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

                                    FORM 10-K

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

For the fiscal year ended                  December 31, 2000

                                    OR

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

For the transition period from              to

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

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

             DELAWARE                                     48-1165245
             DELAWARE                                     43-1746537
  (State or other jurisdiction of                       (IRS Employer
   incorporation or organization)                    Identification Nos.)

6160 Sprint Parkway, Overland Park, Kansas                 66251
 (Address of principal executive offices)                (Zip Code)

Registrant's telephone number, including area code     (800) 829-0965

Securities registered pursuant to Section 12(b) and 12(g) of the Act: None

The registrants  meet the conditions set forth in General  Instruction I (1) (a)
and (b) of Form  10-K and are  therefore  filing  this  Form  with  the  reduced
disclosure format.

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

Indicate by a check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation  S-K is not contained  herein,  and will not be contained,  to the
best of registrant's  knowledge,  in definitive proxy or information  statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ X ]

At March 1, 2001  Sprint  Spectrum  Finance  Corporation  had 100 common  shares
outstanding.

Documents Incorporated by Reference:  None

<PAGE>


                              SPRINT SPECTRUM L.P.
                       SPRINT SPECTRUM FINANCE CORPORATION

                       SECURITIES AND EXCHANGE COMMISSION
                           ANNUAL REPORT ON FORM 10-K





Part I

--------------------------------------------------------------------------------
Item 1.  Business
--------------------------------------------------------------------------------

Sprint  Spectrum L.P. is a Delaware  limited  partnership  formed in March 1995.
Sprint Spectrum refers to Sprint Spectrum L.P. and its subsidiaries.

The general partner of Sprint Spectrum is Sprint Spectrum Holding Company,  L.P.
(Holdings),  and the limited partner is MinorCo,  L.P. (MinorCo).  Both Holdings
and MinorCo are Delaware limited partnerships. In November 1998, Sprint Spectrum
became an indirect  wholly owned  subsidiary of Sprint  Corporation  when Sprint
acquired the remaining  ownership  interests of  Tele-Communications,  Inc., Cox
Communications, Inc., and Comcast Corporation in Holdings and MinorCo.

Sprint Spectrum is a provider of wireless personal  communication services (PCS)
in the United  States.  Sprint  Spectrum's  30 wholly  owned  markets  cover 156
million  population  equivalents (Pops) and include the New York, San Francisco,
Detroit,  Dallas/Fort Worth and  Boston/Providence  major trading areas.  Sprint
Spectrum,  together with certain affiliates,  has licenses to provide service to
the entire U.S. population, including Puerto Rico and the U.S. Virgin Islands.

Sprint  Spectrum is subject to the  jurisdiction  of the Federal  Communications
Commission (FCC).

Each of the markets in which Sprint Spectrum competes is served by other two-way
wireless service providers,  including cellular and PCS operators and resellers.
A majority of the markets  have five or more  commercial  mobile  radio  service
providers.  Each of the top 50  metropolitan  markets has at least one other PCS
competitor  in addition to two cellular  incumbents.  Many of these  competitors
have been  operating  for a number of years and  currently  serve a  significant
subscriber base.

Sprint Spectrum Finance  Corporation  (FinCo), a Delaware  corporation formed in
May 1996, is a wholly owned subsidiary of Sprint Spectrum L.P. FinCo has nominal
assets and does not conduct any operations.  It was formed to be a co-obligor of
certain  securities  issued by Sprint  Spectrum.  Because FinCo is a co-obligor,
certain institutional investors, who might otherwise be limited in their ability
to invest in securities  issued by partnerships  due to legal investment laws in
their states of organization or their charter  documents,  may be able to invest
in Sprint Spectrum's securities.



--------------------------------------------------------------------------------
Item 2.  Properties
--------------------------------------------------------------------------------

Sprint Spectrum's  properties consist mainly of network equipment,  construction
work in progress and buildings and leasehold  improvements.  The following table
summarizes  Sprint  Spectrum's  major assets as a percentage of total  property,
plant and equipment at year-end 2000.

Property, plant and equipment
   Network equipment                              63.1%
   Buildings and leasehold improvements
                                                  16.6%
   Construction work in progress                  14.7%
   Other                                           5.6%
----------------------------------------------------------

                                                 100.0%
                                             -------------


--------------------------------------------------------------------------------
Item 3.  Legal Proceedings
--------------------------------------------------------------------------------

Sprint  Spectrum  has been  involved  in legal  proceedings  in  various  states
concerning  the  suspension  of the  processing or approval of permits and other
issues arising in connection  with tower siting.  There can be no assurance that
such  litigation  and  similar  actions  taken by  others  seeking  to block the
construction of individual cell sites of Sprint Spectrum's  network will not, in
the  aggregate,  significantly  delay  further  expansion  of Sprint  Spectrum's
network coverage.

Sprint Spectrum is involved in various other legal proceedings incidental to the
conduct of its  business.  While it is not  possible to  determine  the ultimate
disposition of each of these proceedings,  management  believes that the outcome
of such proceedings,  individually or in the aggregate, will not have a material
adverse  effect  on  Sprint  Spectrum's   financial   condition  or  results  of
operations.

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

Omitted under the provisions of General Instruction I.

<PAGE>

Part II

--------------------------------------------------------------------------------
Item 5.  Market for Registrant's Common Equity and Related Stockholder Matters
--------------------------------------------------------------------------------

At year-end  2000,  Sprint  Spectrum had no common equity and there is no market
for the common equity of FinCo.

--------------------------------------------------------------------------------
Item 6.  Selected Financial Data
--------------------------------------------------------------------------------

Omitted under the provisions of General Instruction I.

--------------------------------------------------------------------------------
Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations
--------------------------------------------------------------------------------

For information  required by Item 7, refer to the  "Management's  Discussion and
Analysis  of  Financial  Condition  and  Results of  Operations"  section of the
Financial  Statements  and Financial  Statement  Schedule  filed as part of this
document and incorporated by reference herein.

--------------------------------------------------------------------------------
Item 7A.  Quantitative and Qualitative Disclosures about Market Risk
--------------------------------------------------------------------------------

Sprint  Spectrum's  exposure  to  market   risk--through   derivative  financial
instruments  and other  financial  instruments,  such as  long-term  debt,  from
changes in interest rates--is not material.

--------------------------------------------------------------------------------
Item 8.  Financial Statements and Supplementary Data
--------------------------------------------------------------------------------

For  information  required  by Item 8, refer to Sprint  Spectrum's  consolidated
financial statements and FinCo's financial statements, included in the Financial
Statements  and Financial  Statement  Schedule  sections,  filed as part of this
document and incorporated by reference herein.

--------------------------------------------------------------------------------
Item  9.  Changes  in and  Disagreements  With  Accountants  on  Accounting  and
Financial Disclosure
--------------------------------------------------------------------------------

No reportable items.


Part III

--------------------------------------------------------------------------------
Item 10.  Directors and Executive Officers of the Registrants
--------------------------------------------------------------------------------

Omitted under the provisions of General
Instruction I.

--------------------------------------------------------------------------------
Item 11.  Executive Compensation
--------------------------------------------------------------------------------

Omitted under the provisions of
General Instruction I.

--------------------------------------------------------------------------------
Item 12.  Security Ownership of Certain Beneficial Owners and Management
--------------------------------------------------------------------------------

Omitted under the provisions of General
Instruction I.

--------------------------------------------------------------------------------
Item 13.  Certain Relationships and Related Transactions
--------------------------------------------------------------------------------

Omitted under the provisions of General
Instruction I.



