UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-Q/A
                                (Amendment No. 2)


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

For the quarterly period ended                     March 31, 2004               
                               -------------------------------------------------

                                       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 April 30, 2004:
                                 FON COMMON STOCK
                                        Series 1         1,333,945,270
                                        Series 2            92,372,664













                                EXPLANATORY NOTE


The purpose of this Amendment No. 2 on Form 10-Q/A to the Quarterly Report on
Form 10-Q of Sprint Corporation for the quarter ended March 31, 2004 is to
restate our interim consolidated financial statements for the quarters ended
March 31, 2004 and 2003 and related disclosures as discussed in Note 3 of the
Condensed Notes to Consolidated Financial Statements.

Generally, no attempt has been made in this Amendment No. 2 to modify or update
other disclosures presented in the original report on Form 10-Q except as
required to reflect the effects of the restatement. The Form 10-Q/A generally
does not reflect events occurring after the filing of the Form 10-Q or modify or
update those disclosures, including the exhibits to the Form 10-Q, affected by
subsequent events. Information not affected by the restatement is unchanged and
reflects the disclosures made at the time of the original filing of the Form
10-Q on May 7, 2004. Accordingly, this Form 10-Q/A should be read in conjunction
with our filings made with the Securities and Exchange Commission subsequent to
the filing of the original Form 10-Q, including any amendments to those filings.
The following items have been amended as a result of the restatement:

        o Part I - Item 1 - Financial Statements;
        o Part I - Item 2 - Management's Discussion and Analysis of Financial 
          Condition and Results of Operations; 
        o Part I - Item 4 - Controls and Procedures;
        o Part II - Item 5 - Other Information; and 
        o Part II - Item 6 - Exhibits and Reports on Form 8-K

During a review of internal controls relating to our capital assets, we
identified, in the 2004 third quarter, a calculation error that had resulted,
since 1999, in the overstatement of interest capitalized during the construction
of our Wireless capital assets, with a corresponding understatement of interest
expense. The error subsequently resulted in an overstatement of depreciation
expense after the associated capital assets were placed in service. This error
resulted in a cumulative overstatement of capitalized interest costs and a
corresponding understatement of interest expense of $265 million from 1999
through June 30, 2004, as well as a cumulative overstatement of depreciation
expense of $99 million from 1999 through June 30, 2004. The cumulative impacts
of this error as of June 30, 2004, including the related income tax effect,
resulted in a $166 million overstatement of net property, plant and equipment, a
$61 million overstatement of deferred income tax liability, and a $105 million
overstatement of retained earnings.

While we believe the impacts of this calculation error are not material to any
previously issued financial statement, we determined that the cumulative
adjustment required to correct this calculation error was too large to record in
2004, and that the calculation error was most appropriately corrected through
restatement of previously issued financial statements for the fiscal years ended
December 31, 2003, 2002 and 2001 and interim financial statements for the
quarters ended March 31, 2004 and June 30, 2004 and comparative 2003 interim
periods.

Our decision to restate previously issued financial statements was based on the
impact of a cumulative correction on the 2004 financial statements rather than
the impact on any previously issued financial statement.

See Note 3 of the Condensed Notes to Consolidated Financial Statements for
additional information.








TABLE OF CONTENTS
                                                                                                        Page
                                                                                                     Reference
Part I - Financial Information

             Item 1.  Sprint Corporation Financial Statements

                                                                                                     
                      Consolidated Financial Statements
                      Consolidated Statements of Operations                                              1
                      Consolidated Statements of Comprehensive Income                                    2
                      Consolidated Balance Sheets                                                        3
                      Consolidated Statements of Cash Flows                                              5
                      Consolidated Statement of Shareholders' Equity                                     6
                      Condensed Notes to Consolidated Financial Statements                               7

             Item 2.  Management's Discussion and Analysis of Financial Condition and
                        Results of Operations                                                            19

             Item 3.  Quantitative and Qualitative Disclosures about Market Risk                         33

             Item 4.  Controls and Procedures                                                            34

Part II - Other Information

             Item 1.  Legal Proceedings                                                                  35

             Item 2.  Changes in Securities                                                              35

             Item 3.  Defaults Upon Senior Securities                                                    36

             Item 4.  Submission of Matters to a Vote of Security Holders                                37

             Item 5.  Other Information                                                                  38

             Item 6.  Exhibits and Reports on Form 8-K                                                   38

Signature                                                                                                40

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.

SPRINT CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
(millions, except per share data)
--------------------------------------------- --- ------------- -- -------------- -- -------------------------------
Quarters Ended March 31,                                                                 2004              2003
                                                                                    (as restated)      (as restated)
--------------------------------------------- --- ------------- -- -------------- -- ------------- --- -------------

                                                                                                       
Net Operating Revenues                                                            $      6,707     $       6,339
--------------------------------------------- --- ------------- -- -------------- -- ------------- --- -------------

Operating Expenses
   Costs of services and products                                                        3,083             2,839
   Selling, general and administrative                                                   1,637             1,650
   Depreciation                                                                          1,233             1,228
   Restructuring and asset impairments                                                      30                10
--------------------------------------------- --- ------------- -- -------------- -- ------------- --- -------------

   Total operating expenses                                                              5,983             5,727
--------------------------------------------- --- ------------- -- -------------- -- ------------- --- -------------

Operating Income                                                                           724               612

Interest expense                                                                          (326)             (372)
Premium on early retirement of debt                                                          -               (19)
Other, net                                                                                 (26)              (61)
--------------------------------------------- --- ------------- -- -------------- -- ------------- --- -------------

Income from continuing operations before
   income taxes                                                                            372               160
Income tax expense                                                                        (147)              (61)
--------------------------------------------- --- ------------- -- -------------- -- ------------- --- -------------

Income from Continuing Operations                                                          225                99
Discontinued operation, net                                                                  -             1,313
Cumulative effect of change in accounting
   principle, net                                                                            -               258
--------------------------------------------- --- ------------- -- -------------- -- ------------- --- -------------

Net Income                                                                                 225             1,670

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

Earnings Applicable to Common Stock                                               $        223     $       1,668
                                                                                  -- ------------- --- -------------

 Diluted Earnings per Common Share
    Continuing operations                                                         $       0.16     $        0.07
    Discontinued operation                                                                   -              0.93
    Cumulative effect of change in accounting principle, net                                 -              0.18
--------------------------------------------------------------- -- -------------- -- ------------- --- -------------
Total                                                                             $       0.16     $        1.18
                                                                                  -- ------------- --- -------------
Diluted weighted average common shares                                                 1,436.1           1,411.5
                                                                                  -- ------------- --- -------------


 Basic Earnings per Common Share
    Continuing operations                                                         $       0.16     $        0.07
    Discontinued operation                                                                   -              0.93
    Cumulative effect of change in accounting principle, net                                 -              0.18
--------------------------------------------------------------- -- -------------- -- ------------- --- -------------
Total                                                                             $       0.16     $        1.18
                                                                                  -- ------------- --- -------------
Basic weighted average common shares                                                   1,424.2           1,407.6
                                                                                  -- ------------- --- -------------






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








SPRINT CORPORATION
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited)
(millions)

--------------------------------------------- ----------------- ----------------- -- ------------- --- -------------
Quarters Ended March 31,                                                                 2004              2003
                                                                                     (as restated)     (as restated)
--------------------------------------------- ----------------- ----------------- -- ------------- --- -------------

                                                                                                      
Net Income                                                                        $       225      $      1,670
--------------------------------------------- --- ------------- -- -------------- -- ------------- --- -------------

Other Comprehensive Income

   Unrealized holding losses on securities                                                (21)               (1)
   Income tax benefit                                                                       8                 -
--------------------------------------------- --- ------------- -- -------------- -- ------------- --- -------------
Net unrealized holding losses on securities
   during the period                                                                      (13)               (1)

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

Foreign currency translation adjustments                                                    -                 2

   Unrealized gains (losses) on qualifying cash flow hedges                                17                (2)
   Income tax benefit (expense)                                                            (6)                1
--------------------------------------------------------------- -- -------------- -- ------------- --- -------------
Net unrealized gains (losses) on qualifying
   cash flow hedges during the period                                                      11                (1)
--------------------------------------------------------------- -- -------------- -- ------------- --- -------------

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

Comprehensive Income                                                              $       222      $      1,670
                                                                                  -- ------------- --- -------------




























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








SPRINT CORPORATION
CONSOLIDATED BALANCE SHEETS
(millions)
-------------------------------------------------------------------------------------------------------------------------
                                                                                         March 31,       December 31,
                                                                                            2004             2003
                                                                                       (as restated)
                                                                                        (Unaudited)
-------------------------------------------------------------------------------------------------------------------------

Assets
     Current assets
                                                                                                              
       Cash and equivalents                                                            $        2,728    $        2,424
       Accounts receivable, net of allowance for doubtful accounts of
          $260 and $276                                                                         2,927             2,876
       Inventories                                                                                513               582
       Prepaid expenses                                                                           310               279
       Other                                                                                      428               450
-------------------------------------------------------------------------------------------------------------------------
       Total current assets                                                                     6,906             6,611

     Gross property, plant and equipment                                                       54,058            53,994
     Accumulated depreciation                                                                 (27,588)          (26,893)
-------------------------------------------------------------------------------------------------------------------------
     Net property, plant and equipment                                                         26,470            27,101

     Intangibles
        Goodwill                                                                                4,401             4,401
        Spectrum licenses                                                                       3,381             3,385
        Other intangibles                                                                          31                32
-------------------------------------------------------------------------------------------------------------------------
        Total intangibles                                                                       7,813             7,818
        Accumulated amortization                                                                   (3)               (3)
-------------------------------------------------------------------------------------------------------------------------
        Net intangibles                                                                         7,810             7,815

     Other assets                                                                               1,099             1,148
-------------------------------------------------------------------------------------------------------------------------


    Total                                                                              $       42,285    $       42,675
                                                                                      -----------------------------------



























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








SPRINT CORPORATION
CONSOLIDATED BALANCE SHEETS (continued)
(millions, except per share data)
-------------------------------------------------------------------------------------------------------------------------
                                                                                          March 31,       December 31,
                                                                                            2004              2003
                                                                                        (as restated)
                                                                                         (Unaudited)
-------------------------------------------------------------------------------------------------------------------------

Liabilities and Shareholders' Equity
     Current liabilities
                                                                                                             
       Short-term borrowings and current maturities of long-term debt                   $       1,621    $         594
       Accounts payable                                                                         2,118            2,197
       Accrued interconnection costs                                                              522              503
       Accrued taxes                                                                              374              407
       Advance billings                                                                           598              572
       Accrued restructuring costs                                                                111              117
       Payroll and employee benefits                                                              472              683
       Accrued interest                                                                           312              378
       Other                                                                                      909            1,025
-------------------------------------------------------------------------------------------------------------------------
       Total current liabilities                                                                7,037            6,476

