Sprint.com

May 02, 2007

Sprint Nextel Reports First Quarter 2007 Results

    --  Net subscriber additions of nearly 600,000 increase base to
        more than 53.6 million

    --  Strong demand for Sprint, Boost Mobile and MVNO services;
        PowerSource dual-band devices post solid debut

    --  Continued industry leadership in wireless data services

    --  Strong growth in Internet Protocol (IP) services

    --  Business investments enhance capabilities, coverage and
        differentiation

RESTON, Va.--(BUSINESS WIRE)--May 2, 2007--First Quarter Segment Results

    Wireless

    --  Total revenues of $8.7 billion; direct service revenues
        increased 4% year-over-year

    --  Adjusted Operating Income* of $253 million impacted by
        accelerated resource commitments

    --  Adjusted OIBDA* of $2.4 billion exceeds capital investment by
        $1 billion

    Wireline

    --  Total revenues of $1.6 billion; 28% growth in IP revenues
        year-over-year

    --  Adjusted Operating Income* of $78 million reflects voice,
        legacy data trends

    --  Adjusted OIBDA* of $205 million exceeds capital investment by
        $61 million

Sprint Nextel Corp. (NYSE: S) today reported first quarter 2007 financial results. In the quarter, the company added nearly 600,000 net new subscribers, expanded network coverage and capabilities and significantly increased investments in business operations. The company reported strong demand for wireless data services and wireline IP services and achieved a fast start for its PowerSource(TM) handset offering that combines the best push-to-talk, voice and data capabilities on one device. The company also substantially completed a major headcount reduction, continued to build momentum on its planned fourth generation wireless data offering and launched a market trial for a Boost Mobile unlimited local calling plan.

In the first quarter of 2007, diluted earnings per share (EPS) from continuing operations were a loss of 7 cents, compared to income of 5 cents in the first quarter of 2006. Adjusted EPS before Amortization* was 18 cents compared to 26 cents in the year-ago period. The lower earnings in the quarter are due to reduced contributions from operations and lower non-operating income, partially offset by fewer common shares outstanding.

Consolidated net operating revenues of $10.1 billion in the first quarter were modestly above revenues in the year-ago period. Reflecting increased operating expenses, consolidated adjusted OIBDA* of $2.6 billion declined 12% from the first quarter of 2006. First quarter capital expenditures were $1.6 billion and free cash flow* was approximately $500 million.

"Our plans in 2007 call for a substantial increase in the funding of business operations to build long term growth and profitability," said Gary Forsee, Sprint Nextel chairman and CEO. "We established a quick ramp on these investments in the first quarter to accelerate our progress. These increased commitments, along with notably higher device subsidies to drive acquisition and retention, impacted our profitability in the quarter. However, we are seeing some positive tradeoffs in the form of enhanced competitiveness. Examples include:

    --  Double-digit annual growth in prime credit post-paid
        acquisitions;

    --  Continuing improvements in the customer experience;

    --  Good progress in integrating our disparate network users
        through new PowerSource devices and transitioning to a single
        billing and service delivery platform;

    --  Stronger key brand recognition metrics as a result of an
        increase in year-over-year advertising spend, and further
        enhancement of our marketing potential with the announcement
        of a new advertising agency;

    --  iDEN and CDMA networks now performing at their "best ever"
        levels; and

    --  Great strides in planning for next generation capabilities,
        including announcing the market launch schedule for our WiMAX
        broadband wireless data services.

"In the quarter, we had solid performance in our CDMA post-paid business, including sequential growth in both gross and net additions and improved customer churn," said Forsee. "We also achieved a stronger Boost Mobile customer gain, continued growth in MVNO channels and good velocity with PowerSource sales. Together, these four lines of business generated 1.3 million net additions during the first quarter. However, these gains were partially offset by a decline in the iDEN post-paid subscriber base reflecting prior network constraints, which have since been largely mitigated.