<PAGE>

Part IV

Item 14.  Exhibits, Financial Statement Schedule, and Reports on Form 8-K

(a)  1.   The  consolidated  financial  statements  of  Sprint  Spectrum  and
          financial  statements of FinCo filed as part of this report are listed
          in the Index to Financial Statements and Financial Statement Schedule.

     2.   The consolidated financial statement schedule of Sprint Spectrum filed
          as part of this report is listed in the Index to Financial  Statements
          and Financial Statement Schedule.

     3.   The following Exhibits are part of this report.

         EXHIBITS

         Articles of Incorporation and Bylaws:

          (3.1)Certificate  of  Limited  Partnership  of  Sprint  Spectrum  L.P.
               (incorporated  by reference  to Exhibit 3.2 to Sprint  Spectrum's
               Form S-1  Registration  Statement,  Registration  No.  333-06609,
               filed on June 21, 1996).

          (3.2)Agreement of Limited  Partnership  of MajorCo Sub, L.P.  (renamed
               Sprint Spectrum L.P.), dated as of March 28, 1995, among MajorCo,
               L.P. and MinorCo, L.P.  (incorporated by reference to Exhibit 3.6
               to   Sprint   Spectrum's   Form   S-1   Registration   Statement,
               Registration No. 333-06609, filed on June 21, 1996).

          (3.3)First  Amendment to Agreement  of Limited  Partnership  of Sprint
               Spectrum L.P., effective as of February 29, 2000 (incorporated by
               reference to Exhibit 3.3 to Sprint  Spectrum's  Annual  Report on
               Form 10-K for the year ended December 31, 1999).

          (3.4)Certificate  of   Incorporation   of  Sprint   Spectrum   Finance
               Corporation  (incorporated  by reference to Exhibit 3.3 to Sprint
               Spectrum's  Form S-1  Registration  Statement,  Registration  No.
               333-06609, filed on June 21, 1996).

          (3.5)Bylaws of Sprint Spectrum  Finance  Corporation  (incorporated by
               reference   to  Exhibit  3.4  to  Sprint   Spectrum's   Form  S-1
               Registration Statement, Registration No. 333-06609, filed on June
               21, 1996).

         Instruments Defining the Rights of Security Holders

          (4.1)Senior Note  Indenture  (including  form of Senior  Note),  dated
               August 23, 1996,  between Sprint  Spectrum L.P.,  Sprint Spectrum
               Finance  Corporation,  and  The  Bank  of New  York,  as  Trustee
               (incorporated  by reference  to Exhibit 4.1 to Sprint  Spectrum's
               Form 10-Q for the quarter ended September 30, 1996).

          (4.2)Senior   Discount  Note  Indenture   (including  form  of  Senior
               Discount  Note),  dated August 23, 1996,  between Sprint Spectrum
               L.P.,  Sprint Spectrum Finance  Corporation,  and The Bank of New
               York,  as Trustee  (incorporated  by  reference to Exhibit 4.3 to
               Sprint  Spectrum's  Form 10-Q for the quarter ended September 30,
               1996).

          (4.3)Loans  from  Sprint  Corporation  to  Sprint  Spectrum  L.P.  are
               governed by Sprint's  Tracking  Stock Policies  (incorporated  by
               reference  to Exhibit  4D to  Post-Effective  Amendment  No. 2 to
               Sprint    Corporation's   Form   S-3   Registration    Statement,
               Registration No. 33-58488, filed on December 3, 1998).


<PAGE>

         Executive Compensation Arrangements

          (10.1) Employment  Agreement  dated as of September 29, 1995,  between
               Sprint Spectrum  Holding  Company,  L.P. and Joseph M. Gensheimer
               (incorporated by reference to Exhibit 10.11 to Amendment No. 3 to
               Sprint Spectrum's Form S-1 Registration  Statement,  Registration
               No. 333-06609, filed on July 30, 1996).

          (10.2) Employment  Agreement  dated January 21, 1997,  between  Sprint
               Spectrum L.P. and Charles E. Levine (incorporated by reference to
               Exhibit 10.4 to Sprint Spectrum's Form 10-Q for the quarter ended
               March 31, 1997).

Sprint  Spectrum will furnish to the  Securities and Exchange  Commission,  upon
request,  a copy of the instruments (other than those listed above) defining the
rights of holders of its long-term debt.

(b)  Reports on Form 8-K

     No Current Reports on Form 8-K were filed in the 2000 fourth quarter.


<PAGE>

SIGNATURES

Pursuant to the  requirements of Section 13 or 15(d) 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 SPECTRUM L.P.
                             ---------------------------------------------------
                             (Registrant)


                             /s/  Charles E. Levine
                             ---------------------------------------------------
                             Charles E. Levine
                             President

Date:  March 28, 2001

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following  persons on behalf of the  registrant and
in the capacities indicated on the 28th day of March, 2001.


                             /s/  Charles E. Levine
                             ---------------------------------------------------
                             Charles E. Levine
                             President
                             (Principal Executive Officer)


                             /s/  William J. Gunter
                             ---------------------------------------------------
                             William J. Gunter
                             Senior Vice President and Chief Financial Officer
                             (Principal Financial Officer)


                             /s/  Eric R. Slusser
                             ---------------------------------------------------
                             Eric R. Slusser
                             Controller


<PAGE>

SIGNATURES

                             SPRINT SPECTRUM L.P.
                             ---------------------------------------------------
                             (Registrant)

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following  persons on behalf of the  registrant and
in the capacities indicated on the 28th day of March, 2001.

                             /s/  J. Richard Devlin
                             ---------------------------------------------------
                             J. Richard Devlin, Director
                             SWV Six, Inc., a general partner of Sprint Spectrum
                             Holding Company, L.P., a limited partnership that
                             is general partner of Sprint Spectrum L.P.


                             /s/  Tom Gerke
                             ---------------------------------------------------
                             Tom Gerke, Director
                             SWV Six, Inc., a general partner of Sprint Spectrum
                             Holding Company, L.P., a limited partnership that
                             is general partner of Sprint Spectrum L.P.


                             /s/  Arthur B. Krause
                             ---------------------------------------------------
                             Arthur B. Krause, Director
                             SWV Six, Inc., a general partner of Sprint Spectrum
                             Holding Company, L.P., a limited partnership that
                             is general partner of Sprint Spectrum L.P.



<PAGE>

SIGNATURES

Pursuant to the  requirements of Section 13 or 15(d) 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 SPECTRUM FINANCE CORPORATION
                             ---------------------------------------------------
                             (Registrant)



                             /s/  Charles E. Levine
                             ---------------------------------------------------
                             Charles E. Levine
                             President


Date:  March 28, 2001

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following  persons on behalf of the  registrant and
in the capacities indicated on the 28th day of March, 2001.



                             /s/  Charles E. Levine
                             ---------------------------------------------------
                             Charles E. Levine
                             President
                             (Principal Executive Officer)


                             /s/  William J. Gunter
                             ---------------------------------------------------
                             William J. Gunter
                             Senior Vice President and Chief Financial Officer
                             (Principal Financial Officer)


                             /s/  Eric R. Slusser
                             ---------------------------------------------------
                             Eric R. Slusser
                             Controller


                             /s/  Michael T. Hyde
                             ---------------------------------------------------
                             Michael T. Hyde
                             Director


                             /s/  Tom Gerke
                             ---------------------------------------------------
                             Tom Gerke
                             Director


                             /s/  Laura L. Ozenberger
                             ---------------------------------------------------
                             Laura L. Ozenberger
                             Director



<PAGE>
<TABLE>
<CAPTION>




                                    INDEX TO FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULE



                                                                                                        Page
                                                                                                     Reference
                                                                                                 -------------------

SPRINT SPECTRUM L.P.

