-------------------------------------------------------------------------------------------------------------------------


    Total                                                                              $       42,896    $       45,293
                                                                                      -----------------------------------




















                          See accompanying Condensed Notes to Consolidated Financial Statements (Unaudited).











   Eliminations/Reclassifications              Sprint FON Group                         Sprint PCS Group
-------------------------------------   -----------------------------------    -----------------------------------
     September 30,     December 31,         September 30,    December 31,         September 30,     December 31,
         2003              2002                 2003             2002                 2003              2002
-------------------------------------   -----------------------------------    -----------------------------------
      (Unaudited)                            (Unaudited)                           (Unaudited)


                                                                                   
   $         -       $         -          $     1,145      $       641          $      1,456      $        394

             -                 -                1,525            1,650                 1,382             1,301
             -                 -                  215              219                   367               463
             -                 -                   16               42                     -               764
          (186)                -                    -                -                   186                 -
             -                 -                  166              215                   161               145
          (561)             (536)                 561              536                     -                 -
             -                 -                  130              114                    80               130
-------------------------------------   -----------------------------------    -----------------------------------
          (747)             (536)               3,758            3,417                 3,632             3,197

             -                 -                    -              391                     -                 -


             -                 -               35,220           35,055                     -                 -
             -                 -                    -                -                18,306            16,978
-------------------------------------   -----------------------------------    -----------------------------------
             -                 -               35,220           35,055                18,306            16,978
           (48)              (46)             (19,061)         (18,161)               (7,030)           (5,081)
-------------------------------------   -----------------------------------    -----------------------------------
           (48)              (46)              16,159           16,894                11,276            11,897

          (279)             (280)                 252              252                    57               101


             -                 -                   27               27                 4,374             4,374
             -                 -                  300            1,520                 3,093             3,100
             -                 -                   26               24                     3                 2
-------------------------------------   -----------------------------------    -----------------------------------
             -                 -                  353            1,571                 7,470             7,476
             -                 -                   (3)              (2)                    -                 -
-------------------------------------   -----------------------------------    -----------------------------------
             -                 -                  350            1,569                 7,470             7,476

             -                 -                  682              610                   334               351
-------------------------------------   -----------------------------------    -----------------------------------


   $    (1,074)      $      (862)         $    21,201      $    23,133          $     22,769      $     23,022
-------------------------------------   -----------------------------------    -----------------------------------






























CONSOLIDATED BALANCE SHEETS (continued)
                                                                                              Sprint Corporation
                                                                                      -----------------------------------
(millions, except per share data)                                                                Consolidated
-------------------------------------------------------------------------------------------------------------------------
                                                                                        September 30,     December 31,
                                                                                            2003              2002
-------------------------------------------------------------------------------------------------------------------------
                                                                                         (Unaudited)
Liabilities and Shareholders' Equity
     Current liabilities
                                                                                                   
       Short-term borrowings and current maturities of long-term debt                   $         979    $       1,887
       Current maturities of intergroup debt                                                        -                -
       Accounts payable                                                                         1,996            2,151
       Accrued interconnection costs                                                              585              626
       Accrued taxes                                                                              364              358
       Advance billings                                                                           555              510
       Accrued restructuring costs                                                                155              277
       Payroll and employee benefits                                                              471              579
       Accrued interest                                                                           337              416
       Intergroup payable                                                                           -                -
       Other                                                                                      994            1,004
-------------------------------------------------------------------------------------------------------------------------
       Total current liabilities                                                                6,436            7,808

     Liabilities of discontinued operation
        Current tax benefit payable to the PCS Group                                                -               -
        Other                                                                                       -              299

     Noncurrent liabilities
       Long-term debt and capital lease obligations                                            17,025           18,405
       Intergroup debt                                                                              -                -
       Equity unit notes                                                                        1,725            1,725
       Deferred income taxes                                                                    1,839            2,025
       Postretirement and other benefit obligations                                             1,385            1,712
       Other                                                                                      945              769
-------------------------------------------------------------------------------------------------------------------------
       Total noncurrent liabilities                                                            22,919           24,636

     Redeemable preferred stock                                                                   247              256

     Shareholders' equity
       Common stock
         Class A FT, par value $0.00 per share and $0.50 per share, 100.0 shares
            authorized, 43.1 shares issued and outstanding                                          -               22
         FON, par value $2.00 per share, 4,200.0 shares authorized, 903.6 and 895.1
            shares issued and outstanding                                                       1,807            1,790
         PCS, par value $1.00 per share, 4,600.0 shares authorized, 1,034.9 and
            999.8 shares issued and outstanding                                                 1,035            1,000
       Capital in excess of par or stated value                                                10,060            9,931
       Retained earnings                                                                        1,091              252
       Accumulated other comprehensive loss                                                      (699)            (701)
       Combined attributed net assets                                                               -                -
-------------------------------------------------------------------------------------------------------------------------

       Total shareholders' equity                                                              13,294           12,294
-------------------------------------------------------------------------------------------------------------------------

    Total                                                                               $      42,896    $      45,293
                                                                                      -----------------------------------









                          See accompanying Condensed Notes to Consolidated Financial Statements (Unaudited).









  Eliminations/Reclassifications               Sprint FON Group                        Sprint PCS Group
------------------------------------    -----------------------------------   -----------------------------------
     September 30,     December 31,        September 30,      December 31,       September 30,      December 31,
          2003             2002                 2003               2002               2003              2002
------------------------------------    -----------------------------------   -----------------------------------
      (Unaudited)                           (Unaudited)                           (Unaudited)


                                                                                  
   $         -      $         -          $        42       $     1,234          $       937      $        653
             -                -               (1,110)                -                1,110                 -
             -                -                  734               808                1,262             1,343
             -                -                  575               614                   10                12
           (11)               -                  222               122                  153               236
             -                -                  225               232                  330               278
             -                -                  152               251                    3                26
             -                -                  471               488                    -                91
             -                -                   68               116                  269               300
          (561)            (536)                   -                 -                  561               536
           (48)             (46)                 530               545                  512               505
------------------------------------    -----------------------------------   -----------------------------------
          (620)            (582)               1,909             4,410                5,147             3,980


          (175)               -                  175                 -                    -                 -
             -                -                    -               299                    -                 -


             -                -                2,789             3,142               14,236            15,263
             -                -                    -              (406)                   -               406
             -                -                    -                 -                1,725             1,725
             -                -                1,535             1,825                  304               200
             -                -                1,298             1,677                   87                35
             -                -                  392               362                  553               407
------------------------------------    -----------------------------------   -----------------------------------
             -                -                6,014             6,600               16,905            18,036

          (279)            (280)                   -                10                  526               526




             -               22                    -                 -                    -                 -

         1,807            1,790                    -                 -                    -                 -

         1,035            1,000                    -                 -                    -                 -
        10,060            9,931                    -                 -                    -                 -
         1,091              252                    -                 -                    -                 -
          (699)            (701)                   -                 -                    -                 -
       (13,294)         (12,294)              13,103            11,814                  191               480
------------------------------------    -----------------------------------   -----------------------------------

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

   $    (1,074)     $      (862)         $    21,201       $    23,133          $    22,769      $     23,022
------------------------------------    -----------------------------------   -----------------------------------


















CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(millions)                                                                                   Sprint Corporation
                                                                                     ----------------------------------
                                                                                               Consolidated
------------------------------------------------------------------ ----------------- ----------------- ----------------
Year-to-Date September 30,                                                                 2003             2002
------------------------------------------------------------------ ----------------- ----------------- ----------------

Operating Activities

                                                                                                 
Net income (loss)                                                                     $      1,177     $        591
Adjustments to reconcile net income (loss) to net cash
   provided by operating activities:
     Discontinued operation, net                                                            (1,321)            (120)
     Cumulative effect of change in accounting principle, net                                 (258)               -
     Equity in net (gains) losses of affiliates                                                 45              105
     Depreciation and amortization                                                           3,739            3,629
     Deferred income taxes                                                                     440              526
     Net losses on write-down of assets                                                      1,568              396
     Changes in assets and liabilities:
         Accounts receivable, net                                                               44              325
         Inventories and other current assets                                                  174             (159)
         Accounts payable and other current liabilities                                     (1,226)            (665)
         Affiliate receivables and payables, net                                                 -                -
         Noncurrent assets and liabilities, net                                               (148)             (57)
     Other, net                                                                                145             (145)
------------------------------------------------------------------------------------ --- ------------- -- -------------
Net cash provided by operating activities                                                    4,379            4,426
------------------------------------------------------------------ --- ------------- --- ------------- -- -------------

Investing Activities

Capital expenditures                                                                        (2,352)          (3,628)
Investments in and loans to other affiliates, net                                              (16)             (14)
Investments in debt securities                                                                 (91)               -
Net proceeds from sales of assets                                                               81               97
------------------------------------------------------------------ --- ------------- --- ------------- -- -------------
Net cash used by investing activities                                                       (2,378)          (3,545)
------------------------------------------------------------------ --- ------------- --- ------------- -- -------------

Financing Activities

Proceeds from debt                                                                              44            6,023
Payments on debt                                                                            (2,386)          (6,286)
Dividends paid                                                                                (343)            (341)
Other, net                                                                                      20               44
------------------------------------------------------------------------------------ --- ------------- -- -------------
Net cash provided (used) by financing activities of continuing operations                   (2,665)            (560)
------------------------------------------------------------------------------------ --- ------------- -- -------------

------------------------------------------------------------------ --- ------------- --- ------------- -- -------------
Cash from discontinued operations                                                            2,230              104
------------------------------------------------------------------ --- ------------- --- ------------- -- -------------

Increase (Decrease) in Cash and Equivalents                                                  1,566              425
Cash and Equivalents at Beginning of Period                                                  1,035              313
------------------------------------------------------------------ --- ------------- --- ------------- -- -------------

Cash and Equivalents at End of Period                                                 $      2,601     $        738
                                                                                     --- ------------- -- -------------











                          See accompanying Condensed Notes to Consolidated Financial Statements (Unaudited).











   Eliminations/Reclassifications               Sprint FON Group                        Sprint PCS Group
----- ------------- --- -------------    --- ------------- -- -------------     -- ------------- --- -------------
          2003              2002                 2003             2002                 2003              2002
----- ------------- --- -------------    --- ------------- -- -------------     -- ------------- --- -------------



                                                                                   
   $         -       $         -          $     1,516      $       914          $      (339)      $      (323)


             -                 -               (1,321)            (120)                   -                 -
                               -                 (258)               -                    -                 -
             -                 -                   (2)              12                   47                93
             -                 -                1,886            1,971                1,853             1,658
             -                 -                 (428)             376                  868               150
             -                 -                1,558              395                   10                 1

             -                 -                  125              335                  (81)              (10)
           711                16                   44              (66)                (581)             (109)
          (711)              (16)                (286)            (891)                (229)              242
             -                 -                   14              (28)                 (14)               28
             -                 -                 (351)             (37)                 203               (20)
             -                 -                   97             (122)                  48               (23)
----- ------------- --- -------------    --- ------------- -- -------------     -- ------------- --- -------------
             -                 -                2,594            2,739                1,785             1,687
----- ------------- --- -------------    --- ------------- -- -------------     -- ------------- --- -------------



             -                 -               (1,141)          (1,550)              (1,211)           (2,078)
             -                 -                    -              (26)                 (16)               12
                                                  (91)               -                    -                 -
             -                 -                   80               66                    1                31
----- ------------- --- -------------    --- ------------- -- -------------     -- ------------- --- -------------
             -                 -               (1,152)          (1,510)              (1,226)           (2,035)
----- ------------- --- -------------    --- ------------- -- -------------     -- ------------- --- -------------



             -                 -                   44            1,287                    -             4,736
             -                 -               (2,335)          (2,270)                 (51)           (4,016)
             -                 -                 (332)            (330)                 (11)              (11)
             -                 -                  (20)             (53)                  40                97
----- ------------- --- -------------    --- ------------- -- -------------     -- ------------- --- -------------
             -                 -               (2,643)          (1,366)                 (22)              806
----- ------------- --- -------------    --- ------------- -- -------------     -- ------------- --- -------------

----- ------------- --- -------------    --- ------------- -- -------------     -- ------------- --- -------------
             -                 -                1,705              104                  525                 -
----- ------------- --- -------------    --- ------------- -- -------------     -- ------------- --- -------------

             -                 -                  504              (33)               1,062               458
             -                 -                  641              134                  394               179
----- ------------- --- -------------    --- ------------- -- -------------     -- ------------- --- -------------

   $         -       $         -          $     1,145      $       101          $     1,456       $       637
----- ------------- --- -------------    --- ------------- -- -------------     -- ------------- --- -------------













CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY (Unaudited)                                 Sprint Corporation
(millions)
Year-to-date September 30, 2003
----------------------------------------------------------------------------------------------------------------
                                                                                                   Capital in
                                                                     FON              PCS          Excess of
                                                  Class A FT        Common           Common      Par or Stated
                                                 Common Stock       Stock            Stock           Value
----------------------------------------------------------------------------------------------------------------

                                                                                
Beginning 2003 balance                        $         22    $      1,790    $    1,000       $      9,931
Net income (loss)                                        -               -             -                  -
FON common stock dividends                               -               -             -                  -
PCS preferred stock dividends                            -               -             -                 (5)
Conversion of PCS common stock
   underlying Class A common stock                     (22)              -            22                  -
FON Series 1 common stock issued                         -              17             -                 97
PCS Series 1 common stock issued                         -               -            13                 37
Other, net                                               -               -             -                  -
----------------------------------------------------------------------------------------------------------------

September 2003 balance                        $          -    $      1,807    $    1,035       $     10,060
                                              ------------------------------------------------------------------


Shares Outstanding
------------------------------------------------------------------------------------------------
Beginning 2003 balance                                43.1           895.1          999.8
FON Series 1 common stock issued                        -              8.5             -
PCS Series 1 common stock issued                        -               -            13.5
Conversion of Class A FT                                -               -            21.6
------------------------------------------------------------------------------------------------

September 2003 balance                                43.1           903.6        1,034.9
                                              --------------------------------------------------
































                          See accompanying Condensed Notes to Consolidated Financial Statements (Unaudited).











------------------------------------------------------------------------------------
                   Accumulated
                      Other
     Retained     Comprehensive    Consolidated   Combined Attributed Net Assets
     Earnings          Loss           Total     Sprint FON Group Sprint PCS Group
------------------------------------------------------------------------------------

                                                     
$       252      $     (701)     $   12,294    $      11,814     $        480
      1,177               -           1,177            1,516             (339)
       (338)              -            (338)            (338)               -
          -               -              (5)               6              (11)

          -               -               -                -                -
          -               -             114              114                -
          -               -              50                -               50
          -               2               2               (9)              11
------------------------------------------------------------------------------------

$     1,091      $     (699)     $   13,294    $      13,103     $        191
------------------------------------------------------------------------------------




















































                                                                         PART I.
                                                                         Item 1.

CONDENSED NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS (Unaudited)                              Sprint Corporation

The information in this Form 10-Q has been prepared  according to Securities and
Exchange   Commission  (SEC)  rules  and  regulations.   In  our  opinion,   the
consolidated  interim financial  statements reflect all adjustments,  consisting
only of normal recurring accruals, needed to fairly present Sprint Corporation's
consolidated  financial  position,   results  of  operations,   cash  flows  and
comprehensive income (loss).

Certain information and footnote  disclosures  normally included in consolidated
financial  statements  prepared  according to  accounting  principles  generally
accepted in the United States have been condensed or omitted.  As a result,  you
should read these financial statements along with Sprint Corporation's 2002 Form
10-K.  Operating  results for the 2003  year-to-date  period do not  necessarily
represent  the results  that may be expected  for the year ending  December  31,
2003.

--------------------------------------------------------------------------------
1.  Basis of Consolidation and Presentation
--------------------------------------------------------------------------------

Tracking Stock

FON common  stock and PCS common  stock are  intended to reflect  the  financial
results and economic value of the FON and PCS Groups.  However, they are classes
of  common  stock of  Sprint,  not of the  group  they are  intended  to  track.
Accordingly,  FON and PCS  shareholders  are subject to the risks  related to an
equity  investment  in  Sprint  and  all  of  Sprint's  businesses,  assets  and
liabilities.  Shares of FON common stock and PCS common stock do not represent a
direct legal interest in the assets and  liabilities  allocated to either group,
but rather represent a direct equity interest in our assets and liabilities as a
whole.

Board Discretion Regarding Tracking Stocks

Sprint's  Board has the  discretion  to, among other things,  make operating and
financial  decisions  that could favor one group over the other and,  subject to
the restrictions in Sprint's articles of incorporation, to change the allocation
of the assets and  liabilities  that  comprise each of the FON Group and the PCS
Group without shareholder approval. Under the applicable corporate law, Sprint's
Board owes its fiduciary duties to all of Sprint's  shareholders and there is no
Board of Directors  that owes  separate  duties to the holders of either the FON
common stock or the PCS common stock.  The Tracking Stock Policies  provide that
the Board,  in  resolving  material  matters in which the  holders of FON common
stock and PCS common stock have potentially divergent interests, will act in the
best  interests of Sprint and all of its common  shareholders  after giving fair
consideration  to the  potentially  divergent  interests  of the  holders of the
separate  classes of Sprint common stock.  These  policies may be changed by the
Board  without  shareholder  approval.  Given the  Board's  discretion  in these
matters,  it may be difficult to assess the future prospects of each group based
on past performance.

Consolidation and Comparative Presentation

The consolidated financial statements include the accounts of Sprint, its wholly
owned  subsidiaries  and  subsidiaries  it controls.  Investments in entities in
which  Sprint  exercises  significant  influence,  but  does  not  control,  are
accounted for using the equity method (see Note 2).

The consolidated  financial statements are prepared using accounting  principles
generally accepted in the United States.  These principles require management to
make estimates and  assumptions  that affect the reported  amounts of assets and
liabilities,  the  disclosure  of  contingent  assets and  liabilities,  and the
reported  amounts of revenues and  expenses.  Actual  results  could differ from
those estimates.

Certain prior-year amounts have been reclassified to conform to the current-year
presentation. These reclassifications had no effect on the results of operations
or shareholders' equity as previously reported.





Intergroup Transactions

The  PCS  Group  uses  the  long  distance  operation  of the FON  Group  as its
interexchange  carrier and purchases  wholesale  long distance for resale to its
customers.  Additionally,  the FON Group  provides  the PCS Group with Caller ID
services and various  other goods and  services.  Also included in these amounts
are goods capitalized by the PCS Group. Charges to the PCS Group for these items
totaled $163  million and $175  million in the 2003 and 2002 third  quarters and
$513  million  and $500  million  in the 2003  and  2002  year-to-date  periods,
respectively.  The intercompany profit on capitalized charges totaled $1 million
and $4 million in the 2003 and 2002 third quarters and $4 million and $8 million
in the 2003 and 2002  year-to-date  periods,  respectively.  The service charges
less capitalized  charges are included in the FON Group's net operating revenues
and in the PCS Group's costs of services and products.

The  PCS  Group   provides  the  FON  Group  with  access  to  its  network  and
telemarketing  and various  other  services.  Charges to the FON Group for these
items  totaled  $2 million  in the 2003  third  quarter,  $7 million in the 2003
year-to-date  period  and $4  million  in the 2002  third  quarter.  In the 2002
year-to-date period, the PCS Group credited the FON Group for $48 million.  This
credit  was  primarily   related  to   proceedings   initiated  by  the  Federal
Communications Commission (FCC) in 2001 to consider a number of issues regarding
compensation arrangements between carriers that exchange local and long distance
traffic,  including the issue of whether wireless  carriers should be allowed to
charge long  distance  carriers for  terminating  long  distance  calls to their
wireless customers.

