Sprint.com

February 28, 2007

Investor Quarterly Update: Sprint Nextel Reports Fourth Quarter 2006 Results

  • Net operating revenues increase 7% year-over-year
  • Continued strong demand for data services
  • Wireless customer additions of 742,000 raises year-end total to 53.1 million; wireless service revenues and profits increase at double-digit rate
  • Long Distance reports strong IP growth and solid profit contribution
  • Significant investment in network and business operations

RESTON, Va.--(BUSINESS WIRE)--Feb. 28, 2007--Fourth Quarter Highlights

    Wireless
  • Total revenues of $9.0 billion increased 9% from the fourth quarter of 2005.
  • Adjusted Operating Income* of $651 million increased 28% from $508 million reported in the year-ago period
  • Adjusted OIBDA* of $2.9 billion increased 14% from the same period a year ago

  • Long Distance
  • Revenues were $1.6 billion, a decline of 2%, compared to the fourth quarter of 2005
  • Adjusted Operating Income* was $112 million, a 35% gain from the year-ago period
  • Adjusted OIBDA* was $259 million, a 17% increase compared to the fourth quarter of 2005

Sprint Nextel Corp. (NYSE: S) today reported fourth quarter and full-year 2006 financial results. In the quarter, the company enhanced its product portfolio, aggressively expanded network coverage and capabilities, reported continued strong growth in wireless data and wireline IP revenue, and significantly increased investment in business operations to enhance future growth and profitability. The company also made significant strides on its planned fourth generation mobile broadband network.

For the quarter, diluted earnings per share (EPS) from continuing operations were 9 cents, compared to break-even in the fourth quarter of 2005. Adjusted EPS before Amortization* was 29 cents in the most recent quarter, compared to 23 cents in the fourth quarter of 2005, an increase of 26%. The growth in earnings is due to higher contributions in both the Wireless and Long Distance segments.

For the full year, EPS from continuing operations was 34 cents compared to 40 cents for 2005. Full-year 2006 Adjusted EPS before Amortization* was $1.18, compared to pro forma Adjusted EPS before Amortization* of $1.05 for the full year 2005, a 12% increase.

Consolidated net operating revenues in the fourth quarter of 2006 were $10.4 billion, an increase of 7% compared to $9.8 billion in the fourth quarter of 2005. For the full year, total consolidated revenue of $41.0 billion increased 43% on a reported basis and 7% compared to pro forma 2005.

Consolidated adjusted OIBDA* in the most recent quarter was $3.2 billion, an increase of 13% compared to the year-ago period. Full-year consolidated adjusted OIBDA* was $12.7 billion, an increase of 12% compared to pro forma 2005 full year adjusted OIBDA* of $11.3 billion. Consolidated adjusted OIBDA margin* was 32.9% in the fourth quarter of 2006 versus 31.2% in the year-ago period and 33.6% for the full year, compared to 32.2% for pro forma 2005.

"In the fourth quarter, we increased funding of business operations and network investments. We are seeing early returns from these investments as we widen our lead in wireless data services on the CDMA platform and with the iDEN network now delivering substantially improved call quality metrics," said Gary Forsee, Sprint Nextel Chairman and CEO. "The introduction of our PowerSource(TM) phones to bridge the two networks brings customers the industry's best push-to-talk, voice and data services.

"Although we achieved these improvements, we experienced uneven financial performance between our network platforms and within some of our key wireless metrics. We saw these trends in the 4th quarter:

  • Data service revenues increased 66% compared to the year-ago period.
  • Net subscriber growth on the CDMA platform was solid, with a total of more than 1.3 million net additions from post-paid, wholesale and affiliate subscribers.
  • We reported a decline in iDEN post-paid subscribers.
  • Boost Mobile reported a subscriber gain in the quarter.
  • Customer retention rates improved sequentially.
  • The credit mix of new subscribers was enhanced, but gross post-paid customer acquisitions declined.
  • The postpaid Average Revenue Per User (ARPU) rate of decline again moderated.
  • We added several devices to our product line-up, and initiated efforts for aggressive 2007 marketing of PowerSource phones.
  • We made significant investments in branding, distribution and customer care.

"Additionally, we had solid performance in our Long Distance business, with a year-over-year increase in wireline Internet Protocol (IP) revenues of 32%.

"We have established a framework to bolster our business operations and drive future growth and profitability," noted Forsee. "Our efforts in 2007 will be centered on improving subscriber acquisition and retention, extending our lead in data services, fully capturing cost efficiencies and developing an innovative high-speed data network that will provide significant differentiation and cost advantages."

Editor's Note:

In accordance with purchase accounting rules, Sprint Nextel's reported results for the year ended December 31, 2005, are comprised of Sprint's stand-alone results prior to the August 12, 2005, merger with Nextel Communications Inc., plus combined Sprint and Nextel results for the remainder of the year. Results from acquired Sprint PCS affiliates and Nextel Partners are included from either the date the applicable acquisition was completed or the start of the month closest to the acquisition date.

To provide comparability with the full-year 2005 period, Sprint Nextel also is providing pro forma Consolidated and Wireless results and certain other financial measures* for 2005. The pro forma results assume the merger of Sprint and Nextel occurred on January 1, 2005, and include the impact of conforming the accounting policies and both financial and non-financial measures of the two companies. The pro forma Consolidated and Wireless information excludes results of acquired affiliates prior to their respective dates of acquisition.

Consolidated

TABLE No. 1 Selected Unaudited Financial Data (in millions, except per
 share amounts) Diluted EPS below is from continuing operations.

                       Quarter Ended     %      Year-to-Date      %
                        December 31,   change   December 31,    change
                      ---------------- ------ ----------------- ------
As Reported Financial
 Data                  2006     2005           2006     2005
                      -------- -------        -------- --------
  Net operating
   revenues           $10,444  $9,792      7% $41,028  $28,789     43%
  Adjusted operating
   income*                765     612     25%   3,104    2,864      8%
  Adjusted OIBDA*       3,169   2,796     13%  12,696    8,064     57%

  Income from
   Continuing
   Operations             261       5     NM      995      821     21%

  Diluted earnings
   per share          $  0.09  $   --     NM  $  0.34  $  0.40   (15)%

  Capex               $ 2,612  $1,836     42% $ 7,057  $ 4,201     68%

  Free cash flow*     $   421  $1,506   (72)% $ 2,759  $ 5,330   (48)%

Pro Forma Financial
 Data
  Net operating
   revenues           $10,444   9,792      7% $41,028  $38,177      7%
  Adjusted operating
   income*                765     612     25%   3,104    2,979      4%
  Adjusted OIBDA*       3,169   2,796     13%  12,696   11,312     12%

  Diluted earnings
   per share          $  0.09  $   --     NM  $  0.34  $  0.21     62%
  Adjusted earnings
   per share before
   amortization*      $  0.29  $ 0.23     26% $  1.18  $  1.05     12%

Pro Forma Capex       $ 2,612  $1,836     42% $ 7,057  $ 6,231     13%
    The following is a discussion of Consolidated results.

    --  The growth in revenue in the fourth quarter was due to higher
        Wireless revenues which benefited from acquisitions and a
        larger subscriber base.

    --  Adjusted operating income* increased due to growth in the
        Wireless and Long Distance segments.

    --  The annual growth in adjusted OIBDA* was due to higher
        contributions from both the Wireless and Long Distance
        segments.

    --  Interest expense, net of interest income, was $333 million
        compared to $304 million in the fourth quarter of 2005 due to
        lower interest expense offset by lower interest income.

    --  The effective income tax rate in the fourth quarter was 31%.

    --  Non-cash compensation expense was $80 million in the fourth
        quarter of 2006, versus $110 million in the fourth quarter of
        2005.