<S>                                                                                                     <C>
Management's Discussion and Analysis of Financial Condition and Results of Operations
                                                                                                        F-2

Consolidated Financial Statements
     Report of Independent Auditors                                                                     F-4
     Consolidated Statements of Operations                                                              F-6
     Consolidated Balance Sheets                                                                        F-7
     Consolidated Statements of Cash Flows                                                              F-8
     Consolidated Statements of Changes in Partners' Capital                                            F-9
     Notes to Consolidated Financial Statements                                                         F-10

Financial Statement Schedule
     Schedule II                                                                                        F-15


SPRINT SPECTRUM FINANCE CORPORATION

Management's Discussion and Analysis of Financial Condition and Results of Operations
                                                                                                        F-16

Financial Statements
     Balance Sheets                                                                                     F-17
     Note to Balance Sheets                                                                             F-18

</TABLE>



                                       F-1

<PAGE>



MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS               Sprint Spectrum L.P.

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

Sprint  Spectrum L.P.,  with its wholly owned  subsidiaries  (Sprint  Spectrum),
began  commercial  code division  multiple  access  operations  late in the 1996
fourth quarter. Sprint Spectrum is wholly owned by Sprint Corporation (Sprint).

In November 1998, Sprint purchased the remaining  ownership  interests in Sprint
Spectrum Holding Company, L.P. and MinorCo, L.P. from Tele-Communications, Inc.,
Comcast  Corporation and Cox  Communications,  Inc. At that time, Sprint created
the Sprint PCS Group, which consists of Sprint's wireless personal communication
services (PCS), including Sprint Spectrum. Sprint Spectrum Holding Company, L.P.
is the general partner of Sprint Spectrum L.P. and MinorCo,  L.P. is the limited
partner.

--------------------------------------------------------------------------------
Forward-Looking Information
--------------------------------------------------------------------------------

Sprint   Spectrum   includes   certain   estimates,    projections   and   other
forward-looking  statements  in its reports,  in  presentations  to analysts and
others, and in other publicly available  material.  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    the effects of  vigorous  competition  in the markets in which  Sprint
          Spectrum  operates;

     o    the costs and business  risks  associated  with providing new services
          and  entering and  expanding  markets  necessary  to provide  seamless
          services;

     o    the  ability of Sprint  Spectrum  to  continue  to grow a  significant
          market presence;

     o    the    effects   of   mergers    and    consolidations    within   the
          telecommunications  industry;

     o    the impact of any unusual items resulting from ongoing  evaluations of
          Sprint  Spectrum's  business  strategies;

     o    unexpected results of litigation filed against Sprint Spectrum;

     o    the possibility of one or more of the markets in which Sprint Spectrum
          competes  being  impacted by changes in  political,  economic or other
          factors such as monetary policy, legal and regulatory changes or other
          external  factors  over which Sprint  Spectrum  has no control;  and

     o    other  risks  referenced  from  time  to time in  Sprint's  or  Sprint
          Spectrum's filings with the Securities and Exchange Commission.

The words  "estimate,"  "project,"  "intend,"  "expect,"  "believe"  and similar
expressions are intended to identify forward-looking statements. Forward-looking
statements are found throughout MD&A. The reader should not place undue reliance
on forward-looking  statements,  which speak only as of the date of this report.
Sprint  Spectrum  is  not  obligated  to  publicly   release  any  revisions  to
forward-looking  statements  to reflect  events after the date of this report or
unforeseen events.

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

--------------------------------------------------------
                          2000       1999       1998
--------------------------------------------------------
                                 (millions)
Net operating
   revenues          $    3,942  $   2,258  $     961
--------------------------------------------------------

Operating expenses
   Costs of
     services and         1,822      1,451        925
     products
   Selling, general
     and
     administrative       1,896      1,502      1,063
   Depreciation and
     amortization           918        747        592
--------------------------------------------------------
Total operating
   expenses               4,636      3,700      2,580
--------------------------------------------------------

Operating loss       $     (694) $  (1,442) $  (1,619)
                     -----------------------------------

Loss before
   extraordinary     $   (1,337) $   (1,965)$  (1,996)
   items
                     -----------------------------------

Capital expenditures $   (1,957) $  (1,712) $  (1,248)
                     -----------------------------------


Sprint Spectrum  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 subsequent  service  revenues  generated by sales to
its customers accounted for approximately 25% of net operating revenues in 2000,
28% in 1999 and 25% in 1998.

Net Operating Revenues

Net operating  revenues  include  subscriber  revenues and sales of handsets and
accessory  equipment.  Subscriber revenues consist of monthly recurring charges,
usage charges and activation  fees.  Subscriber  revenues  increased 79% in 2000
mainly  reflecting an increase in the average  number of  customers.  Subscriber
revenues  increased 141% in 1999 mainly reflecting the launch of new markets and
an increase in the average number of customers.

Average monthly customer churn rates have improved to the upper 2% range in 2000
from the mid 3% range during 1999 and 1998. The  improvement  reflects  expanded
network coverage and the success of several customer retention initiatives.

Average  monthly  service  revenue  per user (ARPU)  increased  slightly in 2000
partly due to the  implementation  of activation  charges in the second quarter.
ARPU decreased in 1999 due to a wider acceptance of lower-priced, bundled minute
rate plans.

                                       F-2
<PAGE>

Revenues from the sales of handsets and accessories  were  approximately  14% of
net operating  revenues in 2000,  17% in 1999 and 19% in 1998. As part of Sprint
Spectrum's  marketing  plans,  handsets are normally sold at prices below Sprint
Spectrum's cost.

Operating Expenses

Costs of services and  products  mainly  include  handset and  accessory  costs,
switch and cell site  expenses  and other  network-related  costs.  These  costs
increased  26% in 2000 and 57% in 1999  reflecting  the  significant  growth  in
customers and expanded market coverage,  partly offset by a reduction in handset
unit costs.

Selling,  general and  administrative  (SG&A) expense mainly includes  marketing
costs to promote products and services as well as salary and benefit costs. SG&A
expense  increased 26% in 2000 and 41% in 1999 reflecting an expanded  workforce
to support subscriber growth and increased marketing and selling costs.

Acquisition costs per gross customer addition, including equipment subsidies and
marketing  costs,  have improved to the mid-$300 range in 2000 from the mid-$400
range in 1999 and  low-$600  range in 1998.  Lower  handset unit costs and scale
benefits from greater customer additions have contributed to the improvement.

Monthly cash cost per user (CCPU) consists of costs of service revenues, service
delivery  and  other   general  and   administrative   costs.   CCPU   decreased
approximately 30% in 2000 and 1999. The improvements  reflect successful expense
management and scale benefits resulting from the increased customer base.

Depreciation and amortization expense consists mainly of depreciation of network
assets and amortization of intangible  assets. The intangible assets include PCS
licenses,  customer  base  and  microwave  relocation  costs,  which  are  being
amortized  over 30 months to 40 years.  Depreciation  and  amortization  expense
increased  23% in  2000  and 26% in  1999.  The  increase  in  depreciation  and
amortization expense reflects an increased property and customer base.


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

Interest Expense

Sprint  Spectrum's  effective  interest rate on long-term debt was 8.9% in 2000,
9.0% in 1999 and 9.4% in 1998. The decrease in the effective  interest rate from
1998 mainly reflects increased borrowings with lower interest rates.

