sprint nextel Quarterly Presentations 2005 1st

Investor UpdateFirst Quarter 2005

20 April 2005

© 2005 Sprint. All Rights Reserved. Sprint and the diamond logo design are trademarks of Sprint Communications Company L.P. All other trademarks are the property of their respective owners.

First Quarter 2005 Investor Update 2

Cautionary Statement Regarding Forward-Looking InformationThe information highlighted in this presentation includes selected financial information and should be read in conjunction with our consolidated financial statements and notes and the Cautionary Statements Regarding Forward-Looking Information included in our press release dated April 20, 2005, which is posted on Sprint’s website at <<http://www.sprint.com/sprint/ir/fn/>>, as well as our financial statements and notes, the trends and risk factors affecting us and other information provided in our annual, quarterly and current reports, proxy statement, and other filings made with the Securities and Exchange Commission under Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934.

This presentation includes "forward-looking statements" within the meaning of securities laws. The statements in this presentation regarding the business outlook and expected performance as well as other statements that are not historical facts are forward-looking statements. The words "estimate," "project," "forecast," "intend," "expect," "believe," "target," "providing guidance" and similar expressions identify forward-looking statements, which are estimates and projections reflecting management's judgments based on currently available information and involve a number of risks and uncertainties that could cause actual results to differ materially from those suggested by the forward-looking statements. Forward-looking statements speak only as of the date indicated. Sprint is not obligated to publicly release any revisions to forward-looking statements to reflect events after the date of any news release or unforeseen events. With respect to these forward-looking statements, Sprint has made assumptions regarding, among other things, customer and network usage, customer growth and retention, pricing, costs to acquire customers and to provide services, the timing of various events and the economic environment.

This presentation contains certain non-GAAP financial measures as well as reconciliations to the most directly comparable GAAP financial measures. Because Sprint does not predict special items that might occur in the future, and our forecasts are developed at a level of detail different than that used to prepare GAAP-based financial measures, Sprint does not provide reconciliations to its forward-looking measures. Definitions of these non-GAAP financial measures are available in the April 20, 2005, First Quarter 2005 Investor Update located at <http://www.sprint.com/sprint/ir/>.


"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995A number of the matters discussed in this document are not historical or current facts deal with potential future circumstances and developments, in particular, information regarding the new company, including expected synergies resulting from the merger of Sprint and Nextel, combined operating and financial data, future technology plans, and whether and when the transactions contemplated by the merger agreement will be consummated. The discussion of such matters is qualified by the inherent risks and uncertainties surrounding future expectations generally, and also may materially differ from actual future experience involving any one or more of such matters. Such risks and uncertainties include: the failure to realize capital and operating expense synergies; the result of the review of the proposed merger by various regulatory agencies, and any conditions imposed on the new company in connection with consummation of the merger; approval of the merger by the stockholders of Sprint and Nextel and satisfaction of various other conditions to the closing of the merger contemplated by the merger agreement; and the risks that are described from time to time in Sprint’s and Nextel’s respective reports filed with the SEC, including each company’s annual report on Form 10-K for the year ended December 31, 2004. This document speaks only as of its date, and Sprint and Nextel each disclaims any duty to update the information herein.

Additional Information and Where to Find ItSprint Corporation has filed a Registration Statement on Form S-4 with the SEC (Reg. No. 333-123333) containing a preliminary joint proxy statement/prospectus regarding the proposed transaction. SHAREHOLDERS OF SPRINT AND SHAREHOLDERS OF NEXTEL ARE ENCOURAGED TO READ THE REGISTRATION STATEMENT AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC, INCLUDING THE JOINT PROXY STATEMENT/ PROSPECTUS THAT IS PART OF THE REGISTRATION STATEMENT, BECAUSE THEY CONTAIN IMPORTANT INFORMATION ABOUT THE COMBINATION. The final joint proxy statement/prospectus will be mailed to shareholders of Sprint and shareholders of Nextel. Investors and security holders will be able to obtain the documents free of charge at the SEC’s web site, www.sec.gov, from Sprint Investor Relations at Sprint Corporation, 6200 Sprint Parkway, Overland Park, Kansas 66251, 800-259-3755, Option 1 or from Nextel Investor Relations at 2001 Edmund Halley Drive, Reston, Virginia 20191, 703-433-4300.

Participants in SolicitationSprint, Nextel and their respective directors and executive officers, other members of management and employees and the proposed directors and executive officers of Sprint Nextel, may be deemed to be participants in the solicitation of proxies in respect of the combination. Information concerning the proposed directors and executive officers of Sprint Nextel, Sprint’s and Nextel’s respective directors and executive officers and other participants in the proxy solicitation, including a description of their interests, is included in the joint proxy statement/prospectus contained in the above-referenced Registration Statement on Form S-4.