     Noncurrent liabilities
        Long-term debt and capital lease obligations                                           15,822           16,841
        Equity unit notes                                                                       1,725            1,725
       Deferred income taxes                                                                    1,841            1,725
       Postretirement and other benefit obligations                                             1,313            1,572
       Other                                                                                    1,004              976
-------------------------------------------------------------------------------------------------------------------------
       Total noncurrent liabilities                                                            21,705           22,839

     Redeemable preferred stock                                                                   247              247

     Shareholders' equity
       Common stock
         FON, par value $2.00 per share, 3,000.0 shares authorized, 1,425.6 and
            904.3 shares issued and outstanding                                                 2,851            1,809
         PCS, par value $1.00 per share, and 4,000.0 shares authorized, 0 and
            1,035.4 shares issued and outstanding                                                   -            1,035
       Capital in excess of par or stated value                                                10,151           10,084
       Retained earnings                                                                        1,018              906
       Accumulated other comprehensive loss                                                      (724)            (721)
-------------------------------------------------------------------------------------------------------------------------

       Total shareholders' equity                                                              13,296           13,113
-------------------------------------------------------------------------------------------------------------------------

    Total                                                                               $      42,285    $      42,675
                                                                                      -----------------------------------

















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






SPRINT CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(millions)
------------------------------------------------------------------ ----------------- ----------------------------------
Quarters Ended March 31,                                                                   2004             2003
                                                                                      (as restated)     (as restated)
------------------------------------------------------------------ ----------------- ----------------- ----------------

Operating Activities

                                                                                                          
Net income                                                                            $        225     $      1,670
Adjustments to reconcile net income to net cash
   provided by operating activities:
     Discontinued operation, net                                                                 -           (1,313)
     Cumulative effect of change in accounting principle, net                                    -             (258)
     Depreciation                                                                            1,233            1,228
     Deferred income taxes                                                                     146              736
     Changes in assets and liabilities:
         Accounts receivable, net                                                              (51)             138
         Inventories and other current assets                                                   19             (107)
         Accounts payable and other current liabilities                                       (381)          (1,315)
         Noncurrent assets and liabilities, net                                               (202)             200
     Other, net                                                                                 49               73
------------------------------------------------------------------------------------ --- ------------- -- -------------
Net cash provided  by operating activities of continuing operations                          1,038            1,052
------------------------------------------------------------------ --- ------------- --- ------------- -- -------------

Investing Activities

Capital expenditures                                                                          (683)            (541)
Investments in and loans to other affiliates, net                                               (2)             (12)
Investments in debt securities                                                                (108)               -
Proceeds from debt securities                                                                  142                -
Other, net                                                                                       5                3
------------------------------------------------------------------ --- ------------- --- ------------- -- -------------
Net cash used by investing activities of continuing operations                                (646)            (550)
------------------------------------------------------------------ --- ------------- --- ------------- -- -------------

Financing Activities

Payments on debt                                                                               (22)          (1,555)
Proceeds from common stock issued                                                               33                2
Dividends paid                                                                                (115)            (114)
Other, net                                                                                      16               10
------------------------------------------------------------------ --- ------------- --- ------------- -- -------------
Net cash used by financing activities of continuing operations                                 (88)          (1,657)
------------------------------------------------------------------------------------ --- ------------- -- -------------

------------------------------------------------------------------ --- ------------- --- ------------- -- -------------
Cash from discontinued operations                                                                -            2,215
------------------------------------------------------------------ --- ------------- --- ------------- -- -------------

Increase in Cash and Equivalents                                                               304            1,060
Cash and Equivalents at Beginning of Period                                                  2,424            1,035
------------------------------------------------------------------ --- ------------- --- ------------- -- -------------

Cash and Equivalents at End of Period                                                 $      2,728     $      2,095
                                                                                     --- ------------- -- -------------















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








SPRINT CORPORATION
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY (Unaudited)
(millions)


------------------------------------------------------------------------------------------------------------------------
                                                               Capital in   Retained       Accumulated
                                        FON        PCS         Excess of    Earnings          Other
                                      Common      Common         Par or       (as         Comprehensive       Total
Quarter Ended March 31, 2004           Stock      Stock       Stated Value  restated)          Loss        (as restated)
------------------------------------------------------------------------------------------------------------------------

                                                                                           
Beginning 2004 balance            $     1,809  $     1,035 $     10,084   $    906     $      (721)     $    13,113
Net income                                  -            -            -        225               -              225
Common stock dividends                      -            -            -       (113)              -             (113)
Preferred stock dividends                   -            -           (2)       -                 -               (2)
FON Series 1 common stock issued            5            -           57        -                 -               62
PCS Series 1 common stock issued            -            2            6        -                 -                8
Conversion of PCS common stock
   into FON common stock                1,037       (1,037)           -        -                 -                -
Other, net                                  -            -            6        -                (3)               3
------------------------------------------------------------------------------------------------------------------------

March 2004 balance                $     2,851  $         - $     10,151   $    1,018   $      (724)     $    13,296
                                  --------------------------------------------------------------------------------------


Shares Outstanding
------------------------------------------------------------
Beginning 2004 balance                  904.3      1,035.4
FON Series 1 common stock issued          2.9           -
PCS Series 1 common stock issued          -            1.4
Conversion of PCS common stock
   into FON common stock                518.4     (1,036.8)
------------------------------------------------------------

March 2004 balance                    1,425.6           -
                                  --------------------------






























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









                                                                         PART I.
                                                                         Item 1.

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS          Sprint Corporation
(Unaudited)

The information in this Form 10-Q/A 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.

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 2003 Form
10-K/A. Operating results for the 2004 year-to-date period do not necessarily
represent the results that may be expected for the year ending December 31,
2004.

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

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 4 for additional information.

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 net results of
operations or shareholders' equity as previously reported.

Classification of Operations

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's business is divided into three segments: the PCS wireless division, the
global markets division, and the local division.

Change in Depreciable Life

As of January 1, 2004, Sprint re-evaluated the depreciable lives of certain
network assets. The depreciable life of certain high-capacity transmission
equipment was extended from eight years to twelve years. This extension in life
decreased the 2004 first quarter depreciation expense in the global markets
division by approximately $25 million.

--------------------------------------------------------------------------------
2.  Recombination of Tracking Stock
--------------------------------------------------------------------------------

On April 23, 2004, Sprint recombined its two tracking stocks. Each share of PCS
common stock automatically converted into 0.5 shares of FON common stock. As of
April 23, 2004, the FON Group and the PCS Group no longer exist, and FON common
stock represents all of the operations and assets of Sprint, including the PCS
wireless division, the global markets division and the local division. This
event is reflected in the presentation of these financial statements.

FON common stock and PCS common stock were intended to reflect the financial
results and economic value of the FON and PCS Groups. However, they were classes
of common stock of Sprint, not of the group they were intended to track.
Accordingly, FON and PCS shareholders were each 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 did not represent a
direct legal interest in the assets and liabilities allocated to either group,
but rather represented a direct equity interest in Sprint's assets and
liabilities as a whole.



Earnings Per Share

All per share amounts have been restated, for all periods presented, to reflect
the recombination of the FON common stock and PCS common stock as of the
earliest period presented at an identical conversion ratio (0.50). The
conversion ratio was also applied to dilutive PCS securities (mainly stock
options, ESPP, convertible preferred stock, and restricted stock units) to
determine diluted weighted average shares on a consolidated basis.


Following is previously reported earnings per share information for the FON
Group and the PCS Group. These amounts reflect the restatement discussed in Note
3.



                
                Quarter Ended March 31, 2003                         FON Group            PCS Group

                                                                            (as restated)
                --------------------------------------------------------------------------------------
                                                                    (millions, except earnings per
                                                                             share data)
                                                                                        
                Income (Loss) from Continuing Operations         $      279          $      (180)
                Discontinued operation, net                           1,313                    -
                Cumulative effect of change in accounting
                   principle, net                                       258                    -
                                                                 -----------------   -----------------
                Net Income (Loss)                                     1,850                 (180)
                Preferred stock dividends (paid) received                 2                   (4)
                                                                 -----------------   -----------------
                Earnings (Loss) Applicable to Common Stock       $    1,852          $      (184)
                                                                 -----------------   -----------------

                Diluted Earnings (Loss) per Common Share(1)
                   Continuing operations                         $     0.31          $     (0.18)
                   Discontinued operation                              1.46                    -
                   Cumulative effect of change in accounting
                     principle, net                                    0.29                    -
                                                                 -----------------   -----------------
                Total                                            $     2.06          $     (0.18)
                                                                 -----------------   -----------------
                Diluted weighted average common shares                899.5               1,022.1
                                                                 -----------------   -----------------

                Basic Earnings (Loss) per Common Share
                   Continuing operations                         $     0.31          $     (0.18)
                   Discontinued operation                              1.47                    -
                   Cumulative effect of change in accounting
                     principle, net                                    0.29                    -
                                                                 -----------------   -----------------
                Total                                            $     2.07          $     (0.18)
                                                                 -----------------   -----------------
                Basic weighted average common shares                  896.6               1,022.1
                                                                 -----------------   -----------------




              (1) As the effects of including dilutive PCS securities are
                  antidilutive, they are not included in the diluted weighted
                  average common shares outstanding for the PCS Group, nor are
                  they included in the calculation of diluted earnings per
                  share.



Shareholders' Equity

The conversion of PCS common stock into FON common stock resulted in an increase
in FON common stock outstanding of 518.4 million shares as of March 31, 2004.
Although Sprint's Articles of Incorporation continue to authorize PCS common
stock following the conversion of PCS common stock, no shares of PCS common
stock may be issued.



--------------------------------------------------------------------------------
3.  Restatement of Previously Issued Financial Statements
--------------------------------------------------------------------------------

During a review of internal controls relating to its capital assets, Sprint
identified, in the 2004 third quarter, a calculation error that had resulted,
since 1999, in the overstatement of interest capitalized during the construction
of its Wireless capital assets, with a corresponding understatement of interest
expense. The error subsequently resulted in an overstatement of depreciation
expense after the associated capital assets were placed in service. While Sprint
believes the impacts of this calculation error are not material to any
previously issued financial statement, Sprint determined that this calculation
error was most appropriately corrected through restatement of previously issued
financial statements.