Extraordinary Items

In 1999, Sprint Spectrum  terminated its revolving credit facilities and repaid,
prior to scheduled maturities,  the related outstanding balance of $1.7 billion.
These  facilities had interest rates ranging from 5.6% to 6.3%. These repayments
resulted in a $33 million  extraordinary loss. These short-term  borrowings were
repaid with proceeds from long-term financing provided by Sprint.

In 1998, Sprint Spectrum redeemed,  prior to scheduled maturities,  $2.9 billion
of vendor  financing  and term loans with a weighted  average  interest  rate of
8.4%.  This resulted in a $43 million  extraordinary  loss.  The debt was repaid
using proceeds from senior notes allocated from Sprint.

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

Sprint Spectrum's liquidity and capital resources are managed by Sprint.  Sprint
funds the Sprint PCS Group's  (including  Sprint  Spectrum's)  operating losses,
working capital and debt service requirements.

--------------------------------------------------------------------------------
Recently Issued Accounting Pronouncements
--------------------------------------------------------------------------------

See Note 6 of Notes to  Consolidated  Financial  Statements  for a discussion of
recently issued accounting pronouncements.


                                      F-3
<PAGE>

REPORT OF INDEPENDENT AUDITORS

Partners of Sprint Spectrum L.P.

We have audited the accompanying  consolidated balance sheets of Sprint Spectrum
L.P. and  subsidiaries  (Sprint  Spectrum) as of December 31, 2000 and 1999, and
the related  consolidated  statements of  operations,  cash flows and changes in
partners'  capital  for the years then  ended.  Our  audits  also  included  the
financial  statement  schedule  listed in the Index to Financial  Statements and
Financial  Statement Schedule.  These financial  statements and the schedule are
the  responsibility of Sprint Spectrum's  management.  Our  responsibility is to
express an opinion on these consolidated  financial  statements and the schedule
based on our audits.

We conducted our audit in accordance with auditing standards  generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable  assurance about whether the financial  statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting  the amounts and  disclosures in the financial  statements.  An audit
also includes assessing the accounting principles used and significant estimates
made by  management,  as well as  evaluating  the  overall  financial  statement
presentation.  We believe  that our audits  provide a  reasonable  basis for our
opinion.

In our opinion, the consolidated  financial statements referred to above present
fairly, in all material respects,  the consolidated financial position of Sprint
Spectrum L.P. and subsidiaries at December 31, 2000 and 1999, and the results of
their  operations  and their cash flows for the years then ended,  in conformity
with accounting principles generally accepted in the United States. Also, in our
opinion,  the related financial statement schedule,  when considered in relation
to the basic consolidated financial statements taken as a whole, presents fairly
in all material respects the information set forth therein.



                                                               Ernst & Young LLP

Kansas City, Missouri
February 1, 2001







                                       F-4
<PAGE>

REPORT OF INDEPENDENT AUDITORS

Partners of Sprint Spectrum L.P.

We have audited the  consolidated  statements  of  operations  and cash flows of
Sprint  Spectrum  L.P. and  subsidiaries  (Sprint  Spectrum)  for the year ended
December 31, 1998. Our audit also included the 1998 financial statement schedule
(Schedule II). These financial statements and Schedule II are the responsibility
of Sprint Spectrum's management.  Our responsibility is to express an opinion on
these consolidated financial statements and Schedule II based on our audit.

We conducted our audit in accordance with generally accepted auditing standards.
Those standards  require that we plan and perform the audit to obtain reasonable
assurance  about  whether  the  consolidated  financial  statements  are free of
material  misstatement.  An audit includes examining,  on a test basis, evidence
supporting the amounts and disclosures in the consolidated financial statements.
An audit also includes assessing the accounting  principles used and significant
estimates  made by  management,  as well as  evaluating  the  overall  financial
statement  presentation.  We believe that our audit provides a reasonable  basis
for our opinion.

In our opinion,  such consolidated  financial  statements present fairly, in all
material  respects,  the  results  of their  operations  and their cash flows of
Sprint  Spectrum  for the year ended  December  31,  1998,  in  conformity  with
generally accepted  accounting  principles.  Also, in our opinion,  Schedule II,
when considered in relation to the basic 1998 consolidated  financial statements
taken as a whole,  presents fairly in all material  respects the information set
forth therein.


                                                           Deloitte & Touche LLP

Kansas City, Missouri
February 2, 1999




                                       F-5
<PAGE>
<TABLE>
<CAPTION>


CONSOLIDATED STATEMENTS OF OPERATIONS                                                          Sprint Spectrum L.P.
(millions)
-------------------------------------------------------------------------------------------------------------------
Years Ended December 31,                                                    2000           1999            1998
-------------------------------------------------------------------------------------------------------------------

<S>                                                                   <C>             <C>             <C>
Net Operating Revenues                                                $     3,942     $    2,258      $      961
-------------------------------------------------------------------------------------------------------------------

Operating Expenses
      Costs of services and products                                        1,822          1,451             925
      Selling, general and administrative                                   1,896          1,502           1,063
      Depreciation                                                            855            686             531
      Amortization                                                             63             61              61
-------------------------------------------------------------------------------------------------------------------
      Total operating expenses                                              4,636          3,700           2,580
-------------------------------------------------------------------------------------------------------------------

Operating Loss                                                               (694)        (1,442)         (1,619)

Interest expense                                                             (689)          (536)           (387)
Other income, net                                                              46             13              10
-------------------------------------------------------------------------------------------------------------------

Loss before Extraordinary Items                                            (1,337)        (1,965)         (1,996)
Extraordinary items                                                             -            (33)            (43)
-------------------------------------------------------------------------------------------------------------------

Net Loss                                                              $    (1,337)   $    (1,998)    $    (2,039)
                                                                     ----------------------------------------------









































                                     See accompanying Notes to Consolidated Financial Statements.
</TABLE>

                                       F-6
<PAGE>
<TABLE>
<CAPTION>

CONSOLIDATED BALANCE SHEETS                                                                         Sprint Spectrum L.P.
(millions)
-------------------------------------------------------------------------------------------------------------------------
December 31,                                                                                 2000              1999
-------------------------------------------------------------------------------------------------------------------------

    Assets
    Current assets
<S>                                                                                    <C>               <C>
      Cash and equivalents                                                             $        117      $         16
      Accounts receivable, net of allowance for doubtful
        accounts of $57 and $28                                                                 567               361
      Affiliate receivable                                                                      161               142
      Inventories                                                                               493               310
      Prepaid expenses and other assets                                                         103                54
-------------------------------------------------------------------------------------------------------------------------
      Total current assets                                                                    1,441               883

    Property, plant and equipment
      Network equipment                                                                       4,973             3,838
      Construction work in progress                                                           1,161             1,151
      Buildings and leasehold improvements                                                    1,305               873
      Other                                                                                     439               381
-------------------------------------------------------------------------------------------------------------------------
      Total property, plant and equipment                                                     7,878             6,243
      Accumulated depreciation                                                               (2,143)           (1,447)
-------------------------------------------------------------------------------------------------------------------------
      Net property, plant and equipment                                                       5,735             4,796

    Intangible assets
      PCS licenses                                                                            2,129             2,137
      Microwave relocation costs                                                                344               314
      Customer base                                                                              13                 -
-------------------------------------------------------------------------------------------------------------------------
      Total intangible assets                                                                 2,486             2,451
      Accumulated amortization                                                                 (234)             (171)
-------------------------------------------------------------------------------------------------------------------------
      Net intangible assets                                                                   2,252             2,280
    Other assets                                                                                 82                71
-------------------------------------------------------------------------------------------------------------------------