"Overall post-paid subscriber retention rates again trended slightly positive in the quarter, and reported net add performance was ahead of expectations. In the quarter, 44% year-over-year growth in wireless data services continued to partially offset voice revenue declines. In the Wireline segment, we reported 28% growth in IP services year-over-year, and increased the number of cable telephony customers we serve by more than 200,000 during the quarter. Over the course of the year, we expect to achieve improving profitability in consolidated results, consistent with our previously announced annual guidance," Forsee said.

Editor's Note:

In accordance with purchase accounting rules, Sprint Nextel's reported results for the first quarter which ended March 31, 2006, reflect affiliate acquisitions as of the acquisition date.

CONSOLIDATED RESULTS

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


                                             Quarter Ended       %
                                               March 31,       change
                                          ------------------- --------
  Financial Data                            2007      2006
                                          --------- ---------
  Net operating revenues                   $10,096   $10,074       --%
  Adjusted operating income*                   315       598     (47)%
  Adjusted OIBDA*                            2,583     2,944     (12)%

  Income (loss) from continuing operations    (211)      164       NM

  Diluted earnings (loss) per share        $ (0.07)  $  0.05       NM

  Capex                                    $ 1,607   $ 1,243       29%

  Free cash flow*                          $   497   $   808     (38)%
    The following is a discussion of Consolidated results.

    --  Revenues in the quarter reflect growth in Wireless, offset by
        lower Wireline revenues.

    --  The decline in adjusted OIBDA* in the quarter was due to lower
        contributions from both Wireless and Wireline.

    --  Interest expense, net of interest income, was $336 million
        compared to $310 million in the year-ago period, and other
        non-operating income was a net loss of $4 million in the
        current period versus a gain of $76 million in 2006.

    --  The effective income tax benefit rate in the first quarter was
        37.8% compared to an expense rate of 34.4% in the first
        quarter of 2006.

    --  Non-cash compensation cost was $73 million in the first
        quarter versus $105 million in the same period in 2006.

    --  Net debt* was $19.8 billion at the end of the quarter.

    --  During the quarter, the company retired affiliate and other
        debt with the proceeds of a new $750 million unsecured loan
        agreement.

    --  In the first quarter, Sprint Nextel acquired approximately
        $300 million of its common stock through open market
        purchases. At the end of the first quarter, cumulative stock
        buybacks were approximately $1.9 billion under an approved
        plan that authorizes total purchases of up to $6 billion
        through the first quarter of 2008.

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

                                             Quarter Ended
                                               March 31,
                                          -------------------    %
  Financial Data                            2007      2006     change
                                          --------- --------- --------
  Net operating revenues                   $ 8,723   $ 8,518        2%
  Adjusted operating income*                   253       461     (45)%
  Adjusted OIBDA*                            2,395     2,684     (11)%
  Adjusted OIBDA margin                       29.7%     34.9%
  Capex(1)                                 $ 1,403   $ 1,071       31%

(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 nearly 600,000 subscribers and
        ended the quarter with a total subscriber base of 53.6
        million, a 10 percent increase from the year-ago period.
        -- Post-paid subscribers declined by 220,000, reflecting a
           gain in CDMA and PowerSource subscribers, offset by a
           decline in iDEN subscribers.
        -- At the end of the quarter, the company served 41.6 million
           post-paid subscribers, including 24.7 million on CDMA, 16.5
           million on iDEN and 400,000 PowerSource users who access
           both platforms.
        -- Boost Mobile prepaid net subscriber additions were 275,000
           for the quarter, bringing the ending base to 4.3 million.
           Boost Unlimited additions were minimal in the quarter.
        -- Wholesale channels added 467,000 subscribers in the
           quarter, and the total base at the end of the period was
           6.8 million.
        -- Affiliate channels added 46,000 in the quarter, increasing
           the base to 945,000.
    --  In the quarter, the company announced the availability of
        Upstage by Samsung, the first U.S. wireless phone designed
        with a revolutionary form factor that optimizes music
        capabilities with the look of a phone on one side and an MP3
        player on the other. Sprint also bolstered its music
        leadership with the announcement of plans to offer song
        downloads from the Sprint Music Store(SM) for 99 cents each -
        the lowest rate available for over-the-air song downloads
        purchased in the United States.