The impacts of this restatement on the financial statements for the
quarters ended March 31, 2004 and 2003 are summarized below (in
millions, except per share information):




Statement of Operations
Data:                             Quarter Ended March 31, 2004                    Quarter Ended March 31, 2003
                           -----------------------------------------     -------------------------------------------
                           Previously                          As         Previously                          As 
                            Reported      Adjustment       Restated        Reported      Adjustment        Restated
                           ----------- -- ----------- -- -----------     ----------- -- ----------- -- -------------

                                                                                              
Operating income               $  714         $   10         $  724          $  604     $        8        $     612

Interest expense                  320              6            326             366              6              372
Income from continuing
  operations                      222              3            225              97              2               99

Net income                        222              3            225           1,668              2            1,670
Diluted earnings per
  common share(1)                0.15           0.01           0.16            1.18              -             1.18
Basic earnings per
  common share(1)                0.15           0.01           0.16            1.18              -             1.18



                                Quarter Ended March 31, 2004                    Quarter Ended March 31, 2003
                           -----------------------------------------     ------------------------------------------
Statement of Cash Flows    Previously                          As         Previously                         As 
Data:                       Reported      Adjustment       Restated        Reported      Adjustment       Restated
                           ----------- -- ----------- -- -----------     ----------- -- ------------ -- -----------

Net cash provided by
  operating activities
  of continuing
  operations                  $ 1,044        $   (6)         $1,038         $ 1,058          $  (6)        $ 1,052

Capital expenditures              689            (6)            683             547             (6)            541

Increase in
  Cash and Equivalents            304              -            304           1,060               -          1,060


                                     As of March 31, 2004
                           -----------------------------------------
                            Previously                        As
Balance Sheet Data:          Reported     Adjustment       Restated
                           ----------- -- ----------- -- -----------

Total shareholders' equity  $  13,404      $  (108)       $  13,296



(1)  On April 23, 2004 Sprint recombined its two tracking stocks. Each share of
     PCS common stock automatically converted into 0.5 shares of FON common
     stock. All per share amounts have been restated to reflect the
     recombination of the FON common stock as of the earliest period presented
     at an identical conversion ratio (0.5). The conversion ratio was also
     applied to dilutive PCS Group securities (mainly stock options, employee
     stock purchase plan, convertible preferred stock and restricted stock
     units) to determine diluted weighted average shares on a consolidated
     basis.




Following are the impacts of the restatements on previously reported information for the FON Group and the PCS Group:



                                Quarter Ended March 31, 2003
                           -----------------------------------------
                           Previously                          As
                            Reported      Adjustment       Restated
                           ----------- -- ----------- -- -----------

                                                    
FON Net income               $  1,850         $    -       $  1,850
Diluted earnings per FON
  common share                   2.06              -           2.06
Basic earnings per FON
  common share                   2.07              -           2.07
PCS Net loss                     (182)             2           (180)
Diluted and basic loss per
  PCS common share              (0.18)             -          (0.18)



--------------------------------------------------------------------------------
4.  Investments
--------------------------------------------------------------------------------

At March 31, 2004, Sprint carried $483 million in investment asset value: $110
million was included in "Current assets--other" and $373 million in "Other
assets" on the Consolidated Balance Sheets.

At December 31, 2003, Sprint carried $548 million in investment asset value:
$125 million was included in "Current assets--other" and $423 million in "Other
assets" on the Consolidated Balance Sheets.

The material investment types and amounts include:

Investments in Debt Securities

During the second half of 2003, Sprint invested in marketable debt securities.
Interest on these investments is reinvested and recognized in "Other, net" in
the Consolidated Statements of Operations. Sprint recognized approximately $2
million of interest income on these investments in the 2004 first quarter.
Accumulated unrealized holding gains (losses) were immaterial in the 2004 first
quarter. At March 31, 2004, investments in marketable debt securities totaled
$505 million of which $110 million was included in "Current assets - Other" and
$159 million, with maturities of less than five years, was included in "Other
assets" on the Consolidated Balance Sheets. The remaining $236 million have
original or remaining maturities at purchase of less than 90 days and were
included in "Cash and equivalents."

At December 31, 2003, investments in marketable debt securities totaled $503
million of which $125 million was included in "Current assets - Other" and $177
million was included in "Other assets" on the Consolidated Balance Sheets. The
remaining $201 million had original or remaining maturities at purchase of less
than 90 days and were included in "Cash and equivalents."

Investments in Equity Securities

The cost of investments in marketable equity securities, primarily made up of
EarthLink common stock, was $132 million and $134 million at the end of the 2004
first quarter and 2003 year-end, respectively. Accumulated unrealized holding
gains were $23 million (net of $15 million tax) and $38 million (net of $23
million tax) at the end of the 2004 first quarter and 2003 year-end,
respectively. Both gains and losses were included in "Accumulated other
comprehensive income" on the Consolidated Balance Sheets.

At the end of the 2004 first quarter, Sprint held 18.9 million shares of
EarthLink common stock, which were reflected in "Other assets" on the
Consolidated Balance Sheets. These shares were hedged with variable prepaid
forward contracts, maturing from November 2004 to November 2005. See Note 11 for
additional information.

Equity Method Investments

At the end of the 2004 first quarter and at year-end 2003, investments accounted
for using the equity method consisted primarily of Sprint's investment in Virgin
Mobile, USA, LLC (Virgin Mobile, USA). These investments were reflected in 
"Other assets" on the Consolidated Balance Sheets. Certain other equity method
investments were carried at zero value.



Virgin Mobile, USA

Sprint's investment in Virgin Mobile, USA was $31 million at the end of the 2004
first quarter and $41 million at year-end 2003. This joint venture with the
Virgin Group was originally entered into in the 2001 fourth quarter to market
wireless services, principally to youth and pre-pay segments. Virgin Mobile, USA
launched services in June 2002. In the 2002 second quarter, Sprint entered into
a new agreement with Virgin Group for funding of Virgin Mobile, USA. Under the
terms of the agreement, Sprint agreed to fund up to $150 million, with the
majority in the form of discounted network services and the remainder in cash,
and the Virgin Group agreed to fund up to $150 million in cash. As of March 31,
2004, Sprint had satisfied 100% of this cash funding commitment and
approximately 80% of the network services contribution. Additionally, in the
2003 third quarter, Sprint's board of directors authorized additional cash
funding for the joint venture in the amount of $30 million, of which $22 million
had been provided to the joint venture as of March 31, 2004.

In the 2003 third quarter, a Sprint subsidiary agreed to guarantee a $20 million
term-loan facility entered into by Virgin Mobile, USA to fund working capital
needs. The facility expires on December 31, 2004. If required to perform,

Sprint would acquire Virgin  Mobile,  USA's  subscriber  base. The fair value of
this guarantee was recorded in "Current liabilities - Other" on the Consolidated
Balance Sheets in the amount of $5 million.

In the 2004 first quarter, Sprint's board of directors authorized additional
funding of approximately $22 million in the form of loans to the joint venture.
This line of credit remains undrawn.

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



                                                                      Quarters Ended
                                                                        March 31,
                                                           ----------------------------------
                                                                  2004             2003
                     ------------------------------------------------------------------------
                                                                      (millions)
                     Results of operations
                                                                              
                       Net operating revenues              $       295      $       231
                                                           ----------------------------------
                       Operating loss                      $       (30)     $       (14)
                                                           ----------------------------------
                       Net loss                            $       (46)     $       (31)
                                                           ----------------------------------

                     Equity in net losses of affiliates    $       (12)     $       (18)
                                                           ----------------------------------



--------------------------------------------------------------------------------
5.  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 owned and leased property and utility
easements. In the global markets division and the local division, a majority of
the leased property has no requirement for remediation at retirement. The leased
property of the PCS wireless division has potential remediation requirements.
Sprint expects to maintain its property as a necessary component of
infrastructure required to maintain operations or FCC licensing. Sprint
estimates the liability presently required associated with the ultimate
satisfaction of those requirements to be immaterial.

Adoption of SFAS No. 143 affected the cost of removal historically recorded by
the 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, Sprint 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.



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

Sprint Transformation

In the 2003 fourth quarter, Sprint recognized charges from its organizational
redesign initiatives. The restructuring is a company wide effort to create a
more customer focused organization (Sprint Transformation - 2003). This decision
resulted in pre-tax charges of $59 million in the 2003 fourth quarter and $24
million in the 2004 first quarter consisting of severance costs associated with
work force reductions.

In the 2004 first quarter, Sprint continued its transformation initiatives in an
effort to create a more efficient cost structure (Sprint Transformation - 2004).
These decisions resulted in a $4 million pre-tax charge in the 2004 first
quarter for severance costs associated with work force reductions.


In connection with its transformation efforts, Sprint expects the aggregate
pre-tax charges not to exceed $90 million. Additional charges for employee
termination costs will be recorded in subsequent periods and will impact all of
Sprint's divisions. The severance charges are associated with the involuntary
separation of approximately 2,550 employees. As of March 31, 2004, approximately
1,750 of the employee separations had been completed.

Other Restructuring Activity

In the 2003 fourth quarter, Sprint announced the termination of the development
of a new billing platform (PCS Billing Platform Termination). These decisions
resulted in pre-tax charges of $351 million in the 2003 fourth quarter. The
charge for asset impairments was $339 million and the remaining $12 million was
accrued for other contractual obligations.

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 $376 million in 2003 and $2 million in the 2004 first quarter. The
aggregate charge for asset impairments was $316 million, the aggregate charge
for employee terminations was $16 million and the remaining $46 million was
accrued for facility lease terminations. 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. The severance charges are associated with the
involuntary employee separation of approximately 600 employees. As of March 31,
2004, approximately 500 of the employee separations had been completed. Sprint
expects the aggregate pre-tax charge to be approximately $440 million. Sprint
expects to pay the majority of severance and other exit costs in the next three
months.

This activity is summarized as follows:



-------------------------------------- --- ------------------- -- ----------------------------- --- ----------------
                                                                         2004 Activity
                                                                  -----------------------------
                                           December 31, 2003      Restructuring        Cash         March 31, 2004
                                           Liability Balance         Charge          Payments          Liability
                                                                                                        Balance
-------------------------------------- --- ------------------- -- -------------- -- ----------- --- ----------------
                                                                        (millions)
Restructuring Events
   Sprint Transformation - 2004
                                                                                              
     Severance                          $          -           $        4        $      -        $          4
   Sprint Transformation - 2003
     Severance                                    54                   24              24                  54
   PCS Billing Platform Termination
     Other exit costs                             12                    -              10                   2
   Global Markets Web Hosting
        Wind-down
     Severance                                     6                    1               1                   6
     Other exit costs                             45                    1               1                  45
-------------------------------------- --- ------------------- -- -------------- -- ----------- --- ----------------

Total                                   $        117           $       30        $     36        $        111
                                       --- ------------------- -- -------------- -- ----------- --- ----------------


Other Asset Impairments

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



--------------------------------------------------------------------------------
7.  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.