    Total                                                                              $      9,510      $      8,030
                                                                                      -----------------------------------

Liabilities and Partners' Capital
    Current liabilities
      Current maturities of long-term debt                                             $        183      $          5
      Accounts payable                                                                          612               418
      Affiliated payables to Sprint                                                             465               274
      Construction obligations                                                                  589               664
      Accrued advertising                                                                        97                97
      Accrued expenses and other current liabilities                                            601               405
-------------------------------------------------------------------------------------------------------------------------
      Total current liabilities                                                               2,547             1,863

    Long-term debt                                                                            9,656             7,960

    Other noncurrent liabilities                                                                145                89

    Partners' capital and accumulated deficit:
      Partners' capital                                                                       4,495             4,114
      Accumulated deficit                                                                    (7,333)           (5,996)
-------------------------------------------------------------------------------------------------------------------------
      Total partners' capital and accumulated deficit                                        (2,838)           (1,882)
-------------------------------------------------------------------------------------------------------------------------

    Total                                                                              $      9,510      $      8,030
                                                                                      -----------------------------------














                                     See accompanying Notes to Consolidated Financial Statements.
</TABLE>

                                       F-7

<PAGE>
<TABLE>
<CAPTION>

CONSOLIDATED STATEMENTS OF CASH FLOWS                                                             Sprint Spectrum L.P.
(millions)
-----------------------------------------------------------------------------------------------------------------------
Years Ended December 31,                                                 2000              1999             1998
-----------------------------------------------------------------------------------------------------------------------

Operating Activities

<S>                                                                 <C>               <C>              <C>
Net loss                                                            $     (1,337)     $     (1,998)    $     (2,039)
Adjustments to reconcile net loss to net cash used by operating
   activities:
     Depreciation and amortization                                           918               747              592
     Extraordinary loss                                                        -                33               43
     Gain on sale of assets                                                  (34)                -                -
     Amortization of debt discount and issuance costs                         59                56               54
     Changes in assets and liabilities:
       Accounts receivable, net                                             (206)             (135)            (129)
       Affiliated receivables and payables, net                              180               312             (113)
       Inventories and other current assets                                 (189)             (232)               9
       Accounts payable and other current liabilities                        269               216              211
       Other noncurrent assets and liabilities                                32                34               25
-----------------------------------------------------------------------------------------------------------------------
Net cash used by operating activities                                       (308)             (967)          (1,347)
-----------------------------------------------------------------------------------------------------------------------

Investing Activities

Capital expenditures                                                      (1,957)           (1,712)          (1,248)
Proceeds from sale of assets                                                 165                 -                -
-----------------------------------------------------------------------------------------------------------------------
Net cash used by investing activities                                     (1,792)           (1,712)          (1,248)
-----------------------------------------------------------------------------------------------------------------------

Financing Activities

Proceeds from long-term debt                                               1,822             4,074            5,234
Payments on long-term debt                                                     -            (1,875)          (2,889)
Partners' capital contributions                                              379               426              253
-----------------------------------------------------------------------------------------------------------------------
Net cash provided by financing activities                                  2,201             2,625            2,598
-----------------------------------------------------------------------------------------------------------------------

Increase (Decrease) in Cash and Equivalents                                  101               (54)               3
Cash and Equivalents at Beginning of Year                                     16                70               67
-----------------------------------------------------------------------------------------------------------------------

Cash and Equivalents at End of Year                                 $        117      $         16     $         70
                                                                    ----------------- ---------------- ----------------




























                                     See accompanying Notes to Consolidated Financial Statements.
</TABLE>

                                   F-8
<PAGE>
<TABLE>
<CAPTION>


CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS' CAPITAL                                         Sprint Spectrum L.P.
(millions)
---------------------------------------------------------------------------------------------------------------------

                                                                      Partners'        Accumulated
                                                                       Capital           Deficit           Total
---------------------------------------------------------------------------------------------------------------------

<S>       <C>                                                     <C>               <C>              <C>
Beginning 1998 balance                                            $    3,437        $   (1,959)      $    1,478
Capital contributions                                                    253                 -              253
Net loss                                                                   -            (2,039)          (2,039)
---------------------------------------------------------------------------------------------------------------------

Ending 1998 balance                                                    3,690            (3,998)            (308)
Capital contributions                                                    426                 -              426
Net loss                                                                   -            (1,998)          (1,998)
Other, net                                                                (2)                -               (2)
---------------------------------------------------------------------------------------------------------------------

Ending 1999 balance                                                    4,114            (5,996)          (1,882)
Capital contributions                                                    379                 -              379
Net loss                                                                   -            (1,337)          (1,337)
Other, net                                                                 2                 -                2
---------------------------------------------------------------------------------------------------------------------

Ending 2000 balance                                               $    4,495        $   (7,333)      $   (2,838)
                                                                 ----------------------------------------------------














































                                     See accompanying Notes to Consolidated Financial Statements.
</TABLE>

                                      F-9
<PAGE>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS                  Sprint Spectrum L.P.

--------------------------------------------------------------------------------
1.  Summary of Significant Accounting Policies
--------------------------------------------------------------------------------

Tracking Stock Formation

Sprint  Spectrum L.P.,  with its wholly owned  subsidiaries  (Sprint  Spectrum),
began  commercial  code division  multiple  access  operations  late in the 1996
fourth quarter. Sprint Spectrum is wholly owned by Sprint Corporation (Sprint).

In November 1998, Sprint purchased the remaining  ownership  interests in Sprint
Spectrum   Holding   Company,   L.P.   (Holdings)   and   MinorCo,   L.P.   from
Tele-Communications, Inc., Comcast Corporation and Cox Communications, Inc. (the
Cable Partners).  This transaction is referred to as the PCS  Restructuring.  At
that time,  Sprint  created  the Sprint PCS Group,  which  consists  of Sprint's
wireless  personal  communication  services (PCS). The Sprint PCS Group includes
Sprint  Spectrum,   American  PCS,  L.P.  (APC),  PhillieCo,  L.P.  (PhillieCo),
SprintCom, Inc. (SprintCom) and Cox Communications PCS, L.P. (Cox PCS).

Sprint's  PCS  stock,  which is a  separate  class of Sprint  common  stock,  is
intended to reflect the performance of the PCS Group.

Basis of Consolidation and Presentation

The consolidated  financial  statements  include the accounts of Sprint Spectrum
and its subsidiaries.

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

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

Allocation of Shared Services

Sprint  directly  assigns,  where possible,  certain general and  administrative
costs to Sprint Spectrum based on its actual use of those services. Where direct
assignment of costs is not possible, or practical, Sprint uses indirect methods,
including time studies,  to estimate the assignment of costs to Sprint Spectrum.
Sprint  believes that the costs allocated are comparable to the costs that would
be incurred if Sprint Spectrum would have been operating on a stand-alone basis.
The allocation of shared services may change at the discretion of Sprint.

Allocation of Financing

Financing  activities for Sprint Spectrum are managed by Sprint on a centralized
basis.  Debt  incurred by Sprint on behalf of Sprint  Spectrum  is  specifically
allocated  to  and  reflected  in  Sprint  Spectrum's   consolidated   financial
statements.  Interest  expense  is  allocated  to  Sprint  Spectrum  based on an
interest rate that is substantially equal to the rate it would be able to obtain
from third parties as a direct or indirect wholly owned Sprint  subsidiary,  but
without the benefit of any guaranty by Sprint.

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

The allocation of financing may change at the discretion of Sprint.

Income Taxes

Sprint  Spectrum  has not provided for federal or state income taxes since taxes
are the responsibility of the partners.