    --  Net debt* was $20.1 billion at the end of 2006.
Wireless

TABLE No. 2 Selected Unaudited Financial Data (dollars in millions)

                        Quarter Ended
                        December 31,            Year-to-Date
                       ---------------        -----------------
As Reported Financial                    %                        %
 Data                   2006    2005   change  2006     2005    change
                       ------- ------- ------ -------- -------- ------
  Net operating
   revenues            $9,004  $8,230      9% $35,115  $22,328     57%
  Adjusted operating
   income*                651     508     28%   2,603    2,245     16%
  Adjusted OIBDA*       2,908   2,553     14%  11,689    6,944     68%

  Capex(1)             $2,238  $1,535     46% $ 5,846  $ 3,545     65%

Pro Forma Financial
 Data
  Net operating
   revenues            $9,004  $8,230      9% $35,115  $31,726     11%
  Adjusted operating
   income*                651     508     28%   2,603    2,360     10%
  Adjusted OIBDA*       2,908   2,553     14%  11,689   10,192     15%
  Adjusted OIBDA
   margin*               35.4%   34.6%           36.6%    35.6%

Pro Forma Capex(1)     $2,238  $1,535     46% $ 5,846  $ 5,575      5%

(1)Capex includes re-banding capital, but excludes non-network
 rebanding costs
    The following is a discussion of our Wireless results.

    Subscribers

    --  In the quarter, Wireless added a total of 742,000 subscribers.
        -- Postpaid subscribers declined by 306,000 in the quarter,
           reflecting a gain in CDMA subscribers, offset by a decline
           of iDEN subscribers;
        -- Boost pre-paid subscribers increased 171,000;
        -- Wholesale channels added 830,000 subscribers; and,
        -- Affiliates added 46,000 subscribers.

-- Sprint Nextel ended 2006 with a total of 53.1 million

subscribers, compared to 47.6 million at the end of 2005. The

detailed breakdown of the year-end subscriber count includes:

        -- Approximately 41.8 million post-paid subscribers,
           consisting of 24.2 million on the CDMA platform and 17.6
           million on the iDEN platform;
        -- 4.0 million Boost pre-paid subscribers;
        -- 6.4 million wholesale subscribers; and
        -- 900,000 affiliate subscribers.
    Churn

    --  Post-paid churn in the quarter was 2.3% compared to 2.4% in
        the third quarter, and 2.1% in the fourth quarter a year-ago.
        The increase from the year-ago period is due to higher churn
        among iDEN subscribers. The sequential improvement is due to
        lower churn within the CDMA base offset by higher churn in
        former Nextel Partners markets.

    --  Pre-paid churn in the quarter was 6.5% compared to 6.8% in the
        third quarter, and 4.8% a year ago.

    Revenues/ARPU

    --  Total operating revenues increased 9%, compared to the fourth
        quarter of 2005. Service revenues increased 11% due to
        acquisitions and a larger direct customer base, offset by a
        decline in post-paid and pre-paid ARPU. Wireless had strong
        wholesale growth due to a larger MVNO customer base. Equipment
        revenues declined 5% compared to the year-ago period due to
        lower post-paid gross additions partially offset by higher
        customer upgrades.

    --  Post-paid ARPU in the quarter was a little over $60,
        reflecting a 1% sequential decline and a less than 5% decline
        from the year-ago period. Post-paid ARPU continues to be
        impacted by lower voice revenues, which are being partially
        offset by growth in data revenues. Sequentially, CDMA ARPU was
        flat at $59, while iDEN ARPU declined 2% to $62. Compared to
        the year-ago period, CDMA ARPU was down 1%, while iDEN ARPU
        declined 8%.

    --  Boost ARPU was a little under $32 in the quarter, a 3%
        sequential decline and a 14% decline year-over-year.

    --  In the fourth quarter, data service revenues increased 66%,
        compared to the year-ago period and 14% sequentially. The
        growth is being driven by strong take rates for Power Vision
        (SM) data services on handsets, demand for text messaging and
        increasing laptop aircard usage supported by EVDO expansion on
        the CDMA network. Data contributed $8.75 to overall post-paid
        ARPU in the quarter and reached nearly $12 of contribution, or
        20% of CDMA postpaid ARPU.

    Operating Expenses/Margin

    --  In the quarter, costs of services increased 13% compared to
        the year-ago period due to a larger customer base, growth in
        the network and higher service and repair costs. Cost of
        products declined 5% in the quarter due to lower volume,
        partially offset by higher handset upgrade costs. SG+A expense
        increased 9% compared to the fourth quarter of 2005, due to
        increases in sales, marketing, customer care and bad debt
        expense offset by lower IT, employee incentive compensation
        and billing costs. Depreciation expense increased 13% due to a
        larger asset base.

    --  Adjusted OIBDA Margin* was 35.4% in the quarter, compared to
        34.6% in the year-ago period due to increasing scale and
        merger expense synergies. For the full year, the margin
        improved 100 basis points to 36.6% from the 2005 pro forma
        margin.

    Capital Spending

    --  In the quarter, Adjusted OIBDA* exceeded capital investment by
        $670 million, bringing the full year measure to $5.8 billion
        compared to pro forma $4.6 billion in 2005.

    --  In the fourth quarter capital spending of $2.2 billion
        reflects the addition of more than 1,800 cell sites to improve
        capacity and coverage, the extension of EVDO coverage, which
        today reaches 209 million people and the deployment of
        Revision A technology, which currently covers a population of
        110 million.
Long Distance

TABLE No. 3 Selected Unaudited Financial Data (dollars in millions)

                          Quarter Ended    %     Year-to-Date     %
                          December 31,   change  December 31,   change
                         --------------- ------ --------------- ------
                          2006    2005           2006    2005
                         ------- -------        ------- -------
  Net operating revenues $1,635  $1,662    (2)% $6,571  $6,834    (4)%
  Adjusted operating
   income*                  112      83     35%    470     523   (10)%
  Adjusted OIBDA*           259     221     17%    976   1,022    (5)%
  Adjusted OIBDA margin*   15.8% $ 13.3%          14.9%   15.0%

  Capex                  $  274  $  166     65% $  821  $  384     NM
    The following is a discussion of our Long Distance results.

    --  Total revenues declined 2% year-over-year, but increased
        modestly sequentially.

    --  In the quarter, Internet Protocol (IP) revenues increased 32%
        year-over-year and 7% sequentially due to good demand for
        enterprise MPLS services.

    --  Total voice revenues declined 3% year-over-year and 1%
        sequentially. Compared to the year-ago period, growth in
        wholesale services largely offset declines in retail business
        and consumer voice services.

    --  At the end of the quarter, Sprint Nextel was serving cable
        companies with about 1.5 million cable telephony customers, an
        increase of more than 80% from year-end 2005.

    --  In the quarter, the adjusted OIBDA margin* improved 250 basis
        points compared to the fourth quarter of 2005 while the full
        year margin was flat.

    --  The fourth quarter operating expenses declined 2% compared to
        the year-ago period mainly due to lower SG+A costs.

    --  For the full year, adjusted OIBDA* exceeded capital investment
        by a little over $150 million following elevated capital
        investment in 2006 to meet significant growth in the cable
        business and to support demand for IP services.

    Forward-Looking Guidance

Sprint Nextel is reiterating 2007 guidance it initially provided on January 8 for the following items:

    --  Full year consolidated operating revenues of $41 billion to
        $42 billion.

    --  Adjusted OIBDA* of $11.0 billion to $11.5 billion.

    --  The company expects to continue with its previously announced
        share buy-back program. The company will vary the amount and
        timing of its common stock purchases from time to time as the
        program proceeds.

Reflecting accelerated fourth quarter Wireless network deployments, the company is revising its target capital expenditures for 2007 to approximately $8.0 billion from previous guidance of $8.5 billion. In 2007, the company expects to invest approximately $600 million in Long Distance and up to $800 million on its WiMAX initiative. Sprint Nextel expects to invest approximately $5.8 billion on Wireless capital in 2007, inclusive of network investments associated with re-banding. In addition, the company estimates that it could spend up to $800 million on intangible costs associated with re-banding which will largely be dependent upon the timing of user relocations.