The FON Group charges the PCS Group a return on  investment or capital  carrying
charge for the use of FON Group owned capital  assets.  Charges to the PCS Group
for this item  totaled  $11  million  and $8  million in the 2003 and 2002 third
quarters  and $31  million  and $24  million  in the 2003 and 2002  year-to-date
periods,  respectively.  These  amounts are  included  in the FON Group's  other
income and the PCS Group's operating expenses.

Allocation of Shared Services

Sprint  directly  assigns,  where  possible and practical,  certain  general and
administrative  costs to the FON Group and the PCS Group  based on their  actual
use of those  services.  Where direct  assignment of costs is not  possible,  or
practical,  Sprint uses other  indirect  methods,  including  time  studies,  to
estimate the allocation of costs to each group.  Cost  allocation  methods other
than time studies include factors (general, marketing or headcount) derived from
the operating unit's relative share of the predefined  category referenced (e.g.
headcount). Sprint believes that the costs allocated are comparable to the costs
that would be incurred if the groups had been operating on a stand-alone basis.

The FON Group  provides  facilities,  information  services  and  certain  other
services to the PCS Group.  Charges to the PCS Group for these services  totaled
$140  million  and $100  million  in the 2003 and 2002 third  quarters  and $399
million  and  $235   million  in  the  2003  and  2002   year-to-date   periods,
respectively.  This increase  primarily reflects the transition of the PCS Group
to shared  facilities  managed  by the FON Group.  Previously  the PCS Group had
separate  facilities,  and thus a direct  cost.  Group  direct  costs  for these
facilities have dropped  proportionately  for these allocated  shared  services.
Also  included in these  amounts are charges  that were  capitalized  by the PCS
Group.  These capitalized  charges totaled $8 million and $6 million in the 2003
and 2002 third  quarters  and $17  million  and $11 million in the 2003 and 2002
year-to-date periods, respectively. The service charges less capitalized charges
are included in the PCS Group's operating expenses.

Costs for shared services totaled approximately $348 million and $131 million in
the 2003 and 2002 third  quarters  and $890 million and $383 million in the 2003
and 2002  year-to-date  periods,  respectively.  The  percentage  of these costs
allocated to the PCS Group were  approximately  47% and 31% in the 2003 and 2002
third  quarters  and 47% and 29% in the  2003  and  2002  year-to-date  periods,
respectively, with the balance allocated to the FON Group. The increase in total
costs for shared services is driven by the  consolidation  of Sprint's  Network,
Information  Technology,  and  Billing  and  Accounts  Receivable  organizations
announced  in the 2002  fourth  quarter.  As a result of  synergies  from  these
consolidations,  group  direct costs for these  services  have dropped more than
proportionately  for these allocated shared  services.  The allocation of shared
services  may change at the  discretion  of Sprint's  Board and does not require
shareholder approval.

Allocation of Group Financing

Financing  activities  for the  groups are  managed  by Sprint on a  centralized
basis. Debt incurred by Sprint on behalf of the groups is specifically allocated
to and reflected in the financial  statements of the  applicable  group.  If the
group to which the debt has been  allocated  does not  provide  the  funds  when
Sprint subsequently repays all or a part of the


debt, the allocated debt is reported as intergroup  debt. With certain  external
borrowings in 1998, the FON Group extended the PCS Group longer  repayment terms
than the external borrowings.

Interest expense is allocated to the PCS Group based on an interest rate that is
substantially equal to the rate it would be able to obtain from third parties as
a wholly owned Sprint  subsidiary,  but without the benefit of any  guarantee by
Sprint or any member of the FON Group.  That  interest  rate is higher  than the
rate Sprint  obtains on  borrowings.  The  difference  between  Sprint's  actual
interest  rate and the rate charged to the PCS Group is reflected as a reduction
in the FON Group's  interest  expense and totaled $98 million and $82 million in
the 2003 and 2002 third  quarters  and $278 million and $255 million in the 2003
and 2002 year-to-date periods, respectively.  These amounts are reflected in the
"Intergroup interest charge" on the Consolidated Statements of Operations.

Under Sprint's  centralized cash management program, one group may advance funds
to the other group.  These  advances are accounted for as short-term  borrowings
between  the groups and bear  interest  at a market  rate that is  substantially
equal to the rate that group  would be able to obtain  from  third  parties on a
short-term basis.

The  allocation of group  financing  activities  may change at the discretion of
Sprint's Board and does not require shareholder approval.

Allocation of Federal and State Income Taxes

Sprint files a  consolidated  federal income tax return and certain state income
tax returns which include FON Group and PCS Group results.  Sprint adopted a tax
sharing  agreement which provides for the allocation of income taxes between the
two groups.  The FON Group's  income taxes are calculated as if it files returns
which  exclude  the PCS Group.  The PCS  Group's  income  taxes  reflect the PCS
Group's  incremental  cumulative impact on Sprint's  consolidated  income taxes.
Intergroup  tax payments are satisfied on the date Sprint's  related tax payment
is due to or the refund is received from the applicable tax authority.

The  allocation  of federal and state income taxes between the groups may change
at the discretion of Sprint's Board and does not require shareholder approval.







--------------------------------------------------------------------------------
2.  Investments
--------------------------------------------------------------------------------

Investments in Securities

The cost of investments in marketable  equity  securities,  which is included in
"Other assets" in the Consolidated  Balance Sheets,  was $136 million at the end
of September 2003 and $95 million at December 31, 2002.  Accumulated  unrealized
holding gains were $27 million,  gross and $17 million,  net of income taxes, at
the  end  of  September  2003.  Comparatively,  as of  December  31,  2002,  the
accumulated  unrealized holding losses were $20 million,  gross and $12 million,
net of income taxes, and accumulated  unrealized holding gains were $10 million,
gross and $6 million, net of income taxes. Both gains and losses are included in
"Accumulated other comprehensive loss" in the Consolidated Balance Sheets.

During the 2003 third quarter,  Sprint invested in marketable debt securities in
the amount of $250 million.  At September  30, 2003,  $91 million of this amount
was included in "Current  assets--Other"  and "Other assets" in the Consolidated
Balance Sheet.  The remaining $159 million have  maturities of less than 90 days
and was included in "Cash and equivalents." Accumulated unrealized holding gains
were immaterial as of September 30, 2003.

During  the 2003  second  quarter,  Sprint  converted  its  remaining  EarthLink
preferred  shares into 18 million  common shares and sold 10.8 million shares to
EarthLink,  Inc. and in the open market for $66 million.  Sprint recognized a $3
million  loss on the  sales.  At the end of  September  2003,  Sprint  held 18.9
million  EarthLink common shares.  These shares are hedged with variable prepaid
forward contracts, maturing from November 2004 to November 2005.

Sprint's cost method  investment in EarthLink  preferred  shares,  which is also
included in "Other assets" on the  Consolidated  Balance Sheet, was $116 million
at the end of December 2002.

Investments in and Advances to Affiliates

At the end of September 2003,  investments accounted for using the equity method
consisted  primarily of the PCS Group's $57 million investment in Virgin Mobile,
U.S.A.  (Virgin). At the end of September 2002,  investments accounted for using
the equity method consisted primarily of the PCS Group's investment in SVC BidCo
L.P.  (BidCo),  and  Virgin.  During the 2002  fourth  quarter,  the PCS Group's
investment in BidCo was dissolved.

In the 2003 third quarter, a Sprint subsidiary agreed to guarantee a $20 million
term-loan  facility  entered into by Virgin to fund working  capital needs.  The
facility  expires on December  31,  2004.  If required to perform,  Sprint would
acquire  Virgin's  subscriber base. The fair value of this liability is recorded
in  `Noncurrent  liabilities - Other' in the  Consolidated  Balance Sheet in the
amount of $5 million.  Additionally,  in the 2003 third quarter,  Sprint's board
authorized  additional  cash funding for the joint  venture in the amount of $30
million.

In the 2003  third  quarter,  Sprint  evaluated  its  investment  in Virgin  and
determined this interest does not meet the qualifications of a variable interest
entity.

Combined,  unaudited,  summarized financial information (100% basis) of entities
accounted for using the equity method was as follows:



                                                          Quarters Ended                      Year-to-Date
                                                          September 30,                      September 30,
                                              --- ------------------------------- -- -------------------------------
                                                      2003             2002              2003              2002
--------------------------------------------- --- ------------- -- -------------- -- ------------- --- -------------
                                                                           (millions)
Results of operations
                                                                                        
   Net operating revenues                      $       221      $       145       $       568       $       529
                                              --- ------------- -- -------------- -- ------------- --- -------------
   Operating loss                              $       (34)     $       (21)      $       (88)      $      (143)
                                              --- ------------- -- -------------- -- ------------- --- -------------
   Net loss                                    $       (77)     $       (15)      $      (162)      $      (396)
                                              --- ------------- -- -------------- -- ------------- --- -------------

Equity in net losses of affiliates             $       (17)     $        (3)      $       (45)      $      (105)
                                              --- ------------- -- -------------- -- ------------- --- -------------








--------------------------------------------------------------------------------
3.  Asset Retirement Obligations
--------------------------------------------------------------------------------

Sprint  adopted  Statement  of  Financial  Accounting  Standard  (SFAS) No. 143,
Accounting for Asset Retirement  Obligations,  on January 1, 2003. This standard
provides  accounting   guidance  for  legal  obligations   associated  with  the
retirement of long-lived  assets that result from the acquisition,  construction
or  development  and (or)  normal  operation  of that  asset.  According  to the
standard,  the fair  value of an asset  retirement  obligation  (ARO  liability)
should be recognized  in the period in which (1) a legal  obligation to retire a
long-lived  asset  exists  and (2) the  fair  value of the  obligation  based on
retirement  cost and  settlement  date is  reasonably  estimable.  Upon  initial
recognition of the ARO liability,  the related asset  retirement  cost should be
capitalized by increasing the carrying amount of the related long-lived asset.

Sprint's network is primarily  located on leased  property.  In the FON Group, a
majority  of  the  leased   property  has  no  requirement  for  remediation  at
retirement.  The remainder of the FON Group's leased property and  predominately
all of the PCS Group's leased property do have remediation requirements.  Sprint
expects to maintain  the  property as a necessary  component  of  infrastructure
required to maintain FCC licensing. The history and patterns of Sprint's use, as
well as that of our industry,  support a low probability  associated with lessor
enforcement of their remediation  rights.  Based on these trends and our limited
experience in performing  remediation of sites,  Sprint  estimates the liability
associated with the ultimate disposition of those requirements to be immaterial.

Adoption of SFAS No. 143 affected the cost of removal  historically  recorded by
the FON Group's local  division.  Consistent with  regulatory  requirements  and
industry practice,  the local division  historically accrued costs of removal in
its depreciation  reserves.  These costs of removal do not meet the SFAS No. 143
definition  of an ARO  liability.  Upon  adoption of SFAS No. 143, the FON Group
recorded a reduction in its historical  depreciation  reserves of  approximately
$420 million to remove the  accumulated  excess cost of removal,  resulting in a
cumulative effect of change in accounting  principle credit,  net of tax, in the
Consolidated Statements of Operations of $258 million. The annual impact of this
accounting  change on income from continuing  operations is an expected decrease
to the FON Group's 2003 depreciation expense of approximately $40 million and an
increase to 2003  expenses  incurred  for  removal  costs of  approximately  $20
million recognized ratably over the year.



The following table illustrates the effect on net income (loss) had Sprint
applied SFAS No. 143 in the 2002 comparative periods:

                                                                     Sprint FON Group
                                       -----------------------------------------------------------------------------
                                           Quarters Ended September 30,            Year-to-Date September 30,
                                       --- --------------- -- --------------- --- -------------- --- ---------------
                                                2003               2002               2003                2002
-------------------------------------- --- --------------- -- --------------- --- -------------- --- ---------------
                                                                        (millions)
                                                                                      
Net income (loss), as reported          $      (433)       $       526         $     1,516        $       914
Deduct:  Cumulative effect of change
    in accounting principle, net of
    related tax effects                           -                  -                (258)                 -
Add:  Historically accrued cost of
    removal included in depreciation
    reserves, less cash removal
    expenses, net of related tax
    effects                                       -                  1                   -                  7
-------------------------------------- --- --------------- -- --------------- --- -------------- --- ---------------

Pro forma net income (loss)             $      (433)       $       527         $     1,258        $       921
                                       --- --------------- -- --------------- --- -------------- --- ---------------








--------------------------------------------------------------------------------
4. Income Taxes
--------------------------------------------------------------------------------

The differences that caused Sprint's effective income tax rates to vary from the
35% federal statutory rate for income taxes related to continuing operations
were as follows:



                                                                     Sprint            Sprint            Sprint
                                                                  Corporation            FON               PCS
Year-to-date September 30, 2003                                   Consolidated          Group             Group
------------------------------------------------------------- --- ------------- --- -------------- -- --------------
                                                                                   (millions)
                                                                                          
Income tax expense (benefit) at the federal statutory rate    $       (216)     $        (26)      $      (190)
Effect of:
   State income taxes, net of federal income tax effect                  2                14               (12)
   Other, net                                                            1                 2                (1)
------------------------------------------------------------- --- ------------- --- -------------- -- --------------

Income tax expense (benefit)                                  $       (213)     $        (10)      $      (203)
                                                              --- ------------- --- -------------- -- --------------

Effective income tax rate                                            34.6%              13.7%             37.5%
                                                              --- ------------- --- -------------- -- --------------


                                                                     Sprint            Sprint            Sprint
                                                                  Corporation            FON               PCS
Year-to-date September 30, 2002                                   Consolidated          Group             Group
------------------------------------------------------------- --- ------------- --- -------------- -- --------------
                                                                                   (millions)
Income tax expense (benefit) at the federal statutory rate    $        152      $        369       $      (217)
Effect of:
   State income taxes, net of federal income tax effect                  5                25               (20)
   Equity in losses of foreign joint ventures                          (56)                1               (57)
   Decrease in valuation allowance for previous investment
      write-downs                                                     (130)             (130)                -
   Other, net                                                           (8)               (4)               (4)
------------------------------------------------------------- --- ------------- --- -------------- -- --------------

Income tax expense (benefit)                                  $        (37)     $        261       $      (298)
                                                              --- ------------- --- -------------- -- --------------

Effective income tax rate                                              NM               24.7%             48.0%
                                                              --- ------------- --- -------------- -- --------------


NM=Not meaningful

In the 2002 third quarter, Sprint reached a definitive agreement to sell its
directory publishing business to R.H. Donnelley. Due to the anticipated gain on
this sale, Sprint recognized $292 million of tax benefits in the 2002 third
quarter on previously recorded investment losses. The difference between the
benefit recognized in the 2002 third quarter and the 2002 year-to-date impact
reflected in the above reconciliation consists primarily of the tax benefits on
equity losses and the write down of EarthLink, Inc. stock that occurred in the
2002 first and second quarters.


--------------------------------------------------------------------------------
5.  Accounting for Derivative Instruments
--------------------------------------------------------------------------------

Risk Management Policies

Sprint's  derivative  instruments  include interest rate swaps,  stock warrants,
variable  prepaid  forward  contracts,  credit  forward  contracts,  and foreign
currency  forward   contracts.   Sprint's   derivative   transactions  are  used
principally for hedging purposes and comply with Board-approved policies. Senior
finance   management   receives  frequent  status  updates  of  all  outstanding
derivative positions.

Sprint enters into interest rate swap  agreements to manage exposure to interest
rate movements and achieve an optimal  mixture of floating and  fixed-rate  debt
while minimizing liquidity risk. The interest rate swap agreements designated as
fair value hedges  effectively  convert  Sprint's  fixed-rate debt to a floating
rate through the receipt of  fixed-rate  amounts in exchange  for  floating-rate
interest  payments  over the life of the  agreement  without an  exchange of the
underlying principal amount.


Sprint enters into interest rate swap agreements  designated as cash flow hedges
to reduce the impact of interest rate  movements on future  interest  expense by
effectively converting a portion of its floating-rate debt to a fixed rate.

In certain  business  transactions,  Sprint is granted  warrants to purchase the
securities of other companies at fixed rates. These warrants are supplemental to
the  terms  of the  business  transactions  and are not  designated  as  hedging
instruments.

Sprint  enters  into  variable  prepaid  forward   contracts  which  reduce  the
variability  in  expected  cash  flows  related  to a  forecasted  sale  of  the
underlying equity securities held as available for sale.

Sprint enters into fair value hedges  through  credit  forward  contracts  which
hedge changes in fair value of certain debt issues.

Sprint's   foreign   exchange  risk  management   program  focuses  on  reducing
transaction  exposure to optimize  consolidated  cash flow.  Sprint  enters into
forward  contracts  and  options in foreign  currencies  to reduce the impact of
changes in foreign exchange rates. Sprint's primary transaction exposure results
from net payments made to overseas  telecommunications  companies for completing
international calls made by Sprint's domestic  customers.  Forward contracts are
used to offset the impact of foreign currency fluctuations of these payments.

Interest Rate Swaps

The  interest  rate  swaps  met  all  the  required  criteria  under  derivative
accounting  rules for the  assumption of perfect  effectiveness  resulting in no
recognition  of changes in their fair value in  earnings  during the life of the
swap.  During the period  ending  September  30,  2003,  Sprint held  fair-value
interest  rate swaps.  The cash flow  hedges held by Sprint  matured in the 2002
second quarter.

Sprint  recorded  a  $39  million   increase  in  the  2003  third  quarter  and
year-to-date  periods  resulting  from changes in the fair value of the interest
rate swaps.  The  increase in value for these swaps has been  recorded in "Other
non-current  assets" in the  Consolidated  Balance Sheet. As the swaps have been
deemed perfectly effective,  an offset was recorded to the underlying "Long-term
debt."

Sprint recorded a $12 million pre-tax increase in the 2002  year-to-date  period
resulting  from gains on cash flow  hedges.  The changes in other  comprehensive
income are included in "Net  unrealized  gains (losses) on qualifying  cash flow
hedges" in the Consolidated Statements of Comprehensive Income (Loss).

Stock Warrants

The stock warrants are not designated as hedging  instruments and changes in the
fair value of these derivative instruments are recognized in earnings during the
period of change.

Sprint's net  derivative  losses on stock  warrants were  immaterial in the 2003
third quarter and 2003 year-to-date period.

Sprint's net  derivative  losses on stock  warrants were  immaterial in the 2002
third quarter.  Sprint recorded net derivative  losses in earnings of $3 million
after tax for the 2002  year-to-date  period due to changes in the fair value of
the stock warrants.

Net Purchased Equity Options

The net purchased equity options embedded in variable prepaid forward  contracts
are designated as cash flow hedges.

Sprint recorded a $3 million after-tax decrease to other comprehensive income in
the 2003  third  quarter  and a $21  million  after  tax  decrease  for the 2003
year-to-date  period  resulting  from losses on these cash flow  hedges.  Sprint
recorded a $4 million after-tax  increase to other  comprehensive  income in the
2002  third  quarter  and  a  $14  million  after  tax  increase  for  the  2002
year-to-date  period. The changes in other comprehensive  income are included in
"Net  unrealized   gains  (losses)  on  qualifying  cash  flow  hedges"  in  the
Consolidated Statements of Comprehensive Income (Loss).






Credit Forward Contracts

As there is high correlation  between the credit forward  contracts and the debt
issues being hedged,  fluctuations in the value of the credit forward  contracts
are generally  offset by changes in the fair value of the debt issues. A nominal
amount was recorded in Sprint's  Consolidated  Statements  of  Operations in the
2003 third quarter and year-to-date  periods on this  investment.  The contracts
matured in the 2003 third quarter.

Foreign Currency Forward Contracts

Foreign currency forward contracts held during the period were not designated as
hedges as defined in SFAS No. 133,  Accounting  for Derivative  Instruments  and
Hedging  Activities,   and  changes  in  the  fair  value  of  these  derivative
instruments are recognized in earnings during the period of change. The activity
associated with these contracts was immaterial in all periods presented.

