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4Q10 Earnings Conference Call
February 10, 2011
2011 Sprint. This information is subject to Sprint policies regarding use and is the property of Sprint and/or its relevant affiliates and may contain restricted,confidential or privileged materials intended for the sole use of the intended recipient. Any review, use, distribution or disclosure is prohibited without authorization.
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Customer Experience
BEST EVER CSAT and FCR Improvement 12 quarters
op an ottom- ox
INDUSTRY-BEST Call CSAT and FCR (Vocalabs)
BEST EVER Calls per Sub, achieving INDUSTRY BESTIN CLASS
2011 Sprint. This information is subject to Sprint policies regarding use and is the property of Sprint and/or its relevant affiliates and may contain restricted,confidential or privileged materials intended for the sole use of the intended recipient. Any review, use, distribution or disclosure is prohibited without authorization.4
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Customer Experience (contd)
INDUSTRY-BEST Data Satisfaction and BEST EVER
etwor oc s, an
BEST EVER Q4 and annual Postpaid churn
BEST quarter and BEST annual Prepaid churn in 5 years
2011 Sprint. This information is subject to Sprint policies regarding use and is the property of Sprint and/or its relevant affiliates and may contain restricted,confidential or privileged materials intended for the sole use of the intended recipient. Any review, use, distribution or disclosure is prohibited without authorization.5
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Brand
BEST EVER Brand Health metrics in second half:
Most Want to Investigate
Purchase Consideration
rs ran re erence
Positive Brand Momentum
BEST EVER Net Promoter Score, up 24 points in 2 years
2011 Sprint. This information is subject to Sprint policies regarding use and is the property of Sprint and/or its relevant affiliates and may contain restricted,confidential or privileged materials intended for the sole use of the intended recipient. Any review, use, distribution or disclosure is prohibited without authorization.6
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Brand (Subscriber Metrics)
Total net adds of 1.1M and Postpaid net add positive, both
Postpaid net port positive in Q4 for 1sttime EVER
pr n ma or pos pa ran orconsecutive quarter(1), and 5thconsecutive quarter of
positive Sprint brand net adds
Maintained strong prime mix of 84%
Post aid SoGA u YoY for 6thstrai ht uarter and u 460
bps annually
Prepaid net adds up sequentially to BEST EVER Q4
2011 Sprint. This information is subject to Sprint policies regarding use and is the property of Sprint and/or its relevant affiliates and may contain restricted,confidential or privileged materials intended for the sole use of the intended recipient. Any review, use, distribution or disclosure is prohibited without authorization.7
(1) based on T-Mobile Q4 consensus estimates
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Cash
$913M Q4 Free Cash Flow, $2.5 billion in 2010
Grew total net operating revenues sequentially and year-over- ear. First annual rowth in 4 ears
Year-over-year net operating loss improvement of 74%and 57% quarterly and annually, respectively
verac eve rg n an ynergy oa s
2011 Sprint. This information is subject to Sprint policies regarding use and is the property of Sprint and/or its relevant affiliates and may contain restricted,confidential or privileged materials intended for the sole use of the intended recipient. Any review, use, distribution or disclosure is prohibited without authorization.8
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Annual Postpaid Subscriber Change vs.
r or ear3,000
1,000
2,000
(1,000)
(000s)
(4,000)
(3,000)
,
T-MobileSprint Verizon AT&T
2006 2007 2008 2009 2010
2011 Sprint. This information is subject to Sprint policies regarding use and is the property of Sprint and/or its relevant affiliates and may contain restricted,confidential or privileged materials intended for the sole use of the intended recipient. Any review, use, distribution or disclosure is prohibited without authorization.9
Based on Sprint Pro-forma results for 2005, Verizon Pro-forma results for 2008-2010 and T-Mobile Q4 consensus estimates
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Overall Revenue Growth
$9,000
Consolidated Net Operating Revenue & Wireless Service Revenue(1)
Consolidated Net Operating Revenue
$8,000
ions
5.5%YoY
$7,000
$Mill
$6,000
4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10
Sequential Consolidated Net Operating Revenueand Wireless Service Revenue(1) growth
2011 Sprint. This information is subject to Sprint policies regarding use and is the property of Sprint and/or its relevant affiliates and may contain restricted,confidential or privileged materials intended for the sole use of the intended recipient. Any review, use, distribution or disclosure is prohibited without authorization.10
(1) Retail Service Revenues + Wholesale, Affiliate and Other Service Revenues
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Solid Cash Performance
$5.5
Cash, Cash Equivalents and Short-TermInvestments($B)
$3.9
$4.4 $4.3$4.7
generate positive FreeCash Flow* in 2011
4Q09 1Q10 2Q10 3Q10 4Q10
Goal to maintain a the foreseeable future
ree as ow $2.5B full year Free Cash Flow*
$5.5B cash, cash equivalents and short-term investments
2011 Sprint. This information is subject to Sprint policies regarding use and is the property of Sprint and/or its relevant affiliates and may contain restricted,confidential or privileged materials intended for the sole use of the intended recipient. Any review, use, distribution or disclosure is prohibited without authorization.11
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Adjusted OIBDA* Impacted by Stronger Gross Adds
$2.0
4.354.404.454.50
Adjusted OIBDA* ($B) & Retail Gross Adds(1)
3.803.853.903.954.004.054.104.154.204.25. onso ate .