*Financial Measures

Sprint Nextel provides financial measures generated using generally accepted accounting principles (GAAP) and using adjustments to GAAP (non-GAAP). The non-GAAP financial measures reflect industry conventions, or standard measures of liquidity, profitability or performance commonly used by the investment community for comparability purposes. These non-GAAP measures are not measurements under accounting principles generally accepted in the United States. These measurements should be considered in addition to, but not as a substitute for, the information contained in our financial statements prepared in accordance with GAAP. We have defined below each of the non-GAAP measures we use, but these measures may not be synonymous to similar measurement terms used by other companies.

Sprint Nextel provides reconciliations of these non-GAAP measures in its financial reporting. Because Sprint Nextel 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 Nextel does not provide reconciliations to GAAP of its forward-looking financial measures.

The measures used in this release include the following:

Adjusted Earnings per Share (EPS) is defined as income from continuing operations, before special items, net of tax and the diluted EPS calculated thereon. Adjusted EPS before Amortization is defined as income from continuing operations, before special items and amortization, net of tax, and the diluted EPS calculated thereon. These non-GAAP measures should be used in addition to, but not as a substitute for, the analysis provided in the statement of operations. We believe that these measures are useful because they allow investors to evaluate our performance for different periods on a more comparable basis by excluding items that relate to acquired amortizable intangible assets and not to the ongoing operations of our businesses.

Adjusted Net Income is defined as income (loss) from continuing operations before special items. Adjusted Net Income before Amortization is defined as income (loss) from continuing operations before special items and amortization, net of tax. These non-GAAP measures should be used in addition to, but not as a substitute for, the analysis provided in the statement of operations. We believe that these measures are useful because they allow investors to evaluate our performance for different periods on a more comparable basis by excluding items that do not relate to the ongoing operations of our businesses.

Adjusted Operating Income is defined as operating income before special items. This non-

GAAP measure should be used in addition to, but not as a substitute for, the analysis provided in the statement of operations. We believe this measure is useful because it allows investors to evaluate our operating results for different periods on a more comparable basis by excluding special items.

Adjusted OIBDA is defined as operating income before depreciation, amortization, restructuring and asset impairments, and special items. Adjusted OIBDA Margin represents Adjusted OIBDA divided by non-equipment net operating revenues for Wireless and Adjusted OIBDA divided by net operating revenues for Long Distance. Although we have used substantially similar measures in the past, which we called "Adjusted EBITDA," we now use the term Adjusted OIBDA and Adjusted OIBDA Margin to describe the measure we use as it more clearly reflects the elements of the measure. These non-GAAP measures should be used in addition to, but not as a substitute for, the analysis provided in the statement of operations. We believe that Adjusted OIBDA and Adjusted OIBDA Margin provide useful information to investors because they are an indicator of the strength and performance of our ongoing business operations, including our ability to fund discretionary spending such as capital expenditures, spectrum acquisitions and other investments and our ability to incur and service debt. While depreciation and amortization are considered operating costs under generally accepted accounting principles, these expenses primarily represent non-cash current period allocation of costs associated with long-lived assets acquired or constructed in prior periods. Adjusted OIBDA and Adjusted OIBDA Margin are calculations commonly used as a basis for investors, analysts and credit rating agencies to evaluate and compare the periodic and future operating performance and value of companies within the telecommunications industry.

Free Cash Flow is defined as the change in cash and cash equivalents less the change in debt, investment in certain securities, proceeds from common stock and other financing activities, net, from continuing operations. This non-GAAP measure should be used in addition to, but not as a substitute for, the analysis provided in the statement of cash flows. We believe that Free Cash Flow provides useful information to investors, analysts and our management about the cash generated by our core operations after interest and dividends and our ability to fund scheduled debt maturities and other financing activities, including discretionary refinancing and retirement of debt and purchase or sale of investments.

Net Debt is consolidated debt, including current maturities, less cash and cash equivalents, current marketable securities and restricted cash. This non-GAAP measure should be used in addition to, but not as a substitute for, the analysis provided in the balance sheet and statement of cash flows. We believe that Net Debt provides useful information to investors, analysts and credit rating agencies about the capacity of the company to reduce the debt load and improve its capital structure.

Safe Harbor

This news release includes "forward-looking statements" within the meaning of the securities laws. The statements in this news release regarding the business outlook, expected performance, forward looking guidance, continuation of our previously announced share buy-back program, 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 are intended to identify forward-looking statements. Forward-looking statements are estimates and projections reflecting management's judgment 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. With respect to these forward-looking statements, management has made assumptions regarding, among other things, customer and network usage, customer growth and retention, pricing, operating costs, the timing of various events and the economic environment.

Future performance cannot be assured. Actual results may differ materially from those in the forward-looking statements. Some factors that could cause actual results to differ include:

    --  the effects of vigorous competition, including the impact of
        competition on the price we are able to charge customers for
        services we provide and our ability to attract new customers
        and retain existing customers; the overall demand for our
        service offerings, including the impact of decisions of new
        subscribers between our post-paid and prepaid services
        offerings and between our two network platforms; and the
        impact of new, emerging and competing technologies on our
        business;

    --  the impact of overall wireless market penetration on our
        ability to attract and retain customers with good credit
        standing and the intensified competition among wireless
        carriers for those customers;

    --  the potential impact of difficulties we may encounter in
        connection with the integration of the pre-merger Sprint and
        Nextel businesses, and the integration of the businesses and
        assets of certain of the third party affiliates, or PCS
        Affiliates, that provide wireless personal communications
        services, or PCS, under the Sprint(R) brand that we have
        acquired, and Nextel Partners, Inc., including the risk that
        these difficulties could prevent or delay our realization of
        the cost savings and other benefits we expect to achieve as a
        result of these integration efforts and the risk that we will
        be unable to continue to retain key employees;

    --  the uncertainties related to the implementation of our
        business strategies, investments in our networks, our systems,
        and other businesses, including investments required in
        connection with our planned deployment of a next generation
        broadband wireless network;

    --  the costs and business risks associated with providing new
        services and entering new geographic markets, including with
        respect to our development of new services expected to be
        provided using the next generation broadband wireless network
        that we plan to deploy;

    --  the impact of potential adverse changes in the ratings
        afforded our debt securities by ratings agencies;

    --  the effects of mergers and consolidations and new entrants in
        the communications industry and unexpected announcements or
        developments from others in the communications industry;

    --  unexpected results of litigation filed against us;

    --  the inability of third parties to perform to our requirements
        under agreements related to our business operations, including
        a significant adverse change in Motorola, Inc.'s ability or
        willingness to provide handsets and related equipment and
        software applications, or to develop new technologies or
        features for our integrated Digital Enhanced Network, or
        iDEN(R), network;

    --  the impact of adverse network performance;

    --  the costs of compliance with regulatory mandates, particularly
        requirements related to the Federal Communication Commission's
        Report and Order;

    --  equipment failure, natural disasters, terrorist acts, or other
        breaches of network or information technology security;

    --  one or more of the markets in which we compete being impacted
        by changes in political or other factors such as monetary
        policy, legal and regulatory changes or other external factors
        over which we have no control; and

    --  other risks referenced from time to time in our filings with
        the Securities and Exchange Commission, including its Form
        10-K for the year ended December 31, 2005, as amended, in Part
        I, Item 1A, "Risk Factors," and, when filed, our Form 10-K for
        the year ended December 31, 2006.

Sprint Nextel believes these forward-looking statements are reasonable; however, you should not place undue reliance on forward-looking statements, which are based on current expectations and speak only as of the date of this release. Sprint Nextel is not obligated to publicly release any revisions to forward-looking statements to reflect events after the date of this release.