                                                                     Quarters Ended March 31,
                                                                  - -------------- - -------------
                                                                        2004             2003
                                                                    (as restated)    (as restated)
             ---------------------------------------------------- - -------------- - -------------
                                                                    (millions, except per share
                                                                               data)
                                                                                    
             Net income, as reported                              $      225       $     1,670
              Add:  Stock-based employee compensation expense
                included in reported net income, net of related
                tax effects                                               13                 -
              Deduct:  Total stock-based employee compensation
                expense determined under fair value based
                method for all awards, net of related tax
                effects                                                  (28)              (34)
             ---------------------------------------------------- - -------------- - -------------

             Pro forma net income                                 $      210       $     1,636
                                                                  - -------------- - -------------

             Earnings per common share:
                Basic - as reported                               $     0.16       $      1.18
                                                                  - -------------- - -------------
                Basic - pro forma                                 $     0.15       $      1.16
                                                                  - -------------- - -------------

                Diluted - as reported                             $     0.16       $      1.18
                                                                  - -------------- - -------------
                Diluted - pro forma                               $     0.14       $      1.16
                                                                  - -------------- - -------------



Sprint recognized pre-tax charges of $21 million in the 2004 first quarter and
$1 million in the 2003 first quarter related to stock-based grants issued after
December 31, 2002 and grants of restricted stock made in 2002 and previous
years.

--------------------------------------------------------------------------------
8.  Employee Benefit Information
--------------------------------------------------------------------------------

The net periodic benefit cost consisted of the following:




                                                       Pension Benefits                  Other Benefits
                                                 ------------------------------   ------------------------------
                                                        Quarters Ended                   Quarters Ended
                                                           March 31,                        March 31,
                                                 ---------------------------------------------------------------
                                                     2004            2003             2004            2003
----------------------------------------------------------------------------------------------------------------

                                                                                            
  Service cost                                 $       36      $       32      $         4      $         4
  Interest cost                                        62              58               15               16
  Expected return on plan assets                      (76)            (69)              (1)              (1)
  Amortization of transition (asset)                   (1)             (1)               -                -
  obligation
  Amortization of prior service cost                    4               4              (12)             (11)
  Amortization of net loss                             21               8                8                8
----------------------------------------------------------------------------------------------------------------

  Net benefit expense                          $       46      $       32      $        14      $        16
                                               -----------------------------------------------------------------



Sprint contributed $300 million to the pension trust on January 27, 2004. This
is the only contribution expected to be made during the year.

In the 2004 first quarter, Sprint amended certain retiree medical plans to
standardize the plan design effective January 1, 2005, eliminating differences
in benefit levels. These amendments decreased the accumulated 



postretirement   benefit  obligation  (APBO)  related  to  other  postretirement
benefits  by  approximately  $35  million,  and  decreased  the 2004 net benefit
expense by $5 million,  of which  approximately $1 million was recognized in the
2004 first quarter.

As a result of these amendments, Sprint also recognized the effects of the
Medicare Prescription Drug, Improvement and Modernization Act (the Act) signed
into law on December 8, 2003. The Act contains a subsidy to employers who
provide prescription drug coverage to retirees that is actuarially equivalent to
Medicare Part D. Analysis of Sprint's retiree prescription drug claims data
determined that Sprint's retiree prescription drug benefit was actuarially
equivalent. In estimating the effects of the Act, estimates of participation
rates and per capita claims costs were not changed. The effect of recognizing
the federal subsidy related to the Act was a $3 million reduction in the net
benefit cost in the 2004 first quarter and a $73 million reduction in the APBO.

--------------------------------------------------------------------------------
9.  Litigation, Claims and Assessments
--------------------------------------------------------------------------------

In March 2004, eight purported class action lawsuits relating to the
recombination of the tracking stocks were filed against Sprint and its directors
by PCS common stockholders. Seven of the lawsuits were consolidated in the
District Court of Johnson County, Kansas. The eighth, pending in New York, has
been voluntarily stayed. The lawsuits allege breach of fiduciary duty in
connection with the recombination and seek monetary damages.

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. In 2001,
Sprint accrued for the estimated settlement costs of these suits.

In July 2002, the Federal Communications Commission (FCC) 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 Corporation 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 was affirmed by the D.C. Circuit
Court of Appeals. Management believes adequate provisions have been recorded in
the results of operations.

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. In
November 2003, a consolidated amended complaint was filed, naming additional
officers and directors and Fidelity Management, the plan trustee, as defendants.
In December 2003, two additional complaints, making identical allegations, were
filed. These lawsuits have been consolidated before a single judge. 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 more than 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.

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 or its business segments.



--------------------------------------------------------------------------------
10. 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:



                                                                                    Quarters Ended
                                                                                       March 31,
                                                                          ------------------------------------
                                                                                  2004              2003
                                                                              (as restated)     (as restated)
             ------------------------------------------------------------ --- -------------- -- --------------
                                                                                      (millions)

                                                                                               
             Income tax expense at the federal statutory rate             $        130       $        56
             Effect of:
                State income taxes, net of federal income tax effect                12                 8
                Other, net                                                           5                (3)
             ------------------------------------------------------------ --- -------------- -- --------------

             Income tax expense                                           $        147       $        61
                                                                          --- -------------- -- --------------

             Effective income tax rate                                            39.5%             38.1%
                                                                          --- -------------- -- --------------



--------------------------------------------------------------------------------
11.  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 and option 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. Interest rate swap agreements that are
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. Interest rate swap agreements
designated as cash flow hedges 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 and option contracts in foreign currencies to reduce the impact of
changes in foreign exchange rates. Sprint's primary transaction exposure results
from net payments made to and received from overseas telecommunications
companies for completing international calls made by Sprint's domestic customers
and the operation of its international subsidiaries.

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. Sprint held only fair-value hedges during 2003 and the 2004 first quarter.



Sprint recorded a $26 million increase in the 2004 first quarter 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" on the Consolidated
Balance Sheets. As the swaps have been deemed perfectly effective, an offset was
recorded to the underlying long-term debt.

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 both the
2004 and 2003 first quarters.

Net Purchased Equity Options

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

Sprint recorded an $11 million after-tax increase to other comprehensive income
in the 2004 first quarter resulting from gains on these 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.

Credit Forward Contracts

Sprint held fair value hedges in credit forward contracts during the 2003 first
quarter to hedge changes in fair value of certain debt issues. 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 first
quarter on this investment. The contracts matured in the 2003 third quarter.

Foreign Currency Forward and Option Contracts

Foreign currency forward and option contracts held during the periods were not
designated as hedges as defined in SFAS No. 133 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 both
periods presented.

Concentrations of Credit Risk

Sprint's accounts receivable are not subject to any concentration of credit
risk. Sprint controls credit risk of its interest rate swap agreements and
foreign currency contracts through credit approvals, dollar exposure limits and
internal monitoring procedures. In the event of nonperformance by the
counterparties, Sprint's accounting loss would be limited to the net amount it
would be entitled to receive under the terms of the applicable interest rate
swap agreement or foreign currency contract. However, Sprint does not anticipate
nonperformance by any of the counterparties to these agreements.

--------------------------------------------------------------------------------
12.  Discontinued Operation
--------------------------------------------------------------------------------

In the 2003 first quarter, Sprint sold its directory publishing business to R.H.
Donnelley for $2.23 billion in cash. The sale closed on January 3, 2003. In the
2003 first quarter, Sprint recognized a pretax gain of $2.13 billion, $1.31
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. Included in "Discontinued Operations, net" in the 2003 first quarter
Consolidated Statements of Operations was $5 million of previously reported "Net
operating revenues" and "Income from continuing operations before income taxes."



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

Supplemental Cash Flows Information

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




                                                                                  Quarters Ended
                                                                                     March 31,
                                                                        -- ------------- -- -------------
                                                                               2004             2003
                                                                          (as restated)     (as restated)
                    --------------------------------------------------- -- ------------- -- -------------
                                                                                   (millions)
                                                                                          
                    Interest (net of capitalized interest)              $      386       $      425
                                                                        -- ------------- -- -------------
                    Income taxes                                        $       (1)      $        9
                                                                        -- ------------- -- -------------



Sprint's non-cash activities included the following:



                                                                                  Quarters Ended
                                                                                     March 31,
                                                                        -- ------------- -- -------------
                                                                               2004             2003
                    --------------------------------------------------- -- ------------- -- -------------
                                                                                   (millions)
                    Common stock issued under Sprint's employee
                                                                                           
                       benefit stock plans                              $        -       $         6
                                                                        -- ------------- -- -------------
                    Settlement of shareholder suit                      $        5       $         -
                                                                        -- ------------- -- -------------



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

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

Sprint manages its segments to the operating income level of reporting. Items
below operating income are held at a corporate level. The reconciliation from
operating income to net income is shown on the face of the Consolidated
Statements of Operations.

Segment financial information was as follows:




----------------------------------------------------------------------------------------------------------------
                              PCS
                            Wireless
                            Division       Global                                     Corporate    Consolidated
Quarters Ended                (as          Markets        Local                          and           (as
March 31,                  restated)      Division       Division      Other(1)     Eliminations(2)  restated)
----------------------------------------------------------------------------------------------------------------
                                                              (millions)
2004
                                                                                       
Net operating revenues  $   3,437      $   1,912     $    1,506     $     196     $    (344)      $    6,707
Affiliated revenues             4            169             56           115          (344)               -
Operating income (loss)       277             11            446            (8)           (2)             724

2003
Net operating revenues  $   2,947      $   2,046     $    1,532     $     187     $    (373)      $    6,339
Affiliated revenues             3            193             52           125          (373)               -
Operating income (loss)       158              4            462           (10)           (2)             612
----------------------------------------------------------------------------------------------------------------



(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 12 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
     wireless division for resale to PCS customers and for internal business
     use, Caller ID services provided by the local division to the PCS wireless
     division and handset purchases from the PCS wireless division.





Net operating revenues by product and services were as follows:




----------------------------------------------------------------------------------------------------------------------
                                         PCS        Global
Quarters Ended                         Wireless     Markets      Local
March 31,                              Division     Division    Division     Other(1)  Eliminations(2)(3) Consolidated
----------------------------------------------------------------------------------------------------------------------
                                                                        (millions)
2004
                                                                                             
Voice                                $       -   $   1,186    $    1,147   $       -   $    (196)       $    2,137
Data                                         -         452           195           -         (19)              628
Internet                                     -         223             -           -          (3)              220
Wireless services                        3,437           -             -           -          (3)            3,434
Other                                        -          51           164         196        (123)              288
                                     ----------------------------------------------------------------------------------
Total net operating revenues         $   3,437   $   1,912    $    1,506   $     196   $    (344)       $    6,707
                                     ----------------------------------------------------------------------------------


2003
Voice                                $       -   $   1,293    $    1,183   $       -   $    (242)       $    2,234
Data                                         -         462           173           -           -               635
Internet                                     -         243             -           -           -               243
Wireless services                        2,947           -             -           -          (3)            2,944
Other                                        -          48           176         187        (128)              283
                                     ----------------------------------------------------------------------------------
Total net operating revenues         $   2,947   $   2,046    $    1,532   $     187   $    (373)       $    6,339
                                     ----------------------------------------------------------------------------------



(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 12 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
     wireless division for resale to PCS customers and for internal business
     use, Caller ID services provided by the local division to the PCS wireless
     division and handset purchases from the PCS wireless division.