    Churn

    --  Post-paid churn for the quarter was 2.3%, compared to a little
        over 2.3% in the fourth quarter 2006 and 2.1% in the year-ago
        first quarter. In the quarter, CDMA churn improved
        sequentially and year-over-year. The iDEN post-paid churn rate
        increased in the quarter, although total deactivations were
        modestly lower sequentially. Churn within the former Nextel
        Partners base improved from the fourth quarter but remained
        significantly above core iDEN levels.

    --  Boost Mobile prepaid churn was 7.0% for the quarter compared
        to 6.5% in the fourth quarter 2006 and 5.4% in the first
        quarter of 2006. Boost Mobile churn was partially impacted by
        actions to remove inactive subscribers.

    Revenues/ARPU

    --  Net operating revenues increased 2% compared to the year-ago
        period. This was due to a 4% increase in direct service
        revenues and a 29% increase in wholesale and affiliate
        revenues, partially offset by a 22% decline in equipment
        revenues. The lower equipment revenues are due to lower gross
        additions and more competitive pricing. Compared to the
        year-ago period, prime credit gross additions increased 14%,
        while sub-prime declined more than 30%. Sequentially,
        post-paid gross additions were flat and prepaid gross
        additions increased. Total revenues declined 3% sequentially
        due to a lower post-paid average revenue per user, or ARPU,
        and a decline in equipment revenues associated with more
        aggressive acquisition and retention handset pricing.

    --  Post-paid ARPU in the quarter was a little more than $59, a
        decline of slightly less than 5% from the year-ago period and
        a decline of a little under 2% sequentially. In the quarter,
        lower voice contributions to ARPU were partially offset by
        increased data contributions. CDMA ARPU declined 1% from the
        year-ago period while iDEN ARPU declined 9%.

    --  Boost Mobile ARPU was a little more than $32 for the quarter,
        which was a 2% sequential improvement but a 12% decline from a
        year ago.

    --  Data service revenues were nearly $1.2 billion in the quarter,
        an increase of 44% compared to the year-ago period and a 5%
        sequential increase. Data contributed $9.25 or 16% of overall
        ARPU in the quarter and represented more than 20% of CDMA
        ARPU.

    Operating Expenses

    --  Total operating expenses were $8.6 billion in the quarter, an
        increase of 7% year-over-year and 2% sequentially.

    --  In the quarter, costs of services increased 11% compared to
        the year-ago period but were flat sequentially. The
        year-over-year increase is due to increased network costs to
        support a larger footprint and subscriber base and new EV-DO
        data capabilities. EV-DO revision A, which provides
        industry-leading wireless data speeds, currently reaches a
        population area covering nearly 200 million people, and the
        CDMA and iDEN voice networks both cover an area of more than
        270 million people.

    --  Cost of products increased 10% year-over-year and 8%
        sequentially. The major contributors to the increase were
        handset mix, the ramp-up of higher cost PowerSource devices,
        and costs associated with restocking Boost Mobile handsets in
        selected iDEN markets.

    --  SG+A costs increased 7% from the first quarter of 2006 and 5%
        sequentially, mainly due to higher advertising costs,
        increased dealer commissions and sequentially higher employee
        incentive compensation. Bad debt expense increased from the
        year-ago period, but declined sequentially. Depreciation
        expense decreased 4% from the year-ago first quarter and
        decreased 7% from the fourth quarter. The decrease was mainly
        due to lower depreciation rates determined under group life
        depreciation accounting. This decrease was partially offset by
        business acquisitions and an increase in the deployed capital
        asset base.

    Capital Spending

    --  In the quarter, Adjusted OIBDA* exceeded capital investment by
        $992 million.

    --  Total capital investment in the quarter was $1.4 billion and
        was targeted at increasing network capacity, footprint and new
        functionality.

    --  In the quarter, there was minimal capital spending associated
        with the WiMAX broadband network, but the rate of capital
        expenditures is expected to increase over the course of the
        year, with plans calling for initial market deployments by
        year end.