Retail Gross Adds(1)
$1.5
3.303.353.403.453.503.553.603.653.703.75
$1.409$1.478 $1.501
$1.339 $1.315 2.802.852.902.953.003.053.103.153.20.
$1.0 2.502.552.602.652.70.
4Q09 1Q10 2Q10 3Q10 4Q10
2011 Sprint. This information is subject to Sprint policies regarding use and is the property of Sprint and/or its relevant affiliates and may contain restricted,confidential or privileged materials intended for the sole use of the intended recipient. Any review, use, distribution or disclosure is prohibited without authorization.12
(1) Retail Gross Adds include Retail Postpaid and Retail Prepaid Gross Additions
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Q&A
2011 Sprint. This information is subject to Sprint policies regarding use and is the property of Sprint and/or its relevant affiliates and may contain restricted,confidential or privileged materials intended for the sole use of the intended recipient. Any review, use, distribution or disclosure is prohibited without authorization.13
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Non-GAAP Reconciliations Wireless
nau e(Millions, except Margin Data)
Quarter To Date
Year To Date
, , , , ,
2010 2010 2009 2010 2009
Operating Loss (267)$ (345)$ (635)$ (1,229)$ (1,955)$
Severance and exit costs (4) 12 - 62 11 307
Gains from asset dispositions and exchanges (5) (69) - (8) (69) (68)
Asset impairments and abandonments 121 - 41 121 41
Acquisitions (7) - - 35 - 35
Depreciation 1,100 1,164 1,337 4,533 5,252
Amortization 149 246 320 1,164 1,586
Adjusted OIBDA* 1,046 1,065 1,152 4,531 5,198
Capital expenditures(2)
473 341 427 1,444 1,161Adjusted OIBDA* less Capex 573$ 724$ 725$ 3,087$ 4,037$
Adjusted OIBDA Margin* 16.0% 16.6% 18.2% 17.5% 20.1%
2011 Sprint. This information is subject to Sprint policies regarding use and is the property of Sprint and/or its relevant affiliates and may contain restricted,confidential or privileged materials intended for the sole use of the intended recipient. Any review, use, distribution or disclosure is prohibited without authorization.15
See accompanying Notes to the Financial Information (Unaudited) in the Press Release
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Non-GAAP Reconciliations Wireline
nau e(Millions, except Margin Data)
Quarter To Date
Year To Date
ecem er , ep em er , ecem er , ecem er , ecem er ,
2010 2010 2009 2010 2009
Operating Income 128$ 131$ 94$ 630$ 57$Severance and exit costs (4) - - 15 (3) 93
Asset impairments and abandonments 4 - 6 4 6
Access costs (6) - - - (84) (25)
Depreciation 135 140 144 543 568
Adjusted OIBDA* 267 271 259 1,090 1,221
Capital expenditures (2) 67 59 62 231 258
Adjusted OIBDA* less Capex 200$ 212$ 197$ 859$ 96$
Adjusted OIBDA Margin* 21.8% 21.8% 19.5% 21.6% 21.7%
2011 Sprint. This information is subject to Sprint policies regarding use and is the property of Sprint and/or its relevant affiliates and may contain restricted,confidential or privileged materials intended for the sole use of the intended recipient. Any review, use, distribution or disclosure is prohibited without authorization.16
See accompanying Notes to the Financial Information (Unaudited) in the Press Release
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Non-GAAP Reconciliations Free Cash Flow
nau e(Millions)
Quarter Ended Year to Date
December 31, September 30, December 31, December 31, December 31,
2010 2010 2009 2010 2009
Net Cash P rovided by Operating Activities 1,467$ 971$ 1,215$ 4,815$ 4,891$
Capital expenditures (523) (490) (484) (1,935) (1,603)
Expenditures relating to FCC licenses (103) (108) (120) (459) (591)
Proceeds from sales and exchanges of assets 76 9 58 101 115
Ot er nvest ng act v t es, net 4 2 3 10 10
Free Cash Flow* 913 384 666 2,512 2,802
Debt financing costs - - - (51) -
Decrease in debt and other, net (107) (1) (1,012) (862) (923)
Acquisitions, net of cash acquired - - (560) - (560)Investment in Clearwire - - (1,118) (58) (1,118)
er nanc ng ac v es, neNet I ncrease (Decrease) in Cash, Cash Equivalents and
Short-Term Investments 807$ 389$ (2,020)$ 1,549$ 205$
2011 Sprint. This information is subject to Sprint policies regarding use and is the property of Sprint and/or its relevant affiliates and may contain restricted,confidential or privileged materials intended for the sole use of the intended recipient. Any review, use, distribution or disclosure is prohibited without authorization.17
See accompanying Notes to the Financial Information (Unaudited) in the Press Release
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