About Sprint Nextel

Sprint Nextel offers a comprehensive range of wireless and wireline communications services bringing the freedom of mobility to consumers, businesses and government users. Sprint Nextel is widely recognized for developing, engineering and deploying innovative technologies, including two robust wireless networks serving 53.1 million customers at the end of 2006; industry-leading mobile data services; instant national and international walkie-talkie capabilities; and an award-winning and global Tier 1 Internet backbone. For more information, visit www.sprint.com.

                      Sprint Nextel Corporation
        CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (a)
                  (millions, except per share data)


TABLE No. 4                      Quarter Ended        Year-to-Date
                              -------------------  -------------------
                              December  December   December  December
                                 31,       31,        31,       31,
                                2006      2005       2006      2005
                              -------------------  -------------------

Net Operating Revenues        $ 10,444  $  9,792   $ 41,028  $ 28,789
----------------------------- -------------------  -------------------

Operating Expenses
  Costs of services              2,979     2,790     11,646     9,217
  Costs of products              1,273     1,333      4,921     3,272
  Selling, general and
   administrative (1)            3,140     3,213     12,178     8,916
    (includes $117, $319,
     $413 & $580 of merger
     and integration)
  Severance, lease exit costs
   and asset impairments (2)        79       (25)       207        43
  Depreciation                   1,474     1,315      5,738     3,864
  Amortization                     930       869      3,854     1,336
----------------------------- -------------------  -------------------
  Total operating expenses       9,875     9,495     38,544    26,648
----------------------------- -------------------  -------------------
Operating Income                   569       297      2,484     2,141
Interest expense                  (359)     (398)    (1,533)   (1,294)
Interest income                     26        94        301       236
Gain on early retirement of
 debt                                1         -         15         -
Equity in gain (losses)
 earnings of unconsolidated
 investees, net                     (5)       (7)        (6)      107
Other, net                         145        34        222       101
----------------------------- -------------------  -------------------
Income from continuing
 operations before income
 taxes                             377        20      1,483     1,291
Income tax expense                (116)      (15)      (488)     (470)
----------------------------- -------------------  -------------------
Income from Continuing
 Operations                        261         5        995       821
Discontinued operations, net
 (3)                                 -       208        334       980
Cumulative effect of change
 in accounting principle, net        -       (16)         -       (16)
----------------------------- -------------------  -------------------
Net Income                         261       197      1,329     1,785
Preferred stock dividends
 paid                                -        (2)        (2)       (7)
----------------------------- -------------------  -------------------
Income Available to Common
 Shareholders                 $    261  $    195   $  1,327  $  1,778
                              -------------------  -------------------

Diluted Earnings Per Common
 Share                        $   0.09  $   0.07   $   0.45  $   0.87
Discontinued Operations              -     (0.08)     (0.11)    (0.48)
Cumulative effect of change
 in accounting principle, net        -      0.01          -      0.01
                              -------------------  -------------------
Diluted Earnings Per Common
 Share from Continuing
 Operations                   $   0.09  $      -   $   0.34  $   0.40
                              -------------------  -------------------

Diluted weighted average
 common shares                 2,916.2   2,979.4    2,971.7   2,053.6
                              -------------------  -------------------
Basic Earnings Per Common
 Share                        $   0.09  $   0.07   $   0.45  $   0.87
                              -------------------  -------------------

(a) Results for each of the periods reflected include the results of
 Nextel from the date of Sprint-Nextel merger and of each of the
 acquired PCS Affiliates as well as Nextel Partners from either the
 date of the acquisition or the start of the month closest to the
 acquistion date.

(1), (2), (3) See accompanying Notes to Financial Data.
                      Sprint Nextel Corporation
     PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
                  (millions, except per share data)


TABLE No. 5                      Quarter Ended        Year-to-Date
                              -------------------  -------------------
                              December  December   December  December
                                 31,       31,        31,       31,
                                2006      2005       2006      2005
                              -------------------  --------- ---------

Net Operating Revenues        $ 10,444  $  9,792   $ 41,028  $ 38,177
----------------------------- --------- ---------  --------- ---------
Operating Expenses
  Costs of services              2,979     2,790     11,646    10,854
  Costs of products              1,273     1,333      4,921     4,670
  Selling, general and
   administrative
   (includes $117, $319, $413
    & $709 of merger and
    integration) (1)             3,140     3,213     12,178    12,150
  Severance, lease exit costs
   and asset impairments (2)        79       (25)       207        43
  Depreciation                   1,474     1,315      5,738     4,982
  Amortization                     930       869      3,854     3,351
----------------------------- --------- ---------  --------- ---------
  Total operating expenses       9,875     9,495     38,544    36,050
----------------------------- --------- ---------  --------- ---------
Operating Income                   569       297      2,484     2,127
Interest expense                  (359)     (398)    (1,533)   (1,599)
Interest income                     26        94        301       261
Gain (loss) on early
 retirement of debt                  1         -         15       (37)
Equity in (losses) earnings
 of unconsolidated investees,
 net                                (5)       (7)        (6)      158
Other, net                         145        34        222        57
----------------------------- --------- ---------  --------- ---------
Income from continuing
 operations before income
 taxes                             377        20      1,483       967
Income tax expense                (116)      (15)      (488)     (338)
----------------------------- --------- ---------  --------- ---------
Income from Continuing
 Operations                        261         5        995       629
Discontinued Operations, net
 (3)                                 -       208        334       980
Cumulative effect of change
 in accounting principle, net        -       (16)         -       (16)
----------------------------- --------- ---------  --------- ---------
Net Income                         261       197      1,329     1,593
Preferred stock dividends
 paid                                -        (2)        (2)       (7)
----------------------------- --------- ---------  --------- ---------
Income Available to Common
 Shareholders                 $    261  $    195   $  1,327  $  1,586
                              --------- ---------  --------- ---------


Diluted Earnings Per Common
 Share (a)                    $   0.09  $   0.07   $   0.45  $   0.54
Discontinued Operations              -     (0.08)     (0.11)    (0.33)
Cumulative effect of change
 in accounting principle, net        -      0.01          -         -
Special items                        -      0.05       0.06      0.17
                              --------- ---------  --------- ---------
Adjusted EPS * (a)            $   0.09  $   0.05   $   0.40  $   0.38
                              --------- ---------  --------- ---------

Diluted weighted average
 common shares                 2,916.2   2,979.4    2,971.7   2,961.1
                              --------- ---------  --------- ---------

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

(1),(2), (3) See accompanying Notes to Financial Data.

Pro forma consolidated statements of operations have been presented as
 if the Sprint-Nextel merger occurred at the beginning of 2005.
Because the merger occurred in the third quarter 2005, the fourth
 quarter 2005 and the fourth quarter and year-to-date 2006 results
 reflect actual combined results.
The pro forma results do not include the results of any acquired PCS
 Affiliate, Velocita or Nextel Partners prior to the dates of their
 respective acquisitions because they do not significantly affect
 reported results.
                      Sprint Nextel Corporation
          RECONCILIATIONS OF EARNINGS PER SHARE (Unaudited)
                  (millions, except per share data)



TABLE No. 6                                   As Reported
                                  ------------------------------------
                                    Quarter Ended      Year-to-Date
                                  -----------------  -----------------
                                  December December  December December
                                     31,      31,       31,      31,
                                   2006     2005      2006     2005
                                  -----------------  -----------------

