Sprint.com

November 01, 2007

Sprint Nextel Reports Third Quarter 2007 Results

  • Wireless reflects mixed performance between network platforms
  • Improved Wireline profitability
  • Wireless data and Internet revenues continue strong growth
  • Free cash flow* of $1.3 billion in the quarter aided by lower capital expenditures

Third Quarter Segment Results

Wireless

  • Total revenues were $8.7 billion, a decline of 1% sequentially and 4% year-over-year; data revenues increased 28% annually.
  • Adjusted Operating Income* was $514 million, compared to $494 million in the second quarter of 2007 and $792 million in the third quarter of 2006.
  • Adjusted OIBDA* was $2.6 billion, a decline of 3% sequentially and 18% year-over-year. Third quarter Adjusted OIBDA* exceeded capital expenditures by approximately $1.8 billion. For the year-to-date period, the excess was $4.1 billion.

Wireline

  • Net operating revenues were $1.6 billion, a decline of 1% sequentially and 1% year-over-year. IP revenues increased 43% compared to the third quarter of 2006.
  • Adjusted Operating Income* of $158 million increased from $126 million in the second quarter and $86 million in the year-ago third quarter.
  • Adjusted OIBDA* of $290 million improved 12% sequentially and 38% annually. Adjusted OIBDA* exceeded capital investment in the quarter by approximately $150 million and more than $325 million year-to-date.

RESTON, Va.--(BUSINESS WIRE)--Nov. 1, 2007--Sprint Nextel Corp. (NYSE: S) today reported third quarter 2007 financial results. Consolidated net operating revenues in the quarter were $10 billion compared to $10.5 billion in the year-ago third quarter. Net income in the quarter was $64 million or 2 cents diluted earnings per share, which compares to $279 million or 9 cents diluted earnings per share (EPS) in the year-ago period. Adjusted EPS before Amortization*, which removes the effects of special items and merger-related amortization costs, was 23 cents in the quarter compared to 32 cents in this quarter of 2006. The decline in earnings is due to a lower contribution from Wireless, partially offset by an improved contribution from Wireline.

The company reported a net decline of 60,000 total wireless subscribers in the third quarter. Overall subscriber results include growth from CDMA post-paid, Boost Unlimited, wholesale and affiliate channels. These gains were offset by declines from iDEN post-paid and traditional Boost pre-paid product lines. In the quarter, post-paid churn was 2.3% on seasonally higher involuntary deactivations and competitive market conditions. The Wireless post-paid ARPU* of a little more than $59 in the quarter continues to be supported by data growth, offset by lower voice contributions.

"Our third quarter results reflect mixed performance as we address competitive market conditions and manage through credit market impacts on a portion of our customer base," said Paul Saleh, acting CEO and chief financial officer of Sprint Nextel. "In the quarter, our Sprint Ahead marketing campaign gained traction, we improved our device portfolio, and we continued to achieve best-ever network performance. Going forward, our clear mandate is to improve the customer experience at every touchpoint and simplify our business. We also plan to focus more resources on customer retention," Saleh said.

CONSOLIDATED RESULTS

TABLE No. 1 Selected Unaudited Financial Data (dollars in millions)
                            Quarter Ended    %    Year-to-Date     %
                            September 30,   +/-   September 30,   +/-
                           --------------- ----- --------------- -----
  Financial Data            2007    2006          2007    2006
                           ------- -------       ------- -------
  Net operating revenues   $10,044 $10,489  (4)% $30,299 $30,565  (1)%
  Adjusted operating
   income*                     658     877 (25)%   1,542   2,338 (34)%
  Adjusted OIBDA*            2,880   3,365 (14)%   8,345   9,526 (12)%

  Income (loss) from
   continuing operations        64     279 (77)%   (128)     734    NM

  Adjusted Earnings per
   Share Before
   Amortization*           $  0.23 $  0.32 (28)% $  0.67 $  0.89 (25)%

  Diluted earnings (loss)
   per share from
   continuing operations   $  0.02 $  0.09 (78)% $(0.04) $  0.25    NM

  Capex                    $ 1,176 $ 1,843 (36)% $ 4,449 $ 4,445    0%

  Free cash flow*          $ 1,291 $   769   68% $ 1,971 $ 2,338 (16)%

The following is a discussion of consolidated results:

