EXHIBITS
Exhibit A
| KEY ANNUAL FINANCIAL RATIOS | |||||
| FISCAL YEAR ENDING |
12/31/96 |
12/31/95 |
12/31/94 |
MCI |
AT&T |
| Liquidity | |||||
|
QUICK RATIO |
1.09 |
0.32 |
0.53 |
0.76 |
1.03 |
|
CURRENT RATIO |
1.31 |
0.7 |
0.72 |
0.93 |
1.16 |
| Asset Management | |||||
|
RECEIVABLES TURNOVER |
5.7 |
8.38 |
8.64 |
5.31 |
3.25 |
|
RECEIVABLES DAYS SALES |
63.15 |
42.97 |
41.68 |
67.74 |
110.79 |
| Profitability | |||||
|
PROFIT MARGIN ON SALES |
0.08 |
0.03 |
0.07 |
0.06 |
0.11 |
|
RETURN ON TOTAL ASSETS |
0.07 |
0.03 |
0.06 |
0.05 |
0.11 |
|
NET INCOME/INVESTED CAPITAL |
0.1 |
0.05 |
0.1 |
0.07 |
0.21 |
|
RETURN ON COMMON EQUITY |
0.14 |
0.09 |
0.2 |
0.11 |
0.29 |
Exhibit B
| COMMON SIZE BALANCE SHEET | ||||
| ANNUAL ASSETS | ||||
| FISCAL YEAR ENDING |
12/31/96 |
12/31/95 |
12/31/94 |
12/31/93 |
| TOTAL CURRENT ASSETS |
25.68% |
23.82% |
14.05% |
13.98% |
| NET PROP & EQUIP |
61.72% |
63.94% |
70.51% |
72.90% |
| OTHER ASSETS |
12.60% |
12.24% |
15.44% |
13.12% |
| TOTAL ASSETS |
100.00% |
100.00% |
100.00% |
100.00% |
| ANNUAL LIABILITIES | ||||
| FISCAL YEAR ENDING |
12/31/96 |
12/31/95 |
12/31/94 |
12/31/93 |
| NOTES PAYABLE |
1.18% |
14.11% |
N/A |
N/A |
| ACCOUNTS PAYABLE |
6.06% |
6.18% |
6.38% |
6.54% |
| CUR LONG TERM DEBT |
0.58% |
1.85% |
2.28% |
3.70% |
| OTHER CURRENT LIAB |
11.73% |
11.71% |
10.88% |
11.45% |
|
TOTAL CURRENT LIAB |
19.55% |
33.84% |
19.54% |
21.69% |
| OTHER LIABILITIES |
30.13% |
35.40% |
49.10% |
50.35% |
|
TOTAL LIABILITIES |
49.67% |
69.23% |
68.64% |
72.03% |
| PREFERRED STOCK |
0.07% |
0.21% |
0.26% |
0.27% |
| COMMON STOCK NET |
6.44% |
5.74% |
5.99% |
6.07% |
| CAPITAL SURPLUS |
26.11% |
6.32% |
6.48% |
5.85% |
| RETAINED EARNINGS |
18.95% |
18.18% |
18.77% |
15.44% |
| TREASURY STOCK |
-1.55% |
N/A |
N/A |
N/A |
| OTHER EQUITIES |
0.31% |
0.31% |
-0.14% |
0.34% |
|
SHAREHOLDER EQUITY |
50.33% |
30.77% |
31.36% |
27.97% |
| TOT LIAB & NET WORTH |
100.00% |
100.00% |
100.00% |
100.00% |
| Exhibit C | |||||
| WACC |
Source |
EVA | |||
| % of Capital in Long Term Debt |
25% |
Bibl. 10 | |||
| % of Capital in Retained Earnings |
75% |
Bibl. 10 | Sales Revenue |
14,044,700,000 |
|
| Risk Free Rate |
6.4% |
Wall Street | Operating Cost |
3,157,800,000 |
|
| Sprint’s Beta |
1.1 |
Bibl. 10 | Taxes |
721,000,000 |
|
| Risk Free Rate for Industry |
14.80% |
Bibl. 15 | Op. Profit after Taxes |
10,165,900,000 |
|
| Long Term Bond Rate (Lehman Bros) |
6.75% |
Wall Street | Total Capital Supplied |
3,128,300,000 |
|
| Cost of Capital for Debt |
1.69% |
WACC |
13.42% |
||
| Cost of Capital for Shareholder’s Equity |
11.73% |
Cost of All Capital |
419,817,860 |
||
| Weighted Average Cost Of Capital(WACC) |
13.42% |
||||
| EVA |
9,746,082,140 |
| Exhibit D | Exhibit E | |||||
| COMPETITORS | NAFTA | |||||
|
EPS |
EPS |
|||||
|
Last Quarter |
This Quarter |
Year |
Employees |
Union % |
||
| BELL ATLANTIC |
1.17 |
1.22 |
1993 |
50,500 |
25% |
|
| AMERITECH CORP |
1.13 |
1.04 |
1994 |
51,600 |
25% |
|
| SBC COMMUN INC |
0.9 |
0.98 |
1995 |
48,300 |
26% |
|
| BELL SOUTH |
0.71 |
0.7 |
1996 |
48,000 |
24% |
|
| GTE CORP |
0.7 |
0.76 |