(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.  Subsequent Events
--------------------------------------------------------------------------------

Dividend Declaration

On April 20, 2004, Sprint's board of directors declared a dividend of 12.5 cents
per share on the FON common stock to shareholders of record at the close of
business, June 9, 2004. The dividend will be paid June 30, 2004.

Debt Extinguishment

In May 2004, Sprint repurchased $750 million aggregate principal amount of its
6.0% equity unit senior notes, scheduled to mature August 17, 2006, from a
single noteholder. Upon completion of this transaction, $975 million aggregate
principal amount of these notes remains outstanding.




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

--------------------------------------------------------------------------------
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 and retention, pricing, operating costs, 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 any 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; 
        o adverse change in the ratings afforded our debt securities by
          ratings agencies; 
        o the ability of the PCS wireless division to continue to grow
          a significant market presence;
        o the ability of the PCS wireless division to continue to improve
          profitability; 
        o the ability of the global markets division and the local division to
          improve cash flow generation;
        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 of financial difficulties of third-party affiliates on the
          PCS wireless division's network coverage; 
        o the uncertainties related to Sprint's investments in networks, systems
          and other businesses; 
        o the uncertainties related to the implementation of Sprint's
          business strategies, including our initiative to realign
          services to enhance the focus on business and consumer customers;
        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 (WLNP) on the PCS 
          wireless division's growth and churn rates, revenues and expenses;
        o the risk of equipment failure, natural disasters, terrorist acts, or
          other breaches of network or information technology security;
        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 2003 Form 10-K/A, and you are encouraged to review these filings.



--------------------------------------------------------------------------------
Overview
--------------------------------------------------------------------------------

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. Sprint currently serves approximately 7.9 million
access lines in its franchise territories in 18 states. Additionally, Sprint
provides local service using its facilities, leased facilities or unbundled
network elements provided by other carriers in a total of 36 states and the
District of Columbia. Sprint is selling into the cable telephony market through
arrangements with cable companies that resell Sprint long distance service and
use Sprint back office systems and network assets in support of their local
telephone service provided over cable facilities. Sprint also operates a 100%
digital PCS wireless network with licenses to provide service to the entire
United States population, including Puerto Rico and the U.S. Virgin Islands,
using a single frequency band and a single technology. The PCS wireless
division, together with third party affiliates, operates PCS systems in over 300
metropolitan markets, including the 100 largest U.S. metropolitan areas. The PCS
wireless division service, including third party affiliates, reaches a quarter
billion people. The PCS wireless division, combined with our wholesale and
affiliate partners, served more than 21 million customers at the end of the 2004
first quarter.

Sprint operates in an industry that has been and continues to be subject to
consolidation and dynamic change. Therefore, Sprint routinely reassesses its
business strategies. Due to changes in telecommunications, including
bankruptcies, over-capacity and the current economic environment, 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 PCS
wireless division, the global markets division and the local division.

In the 2003 fourth quarter, Sprint undertook an initiative to realign internal
resources. This effort was 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 taking into consideration the re-aligned customer-focused
approach.

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.



Elimination of Tracking Stocks

On April 23, 2004, Sprint recombined its two tracking stocks. Each share of PCS
common stock automatically converted into 0.5 shares of FON common stock. As of
April 23, 2004, the FON Group and the PCS Group no longer exist, and FON common
stock represents all of the operations and assets of Sprint, including the PCS
wireless division, the global markets division and the local division.

FON common stock and PCS common stock were intended to reflect the financial
results and economic value of the FON and PCS Groups. However, they were classes
of common stock of Sprint, not of the group they were intended to track.
Accordingly, FON and PCS shareholders were each 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 did not represent a
direct legal interest in the assets and liabilities allocated to either group,
but rather represented a direct equity interest in Sprint assets and liabilities
as a whole.

Restatement of Previously Issued Financial Statements

During a review of internal controls relating to its capital assets, Sprint
identified, in the 2004 third quarter, a calculation error that had resulted,
since 1999, in the overstatement of interest capitalized during the construction
of its Wireless capital assets, with a corresponding understatement of interest
expense. The error subsequently resulted in an overstatement of depreciation
expense after the associated capital assets were placed in service. While Sprint
believes the impacts of this calculation error are not material to any
previously issued financial statement, Sprint determined that this calculation
error was most appropriately corrected through restatement of previously issued
financial statements. The following discussion reflects this restatement. See
Note 3 of the Condensed Notes to Consolidated Financial Statements for
additional information.


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

Consolidated

Net operating revenues increased 6% to $6.7 billion in the 2004 first quarter
compared to $6.3 billion in the same 2003 period reflecting growth in the PCS
wireless division's revenues partially offset by declining long distance voice
revenues in the global markets division.

Income from continuing operations increased to $225 million in the 2004 first
quarter compared to $99 million in the 2003 first quarter and includes the
after-tax impacts of the items discussed below.

In the 2004 first quarter, income from continuing operations included a $19
million charge related to severance costs associated with Sprint's
transformation and the wind-down of its web hosting business, as well as $9
million in advisory fees associated with the recombination of the tracking
stocks.

In the 2003 first quarter, income from continuing operations included 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.

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

PCS Wireless Division

The PCS wireless division operates a 100% digital PCS wireless network with
licenses to provide service to the entire United States population, including
Puerto Rico and the U.S. Virgin Islands, using a single frequency band and a
single technology. The PCS wireless division, together with third party
affiliates, operates PCS systems in over 300 metropolitan markets, including the
100 largest U.S. metropolitan areas. The PCS wireless division's service,
together with third party affiliates, reaches a quarter billion people. The PCS
wireless division combined with our wholesale and affiliate partners served more
than 21 million customers at the end of the 2004 first quarter. The PCS wireless
division 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
          transmission  bits,  sending a scrambled  transmission  of the encoded
          information over the air and reassembling the speech and data 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's third generation (3G) 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(TM),"
allows consumer and business customers to use their Vision-enabled PCS devices
to exchange instant messages, 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 wireless division supplements its own network through affiliation
arrangements with other companies that use CDMA. Under these arrangements, these
companies offer PCS services using Sprint's spectrum 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 or have
completed restructuring activities. Two affiliates have filed for bankruptcy
protection and one of them continues to pursue claims against Sprint in the
bankruptcy court. One other affiliate has filed suit against us. Several of the
affiliates are disputing and refusing to pay amounts owed to Sprint. 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.

Sprint has reached agreements with several of its affiliates, including two of
the largest who have completed restructuring activities. Sprint has amended the
existing agreements to provide for a simplified pricing mechanism, as well as
refining and changing various business processes. The amended agreements cover
nearly 50% of the customers served by all affiliates. 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, the
agreements settled all significant outstanding disputes.

The PCS wireless division 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 wireless division affiliates cease operations, the PCS wireless division
may incur roaming charges in areas where service was previously provided by the
affiliates and costs to meet FCC buildout and renewal requirements, as well as
experience lower revenues.

The PCS wireless division also provides wireless services to companies that
resell wireless 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 (Qwest) whereby Qwest wireless subscribers
will use Sprint's national PCS network and have access to Sprint-branded PCS
Vision data services. Qwest will continue to provide sales and service support
to its wireless customers, including the promotion and sale of handsets and
price plans, as well as provide 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 wireless division. Qwest
began adding new customers in the 2004 first quarter. The transition of existing
customers will begin in the 2004 second quarter and is expected to be complete
by year-end.

The PCS wireless division also includes its investment in Virgin Mobile, USA, a
joint venture to market wireless services, principally to youth and pre-pay
segments.






                                                                    Selected Operating Results
                                               ---------------------------------------------------------------------
                                                        Quarters Ended
                                                           March 31,                            Variance
                                               ----------------------------------    -------------------------------
                                                    2004              2003                $               %
(millions)                                      (as restated)    (as restated)
---------------------------------------------- ---------------- ----------------- -- ------------- -----------------

                                                                                               
Net operating revenues                         $    3,437       $    2,947        $       490            16.6%
---------------------------------------------- -- ------------- -- -------------- -- -------------

Operating expenses
   Costs of services and products                   1,744            1,448                296            20.4%
   Selling, general and administrative                768              731                 37             5.1%
   Depreciation                                       644              600                 44             7.3%
   Restructuring and asset impairment                   4               10                 (6)          (60.0)%
---------------------------------------------- -- ------------- -- -------------- -- -------------

Total operating expenses                            3,160            2,789                371            13.3%
---------------------------------------------- -- ------------- -- -------------- -- -------------

Operating income                               $      277       $      158        $       119            75.3%
                                               -- ------------- -- -------------- -- -------------

Capital expenditures                           $      406       $      181        $       225           124.3%
                                               -- ------------- -- -------------- -- -------------



The PCS wireless division 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 21.4% of net operating revenues in the 2004 first
quarter compared to 22.8% for the same 2003 period.



Net Operating Revenues


                                                                      Quarters Ended
                                                                        March 31,
                                                           ----------------------------------
                                                                  2004             2003
                     ------------------------------------------------------------------------

                     Customers
                                                                                
                        (millions)                                  16.3             15.0
                                                           ----------------------------------
                     Average monthly service revenue per
                        user (ARPU)                        $          61    $          59
                                                           ----------------------------------
                     Customer churn rate                             2.9%             3.1%
                                                           ----------------------------------



Average monthly service revenue per user (ARPU) is calculated by dividing
wireless service revenues by weighted average monthly wireless subscribers to
measure revenue on a per user basis. This is a measure which uses GAAP as the
basis for the calculation. ARPU, which is used by most wireless companies, is a
method of valuing the recurring activity by measuring revenue on a per user
basis. Analysts and investors primarily use ARPU to compare relative value
across the wireless industry.

Net operating revenues include service revenues and revenues from sales of
handsets and accessory equipment. 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 14.2% in the 2004 first quarter period from the same 2003
period reflecting an increase in the number of customers, increased revenues
from data services, customer elections to add services to their base plans and
increased fees. These increases were partially offset by lower overage charges
from usage-based plans. Average monthly usage in the 2004 first quarter was
approximately 15 hours per month, an increase of more than three hours when
compared to the 2003 first quarter. At the end of the period 38% of the customer
base was subscribing to data services compared to approximately 25% at the end
of the 2003 first quarter.



The PCS wireless division had 414,000 post-paid retail additions in the 2004
first quarter, ending the period with approximately 16.3 million customers
compared to approximately 15.0 million customers at the end of the 2003 first
quarter. Resellers added 420,000 customers in the first quarter of 2004, which
increased their customer base to 2.0 million, principally due to Virgin Mobile,
USA. The PCS wireless division third party affiliates added 138,000 customers in
the first quarter of 2004. This brings the total number of customers served on
the PCS and affiliate networks, including post-paid retail, affiliate and
wholesale customers, to more than 21.3 million at the end of the 2004 first
quarter. In the 2004 first quarter, more than half of new post-paid retail
customers chose to include PCS Vision in their service package.