Reconciliation of non-GAAP Liquidity Measures

Quarter ended March 31, 2005Long Other &

Consolidated Wireless Local Distance Eliminations

Operating income (loss) 1,036$ 455$ 445$ 146$ (10)$ Special items (1) - 2 1 (3) - Adjusted operating income (loss)* 1,036 457 446 143 (10) Depreciation and amortization 1,036 644 277 117 (2) Adjusted EBITDA* 2,072 1,101$ 723$ 260$ (12)$ Adjust for special items - Other operating activities, net (2) (688) Cash provided by operating activities-GAAP 1,384 Capital expenditures (659) Dividends paid (187) Investments in and loans to affiliates, net (14) Other investing activities, net 8 Free Cash Flow* 532 Decrease in debt, net (1,012) Investments in debt securities, net 19 Proceeds from common stock issued 58 Other financing activities, net 13 Change in cash and equivalents - GAAP (390)$

Quarter ended March 31, 2004Long Other &

Consolidated Wireless Local Distance Eliminations

Operating income (loss) 724$ 277$ 446$ 11$ (10)$ Special items (1) 30 4 14 12 - Adjusted operating income (loss)* 754 281 460 23 (10) Depreciation and amortization 1,233 644 268 320 1 Adjusted EBITDA* 1,987 925$ 728$ 343$ (9)$ Adjust for special items (30) Other operating activities, net (2) (919) Cash provided by operating activities-GAAP 1,038 Capital expenditures (683) Dividends paid (115) Other investing activities, net 3 Free Cash Flow* 243 Decrease in debt, net (22) Proceeds from common stock issued 33 Investments in debt securities, net 34 Other financing activities, net 16 Change in cash and equivalents - GAAP 304$

(1) In the 2005 first quarter, Sprint's restructuring activities were related to its ongoing organizational realignment initiatives as well as the Web

In the 2004 first quarter, Sprint recorded a $30 million pre-tax restructuring charge related to its ongoing organizational realignment initiatives as well as the Web Hosting wind-down. These charges reduced net income by $19 million.

(2) Other operating activities, net includes the change in working capital, change in deferred income taxes, miscellaneous operating activities and

Hosting wind-down. This activity had no impact on consolidated results.

non-operating items in income (loss) from continuing operations.


Adjusted Earnings Per Share Reconciliation

Quarters Ended March 31, 2005 2004

Earnings Applicable to Common Stock 470$ 223$ Preferred stock dividends paid 2 2 GAAP Net income 472 225

Special items (net of taxes) (1)

Restructuring and asset impairments - 19

Adjusted Net Income 472$ 244$

GAAP diluted earnings per share 0.31$ 0.16$ Special items - 0.01

Adjusted Earnings Per Share (2) 0.31$ 0.17$

(2) Earnings per share data may not add due to rounding.

(1) In the 2004 first quarter, Sprint recorded a $30 million pre-tax restructuring charge related to its ongoing organizational realignment initiatives as well as the Web Hosting wind-down. These charges reduced net income by $19 million.


Sprint Consolidated Financial Results

Consistent execution while planning merger

1Q05 4Q04 1Q04

Net Operating Revenues $6.94B $6.93B - $6.71B 3%

Adjusted Operating Income $1.04B $1.02B 2% $754M 37%

Adjusted EBITDA $2.07B $2.05B 1% $1.99B 4%

Adjusted EPS $0.31 $0.31 - $0.17 82%

Capital Expenditures $659M $1.34B -51% $683M -4%

Free Cash Flow $532M $624M -15% $243M 119%


53% 52% 47%

12% 11% 17%

35% 37% 36%

0%

25%

50%

75%

100%

1Q05 4Q04 1Q04

Wireless LD Local

Mix Weighted Towards Growth Sectors

• Wireless contribution is increasing

• Strong year-over-year growth in DSL and IP

Revenue Contribution Adjusted EBITDA Contribution

55% 55% 50%

24% 24% 28%

21% 21% 22%

0%

25%

50%

75%

100%

1Q05 4Q04 1Q04

Wireless LD LocalResults exclude North Supply & before eliminations


Progress on Financial Priorities for 2005

• Focus on day-to-day operations

• Deliver the numbers

• Seamless merger / spin

Execute 2005 Plan Profitable Growth Improve Margins

• Key partnerships

• Strategic products and investments

• Drive productivity

• Leverage expense initiatives

• Detailed synergy plans


Updated 2005 Guidance

• Reiterating consolidated forecast

• Improved outlook for wireline businesses

• Continued bullish view on wireless

Revenue Adj EBITDA Adj Op Income Capex

Low Single Digit Growth

$8.5B - $8.7B $4.3B - $4.5B $4.0B - $4.2B

Consolidated


Wireless 1Q05 Highlights

• Strong subscriber growth

• Profit improvement

• Significant traction in Sprint PCS Fair & FlexibleSM offering

• Momentum in MVNO strategy

Wireless Net Additions(includes direct, MVNO, and aff iliate)

0

250

500

750

1,000

1,250

1,500

1Q04 1Q05

(000

s)