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

                                           Quarter Ended         %
                                             March 31,         change
                                        --------------------  --------
                                          2007       2006
                                        ---------  ---------
  Net operating revenues                 $ 1,598    $ 1,666       (4)%
  Adjusted operating income*                  78        117      (33)%
  Adjusted OIBDA*                            205        239      (14)%
  Adjusted OIBDA margin*                    12.8%   $  14.3%

  Capex                                  $   144    $    92        57%
    The following is a discussion of our Wireline results.

    --  Sequential revenue comparisons were partially impacted by
        reduced billing adjustments in the fourth quarter 2006, which
        reflected improved billing and dispute resolution processes.

    --  In the quarter, Internet Protocol (IP) revenues increased 28%
        year-over-year and 8% sequentially due to strength in
        dedicated IP services for enterprise customers and strong
        growth in cable VOIP services.

    --  Total voice revenues declined 7% from the year-ago period and
        2% sequentially. Year-over-year growth in affiliate and
        wholesale revenues was offset by declines in consumer and
        retail business revenues.

    --  In the quarter, legacy data services declined 17%
        year-over-year and 11% sequentially, mainly due to technology
        migration.

    --  At the end of the quarter, Wireline was supporting more than
        1.7 million cable telephony subscribers and added more than
        200,000 subscribers in the quarter.

    --  First quarter operating expenses increased 1% year-over-year
        and 4% sequentially. First quarter spending reflects higher
        costs of services to support cable telephony expansion and a
        sequential increase in employee incentive compensation,
        partially offset by a sequential decline in depreciation due
        to lower rates determined under group life depreciation
        accounting.

    --  Adjusted operating income* in the quarter was impacted by
        non-recurring operating losses in an international product.

    --  Capital investment in the quarter of $144 million was targeted
        at additional capacity and IP services.

    --  Adjusted OIBDA* exceeded capital spending by $61 million.

    Forward-Looking Guidance

    Sprint Nextel is reiterating 2007 guidance as follows:

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

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

    --  Capital spending of approximately $7.2 billion and an
        investment of up to $800 million for intangible costs
        associated with re-banding iDEN spectrum.

The company expects to continue with its program of buying back shares of its common stock over the course of the year. The company will vary the amount and timing of these purchases from time to time as the program proceeds.

*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 (Loss) 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 (Loss) is defined as income (loss) from continuing operations before special items, net of tax. 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 (Loss) is defined as operating income (loss) 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. 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 Nextel Partners, Inc. and the PCS Affiliates that we
        have acquired, 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 iDEN(R), network;

    --  the impact of adverse network performance;

    --  the costs of compliance with regulatory mandates, particularly
        requirements related to the Federal Communications
        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 our Form
        10-K for the year ended December 31, 2006, in Part I, Item 1A,
        "Risk Factors."

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 more than 53.6 million customers at the end of the first quarter 2007; industry-leading mobile data services; instant national and international walkie-talkie capabilities; and a 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
                                              ------------------------
                                               March 31,    March 31,
                                                 2007         2006
                                              ------------------------

Net Operating Revenues                         $  10,096    $  10,074
--------------------------------------------  ------------------------
Operating Expenses

  Costs of services                                2,971        2,821
  Costs of products                                1,379        1,253
  Selling, general and administrative (1)          3,303        3,132
  Severance, lease exit costs and asset
   impairments (2)                                   174           38
  Depreciation                                     1,355        1,408
  Amortization                                       913          938
--------------------------------------------  ------------------------
  Total operating expenses                        10,095        9,590
--------------------------------------------  ------------------------
Operating Income                                       1          484
Interest expense                                    (367)        (394)
Interest income                                       31           84
Gain on early retirement of debt                       4            1
Equity in (losses) earnings of
 unconsolidated investees, net                        (2)          20
Other, net                                            (6)          55
--------------------------------------------  ------------------------
(Loss) Income from continuing operations
 before income taxes                                (339)         250
Income tax expense                                   128          (86)
--------------------------------------------  ------------------------
(Loss) Income from Continuing Operations            (211)         164
Discontinued operations, net (3)                       -          255
                                              ------------------------
Net (Loss) Income                                   (211)         419
Preferred stock dividends paid                         -           (2)
--------------------------------------------  ------------------------
(Loss) Income Available to Common
 Shareholders                                  $    (211)   $     417
                                              ------------------------