--------------------------------------------------------------------------------
6.  Restructuring and Asset Impairment
--------------------------------------------------------------------------------

Restructuring Activity

In the 2003 second  quarter,  Sprint  announced the wind-down of its web hosting
business.  Restructurings  of other  global  markets  division  operations  also
occurred in the  continuing  effort to create a more  efficient  cost  structure
(Global  Markets Web Hosting  Wind-down).  These  decisions  resulted in pre-tax
charges of $348  million in the 2003  second  quarter and $2 million in the 2003
third quarter consisting of asset write-offs and severance costs associated with
work force reductions. The charge for asset impairments was $337 million and the
remaining  $13  million was accrued for  employee  terminations.  The  severance
charges are associated with the involuntary employee separation of approximately
750  employees.  In connection  with the wind-down of the web hosting  business,
Sprint will record additional charges for facility lease terminations,  customer
migration,  employee  termination,  and  other  wind-down  costs  in  subsequent
periods. As of September 30, 2003, approximately 350 of the employee separations
had  been  completed.   Sprint  expects  the  aggregate  pre-tax  charge  to  be
approximately  $400 million to $475 million.  Sprint expects to pay the majority
of severance and other exit costs in the next nine months.

In the 2002 fourth quarter,  Sprint  announced a  consolidation  in its Network,
Information Technology,  and Billing and Accounts Receivable  organizations,  as
well as in other  areas of the  Company,  in the  ongoing  effort to  streamline
operations and maintain a competitive cost structure (One Sprint Consolidation).
These  decisions  resulted  in a  $146  million  pre-tax  charge  consisting  of
severance costs associated with work force reductions totaling $58 million,  and
the remaining $88 million accrued for other exit costs primarily associated with
the termination of real estate leases.  The severance  charge is associated with
the involuntary  employee  separation of approximately  2,100  employees.  As of
September  30,  2003,  substantially  all of the employee  separations  had been
completed.  Sprint expects to pay the majority of severance and other exit costs
by March 31, 2004.

In the 2002 fourth quarter,  the PCS group  announced it would reduce  operating
expenses through a work force reduction (PCS Consolidation).  This action, which
was  undertaken to create a more  competitive  cost  structure for the business,
resulted in a $43 million pre-tax charge. The charge for severance costs totaled
$25  million,  and the  remaining  $18  million was accrued for other exit costs
primarily  associated with the termination of real estate leases.  The severance
charge was associated with the involuntary  employee separation of approximately
1,600  employees.  As of December  31, 2002,  substantially  all of the employee
separations  had been  completed.  Sprint  expects  to pay the  majority  of the
remaining severance and other exit costs by March 31, 2004.

In the 2002 third quarter,  Sprint  announced a  restructuring  integrating  its
E|Solutions' web hosting sales,  mobile  computing  consulting,  marketing,  and
product  sales  support  capabilities  into Sprint  Business  while  integrating
E/solutions'  customer service  operations into Network Services.  Additionally,
Sprint announced that its global markets division would discontinue offering and
internally supporting facilities-based Digital Subscriber Line (DSL) services to
customers  (collectively,  the Global Markets  Consolidation).  These  decisions
resulted in a $202 million pre-tax charge.  The charge for asset impairments was
$142 million, severance costs totaled $22 million, and the remaining $38 million
was accrued for other exit costs  associated with the termination of real estate
leases and other  contractual  obligations.  The severance charge was associated
with the involuntary employee separation of approximately 1,100 employees. As of
September  30,  2002,  substantially  all of the employee  separations  had been
completed.   As  of  September  30,  2003,  the  remaining  liability  primarily
represents lease termination costs.

In the 2002  first  quarter,  the PCS Group  announced  plans to close  five PCS
customer solution centers, as well as additional steps to reduce operating costs
in its network,  sales and distribution,  and customer  solutions business


units (PCS Customer Service Center Closures).  These decisions resulted in a $23
million pre-tax charge.  The charge for severance costs was $13 million with the
remaining $10 million being for other exit costs,  primarily for the termination
of real estate leases.  The severance charge was associated with the involuntary
employee separation of approximately 2,600 employees.  As of September 30, 2002,
substantially  all of the employee  separations had been completed.  In the 2002
third  quarter,  Sprint  performed  an analysis to  finalize  the  restructuring
estimates  recorded  in the 2002 first  quarter.  This  analysis  resulted  in a
reserve  reduction  of $6 million  primarily  associated  with real estate lease
terminations.

In the 2001 fourth quarter,  Sprint terminated its efforts to provide its Sprint
ION consumer and business  offerings  and  announced  plans to reduce  operating
costs in the business units that comprise its FON Group.  These efforts included
consolidation and streamlining of marketing and network  operations,  as well as
streamlining  corporate  support  functions  (Sprint  ION  Termination).   These
decisions  resulted in a $1,813  million  pre-tax  charge.  The charge for asset
impairments  was $1,327 million,  severance costs totaled $231 million,  and the
remaining $256 million was accrued for other exit costs including termination of
supplier agreements, real estate leases, and other contractual obligations.  The
severance  charge was associated  with the  involuntary  employee  separation of
approximately  6,000 employees.  As of September 30, 2002,  substantially all of
the employee separations had been completed.  In the 2002 third quarter,  Sprint
performed an analysis to finalize the  restructuring  estimates  recorded in the
2001 fourth quarter.  This analysis resulted in a reserve reduction in the third
quarter of 2002 of $42 million  primarily  associated  with exit costs and a $34
million reduction associated with the asset impairment charge. Sprint expects to
pay the majority of the remaining severance costs by December 31, 2003.

In several of these  restructuring  events,  the remaining  other exit costs are
primarily lease commitments which will be paid according to their terms.

This activity is summarized as follows:



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

                                                                      2003 Activity
                                                         -----------------------------------------

                                         December 31,         Total                                   September 30,
                                        2002 Liability     Restructuring    Cash       Non-cash/     2003 Liability
                                            Balance           Charge      Payments    Adjustments        Balance
----------------------------------------------------------------------------------------------------------------------
                                                                       (millions)
Restructuring Events - 2003
   Global Markets Web Hosting
   Wind-down
                                                                                   
      Severance                      $         -         $     13       $      7     $     -      $         6

Restructuring Events - 2002
   One Sprint Consolidation
      Severance                               58                -             40           -               18
      Other exit costs                        51                -              4           -               47
   PCS Consolidation
      Severance                               22                -             17           -                5
      Other exit costs                        16                -              3          (3)              10
   Global Markets Consolidation
      Severance                                8                -              8           -                -
      Other exit costs                        30                -              9           -               21
   PCS Customer Service Center
   Closures
      Other exit costs                         2                -              1           -                1

Restructuring Events - 2001
   Sprint ION Termination
      Severance                               43                -             19           -               24
      Other exit costs                        47                -             15          (9)              23
----------------------------------------------------------------------------------------------------------------------

Total                                $        277        $     13       $    123     $    (12)    $        155
                                    ----------------------------------------------------------------------------------







Other Asset Impairments

In the 2003 third quarter,  the FON Group's global markets  division  recorded a
pre-tax,  non-cash  charge of $1.2 billion related to the write-down in the fair
value of its MMDS spectrum. Sprint's ongoing evaluation of business use for this
asset  resulted  in a decision to end pursuit of a  residential  fixed  wireless
strategy.  This decision  required a revaluation of the fair value of the asset.
Sprint is now focusing its efforts on a broad range of  alternative  strategies.
Sprint is  continuing to invest in the spectrum,  is monitoring  technology  and
industry  developments,   and  is  involved  in  efforts  to  achieve  favorable
regulatory rulings with respect to this spectrum.

In the 2003 first quarter,  the PCS Group recorded a charge for asset impairment
of $10 million.  This charge was associated  with the  termination of a software
development project.

--------------------------------------------------------------------------------
7.  Discontinued Operation
--------------------------------------------------------------------------------

In the 2002 third  quarter,  Sprint  reached a definitive  agreement to sell its
directory  publishing  business to R.H. Donnelley for $2.23 billion in cash. The
sale closed on January 3, 2003. In the 2003 third quarter,  Sprint  recognized a
loss of $1 million  primarily  related to a state tax rate  true-up.  The pretax
gain  recognized in the  year-to-date  period was $2.14  billion,  $1.32 billion
after-tax.  In accordance  with SFAS No. 144,  Accounting  for the Impairment or
Disposal of Long-lived  Assets,  Sprint has  presented the directory  publishing
business as a discontinued  operation in the consolidated  financial statements.
Summary financial information is as follows:



                                                                       September 30,      December 31,
                                                                            2003              2002
                  --------------------------------------------------- -----------------------------------
                                                                                  (millions)
                  Assets of discontinued operation
                                                                                  
                     Accounts receivable, net                         $        -        $     277
                     Prepaids                                                  -               99
                     Other assets                                              -               15
                  --------------------------------------------------- -- -------------- -- --------------
                  Total assets of discontinued operation              $        -        $     391
                                                                      -- -------------- -- --------------

                  Liabilities of discontinued operation
                     Advance billings and other                       $        -        $     299
                                                                      -- -------------- -- --------------


                                                                                Quarters Ended
                                                                                September 30,
                                                                      -- -------------- -- --------------
                                                                             2003              2002
                  --------------------------------------------------- -- -------------- -- --------------
                                                                                  (millions)
                     Net operating revenues                           $         -       $       133
                                                                      -- -------------- -- --------------
                     Income before income taxes                       $         -       $        66
                                                                      -- -------------- -- --------------


                                                                                 Year-to-Date
                                                                                September 30,
                                                                      -- -------------- -- --------------
                                                                             2003              2002
                  --------------------------------------------------- -- -------------- -- --------------
                                                                                  (millions)
                     Net operating revenues                           $         5       $       409
                                                                      -- -------------- -- --------------
                     Income before income taxes                       $         5       $       193
                                                                      -- -------------- -- --------------



At September 30, 2003, the FON Group had a current tax payable to the PCS Group
related to the gain on the sale of the directory publishing business in the
amount of $175 million for the tax allocation between the PCS Group and the FON
Group under the tax sharing agreement.






--------------------------------------------------------------------------------
8. Short-term Borrowings and Current Maturities of Long-term Debt
--------------------------------------------------------------------------------

In the 2003 third quarter,  Sprint repaid,  before  scheduled  maturities,  $334
million of its current  maturities of long-term  debt. The debt consisted of $34
million of senior notes with  interest  rates  ranging from 5.7% to 5.9% and the
$300  million  Export  Development  Canada loan with an  interest  rate of 2.8%.
Sprint  recorded a discount of $3 million  associated  with the repayment of the
senior notes.

In March  2003,  Sprint  completed  a  tender  offer to  purchase  $442  million
principal  amount of current senior notes before their scheduled  maturity.  The
notes had an interest  rate of 5.7% and a maturity  date of November 15, 2003. A
premium  of $6  million  was paid as part of the  tender  offer.  The notes were
allocated to the PCS Group and  reflected as  long-term  debt.  The PCS Group is
scheduled  to pay $36  million of the total to the FON Group in the 2003  fourth
quarter and the remaining $406 million in the 2004 second quarter.

In March  2003,  Sprint  completed  a  tender  offer to  purchase  $635  million
principal amount of its long-term senior notes before their scheduled  maturity.
See further discussion in Note 9.

At the end of the  2003  third  quarter,  there  was  $1.1  billion  of  current
maturities of intergroup debt on the PCS Group balance sheet.  This is comprised
of the senior  notes  purchased  in the first and third  quarters of 2003.  As a
result  of the  FON  Group's  prepayment  of the  notes  the  allocated  debt is
reflected as intergroup debt in the PCS Group balance sheet. The intergroup debt
is eliminated in the Consolidated Balance Sheet.

In February 2003, Sprint prepaid the $455 million balance  outstanding  relating
to  the  global  markets  division  accounts  receivable  asset   securitization
facility.

--------------------------------------------------------------------------------
9.  Long-term Debt and Capital Lease Obligations
--------------------------------------------------------------------------------

In the 2003 third  quarter,  Sprint repaid,  before  scheduled  maturities,  $84
million of its local division's  first mortgage bonds.  These bonds had interest
rates  ranging from 9.1% to 9.3% and maturity  dates  ranging from 2019 to 2021.
Sprint recorded a premium of $5 million associated with this repayment.

In March  2003,  Sprint  completed  a  tender  offer to  purchase  $635  million
principal amount of its long-term senior notes before their scheduled  maturity.
The notes had an  interest  rate of 5.9% and a maturity  date of May 1, 2004.  A
premium  of $13  million  was paid as part of the tender  offer.  The notes were
allocated to the PCS Group and  reflected  as long-term  debt at the time of the
tender  offer.  As a result  of the FON  Group's  repayment  of the  notes,  the
allocated debt was reflected as intergroup  debt on the PCS Group balance sheet.
The notes are scheduled to be paid to the FON Group in the 2004 second  quarter.
At the end of the 2003 third quarter, the allocated debt is reflected as current
maturities of intergroup  debt on the PCS balance sheet.  The intergroup debt is
eliminated in the Consolidated Balance Sheet.

In March 2002,  Sprint issued $5 billion of debt  securities  which replaced its
commercial paper program.

--------------------------------------------------------------------------------
10.  Common Stock Issuances
--------------------------------------------------------------------------------

In March 2003, France Telecom (FT) converted 34.4 million shares of Series 3 PCS
common  stock into  shares of Series 1 PCS common  stock.  At the same time,  FT
converted  21.6  million  shares of PCS common stock  underlying  Class A common
stock into Series 1 PCS common stock.

Upon the issuance of the PCS shares  underlying the Class A common stock,  there
were no more underlying shares of PCS or FON stock. The par value of the Class A
common stock was automatically  reduced to $0.00 per share from $0.50 per share.

According  to an  amended  Schedule  13D  filed by FT with the SEC,  it sold its
shares of Series 1 PCS common stock in June 2003.  As a result,  neither  France
Telecom nor  Deutsche  Telekom own any shares of PCS common  stock or FON common
stock or any shares convertible into PCS common stock or FON common stock.






--------------------------------------------------------------------------------
11.  Stock-based Compensation
--------------------------------------------------------------------------------

Effective  January  1,  2003,  Sprint  adopted  SFAS  No.  123,  Accounting  for
Stock-Based Compensation, as amended by SFAS No. 148, Accounting for Stock-Based
Compensation - Transition and  Disclosure,  using the prospective  method.  Upon
adoption Sprint began expensing the fair value of stock-based  compensation  for
all grants,  modifications  or settlements made on or after January 1, 2003. The
following  table  illustrates the effect on net income and earnings per share of
stock-based compensation included in net income and the effect on net income and
earnings per share for grants issued on or before  December 31, 2002, had Sprint
applied the fair value recognition provisions of SFAS 123.



                                                                        Sprint FON Group
                                              ----------------------------------------------------------------------
                                                          Quarters Ended                      Year-to-Date
                                                          September 30,                      September 30,
                                              --- ------------------------------- -- -------------------------------
                                                      2003             2002              2003              2002
--------------------------------------------- --- ------------- -- -------------- -- ------------- --- -------------
                                                                (millions, except per share data)
                                                                                        
Net income (loss), as reported                 $      (433)     $        526      $      1,516      $        914
Add:  Stock-based employee compensation
   expense included in reported net income
   (loss), net of related tax effects
                                                         6                 1                14                 2
Deduct:  Total stock-based employee
   compensation expense determined under
   fair value based method for all awards,
   net of related tax effects                          (14)              (23)              (53)              (70)
--------------------------------------------- --- ------------- -- -------------- -- ------------- --- -------------

Pro forma net income (loss)                   $       (441)     $        504      $      1,477     $         846
                                              --- ------------- -- -------------- -- ------------- --- -------------

Earnings (loss) per common share:
   Basic - as reported                         $     (0.48)     $       0.59      $       1.69      $       1.03
                                              --- ------------- -- -------------- -- ------------- --- -------------
   Basic - pro forma                           $     (0.49)     $       0.57      $       1.65      $       0.95
                                              --- ------------- -- -------------- -- ------------- --- -------------

   Diluted - as reported                       $     (0.48)     $       0.59      $       1.69      $       1.03
                                              --- ------------- -- -------------- -- ------------- --- -------------
   Diluted - pro forma                         $     (0.49)     $       0.57      $       1.65      $       0.95
                                              --- ------------- -- -------------- -- ------------- --- -------------


                                                                        Sprint PCS Group
                                              ----------------------------------------------------------------------
                                                          Quarters Ended                      Year-to-Date
                                                          September 30,                      September 30,
                                              --- ------------------------------- -- -------------------------------
                                                      2003             2002              2003              2002
--------------------------------------------- --- ------------- -- -------------- -- ------------- --- -------------
                                                                (millions, except per share data)
Net loss, as reported                          $        (65)    $          (7)    $       (339)     $       (323)
Add:  Stock-based employee compensation
   expense included in reported net loss,
   net of related tax effects
                                                          4                 1               11                 2
Deduct:  Total stock-based employee
   compensation expense determined under
   fair value based method for all awards,
   net of related tax effects                           (19)              (34)             (73)              (97)
--------------------------------------------- --- ------------- -- -------------- -- ------------- --- -------------

Pro forma net loss                            $         (80)    $         (40)    $       (401)    $        (418)
                                              --- ------------- -- -------------- -- ------------- --- -------------

Loss per common share:
   Basic - as reported                         $      (0.07)    $      (0.01)     $      (0.34)     $      (0.33)
                                              --- ------------- -- -------------- -- ------------- --- -------------
   Basic - pro forma                           $      (0.08)    $      (0.04)     $      (0.40)     $      (0.42)
                                              --- ------------- -- -------------- -- ------------- --- -------------

   Diluted - as reported                       $      (0.07)    $      (0.01)     $      (0.34)     $      (0.33)
                                              --- ------------- -- -------------- -- ------------- --- -------------
   Diluted - pro forma                         $      (0.08)    $      (0.04)     $      (0.40)     $      (0.42)
                                              --- ------------- -- -------------- -- ------------- --- -------------




Sprint  recognized  pre-tax charges of $14 million in the 2003 third quarter and
$23 million in the year-to-date  period related to stock-based  grants issued in
2003. In 2002, pre-tax charges of $2 million in the third quarter and $5 million
in the  year-to-date  period were recognized for grants of restricted stock made
in 2002 and previous years.

In the 2003 second quarter,  Sprint recognized pre-tax charges of $15 million of
non-cash  expense in connection with separation  agreements  agreed to by Sprint
and William T. Esrey,  former  chairman and chief executive  officer;  Ronald T.
LeMay,  former  president and chief  operating  officer;  and J. Richard Devlin,
former  executive  vice  president  -  general  counsel,  external  affairs  and
corporate   secretary.   The  charges  were   associated   with  accounting  for
modifications  which accelerated  vesting and extended exercise periods of stock
options  granted in prior periods,  as required by SFAS No. 123  "Accounting for
Stock-Based Compensation." Most of the FON options had exercise prices that were
approximately two times the market price at the modification date, while most of
the PCS  options had  exercise  prices  that were  approximately  five times the
market  price at the  modification  date.  The charge to  earnings in the second
quarter was  approximately one cent per share each for the FON Group and the PCS
Group.

--------------------------------------------------------------------------------
12.  Litigation, Claims and Assessments
--------------------------------------------------------------------------------

In March 2003,  settlements  subject to court  approval were announced in both a
derivative   action  and  a  securities  class  action  filed  by  institutional
stockholders.  The  derivative  settlement  includes  the  adoption  of  certain
corporate governance enhancements,  certain restrictions on stock and options by
individual defendants,  and the payment of plaintiff's attorneys' fees in Sprint
stock,  for which Sprint  reserved $5 million in the 2003 first quarter in other
income (expense),  net. The securities class action settlement  provides for the
payment of a total of $50 million to the plaintiff  class.  Sprint  reserved $45
million,   representing  the  settlement  amount  net  of  undisputed  insurance
coverage, in the 2003 first quarter in other income (expense),  net. In the 2003
third quarter,  Sprint recorded $17 million in an additional  insurance recovery
related to this  action.  Sprint  remains  in  negotiations  with its  insurance
carriers regarding remaining coverage.