  • The decline in revenues is due to a lower Wireless contribution.
  • Adjusted operating income* benefited from lower amortization expense and reduced variable compensation.
  • Special items in the quarter diluted reported GAAP earnings by 5 cents per share. These items included pre-tax charges of $135 million for merger and integration costs and $125 million for severance, exit costs and asset impairment. Special item details are discussed in the Notes to Financial Data.
  • Capital expenditures were lower in the quarter, due to a draw down of inventory and project timing. Capital expenditures are expected to be higher in the fourth quarter, but full-year capital is expected to be below prior guidance.
  • Consolidated results include operating expenses of approximately $31 million and capital investments of $73 million related to the company's WiMAX initiative.
  • In the quarter, the company purchased approximately 21 million shares of its common stock in the open market for a total investment of $432 million. Purchases in the quarter were predominately in July and August, and the company has since taken a conservative approach, reflecting recent capital market and macroeconomic conditions. The company has purchased a cumulative total of 185 million shares of its common stock for $3.5 billion under a $6 billion authorization that is set to expire in the first quarter of 2008.
  • The effective income tax rate in the quarter was 34%, compared to 31.8% in the third quarter of 2006.
  • Net debt* at the end of the quarter was $19.9 billion.
  • Interest expense, net of interest income, was $301 million, compared to $307 million in the year-ago period.
  • Non-cash compensation expense was $66 million in the third quarter of 2007 compared to $75 million in the third quarter of 2006.

WIRELESS RESULTS

TABLE No. 2 Selected Unaudited Financial Data (dollars in millions)
                          Quarter Ended          Year-to-Date
                          September 30,          September 30,
                         ---------------   %   -----------------   %
   Financial Data         2007    2006    +/-    2007     2006    +/-
                         ------- ------- ----- -------- -------- -----
  Net operating revenues $ 8,698 $ 9,067  (4)% $ 26,203 $ 26,100    0%
  Adjusted operating
   income*                   514     792 (35)%    1,261    1,940 (35)%
  Adjusted OIBDA*          2,603   3,156 (18)%    7,669    8,769 (13)%
   Adjusted OIBDA
    margin*                32.4%   38.4%          31.6%    37.0%
  Capex(1)               $   813 $ 1,473 (45)% $  3,587 $  3,608  (1)%

(1)Capex includes re-
 banding capital, but
 excludes rebanding
 costs related to FCC
 licenses.

The following is a discussion of Wireless results:

Subscribers

  • Wireless ended the period with nearly 54 million total subscribers, compared to 51.9 million subscribers at the end of the third quarter of 2006. The growth is due to gains in pre-paid and wholesale offset by a decline in post-paid.
  • At the end of the period, Sprint Nextel was serving approximately 34.1 million customers on CDMA, 18.7 million on iDEN, and 1.2 million PowerSource users who access both network platforms.
  • As a result of the acquisition of Northern PCS, 170,000 post-paid subscribers were transferred from affiliates to the direct post-paid subscriber base. This transaction did not impact post-paid net adds or churn in the quarter.
  • Beginning in the third quarter, the company adopted a gross addition and deactivation methodology which reduced reported churn by 10 basis points and reduced reported gross additions by a corresponding amount. The change had no effect on reported net additions, revenues or profits and is not reflected in prior period results.
  • Excluding the impact of acquisitions, direct net post- paid subscribers declined by 337,000 in the quarter. Growth in CDMA and PowerSource users was offset by a net loss in iDEN subscribers. Approximately 40% of the net subscriber loss in the quarter occurred within the former Nextel Partners territories.
  • Compared to the second quarter, the loss of net post-paid subscribers reflects higher customer churn, partially offset by an increase in gross additions in both the consumer and business channels.
  • Pre-paid net additions for the quarter were 67,000 due to growth of 124,000 Boost Unlimited subscribers and a loss of 57,000 traditional pre-paid subscribers. Beginning in the fourth quarter, Boost Unlimited services are being expanded to an area covering approximately 50 million people, bringing coverage to more than 100 million people.
  • Wholesale channels added 194,000 subscribers in the quarter, bringing the base to nearly 7.2 million.

  • he quarter, the company added extensively to its portfolio of devices and services. These additions included the MOTORAZR2 V9m by Motorola(TM), the Muziq(TM) by LG(R), the Mogul(TM) by HTC, and the KATANA(R) II and Katana(R) DLX by Sanyo(R). In the fourth quarter, the device lineup is expanding further to include the HTC Touch(TM), the Rumor(TM) by LG(R), the Power Source ic602 from Motorola, the Centro(TM) by Palm(R), the SCP-2500 by Sanyo(R), the BlackBerry(R)Pearl 8130 and two new USB connection cards.