Diluted (Loss) Earnings Per Common Share       $   (0.07)   $    0.14
Discontinued operations, net (3)                       -        (0.09)
                                              ------------------------
Diluted (Loss) Earnings Per Common Share
 from Continuing Operations                    $   (0.07)   $    0.05
                                              ------------------------

Diluted weighted average common shares           2,898.7      2,993.7
                                              ------------------------
Basic (Loss) Earnings Per Common Share         $   (0.07)   $    0.14
                                              ------------------------

(a) Results for each of the periods reflected include the results of
 each of the acquired PCS Affiliates and Velocita from either the date
 of the acquisition or the start of the month closest to the
 acquisition date.

(1), (2), (3) See accompanying Notes to Financial Data.
                       Sprint Nextel Corporation
           RECONCILIATIONS OF EARNINGS PER SHARE (Unaudited)
                   (millions, except per share data)


TABLE No. 5
                                                   Quarter Ended
                                              ------------------------
                                               March 31,    March 31,
                                                 2007         2006
                                              ------------------------

(Loss) Income Available to Common
 Shareholders                                  $    (211)   $     417
Preferred stock dividends paid                         -            2
--------------------------------------------  ------------------------
Net (Loss) Income                                   (211)         419
Discontinued operations, net                           -         (255)
--------------------------------------------  ------------------------
(Loss) Income from Continuing Operations            (211)         164
Special items (net of taxes) (a)
  Severance, lease exit costs and asset
   impairments                                       109           23
  Merger and integration expense                      60           46
  Contingencies and Other (a)                         25            -
  Net gains on investment activities and
   equity in earnings                                  -          (32)
  Gain on early retirement of debt                    (2)           -
--------------------------------------------  ------------------------
Adjusted Net (Loss) Income*                    $     (19)   $     201
--------------------------------------------  ------------------------

Amortization (net of taxes)                          551          565

--------------------------------------------  ------------------------
Adjusted Net Income before Amortization*       $     532    $     766
--------------------------------------------  ------------------------

Diluted (Loss) Earnings Per Share              $   (0.07)   $    0.14
Discontinued operations, net                           -        (0.09)
--------------------------------------------  ------------------------
(Loss) Earnings Per Share from Continuing
 Operations                                        (0.07)        0.05
Special items                                       0.07         0.02

--------------------------------------------  ------------------------
Adjusted Earnings Per Share*                   $    0.00    $    0.07
--------------------------------------------  ------------------------

Amortization (net of taxes) (b)                     0.18         0.19

--------------------------------------------  ------------------------
Adjusted Earnings Per Share before
 Amortization*                                 $    0.18    $    0.26
--------------------------------------------  ------------------------

(a) See accompanying Notes to Financial Data for more information
(b) Rounding differences are recorded to the Amortization (net of
 taxes) line
                       Sprint Nextel Corporation
                CONDENSED CONSOLIDATED BALANCE SHEETS
                              (millions)


TABLE No. 6                                 (Unaudited)
                                            --------------------------
                                             March 31,    December 31,
                                               2007          2006
                                            --------------------------
Assets
  Current assets
    Cash and cash equivalents                $    2,346    $    2,046
    Marketable securities                             8            15
    Accounts receivable, net                      4,258         4,595
    Inventories                                     884         1,176
    Deferred tax assets                             602           923
    Prepaid expenses and other current
     assets                                         849         1,549
----------------------------------------------------------------------
    Total current assets                          8,947        10,304

  Investments                                       261           253
  Property, plant and equipment, net             26,071        25,868
  Goodwill                                       30,556        30,904
  FCC licenses and other                         20,384        19,935
  Customer relationships, net                     6,348         7,256
  Other definite lived intangible assets,
   net                                            1,916         1,962
  Other assets                                      606           679
----------------------------------------------------------------------

  Total                                      $   95,089    $   97,161
                                            --------------------------

Liabilities and Shareholders' Equity
  Current liabilities
    Accounts payable                         $    3,307    $    3,394
    Accrued expenses and other liabilities        4,606         5,261
    Current portion of long-term debt and
     capital lease obligations                      419         1,143
----------------------------------------------------------------------
    Total current liabilities                     8,332         9,798