Revenue Recognition

Sprint  Spectrum  recognizes  operating  revenues as services are rendered or as
products are delivered to customers.  Service  activation  fees are deferred and
amortized over the average life of the service.

Sprint Spectrum  implemented  SEC Staff  Accounting  Bulletin No. 101,  "Revenue
Recognition  in  Financial  Statements,"  during  the  fourth  quarter  of 2000,
effective  the  beginning of the year.  This bulletin  requires  activation  and
installation  fee revenues that do not represent a separate  earnings process to
be  deferred  and  recognized  over the  estimated  service  period.  Associated
incremental  direct  costs  may  also be  deferred,  but only to the  extent  of
revenues subject to deferral.  The effect of the change on the nine months ended
September 30, 2000 was to decrease revenues and expenses by $60 million.

Cash and Equivalents

Cash  equivalents  generally  include  highly liquid  investments  with original
maturities of three months or less. They are stated at cost, which  approximates
market value. Sprint Spectrum uses controlled  disbursement banking arrangements
as part of its cash  management  program.  Outstanding  checks in excess of cash
balances were included in accounts payable. These amounts totaled $17 million at
year-end 2000 and $22 million at year-end 1999.  Sprint  Spectrum had sufficient
funds  available to fund these  outstanding  checks when they were presented for
payment.

                                      F-10
<PAGE>

Inventories

Inventories  are stated at the lower of cost  (principally  first-in,  first-out
method) or replacement value.

Property, Plant and Equipment

Property,  plant and equipment is recorded at cost.  Generally,  ordinary  asset
retirements and disposals are charged against  accumulated  depreciation with no
gain or loss  recognized.  Property,  plant and  equipment is  depreciated  on a
straight-line basis over estimated economic useful lives. Repair and maintenance
costs are expensed as incurred.

Capitalized Interest

Sprint Spectrum  capitalizes  interest costs related to network buildout and PCS
licenses, which totaled $99 million in 2000, $71 million in 1999 and $36 million
in 1998.

Intangible Assets

Sprint Spectrum evaluates the recoverability of intangible assets when events or
circumstances  indicate  that such assets  might be  impaired.  Sprint  Spectrum
determines  impairment by comparing the undiscounted future cash flows estimated
to be generated by these assets to their respective carrying value. In the event
impairment  exists,  a loss is  recognized  based on the  amount  by  which  the
carrying value exceeds the fair value of the asset.

PCS Licenses

Sprint Spectrum  acquired  licenses from the Federal  Communications  Commission
(FCC) to operate as a PCS service provider. These licenses are granted for up to
10-year terms with renewals for additional 10-year terms if license  obligations
are  met.   These  licenses  are  recorded  at  cost  and  are  amortized  on  a
straight-line  basis over 40 years when service begins in a specific  geographic
area.  Accumulated  amortization  totaled $205 million at year-end 2000 and $152
million at year-end 1999.

Microwave Relocation Costs

Sprint   Spectrum  has  incurred  costs  related  to  microwave   relocation  in
constructing  the PCS network.  Microwave  relocation  costs are being amortized
over the remaining lives of the PCS licenses.  Accumulated  amortization totaled
$27 million at year-end 2000 and $19 million at year-end 1999.

Customer Base

Sprint Spectrum  capitalized the fair value of $13 million for the customer base
acquired in 2000. The customer base is being  amortized over 30 months using the
straight-line  method.  Accumulated  amortization totaled $2 million at year-end
2000.


Advertising Costs

Sprint  Spectrum  expenses costs of advertising as incurred.  Advertising  costs
totaled $456 million in 2000, $371 million in 1999 and $212 million in 1998.

Stock-based Compensation

Sprint  Spectrum  participates  in the  incentive-based  stock  option plans and
employee  stock  purchase plan  administered  by Sprint for executives and other
employees.  Sprint Spectrum adopted the pro forma disclosure  requirements under
Statement  of  Financial  Accounting  Standards  (SFAS)  No.  123,  "Stock-based
Compensation,"  and continues to apply  Accounting  Principles Board Opinion No.
25,  "Accounting for Stock Issued to Employees," and related  interpretations to
its stock option and employee stock purchase plans.  Had Sprint Spectrum applied
SFAS 123,  pro forma net loss would  have been  $1,522  million in 2000,  $2,051
million in 1999 and would not have changed materially for the year ended 1998.

Trademark Agreement

Sprint(R) is a  registered  trademark of Sprint and Sprint PCSSM is a registered
service mark of Sprint. Sprint Spectrum uses these on a royalty-free basis under
trademark license agreements.

--------------------------------------------------------------------------------
2.  Employee Benefit Plans
--------------------------------------------------------------------------------

Defined Benefit Pension Plan

Effective  January  1999,  most Sprint  Spectrum  employees  became  eligible to
participate in Sprint's  pension plans.  Pension  benefits are based on years of
service and the participants' compensation.

Sprint's policy is to make plan contributions equal to an actuarially determined
amount  consistent  with federal tax  regulations.  The funding  objective is to
accumulate  funds at a  relatively  stable rate over the  participants'  working
lives so benefits are fully funded at retirement.

Net  pension  costs  are  determined  for  Sprint  Spectrum  based  on a  direct
calculation  of service  costs.  Sprint  Spectrum  recorded net pension costs of
approximately $5 million in 2000 and $4 million in 1999.

Defined Contribution Plan

Prior to January  1999,  Sprint  Spectrum  sponsored  a savings  and  retirement
program for certain employees.  Sprint Spectrum matched  contributions  equal to
50% of the contribution of each participant,  up to the first 6% of compensation
that the employee  elected to contribute.  Expense under the savings plan was $6
million in 1998.  Effective January 1999, Sprint Spectrum employees began making
contributions to Sprint's defined  contribution plan. The existing assets of the
Sprint Spectrum savings plan were rolled over to Sprint's  defined  contribution
plan in early  1999.  Sprint  Spectrum  recorded  expense of  approximately  $14
million in 2000 and $9 million in 1999 for matching  contributions to the Sprint
defined contribution plans.

Postretirement Benefits

Effective January 1999, most Sprint Spectrum  employees also became eligible for
postretirement  benefits  (principally  medical  and life  insurance  benefits).
Retiring  employees  are eligible for benefits on a  shared-cost  basis.  Sprint
funds the accrued costs as benefits are paid.

Net postretirement  benefits costs are determined for Sprint Spectrum based on a
direct calculation of service costs. Sprint Spectrum recorded net postretirement
benefits costs of $0.2 million in 2000 and $1 million in 1999.


                                      F-11
<PAGE>

Long-term Incentive Plan

Sprint Spectrum employees meeting certain eligibility requirements were included
in its long-term incentive plan (LTIP). Under this plan,  participants  received
appreciation  units based on independent  appraisals.  Appreciation on the units
was  based on annual  independent  appraisals.  The 1997 plan year  appreciation
units vest 25% per year  beginning one year from the grant date and expire after
10 years.

In  connection  with  the PCS  Restructuring,  Sprint  discontinued  the  Sprint
Spectrum  LTIP.  The  appreciation  units were converted to shares of Sprint PCS
stock and  options to buy PCS stock  based on a formula  designed to replace the
appreciated  value of the units at the beginning of July 1998.  For vested units
at year-end 1998,  participants could elect to receive the appreciation in cash,
or in shares and options. Most elected to receive shares and options.

In  1999,   Sprint  began  issuing  the  shares  and  the  options  have  become
exercisable, based on the vesting requirements of the converted units.