2.0%

2.5%

3.0%

3.5%

1Q04 1Q05

Churn

+34%

-40 bps


Wireless Financial Results

1Q05 4Q04 1Q04

Net Operating Revenues $3.87B $3.84B 1% $3.44B 13%

Adjusted Operating Income $457M $417M 10% $281M 63%

Adjusted EBITDA $1.10B $1.07B 3% $925M 19%

Adjusted EBITDA as a percent of Service Revenue

31.1% 31.0% +10bps 30.2% +90bps

Adjusted EBITDA less CAPEX $683M $177M NA $519M 32%


Wireless Operating Performance

Improving customer retention driving higher adds

1Q05 4Q04 1Q04

Direct Net Additions 518K 526K -2% 414K 25%Wholesale Net Additions 621K 923K -33% 420K 48%Affiliate Net Additions 166K 133K 24% 138K 20%

Total Net Subscriber Additions 1.31M 1.58M -18% 972K 34%

Churn 2.5% 2.7% -20bps 2.9% -40bps

ARPU $61 $62 -1% $61 NA

Costs of Services and Products $1.83B $1.85B -1% $1.74B 5%

Selling, General & Admin $935M $919M 2% $768M 22%


Wireless Data ARPU

$0.00

$2.00

$4.00

$6.00

$8.00

1Q04 1Q05

Wireless Data Subscribers

4.0

5.0

6.0

7.0

8.0

9.0

1Q04 1Q05

Strong Momentum in Data

• Highest ARPU contribution from data in industry

• EV-DO being aggressively deployed into the network

Wireless Data Revenue

$0

$100

$200

$300

$400

1Q04 1Q05

+83%+63%

+29%


Long Distance Highlights

• Good performance driven by solid execution

• Progress on strategy to focus on solutions, network convergence and targeting growth opportunities

• Encouraging signs in LD voice pricing thresholds

• CNO revenues and subscribers ramping

$750

$1,000

$1,250

$1,500

$1,750

$2,000

4Q04 1Q05

Revenue

$200

$225

$250

$275

$300

4Q04 1Q05

Adjusted EBITDA

+11%

-1%

(mill

ions

)(m

illio

ns)


Long Distance Financial Results1Q05 4Q04 1Q04

Net Operating Revenues $1.72B $1.73B -1% $1.91B -10%

Business Voice $882M $889M -1% $957M -8%

Consumer Voice $183M $190M -4% $229M -20%

Data $412M $405M 2% $452M -9%

Internet $178M $176M 1% $223M -20%

Adjusted Operating Income $143M $124M 15% $23M NA

Adjusted EBITDA $260M $235M 11% $343M -24%

Adjusted EBITDA less Capex $195M $144M 35% $287M -32%


Aggressive Cost Management

• Full year 2005 expected to benefit from aggressive cost actions taken in 2004

• Access initiatives paying dividends

• CSP + SGA down 3% sequentially and 7% y-o-y

• Adjusted EBITDA well in excess of capex on prudent investment allocations


Local 1Q05 Highlights

• Strong 1st quarter

• Data growth largely offset effect of access line declines

• Solid Adjusted EBITDA margin

• Executed while planning local spin-off

Revenue

$800

$1,000

$1,200

$1,400

$1,600

1Q04 4Q04 1Q05($

Milli

ons


Local Financial Results1Q05 4Q04 1Q04

Net Operating Revenue $1.50B $1.51B -1% $1.51B -1%

Adjusted Operating Income $446M $484M -8% $460M -3%

Adjusted EBITDA $723M $757M -4% $728M -1%

Adjusted EBITDA less CAPEX $567M $428M 32% $519M 9%

Access Lines 7.64M 7.67M -0.4% 7.88M -3.0%

Access MOU 7.55B 7.72B -2% 8.46B -11%

LD MOU 1.33B 1.29B 3% 990M 34%


DSL – Building Long Term Value

• Strong service line growth

• DSL penetration increased

to 10% of capable lines

• Average revenue per user

of $43

• $300M annualized revenue

stream and growing

Lines in Service (000's)

200

300

400

500

600

1Q04 1Q05

Net Additions (000's)

0

25

50

75

100

1Q04 1Q05

+31%

+58%


Increasing Household Penetration of Strategic Products

• Penetration of at least one

or more strategic product

rose to 71%

• Consumer LD penetration

increased over 400 basis

points year-over-year

• DSL penetration increased

by almost 400 basis points

33% 29%

33%32%

26%27%

8% 12%

0%

25%

50%

75%

100%

1Q04 1Q05

Basic Service 1 Strategic Product2 Strategic Products 3+ Strategic Products


Q&A• Gary Forsee, Chairman and CEO

• Len Lauer, President and COO

• Bob Dellinger, Executive Vice President and CFO

• Mike Fuller, President Local

• Howard Janzen, President Sprint Business Solutions

• Tim Kelly, President Sprint Consumer Solutions

• Kurt Fawkes, Vice President Investor Relations

sprint nextel Quarterly Presentations 2005 1st

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