A number of putative  class  action  cases that allege  Sprint  failed to obtain
easements  from  property  owners  during the  installation  of its fiber  optic
network  have been  filed in  various  courts.  Several  of these  cases  sought
certification  of nationwide  classes,  and in one case, a nationwide  class was
certified.  However,  a  nationwide  settlement  of these  claims  was  recently
approved by the U.S. District Court for the Northern District of Illinois, which
has enjoined all other similar cases.  Objectors  have appealed the  preliminary
approval  order and injunction to the Seventh  Circuit Court of Appeals.  Sprint
has previously accrued for the estimated settlement costs of these suits.

In July 2002,  the  Federal  Communications  Commission  released a  declaratory
ruling in a matter referred to it by the federal  district court for the Western
District of Missouri in Sprint's  suit against AT&T Corp for the  collection  of
terminating  access  charges.  The FCC ruled that  although  nothing  prohibited
wireless  carriers  from  charging for access to their  networks,  interexchange
carriers were not required to pay such charges  absent a contractual  obligation
to do so. This decision has been appealed to the D.C.  Circuit Court of Appeals.
Management  believes  adequate  provisions have been recorded in the PCS Group's
results of operations.

In July 2003, the Inspector General of the General Services Administration (GSA)
recommended  that  the GSA  Debarment  Official  consider  whether  to  initiate
debarment  proceedings against Sprint. The recommendation was based on a billing
error related to Sprint's  FTS2001  contract with the GSA. In June 2003,  Sprint
reached  agreement  with  the  Justice  Department  to pay the  government  $5.2
million,  an amount  twice the  estimate of the amount over billed and an amount
that  both  agreed  compensated  the  government.  In  October  2003,  the GSA's
Debarment  Official  decided,  based on a review of the record,  not to initiate
debarment proceedings against Sprint.

In April and May 2003,  three putative  class action  lawsuits were filed in the
U.S. District Court for the District of Kansas by individual participants in the
Sprint  Retirement  Savings  Plan and the  Centel  Retirement  Savings  Plan for
Bargaining  Unit Employees  against  Sprint  Corporation,  the  committees  that
administer the two plans, and various current and former officers of Sprint. The
lawsuits allege that defendants breached their fiduciary duties to the plans and
violated  the ERISA  statutes  by  including  FON and PCS stock among the thirty
investment  options offered to plan  participants.  The lawsuits seek to recover
any  decline in the value of FON and PCS stock  during the class  period.  These
lawsuits have been consolidated before a single judge.





Various other suits,  proceedings and claims, including purported class actions,
typical for a business enterprise, are pending against Sprint.

While it is not possible to determine the ultimate  disposition of each of these
proceedings and whether they will be resolved  consistent with Sprint's beliefs,
Sprint  expects  that the outcome of such  proceedings,  individually  or in the
aggregate, will not have a material adverse effect on the financial condition or
results of operations of Sprint, the FON Group or the PCS Group.

--------------------------------------------------------------------------------
13.  Other Financial Information
--------------------------------------------------------------------------------

Allowance for Doubtful Accounts

Sprint's allowance for doubtful accounts was as follows:



                                                                        ----------------- ----------------
                                                                         September 30,     December 31,
                                                                              2003             2002
                    --------------------------------------------------- -----------------------------------
                                                                                    (millions)
                                                                                    
                    FON Group                                           $      189        $     279
                    PCS Group                                                   95              135
                    --------------------------------------------------- -- -------------- -- --------------

                    Consolidated                                        $      284        $     414
                                                                        -- -------------- -- --------------


Supplemental Cash Flows Information

Sprint's net cash paid (received) for interest and income taxes was as follows:

                                                                                   Year-to-Date
                                                                                   September 30,
                                                                        -- ------------- -- -------------
                                                                              2003             2002
                    --------------------------------------------------- -- ------------- -- -------------
                                                                                   (millions)
                    Interest (net of capitalized interest)              $    1,118       $      963
                                                                        -- ------------- -- -------------
                    Income taxes                                        $       70       $     (453)
                                                                        -- ------------- -- -------------


Sprint's non-cash activities included the following:

                                                                                   Year-to-Date
                                                                                   September 30,
                                                                        -- ------------- -- -------------
                                                                              2003             2002
                    --------------------------------------------------- -- ------------- -- -------------
                                                                                   (millions)
                    Common stock issued under Sprint's employee
                       benefit stock plans                              $      152       $       147
                                                                        -- ------------- -- -------------
                    Tax benefit from stock options exercised            $        3       $         -
                                                                        -- ------------- -- -------------
                    Contribution to equity investment                   $        4       $        35
                                                                        -- ------------- -- -------------








--------------------------------------------------------------------------------
14.  Segment Information
--------------------------------------------------------------------------------

Sprint is  divided  into  three  main  lines of  business:  the  global  markets
division,  the local  division,  and the PCS  wireless  telephony  products  and
services  business,  also known as the PCS Group.  Other  consists  primarily of
wholesale distribution of telecommunications products.

Sprint  manages its segments to the operating  income (loss) level of reporting.
Items  below  operating  income  (loss) are held at a  corporate  level and only
attributed to the group level. The  reconciliation  from operating income to net
income is shown on the face of the Consolidated  Statements of Operations in the
consolidating information.

Segment financial information was as follows:



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

                             Global                                                   Corporate
Quarters Ended              Markets         Local                         PCS            and
September 30,               Division      Division       Other(1)      Group(2)     Eliminations(3) Consolidated
----------------------------------------------------------------------------------------------------------------
                                                              (millions)
2003
                                                                                
Net operating revenues  $   1,974      $    1,530    $     220      $   3,340     $    (350)      $    6,714
Affiliated revenues           167              40          141              2          (350)               -
Operating income (loss)    (1,181)            459           (7)           284             7             (438)

2002
Net operating revenues  $   2,231      $    1,580    $     229      $   3,157     $    (399)      $    6,798
Affiliated revenues           171              68          155              5          (399)               -
Operating income (loss)       (63)            450           (6)           141             2              524
----------------------------------------------------------------------------------------------------------------


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

                             Global                                                   Corporate
Year-to-Date                Markets         Local                         PCS            and
September 30,               Division      Division       Other(1)      Group(2)     Eliminations(3) Consolidated
----------------------------------------------------------------------------------------------------------------
                                                              (millions)
2003
Net operating revenues  $   6,018      $    4,595    $     617      $   9,383     $  (1,097)      $   19,516
Affiliated revenues           530             158          402              7        (1,097)               -
Operating income (loss)    (1,504)          1,368          (23)           675            20              536

2002
Net operating revenues  $   6,848      $    4,693    $     649      $   9,023     $  (1,075)      $   20,138
Affiliated revenues           495             218          409            (47)       (1,075)               -
Operating income (loss)      (168)          1,412          (16)           475             9            1,712
----------------------------------------------------------------------------------------------------------------



(1)  In the 2003 first quarter, Sprint closed the sale of its directory
     publishing business to R.H. Donnelley for $2.23 billion in cash. Operations
     of the directory publishing business are reported as a discontinued
     operation for all periods presented. See Note 7 for additional information.

(2)  Affiliate revenues in the 2002 third quarter and year-to-date periods
     reflect the adjustment of previously recorded inter-segment wireless access
     revenue between the global markets division and the PCS Group.

(3)  Revenues eliminated in consolidation consist principally of local access
     charged to the global markets division by the local division, equipment
     purchases from the wholesale distribution business, interexchange services
     provided to the local division, long-distance services provided to the PCS
     Group for resale to PCS customers and for internal business use, Caller ID
     services provided by the local division to the PCS Group and handset
     purchases from the PCS Group.








Net operating revenues by product and services were as follows:



----------------------------------------------------------------------------------------------------------------------
                                       Global
Quarters Ended                         Markets     Local                        PCS
September 30,                          Division     Division     Other(1)      Group     Eliminations(2)Consolidated
----------------------------------------------------------------------------------------------------------------------
                                                                        (millions)
2003
                                                                                      
Voice                                $   1,240   $        -   $       -    $       -   $    (149)       $    1,091
Data                                       462            -           -            -         (16)              446
Internet                                   233            -           -            -          (2)              231
Local service                                -          757           -            -          (1)              756
Network access                               -          525           -            -         (32)              493
Long distance                                -          135           -            -           -               135
Wireless services                            -            -           -        3,340          (2)            3,338
Other                                       39          113         220            -        (148)              224
                                     ----------------------------------------------------------------------------------
Total net operating revenues         $   1,974   $    1,530   $     220    $   3,340   $    (350)       $    6,714
                                     ----------------------------------------------------------------------------------


2002
Voice                                $   1,433   $        -   $       -    $       -   $    (171)       $    1,262
Data                                       445            -           -            -           -               445
Internet                                   258            -           -            -           -               258
Local service                                -          765           -            -           -               765
Network access                               -          526           -            -         (52)              474
Long distance                                -          155           -            -           -               155
Wireless services                            -            -           -        3,157          (5)            3,152
Other                                       95          134         229            -        (171)              287
                                     ----------------------------------------------------------------------------------
Total net operating revenues         $   2,231   $    1,580   $     229    $   3,157   $    (399)       $    6,798
                                     ----------------------------------------------------------------------------------



(1)  In the 2003 first quarter, Sprint closed the sale of its directory
     publishing business to R.H. Donnelley for $2.23 billion in cash. Operations
     of the directory publishing business are reported as a discontinued
     operation for all periods presented. See Note 7 for additional information.

(2)  Revenues eliminated in consolidation consist principally of local access
     charged to the global markets division by the local division, equipment
     purchases from the wholesale distribution business, interexchange services
     provided to the local division, long-distance services provided to the PCS
     Group for resale to PCS customers and for internal business use, Caller ID
     services provided by the local division to the PCS Group and handset
     purchases from the PCS Group.

(3)  Prior to the 2003 second quarter, elimination information for the global
     markets division was not tracked at a specific products and services level.
     All eliminations were considered voice revenues.










----------------------------------------------------------------------------------------------------------------------
                                       Global
Year-to-Date                           Markets     Local                        PCS
September 30,                          Division(1)  Division     Other(1)      Group     Eliminations(2)Consolidated
----------------------------------------------------------------------------------------------------------------------
                                                                        (millions)
2003
                                                                                      
Voice                                $   3,775   $        -   $       -    $       -   $    (445)       $    3,330
Data                                     1,386            -           -            -         (58)            1,328
Internet                                   721            -           -            -         (25)              696
Local service                                -        2,284           -            -          (2)            2,282
Network access                               -        1,567           -            -        (132)            1,435
Long distance                                -          412           -            -           -               412
Wireless services                            -            -           -        9,383          (7)            9,376
Other                                      136          332         617            -        (428)              657
                                     ----------------------------------------------------------------------------------
Total net operating revenues         $   6,018   $    4,595   $     617    $   9,383   $  (1,097)       $   19,516
                                     ----------------------------------------------------------------------------------


2002
Voice                                $   4,437   $        -   $       -    $       -   $    (495)       $    3,942
Data                                     1,396            -           -            -           -             1,396
Internet                                   750            -           -            -           -               750
Local service                                -        2,289           -            -           -             2,289
Network access                               -        1,562           -            -        (164)            1,398
Long distance                                -          479           -            -           -               479
Wireless services                            -            -           -        9,023          47             9,070
Other                                      265          363         649            -        (463)              814
                                     ----------------------------------------------------------------------------------
Total net operating revenues         $   6,848   $    4,693   $     649    $   9,023   $  (1,075)       $   20,138
                                     ----------------------------------------------------------------------------------



(1)  In the 2003 first quarter, Sprint closed the sale of its directory
     publishing business to R.H. Donnelley for $2.23 billion in cash. Operations
     of the directory publishing business are reported as a discontinued
     operation for all periods presented. See Note 7 for additional information.

(2)  Revenues eliminated in consolidation consist principally of local access
     charged to the global markets division by the local division, equipment
     purchases from the wholesale distribution business, interexchange services
     provided to the local division, long-distance services provided to the PCS
     Group for resale to PCS customers and for internal business use, Caller ID
     services provided by the local division to the PCS Group and handset
     purchases from the PCS Group.

(3)  Prior to the 2003 second quarter, elimination information for the global
     markets division was not tracked at a specific products and services level.
     All eliminations were considered voice revenues.








--------------------------------------------------------------------------------
15.  Recently Issued Accounting Pronouncements
--------------------------------------------------------------------------------

In  November  2002,  the  Emerging  Issues  Task Force  (EITF) of the  Financial
Accounting  Standards  Board  (FASB)  reached  a  consensus  on EITF No.  00-21,
Accounting for Revenue Arrangements with Multiple Deliverables (EITF 00-21). The
issue  addresses  how to account  for  arrangements  that may  involve  multiple
revenue-generating  activities,  i.e.,  the delivery or  performance of multiple
products,  services,  and/or rights to use assets.  In applying  this  guidance,
separate  contracts with the same party,  entered into at or near the same time,
will be  presumed to be a bundled  transaction,  and the  consideration  will be
measured  and  allocated  to the  separate  units based on their  relative  fair
values.  This consensus  guidance applies to agreements entered into in quarters
beginning after June 15, 2003. Sprint adopted this new accounting effective July
1, 2003.

The  PCS  Group   currently   sells  wireless   phones  and  service   contracts
simultaneously in its company-owned  stores.  Under previous accounting guidance
in Staff Accounting Bulletin 101, these direct sales channel activation fees and
associated  costs were deferred and recognized over the average life of service.
These were considered to be service revenues and expenses. EITF 00-21 results in
this  activation fee revenue being  recognized at the time the related  wireless
phone is sold, and classifies it as equipment sales. The associated costs are no
longer deferred.

While this change  accelerates the recognition of revenue and associated expense
over the next twenty-four  months,  which is the previous  deferral period,  the
impact to results of operations and cash flows is not material.

In May 2003,  the FASB  issued SFAS No. 150,  Accounting  for Certain  Financial
Instruments with  Characteristics of Both Liabilities and Equity.  This standard
requires the  classification of certain  freestanding  financial  instruments as
liabilities measured at their fair value. Financial instruments within the scope
of  this  standard  include  mandatorily  redeemable  shares,  instruments  that
constitute an obligation to repurchase  equity  shares,  or certain  instruments
that  constitute an obligation  that may be settled by issuing a variable number
of equity shares.  SFAS 150 is effective for financial  instruments entered into
or modified  after May 31,  2003,  or  otherwise  at the  beginning of the first
interim  period  beginning  after June 15, 2003.  Sprint  adopted this  standard
effective  July 1, 2003.  There was no financial  statement  impact to Sprint in
applying this standard.

In  January  2003,  the FASB  issued  Financial  Interpretation  (FIN)  No.  46,
Consolidation of Variable Interest Entities.  This interpretation  addresses the
consolidation  of certain  business  entities  to which the usual  condition  of
consolidation does not apply. The interpretation  focuses on financial interests
that  indicate  control and  concludes  that in the  absence of control  through
voting  interests,  a company's  exposure  to the  economic  risk and  potential
rewards from an entity's assets and activities are the best evidence of control.
Variable  interests are the rights and obligations that convey economic gains or
losses from changes in the value of the entity's assets and  liabilities.  If an
enterprise  holds a majority  of the  variable  interests  of an  entity,  it is
considered the primary  beneficiary and as such would be required to include the
assets,  liabilities  and the results of  operations  of the  variable  interest
entity in its financial statements.

The provisions of this  interpretation  were applied by Sprint  beginning in the
2003  third  quarter.  There  was no  financial  statement  impact  to Sprint in
applying this interpretation.

--------------------------------------------------------------------------------
16.  Subsequent Events
--------------------------------------------------------------------------------

Dividend Declaration

On October 14, 2003,  Sprint's  Board of  Directors  declared a dividend of 12.5
cents per share on the FON common stock.  The dividend will be paid December 30,
2003.

Change in Independent Auditor

On October 14, 2003, the audit committee of the board of directors selected KPMG
LLP as Sprint's  independent auditor for the fiscal year 2004. Ernst & Young LLP
will continue as Sprint's independent auditor for the fiscal year 2003 audit.






                                                                         Part I.
                                                                         Item 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS                 Sprint Corporation

--------------------------------------------------------------------------------
Forward-looking Information
--------------------------------------------------------------------------------

Sprint  includes  certain  estimates,   projections  and  other  forward-looking
statements in its reports and in other publicly available  material.  Statements
regarding expectations, including performance assumptions and estimates relating
to capital  requirements,  as well as other  statements  that are not historical
facts, are forward-looking statements.

These statements  reflect  management's  judgments based on currently  available
information  and  involve a number of risks and  uncertainties  that could cause
actual  results  to  differ   materially  from  those  in  the   forward-looking
statements.  With respect to these  forward-looking  statements,  management has
made  assumptions  regarding,  among other things,  customer and network  usage,
customer growth,  pricing,  costs to acquire customers and provide service,  the
timing of various events and the economic environment.

Future performance cannot be ensured.  Actual results may differ materially from
those in the  forward-looking  statements.  Some factors that could cause actual
results to differ include:

     o    extent and duration of the current economic downturn;
     o    the effects of  vigorous  competition  in the markets in which  Sprint
          operates;
     o    the costs and business  risks  associated  with providing new services
          and entering new markets  necessary  to provide  nationwide  or global
          services;
     o    adverse change in the ratings  afforded our debt securities by ratings
          agencies;
     o    the  ability  of the PCS  Group and the  global  markets  division  to
          continue to grow a significant  market presence;
     o    the  ability  of the PCS  Group and the  global  markets  division  to
          improve profitability and reduce cash requirements;
     o    the    effects   of   mergers    and    consolidations    within   the
          telecommunications    industry   and   unexpected   announcements   or
          developments from others in the telecommunications industry;
     o    the uncertainties related to the outcome of bankruptcies affecting the
          telecommunications industry;
     o    the  impact  to the PCS  Group's  network  coverage  due to  financial
          difficulties of third-party affiliates;
     o    the  uncertainties   related  to  Sprint's  investments  in  networks,
          systems, and other businesses;
     o    the impact of any unusual items resulting from ongoing  evaluations of
          Sprint's business strategies;
     o    the impact of new,  emerging and  competing  technologies  on Sprint's
          business;
     o    unexpected results of litigation filed against Sprint;
     o    the impact of wireless  local  number  portability  on the PCS Group's
          growth and churn rates, revenues, and expenses;
     o    the possibility of one or more of the markets in which Sprint competes
          being  impacted  by  changes in  political  or other  factors  such as
          monetary policy, legal and regulatory changes, including the impact of
          the  Telecommunications  Act of 1996 (Telecom  Act), or other external
          factors over which Sprint has no control; and
     o    other risks  referenced from time to time in Sprint's filings with the
          Securities and Exchange Commission (SEC).

The words "estimate," "project," "intend," "expect," "believe," "target" and
similar expressions are intended to identify forward-looking statements.
Forward-looking statements are found throughout Management's Discussion and
Analysis. The reader should not place undue reliance on forward-looking
statements, which speak only as of the date of this report. Sprint is not
obligated to publicly release any revisions to forward-looking statements to
reflect events after the date of this report or unforeseen events. Sprint
provides a detailed discussion of risk factors in various SEC filings, including
its 2002 Form 10-K, and you are encouraged to review these filings.






--------------------------------------------------------------------------------
Definitions of Financial Measures
--------------------------------------------------------------------------------

Sprint provides readers financial  measures  generated using generally  accepted
accounting principles (GAAP).

ARPU  (Average  monthly  service  revenue  per user) is  calculated  by dividing
wireless service revenues by weighted average monthly wireless subscribers. ARPU
is used to measure  revenue on a per user  basis.  This is a measure  which uses
GAAP as the basis for the calculation.