  Long-term debt and capital lease
   obligations                                   21,752        21,011
  Deferred income taxes                           9,160        10,095
  Postretirement and other benefit
   obligations                                      244           244
  Other liabilities                               3,129         2,882
----------------------------------------------------------------------
    Total liabilities                            42,617        44,030

  Shareholders' equity
    Common shares                                 5,902         5,902
    Treasury shares, at cost                     (1,073)         (925)
    Other shareholders' equity                   47,643        48,154
----------------------------------------------------------------------
    Total shareholders' equity                   52,472        53,131
----------------------------------------------------------------------

  Total                                      $   95,089    $   97,161
                                            --------------------------
                      Sprint Nextel Corporation
     CONDENSED CONSOLIDATED CASH FLOW INFORMATION (Unaudited) (a)
                              (millions)

TABLE No. 7

----------------------------------------------------------------------
                                               March 31,    March 31,
For the Year-to-Date Period Ended                2007         2006
----------------------------------------------------------------------

Operating Activities
  Net (Loss) income                            $    (211)   $     419
  Discontinued operations, net                         -         (255)
  Depreciation and amortization                    2,268        2,346
  Deferred income taxes                             (185)         129
  Other, net                                         592         (372)
----------------------------------------------------------------------
Net cash provided by continuing operations         2,464        2,267
Net cash provided by discontinued operations           -          698
----------------------------------------------------------------------
Net cash provided by operating activities          2,464        2,965
----------------------------------------------------------------------

Investing Activities
  Cash paid for capital expenditures              (1,813)      (1,728)
  Expenditures relating to FCC licenses and
   other intangible assets                          (109)        (136)
  Cash collateral for securities loan
   agreements                                        866            -
  Acquisitions, net of cash acquired                   -       (3,399)
  Proceeds from sales of assets and
   investments                                        27          123
  Purchases of marketable securities                   -         (464)
  Proceeds from maturities and sales of
   marketable securities                               7        1,294
  Other, net                                           -           51
----------------------------------------------------------------------
Net cash used in investing activities             (1,022)      (4,259)
----------------------------------------------------------------------

Financing Activities
  Borrowings under credit facility                   750            -
  Purchase and retirements of debt                  (608)        (868)
  Proceeds from issuance of commercial paper       2,591            -
  Commercial paper maturities                     (2,706)           -
  Payments of securities loan agreements            (866)           -
  Purchase of common shares                         (300)           -
  Retirement of redeemable preferred shares            -         (247)
  Proceeds from issuance of common shares             69          185
  Dividends paid                                     (72)         (76)
----------------------------------------------------------------------
Net cash used in financing activities             (1,142)      (1,006)
----------------------------------------------------------------------

Change in cash and cash equivalents                  300       (2,300)

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

Cash and cash equivalents, end of period       $   2,346    $   6,603
                                              ------------------------
                      Sprint Nextel Corporation
          NON-GAAP MEASURES AND RECONCILIATIONS (Unaudited)
                              (millions)


TABLE No. 8
                           -------------------------------------------
                                                   Long   Corporate &
For the Quarter Ended      Consolidated Wireless Distance Eliminations
 March 31, 2007
----------------------------------------------------------------------

Operating Income (Loss)     $        1   $   94   $   23   $     (116)
   Special items (a)
    Severance, lease exit
     costs and asset
     impairments                   174      141       32            1
    Merger and integration
     expense                        99        -        -           99
    Contingencies and
     Other (a)                      41       18       23            -
                           -------------------------------------------
Adjusted Operating Income
 (Loss)*                           315      253       78          (16)
   Depreciation and
    amortization                 2,268    2,142      127           (1)
                           -------------------------------------------
Adjusted OIBDA*                  2,583    2,395      205          (17)
   Capital expenditures          1,607    1,403      144           60
                           -------------------------------------------
Adjusted OIBDA* less Capex  $      976   $  992   $   61   $      (77)
                           -------------------------------------------