Customer churn is calculated by dividing the customers who discontinued PCS
service by the weighted average subscribers for the period. This is an
operational measure which is used by most wireless companies as a method of
estimating the life of the customer. Analysts and investors primarily use churn
to compare relative value across the wireless industry. The customer churn rate
in the 2004 first quarter was 2.9% compared to 3.1% for the same 2003 period.
Improvement was due to effective customer retention programs, as well as credit
management policies. This improvement was partially offset by an increase in
voluntary churn due in part to the institution of WLNP in the 2003 fourth
quarter.

Revenues from sales of handsets and accessories, including new customers and
upgrades, were approximately 11.0% of net operating revenues in the 2004 first
quarter compared to 9.1% for the same 2003 period. The increase was mainly due
to higher customer additions and higher retail prices, which was partially
offset by higher rebates. As part of the PCS wireless division's marketing
plans, handsets, net of rebates, are normally sold at prices below the PCS
wireless division's cost.

Other service revenues consist primarily of net revenues retained from Sprint
PCS customers residing in PCS affiliate territories, and revenues from the sale
of PCS services to companies that resell those services to their customers on a
retail basis. Other revenues represented 3.5% of net operating revenues in the
2004 first quarter compared to 2.5% for the same 2003 period. These increases
mainly reflect net additions to the affiliate and wholesale customer base.

Costs of Services and Products

The PCS wireless division's costs of services and products mainly include
handset and accessory costs, switch and cell site expenses, customer service
costs and other network-related costs. These costs increased 20% in the 2004
first quarter from the same 2003 period. These increases were primarily due to
network support of a larger customer base, higher minutes of use and expanded
market coverage. Equipment costs also increased due to higher gross additions
and handset upgrades as well as a decline in availability of refurbished
handsets. These increases were somewhat offset by scale benefits resulting from
the increased customer base and decreases in information technology expense.
Handset and equipment costs were 41% of total costs of services and products in
the 2004 first quarter compared to 40% for the same 2003 period. Costs of
services and products were 50.7% of net operating revenues in the 2004 first
quarter compared to 49.1% for the same 2003 period.

Selling, General and Administrative

Selling, General and Administrative (SG&A) expense mainly includes marketing
costs to promote products and services, as well as related salary and benefit
costs. SG&A expense increased 5% in the 2004 first quarter from the same 2003
period reflecting an increase in marketing, sales and distribution costs
primarily driven by higher gross post-paid retail additions and an increase in
the number of our own retail stores. This increase was offset by a decline in
bad debt expense due to a better credit class mix, leading to lower write-offs
and higher recovery. SG&A expense was 22.3% of net operating revenues in the
2004 first quarter compared to 24.8% for the same 2003 period. Bad debt expense
as a percentage of net revenues was 1.1% in the 2004 first quarter compared to
3.0% in the same 2003 period. Reserve for bad debt as a percent of outstanding
accounts receivable was 6.8% at the end of the 2004 first quarter and 7.3% at
year-end 2003. This improvement was mainly driven by lower involuntary churn and
improved cash collections.

Depreciation

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 expense consists mainly of depreciation of
network assets.



Depreciation expense increased 7% in the 2004 first quarter from the same 2003
period due to an increase in the network asset investment during 2003 and the
2004 year-to-date period. Depreciation expense was 18.7% of net operating
revenues in the 2004 first quarter compared to 20.4% for the same 2003 period.

Restructuring and Asset Impairment

In the first quarter of 2004, the PCS wireless division recorded a $4 million
restructuring charge representing severance associated with Sprint's
transformation to a customer-focused organizational design.

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

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. Additionally, the
global markets division provides local service using Sprint's facilities, leased
facilities or unbundled network elements provided by other carriers in a total
of 36 states and the District of Columbia. The global markets division is
selling into the cable telephony market through arrangements with cable
companies that resell Sprint long distance service and use Sprint back office
systems and network assets in support of their local telephone service provided
over cable facilities. 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 using Multichannel Multipoint Distribution Services (MMDS) technology.
Sprint is focusing its efforts in the use of MMDS technology on a broad range of
alternative strategies. Sprint is continuing to optimize its spectrum portfolio,
is monitoring technology and industry developments, and is involved in efforts
to achieve favorable regulatory rulings with respect to this spectrum.



                                                                    Selected Operating Results
                                               ---------------------------------------------------------------------
                                                        Quarters Ended
                                                           March 31,                            Variance
                                               ----------------------------------    -------------------------------
(millions)                                          2004              2003                $               %
---------------------------------------------- ---------------- ----------------- -- ------------- -----------------

Net operating revenues
                                                                                               
   Voice                                       $     1,186      $     1,293       $      (107)          (8.3)%
   Data                                                452              462               (10)          (2.2)%
   Internet                                            223              243               (20)          (8.2)%
   Other                                                51               48                 3            6.3%
---------------------------------------------- -- ------------- -- -------------- -- -------------

Total net operating revenues                         1,912            2,046              (134)          (6.5)%
---------------------------------------------- -- ------------- -- -------------- -- -------------

Operating expenses
   Costs of services and products                    1,053            1,106               (53)          (4.8)%
   Selling, general and administrative                 516              575               (59)         (10.3)%
   Depreciation                                        320              361               (41)         (11.4)%
   Restructuring and asset impairment                   12                -                12             NM
---------------------------------------------- -- ------------- -- -------------- -- -------------

Total operating expenses                             1,901            2,042              (141)          (6.9)%
---------------------------------------------- -- ------------- -- -------------- -- -------------

Operating income                               $        11      $         4       $         7             NM
                                               -- ------------- -- -------------- -- -------------

Capital Expenditures                           $        56      $        61       $        (5)          (8.2)%
                                               -- ------------- -- -------------- -- -------------


NM = Not meaningful




Net Operating Revenues

Net operating revenues decreased 6.5% in the 2004 first quarter from the same
2003 period. The overall revenue decrease is in large part due to the decline in
voice revenues.

Voice Revenues

Voice revenues decreased 8% in the 2004 first quarter from the same 2003 period
due to a decline in consumer voice revenues resulting from wireless, e-mail and
instant messaging substitution, aggressive competition from Regional Bell
Operating Companies (RBOCs) for consumer and small business customers and
aggressive pricing by traditional interexchange carriers and the RBOCs for
enterprise customers. Minute volume increased 9% in the 2004 first quarter
compared to the 2003 first quarter.

Data Revenues

Data revenues decreased 2% in the 2004 first quarter from the same 2003 period.
The decrease is driven by declines in frame relay, private line services and ATM
partially offset by an increase in managed network services.

Internet Revenues

Internet revenues decreased 8% in the 2004 first quarter from the same 2003
period. The decline was mainly driven by a decrease in dial IP and web hosting
services, somewhat offset by an increase in dedicated IP. Sprint made the
decision to exit the web hosting business in the 2003 second quarter.

Other Revenues

Other revenues increased 6% in the 2004 first quarter from the same 2003 period.
The increase was primarily due to higher 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 5% in the 2004 first quarter from the same 2003 period. The decrease
was due to FCC-mandated access rate reductions, favorable carrier access
settlements, and initiatives to reduce access unit costs. Costs of services and
products for the global markets division were 55.1% of net operating revenues in
the 2004 first quarter compared to 54.1% for the same period a year ago.

Selling, General and Administrative

SG&A expenses decreased 10% in the 2004 first quarter from the same 2003 period.
The decline was due to reduced bad debt provisions, restructuring efforts, and
general cost controls. SG&A expense was 27.0% of net operating revenues in the
2004 first quarter compared to 28.1% for the same period 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 1.3% in the 2004 first quarter
compared to 2.4% for the same 2003 period. 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 9.8% at the end of the 2004 first quarter and 11.0% at year-end 2003.



Depreciation

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 expense decreased 11% in the 2004 first quarter
from the same period a year ago primarily driven by a decreased asset base due
to the asset impairments associated with the wind-down of the web hosting
business which occurred in the 2003 second quarter, as well as the extension of
the depreciable life of certain high-capacity transmission equipment from eight
years to twelve years due to slower anticipated evolution of technology and
limited physical deterioration. This extension in life decreased the 2004 first
quarter depreciation expense in the global markets division by approximately $25
million. Depreciation expense was 16.7% of net operating revenues in the 2004
first quarter compared to 17.6% for the same 2003 period.

Restructuring and Asset Impairment

In the 2004 first quarter, the global markets division recorded a $12 million
restructuring charge representing severance associated with Sprint's
transformation to a customer-focused organizational design and the wind-down of
the 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 in its franchise territories, sales of
telecommunications equipment, and other services within specified calling areas
to residential and business customers. The local division provides wireless
services to customers in its franchise territories through agency relationships.
DSL enables high speed transmission of data over existing copper telephone
lines.



                                                                    Selected Operating Results
                                               ---------------------------------------------------------------------
                                                        Quarters Ended
                                                          March 31,                             Variance
                                              -----------------------------------    -------------------------------
(millions)                                          2004              2003                $               %
--------------------------------------------- ----------------- ----------------- -- ------------- -----------------

Net operating revenues
                                                                                                
   Voice                                      $      1,147      $     1,183       $       (36)           (3.0)%
   Data                                                195              173                22            12.7%
   Other                                               164              176               (12)           (6.8)%
--------------------------------------------- --- ------------- -- -------------- -- -------------

Total net operating revenues                         1,506            1,532               (26)           (1.7)%
--------------------------------------------- --- ------------- -- -------------- -- -------------

Operating expenses
   Costs of services and products                      451              487               (36)           (7.4)%
   Selling, general and administrative                 327              318                 9             2.8%
   Depreciation                                        268              265                 3             1.1%
   Restructuring                                        14                -                14             NM
--------------------------------------------- --- ------------- -- -------------- -- -------------

Total operating expenses                             1,060            1,070               (10)           (0.9)%
--------------------------------------------- --- ------------- -- -------------- -- -------------

Operating income                              $        446      $       462       $       (16)           (3.5)%
                                              --- ------------- -- -------------- -- -------------

Operating margin                                      29.6%            30.2%
                                              --- ------------- -- --------------

Capital expenditures                          $        209      $       281       $       (72)          (25.6)%
                                              --- ------------- -- -------------- -- -------------

NM = Not meaningful




Net Operating Revenues

Net operating revenues decreased 2% in the 2004 first quarter from the same 2003
period. The decline was driven by lower voice revenue primarily due to fewer
access lines and lower consumer long distance services. Equipment sales also
contributed to the decrease. The local division ended the 2004 first 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 wireless and
broadband substitution, losses to competitive local providers, and the economic
environment. The reduction in access lines is expected to continue, although
Sprint expects its ongoing rate of line loss to be less than the loss rates
experienced by other major urban 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.

Voice Revenues

Voice revenues, derived from local exchange services, long distance revenue and
switched access revenue, decreased 3% in the 2004 first quarter from the same
2003 period due to a decrease in access lines, lower consumer long distance
revenue and the discontinuation of cost recovery related to local number
portability.