Churn

  • Post-paid churn for the quarter was 2.3% compared to 2.0% in the second quarter and 2.4% in the year-ago period. In the third quarter, the sequential increase in overall churn was driven equally by higher voluntary and involuntary deactivations, primarily on the CDMA platform. The CDMA post-paid churn rate remained below iDEN churn in the quarter.
  • Boost pre-paid churn was 6.2% for the quarter, compared to 6.8% in both the second quarter of 2007 and in the year-ago third quarter.

Revenues/ARPU

  • Net operating revenues declined 1% sequentially and 4% compared to the year-ago period. Service revenue declines reflect lower average customer revenues and a lower post-paid base, partially offset by increases in the pre-paid and wholesale subscriber base. Equipment revenues declined 21% compared to the year-ago period due to lower pricing. Equipment revenues increased 8% sequentially due to increased pricing and volumes.
  • Post-paid ARPU of a little more than $59 in the quarter declined 3% year-over-year and a little under 2% sequentially. The company reported modest annual growth in CDMA ARPU that was offset by a decline in iDEN. Sequentially, ARPU declined on both platforms, mainly due to lower average pricing plans. In the quarter, post-paid ARPU for CDMA and iDEN subscribers were substantially similar.
  • Data contributed more than $10 to overall post-paid ARPU in the third quarter and contributed more than $13 to CDMA post-paid ARPU.
  • Pre-paid ARPU was slightly more than $30 for the quarter, partially aided by non-recurring items. This compares to a little less than $31 in the second quarter and a little less than $33 in the third quarter of 2006. Competition and general economic factors are expected to continue to impact pre-paid usage and ARPU.

Operating Expenses

  • Total operating expenses of $8.4 billion were flat with the year-ago period and 1% below the second quarter levels. Compared to the year-ago period, increases in cost of services, selling, general and administrative (SG&A) and severance and asset impairment expenses were offset by lower amortization and depreciation expense. Sequentially, lower amortization and costs of products were offset by increased costs of services and depreciation expense.
  • In the quarter, costs of services increased 4% annually and 1% sequentially. The increases are primarily due to growth in network sites and increased data usage offset by lower variable compensation. The company's data services, which ride on the nation's largest and fastest mobile broadband network, are now available to a population of nearly 215 million people.
  • Costs of products improved 3 percent compared to the year-ago period and 5 percent sequentially, due to cost reductions on handsets and fewer Boost iDEN shipments.
  • SG&A expense increased 5% compared to the year-ago period due to increased marketing costs, higher bad debt and customer care expense, offset by lower IT costs. Sequentially, the higher bad debt and customer care costs were offset by lower advertising and variable compensation costs.

Capital Spending

In the quarter, Wireless capital spending of $813 million was mainly targeted at capacity and footprint and extending the reach of EV-DO Rev. A capability. Wireless capital spending is expected to increase significantly in the fourth quarter.

WIRELINE RESULTS

TABLE No. 3 Selected Unaudited Financial Data (dollars in millions)
                               Quarter Ended       Year-to-Date
                               September 30,       September 30,
                               -------------   %   -------------   %
                                2007   2006   +/-   2007   2006   +/-
                               ------ ------ ----- ------ ------ -----
  Net operating revenues       $1,612 $1,624  (1)% $4,844 $4,928  (2)%
  Adjusted operating income*      158     86   84%    362    369  (2)%
  Adjusted OIBDA*                 290    210   38%    754    728    4%
  Adjusted OIBDA margin*        18.0%  12.9%        15.6%  14.8%

  Capex                        $  138 $  255 (46)% $  427 $  547 (22)%

The following is a discussion of Wireline results.

  • For the quarter, total revenues declined 1% annually and sequentially.
  • Internet Protocol (IP) revenues increased 43% annually and 10% sequentially. The growth is due to strong demand from cable partners and corporate users.
  • Voice revenues declined 8% compared to the year-ago period and 5% compared to the second quarter of 2007. Declines in consumer and business markets were partially offset by growth in demand from the Wireless segment.
  • Legacy data services declined 14% year-over-year and 4% sequentially. The decline is mainly driven by lower Frame Relay services as we encourage customers to transition to IP services.
  • At the end of the period, the company was providing telephony services to 2.6 million cable VOIP customers. This is double the level supported at the end of the third quarter of 2006.
  • In the quarter, operating expenses declined 6% compared to the year-ago period and 3% sequentially due to lower costs of services and reduced variable compensation.
  • Capital expenditures in the quarter of $138 million were mainly due to growth in IP services and to meet wireless transport demand.