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

Operating Income (Loss)     $      484   $  433   $  107   $      (56)
   Special items (a)
    Severance, lease exit
     costs and asset
     impairments                    38       28       10            -
    Merger and integration
     expense                        76        -        -           76
                           -------------------------------------------
Adjusted Operating Income*         598      461      117           20
   Depreciation and
    amortization                 2,346    2,223      122            1
                           -------------------------------------------
Adjusted OIBDA*                  2,944    2,684      239           21
   Capital expenditures          1,243    1,071       92           80
                           -------------------------------------------
Adjusted OIBDA* less Capex  $    1,701   $1,613   $  147   $      (59)
                           -------------------------------------------

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

TABLE No. 9
                                              ------------------------
                                                   Quarter Ended
                                              ------------------------
                                               March 31,    March 31,
                                                 2007         2006
                                              ------------------------
Wireless
  Adjusted OIBDA*                              $   2,395    $   2,684
  Service, wholesale, affiliate and other net
   operating revenues (a)                          8,065        7,688
  Adjusted OIBDA margin*                            29.7%        34.9%

  Operating income                             $      94    $     433
  Operating income margin                            1.2%         5.6%


Long Distance
  Adjusted OIBDA*                              $     205    $     239
  Total net operating revenues                     1,598        1,666
  Adjusted OIBDA margin*                            12.8%        14.3%

  Operating income                             $      23    $     107
  Operating income margin                            1.4%         6.4%


Consolidated
  Adjusted OIBDA*                              $   2,583    $   2,944
  Service, wholesale, affiliate and other net
   operating revenues (a)                          9,438        9,244
  Adjusted OIBDA margin*                            27.4%        31.8%

  Operating income                             $       1    $     484
  Operating income margin                            0.0%         5.2%


(a) Excludes $10 million of revenue generated by Velocita, which has
 been normalized out of Adjusted OIBDA.
                      Sprint Nextel Corporation
                NON-GAAP MEASURES AND RECONCILIATIONS
                              (millions)

TABLE No. 10
                                              ------------------------
                                                   Quarter Ended
                                              ------------------------
                                               March 31,    March 31,
                                                 2007         2006
                                              ------------------------

Adjusted OIBDA*                                $   2,583    $   2,944
   Adjust for special items                         (314)        (114)
   Other operating activities, net (a)               195         (563)
                                              ------------------------
Cash provided by continuing operations (GAAP)      2,464        2,267
                                              ------------------------
   Capital expenditures                           (1,813)      (1,518)
   Dividends paid                                    (72)         (76)
   Proceeds from sales of assets                      27          119
   Payments for FCC Licenses                        (107)        (136)
   Other investing activities, net                    (2)         152
                                              ------------------------
Free Cash Flow*                                      497          808
                                              ------------------------
   Increase (decrease) in debt, net                   27         (868)
   Retirement of redeemable preferred shares           -         (247)
   Purchase of common shares                        (300)           -
   Discontinued operations activity, net (b)           -          298
   Purchase of PCS Affiliates and Velocita,
    net of cash acquired                               -       (3,399)
   Change in restricted cash                           -           93
   Investments in debt securities, net                 7          830
   Proceeds from common shares issued                 69          185
                                              ------------------------
Change in cash and cash equivalents - GAAP     $     300    $  (2,300)
                                              ========================



TABLE No. 11
                                               March 31,
                                                 2007
                                              -----------
Total Debt                                     $  22,171
   Less: Cash on hand                             (2,346)
   Less: Current marketable securities                (8)
                                              -----------
Net Debt*                                      $  19,817
                                              ===========


(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).