||||
| US WEST COMM |
0.65 |
0.62 |
||||
| SPRINT CORP |
0.62 |
0.57 |
||||
| AT&T CORP |
0.59 |
0.65 |
||||
| MCI COMMS CORP |
0.4 |
0.19 |
||||
| LCI INTL INC |
0.25 |
0.26 |
||||
| WORLDCOM INC |
0.08 |
0.11 |
Exhibit F
|
Stock |
Beta |
# Of Shares |
Share Price |
Value of Shares |
% of Portfolio |
% Beta |
Source |
| Netscape |
1.35 |
5850 |
40.13 |
316887.19 |
49.30% |
0.67 |
Netscape Corporate |
| Sun Microsystems |
0.88 |
3470 |
39.50 |
120617.20 |
18.77% |
0.17 |
S&P Stock |
| Silicon Graphics |
0.96 |
1715 |
16.81 |
27680.10 |
4.31% |
0.04 |
S&P Stock |
| Apple Computer |
0.9 |
2915 |
13.69 |
35909.16 |
5.59% |
0.05 |
Value Line |
| Sprint |
1.1 |
2500 |
51.50 |
141625.00 |
22.04% |
0.24 |
Value Line |
| Average |
642718.64 |
100.00% |
1.16 |
Exhibit G
| COMMON SIZE INCOME | ||||
| FISCAL YEAR ENDING |
12/31/96 |
12/31/95 |
12/31/94 |
12/31/93 |
| NET SALES |
100.00% |
100.00% |
100.00% |
100.00% |
| COST OF GOODS |
50.05% |
50.96% |
51.34% |
51.23% |
|
GROSS PROFIT |
49.95% |
49.04% |
48.66% |
48.77% |
| SELL GEN & ADMIN EXP |
22.48% |
22.50% |
22.99% |
23.20% |
| INC BEF DEP & AMORT |
27.47% |
26.54% |
25.67% |
25.56% |
| DEPRECIATION & AMORT |
11.33% |
11.49% |
11.56% |
11.76% |
| NON-OPERATING INC |
-1.13% |
-1.42% |
-2.00% |
-2.99% |
| INTEREST EXPENSE |
1.40% |
2.04% |
2.51% |
3.36% |
|
INCOME BEFORE TAX |
13.61% |
11.60% |
11.58% |
7.45% |
| PROV FOR INC TAXES |
5.13% |
4.19% |
4.08% |
2.71% |
| NET INC BEF EX ITEMS |
8.48% |
7.41% |
7.50% |
4.74% |
| EX ITEMS & DISC OPS |
-5.00% |
-4.31% |
-0.70% |
-4.23% |
| NET INCOME |
8.43% |
3.10% |
7.43% |
0.50% |
| PREFERRED STOCK DIV |
0.08% |
0.25% |
0.31% |
0.35% |
| NET INCOME AVAILABLE | ||||
|
FOR COMMON SHAREHOLDER |
8.35% |
2.85% |
7.12% |
0.15% |
Exhibit H
| ANNUAL INCOME (000$) | For. Basis | |||||
| FISCAL YEAR ENDING |
12/31/96 |
First Pass | Second Pass | Final | ||
| NET SALES |
14,044,700 |
x 1.085 |
15,238,500 |
15,238,500 |
15,238,500 |
|
| COST OF GOODS |
7,028,700 |
x 1.085 |
7,626,140 |
7,626,140 |
7,626,140 |
|
| GROSS PROFIT |
7,016,000 |
7,612,360 |
7,612,360 |
7,612,360 |
||
| SELL GEN & ADMIN EXP |
3,157,800 |
x 1.085 |
3,426,213 |
3,426,213 |
3,426,213 |
|
| INC BEF DEP & AMORT |
3,858,200 |
4,186,147 |
4,186,147 |
4,186,147 |
||
| DEPRECIATION & AMORT |
1,591,000 |
x1.085 |
1,726,235 |
1,726,235 |
1,726,235 |
|
| NON-OPERATING INC |
-158,600 |
-158,600 |
-158,600 |
-158,600 |
||
| INTEREST EXPENSE |
196,700 |
196,700 |
5234.72(c) |
201,935 |
201,935 |
|
| INCOME BEFORE TAX |
1,911,900 |
2,104,612 |
2,099,377 |
2,099,377 |
||
| PROV FOR INC TAXES(a) |
721,000 |
799,753 |
797,763 |
797,763 |
||
| NET INC BEF EX ITEMS |
1,190,900 |
1,304,859 |
-3,246 |
1,301,614 |
1,301,614 |
|
| EX ITEMS & DISC OPS |
-7,100 |
-7,100 |
-7,100 |
-7,100 |
||
| NET INCOME |
1,183,800 |
1,297,759 |
1,294,514 |
1,294,514 |
||
| PREFERRED STOCK DIV |
11,800 |
11,800 |
11,800 |
11,800 |
||
| NI AVAILABLE TO COMMON |
1,172,000 |
1,285,959 |
1,282,714 |
1,282,714 |
||
| DIV TO COMMON(b)© |
343,900 |
343,900 |
12192.65(d) |
356,093 |
356,093 |
|
| ADD. TO RETAIN. EARNINGS |
828,100 |
942,059 |
15,438 |