--------------------------------------------------------------------------------
3.  Long term Debt
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>

Sprint Spectrum's long-term debt at year-end was as follows:

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

                                                                 Maturing             2000              1999
------------------------------------------------------------------------------------------------------------------
                                                                                            (millions)
Senior notes
<S>                                                            <C>             <C>              <C>
    7.6% to 9.5% (1)                                           2004 to 2028    $     6,331      $      5,331
    11.0% to 12.5%                                             2001 to 2006            714               661
Notes payable and commercial paper (1)                              -                1,945             1,124
Intercompany notes with Sprint
    8.4%                                                           2006                844               844
Other
    6.5%                                                           2001                  5                 5
------------------------------------------------------------------------------------------------------------------
                                                                                     9,839             7,965
Less:  current maturities                                                              183                 5
------------------------------------------------------------------------------------------------------------------
Long-term debt                                                                 $     9,656      $      7,960
                                                                               -----------------------------------

(1) These borrowings were incurred by Sprint and allocated to Sprint Spectrum.  See Note 1 for a more detailed description of how
    Sprint allocates financing to Sprint Spectrum.

</TABLE>



Scheduled  principal payments,  excluding  reclassified  short-term  borrowings,
during each of the next five years are as follows:

------------------------------------------------------
                                         (millions)
2001                                  $        183
2002                                         1,000
2003                                             -
2004                                         1,406
2005                                             -
------------------------------------------------------


Short-term Borrowings

Sprint  allocated a portion of its notes payable and commercial  paper to Sprint
Spectrum.  Though Sprint's  borrowings are renewable at various dates throughout
the year,  they were classified as long-term debt because of Sprint's intent and
ability,  through unused credit  facilities,  to refinance these borrowings on a
long-term  basis.  The weighted average interest rate charged to Sprint Spectrum
was 8.3% at year-end 2000 and 7.8% at year-end 1999.

In the 1999 first  quarter,  Sprint  Spectrum  terminated  its revolving  credit
facilities and repaid,  prior to scheduled  maturities,  the related outstanding
balance of $1.7 billion.  These  facilities had interest rates ranging from 5.6%
to 6.3%. These repayments  resulted in a $33 million  extraordinary  loss. These
short-term  borrowings  were repaid  with the  long-term  financing  provided by
Sprint.

Long-term Debt

Sprint  Spectrum had borrowings  allocated from Sprint  totaling $8.3 billion at
year-end  2000 and $6.5  billion at  year-end  1999.  Sprint  Spectrum  used the
proceeds from debt  allocated  from Sprint and other  borrowings  from Sprint to
fund new capital investments,  repay existing debt and fund operating losses and
working capital requirements.

Sprint  loaned  Sprint  Spectrum  $844 million in 1999 and $180 million in 1998.
Sprint Spectrum repaid $180 million in 1999.

In 1998, Sprint Spectrum redeemed,  prior to scheduled maturities,  $2.9 billion
of vendor  financing  and term loans with a weighted  average  interest  rate of
8.4%.  This resulted in a $43 million  extraordinary  loss.  The debt was repaid
using proceeds from senior notes allocated from Sprint.

Sprint  Spectrum's  Senior  Discount  notes  are  recorded  net  of  unamortized
discounts  totaling  $36  million at  year-end  2000 and $89 million at year-end
1999.

                                      F-12

<PAGE>

Other

Sprint  Spectrum  had  complied  with all  restrictive  or  financial  covenants
relating to its debt arrangements at year-end 2000.

Sprint  Spectrum  estimates the fair value of its long-term debt using available
market  information and appropriate  valuation  methodologies.  As a result, the
following  estimates do not  necessarily  represent the values  Sprint  Spectrum
could realize in a current market exchange.  Although management is not aware of
any factors that would affect the year-end  2000  estimated  fair values,  those
amounts have not been  comprehensively  revalued for purposes of these financial
statements  since that date.  Therefore,  estimates of fair value after year-end
2000 may differ significantly.

The estimated fair value of Sprint Spectrum's  long-term debt is based on quoted
market prices for publicly traded issues.  The estimated fair value of all other
issues is based on the  present  value of  estimated  future  cash flows using a
discount rate based on the risks  involved.  The estimated  fair value of Sprint
Spectrum's  long-term debt was $9.5 billion at year-end 2000 and $7.8 billion at
year-end 1999.

In 1998,  Sprint  deferred  losses from the  termination  of interest  rate swap
agreements used to hedge a portion of a $5.0 billion debt offering. A portion of
these  losses  totaling $65 million  were  allocated to Sprint  Spectrum and are
being amortized to interest expense using the effective interest method over the
term of the debt. At year-end  2000,  Sprint  Spectrum's  share of the remaining
unamortized deferred loss totaled $53 million.

--------------------------------------------------------------------------------
4.  Commitments and Contingencies
--------------------------------------------------------------------------------

Litigation, Claims and Assessments

Various  suits  arising in the ordinary  course of business are pending  against
Sprint  Spectrum.  Management  cannot predict the final outcome of these actions
but believes they will not be material to the consolidated financial statements.

Commitments

At year-end 2000, Sprint Spectrum has purchase  commitments with various vendors
to purchase handsets and other equipment through 2001.  Outstanding  commitments
at year-end totaled approximately $830 million.

Sprint  Spectrum has an  agreement  with a vendor to provide PCS call record and
retention  services.  Annual minimum  commitments  range from $40 to $60 million
through 2004.  The agreement may be extended  beyond 2004 at one-year  intervals
with consent of both parties.  Termination of the agreement is permissible  with
cause.


Operating Leases

Minimum  rental  commitments  at year-end 2000 for all  noncancelable  operating
leases,  consisting mainly of leases for cell and switch sites and office space,
are as follows:

------------------------------------------------------
                                         (millions)

2001                                  $       101
2002                                           69
2003                                           53
2004                                           35
2005                                           11
Thereafter                                     34
------------------------------------------------------


Gross rental expense totaled $234 million in 2000, $172 million in 1999 and $139
million in 1998.  Rental  commitments  for subleases were not  significant.  The
table excludes  renewal  options related to certain cell and switch site leases.
These renewal  options  generally have five-year terms and may be exercised from
time to time.

--------------------------------------------------------------------------------
5.  Additional Financial Information
--------------------------------------------------------------------------------

Supplemental Cash Flows Information

Sprint Spectrum paid cash for interest,  net of capitalized  interest,  totaling
$562 million in 2000, $409 million in 1999 and $189 million in 1998.

Noncash activities for Sprint Spectrum included $154 million of accrued interest
converted to long-term debt in 1998.

Related Party Transactions

Sprint

Sprint Spectrum is using Sprint's global markets  division as its  interexchange
carrier and  purchasing  wholesale  long  distance for resale to its  customers.
Additionally,  Sprint  provided  Sprint  Spectrum  with Caller ID  services  and
various  other goods and  services.  Charges to Sprint  Spectrum for these items
totaled $238 million in 2000, $164 million in 1999 and $125 million in 1998.

Sprint Spectrum provides Sprint with access to its network and telemarketing and
various other services. Charges to Sprint for these items totaled $21 million in
2000 and $2 million in 1999.

Sprint provided management, printing, mailing and warehousing services to Sprint
Spectrum  totaling $103 million in 2000,  $40 million in 1999 and $25 million in
1998.

The difference  between  Sprint's  actual  interest costs and the interest costs
charged to Sprint  Spectrum on allocated debt totaled $130 million in 2000, $108
million  in  1999  and $9  million  in  1998.  See  Note  1 for a more  detailed
description of how Sprint allocates financing to Sprint Spectrum.  Additionally,
Sprint had an investment in Sprint  Spectrum's  Senior  Discount  notes totaling
$169  million at year-end  2000 and $150 million at year-end  1999.  The related
interest  expense  totaled  $19  million  in 2000,  $16  million in 1999 and $15
million in 1998.