Forward-Looking Guidance

Sprint Nextel continues to expect full-year consolidated revenues to be slightly below $41 billion and Adjusted OIBDA* to be slightly below $11 billion. The company expects net customer additions to continue to be pressured in the fourth quarter. Full-year 2007 capital investments are now expected to be in the mid $6 billion range compared to prior expectations of approximately $7.2 billion. The company also noted that it is removing its previous double-digit growth guidance for 2008 OIBDA, and that it expects to comment on the 2008 outlook early next year.

*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 (loss) from continuing operations, before special items, net of tax and the diluted EPS calculated thereon. Adjusted EPS before Amortization is defined as income (loss) 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, severance, exit costs 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 and equipment 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 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 and/or potential customer impacts of compliance with regulatory mandates, particularly requirements related to the reconfiguration of the 800 MHz band used to operate our iDEN network as contemplated by the Federal Communications Commission's Report and Order released in August 2004 as supplemented by subsequent memoranda;
  • 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 about 54 million customers at the end of the third 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) (1)
                  (Millions, except per share data)
TABLE NO. 4
----------------------------------------------------------------------
                                  Quarter Ended       Year To Date
                               ------------------- -------------------
                               September September September September
                                  30,       30,       30,       30,
                                 2007      2006      2007      2006
                               ------------------- -------------------

Net Operating Revenues         $10,044   $10,489   $30,299   $30,565
                               ------------------- -------------------
Operating Expenses
  Cost of services               3,005     3,044     9,044     8,791
  Cost of products               1,217     1,227     3,910     3,652
  Selling, general and
   administrative (2)            3,077     2,961     9,443     8,891
  Severance, exit costs and
   asset impairments (3)           125        50       384       128
  Depreciation                   1,441     1,460     4,203     4,264
  Amortization                     781     1,028     2,600     2,924
                               ------------------- -------------------
  Total operating expenses       9,646     9,770    29,584    28,650
                               ------------------- -------------------
Operating Income                   398       719       715     1,915
Interest expense                  (367)     (381)   (1,099)   (1,174)
Interest income                     66        74       123       275
Other, net                           -        (3)       13        89
                               ------------------- -------------------
(Loss) Income from continuing
 operations before income
 taxes                              97       409      (248)    1,105
Income tax (expense) benefit       (33)     (130)      120      (371)
                               ------------------- -------------------
Income (Loss) from Continuing
 Operations                         64       279      (128)      734
Discontinued operations, net
 (4)                                 -         -         -       334
                               ------------------- -------------------
Net Income (Loss)                   64       279      (128)    1,068
Preferred stock dividends paid       -         -         -        (2)
                               ------------------- -------------------
Income (Loss) Available to
 Common Shareholders           $    64   $   279   $  (128)  $ 1,066
                               ------------------- -------------------

Earnings per Share
Diluted Earnings (Loss) Per
 Common Share                  $  0.02   $  0.09   $ (0.04)  $  0.36
Discontinued operations              -         -         -     (0.11)
                               ------------------- -------------------
Diluted Earnings (Loss) Per
 Common Share from Continuing
 Operations                    $  0.02   $  0.09   $ (0.04)  $  0.25
                               ------------------- -------------------
Diluted weighted average
 common shares                   2,860     2,973     2,876     2,990
                               ------------------- -------------------

Basic Earnings (Loss) Per
 Common Share                  $  0.02   $  0.09   $ (0.04)  $  0.36
Basic weighted average common
 shares                          2,845     2,956     2,876     2,968
----------------------------------------------------------------------


----------------------------------------------------------------------
                Quarter Ended     Quarter Ended       Year To Date
               --------------- ------------------- -------------------
                June    June   September September September September
                 30,     30,      30,       30,       30,       30,
                2007    2006     2007      2006      2007      2006
               --------------- ------------------- -------------------

Operating
 Income        $  316  $  712  $   398   $   719   $   715   $ 1,915
 Special items
  before taxes
 Merger and
  integration
  expense (2)     163     113      135       107       397       296
 Severance,
  exit costs
  and asset
  impairments
  (3)              85      40      125        50       384       128
 Contingencies
  and other
  (5)               5      (2)       -         1        46        (1)
               --------------- ------------------- -------------------
Adjusted
 Operating
 Income           569     863      658       877     1,542     2,338
Depreciation
 and
 amortization   2,313   2,354    2,222     2,488     6,803     7,188
               --------------- ------------------- -------------------
Adjusted
 OIBDA*         2,882   3,217    2,880     3,365     8,345     9,526
Capital
 expenditures
 (b)            1,666   1,359    1,176     1,843     4,449     4,445
               --------------- ------------------- -------------------
Adjusted
 OIBDA* less
 Capex         $1,216  $1,858  $ 1,704   $ 1,522   $ 3,896   $ 5,081
               --------------- ------------------- -------------------