CCPU  (Cash  cost per user) is  calculated  by  dividing  the costs of  wireless
service revenues, service delivery and other general and administrative costs by
weighted average monthly wireless subscribers. CCPU is a measure analysts use to
evaluate the cash costs to operate the  business on a per user basis.  This is a
measure which uses GAAP as the basis for the calculation.

CPGA (Cost per gross  addition) is calculated by dividing the costs of acquiring
a new wireless subscriber,  including equipment  subsidies,  marketing costs and
selling expenses, by gross additional subscribers.  Analysts use this measure in
conjunction  with the  other  measures  to  evaluate  the  profitability  of the
operation. This is a measure which uses GAAP as the basis for the calculation.

--------------------------------------------------------------------------------
General
--------------------------------------------------------------------------------

Sprint  is  a  global  communications   company  and  a  leader  in  integrating
long-distance, local service, and wireless communications. Sprint is also one of
the largest  carriers of Internet  traffic using its tier one Internet  protocol
network, which provides connectivity to any point on the Internet either through
its own network or via direct connections with other backbone providers.  Sprint
is the  nation's  third-largest  provider of long  distance  services,  based on
revenues,  and  operates  nationwide,  all-digital  long  distance  and tier one
Internet protocol  networks.  In addition,  the local division  currently serves
approximately 7.9 million access lines in 18 states. Sprint also operates a 100%
digital PCS  wireless  network  with  licenses to provide  service to the entire
United States population using a single frequency band and a single technology.

Sprint  operates  in  industries  that have been and  continue  to be subject to
consolidation  and dynamic change.  Therefore,  Sprint routinely  reassesses its
business  strategies.  Due  to  changes  in  the  telecommunications   industry,
including  bankruptcies,   over-capacity  and  the  economic  downturn,   Sprint
continues to assess the implications on its operations.  Any such assessment may
impact the valuation of its long-lived assets.

As  part  of  its  overall  business   strategy,   Sprint  regularly   evaluates
opportunities  to expand  and  complement  its  business  and may at any time be
discussing  or  negotiating a transaction  that,  if  consummated,  could have a
material effect on its business,  financial  condition,  liquidity or results of
operations.

In the 2003 first quarter, Sprint sold its directory publishing business to R.H.
Donnelley for $2.23 billion in cash.

Business Transformation

Currently,  Sprint's  operations  are divided into three lines of business:  the
global  markets  division,  the local  division and the PCS  wireless  telephony
products and services business.

Sprint has commenced an initiative to realign internal resources. This effort is
being  implemented  to  enhance  the  customer-facing  focus  on the  needs  and
preferences of two distinct  consumer types - businesses and  individuals.  This
effort is expected to enable Sprint to more  effectively and efficiently use its
portfolio of assets to create customer-focused  communications solutions. During
2004,  Sprint  intends to continue to measure its  activities  using its current
business   segments,   and  begin  to  measure  certain  activities  under  this
customer-focused approach.

Throughout 2004, management  anticipates  continuing to make decisions using the
current segmentation.






In conjunction  with the realignment  initiative,  Sprint  commenced  efforts to
improve Sprint's productivity through:

     o    Consolidating systems and eliminating redundancies
     o    Automation
     o    Process re-engineering
     o    E-enablement
     o    Organizational redesign and streamlining

These efforts could result in  restructuring  charges and asset  impairments  in
subsequent quarters.

Board Discretion Regarding Tracking Stocks

FON common  stock and PCS common  stock are  intended to reflect  the  financial
results and economic value of the FON and PCS Groups.  However, they are classes
of  common  stock of  Sprint,  not of the  group  they are  intended  to  track.
Accordingly,  FON and PCS  shareholders  are subject to the risks  related to an
equity  investment  in  Sprint  and  all  of  Sprint's  businesses,  assets  and
liabilities.  Shares of FON common stock and PCS common stock do not represent a
direct legal interest in the assets and  liabilities  allocated to either group,
but rather represent a direct equity interest in our assets and liabilities as a
whole.

Sprint's  board of directors has the  discretion  to, among other  things,  make
operating and financial decisions that could favor one group over the other and,
subject to the restrictions in Sprint's articles of incorporation, to change the
allocation of the assets and liabilities that comprise each of the FON Group and
the PCS Group without shareholder approval.  Under the applicable corporate law,
Sprint's  Board owes its fiduciary  duties to all of Sprint's  shareholders  and
there is no board of  directors  that owes  separate  duties to the  holders  of
either the FON common stock or the PCS common stock. The Tracking Stock Policies
provide that the Board,  in resolving  material  matters in which the holders of
FON common stock and PCS common stock have potentially divergent interests, will
act in the best  interests  of Sprint and all of its common  shareholders  after
giving fair consideration to the potentially  divergent interests of the holders
of the separate classes of Sprint common stock. These policies may be changed by
the Board without  shareholder  approval.  Given the Board's discretion in these
matters,  it may be difficult to assess the future prospects of each group based
on past performance.

Sprint's  board of  directors  may convert the PCS common  stock into FON common
stock at any time. The conversion  ratio would be at the discretion of the board
of  directors,  subject  to  the  requirement  that  it  must  make  independent
determinations  as to the fairness of the conversion ratio to the holders of the
PCS common  stock,  taken as a  separate  class,  and to the  holders of the FON
common stock,  taken as a separate  class.  The board of directors  continues to
evaluate the  advisability  of  converting  the PCS common stock into FON common
stock.

--------------------------------------------------------------------------------
General Overview of the Sprint FON Group
--------------------------------------------------------------------------------

The FON Group is comprised of the global  markets  division,  the local division
and  other  businesses   consisting  primarily  of  wholesale   distribution  of
telecommunications  products.  The  global  markets  division  is  the  nation's
third-largest  provider  of  long  distance  services  based  on  revenues.  The
activities of the local  division  include  local  exchange  communications  and
consumer  long  distance  services  used  by  customers  within  Sprint's  local
franchise territories. The FON Group also includes its investments in EarthLink,
Inc., an Internet service  provider,  and Call-Net,  a long distance provider in
Canada.

Global Markets Division

The global markets division  provides a broad suite of  communications  services
targeted  to  domestic   business  and  residential   customers,   multinational
corporations and other communications companies. These services include domestic
and  international  voice; data  communications  using various protocols such as
Internet protocol (IP) and frame relay (a data service that transfers packets of
data over Sprint's  network);  and managed network  services.  In addition,  the
global markets division  provides  consulting  services and  international  data
communications.

The global markets division also includes the operating  results of the wireless
high speed data and cable TV service  operations of the broadband fixed wireless
companies.  In 2001,  Sprint  announced  it would  halt  further  deployment  of
Multichannel Multipoint Distribution Services (MMDS) using current line of sight
technology.  In the  third  quarter  of 2003,  Sprint's  ongoing  evaluation  of
business  use for the MMDS  spectrum  resulted in a decision to end pursuit of a
residential fixed wireless strategy. This decision required a revaluation of the
fair  value of this  asset,  resulting  in a  pre-tax,  non-cash  charge of $1.2
billion.  Sprint is now  focusing  its efforts on a broad  range of  alternative
strategies.


Sprint is  continuing to invest in the spectrum,  is monitoring  technology  and
industry  developments,   and  is  involved  in  efforts  to  achieve  favorable
regulatory rulings with respect to this spectrum.

In July 2003, the Inspector General of the General Services Administration (GSA)
recommended  that  the GSA  Debarment  Official  consider  whether  to  initiate
debarment  proceedings against Sprint. The recommendation was based on a billing
error related to Sprint's  FTS2001  contract with the GSA. In June 2003,  Sprint
reached  agreement  with  the  Justice  Department  to pay the  government  $5.2
million,  an amount  twice the  estimate of the amount over billed and an amount
that  both  agreed  compensated  the  government.  In  October  2003,  the GSA's
Debarment  Official  decided,  based on a review of the record,  not to initiate
debarment proceedings against Sprint.

In the 2003 second  quarter,  Sprint  announced the wind-down of its web hosting
business.

Local Division

The local division  consists mainly of regulated  local phone companies  serving
approximately 7.9 million access lines in 18 states. The local division provides
local voice and data services,  including  digital  subscriber  line (DSL),  for
customers within its franchise territories,  access by phone customers and other
carriers  to the  local  division's  local  network,  nationwide  long  distance
services to residential  customers  within its franchise  territories,  sales of
telecommunications  equipment, and other services within specified calling areas
to residential and business  customers.  DSL enables high speed  transmission of
data over existing copper telephone lines.

--------------------------------------------------------------------------------
General Overview of the Sprint PCS Group
--------------------------------------------------------------------------------

The PCS Group  includes  Sprint's  wireless PCS  operations.  It operates a 100%
digital PCS  wireless  network  with  licenses to provide  service to the entire
United States population using a single frequency band and a single  technology.
The PCS Group,  together  with third party  affiliates,  operates PCS systems in
over 300  metropolitan  markets,  including  the 100 largest  U.S.  metropolitan
areas.  The PCS Group's  service,  including third party  affiliates,  reaches a
quarter  billion  people.  The PCS Group provides  nationwide  service through a
combination of:

     o    operating  its own digital  network in major U.S.  metropolitan  areas
          using  code  division  multiple  access  (CDMA),  which  is a  digital
          spread-spectrum  wireless  technology  that  allows a large  number of
          users to access a single  frequency  band by  assigning  a code to all
          speech bits,  sending a scrambled  transmission  of the encoded speech
          over the air and reassembling the speech into its original format,
     o    affiliating  with other companies that use CDMA,  mainly in and around
          smaller U.S.  metropolitan areas,
     o    roaming on other providers'  analog cellular networks using multi-mode
          and multi-band handsets, and
     o    roaming on other providers' digital networks that use CDMA.

Sprint  PCS  customers  can use  their  phones  through  roaming  agreements  in
countries other than the United States, including areas of:

     o    Asia Pacific, including China, Guam, Hong Kong and New Zealand,
     o    Canada and Mexico,
     o    Central  and  South  America,  including  Argentina,  Bolivia,  Chile,
          Colombia, Ecuador,  Guatemala,  Paraguay and Uruguay, and
     o    Most major Caribbean Islands.

Sprint launched  nationwide  third  generation (3G) capability in the 2002 third
quarter.  This capability allows more efficient  utilization of the network when
voice calls are made using 3G-enabled  handsets.  It also provides enhanced data
services.  The service,  marketed as "PCS Vision,"  allows consumer and business
customers  to use their  Vision-enabled  PCS  devices to exchange  personal  and
corporate e-mail,  take, send and receive  pictures,  play games with full-color
graphics and polyphonic sounds and browse the Internet wirelessly with speeds up
to 144 kbps (with average speeds of 50 to 70 kbps).

The PCS Group supplements its own network through affiliation  arrangements with
other companies that use CDMA. Under these  arrangements,  these companies offer
PCS services  under the Sprint brand name on CDMA networks built and operated at
their own expense.

Several of these  affiliates are  experiencing  financial  difficulties  and are
evaluating  restructuring  activities.  Two affiliates have filed for bankruptcy
protection and made claims against  Sprint in the bankruptcy  courts.  One other
affiliate has filed suit against Sprint. Several of the affiliates are disputing
and  refusing  to pay  amounts  owed  to  the  PCS  Group.  Reserves  have  been
established  that are expected to provide for the ultimate  resolution  of these



disputes,  and Sprint is in negotiations  with some of the affiliates  regarding
restructuring  its  relationship  with them. The PCS Group may incur  additional
expenses to ensure  that  service is  available  to its  customers  in the areas
served by its affiliates.  If any of the PCS Group affiliates cease  operations,
the PCS Group may incur roaming  charges in areas where  service was  previously
provided by the affiliates and costs to meet FCC buildout requirements,  as well
as experience lower revenues.

Sprint  has  reached  agreements  with two of its  largest  affiliates,  Alamosa
Holdings,  Inc.  (Alamosa),  and UbiquiTel  Operating  Company.  The  agreements
provide simplified and predictable long-term pricing for service bureau fees and
stability to the rates charged for inter-area service fees. In addition,  Sprint
and the companies settled all outstanding  disputes.  The agreement with Alamosa
is  conditioned  upon  Alamosa's  successful  completion of an exchange offer to
restructure  its capital  structure.  The revised terms under the agreements are
expected to have an immaterial impact on future PCS Group results.

The PCS Group  also  includes  its  investment  in Virgin  Mobile,  USA  (Virgin
Mobile),  a joint  venture  to market  wireless  services.  This  investment  is
accounted for using the equity method.

The PCS Group also  provides PCS services to companies  that resell PCS services
to their customers on a retail basis under their own brand. These companies bear
the costs of  acquisition,  billing  and  customer  service.  In the 2003  third
quarter,   Sprint   executed  a  five  year   wholesale   agreement  with  Qwest
Communications whereby Qwest wireless subscribers will use Sprint's national PCS
network  and have access to Sprint  branded  Vision  data  services.  Qwest will
continue  to  provide  sales and  service  support  to its  wireless  customers,
including the promotion and sale of handsets,  price plans and customer service,
including  billing and account  information.  Sprint will serve as the exclusive
provider to Qwest of wireless  services for resale in the markets  served by the
PCS Group.  The  transition  of customers to the PCS network will begin in early
2004.

By November  24,  2003,  all covered  commercial  mobile  radio  service  (CMRS)
providers,  including  the PCS Group,  must offer a database  solution for local
number  portability  (LNP)  that must be able to  support  roaming.  LNP  allows
customers  to  retain,  subject to certain  geographical  limitations,  existing
telephone numbers when switching from one telecommunications carrier to another.
The LNP requirement will impose  increased  operating costs on all CMRS carriers
and may result in higher subscriber churn rates.

The wireless  industry,  including the PCS Group,  typically  generates a higher
number of subscriber  additions and handset sales in the fourth  quarter of each
year  compared  to  the  other  quarters.  This  is due  to  the  use of  retail
distribution,  which is dependent on the holiday shopping season;  the timing of
new products  and service  introductions;  and  aggressive  marketing  and sales
promotions.






--------------------------------------------------------------------------------
Results of Operations
--------------------------------------------------------------------------------

Consolidated

Total net operating revenues were as follows:



                                                        Quarters Ended                      Year-to-Date
                                                        September 30,                       September 30,
                                              ----------------------------------- ----------------------------------
                                                      2003             2002              2003              2002
--------------------------------------------- --- ------------- -- -------------- -- ------------- --- -------------
                                                                           (millions)
                                                                                       
FON Group                                     $     3,538       $    3,816        $    10,649      $     11,559
PCS Group                                           3,340            3,157              9,383             9,023
Intergroup eliminations                              (164)            (175)              (516)             (444)
--------------------------------------------- --- ------------- -- -------------- -- ------------- --- -------------

Net operating revenues                        $     6,714       $    6,798        $    19,516      $     20,138
                                              --- ------------- -- -------------- -- ------------- --- -------------



Net operating  revenues  decreased 1% in the 2003 third quarter and decreased 3%
in the 2003  year-to-date  period  compared to the same 2002 periods  reflecting
declining FON Group long distance voice revenues  substantially offset by growth
in the PCS Group revenues.

Income (loss) from continuing operations was as follows:



                                                        Quarters Ended                      Year-to-Date
                                                        September 30,                       September 30,
                                              ----------------------------------- ----------------------------------
                                                      2003             2002              2003              2002
--------------------------------------------- --- ------------- -- -------------- -- ------------- --- -------------
                                                                           (millions)
                                                                                       
FON Group                                     $      (432)      $      484        $       (63)     $        794
PCS Group                                             (65)              (7)              (339)             (323)
--------------------------------------------- --- ------------- -- -------------- -- ------------- --- -------------

Income (loss) from continuing operations      $      (497)      $      477        $      (402)     $        471
                                              --- ------------- -- -------------- -- ------------- --- -------------



In the 2003  third  quarter,  loss from  continuing  operations  includes a $777
million  charge  related to the  impairment  of the FON  Group's  MMDS  spectrum
licenses  resulting  from a decision  to no longer  pursue a  residential  fixed
wireless  strategy.  Additionally,  Sprint  recorded  an $11  million  insurance
recovery, a $1 million charge related to web hosting wind-down activities, and a
$1  million  net  premium  primarily  related to the early  retirement  of local
division debt.

The 2003  year-to-date  loss from  continuing  operations  also  includes  a $22
million charge in connection with the separation  agreements agreed to by Sprint
and three former executive officers and a $218 million charge related to winding
down the global  markets  division's  web hosting  business.  Additionally,  the
year-to-date  period includes a $32 million charge to settle  derivative  action
and securities  class action  litigation,  a $12 million  charge  reflecting the
premiums paid on debt tender offers, and a $6 million charge associated with the
termination of a software development project.

In the 2002 third quarter,  income from continuing  operations includes a charge
of $23 million to reflect loss on receivables due to the WorldCom bankruptcy,  a
$76 million net charge for  restructuring and asset  impairments,  and a gain on
the sale of an equity method  investment of $67 million.  Income from continuing
operations also includes a previously unrecognizable tax benefit of $292 million
related to previously recorded investment losses.

The 2002 year-to-date income from continuing  operations also includes a gain of
$25 million related to the sale of customer  contracts and a $241 million charge
related to a write-down  of an  investment  due to declining  market  value.  In
addition,  the 2002  year-to-date  period  includes a $15 million  restructuring
charge  representing the closing of five PCS customer solution centers,  as well
as additional  steps to reduce  operating costs in the PCS business units.  This
charge was offset by favorable  true-ups of unrelated  items. In total,  the PCS
Group charge and true-ups had no effect on income from continuing operations.







--------------------------------------------------------------------------------
Segmental Results of Operations
--------------------------------------------------------------------------------

Global Markets Division



                                                                    Selected Operating Results
                                               ---------------------------------------------------------------------
                                                        Quarters Ended
                                                         September 30,                          Variance
                                               ----------------------------------    -------------------------------
                                                    2003              2002                $               %
---------------------------------------------- ---------------- ----------------- -- ------------- -----------------
                                                                   (millions)
Net operating revenues
                                                                                           
   Voice                                       $     1,240      $     1,433       $      (193)         (13.5)%
   Data                                                462              445                17            3.8%
   Internet                                            233              258               (25)          (9.7)%
   Other                                                39               95               (56)         (58.9)%
---------------------------------------------- -- ------------- -- -------------- -- -------------

Total net operating revenues                         1,974            2,231              (257)         (11.5)%
---------------------------------------------- -- ------------- -- -------------- -- -------------

Operating expenses
   Costs of services and products                    1,059            1,189               130           10.9%
   Selling, general and administrative                 522              604                82           13.6%
   Depreciation and amortization                       351              378                27            7.1%
   Restructuring and asset impairments               1,223              123            (1,100)            NM
---------------------------------------------- -- ------------- -- -------------- -- -------------

Total operating expenses                             3,155            2,294              (861)         (37.5)%
---------------------------------------------- -- ------------- -- -------------- -- -------------

Operating loss                                 $    (1,181)     $       (63)      $    (1,118)            NM
                                               -- ------------- -- -------------- -- -------------

Operating margin                                       NM               NM
                                               -- ------------- -- --------------


                                                                    Selected Operating Results
                                               ---------------------------------------------------------------------
                                                         Year-to-Date
                                                         September 30,                          Variance
                                               ----------------------------------    -------------------------------
                                                    2003              2002                $               %
---------------------------------------------- ---------------- ----------------- -- ------------- -----------------
                                                                   (millions)
Net operating revenues
   Voice                                       $     3,775      $     4,437       $      (662)         (14.9)%
   Data                                              1,386            1,396               (10)          (0.7)%
   Internet                                            721              750               (29)          (3.9)%
   Other                                               136              265              (129)         (48.7)%
---------------------------------------------- -- ------------- -- -------------- -- -------------

Total net operating revenues                         6,018            6,848              (830)         (12.1)%
---------------------------------------------- -- ------------- -- -------------- -- -------------

Operating expenses
   Costs of services and products                    3,225            3,939               714           18.1%
   Selling, general and administrative               1,653            1,855               202           10.9%
   Depreciation and amortization                     1,073            1,099                26            2.4%
   Restructuring and asset impairments               1,571              123            (1,448)            NM
---------------------------------------------- -- ------------- -- -------------- -- -------------

Total operating expenses                             7,522            7,016              (506)          (7.2)%
---------------------------------------------- -- ------------- -- -------------- -- -------------

Operating loss                                 $    (1,504)     $      (168)      $    (1,336)            NM
                                               -- ------------- -- -------------- -- -------------

Operating margin                                       NM               NM
                                               -- ------------- -- --------------

NM = Not meaningful







Net Operating Revenues

Net operating  revenues  decreased 12% in the 2003 third quarter and in the 2003
year-to-date period from the same 2002 periods.  The overall revenue decrease is
in  large  part  due to the  decline  in voice  revenues  including  the loss of
revenues from a major wholesale customer.