                                      F-13
<PAGE>

Interest  expense  related to the  intercompany  notes with  Sprint  totaled $70
million in 2000, $60 million in 1999 and $26 million in 1998.

APC

APC reimburses  Sprint Spectrum for certain  allocated  costs.  APC provides PCS
services in the  Washington,  DC --  Baltimore  major  trading  area  (MTA).  In
addition,  APC pays  affiliation fees to Sprint  Spectrum.  Reimbursement  costs
totaled $62 million in 2000, $60 million in 1999 and $15 million in 1998. Sprint
Spectrum  earned $10 million in 2000,  $6 million in 1999 and $4 million in 1998
for  affiliation  fees.  Sprint  Spectrum had a receivable from APC totaling $37
million at year-end 2000 and $8 million at year-end 1999.

PhillieCo

Sprint  Spectrum  provides  various  services  and charges  affiliation  fees to
PhillieCo,  which provides PCS services in the  Philadelphia  MTA. These charges
totaled $66 million in 2000, $47 million in 1999 and $21 million in 1998. Sprint
Spectrum had a receivable  from PhillieCo  totaling $15 million at year-end 2000
and $5 million at year-end 1999.

SprintCom

In 1997, Sprint Spectrum began building SprintCom's PCS network.  These services
include  engineering,  management,  purchasing,  accounting  and  other  related
services and totaled $518 million in 2000, $395 million in 1999 and $100 million
in 1998. Sprint Spectrum had a receivable from SprintCom totaling $86 million at
year-end 2000 and $98 million at year-end 1999.

Cox PCS

Cox PCS, which provides PCS services in the Los  Angeles--San  Diego--Las  Vegas
MTAs, reimburses Sprint Spectrum for certain allocated costs and participates in
certain handset  agreements.  Allocated costs totaled $159 million in 2000, $121
million in 1999 and $34 million in 1998.  Sprint  Spectrum had a receivable from
Cox PCS totaling $23 million at year-end 2000 and $30 million at year-end 1999.

Major Customer

Sprint Spectrum  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 subsequent  service  revenues  generated by sales to
its customers accounted for approximately 25% of net operating revenues in 2000,
28% in 1999 and 25% in 1998

Concentrations of Credit Risk

Sprint  Spectrum's  accounts  receivable are not subject to any concentration of
credit risk.

--------------------------------------------------------------------------------
6.  Recently Issued Accounting Pronouncements
--------------------------------------------------------------------------------

In June 1998,  the  Financial  Accounting  Standards  Board  issued SFAS No.133,
"Accounting for Derivative  Instruments and Hedging  Activities."  This standard
requires all derivatives to be recorded on the balance sheet as either assets or
liabilities  and be measured at fair value.  Gains or losses from changes in the
derivative  values are to be accounted for based on how the  derivative was used
and whether it qualified  for hedge  accounting.  When adopted in January  2001,
this  statement  had  no  material  impact  on  Sprint  Spectrum's  consolidated
financial statements.

In September 2000, the Financial Accounting Standards Board issued SFAS No. 140,
"Accounting for Transfers and Servicing of Financial Assets and  Extinguishments
of Liabilities--a replacement of FASB Statement No. 125." This statement revises
the  standards  for  accounting  for  securitizations  and  other  transfers  of
financial assets and provides consistent standards for distinguishing  transfers
from sales and secured borrowings.  This statement is effective for transactions
occurring  after March 31, 2001 and is not expected to have a material impact on
Sprint Spectrum's consolidated financial statements.

--------------------------------------------------------------------------------
7.  Subsequent Event (Unaudited)
--------------------------------------------------------------------------------

In January  2001,  Sprint issued $2.4 billion of debt  securities  and allocated
$750 million of debt maturing in 2006 to Sprint  Spectrum at an interest rate of
8.2%. The allocated debt was used mainly to repay commercial paper.




                                      F-14
<PAGE>

<TABLE>
<CAPTION>
                                                         SPRINT SPECTRUM L.P.
                                     SCHEDULE II -- CONSOLIDATED VALUATION AND QUALIFYING ACCOUNTS
                                             Years Ended December 31, 2000, 1999 and 1998


                                                                     Additions
                                                             ---------------------------
                                                Balance                     Charged to                     Balance
                                               Beginning     Charged to        Other          Other        End of
                                                of Year        Income        Accounts       Deductions        Year
----------------------------------------------------------------------------------------------------------------------
                                                                           (millions)
2000
<S>                                         <C>            <C>           <C>            <C>             <C>
    Allowance for doubtful accounts         $      28      $      142    $        -     $      (113)(1) $       57
                                            --------------------------------------------------------------------------

1999
    Allowance for doubtful accounts         $      10      $      123    $        -     $      (105)(1) $       28
                                            --------------------------------------------------------------------------

1998
    Allowance for doubtful accounts         $      9       $       52    $        -     $       (51)(1) $       10
                                            --------------------------------------------------------------------------


(1) Accounts written off, net of recoveries.

All other schedules are omitted because they are not applicable or because the required information is contained in the consolidated
financial statements or notes thereto included in this document.
</TABLE>

                                      F-15
<PAGE>

--------------------------------------------------------------------------------
MANAGEMENT'S DISCUSSION AND ANALYSIS OF                          Sprint Spectrum
FINANCIAL CONDITION AND RESULTS OF OPERATIONS                Finance Corporation

Sprint Spectrum Finance Corporation (FinCo), a wholly owned subsidiary of Sprint
Spectrum  L.P.,  was formed to be a co-obligor of certain  securities  issued by
Sprint Spectrum. FinCo has nominal assets and does not conduct any operations.


                                      F-16
<PAGE>
<TABLE>
<CAPTION>

--------------------------------------------------------------------------------------------------------------------
BALANCE SHEETS (Unaudited)                                                      Sprint Spectrum Finance Corporation

--------------------------------------------------------------------------------------------------------------------
December 31,                                                                               2000            1999
--------------------------------------------------------------------------------------------------------------------

Liabilities and Shareholder's Deficit
<S>                                                                                  <C>             <C>
Payable to Sprint Spectrum                                                           $     1,497     $     1,497
--------------------------------------------------------------------------------------------------------------------

Shareholder's deficit
     Common stock, $1.00 par value; 1,000 shares authorized;
         100 shares issued and outstanding                                                   100             100
     Accumulated deficit                                                                  (1,597)         (1,597)
--------------------------------------------------------------------------------------------------------------------
     Total shareholder's deficit                                                          (1,497)         (1,497)
--------------------------------------------------------------------------------------------------------------------
Total                                                                                $         -     $         -
                                                                                     -------------------------------
















































                                               See accompanying Note to Balance Sheets.
</TABLE>

                                      F-17
<PAGE>

--------------------------------------------------------------------------------
NOTE TO BALANCE SHEETS (Unaudited)           Sprint Spectrum Finance Corporation

FinCo,  a wholly owned  subsidiary of Sprint  Spectrum  L.P., was formed to be a
co-obligor of certain  securities  issued by Sprint Spectrum.  FinCo has nominal
assets and had no  operations  or cash flows for the years  ended  December  31,
2000, 1999 and 1998. At year-end 2000, FinCo was a co-obligor of $714 million of
Sprint  Spectrum's  senior  notes.  See  Note 3 of  Sprint  Spectrum's  Notes to
Consolidated Financial Statements for more information.


                                      F-18
<PAGE>