Operating
 Income Margin
 (c)              3.3%    7.7%     4.2%      7.5%      2.5%      6.8%
Adjusted OIBDA
 Margin* (c)     30.1%   34.7%    30.7%     34.9%     29.4%     33.8%
----------------------------------------------------------------------

(a) Results for each of the periods reflected include the results of
 each of the acquired PCS Affiliates, Nextel Partners and Velocita
 from either the date of the acquisition or the start of the month
 closest to the acquisition date.
(b) Capital expenditures includes capex accruals
(c) Operating Income Margin and Adjusted OIBDA Margin excludes
 equipment revenue and revenue generated by the non-core line of
 business that has been normalized out of Adjusted OIBDA.
(1), (2), (3), (4), (5) 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    Quarter Ended    Year To Date
                 ------------------- ------------- -------------------
                 September September June   June   September September
                    30,       30,      30,    30,     30,       30,
                   2007      2006     2007   2006    2007      2006
                 ------------------- ------------- -------------------

Income (Loss)
 Available to
 Common
 Shareholders       $  64     $ 279  $  19  $ 370    $ (128)   $1,066
                          -                -                -
Preferred stock
 dividends paid         -         -      -      -         -         2
                 ------------------- ------------- -------------------
Net Income
 (Loss)                64       279     19    370      (128)    1,068
Discontinued
 operations, net        -         -      -    (79)        -      (334)
                 ------------------- ------------- -------------------
Income (Loss)
 from Continuing
 Operations            64       279     19    291      (128)      734
Special items
 (net of taxes)
 (a)
  Merger and
   integration
   expense             84        66    100     69       244       181
  Severance,
   exit costs
   and asset
   impairment          78        31     52     23       239        77
  Contingencies
   and other            -         2     12      -        37         2
  Net gains on
   investment
   activities
   and equity in
   earnings            (4)        -    (11)    (8)      (15)      (40)
  Tax audit
   settlement         (19)      (42)     -      -       (19)      (42)
  Gain on early
   retirement of
   debt                (3)       (4)     -     (5)       (5)       (9)
                 ------------------- ------------- -------------------
Adjusted Net
 Income*            $ 200     $ 332  $ 172  $ 370    $  353    $  903
                 ------------------- ------------- -------------------

Amortization
 (net of taxes)       472       619    547    577     1,570     1,760
                 ------------------- ------------- -------------------
Adjusted Net
 Income before
 Amortization*      $ 672     $ 951  $ 719  $ 947    $1,923    $2,663
                 ------------------- ------------- -------------------



Diluted Earnings
 (Loss) Per
 Common Share        0.02      0.09   0.01   0.12     (0.04)     0.36
Discontinued
 operations             -         -      -   0.02         -     (0.11)
                 ------------------- ------------- -------------------
Diluted Earnings
 (Loss) Per
 Common Share
 from Continuing
 Operations          0.02      0.09   0.01   0.10     (0.04)     0.25
Special items
 (net of taxes)
 (a)                 0.05      0.02   0.05   0.02      0.16      0.05
                 ------------------- ------------- -------------------
Adjusted
 Earnings Per
 Share*             $0.07     $0.11  $0.06  $0.12    $ 0.12    $ 0.30
                 ------------------- ------------- -------------------

Amortization
 (net of taxes)
 (b)                 0.16      0.21   0.19   0.20      0.55      0.59
                 ------------------- ------------- -------------------
Adjusted
 Earnings Per
 Share before
 Amortization*
 (b)                $0.23     $0.32  $0.25  $0.32    $ 0.67    $ 0.89
----------------------------------------------------------------------