926,621 |
926,621 |
|
| a-Value Line projected 38% | c- Interest rate of 6.75% | |||||
| b-If continue dividend of $1.00 | d- Dividend of 0.05% on common stock | |||||
Exhibit I
| ANNUAL ASSETS | 1997 Forecast | |||||
| FISCAL YEAR ENDING |
12/31/96 |
For. Basis |
First Pass |
AFN |
Second Pass |
Final |
| CASH |
1,150,600 |
x 1.085 |
1,248,401 |
|||
| RECEIVABLES |
2,463,500 |
x 1.085 |
2,672,898 |
|||
| OTHER CURRENT ASS |
738,700 |
x 1.085 |
801,490 |
|||
| TTL CURRENT ASSETS |
4,352,800 |
4,722,788 |
||||
| NET PROP & PLANT |
10,464,100 |
x 1.085 |
11,353,549 |
|||
| OTHER ASSETS |
2,136,100 |
x 1.085 |
2,317,669 |
|||
| TOTAL ASSETS |
16,953,000 |
18,394,005 |
18,394,005 |
18,394,005 |
||
| NOTES PAYABLE |
200,000 |
200,000 |
200,000 |
200,000 |
||
| ACCOUNTS PAYABLE |
1,026,700 |
x 1.085 |
1,113,970 |
1,113,970 |
1,113,970 |
|
| ACCRUED EXPENSES |
1,018,100 |
x 1.085 |
1,104,639 |
1,104,639 |
1,104,639 |
|
| OTHER CURRENT LIAB |
1,069,400 |
1,069,400 |
1,069,400 |
1,069,400 |
||
| TOTAL CURRENT LIAB |
3,314,200 |
3,488,008 |
3,488,008 |
3,488,008 |
||
| LONG TERM DEBT(b) |
2,981,500 |
2,981,500 |
81,284.5 |
3,062,784 |
3,066,644 |
|
| OTHER LIABILITIES |
2,125,600 |
2,125,600 |
2,125,600 |
2,125,600 |
||
| TOTAL LIABILITIES |
8,421,300 |
8,595,108 |
8,676,392 |
8,680,252 |
||
| PREFERRED STOCK |
11,800 |
11,800 |
11,800 |
11,800 |
||
| COMMON STOCK NET(b) |
1,091,300 |
1,091,300 |
243,853.5 |
1,335,153 |
1,346,733 |
|
| CAPITAL SURPLUS |
4,425,900 |
4,425,900 |
4,425,900 |
4,425,900 |
||
| RETAINED EARNINGS |
3,211,800 |
942,059 |
4,153,859 |
4,138,421 |
4,138,421 |
|
| TREASURY STOCK |
-262,200 |
-262,200 |
-262,200 |
-262,200 |
||
| OTHER EQUITIES |
53,100 |
53,100 |
53,100 |
53,100 |
||
| SHAREHOLDER EQUITY |
8,531,700 |
9,473,759 |
9,702,174 |
9,713,754 |
||
| TOT LIAB & NET WORTH |
16,953,000 |
18,068,867 |
325,138 |
18,378,566 |
18,394,005 |
|
| AFN THIS PASS |
325,138 |
15,438 |
0 |
|||
| CUMULATIVE AFN |
325,138 |
340,576 |
340,576 |
|||
| a – Paid off this yr.& not carried. | ||||||
| b – 75% to Stock; 25% LT debt | ||||||
BIBLIOGRAPHY
| http://biz.yahoo.com/news/fon.html | ||
| 1 | Tuesday October 7, 1997 | Sprint unit to guarantee Internet access |
| 2 | Friday October 3, 1997 | WorldCom seen pushing business over residential |
| 3 | France Telecom , world no 4 in sales terms | |
| 4 | Thursday October 2, 1997 | AT&T, Sprint seen moving faster to pursue deals |
| 5 | WorldCom-MCI could tilt Asia telecom power balance | |
| 6 | Monday September 29, 1997 | NEC, Sprint to start Internet roaming service |
| 7 | Tuesday September 23, 1997 | Grand Opening of 6,000 Sprint Stores at RadioShack Brings One-StopCommunications Shopping to America |
| 8 |
1996 10-K |
|
| 9 |
Financial Management Text |
|
| 10 |
Value Line |
|
| 11 |
CD Disclosure |
|
| 12 |
Yahoo Utility Telephone Listing |
biz.yahoo.com/research /indgrp/util_telephone.htm |
| 13 |
September 11, 1997 |
Wall Street Journal, p. R22, “The Squeeze” |
| 14 | NAIC Greensheet from Sprint’s web site (www.sprint.com) | |
| 15 |
January 12,1997 |
Telephony, p. 15 |
Walking Down Life's Road With Andy 