Income Available to Common
 Shareholders                     $   261  $   195   $ 1,327  $ 1,778
Preferred stock dividends paid          -        2         2        7
--------------------------------- -----------------  -----------------
Net Income (Loss)                     261      197     1,329    1,785
Discontinued operations, net            -     (208)     (334)    (980)
Cumulative effect of change in
 accounting principle                   -       16         -       16
--------------------------------- ------------------------------------
Income from Continuing Operations     261        5       995      821
Special items (net of taxes) (a)
  Severance, lease exit costs and
   asset impairments                   52      (15)      129       28
  Merger and integration expense       71      190       252      356
  Hurricane charges (excluding
   asset impairments)                   -       12         -       61
  Net gains on investment
   activities and equity in
   earnings                           (92)     (27)     (132)    (117)
  (Gain) Loss on early retirement
   of debt                              -        -        (9)       -
  Tax audit settlement                (16)       -       (58)       -
  Motorola consent fee                  -        -         -        -
--------------------------------- -----------------  -----------------
Adjusted Net Income*              $   276  $   165   $ 1,177  $ 1,149
--------------------------------- -----------------  -----------------

Amortization (net of taxes)           560      522     2,320      803

--------------------------------- -----------------  -----------------
Adjusted Net Income before
 Amortization*                    $   836  $   687   $ 3,497  $ 1,952
--------------------------------- -----------------  -----------------

Diluted Earnings Per Share        $  0.09  $  0.07   $  0.45  $  0.87
Discontinued operations                 -    (0.08)    (0.11)   (0.48)
Cumulative effect of change in
 accounting principle                   -     0.01         -     0.01

--------------------------------- -----------------  -----------------
Earnings Per Share from
 Continuing Operations               0.09        -      0.34     0.40
Special items                           -     0.05      0.06     0.16

--------------------------------- -----------------  -----------------
Adjusted Earnings Per Share* (b)  $  0.09  $  0.05   $  0.40  $  0.56
--------------------------------- -----------------  -----------------

Amortization (net of taxes) (d)      0.20     0.18      0.78     0.39

--------------------------------- -----------------  -----------------
Adjusted Earnings Per Share
 before Amortization* (b)         $  0.29  $  0.23   $  1.18  $  0.95
--------------------------------- -----------------  -----------------




TABLE No. 6                                  Pro Forma (c)
                                 -------------------------------------
                                    Quarter Ended      Year-to-Date
                                  -----------------  -----------------
                                  December December  December December
                                     31,      31,       31,      31,
                                   2006     2005      2006     2005
                                  -----------------  -----------------

Income Available to Common
 Shareholders                     $   261  $   195   $ 1,327  $ 1,586
Preferred stock dividends paid          -        2         2        7
--------------------------------- -----------------  -----------------
Net Income (Loss)                     261      197     1,329    1,593
Discontinued operations, net            -     (208)     (334)    (980)
Cumulative effect of change in
 accounting principle                   -       16         -       16
--------------------------------- ------------------------------------
Income from Continuing Operations     261        5       995      629
Special items (net of taxes) (a)
  Severance, lease exit costs and
   asset impairments                   52      (15)#     129       28
  Merger and integration expense       71      190       252      438
  Hurricane charges (excluding
   asset impairments)                   -       12         -       61
  Net gains on investment
   activities and equity in
   earnings                           (92)     (27)     (132)    (117)
  (Gain) Loss on early retirement
   of debt                              -        -        (9)      22
  Tax audit settlement                (16)       -       (58)       -
  Motorola consent fee                  -        -         -       50
--------------------------------- -----------------  -----------------
Adjusted Net Income*              $   276  $   165   $ 1,177  $ 1,111
--------------------------------- -----------------  -----------------

Amortization (net of taxes)           560      522     2,320    2,014

--------------------------------- -----------------  -----------------
Adjusted Net Income before
 Amortization*                    $   836  $   687   $ 3,497  $ 3,125
--------------------------------- -----------------  -----------------

Diluted Earnings Per Share        $  0.09  $  0.07   $  0.45  $  0.54
Discontinued operations                 -    (0.08)    (0.11)   (0.33)
Cumulative effect of change in
 accounting principle                   -     0.01         -        -

--------------------------------- -----------------  -----------------
Earnings Per Share from
 Continuing Operations               0.09        -      0.34     0.21
Special items                           -     0.05      0.06     0.17

--------------------------------- -----------------  -----------------
Adjusted Earnings Per Share* (b)  $  0.09  $  0.05   $  0.40  $  0.38
--------------------------------- -----------------  -----------------

Amortization (net of taxes) (d)      0.20     0.18      0.78     0.67

--------------------------------- -----------------  -----------------
Adjusted Earnings Per Share
 before Amortization* (b)         $  0.29  $  0.23   $  1.18  $  1.05
--------------------------------- -----------------  -----------------


(a) See accompanying Notes to Financial Data for more information on
 special items.
(b) Earnings per share data may not add due to rounding.
(c) Pro forma consolidated information has been presented as if the
 Sprint Nextel merger occurred at the beginning of 2005. The fourth
 quarter 2005 and all 2006 periods reflect actual results.
(d) Rounding difference is pushed to this line.
                       Sprint Nextel Corporation
          CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
                              (millions)


TABLE No. 7
                                            --------------------------
                                            December 31,  December 31,
                                               2006          2005
                                            --------------------------
Assets
  Current assets
    Cash and cash equivalents                 $   2,046     $   8,903
    Marketable securities                            15         1,763
    Accounts receivable, net                      4,595         4,166
    Inventories                                   1,176           776
    Deferred tax assets                             923         1,789
    Prepaid expenses and other current
     assets                                       1,549           779
    Current assets of discontinued
     operations                                       -           916
----------------------------------------------------------------------
    Total current assets                         10,304        19,092

  Investments                                       253         2,543
  Property, plant and equipment, net             25,868        23,329
  Goodwill                                       30,904        21,288
  FCC licenses                                   19,519        18,023
  Customer relationships, net                     7,256         8,651
  Other intangible assets, net                    2,378         1,345
  Other assets                                      679           632
  Non-current assets of discontinued
   operations                                         -         7,857
----------------------------------------------------------------------

  Total                                       $  97,161     $ 102,760
                                            --------------------------

Liabilities and Shareholders' Equity
  Current liabilities
    Accounts payable                          $   3,463     $   3,562
    Accrued expenses and other liabilities        5,192         4,622
    Current portion of long-term debt and
     capital lease obligations                    1,143         5,045
    Current liabilities of discontinued
     operations                                       -           822
----------------------------------------------------------------------
    Total current liabilities                     9,798        14,051

  Long-term debt and capital lease
   obligations                                   21,011        19,969
  Deferred income taxes                          10,095        10,405
  Postretirement and other benefit
   obligations                                      244         1,385
  Other liabilities                               2,882         2,753
  Non-current liabilities of discontinued
   operations                                         -         2,013
----------------------------------------------------------------------
    Total liabilities                            44,030        50,576


  Redeemable preferred shares                         -           247

  Shareholders' equity
    Common shares                                 5,902         5,846
    Treasury shares, at cost                       (925)            -
    Other shareholders' equity                   48,154        46,091
----------------------------------------------------------------------
    Total shareholders' equity                   53,131        51,937
----------------------------------------------------------------------

  Total                                       $  97,161     $ 102,760
                                            --------------------------
                      Sprint Nextel Corporation
     CONDENSED CONSOLIDATED CASH FLOW INFORMATION (Unaudited) (a)
                              (millions)

TABLE No. 8

----------------------------------------------------------------------
                                             December 31, December 31,
For the Year-to-Date Period Ended               2006         2005
----------------------------------------------------------------------

Cash flows from operating activities
    Net income                                 $   1,329    $   1,785
    Income from discontinued operations             (334)        (980)
    Depreciation and amortization                  9,592        5,200
    Deferred income taxes                            468          798
    Proceeds from communication towers lease
     transactions                                      -        1,195
    Other, net                                    (1,000)         657
----------------------------------------------------------------------
Net cash provided by continuing operations        10,055        8,655
Net cash provided by discontinued operations         903        2,024
----------------------------------------------------------------------
Net cash provided by operating activities         10,958       10,679
----------------------------------------------------------------------