(a) See accompanying Notes to Financial Data.
(b) Rounding differences are recorded to the Amortization (net of
 taxes) line.
                      Sprint Nextel Corporation
NON-GAAP WIRELESS STATEMENTS OF OPERATIONS AND STATISTICS (Unaudited)
                                (a) (1)
           (millions, except subscriber counts and metrics)
TABLE No. 6
----------------------------------------------------------------------
                                  Quarter Ended       Year To Date
                               ------------------- -------------------
                               September September September September
                                  30,       30,       30,       30,
                                 2007      2006      2007      2006
                               ------------------- -------------------
Net Operating Revenues
Service                        $ 7,778   $ 8,017   $23,491   $23,100
Equipment                          662       836     1,919     2,378
Wholesale, affiliate and other     258       214       793       622
                               ------------------- -------------------
Total Net Operating Revenues   $ 8,698   $ 9,067   $26,203   $26,100
                               ------------------- -------------------

Operating Expenses
Costs of services                2,166     2,085     6,420     5,938
Costs of products                1,195     1,227     3,833     3,652
Selling, general and
 administrative (2)              2,734     2,599     8,281     7,741
Merger & integration (2)            76        42       257       105
Severance, exit costs and
 asset impairments (3)             119        41       345       102
Contingencies and other              -         1        23        (1)
Depreciation                     1,308     1,336     3,809     3,905
Amortization                       781     1,028     2,599     2,924
                               ------------------- -------------------
Total operating expenses       $ 8,379   $ 8,359   $25,567   $24,366
                               ------------------- -------------------
Operating Income               $   319   $   708   $   636   $ 1,734
----------------------------------------------------------------------


----------------------------------------------------------------------
NON GAAP RECONCILIATION
               Quarter Ended      Quarter Ended       Year To Date
              ---------------- ------------------- -------------------
               June     June   September September September September
                30,     30,       30,       30,       30,       30,
               2007     2006     2007      2006      2007      2006
              ---------------- ------------------- -------------------

Operating
 Income          282      624      319       708       636     1,734
Special items
 before taxes
Merger and
 integration
 expense (2)     122       32       76        42       257       105
Severance,
 exit costs
 and asset
 impairments
 (3)              85       33      119        41       345       102
Contingencies
 and other
 (5)               5       (2)       -         1        23        (1)
              ---------------- ------------------- -------------------
Adjusted
 Operating
 Income          494      687      514       792     1,261     1,940
Depreciation
 and
 amortization  2,177    2,242    2,089     2,364     6,408     6,829
              ---------------- ------------------- -------------------
Adjusted
 OIBDA*        2,671    2,929    2,603     3,156     7,669     8,769
Capital
 expenditures
 (b)           1,371    1,064      813     1,473     3,587     3,608
              ---------------- ------------------- -------------------
Adjusted
 OIBDA* less
 Capex        $1,300  $ 1,865  $ 1,790   $ 1,683   $ 4,082   $ 5,161
              ---------------- ------------------- -------------------

Operating
 Income
 Margin (c)      3.5%     8.0%     4.0%      8.6%      2.6%      7.3%
Adjusted
 OIBDA
 Margin* (c)    32.7%    37.7%    32.4%     38.4%     31.6%     37.0%
----------------------------------------------------------------------


----------------------------------------------------------------------
Operating               QTD       QTD       QTD                 YTD
 Statistics
                      1Q 2007   2Q 2007   3Q 2007              2007
                      ------------------------------------------------
Direct Post-
 Paid
 Subscribers
Service
 revenue (in
 millions)            $ 7,418  $ 7,497   $ 7,364             $22,279
ARPU                       59       60        59                  60
Churn                     2.3%     2.0%      2.3%                2.2%
Additions (in
 thousands)              (220)      16      (337)               (541)
End of period
 subscribers
 (in
 thousands)
 (d)                   41,585   41,601    41,434              41,434
Hours per
 subscriber                16       16        16                  16

Direct
 Prepaid
 Subscribers
Service
 revenue (in
 millions)            $   397  $   401   $   414             $ 1,212
ARPU                       32       31        30                  31
Churn                     7.0%     6.8%      6.2%                6.6%
Additions (in
 thousands)               275      169        67                 511
End of period
 subscribers
 (in
 thousands)             4,287    4,456     4,523               4,523

Wholesale
 Subscribers
Additions (in
 thousands)               467      155       194                 816
End of period
 subscribers
 (in
 thousands)             6,825    6,980     7,174               7,174

Affiliate
 Subscribers
Additions (in
 thousands)                46       33        16                  95
End of period
 subscribers
 (in
 thousands)
 (d)                      945      978       824                 824

Total
 Subscribers
Additions (in
 thousands)               568      373       (60)                881
End of period
 subscribers
 (in
 thousands)            53,642   54,015    53,955              53,955
Number of
 cell sites
 on air (in
 thousands)                62       64        65                  65
----------------------------------------------------------------------