Data Revenues

Data revenues are mainly derived from DSL, local data transport services, and
special access. Data revenues increased 13% in the 2004 first quarter compared
to a year ago driven by strong growth in DSL lines.

Other Revenues

Other revenues decreased 7% in the 2004 first quarter from the same 2003 period
principally driven by lower equipment sales. The decrease in equipment sales was
primarily the result of a planned shift in focus to selling higher margin
products.

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 7% in the 2004 first
quarter compared to the same 2003 period. This decrease was mainly driven by
general expense controls and lower costs associated with equipment sales,
somewhat offset by higher pension costs. Costs of services and products were
29.9% of net operating revenues in the 2004 first quarter compared to 31.8% for
the same period a year ago.

Selling, General and Administrative

SG&A expense increased 3% in the 2004 first quarter compared to the same 2003
period. The increase was primarily due to higher pension costs and stock-based
compensation offset by lower bad debt expense and general expense controls. SG&A
expense was 21.7% of net operating revenues in the 2004 first quarter compared
to 20.8% for the same period 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 1.3% in the 2004 first quarter compared to 1.6% in the same period a year
ago resulting from improvements in collections and aging. Reserve for bad debt
as a percent of outstanding accounts receivable was 8.8% at the end of the 2004
first quarter and 8.5% at year-end 2003.

Depreciation

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 expense increased 1% in the 2004 first quarter
compared to the same 2003 period. Depreciation expense was 17.8% of net
operating revenues in the 2004 first quarter compared to 17.3% for the same
period a year ago.



Restructuring and Asset Impairment

In the 2004 first quarter, the local division recorded a $14 million
restructuring charge representing severance associated with Sprint's
transformation to a customer-focused organizational design.

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

Interest Expense

Sprint's effective interest rate on long-term debt was 6.9% in the 2004 first
quarter compared to 7.0% in the 2003 first 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 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, net

Other, net consisted of the following:




                                                                      Quarters Ended
                                                                        March 31,
                                                           ----------------------------------
                                                                  2004             2003
                     ------------------------------------------------------------------------
                                                                      (millions)
                                                                             
                     Dividend and interest income          $        9       $       14
                     Equity in net losses of affiliates           (12)             (18)
                     Losses from disposal of Property,
                        plant and equipment                         -               (1)
                     Amortization of debt costs                    (6)              (7)
                     Royalties                                      4                3
                     Litigation settlement                          -              (50)
                     Tracking stock recombination                 (15)               -
                     Other, net                                    (6)              (2)
                     ------------------------------------------------------------------------

                     Total                                 $      (26)      $      (61)
                                                           ----------------------------------



Equity in net losses of affiliates was driven by Sprint's investment in Virgin
Mobile, USA, in all periods presented.

Royalties are payments made to Sprint by Call-Net equaling 2.5% of Call-Net
gross revenues from telecommunication services.

In the 2003 first quarter, Sprint recorded a $50 million charge to settle
shareholder litigation.

In the 2004 first quarter, Sprint recorded $15 million in advisory fees relating
to the tracking stock recombination.

Income Taxes

See Note 10 of the 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 first quarter, Sprint recognized a
pretax gain of $2.13 billion, $1.31 billion after-tax gain. 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, Sprint 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
--------------------------------------------------------------------------------

Sprint's consolidated assets of $42.3 billion decreased $390 million in the 2004
first quarter. Cash and equivalents increased $304 million as operating cash
flows exceeded capital expenditures and dividend payments. Net property, plant,
and equipment decreased $631 million. Capital expenditures were more than offset
by depreciation expense in the 2004 year-to-date period.

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

Sprint's board of directors exercises discretion regarding the liquidity and
capital resource needs of Sprint's business segments. 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.

Operating Activities

Sprint's operating cash flows of $1.0 billion decreased $14 million in the 2004
first quarter from the same 2003 period. The 2004 decrease was mainly due to a
$300 million contribution to the pension trust in the 2004 first quarter, offset
by growth in the PCS wireless division.

Investing Activities

Sprint's cash flows used by investing activities, which consisted mainly of
capital expenditures, totaled $646 million in the 2004 first quarter compared to
$550 million a year ago. The PCS wireless division's capital expenditures were
incurred to increase capacity and coverage. Global markets division capital
expenditures were incurred mainly to maintain 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 our network from
circuit to packet switching, and continue the build-out of high-speed DSL
services and to meet federal, state and local regulatory requirements and
replace network and support assets. The overall increase in capital expenditures
in 2004 was driven mainly by the PCS wireless division.

Financing Activities

Sprint's cash flows used by financing activities totaled $88 million in the 2004
first quarter and $1.7 billion in the year ago period. Financing activities
include a $22 million reduction of debt in the 2004 first quarter compared with
a reduction of $1.6 billion in the same 2003 period. The debt reduction in the
2003 first quarter was mainly due to the tender for the 2003 and 2004 senior
notes and the prepayment of the global markets division accounts receivable
securitization. Sprint paid cash dividends of $116 million in the 2004 first
quarter compared with $114 million in the 2003 first quarter.



Capital Requirements

Sprint's 2004 investing activities, mainly consisting of capital expenditures,
are expected to total approximately $4.0 billion. These expenditures are
primarily for increased network capacity and coverage. They also include
investments for growth in demand for enterprise services, broadband initiatives
and the phased transition from circuit to packet switching. Sprint continues to
review capital expenditure requirements closely and will adjust spending and
capital investment in concert with growth. Dividend payments are expected to
approximate $670 million in 2004 including the impact of the recombination of
the tracking stocks in April 2004. Sprint expects overall cash from operations
to be $6.5 billion in 2004.

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 2004 to fund capital expenditures and operating requirements.

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 $124 million as of March 31, 2004.

Sprint has a PCS wireless division 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 $212 million was
available as of March 31, 2004.

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 March 31, 2004, Sprint had more than $497 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, including capital lease obligations, for the remainder of 2004
total approximately $570 million. Sprint's $2.7 billion cash balance at March
31, 2004, existing financing agreements, and expected 2004 cash flow from
operations more than fund these requirements.

Any borrowings Sprint may incur are ultimately limited by certain debt
covenants. On March 31, 2004, Sprint's most restrictive debt covenant would
allow an additional $6.7 billion of debt. Sprint is currently in compliance with
all debt covenants associated with its borrowings.

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. Given the
volatility in the markets, Sprint continues to monitor the markets closely and
to take steps to maintain financial flexibility and a reasonable capital
structure cost. Sprint currently plans to access the markets only for extension,
replacement or renewal of 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 2003, 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 March 31, 2004, 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 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 and from the operation of its international subsidiaries.
These international operations were not material to the consolidated financial
position at March 31, 2004 or results of operations or cash flows for the
quarter ended March 31, 2004. Sprint has not entered into any significant
foreign currency forward and option 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 agreements to
manage its exposure to interest rate changes on its debt.

Approximately 92% of Sprint's outstanding debt at March 31, 2004 is fixed-rate
debt, excluding interest rate swaps. 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 market conditions
are favorable.

As of March 31, 2004, Sprint held fair value interest rate swaps with a notional
value of $1 billion. These swaps were entered into as hedges of the fair value
of a portion of our senior notes. These interest rate swaps have maturities
ranging from 2008 to 2012. On a semiannual basis, Sprint pays a floating rate of
interest equal to the six-month LIBOR, plus a fixed spread, which averaged 4.1%
as of March 31, 2004, and received an average interest rate equal to the coupon
rates stated on the underlying senior notes of 7.2%. 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 $54 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
including interest rate swaps. These analyses indicate that a one percentage
point change in interest rates would have an annual pre-tax impact of $14
million on the Statements of Operations and Consolidated Statements of Cash
Flows at March 31, 2004. 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% decrease in market interest rates would cause a $533
million increase in fair market value of its debt to $20 billion. This analysis
includes the hedged debt, but excludes Sprint's equity unit notes.

Foreign Currency Risk

Sprint also enters into forward and option contracts in foreign currencies to
reduce the impact of changes in foreign exchange rates. Sprint uses foreign
currency derivatives to hedge its foreign currency payable related to settlement
of international telecommunications access charges and the operation of
international subsidiaries. The dollar equivalent of Sprint's net foreign
currency payables from international settlements was $40 million and net foreign
currency receivables from international operations was $25 million at March 31,
2004. 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 the
Form 10-Q and as of March 31, 2004, 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, as well as members of the financial accounting
and legal departments, 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 as of March 31, 2004 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 quarter ended March 31, 2004 that have materially affected, or are
reasonably likely to materially affect, Sprint's internal controls over
financial reporting.

During a review of internal controls relating to its capital assets, Sprint
identified, in the 2004 third quarter, a calculation error that had resulted,
since 1999, in the overstatement of interest capitalized during the construction
of its Wireless capital assets, with a corresponding understatement of interest
expense. The error subsequently resulted in an overstatement of depreciation
expense after the associated capital assets were placed in service. While Sprint
believes the impacts of this calculation error are not material to any
previously issued financial statement, Sprint determined that this calculation
error was most appropriately corrected through restatement of previously issued
financial statements.

This overstatement of capitalized interest resulted from the application of
interest capitalization rates to assets which were under construction, but had
not yet required the payment of cash or the incurrence of an interest-bearing
liability, and accordingly, were not incurring interest cost. SFAS No. 34,
Capitalization of Interest Costs, requires that assets under construction be
incurring interest cost through the payment of cash or incurrence of an
interest-bearing liability in order to qualify for interest capitalization.
Process changes have been instituted to appropriately exclude assets under
construction which are not incurring interest cost from the capitalized interest
calculation in the future.

See Note 3 of the Condensed Notes to Consolidated Financial Statements for the
impact of this restatement on previously issued financial statements.



                                                                        PART II.
                                                               Other Information

PART II. - Other Information

Item 1.  Legal Proceedings

         All of the purported class action lawsuits relating to the
         recombination of the tracking stocks filed in the District Court of
         Johnson County, Kansas that were reported in Sprint's 2003 Annual
         Report on Form 10-K have been consolidated in the District Court of
         Johnson County, Kansas. Two additional lawsuits were filed in Johnson
         County, Kansas and have also been consolidated. The previously reported
         lawsuit filed in the Supreme Court of the State of New York has been
         voluntarily stayed by the plaintiff. The plaintiff's withdrew their
         request for a preliminary injunction. The lawsuits allege breach of
         fiduciary duty in connection with the recombination and seek monetary
         damages.

         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 or
         its business segments.

Item 2.  Changes in Securities

         Bylaws Amendment

         On April 20, 2004, Sprint's board of directors amended Sprint's bylaws
         to specifically provide for continuation of indemnification for actions
         that occur before any amendment to or repeal of the indemnification
         provision contained in the bylaws. The amendment also clarifies and
         confirms that serving on an employee benefit plan committee is serving
         at the request of the corporation and therefore any committee member is
         entitled to indemnification under the bylaws.