Cash flows from investing activities
    Capital expenditures                          (7,556)      (5,057)
    Expenditures relating to FCC licenses
     and other intangibles                          (822)        (150)
    Proceeds from spin-off of local
     communications business, net                  1,821            -
    Proceeds from sale of Embarq notes             4,447            -
    Cash acquired in Nextel merger, net of
     cash paid                                         -        1,183
   Acquisitions, net of cash acquired            (10,481)      (1,371)
    Proceeds from maturities and sales of
     marketable securities                         1,130          (13)
    Cash collateral for borrowings                  (866)         (93)
    Proceeds from sales of assets and
     investments                                     842          648
    Distributions from unconsolidated
     investees, net                                    -          167
    Other, net                                        93          (38)
----------------------------------------------------------------------
Net cash used in investing activities            (11,392)      (4,724)
----------------------------------------------------------------------

Cash flows from financing activities
    Purchase and retirements of debt              (8,042)      (1,170)
    Proceeds from issuance of debt
     securities                                    1,992            -
    Proceeds from collateralized borrowings          866            -
    Net issuances and maturities of
     commercial paper                                514            -
    Retirement of redeemable preferred
     shares                                         (247)           -
    Purchase of common shares                     (1,643)           -
    Proceeds from issuance of common shares          405          432
    Dividends paid                                  (296)        (525)
    Other, net                                        28           35
----------------------------------------------------------------------
Net cash used in financing activities             (6,423)      (1,228)
----------------------------------------------------------------------

Net (decrease) increase in cash and cash
 equivalents                                      (6,857)       4,727

Cash and cash equivalents, beginning of
 period                                            8,903        4,176

Cash and cash equivalents, end of period       $   2,046    $   8,903
                                             -------------------------


(a) The 2005 statement is comprised of Sprint's stand-alone results,
 prior to the merger with Nextel Communications, Inc., plus combined
 Sprint and Nextel results for the remainder of the year. Results from
 PCS Affiliates and Nextel Partners acquired in 2006 are included
 beginning from either the date of acquisition or the start of the
 month closest to the acquisition date.
                      Sprint Nextel Corporation
       PRO FORMA WIRELESS STATEMENTS OF OPERATIONS (Unaudited)
                              (millions)

TABLE No. 9                         Quarter Ended      Year-to-Date
                                  -----------------  -----------------
                                  December December  December December
                                     31,      31,       31,      31,
                                   2006     2005      2006     2005
                                  -----------------  -----------------

Net Operating Revenues
  Service                         $ 7,959  $ 7,173   $31,059  $27,739
  Equipment                           800      842     3,197    3,095
  Wholesale, affiliate and other      245      215       859      892
--------------------------------- -------- --------  -------- --------
Total                               9,004    8,230    35,115   31,726
--------------------------------- -------- --------  -------- --------

Operating Expenses
  Cost of services                  2,074    1,833     7,933    7,026
  Cost of products                  1,273    1,333     4,921    4,670
  Selling, general and
   administrative                   2,749    2,531    10,572    9,923
  Severance, lease exit costs and
   asset impairments                   73      (17)      175       20
  Depreciation                      1,327    1,176     5,232    4,482
  Amortization                        930      869     3,854    3,350
--------------------------------- -------- --------  -------- --------
  Total operating expenses          8,426    7,725    32,687   29,471
--------------------------------- -------- --------  -------- --------
                                                                    -
Operating Income                  $   578  $   505   $ 2,428  $ 2,255
                                  -------- --------  -------- --------


NON-GAAP MEASURES AND
 RECONCILIATIONS

  Operating Income                $   578  $   505   $ 2,428  $ 2,255
  Special items:                                                    -
    Severance, lease exit costs
     and asset impairments             73      (17)      175       20
    Hurricane charges (excluding
     asset impairments)                 -       20         -       85
                                  -------- --------  -------- --------
  Adjusted Operating Income *     $   651  $   508   $ 2,603  $ 2,360
    Depreciation and amortization   2,257    2,045     9,086    7,832
                                  -------- --------  -------- --------
  Adjusted OIBDA *                $ 2,908  $ 2,553   $11,689  $10,192
                                  -------- --------  -------- --------

  Operating Income Margin (1)         7.0%     6.8%      7.6%     7.9%
  Adjusted OIBDA Margin *            35.4%    34.6%     36.6%    35.6%


(1) Operating Income Margin percentage excludes
 wireless equipment revenue.

Pro forma consolidated statements of operations have been presented as
 if the Sprint-Nextel merger occurred at the beginning of 2005.
Because the merger occurred in the third quarter of 2005, the fourth
 quarter 2005 and the fourth quarter and year-to-date 2006 reflect
 actual results.
The pro forma results do not include the results of any acquired PCS
 Affiliate, Velocita or Nextel Partners prior to the dates of their
 respective acquisitions because they do not significantly affect
 reported results.
                      Sprint Nextel Corporation
          NON-GAAP MEASURES AND RECONCILIATIONS (Unaudited)
                              (millions)


TABLE No. 10
                           -------------------------------------------
                                                   Long   Corporate &
For the Quarter Ended      Consolidated Wireless Distance Eliminations
 December 31, 2006
----------------------------------------------------------------------

Operating Income (Loss)      $     569   $  578    $ 107    $    (116)
    Special items (a)
     Severance, lease exit
      costs and asset
      impairments                   79       73        5            1
     Merger and
      integration expense          117        -        -          117
                           -------------------------------------------
Adjusted Operating Income*         765      651      112            2
    Depreciation and
     amortization                2,404    2,257      147            -
                           -------------------------------------------
Adjusted OIBDA*                  3,169    2,908      259            2
    Capital expenditures         2,612    2,238      274          100
                           -------------------------------------------
Adjusted OIBDA* less Capex   $     557   $  670    $ (15)   $     (98)
                           -------------------------------------------



                           -------------------------------------------
                                                   Long   Corporate &
For the Quarter Ended      Consolidated Wireless Distance Eliminations
 December 31, 2005
----------------------------------------------------------------------

Operating Income (Loss)      $     297   $  505    $  98    $    (306)
    Special items
     Severance, lease exit
      costs and asset
      impairments                  (25)     (17)     (16)           8
     Merger and
      integration expense          319        -        -          319
     Hurricane charges              21       20        1            -
                           -------------------------------------------
Adjusted Operating Income*         612      508       83           21
    Depreciation and
     amortization                2,184    2,045      138            1
                           -------------------------------------------
Adjusted OIBDA*                  2,796    2,553      221           22
    Capital expenditures         1,836    1,535      166          135
                           -------------------------------------------
Adjusted OIBDA* less Capex   $     960   $1,018    $  55    $    (113)
                           -------------------------------------------



                           -------------------------------------------
                                                   Long   Corporate &
For the Quarter Ended      Consolidated Wireless Distance Eliminations
 September 30, 2006
----------------------------------------------------------------------

Operating Income (Loss)      $     719   $  754    $  73    $    (108)
    Special items
     Severance, lease exit
      costs and asset
      impairments                   50       41        9            -
     Merger and
      integration expense          107        -        -          107
                           -------------------------------------------
Adjusted Operating Income*         876      795       82           (1)
    Depreciation and
     amortization (b)            2,488    2,364      124            -
                           -------------------------------------------
Adjusted OIBDA*                  3,364    3,159      206           (1)
    Capital expenditures         1,843    1,473      255          115
                           -------------------------------------------
Adjusted OIBDA* less Capex   $   1,521   $1,686    $ (49)   $    (116)
                           -------------------------------------------


(a) See accompanying Notes to Financial Data for more information on
 special items.
(b) Amortization expense for the third quarter 2006 includes an
 adjustment of $52 million, which reverses amortization expense that
 was previously recorded in our Form 10-Q for the period ended
 September 30, 2006.
                      Sprint Nextel Corporation
          NON-GAAP MEASURES AND RECONCILIATIONS (Unaudited)
                              (millions)