(a) Results for each of the periods reflected include the results of
 each of the acquired PCS Affiliates, Nextel Partners and Velocita
 from either the date of the acquisition or the start of the month
 closest to the acquisition date.
(b) Capital expenditures includes capex accruals
(c) Operating Income Margin and Adjusted OIBDA Margin excludes
 equipment revenue and revenue generated by the non-core line of
 business that has been normalized out of Adjusted OIBDA.
(d) Reflects the transfer of 170,000 subscribers from Affiliates to
 Post-Paid due to the acquisition of an Affiliate in the quarter ended
 September 30, 2007.
(1), (2), (3), (4), (5) See accompanying Notes to Financial Data.
                      Sprint Nextel Corporation
   WIRELINE STATEMENTS OF OPERATIONS AND STATISTICS (Unaudited) (1)
                  (Millions, except per share data)
TABLE NO. 7
----------------------------------------------------------------------
                                  Quarter Ended       Year To Date
                               ------------------- -------------------
                               September September September September
                                  30,       30,       30,       30,
                                 2007      2006      2007      2006
                               ------------------- -------------------
Net Operating Revenues
Voice                            $  868    $  943    $2,676    $2,857
Data                                297       345       918     1,082
Internet                            407       284     1,122       824
Other                                40        52       128       165
                               ------------------- -------------------
Total Operating Revenues         $1,612    $1,624    $4,844    $4,928
                               ------------------- -------------------

Operating Expenses
Costs of services and products    1,095     1,159     3,343     3,370
Selling, general and
 administrative (2)                 227       255       770       830
Severance, exit costs and
 asset impairments (3)                3         9        35        26
Depreciation                        132       124       391       359
Amortization                          -         -         1         -
                               ------------------- -------------------
Total operating expenses          1,457     1,547     4,540     4,585
                               ------------------- -------------------
Operating Income                    155        77       304       343
----------------------------------------------------------------------


----------------------------------------------------------------------
NON GAAP RECONCILIATION
                Quarter Ended     Quarter Ended       Year To Date
                -------------- ------------------- -------------------
                June    June   September September September September
                  30,    30,      30,       30,       30,       30,
                 2007   2006     2007      2006      2007      2006
                -------------- ------------------- -------------------
Operating
 Income         $ 126   $ 159    $  155    $   77    $  304    $  343
Special items
 before taxes
Severance, exit
 costs and asset
 impairments (3)    -       7         3         9        35        26
Contingencies
 and other (5)      -       -         -         -        23         -
                -------------- ------------------- -------------------
Adjusted
 Operating
 Income           126     166       158        86       362       369
Depreciation
 and
 amortization     133     113       132       124       392       359
                -------------- ------------------- -------------------
Adjusted OIBDA*   259     279       290       210       754       728
Capital
 expenditures
 (a)              145     200       138       255       427       547
                -------------- ------------------- -------------------
Adjusted OIBDA*
 less Capex     $ 114   $  79    $  152    $  (45)   $  327    $  181
                -------------- ------------------- -------------------

Operating
 Income Margin    7.7%    9.7%      9.6%      4.7%      6.3%      7.0%
Adjusted OIBDA
 Margin*         15.9%   17.0%     18.0%     12.9%     15.6%     14.8%
----------------------------------------------------------------------


----------------------------------------------------------------------
Operating Statistics     QTD      QTD       QTD                 YTD
                       1Q 2007  2Q 2007   3Q 2007              2007
                       ----------------------------          ---------
YOY Voice only minutes
 volume growth (b)          3%        6%        4%                  4%

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

(a) Capital expenditures includes capex accruals
(b) Does not include minutes associated with Cable VOIP
(1), (2), (3), (5) See accompanying Notes to Financial Data.
                      Sprint Nextel Corporation
       CONDENSED CONSOLIDATED CASH FLOW INFORMATION (Unaudited)
                              (Millions)
TABLE NO. 8
----------------------------------------------------------------------
                                           September 30, September 30,
For the Year to Date Period Ended              2007          2006
----------------------------------------------------------------------
Operating Activities
  Net (loss) income                             $  (128)     $  1,068
  Income from discontinued operations                 -          (334)
  Provision for losses on accounts
   receivable                                       645           442
  Depreciation and amortization                   6,803         7,188
  Deferred income taxes                            (159)          254
  Share-based compensation expense                  197           258
  Other, net                                       (210)       (1,284)
                                           ---------------------------
Net cash provided by continuing operations        7,148         7,592
Net cash provided by discontinued
 operations                                           -           903
                                           ---------------------------
Net cash provided by operating activities         7,148         8,495
                                           ---------------------------