         In addition, the board of directors amended Sprint's bylaws, effective
         April 23, 2004, to remove provisions relating to the Capital Stock
         Committee. The Capital Stock Committee was a committee of independent
         members of the board of directors that interpreted and supervised the
         implementation of the board's policies to address tracking stock
         issues.

         Shareholder Rights Plan Amendment

         In connection with the recombination of the tracking stocks, the board
         of directors amended Sprint's Rights Agreement, effective April 23,
         2004. The PCS group rights were converted into FON group rights, based
         on the conversion ratio, and the FON group rights were redesignated
         merely as "rights". The rights are now the same for all holders of
         Sprint common stock. These rights are the same as the FON group rights
         in existence before April 23, 2004.

         Articles Amendment

         In connection with the amendment to the Rights Agreement, the board of
         directors amended Sprint's Articles of Incorporation by adopting
         modified terms for the Preferred Stock-Sixth Series, which is the
         preferred stock that the holders of rights are entitled to purchase
         under certain circumstances if certain takeover events occur. The
         Preferred Stock - Sixth Series was the preferred stock that the holders
         of FON group rights were entitled to purchase if certain takeover
         events had occurred before the recombination of the tracking stocks. In
         addition, the board of directors authorized the elimination of the
         Preferred Stock - Eighth Series, which was the preferred stock that the
         holders of PCS group rights were entitled to purchase if certain
         takeover events had occurred before the recombination of the tracking
         stocks.



         Sale of Unregistered Equity Securities

         The settlement of the derivative action filed in 2000 by Amalgamated
         Bank, an institutional shareholder, included an award of attorney's
         fees to plaintiff's counsel in the form of 250,000 shares of FON common
         stock and 500,000 shares of PCS common stock. The settlement was
         approved by the court in December 2003, and the shares were issued in
         January 2004. Sprint reserved for these shares in the 2003 first
         quarter.

         The shares of common stock were not registered under the Securities Act
         of 1933. The common stock was exempt from registration under the
         Securities Act by the provisions of Section 3(a)(10) of the Securities
         Act.

         Issuer Purchases of Equity Securities


                                              --- ------------- -- -------------- -- ------------- -----------------
                                                                                        Total       
                                                                                      Number of       Maximum Number
                                                                                        Shares       (or Approximate
                                                                                      Purchased        Dollar Value)
                                                                                      as Part of      of Shares that
                                                     Total                             Publicly         May Yet Be
                                                   Number of          Average         Announced      Purchased Under
                                                     Shares         Price Paid         Plans or        the Plans or
          Period                                  Purchased(1)     Per Share(2)        Programs          Programs 
                                              --- ------------- -- -------------- -- ------------- -----------------

         January 1 through January 31
                                                                                            
              FON Stock                                   -                 -               -             -
              PCS Stock                                   -                 -               -             -

         February 1 through February 29
              FON Stock                               5,991     $      17.700               -             -
              PCS Stock                               6,383     $       8.850               -             -

         March 1 through March 31
              FON Stock                             156,730     $      17.555               -             -
              PCS Stock                             157,520     $       8.805               -             -



         (1)  All acquisitions of equity securities during the 2004 first
              quarter were the result of the operation of the terms of Sprint's
              shareholder approved equity compensation plans (the Management
              Incentive Stock Option Plan and the 1997 Long-Term Stock Incentive
              Program) and the terms of the equity grants pursuant to those
              plans, as follows: the forfeiture of restricted stock; the
              surrender of restricted stock to pay required minimum income,
              Medicare and FICA tax withholding on the vesting of restricted
              stock; and the delivery of previously owned shares owned by the
              grantee to pay additional income tax withholding on (i) the
              vesting of restricted stock, (ii) the delivery of shares
              underlying restricted stock units, and (iii) the exercise of
              options. Excludes shares used for the exercise price of options
              and required minimum tax withholding on the exercise of options
              and the delivery of shares underlying restricted stock units when
              only the net shares were issued.

         (2)  Excludes forfeited restricted stock since the purchase price was
              zero. The purchase price of a share of stock used for tax
              withholding is the amount of withholding paid per share used for
              that purpose, which is the market price of the stock on the date
              of vesting of the restricted stock, the delivery date of the stock
              underlying restricted stock units, and the date of the exercise of
              the option.



         No options may be granted pursuant to the Management Incentive Stock
         Option Plan after April 18, 2005. No awards may be granted pursuant to
         the 1997 Long-Term Stock Incentive Program after April 15, 2007.
         Options, restricted stock awards and restricted stock unit awards
         outstanding on those dates may continue to be outstanding after those
         dates. Sprint cannot estimate how many shares will be acquired in the
         manner described in footnote (1) to the table above through operation
         of these plans.

Item 3.  Defaults Upon Senior Securities

         There were no reportable events during the quarter ended March 31,
         2004.



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

         On April 20, 2004, Sprint held its annual meeting of shareholders. In
         addition to the election of four directors to serve a term of one year,
         the shareholders ratified the appointment of KPMG LLP as independent
         auditors of Sprint for 2004. The shareholders did not approve four
         shareholder proposals.

         The following votes were cast for each of the following nominees for
         director or were withheld with respect to such nominees:

                                        For                           Withheld
           Gordon M. Bethune       1,118,424,077                     28,619,249
           E. Linn Draper, Jr.     1,119,191,385                     27,851,941
           Deborah A. Henretta     1,119,101,182                     27,942,144
           Linda Koch Lorimer        903,478,590                    243,564,736

         The following votes were cast with respect to the proposal to ratify
         the appointment of KPMG LLP as independent auditors of Sprint for 2004:

           For                                      1,104,672,293
           Against                                     23,537,370
           Abstain                                     18,833,820

         The following votes were cast with respect to a shareholder proposal
         requesting the Sprint board to adopt an executive compensation policy
         that all future stock option grants to senior executives be indexed to
         an industry peer group stock performance index.

           For                                        308,500,915
           Against                                    658,961,361
           Abstain                                     23,390,075
           Broker Non-Votes                           156,190,973

         The following votes were cast with respect to a shareholder proposal
         requesting the Sprint board to (1) establish a cap on the total
         compensation that may be paid to the CEO in a given year equal to 50
         times the average compensation paid to employees not exempt from
         coverage under the Fair Labor Standards Act in the prior year and (2)
         report to shareholders on the policy before the 2005 annual
         shareholders' meeting.

           For                                         90,250,278
           Against                                    879,936,280
           Abstain                                     20,670,932
           Broker Non-Votes                           156,185,834

         The following votes were cast with respect to a shareholder proposal
         urging the Sprint board to amend the bylaws, effective upon expiration
         of current employment contracts, to require that an independent
         director be chairman of the board of directors.

           For                                        346,806,821
           Against                                    622,117,140
           Abstain                                     21,932,429
           Broker Non-Votes                           156,186,935

         The following votes were cast with respect to a shareholder proposal
         requesting the Sprint board to establish an independent committee to
         prepare a report evaluating the risk of damage to Sprint's brand name
         and reputation in the United States resulting from its offshoring
         initiative and make copies of the report available to shareholders upon
         request.

           For                                         90,348,634
           Against                                    803,327,826
           Abstain                                     97,175,145
           Broker Non-Votes                           156,191,721



Item 5.  Other Information

         Ratios of Earnings to Fixed Charges

         Sprint's ratio of earnings to fixed charges was 1.82 in the 2004 first
         quarter and 1.33 in the 2003 first quarter. 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 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.

         Debt Extinguishment

         In May 2004, Sprint repurchased $750 million aggregate principal amount
         of its 6.0% equity unit senior notes, scheduled to mature August 17,
         2006, from a single noteholder. Upon completion of this transaction,
         $975 million aggregate principal amount of these notes remains
         outstanding.

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)    Restated Articles of Incorporation, dated as of
                         December 9, 2003 *

                  (b)    Certificate of Designation, Preferences and Rights of
                         Preferred Stock-Sixth Series, dated as of April 23,
                         2004 *

                  (c)    Certificate of Elimination of Designations of Preferred
                         Stock-Eighth Series, dated as of April 23, 2004 *

                  (d)    Amended and Restated Bylaws *

           (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
                         Exhibits 3(a), 3(b) and 3(c).

                  (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. See Exhibit 3(d).

                  (c)    Second Amended and Restated Rights Agreement between
                         Sprint Corporation and UMB Bank, n.a., as Rights Agent,
                         dated as of March 16, 2004 and effective as of April
                         23, 2004 (filed as Exhibit 1 to Amendment No. 5 to
                         Sprint Corporation's Registration Statement on Form 8-A
                         relating to Sprint's Rights, filed April 12, 2004, and
                         incorporated herein by reference).

           (10)   Executive Compensation Plans and Arrangements

                  (a)    Executive Deferred Compensation Plan, as amended. *

                  (b)    Directors' Deferred Fee Plan, as amended. *

                  (c)    Amended and Restated Centel Directors Deferred
                         Compensation Plan. *

                  (d)    Management Incentive Stock Option Plan, as amended. *

                  (e)    1997 Long-Term Stock Incentive Program, as amended. *

                  (f)    Form of Election relating to 2003 Executive restricted
                         stock unit awards. *



           (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.

*  Previously filed on Amendment No. 1 to Form 10-Q on Form 10-Q/A.

     (b) Reports on Form 8-K

         Sprint filed a Current Report on Form 8-K dated February 3, 2004, in
         which it reported that it announced fourth quarter and full-year
         results. The news release, which was furnished as an exhibit to the
         Current Report, included the following 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 Corporation--FON Group--Local Division Selected Information

         Sprint filed a Current Report on Form 8-K dated February 28, 2004, in
         which it reported that its board of directors had approved the
         recombination of PCS common stock and FON common stock effective April
         23, 2004. The notice to shareholders was included as an exhibit to the
         Current Report.

         Sprint filed a Current Report on Form 8-K dated February 29, 2004, in
         which it reported that it had announced that its board of directors had
         approved the recombination of PCS common stock and FON common stock.
         The news release was furnished as an exhibit to the Current Report.

         Sprint filed a Current Report on Form 8-K dated March 2, 2004, in which
         it reported that it had announced the appointment of two new
         independent directors, Gordon M. Bethune, Chairman of the Board and
         Chief Executive Officer of Continental Airlines, Inc., and Deborah A.
         Henretta, President of Proctor & Gamble's global baby care division, to
         the Sprint board of directors.

         Sprint filed a Current Report on Form 8-K dated April 5, 2004, in which
         it reported that it had been advised of the plaintiffs' decision to
         withdraw their request for a preliminary injunction in the lawsuits
         relating to the recombination of Sprint's PCS and FON tracking stocks.

         Sprint filed a Current report on Form 8-K dated April 20, 2004, in
         which it reported that it announced 2004 first quarter results. The
         news release, which was furnished as an exhibit to the Current Report,
         included the following 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 Operating Statistics 
              Sprint Corporation Reconciliation of Earnings Per Share
              Sprint Corporation Selected Information




                                    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 9, 2004