TABLE No. 10
                           -------------------------------------------
                                                   Long   Corporate &
For the Quarter Ended June Consolidated Wireless Distance Eliminations
 30, 2006
----------------------------------------------------------------------

Operating Income (Loss)      $     712   $  660   $  155    $    (103)
    Special items
     Severance, lease exit
      costs and asset
      impairments                   40       33        7            -
     Merger and
      integration expense          113        -        -          113
                           -------------------------------------------
Adjusted Operating Income*         865      693      162           10
    Depreciation and
     amortization                2,354    2,242      113           (1)
                           -------------------------------------------
Adjusted OIBDA*                  3,219    2,935      275            9
    Capital expenditures         1,359    1,064      200           95
                           -------------------------------------------
Adjusted OIBDA* less Capex   $   1,860   $1,871   $   75    $     (86)
                           -------------------------------------------



                           -------------------------------------------
                                                   Long   Corporate &
For the Quarter Ended      Consolidated Wireless Distance Eliminations
 March 31, 2006
----------------------------------------------------------------------

Operating Income (Loss)      $     484   $  436   $  104    $     (56)
    Special items
     Severance, lease exit
      costs and asset
      impairments                   38       28       10            -
     Merger and
      integration expense           76        -        -           76
                           -------------------------------------------
Adjusted Operating Income*         598      464      114           20
    Depreciation and
     amortization                2,346    2,223      122            1
                           -------------------------------------------
Adjusted OIBDA*                  2,944    2,687      236           21
    Capital expenditures         1,243    1,071       92           80
                           -------------------------------------------
Adjusted OIBDA* less Capex   $   1,701   $1,616   $  144    $     (59)
                           -------------------------------------------
                      Sprint Nextel Corporation
          NON-GAAP MEASURES AND RECONCILIATIONS (Unaudited)
                              (millions)


TABLE No. 11
                           -------------------------------------------
                                                   Long   Corporate &
For the Year Ended         Consolidated Wireless Distance Eliminations
 December 31, 2006
----------------------------------------------------------------------

Operating income (Loss)      $   2,484  $ 2,428   $  439    $    (383)
    Special items (a)              620      175       31          414
                           -------------------------------------------
Adjusted operating income*       3,104    2,603      470           31
    Depreciation and
     amortization                9,592    9,086      506            -
                           -------------------------------------------
Adjusted OIBDA*                 12,696   11,689      976    $      31
    Capital expenditures         7,057    5,846      821          390
                           -------------------------------------------
Adjusted OIBDA* less Capex   $   5,639  $ 5,843   $  155    $    (359)
                           -------------------------------------------



                           -------------------------------------------
                                                   Long   Corporate &
For the Year Ended         Consolidated Wireless Distance Eliminations
 December 31, 2005
----------------------------------------------------------------------

Operating income (Loss)      $   2,141  $ 2,140   $  493    $    (492)
    Special items                  723      105       30          588
                           -------------------------------------------
Adjusted operating income
 (loss)*                         2,864    2,245      523           96
    Depreciation and
     amortization                5,200    4,699      499            2
                           -------------------------------------------
Adjusted OIBDA*              $   8,064  $ 6,944   $1,022    $      98
                           -------------------------------------------
    Capital expenditures         4,201    3,545      384          272
                           -------------------------------------------
Adjusted OIBDA* less Capex   $   3,863  $ 3,399   $  638    $    (174)
                           -------------------------------------------



                           -------------------------------------------
                            Pro forma     Pro      Long   Corporate &
                                          forma
For the Year Ended         Consolidated Wireless Distance Eliminations
 December 31, 2005
----------------------------------------------------------------------

Operating income (Loss)      $   2,127  $ 2,255   $  493    $    (621)
    Special items                  852      105       30          717
                           -------------------------------------------
Adjusted Operating Income*       2,979    2,360      523           96
    Depreciation and
     amortization                8,333    7,832      499            2
                           -------------------------------------------
Adjusted OIBDA*                 11,312   10,192    1,022           98
                           -------------------------------------------
    Capital expenditures         6,231    5,575      384          272
                           -------------------------------------------
Adjusted OIBDA* less Capex   $   5,081  $ 4,617   $  638    $    (174)
                           -------------------------------------------


(a) See accompanying Notes to Financial Data for more information on
 special items.
                      Sprint Nextel Corporation
          NON-GAAP MEASURES AND RECONCILIATIONS (Unaudited)
                              (millions)

TABLE No.12
                                ------------------  ------------------
                                  Quarter Ended        Year-to-date
                                ------------------  ------------------
                                December  December  December  December
                                   31,       31,       31,       31,
                                 2006      2005      2006      2005
                                ------------------  ------------------
Wireless Pro Forma
  Adjusted OIBDA*               $ 2,908   $ 2,553   $11,689   $10,192
  Service, wholesale, affiliate
   and other net operating
   revenues                       8,204     7,388    31,918    28,631
  Adjusted OIBDA margin*           35.4%     34.6%     36.6%     35.6%

  Operating income              $   578   $   505   $ 2,428   $ 2,255
  Operating income margin           7.0%      6.8%      7.6%      7.9%


Long Distance
  Adjusted OIBDA*               $   259   $   221   $   976   $ 1,022
  Total net operating revenues    1,635     1,662     6,571     6,834
  Adjusted OIBDA margin*           15.8%     13.3%     14.9%     15.0%

  Operating income              $   107   $    98   $   439   $   493
  Operating income margin           6.5%      5.9%      6.7%      7.2%


Consolidated Pro Forma
  Adjusted OIBDA*               $ 3,169   $ 2,796   $12,696   $11,312
  Service, wholesale, affiliate
   and other net operating
   revenues                       9,644     8,950    37,831    35,082
  Adjusted OIBDA margin*           32.9%     31.2%     33.6%     32.2%

  Operating income              $   569   $   297   $ 2,484   $ 2,127
  Operating income margin           5.9%      3.3%      6.6%      6.1%
                      Sprint Nextel Corporation
                NON-GAAP MEASURES AND RECONCILIATIONS
                              (millions)


TABLE No. 13
                                 -------------------------------------
                                   Quarter Ended       Year-to-Date
                                 -----------------  ------------------
                                 December December  December  December
                                    31,      31,       31,       31,
                                  2006     2005       2006     2005
                                 -----------------  ------------------

Adjusted OIBDA*                  $ 3,169  $ 2,796   $ 12,696  $ 8,064
  Adjust for special items          (196)    (315)      (620)    (723)
  Proceeds from communications
   towers lease transactions           -        -          -    1,195
  Other operating activities,
   net (a)                          (510)     955     (2,021)     116
  Capital expenditures            (2,411)  (1,861)    (7,209)  (4,226)
  Dividends paid                     (72)     (78)      (296)    (525)
  Proceeds from sales of assets      626       47        837      636
  Other investing activities,
   net                              (185)     (38)      (628)     793
                                 -----------------  ------------------
Free Cash Flow*                      421    1,506      2,759    5,330
  Decrease in debt, net              210      (31)    (5,536)  (1,055)
  Retirement of redeemable
   preferred shares                    -        -       (247)       -
  Purchase of treasury shares       (120)       -     (1,643)       -
  Cash transferred to Embarq, net
   of cash received and proceeds
   from the sale of Embarq notes       -        -      6,268        -
  Discontinued operations
   activity, net                       -       13        367       96
  Cash acquired in Nextel
   merger, net of cash paid            -        -          -    1,183
  Purchase of PCS Affiliates,
   Nextel Partners and Velocita,
   net of cash acquired                2     (422)   (10,481)  (1,371)
  Change in restricted cash            -      (93)        93      (93)
  Distributions from
   unconsolidated investees, net       -      (14)         -      167
  Investments in debt
   securities, net                     2      (62)     1,130      (13)
  Proceeds from common shares
   issued                             33      139        405      432
  Other financing activities,
   net                                16       39         28       51
                                 -----------------  ------------------
Change in cash and cash
 equivalents - GAAP              $   564  $ 1,075   $ (6,857) $ 4,727
                                 =================  ==================