Voice Revenues

Voice  revenues  decreased  13% in the 2003  third  quarter  and 15% in the 2003
year-to-date  period  from the same 2002  periods  due to a decline in  consumer
voice  revenues   resulting  from   wireless,   e-mail  and  instant   messaging
substitution,  aggressive competition from RBOCs for consumer and small business
customers and lower business voice  pricing.  Minute volume  decreased 4% in the
2003 third quarter  compared to the 2002 third  quarter.  The minute decline was
primarily  driven by the loss of a major wholesale  customer and a large prepaid
customer.

Data Revenues

Data  revenues  increased 4% in the 2003 third  quarter and  decreased 1% in the
2003 year-to-date  period from the same 2002 periods.  The  quarter-over-quarter
increase is driven by an increase in frame relay partially offset by declines in
private line services and ATM.

Internet Revenues

Internet  revenues  decreased  10% in the 2003 third  quarter and 4% in the 2003
year-to-date period from the same 2002 periods. The quarter-over-quarter decline
was  mainly  driven  by a  decrease  in dial IP,  dedicated  IP and web  hosting
services.  The  year-to-date  decrease in dial IP was primarily due to the final
contractually-scheduled repricing of the AOL dial IP agreement. While Sprint has
made the  decision to exit the web hosting  business,  the  year-to-date  period
still  reflects the increased  web-hosting  revenue in the 2003 first and second
quarters.

Other Revenues

Other  revenues  decreased  59% in the 2003  third  quarter  and 49% in the 2003
year-to-date  period from the same 2002 periods.  The decrease was primarily due
to the sale of a  consulting  business  in the third  quarter  of 2002 and lower
equipment sales.

Costs of Services and Products

Costs of services and products include interconnection costs paid to local phone
companies,  other  domestic  service  providers and foreign  phone  companies to
complete calls made by the division's domestic  customers,  costs to operate and
maintain our long distance  networks,  and costs of equipment sales. These costs
decreased 11% in the 2003 third quarter and 18% in the 2003 year-to-date  period
from  the same  2002  periods.  The  decrease  was due to  volume  declines,  an
improving  product mix, and  initiatives  to reduce access unit costs.  Costs of
services  and  products  for the  global  markets  division  were  53.6%  of net
operating  revenues in the 2003 third quarter and year-to-date  periods compared
to 53.3% and 57.5% for the same periods a year ago.

Selling, General and Administrative Expense

Selling,  general and  administrative  (SG&A) expenses decreased 14% in the 2003
third  quarter  and 11% in the 2003  year-to-date  period  from  the  same  2002
periods.  The  decline  was due to reduced  bad debt  provisions,  restructuring
efforts, and general cost controls partially offset by the cost of the executive
separation  agreements reached during the second quarter. SG&A expense was 26.4%
of net  operating  revenues  in the 2003  third  quarter  and  27.5% in the 2003
year-to-date period compared to 27.1% for the same periods a year ago.

SG&A includes charges for estimated bad debt expense.  The reserve for bad debts
requires management's judgment and is based on customer specific indicators,  as
well  as  historical   trending,   industry  norms,   regulatory  decisions  and
recognition of current market indicators about general economic conditions.  Bad
debt expense as a percentage  of net revenues was 0.8% in the 2003 third quarter
and 1.7% in the 2003 year-to-date  period compared to 3.9% and 3.6% for the same
2002 periods.  This reduction reflects an improvement in collections,  aging and
recoveries of previously written-off accounts. Reserve for bad debt as a percent
of  outstanding  accounts  receivable  was  11.8% at the end of the  2003  third
quarter and 14.9% at year-end 2002.



Depreciation and Amortization Expense

Estimates and assumptions are used both in setting depreciable lives and testing
for  recoverability.  Assumptions are based on internal studies of use, industry
data on lives,  recognition of technological  advancements and  understanding of
business  strategy.  Depreciation and amortization  expense  decreased 7% in the
2003 third quarter and 2% in the 2003 year-to-date  period from the same periods
a year ago primarily driven by a decrease in capital spending.  Depreciation and
amortization  expense was 17.8% of net operating revenues in both the 2003 third
quarter  and the 2003  year-to-date  period  compared to 16.9% and 16.0% for the
same 2002 periods.

Restructuring and Asset Impairment

In the 2003 third quarter, the FON Group recorded a pre-tax,  non-cash charge of
$1.2 billion  related to the  write-down in the fair value of its MMDS spectrum.
Sprint's  ongoing  evaluation  of  business  use for this  asset  resulted  in a
decision to end pursuit of a residential fixed wireless strategy.  This decision
required a  revaluation  of the fair value of the asset.  Sprint is now focusing
its efforts on a broad range of alternative strategies.. Sprint is continuing to
invest in the spectrum, is monitoring technology and industry developments,  and
is involved in efforts to achieve favorable  regulatory  rulings with respect to
this spectrum.

In the 2003 second  quarter,  a $348 million  charge was recorded in  connection
with Sprint's  announcement  of the wind-down of its web hosting  business.  The
charge for asset  impairments  was $337  million.  The remaining $11 million was
accrued for employee  terminations  in connection  with the wind-down of the web
hosting  business,  as well as  restructurings  of other global markets division
operations in the continuing  effort to create a more efficient cost  structure.
In the 2003 third quarter,  an additional $2 million charge was recorded related
to  employee  terminations.  Sprint  will record  additional  wind-down  related
charges  for  facility  lease   terminations,   customer   migration,   employee
termination, and other wind-down costs in subsequent periods. Sprint expects the
aggregate pre-tax charge to be approximately $400 to $475 million.

Local Division



                                                                    Selected Operating Results
                                               ---------------------------------------------------------------------
                                                        Quarters Ended
                                                        September 30,                           Variance
                                              -----------------------------------    -------------------------------
                                                    2003              2002                $               %
--------------------------------------------- ----------------- ----------------- -- ------------- -----------------
                                                                  (millions)
Net operating revenues
                                                                                             
   Local service                              $        757      $       765       $        (8)           (1.0)%
   Network access                                      525              526                (1)           (0.2)%
   Long distance                                       135              155               (20)          (12.9)%
   Other                                               113              134               (21)          (15.7)%
--------------------------------------------- --- ------------- -- -------------- -- -------------

Total net operating revenues                         1,530            1,580               (50)           (3.2)%
--------------------------------------------- --- ------------- -- -------------- -- -------------

Operating expenses
   Costs of services and products                      493              513                20             3.9%
   Selling, general and administrative                 308              323                15             4.6%
   Depreciation and amortization                       270              291                21             7.2%
   Restructuring                                         -                3                 3           100.0%
--------------------------------------------- --- ------------- -- -------------- -- -------------

Total operating expenses                             1,071            1,130                59             5.2%
--------------------------------------------- --- ------------- -- -------------- -- -------------

Operating income                              $        459      $       450       $         9             2.0%
                                              --- ------------- -- -------------- -- -------------

Operating margin                                      30.0%            28.5%
                                              --- ------------- -- --------------











                                                                    Selected Operating Results
                                               ---------------------------------------------------------------------
                                                         Year-to-Date
                                                        September 30,                           Variance
                                              -----------------------------------    -------------------------------
                                                    2003              2002                $               %
--------------------------------------------- ----------------- ----------------- -- ------------- -----------------
                                                                  (millions)
Net operating revenues
                                                                                             
   Local service                              $      2,284      $     2,289       $        (5)           (0.2)%
   Network access                                    1,567            1,562                 5             0.3%
   Long distance                                       412              479               (67)          (14.0)%
   Other                                               332              363               (31)           (8.5)%
--------------------------------------------- --- ------------- -- -------------- -- -------------

Total net operating revenues                         4,595            4,693               (98)           (2.1)%
--------------------------------------------- --- ------------- -- -------------- -- -------------

Operating expenses
   Costs of services and products                    1,473            1,467                (6)           (0.4)%
   Selling, general and administrative                 946              946                 -             -
   Depreciation and amortization                       808              865                57             6.6%
   Restructuring                                         -                3                 3           100.0%
--------------------------------------------- --- ------------- -- -------------- -- -------------

Total operating expenses                             3,227            3,281                54             1.6%
--------------------------------------------- --- ------------- -- -------------- -- -------------

Operating income                              $      1,368      $     1,412       $       (44)           (3.1)%
                                              --- ------------- -- -------------- -- -------------

Operating margin                                      29.8%            30.1%
                                              --- ------------- -- --------------



Net Operating Revenues

Net operating revenues decreased 3% in the 2003 third quarter and 2% in the 2003
year-to-date  period from the same 2002 periods.  The decline is driven by lower
long distance  services and equipment  sales.  The local division ended the 2003
third  quarter  with  approximately  7.9 million  switched  access  lines,  a 2%
decrease during the past 12 months.  The reduction in access lines was driven by
the  continuing  economic  slowdown,  wireless and broadband  substitution,  and
losses to competitive local providers. The reduction in access lines is expected
to continue  although  Sprint  expects the rate of line loss to remain below the
losses  experienced  by the other major  carriers.  On a voice-grade  equivalent
basis,  which  includes  both  traditional  switched  services and high capacity
lines,  voice-grade  equivalents grew 6% during the past 12 months.  This growth
reflects  growth  in DSL as well  as  many  business  customers  switching  from
individual lines to high capacity dedicated circuits.

Local Service Revenues

Local service revenues,  derived from local exchange  services,  decreased 1% in
the 2003 third  quarter and remained flat in the 2003  year-to-date  period from
the same 2002  periods as the  increase in vertical  services  revenue and local
service rates were more than offset by the decrease in access lines.

Network Access Revenues

Network access  revenues,  derived from long distance phone  companies using the
local network to complete calls, remained flat in the 2003 third quarter and the
2003  year-to-date  period compared to a year ago. Strong growth in DSL services
in the 2003 third  quarter was offset by a 4% decline in access  minutes of use,
as well as by regulator-mandated access rate reductions.

Long Distance Revenues

Long  distance  revenues  are mainly  derived  from  providing  nationwide  long
distance  services to residential  customers  within  Sprint's  local  franchise
territories and other services within  specified  regional call areas, or LATAs,
to residential and business  customers.  These revenues declined 13% in the 2003
third  quarter  and 14% in the 2003  year-to-date  period  from  the  same  2002
periods.  This was primarily due to a decline in total long distance  minutes of
use, as customers shifted more of their  communications to wireless,  e-mail and
instant messaging.






Other Revenues

Other  revenues  decreased  16% in the  2003  third  quarter  and 9% in the 2003
year-to-date  period  from the same  2002  periods  principally  driven by lower
equipment sales. The decrease in equipment sales was primarily the result of the
economic  slowdown  causing a reduction  in customer  demand for  equipment  and
increased focus toward selling network solutions.

Costs of Services and Products

Costs of services and products  include  costs to operate and maintain the local
network and costs of equipment sales. These costs decreased 4% in the 2003 third
quarter and remained flat in the 2003  year-to-date  period compared to the same
2002 periods.  This decrease was mainly driven by general  expense  controls and
lower costs associated with equipment and long distance revenues somewhat offset
by higher  pension  costs.  Costs of  services  and  products  were 32.2% of net
operating  revenues in the 2003 third quarter and 32.1% in the 2003 year-to-date
period compared to 32.5% and 31.3% for the same periods a year ago.

Selling, General and Administrative Expense

SG&A  expense  decreased 5% in the 2003 third  quarter and remained  flat in the
2003  year-to-date  period compared to the same 2002 periods.  The third quarter
decrease was  primarily  due to lower bad debt  expense  driven by a $27 million
charge  associated  with the WorldCom  bankruptcy in third quarter 2002 somewhat
offset by  additional  pension  costs.  SG&A expense was 20.1% of net  operating
revenues  in the 2003 third  quarter and 20.6% in the 2003  year-to-date  period
compared to 20.4% and 20.2% for the same periods a year ago. Bad debt expense as
a percentage  of net revenues was 1.6% in the 2003 third quarter and 1.4% in the
2003  year-to-date  period  compared to 3.2% and 2.7% in the same periods a year
ago. This  reflects an  improvement  in  collections  and aging,  as well as the
charges for the WorldCom  bankruptcy in the 2002 third quarter.  Reserve for bad
debt as a percent of outstanding  accounts receivable was 9.9% at the end of the
2003 third quarter and 13.9% at year-end 2002.

Depreciation and Amortization Expense

Estimates and assumptions are used in setting  depreciable lives and testing for
recoverability.  Assumptions are based on internal studies of use, industry data
on  lives,  recognition  of  technological  advancements  and  understanding  of
business  strategy.  Depreciation and amortization  expense decreased 7% in both
the 2003 third quarter and the  year-to-date  periods  compared to the same 2002
periods. This decline was driven by the implementation of Statement of Financial
Accounting   Standards   (SFAS)  No.  143,   Accounting  for  Asset   Retirement
Obligations,  which eliminated the accrual for removal cost from the depreciable
rate,  as well as  declines  in circuit  switching  depreciation  rates due to a
revised schedule for converting from a digital to a packet network. Depreciation
and amortization  expense was 17.6% of net operating  revenues in the 2003 third
quarter and year-to-date  periods compared to 18.4% for both of the same periods
a year ago.






PCS Group



                                                                    Selected Operating Results
                                               ---------------------------------------------------------------------
                                                        Quarters Ended
                                                         September 30,                          Variance
                                               ----------------------------------    -------------------------------
                                                    2003              2002                $               %
---------------------------------------------- ---------------- ----------------- -- ------------- -----------------
                                                                   (millions)
                                                                                              
Net operating revenues                         $    3,340       $    3,157        $       183             5.8%
---------------------------------------------- -- ------------- -- -------------- -- -------------

Operating expenses
   Costs of services and products                   1,628            1,478               (150)          (10.1)%
   Selling, general and administrative                800              955                155            16.2%
   Depreciation and amortization                      628              588                (40)           (6.8)%
   Restructuring                                        -               (5)                (5)         (100.0)%
---------------------------------------------- -- ------------- -- -------------- -- -------------

Total operating expenses                            3,056            3,016                (40)           (1.3)%
---------------------------------------------- -- ------------- -- -------------- -- -------------

Operating income                               $      284       $      141        $       143           101.4%
                                               -- ------------- -- -------------- -- -------------


                                                                    Selected Operating Results
                                               ---------------------------------------------------------------------
                                                         Year-to-Date
                                                         September 30,                          Variance
                                               ----------------------------------    -------------------------------
                                                    2003              2002                $               %
---------------------------------------------- ---------------- ----------------- -- ------------- -----------------
                                                                   (millions)
Net operating revenues                         $    9,383       $    9,023        $       360             4.0%
---------------------------------------------- -- ------------- -- -------------- -- -------------

Operating expenses
   Costs of services and products                   4,597            4,316               (281)           (6.5)%
   Selling, general and administrative              2,248            2,556                308            12.1%
   Depreciation and amortization                    1,853            1,658               (195)          (11.8)%
   Restructuring and asset impairment                  10               18                  8            44.4%
---------------------------------------------- -- ------------- -- -------------- -- -------------

Total operating expenses                            8,708            8,548               (160)           (1.9)%
----------------------------------------------
                                               -- ------------- -- -------------- -- -------------

Operating income                               $      675       $      475        $       200            42.1%
                                               -- ------------- -- -------------- -- -------------



The PCS Group  markets its  products  through  multiple  distribution  channels,
including its own retail stores as well as other retail outlets. Equipment sales
to one retail chain and the service revenues generated by sales to its customers
accounted  for 20.3% of net  operating  revenues  in the 2003 third  quarter and
21.2% in the 2003  year-to-date  period compared to 22.2% and 22.5% for the same
2002 periods.






Net Operating Revenues



                                                        Quarters Ended                      Year-to-Date
                                                        September 30,                       September 30,
                                              ----------------------------------- ----------------------------------
                                                      2003             2002              2003              2002
--------------------------------------------- --- ------------- -- -------------- -- ------------- --- -------------

                                                                                                
Customers (millions)                                   15.5             14.5              15.5              14.5
                                              --- ------------- -- -------------- -- ------------- --- -------------
Average monthly service revenue
   per user (ARPU)                            $          63     $         63      $         61     $          62
                                              --- ------------- -- -------------- -- ------------- --- -------------
Customer churn rate                                     2.7%             3.8%              2.7%              3.3%
                                              --- ------------- -- -------------- -- ------------- --- -------------



Net operating revenues include service revenues, sales of handsets and accessory
equipment,  and other revenues.  Service revenues  consist of monthly  recurring
charges,  usage  charges and  miscellaneous  fees such as directory  assistance,
operator-assisted  calling,  handset insurance and late payment charges. Service
revenues  increased  6.6%  in the  2003  third  quarter  and  5.6%  in the  2003
year-to-date  period from the same 2002  periods  reflecting  an increase in the
number of customers,  higher monthly recurring charges and increased fees. These
increases were partially offset by lower overage charges from usage-based plans.
Average  monthly usage in the 2003 third quarter  increased by more than 3 hours
when compared to the 2002 third quarter.

The PCS Group had 184,000  post-paid retail additions in the 2003 third quarter,
ending  the  period  with  approximately  15.5  million  customers  compared  to
approximately  14.5  million  customers  at the end of the 2002  third  quarter.
Resellers added 290,000  customers in the third quarter of 2003, which increased
their customer base to 1.1 million,  principally  due to Virgin Mobile.  The PCS
Group third party  affiliates  added 22,000  customers  in the third  quarter of
2003.  This  brings the total  number of  customers  served on the PCS  network,
including  post-paid retail,  affiliate and resale customers,  at the end of the
quarter to more than 19.3 million. In the 2003 third quarter,  nearly 41 percent
of new post-paid  retail  customers chose to include PCS Vision in their service
package.

The customer  churn rate in the 2003 third quarter was 2.7% compared to 3.8% for
the  same  2002  period.  Improvement  was  primarily  due to  reduction  in the
involuntary  churn  rate as the  PCS  Group  benefited  from  credit  management
policies initiated in the 2002 fourth quarter.

Revenues  from sales of handsets and  accessories,  including  new customers and
upgrades,  were approximately  10.2% of net operating revenues in the 2003 third
quarter and 9.0% in the 2003 year-to-date period compared to 10.9% and 10.4% for
the same 2002  periods.  These  declines  were mainly due to higher  rebates and
lower gross additions.  As part of the PCS Group's marketing plans, handsets are
normally sold at prices below the PCS Group's cost.

Other  revenues  consist  of net fees  collected  from  affiliates  for  network
operation and customer maintenance. It also includes revenues from the wholesale
of PCS services to companies  that resell to their  customers on a retail basis.
Other  revenues  represented  3.0% of net  operating  revenues in the 2003 third
quarter and 2.4% in the 2003  year-to-date  period compared to 1.7% and 1.8% for
the same 2002  periods.  These  increases  mainly  reflect net  additions to the
affiliate and wholesale customer base.