(b) See accompanying Notes to Financial Data for more information
                      Sprint Nextel Corporation
                         OPERATING STATISTICS

TABLE No. 12
----------------------------------------------------------------------
                                                      1Q07      4Q06
----------------------------------------------------------------------

Wireless

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

     Direct Post-Paid Subscribers
         Service revenue (in millions)              $ 7,418   $ 7,588
         ARPU                                       $    59   $    60
         Churn                                          2.3%      2.3%
         Additions (in thousands)                      (220)     (306)
         End of period subscribers (in thousands)    41,585    41,805
         Hours per subscriber                            16        16

     Direct Prepaid Subscribers
         Service revenue (in millions)              $   397   $   371
         ARPU                                       $    32   $    32
         Churn                                          7.0%      6.5%
         Additions (in thousands)                       275       171
         End of period subscribers (in thousands)     4,287     4,012

     Wholesale Subscribers
         Additions (in thousands)                       467       830
         End of period subscribers (in thousands)     6,825     6,358

     Affiliate Subscribers
         Additions (in thousands)                        46        46
         End of period subscribers (in thousands)       945       899

     Total Subscribers
         Additions (in thousands)                       568       741
         End of period subscribers (in thousands)    53,642    53,074

     Number of cell sites on air (in thousands)          62        61

     Adjusted OIBDA* (in millions) (1) (3)          $ 2,395         -
     Service, wholesale, affiliate and other net
      operating revenues (in millions) (2) (3)      $ 8,065         -
     Adjusted OIBDA margin* (3)                        29.7%        -

     Capital expenditures                           $ 1,403   $ 2,238
     Adjusted OIBDA* less capital expenditures (3)  $   992         -

Long Distance

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

     Total Long Distance Net Operating Revenues     $ 1,598   $ 1,632
         Voice net operating revenue                $   898   $   912
         Data net operating revenue                 $   311   $   350
         Internet net operating revenue             $   344   $   319
         Other net operating revenue                $    45   $    51

     Total Operating Expenses                       $ 1,575   $ 1,520
         Costs of services and products             $ 1,112   $ 1,096
         Selling, general and administrative        $   304   $   272
         Depreciation                               $   127   $   147
         Severance, lease exit costs and asset
          impairments                               $    32   $     5

     Operating income                               $    23   $   112
     Operating income margin                            1.4%      6.9%

     Adjusted OIBDA* (3)                            $   205         -
     Adjusted OIBDA margin* (3)                        12.8%        -

     Capital expenditures                           $   144   $   274
     Adjusted OIBDA* less capital expenditures (3)  $    61         -

     YOY voice volume growth                              4%        1%

(1)  See Table 8 for Adjusted OIBDA* reconciliation.
(2)  Excludes $10 million of revenue generated by Velocita, which has
      been normalized out of Adjusted OIBDA.
(3)  4Q06 non-GAAP metrics and other items not included.
                      Sprint Nextel Corporation
                 NOTES TO FINANCIAL DATA (Unaudited)

(1)  In the first quarter 2007, we recorded merger and integration
      costs of $99 million pre-tax ($60 million, net of tax). All
      merger costs were related to the Sprint-Nextel merger, the PCS
      Affiliates and Nextel Partners' acquisitions. Certain merger and
      integration costs are generally considered to be non-recurring
      in nature and have been reflected as unallocated corporate costs
      and therefore excluded from segment results.

     In the first quarter 2006, we recorded merger and integration
      costs of $76 million pre-tax ($46 million, net of tax). All
      merger costs were related to the Sprint-Nextel merger, the PCS
      Affiliates and Nextel Partners' acquisitions. Certain merger and
      integration costs are generally considered to be non-recurring
      in nature and have been reflected as unallocated corporate costs
      and therefore excluded from segment results.

(2)  In the first quarter 2007, we recorded severance, lease exit
      costs and asset impairment charges of $174 million pre-tax ($109
      million, net of tax), which consists of about $166 million pre-
      tax related to work force reductions and lease termination
      charges, and $8 million pre-tax of asset impairments primarily
      related to the abandonment of various assets. Severance, lease
      exit costs and asset impairment charges are allocated to the
      appropriate segment results.

     In the first quarter 2006, we recorded severance and asset
      impairment charges of $38 million pre-tax ($23 million, net of
      tax), which consists of about $20 million pre-tax in severance
      and related costs associated to work force reductions of legacy
      Sprint employees and $18 million pre-tax of asset impairments
      primarily related to software asset impairment and abandonment.
      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. 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.

(4)  Contingencies and other includes a charge associated with legal
      contingencies and net costs associated with the planned exit of
      a non-core line of business.

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

    SOURCE: Sprint Nextel Corp.


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