TABLE No.14
                                                    December
                                                       31,
                                                      2006
                                                    ---------
Total Debt                                          $ 22,154
  Less: Cash on hand                                  (2,046)
  Less: Current marketable
   securities                                            (15)
                                                    ---------
Net Debt*                                           $ 20,093
                                                    =========


(a) Other operating activities, net includes the change in working
 capital, change in deferred income taxes, miscellaneous operating
 activities and non-operating items in net income (loss).
                       Sprint Nextel Corporation
                          OPERATING STATISTICS

TABLE No. 15
---------------------------------------------------------------------
                          1Q06      2Q06     3Q06     4Q06   YTD 2006
---------------------------------------------------------------------

Wireless

   Financial and Other
    Statistics
   ---------------------

   Direct Post-Paid
    Subscribers
       Service revenue
        (in millions)    $ 7,175  $ 7,259  $ 7,653  $ 7,588   $29,675
       ARPU              $    62  $    62  $    61  $    60   $    61
       Churn                 2.1%     2.1%     2.4%     2.3%      2.3%
       Additions (in
        thousands) (1)       563      210     (188)    (306)      279
       End of period
        subscribers (in
        thousands) (2)    39,103   41,405   41,675   41,805    41,805
       Hours per
        subscriber            17       17       17       16        17

   Direct Pre-Paid
    Subscribers
       Service revenue
        (in millions)    $   312  $   337  $   364  $   371   $ 1,384
       ARPU              $    36  $    34  $    33  $    32   $    33
       Churn (4)             5.4%     6.0%     6.8%     6.5%      6.2%
       Additions (in
        thousands)           502      498      216      171     1,387
       End of period
        subscribers (in
        thousands) (3)     3,127    3,625    3,841    4,012     4,012

   Wholesale Subscribers
       Additions (in
        thousands)           228      (31)     177      830     1,204
       End of period
        subscribers (in
        thousands)         5,382    5,351    5,528    6,358     6,358

   Affiliate Subscribers
       Additions (in
        thousands) (1)        45       27       28       46       146
       End of period
        subscribers (in
        thousands)         1,256    1,283      853      899       899

   Total Subscribers
       Additions (in
        thousands) (1)     1,338      704      233      741     3,016
       End of period
        subscribers (in
        thousands)        48,868   51,664   51,897   53,074    53,074

   Number of cell sites
    on air (in
    thousands)                55       57       59       61        61

   Adjusted OIBDA* (in
    millions) (5)        $ 2,687  $ 2,935  $ 3,159  $ 2,908   $11,689
   Service, wholesale,
    affiliate and other
    net operating
    revenues (in
    millions)            $ 7,685  $ 7,800  $ 8,229  $ 8,204   $31,918
   Adjusted OIBDA
    margin*                 35.0%    37.6%    38.4%    35.4%     36.6%

   Capital expenditures  $ 1,071  $ 1,064  $ 1,473  $ 2,238   $ 5,846
   Pro forma Adjusted
    OIBDA* less capital
    expenditures         $ 1,616  $ 1,871  $ 1,686  $   670   $ 5,843

(1)Direct post-paid and affiliate net subscriber additions for the
    first quarter 2006 have been reported before transfers from the
    affiliate subscriber base totaling 1,605,000.
   Direct post-paid additions for the second quarter 2006 have been
    reported before acquisitions of subscribers from Nextel Partners
    totaling 2,092,000. Direct post-paid additions for the third
    quarter 2006 have been reported before transfers from the
    affiliate subscriber base totalling 458,000.
(2)Direct post-paid end of period subscribers reflect a decrease in
    the first quarter and year-to-date 2006 due to a reclassification
    of 42,000 employee phone rate plans from revenue-generating to
    non-revenue-generating. In the quarter ended December 31, 2006,
    the Company changed its subscriber deactivation process for post
    paid subscribers. To effect this change, the customer subscriber
    base as of October 1, 2006 was increased by 436,000 subscribers.
    This adjustment did not impact reported net adds or reported
    churn in the quarter ended December 31, 2006.
(3)Direct prepaid end of period subscribers for the first quarter
    2006 and year-to-date 2006 reflect a beginning balance adjustment
    of 59,000 subscribers to exclude prepaid subscribers acquired
    from affiliates in the third and fourth quarters 2005.
(4)Represents prepaid churn normalized for a change in the first
    quarter 2006 in the treatment of low-balance customers.
(5)See Tables 10 and 11 for Adjusted OIBDA* reconciliation.


Long Distance

   Financial and Other Statistics (dollars
    in millions, except where stated)
   ---------------------------------------

   Total Long Distance
    Net Operating
    Revenues             $ 1,669  $ 1,641  $ 1,626  $ 1,635   $ 6,571
       Voice net
        operating
        revenue          $ 1,009  $ 1,003  $   989  $   978   $ 3,979
       Data net
        operating
        revenue          $   375  $   366  $   346  $   353   $ 1,440
       Internet net
        operating
        revenue          $   225  $   217  $   237  $   254   $   933
       Other net
        operating
        revenue          $    60  $    55  $    54  $    50   $   219

   Total Operating
    Expenses             $ 1,565  $ 1,486  $ 1,553  $ 1,528   $ 6,132
       Costs of services
        and products     $ 1,098  $ 1,085  $ 1,141  $ 1,102   $ 4,426
       Selling, general
        and
        administrative   $   335  $   281  $   279  $   274   $ 1,169
       Depreciation      $   122  $   113  $   124  $   147   $   506
       Severance, lease
        exit costs and
        asset
        impairments      $    10  $     7  $     9  $     5   $    31

   Operating income      $   104  $   155  $    73  $   107   $   439
   Operating income
    margin                   6.2%     9.4%     4.5%     6.5%      6.7%

   Adjusted OIBDA*       $   236  $   275  $   206  $   259   $   976
   Adjusted OIBDA
    margin*                 14.1%    16.8%    12.7%    15.8%     14.9%

   Capital expenditures  $    92  $   200  $   255  $   274   $   821
   Adjusted OIBDA* less
    capital expenditures $   144  $    75  $   (49) $   (15)  $   155

   YOY voice volume
    growth                    10%       5%       5%       1%        5%

                      Sprint Nextel Corporation
                 NOTES TO FINANCIAL DATA (Unaudited)

(1)In the fourth quarter 2006, we recorded merger and integration
    costs of $117 million (pre-tax). All merger costs were related to
    the Sprint-Nextel merger and the acquisition of PCS Affiliates.
    Merger and integration costs are considered to be non-recurring in
    nature, and have been reflected as unallocated corporate costs and
    therefore excluded from segment results.

(2)In the fourth quarter 2006, we recorded severance, lease exit costs
    and asset impairment charges of $79 million (pre-tax), which
    consists of about $71 million related to work force reductions and
    lease termination charges, and $8 million of asset impairments
    primarily related to the abandonment of various assets including
    certain cell sites under construction. Severance, lease exit costs
    and asset impairment charges are allocated to the appropriate
    segment results.

(3)In May 2006 we entered into a separation and distribution agreement
    with Embarq Corporation, which consists primarily of the business
    that we had reported as the Local segment in our consolidated
    financial statements in prior periods, and, at the time, was a
    wholly owned subsidiary, and on May 17, 2006, we completed the
    spin off of Embarq. The results of the discontinued operations
    (net of tax), have been reclassified out of the operating results
    as of the first day of each period presented.

CONTACT: Sprint Nextel Corp.
Media Relations
James Fisher, 703-433-8677
james.w.fisher@sprint.com
or
Investor Relations
Kurt Fawkes, 800-259-3755
Investorrelations@sprint.com

SOURCE: Sprint Nextel Corp.



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