The PCS  Group  assesses  access  charges  to  long  distance  carriers  for the
termination of landline originated calls. Though regulations generally entitle a
carrier  that  terminates  a call on behalf of  another  to be  compensated  for
providing  that  service,  these  regulations  were  developed in a period where
services of this nature were provided  exclusively by local  exchange  carriers.
Certain long distance carriers have disputed the PCS Group's assessment of these
charges as well as the corresponding  rate at which the charges were determined.
In July  2002,  the FCC  released a ruling  affirming  that  nothing  prohibited
wireless  carriers from imposing  access charges for the use of their  networks;
however,  the  FCC  also  stated  that  inter-exchange  carriers  could  not  be
unilaterally  required to pay these charges without a contractual  obligation to
do so. The FCC  referred the matter back to the Federal  District  Court for the
Western District of Missouri. The decision has been appealed to the D.C. Circuit
Court of Appeals.  In light of this ruling,  in the 2002 second  quarter the PCS
Group recorded an additional  provision for outstanding  receivables  related to
amounts previously billed and is fully reserved for 2003.






Operating Expenses



                                                        Quarters Ended                      Year-to-Date
                                                        September 30,                       September 30,
                                              ----------------------------------- ----------------------------------
                                                      2003             2002              2003              2002
--------------------------------------------- --- ------------- -- -------------- -- ------------- --- -------------

Acquisition costs per gross customer
                                                                                       
   addition (CPGA)                            $       465       $      395        $       415      $        350
                                              --- ------------- -- -------------- -- ------------- --- -------------
Monthly cash costs per user (CCPU)            $        31       $       33        $        31      $         32
                                              --- ------------- -- -------------- -- ------------- --- -------------



Cost per Gross Customer Addition

CPGA,  a  measure  of  the  costs  of  acquiring  a  new  subscriber,  increased
approximately  18% in the 2003 third  quarter  and 19% in the 2003  year-to-date
period from the same 2002 periods.  These CPGA  increases  were primarily due to
certain fixed costs being spread across lower gross customer  additions,  higher
handset rebates in exchange for one- and two-year service agreements,  and a $27
million write-down to replacement cost of the first generation camera phone.

Cash Cost per User

CCPU,  a measure of the cash costs to operate the  business on a per user basis,
decreased  approximately  6% in the  2003  third  quarter  and  3% in  the  2003
year-to-date  period from the same 2002 periods.  The reduction in CCPU occurred
primarily  due to lower bad debt  expense and  decreases  in customer  solutions
expense;  however,  this savings was partially  offset by increased USF charges,
charges  associated  with the  executive  separation  agreements  reached in the
second quarter and upgrade  equipment  rebate costs incurred to retain customers
initiated in the fourth quarter of 2002.

Costs of Services and Products

The PCS Group's  costs of  services  and  products  mainly  include  handset and
accessory  costs,  switch and cell site expenses,  customer  solutions costs and
other network-related costs. These costs increased 10% in the 2003 third quarter
and 7% in the  2003  year-to-date  period  from  the same  2002  periods.  These
increases  were  primarily  due to network  support of a larger  customer  base,
expanded market coverage, and increased unit handset costs. These increases were
somewhat offset by scale benefits resulting from the increased customer base and
decreases in customer solutions expense. Handset and equipment costs were 41% of
total costs of services  and  products in the 2003 third  quarter and 39% in the
2003  year-to-date  period  compared to 40% and 39% for the same  periods a year
ago. Costs of services and products were 48.7% of net operating  revenues in the
2003 third quarter and 49.0% in the 2003  year-to-date  period compared to 46.8%
and 47.8% for the same periods a year ago.

Selling, General and Administrative Expense

SG&A expense mainly includes marketing costs to promote products and services as
well as related salary and benefit costs. SG&A expense decreased 16% in the 2003
third quarter and 12% in the 2003 year-to-date period from the same 2002 periods
reflecting  a decline  in bad debt  expense  due to a better  credit  class mix,
leading to lower write-offs and higher recovery, and reduced sales and marketing
costs,  partially  offset  by the cost of the  executive  separation  agreements
reached in the second quarter.  SG&A expense was 24.0% of net operating revenues
in the 2003 third quarter and  year-to-date  periods compared to 30.3% and 28.3%
for the same  periods  a year  ago.  Bad debt  expense  as a  percentage  of net
revenues was 2.3% in the 2003 third quarter and year-to-date periods compared to
6.8% and 5.6% in the same periods a year ago.  Reserve for bad debt as a percent
of outstanding accounts receivable was 6.4% at the end of the 2003 third quarter
and 9.4% at year-end  2002.  These  improvements  were  mainly  driven by credit
management  policies  initiated  in the 2002 fourth  quarter  resulting in lower
involuntary churn and improved receivables aging.






Depreciation and Amortization Expense

Estimates and assumptions are used both in setting depreciable lives and testing
for  recoverability.  Assumptions are based on internal studies of use, industry
data on lives,  recognition of technological  advancements and  understanding of
business  strategy.  Depreciation  and  amortization  expense consists mainly of
depreciation  of network  assets and  amortization  of definite life  intangible
assets.  The definite life  intangible  assets include  various  customer bases,
which became fully amortized in August 2002.

Depreciation and amortization expense increased 7% in the 2003 third quarter and
12% in the  2003  year-to-date  period  from  the same  2002  periods  due to an
increase in the network asset investment  during 2002 and the 2003  year-to-date
period.

Depreciation and amortization expense was 18.8% of net operating revenues in the
2003 third quarter and 19.7% in the 2003  year-to-date  period compared to 18.6%
and 18.4% for the same periods a year ago.

Restructuring and Asset Impairment

In the first  quarter of 2003,  the PCS Group  recorded a charge of $10  million
associated with the termination of a software development project.

In the first quarter of 2002, the PCS Group announced plans to reduce  operating
costs  through the closing of five PCS  customer  solution  centers,  as well as
additional  steps to reduce  operating  costs in the PCS business  units.  These
actions were finalized in the third quarter of 2002, and ultimately  resulted in
the PCS Group incurring an $18 million charge.

--------------------------------------------------------------------------------
Nonoperating Items
--------------------------------------------------------------------------------

Interest Expense

Sprint's  effective  interest rate on long-term  debt was 6.9% in the 2003 third
quarter compared to 7.0% in the 2002 third quarter. Interest costs on short-term
borrowings and interest costs on deferred  compensation plans have been excluded
so as not to  distort  the  effective  interest  rate  on  long-term  debt.  See
"Liquidity  and Capital  Resources" for more  information on Sprint's  financing
activities.

Premium on Early Retirement of Debt

In the third quarter of 2003, Sprint recorded a net premium of $2 million due to
the early  retirement of $118 million of debt primarily  consisting of the local
division's first mortgage bonds.  This debt had interest rates ranging from 5.7%
to 9.3% and maturity dates ranging from 2003 to 2021.

In March  2003,  Sprint  completed  a  tender  offer to  purchase  $442  million
principal  amount of current senior notes before their scheduled  maturity.  The
notes had an interest  rate of 5.7% and a maturity  date of November 15, 2003. A
premium of $6 million was paid as part of the tender offer.

Also in March 2003,  Sprint  completed a tender  offer to purchase  $635 million
principal amount of its long-term senior notes before their scheduled  maturity.
The notes had an  interest  rate of 5.9% and a maturity  date of May 1, 2004.  A
premium of $13 million was paid as part of the tender offer.






Other Income (Expense), net

Other income (expense), net consisted of the following:



                                                        Quarters Ended                      Year-to-Date
                                                        September 30,                       September 30,
                                              ----------------------------------- ----------------------------------
                                                      2003             2002              2003              2002
--------------------------------------------- --- ------------- -- -------------- -- ------------- --- -------------
                                                                           (millions)
                                                                                       
Dividend and interest income                  $        17       $        4        $        38      $         25
Equity in net losses of affiliates                    (17)              (4)               (45)             (105)
Net losses from investments                             -                -                  -              (253)
Gains (losses) on sales of assets                       -               67                 (3)              117
Amortization of debt costs                            (11)              (7)               (26)              (27)
Losses from disposal of PPE                            (2)              (1)                (7)               (3)
Royalties                                               3                3                 10                 9
Litigation settlement                                  17                -                (33)                -
Gains (losses) from foreign currency
   transactions                                        (3)               7                 (3)                7
Other, net                                              -                5                 (9)               (4)
--------------------------------------------- --- ------------- -- -------------- -- ------------- --- -------------

Total                                         $         4       $       74        $       (78)     $       (234)
                                              --- ------------- -- -------------- -- ------------- --- -------------



Equity in net losses of affiliates  was driven by the PCS Group's  investment in
Virgin  Mobile,  U.S.A.,  in all  periods  presented  as well as the PCS Group's
investment in Pegaso  Telecomunicaciones,  S.A. de C.V. in the 2002 year-to-date
period.

Net losses from investments in the 2002  year-to-date  period mainly consists of
the  write-down  of  EarthLink  preferred  shares to  current  market  value and
Sprint's equity investment in Intelig Telecommunicacoes Ltda.

In the first  quarter of 2003,  Sprint  recorded a $50 million  charge to settle
shareholder litigation. In the 2003 third quarter, Sprint recorded a $17 million
credit  from an  insurance  recovery  related  to this  action.  See  Note 12 of
Condensed Notes to Consolidated Financial Statements for additional information.

Beginning in January 2002,  Call-Net  began making a royalty  payment of 2.5% of
revenues to Sprint. Currently, this is approximately $3 million per quarter.

Income Taxes

See  Note  4  of  Condensed  Notes  to  Consolidated  Financial  Statements  for
information  about the differences that caused the effective income tax rates to
vary from the federal  statutory  rate for income  taxes  related to  continuing
operations.

Discontinued Operation, Net

In the 2002 third  quarter,  Sprint  reached a definitive  agreement to sell its
directory  publishing  business to R.H. Donnelley for $2.23 billion in cash. The
sale closed on January 3, 2003. In the 2003 second quarter,  Sprint recognized a
pretax gain of $14 million, $9 million after-tax, primarily related to a working
capital  payment.  In the 2003 third  quarter,  Sprint  recognized  a loss of $1
million  primarily  related  to a  state  tax  rate  true-up.  The  pretax  gain
recognized  in  the  year-to-date  period  was  $2.14  billion,   $1.32  billion
after-tax.  In accordance  with SFAS No. 144,  Accounting  for the Impairment or
Disposal of Long-lived  Assets,  Sprint has  presented the directory  publishing
business as a discontinued operation in the consolidated financial statements.

Cumulative Effect of Change in Accounting Principle, Net

In the 2003 first  quarter,  Sprint  adopted SFAS No. 143,  Accounting for Asset
Retirement Obligations.  Upon adoption of SFAS No. 143, the FON Group recorded a
reduction in the local  division's  depreciation  reserves to remove  previously
accrued  costs of removal.  Historically,  the local  division  accrued costs of
removal  in  its  depreciable  rate,  a  practice   consistent  with  regulatory
requirements and others in the industry.  These costs of removal do not meet the
standard's definition of an asset retirement obligation liability. This one-time
benefit of approximately  $420 million resulted in a cumulative effect of change
in accounting  principle credit,  net of tax, in the Consolidated  Statements of
Operations of $258 million.


--------------------------------------------------------------------------------
Financial Condition
--------------------------------------------------------------------------------

Total consolidated assets were as follows:



                                                           ----------------------------------
                                                            September 30,     December 31,
                                                                 2003             2002
                     ------------------------------------------------------------------------
                                                                      (millions)
                                                                      
                     FON Group                             $     21,201     $     23,133
                     PCS Group                                   22,769           23,022
                     Intergroup eliminations                     (1,074)            (862)
                     ------------------------------------------------------------------------

                     Consolidated assets                   $     42,896     $     45,293
                                                           ----------------------------------



Sprint's  consolidated  assets decreased $2,397 million in the 2003 year-to-date
period. Cash and equivalents  increased $1,566 million due to improved operating
cash flows,  reduced capital  expenditures,  and the sale of Sprint's  directory
publishing  business to R.H. Donnelley in the 2003 first quarter.  Net property,
plant, and equipment  decreased $1,358 million.  Capital  expenditures were more
than  offset  by  depreciation  expense  and the asset  impairments  in the 2003
year-to-date  period.  Spectrum licenses declined due to an impairment charge of
$1.2  billion  related  to the  write-down  in the fair value of  Sprint's  MMDS
spectrum.

--------------------------------------------------------------------------------
Liquidity and Capital Resources
--------------------------------------------------------------------------------

Sprint's  board of directors  exercises  discretion  regarding the liquidity and
capital  resource  needs of the FON Group and the PCS Group.  This  includes the
ability to prioritize  the use of capital and debt  capacity,  to determine cash
management  policies and to make  decisions  regarding  the timing and amount of
capital  expenditures.  The actions of the board of directors are subject to its
fiduciary duties to all shareholders of Sprint, and not just to the holders of a
particular  class of common  stock.  Given the above,  it may be  difficult  for
investors to assess each group's liquidity and capital resources and in turn the
future prospects of each group based on past performance.

Operating Activities



                                                                       Year-to-Date
                                                                      September 30,
                                                           ----------------------------------
                                                                  2003             2002
                     ------------------------------------------------------------------------
                                                                      (millions)
                                                                      
                     FON Group                             $     2,594      $     2,739
                     PCS Group                                   1,785            1,687
                     ------------------------------------------------------------------------

                     Cash flows provided by operating
                        activities                         $     4,379      $     4,426
                                                           ----------------------------------



Cash flow from operations  decreased $47 million in the 2003 year-to-date period
from the same 2002  period.  The decline was  primarily  due to the $400 million
cash contribution to the pension trust in July 2003, most of which was allocated
to the FON Group. This decline was mostly offset by the FON Group's improvements
in its  operations as cost controls have  mitigated the revenue  erosion seen in
the global market division and also reduced its working capital requirements.






Investing Activities



                                                                       Year-to-Date
                                                                      September 30,
                                                           ----------------------------------
                                                                  2003             2002
                     ------------------------------------------------------------------------
                                                                      (millions)
                                                                      
                     FON Group                             $    (1,152)     $    (1,510)
                     PCS Group                                  (1,226)          (2,035)
                     ------------------------------------------------------------------------

                     Cash flows used by
                        investing activities               $    (2,378)     $    (3,545)
                                                           ----------------------------------



The  FON  Group's  capital  expenditures  totaled  $1,141  million  in the  2003
year-to-date  period and $1,550 million in the same 2002 period.  The decline in
capital  expenditures is primarily due to the global markets division continuing
to take advantage of existing network  capacity to meet customer demand.  Global
markets division capital expenditures were incurred mainly to support increasing
demand,  enhance network reliability and upgrade  capabilities for providing new
products and services.  The local  division  incurred  capital  expenditures  to
accommodate  voice grade equivalent  growth,  expand  capabilities for providing
enhanced  services,  convert its network from circuit to next generation  packet
switching, and continue the build-out of high-speed DSL services.

PCS Group  capital  expenditures  were $1,211  million in the 2003  year-to-date
period and $2,078 million in the same 2002 period.  Capital expenditures in both
years  were  incurred  to  increase  capacity  and  expand  coverage.  The  2002
year-to-date  period  capital  expenditures  also include the  deployment  of 3G
technology,  which was launched  nationwide in the 2002 third  quarter.  Despite
lower capital  spending in 2003,  PCS has  experienced  strong  improvements  in
network  performance  since  the  deployment  of 1x  technology.  The PCS  Group
continues to expect a significant  increase in capital  expenditures in the 2003
fourth quarter.

Proceeds from the sale of assets in the 2003 year-to-date period mainly consists
of the sale of  marketable  securities.  The  2002  year-to-date  period  mainly
consists of the proceeds from sales of certain contracts, investment securities,
and other administrative assets.

Investments  in debt  securities  in the 2003  year-to-date  period  consists of
investments in marketable securities.

Financing Activities



                                                                       Year-to-Date
                                                                      September 30,
                                                           ----------------------------------
                                                                  2003             2002
                     ------------------------------------------------------------------------
                                                                      (millions)
                                                                      
                     FON Group                             $    (2,643)     $    (1,366)
                     PCS Group                                     (22)             806
                     ------------------------------------------------------------------------

                     Cash flows provided (used) by
                        financing activities               $    (2,665)     $      (560)
                                                           ----------------------------------



Financing  activities  include  a debt  reduction  of $2.3  billion  in the 2003
year-to-date  period compared to a $263 million decline in debt in the same 2002
period. The debt reduction in the 2003 year-to-date  period is mainly due to the
March 2003  tender for the 2003 and 2004 senior  notes,  the  prepayment  of the
global markets division accounts receivable asset securitization  facility,  the
prepayment of the Export Development Canada loan, and other scheduled maturities
for the 2003 year-to-date period.

Sprint  paid cash  dividends  of $343  million in the 2003  year-to-date  period
compared to $341 million in the same 2002 period.






Capital Requirements

Sprint's 2003 investing  activities,  mainly consisting of capital expenditures,
are expected to total approximately $3.8 billion. FON Group capital expenditures
are expected to be approximately  $1.7 billion.  PCS Group capital  expenditures
are  expected to be  approximately  $2.1  billion.  Sprint  continues  to review
capital  expenditures and will adjust capital investment in concert with growth.
Dividend  payments are  expected to  approximate  $463  million in 2003.  Sprint
expects  these  capital  requirements  and  dividend  payments  to be  funded by
Sprint's  $2.6 billion cash balance at September  30, 2003,  existing  financing
agreements, and expected 2003 cash flow from operations.

Liquidity

In recent  years,  Sprint has used the  long-term  bond  market as well as other
financial  markets  to fund its  needs.  As a result of its  improved  liquidity
position,  Sprint  currently does not expect to borrow funds through the capital
markets in 2003 to fund capital  expenditures  and operating and working capital
requirements.

In January  2003,  Sprint closed on the $2.23 billion cash sale of its directory
publishing business to R.H. Donnelley.

In June  2003,  Sprint  entered  into a new  revolving  credit  facility  with a
syndicate of banks.  The $1.0 billion  facility is unsecured,  with no springing
liens,  and is structured as a 364-day  credit line with a subsequent  one-year,
$1.0  billion  term-out  option.  Sprint  does not intend to draw  against  this
facility.  Sprint had standby  letters of credit  serving as a backup to various
obligations of approximately $127 million as of September 30, 2003.

Sprint has a PCS Group accounts  receivable asset  securitization  facility that
provides Sprint with up to $500 million of additional  liquidity.  The facility,
which  expires in 2005,  is subject to annual  renewals and does not include any
ratings triggers that would allow the lenders involved to terminate the facility
in the  event of a credit  rating  downgrade.  The  maximum  amount  of  funding
available is based on numerous factors and will fluctuate each month. Sprint has
not drawn  against the facility  and more than $208 million was  available as of
September 30, 2003.

Sprint has a global markets division  accounts  receivable asset  securitization
facility that provides  Sprint with up to $700 million of additional  liquidity.
The facility,  which expires in 2005, is subject to annual renewals and does not
include any ratings  triggers that would allow the lenders involved to terminate
the facility in the event of a credit rating  downgrade.  The maximum  amount of
funding available is based on numerous factors and will fluctuate each month. In
February 2003, Sprint prepaid all outstanding borrowings under this facility. As
of September 30, 2003, Sprint had more than $462 million total funding available
under the facility.

The undrawn loan facilities described above would charge interest rates equal to
LIBOR or Prime Rate plus a spread  that  varies  depending  on  Sprint's  credit
ratings.

Debt  maturities for the 2003 fourth quarter total  approximately  $566 million.
Debt maturities for 2004 total approximately $519 million. Sprint's $2.6 billion
cash balance at September 30, 2003, existing financing agreements,  and expected
2003 and 2004 cash flow from operations more than fund these requirements.

Any  borrowings  Sprint  may  incur  are  ultimately  limited  by  certain  debt
covenants. Sprint could borrow up to an additional $7.9 billion at September 30,
2003 under the most  restrictive of its debt  covenants.  Sprint is currently in
compliance with all debt covenants associated with its borrowings.

Sprint  completed its tender offers to repurchase  senior notes in March 2003 in
the amount of $1.1 billion and repaid, before scheduled maturities, $118 million
of debt primarily consisting of the local division's first mortgage bonds in the
2003 third  quarter.  Sprint  continually  evaluates  various  factors and, as a
result, may repurchase additional debt in the future.

In September  2003,  Sprint repaid the $300 million  Export  Development  Canada
loan.

Fitch Ratings (Fitch)  currently rates Sprint's  long-term senior unsecured debt
at BBB with a stable outlook.  Standard and Poor's Corporate  Ratings  (Standard
and Poor's)  currently rates Sprint's  long-term  senior  unsecured debt at BBB-
with a stable outlook.  In June 2003, Moody's Investors Service (Moody's) raised
Sprint's outlook to stable.  Moody's  currently rates Sprint's  long-term senior
unsecured debt at Baa3.

Sprint's ability to fund its capital needs is ultimately impacted by the overall
capacity and terms of the bank, term-debt and equity markets. There continues to
be  significant  volatility  in the  markets.  Sprint  continues  to monitor the




markets  closely and to take steps to maintain as much financial  flexibility as
possible,   while  maintaining  a  reasonable  capital  structure  cost.  Sprint
currently does not intend to access the markets other than extending,  replacing
or renewing current credit arrangements.

Off-Balance Sheet Financing

Sprint does not participate in, nor secure,  financings for any  unconsolidated,
special purpose entities.

--------------------------------------------------------------------------------
Financial Strategies
--------------------------------------------------------------------------------

General Risk Management Policies

Sprint  selectively  enters into  interest  rate swap  agreements  to manage its
exposure to interest  rate changes on its debt.  Sprint also enters into forward
contracts  and options in foreign  currencies to reduce the impact of changes in
foreign  exchange  rates.  Sprint  seeks to  minimize  counterparty  credit risk
through  stringent credit approval and review  processes,  the selection of only
the most  creditworthy  counterparties,  continual  review and monitoring of all
counterparties,  and thorough  legal review of  contracts.  Sprint also controls
exposure to market risk by regularly  monitoring changes in foreign exchange and
interest rate positions under normal and stress conditions to ensure they do not
exceed established limits.

Sprint's  derivative  transactions are used principally for hedging purposes and
comply with Board-approved policies.  Senior management receives frequent status
updates of all outstanding derivative positions.

Interest Rate Risk Management

Fair Value Hedges

Sprint enters into interest rate swap  agreements to manage exposure to interest
rate movements and achieve an optimal  mixture of floating and  fixed-rate  debt
while minimizing liquidity risk. The interest rate swap agreements designated as
fair value hedges  effectively  convert  Sprint's  fixed-rate debt to a floating
rate by receiving  fixed rate amounts in exchange  for  floating  rate  interest
payments  over the life of the agreement  without an exchange of the  underlying
principal  amount.  During the 2003 third quarter,  Sprint entered into interest
rate swap agreements, which were designated as fair value hedges.

Cash Flow Hedges

Sprint enters into interest rate swap agreements  designated as cash flow hedges
to reduce the impact of interest rate  movements on future  interest  expense by
effectively  converting a portion of its floating-rate debt to a fixed-rate.  As
of September 30, 2003, Sprint had no outstanding interest rate cash flow hedges.

Other Derivatives

In certain  business  transactions,  Sprint is granted  warrants to purchase the
securities of other companies at fixed rates. These warrants are supplemental to
the  terms  of the  business  transaction  and are  not  designated  as  hedging
instruments.

During 2002 and 2003,  Sprint entered into variable prepaid forward contracts to
monetize equity securities held as available for sale. The derivatives have been
designated as cash flow hedges to reduce the  variability in expected cash flows
related to the forecasted sale of the underlying equity securities.

Foreign Exchange Risk Management

Sprint's   foreign   exchange  risk  management   program  focuses  on  reducing
transaction  exposure  to  optimize  consolidated  cash flow.  Sprint's  primary
transaction  exposure  results from  payments made to and received from overseas
telecommunications companies for completing international calls made by Sprint's
domestic  customers.  These  international  operations  were not material to the
consolidated  financial  position at September 30, 2003 or results of operations
or cash flows for the quarter ended  September 30, 2003.  Sprint has not entered
into any significant  foreign  currency  forward  contracts or other  derivative
instruments to reduce the effects of adverse  fluctuations  in foreign  exchange
rates. As a result, Sprint was not subject to material foreign exchange risk.





                                                                         PART I.
                                                                         Item 3

Item 3.  Quantitative and Qualitative Disclosures about Market Risk

The risk inherent in Sprint's market risk sensitive instruments and positions is
the  potential  loss arising from adverse  changes in those  factors.  Sprint is
susceptible  to certain risks  related to changes in interest  rates and foreign
currency  exchange  rate  fluctuations.  Sprint  does not  purchase  or hold any
derivative financial instruments for trading purposes.

Interest Rate Risk

The communications industry is a capital intensive,  technology driven business.
Sprint  is  subject  to  interest  rate  risk  primarily   associated  with  its
borrowings. Sprint selectively enters into interest rate swap and cap agreements
to manage its exposure to interest rate changes on its debt.

Approximately  95% of  Sprint's  outstanding  debt  at  September  30,  2003  is
fixed-rate  debt.  While changes in interest rates impact the fair value of this
debt,  there is no impact to earnings and cash flows because  Sprint  intends to
hold these obligations to maturity unless refinancing conditions are favorable.

In the 2003 third  quarter,  Sprint  entered into fair value interest rate swaps
effectively converting approximately 5% of its outstanding debt to variable rate
debt.  These  interest  rate swaps have  maturities  ranging  from 2008 to 2012.
Assuming a one percentage point increase in the prevailing  forward yield curve,
the fair value of the interest rate swaps and the underlying  senior notes would
change by $57 million.  These interest rate swaps met all the  requirements  for
perfect effectiveness under derivative  accounting rules;  therefore there is no
impact to earnings and cash flows for any fair value fluctuations.

Sprint performs interest rate sensitivity  analyses on its  variable-rate  debt.
These  analyses  indicate that a one  percentage  point change in interest rates
would  have an  annual  impact  of $17  million  pre-tax  on the  statements  of
operations and cash flows at September 30, 2003.  While  Sprint's  variable-rate
debt is subject to earnings and cash flows impacts as interest rates change,  it
is not subject to changes in fair values.

Sprint also  performs a  sensitivity  analysis  on the fair market  value of its
outstanding  debt.  A 10%  decline in market  interest  rates would cause a $542
million increase in fair market value of its debt of $20 billion.  This analysis
includes the hedged debt, but excludes Sprint's equity unit notes.

Foreign Currency Risk

Sprint also enters into forward  contracts and options in foreign  currencies to
reduce the impact of changes in foreign  exchange  rates.  Sprint  uses  foreign
currency   derivatives  to  hedge  its  foreign  currency  exposure  related  to
settlement  of  international  telecommunications  access  charges.  The  dollar
equivalent  of  Sprint's  net foreign  currency  payables  was $10.5  million at
September 30, 2003.  The potential  immediate  pre-tax loss to Sprint that would
result from a hypothetical 10% change in foreign  currency  exchange rates based
on these positions would be approximately $1 million.






                                                                         PART I.
                                                                         Item 4

Item 4.  Controls and Procedures

In response to adoption of the Sarbanes-Oxley Act of 2002, Sprint formalized its
disclosure  controls and procedures.  In connection with the preparation of this
Form 10-Q and as of September 30, 2003,  Sprint's  Chief  Executive  Officer and
Chief Financial  Officer  directed  Sprint's  internal  auditors to update their
review of the  effectiveness  of these  disclosure  controls and  procedures and
report  their  conclusions.  The Chief  Executive  Officer  and Chief  Financial
Officer  also met with other  members of  management,  members of the  financial
accounting and legal departments,  and Sprint's  independent auditors to discuss
and  evaluate  Sprint's  disclosures  and the  effectiveness  of the  disclosure
controls  and  procedures.  Based on these  discussions  and the  report  of the
internal  auditors,  the Chief  Executive  Officer and Chief  Financial  Officer
concluded  that  the  design  and  operation  of  the  disclosure  controls  and
procedures were effective and enabled Sprint to disclose all material  financial
and non-financial  information affecting its businesses as required by the rules
governing this report.  No changes were made in Sprint's  internal controls over
financial  reporting  during the third quarter that have materially  affected or
are reasonably likely to materially affect Sprint's financial reporting.






PART II.
                                                               Other Information

PART II. - Other Information

Item 1.  Legal Proceedings

          Sprint  reported in its Quarterly  Report on Form 10-Q for the quarter
          ended  June  30,  2003,  that the  Inspector  General  of the  General
          Services  Administration  (GSA) had recommended that the GSA Debarment
          Official consider whether to initiate  debarment  proceedings  against
          Sprint following a billing error related to Sprint's FTS 2001 contract
          with the GSA. In October 2003, the GSA's Debarment  Official  decided,
          based on a review of the record, not to initiate debarment proceedings
          against Sprint.

          In October 2003,  the  settlements  in the  derivative  action and the
          securities  class action reported by Sprint in its Quarterly Report on
          Form  10-Q  for  the  quarter   ended  March  31,   2003,   were  each
          preliminarily  approved  by the court in which  each case is  pending.
          Final  approval  hearings in both cases have been set for December 16,
          2003.

          The three putative class action  lawsuits  alleging ERISA  violations,
          filed by  participants in the Sprint  Retirement  Savings Plan and the
          Centel  Retirement  Savings Plan for  Bargaining  Unit  Employees  and
          reported  by Sprint in its Form 10-Q for the  quarter  ended  June 30,
          2003,  have  been  consolidated  in the U.S.  District  Court  for the
          District of Kansas for all  purposes.  Plaintiffs  seek to recover any
          decline  in the  value of their  FON and PCS  stock  during  the class
          period.

          Various other suits, proceedings and claims, including purported class
          actions,  typical  for a  business  enterprise,  are  pending  against
          Sprint.

          While it is not possible to determine the ultimate disposition of each
          of these proceedings and whether they will be resolved consistent with
          Sprint's  beliefs,  Sprint  expects the  outcome of such  proceedings,
          individually  or in the  aggregate,  will not have a material  adverse
          effect on the financial  condition or results of operations of Sprint,
          the FON Group or the PCS Group.

Item 2.  Changes in Securities

         Bylaw Amendment

          On August 12, 2003,  the Sprint Board of  Directors  amended  Sprint's
          Bylaws to provide that the Kansas Control Share  Acquisition  Act does
          not apply to acquisitions of Sprint stock.  Article II, Section 5. The
          Kansas Control Share  Acquisition Act provides that a person loses the
          right to vote shares of a publicly traded Kansas corporation  acquired
          in a transaction  resulting in beneficial ownership of voting stock in
          excess of certain thresholds (20%, 33 1/3% and 50% of the voting power
          of  the  corporation)  unless  the  acquisition  is  approved  by  the
          shareholders of the corporation.  By opting out of this Act, shares of
          Sprint  stock  acquired  in  a  transaction  resulting  in  beneficial
          ownership of voting stock in excess of one of these  thresholds  would
          retain their voting rights without shareholder approval.

          Sale of Unregistered Equity Securities

          In September 2003, Sprint issued to Len Lauer,  Sprint's new President
          and Chief Operating Officer, 50,000 restricted stock units relating to
          shares of FON Stock and 50,000  restricted  stock  units  relating  to
          shares of PCS Stock.  The  restricted  stock units were granted to Mr.
          Lauer  in  connection  with  his  promotion  to  President  and  Chief
          Operating  Officer as part of his  long-term  incentive  compensation.
          Each restricted stock unit represents the right to one share of common
          stock once the unit vests.  The  restricted  stock units also  include
          dividend  equivalent  rights,  which  means  that,  when Sprint pays a
          dividend on the stock  represented by the units, Mr. Lauer is entitled
          to additional  shares of the stock when the units vest. The units vest
          at various times beginning in 2006 and ending in 2008.

          Neither the units nor the common  stock  issuable  once the units vest
          were registered  under the Securities Act of 1933. The issuance of the
          restricted  stock  units  was  exempt  from  registration   under  the
          Securities  Act in reliance on the exemption  provided by Section 4(2)
          of the Securities  Act because the restricted  stock units were issued
          in a transaction  not involving a public  offering.  Sprint may in the
          future  register  the resale of the shares of stock to be  received by
          Mr. Lauer once the units vest.



Item 3.  Defaults Upon Senior Securities

          There were no reportable events during the quarter ended September 30,
          2003.

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

          There were no reportable events during the quarter ended September 30,
          2003.

Item 5.  Other Information

          Ratios of Earnings to Fixed Charges

          Sprint's earnings, as adjusted, were inadequate to cover fixed charges
          by $777  million in the 2003 third  quarter and by $633 million in the
          year-to-date  period.  Sprint's ratio of earnings to fixed charges was
          1.45 in the 2002  third  quarter  and  1.30 in the  2002  year-to-date
          period.  The  ratio of  earnings  to fixed  charges  was  computed  by
          dividing  fixed  charges  into  the  sum of  earnings,  after  certain
          adjustments,  and fixed charges.  Earnings include income or loss from
          continuing  operations  before  income taxes plus net losses in equity
          method  investees,  less capitalized  interest.  Fixed charges include
          interest on all debt of continuing operations,  including amortization
          of debt issuance costs, and the interest component of operating rents.

Item 6.  Exhibits and Reports on Form 8-K

     (a) The following exhibits are filed as part of this report:

               (3)  Articles of Incorporation and Bylaws:

                    (a)  Articles of Incorporation, as amended (filed as Exhibit
                         3.1  to  Amendment   No.  5  to  Sprint   Corporation's
                         Registration Statement on Form 8-A relating to Sprint's
                         Series 1 FON  Common  Stock,  filed May 22,  2003,  and
                         incorporated herein by reference).

                    (b)  Bylaws, as amended.

               (4)  Instruments   defining  the  Rights  of  Sprint's   Security
                    Holders:

                    (a)  The rights of  Sprint's  equity  security  holders  are
                         defined  in  the  Fifth,  Sixth,   Seventh  and  Eighth
                         Articles of Sprint's  Articles  of  Incorporation.  See
                         Exhibit 3(a).

                    (b)  Provision  regarding  Kansas Control Share  Acquisition
                         Act  is  in  Article  II,  Section  5  of  the  Bylaws.
                         Provisions  regarding  Stockholders'  Meetings  are set
                         forth  in  Article  III  of  the   Bylaws.   Provisions
                         regarding the Capital Stock  Committee are set forth in
                         Article IV, Section 12 of the Bylaws. See Exhibit 3(b).

                    (c)  Amended  and  Restated  Rights  Agreement  dated  as of
                         November 23, 1998,  between Sprint  Corporation and UMB
                         Bank,  n.a. (filed as Exhibit 4.1 to Amendment No. 1 to
                         Sprint Corporation's Registration Statement on Form 8-A
                         relating to Sprint's PCS Group Rights,  filed  November
                         25, 1998, and incorporated herein by reference).

                    (d)  Amendment dated March 28, 2003, to Amended and Restated
                         Rights Agreement  between the Registrant and UMB, n.a.,
                         as Rights Agent (filed as Exhibit 4.2 to Amendment  No.
                         3 to Sprint  Corporation's  Registration  Statement  on
                         Form 8-A relating to Sprint's PCS Group  Rights,  filed
                         April 2, 2003, and incorporated herein by reference).

                    (e)  Amended  and  Restated   Standstill   Agreement   dated
                         November  23, 1998,  by and among  Sprint  Corporation,
                         France  Telecom  and  Deutsche  Telekom  AG  (filed  as
                         Exhibit 4E to Post-Effective  Amendment No. 2 to Sprint
                         Corporation's  Registration  Statement on Form S-3 (No.
                         33-58488) and  incorporated  herein by  reference),  as
                         amended by the Master Transfer  Agreement dated January
                         21, 2000  between and among  France  Telecom,  Deutsche
                         Telekom AG, NAB Nordamerika  Beteiligungs Holding GmbH,
                         Atlas  Telecommunications,  S.A.,  Sprint  Corporation,
                         Sprint  Global  Venture,  Inc.  and the JV Entities set
                         forth


                         in  Schedule  II thereto  (filed as Exhibit 2 to Sprint
                         Corporation's  Current Report on Form 8-K dated January
                         26, 2000 and incorporated herein by reference).

                    (f)  Tracking  Stock  Policies  of  Sprint  Corporation,  as
                         amended (filed as Exhibit 4(c) to Sprint  Corporation's
                         Annual  Report  on  Form  10-K/A  for  the  year  ended
                         December   31,   2001  and   incorporated   herein   by
                         reference).

               (12) Computation of Ratios of Earnings to Fixed Charges

               (31) (a)  Certification  of Chief Executive  Officer  Pursuant to
                    Securities Exchange Act of 1934 Rule 13a-14(a).

                    (b)  Certification  of Chief Financial  Officer  Pursuant to
                         Securities Exchange Act of 1934 Rule 13a-14(a).

               (32) (a)  Certification of Chief Executive Officer pursuant to 18
                    U.S.C.  Section 1350, As Adopted  Pursuant to Section 906 of
                    the Sarbanes-Oxley Act of 2002.

                    (b)  Certification of Chief Financial Officer pursuant to 18
                         U.S.C. Section 1350, As Adopted Pursuant to Section 906
                         of the Sarbanes-Oxley Act of 2002.

Sprint will furnish to the Securities and Exchange  Commission,  upon request, a
copy of the  instruments  defining the rights of holders of long-term  debt that
does not exceed 10% of the total assets of Sprint.

     (b) Reports on Form 8-K

          Sprint  filed a Current  Report on Form 8-K dated  July 28,  2003,  in
          which it reported that it announced  second quarter 2003 results.  The
          news  release  regarding  second  quarter  2003  results,   which  was
          furnished as an exhibit to the Current Report,  included the following
          financial information:

               Sprint Corporation Consolidated Statements of Operations
               Sprint Corporation Consolidated Balance Sheets
               Sprint Corporation Condensed Consolidated Cash Flow Information
               Sprint Corporation Reconciliation of Non-GAAP Liquidity Measures
               Sprint Corporation FON Group Operating Statistics
               Sprint Corporation PCS Group Operating Statistics

          Sprint filed a Current Report on Form 8-K dated  September 10, 2003 in
          which it reported that it had announced the  appointment  of Len Lauer
          as President and Chief Operating Officer of Sprint.

          Sprint  filed a Current  Report on Form 8-K dated  October 14, 2003 in
          which it reported  that the Audit  Committee of its Board of Directors
          had determined that Sprint's independent auditor, Ernst and Young LLP,
          would be  replaced by KPMG LLP as the  independent  auditor for Sprint
          for the year ending  December 31, 2004.  Ernst and Young will continue
          as Sprint's independent auditor for the year ending December 31, 2003.

          Sprint filed a Current  Report on Form 8-K dated  October 23, 2003, in
          which it reported that it announced  third  quarter 2003 results.  The
          news release regarding third quarter 2003 results, which was furnished
          as an exhibit to the Current Report,  included the following financial
          information:

               Sprint Corporation Consolidated Statements of Operations
               Sprint Corporation Consolidated Balance Sheets
               Sprint Corporation Condensed Consolidated Cash Flow Information
               Sprint Corporation Reconciliation of Non-GAAP Liquidity Measures
               Sprint Corporation FON Group Operating Statistics
               Sprint Corporation PCS Group Operating Statistics






                                    SIGNATURE





Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.







                                                              SPRINT CORPORATION
                                                              ------------------
                                                                 (Registrant)





                                      By     /s/  John P. Meyer
                                             -----------------------------------
                                             John P. Meyer
                                             Senior Vice President -- Controller
                                             Principal Accounting Officer


Dated:  November 10, 2003