Investing activities
  Capital expenditures                           (4,651)       (5,145)
  Cash collateral for securities loan
   agreements                                       866             -
  Expenditures relating to FCC licenses
   and other intangible assets                     (468)         (637)
  Proceeds from sale of Embarq notes                  -         4,447
  Proceeds from spin-off of local
   communications business                            -         1,821
  Acquisitions, net of cash acquired               (287)      (10,483)
  Other investing activities                        166         1,437
                                           ---------------------------
Net cash used in investing activities            (4,374)       (8,560)
                                           ---------------------------

Financing activities
  Purchase and retirements of debt               (1,386)       (3,060)
  Borrowings under credit facility                  750           500
  Proceeds from issuance of debt
   securities                                       750             -
  Retirement of bank facility term loan               -        (3,700)
  Proceeds from issuance of commercial
   paper                                          4,837         3,380
  Maturities of commercial paper                 (4,951)       (2,866)
  Payments of securities loan agreements           (866)            -
  Purchase of common shares                      (1,833)       (1,523)
  Proceeds from issuances of common shares          337           372
  Retirement of redeemable preferred
   shares                                             -          (247)
  Dividends paid                                   (215)         (224)
  Other, net                                          -            12
                                           ---------------------------
Net cash used in financing activities            (2,577)       (7,356)
                                           ---------------------------

Change in cash and cash equivalents                 197        (7,421)

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

Cash and cash equivalents, end of period        $ 2,243      $  1,482
----------------------------------------------------------------------
                      Sprint Nextel Corporation
                      FREE CASH FLOW (NON GAAP)
                              (Millions)
TABLE NO. 9
----------------------------------------------------------------------

                                Quarter Ended          Quarter Ended
                         --------------------------- -----------------
                         September 30, September 30, June 30, June 30,
                             2007          2006        2007     2006
                         --------------------------- -----------------

Adjusted OIBDA*           $     2,880   $     3,365  $ 2,882  $ 3,217
  Adjust for special
   items                         (260)         (158)    (253)    (151)
  Other operating
   activities, net (a)             94          (303)    (659)    (645)
                         --------------------------- -----------------
Cash from continuing
 operating activities
 (GAAP)                         2,714         2,904    1,970    2,421
                         --------------------------- -----------------

  Capital expenditures         (1,261)       (1,885)  (1,577)  (1,395)
  Expenditures relating
   to FCC Licenses               (204)          (51)    (151)    (271)
  Dividends paid                  (71)          (74)     (72)     (74)
  Proceeds from sales of
   investments and
   assets                         115            54       15       38
  Other investing
   activities, net                 (2)         (179)      (2)      42
                         --------------------------- -----------------
Free Cash Flow*                 1,291           769      183      761
                         --------------------------- -----------------

  Increase (decrease) in
   debt, net                     (775)       (1,783)     748   (3,095)
  Purchase of common
   shares                        (432)       (1,523)  (1,101)       -
  Retirement of
   redeemable preferred
   shares                           -             -        -        -
  Acquisitions net of
   cash acquired                 (287)         (867)       -   (6,216)
  Proceeds from spin-off
   of local
   communications
   business and proceeds
   from sale of Embarq
   notes                            -             -        -    6,268
  Discontinued
   operations activity,
   net                              -             -        -       69
  Change in restricted
   cash                             -         1,124        -   (1,125)
  Investments, net                 (3)           91        5      207
  Proceeds from common
   shares issued                   25            46      243      141
  Other financing
   activities, net                  -            12        -        -
                         --------------------------- -----------------
Change in cash and cash
 equivalents - GAAP       $      (181)  $    (2,131) $    78  $(2,990)
                         --------------------------- -----------------

                                                  Year To Date
                                           ---------------------------
                                           September 30, September 30,
                                               2007          2006
                                           ---------------------------

Adjusted OIBDA*                             $     8,345   $     9,526
  Adjust for special items                         (827)         (423)
  Other operating activities, net (a)              (370)       (1,511)
                                           ---------------------------
Cash from continuing operating activities
 (GAAP)                                           7,148         7,592
                                           ---------------------------

  Capital expenditures                           (4,651)       (4,798)
  Expenditures relating to FCC Licenses            (462)         (458)
  Dividends paid                                   (215)         (224)
  Proceeds from sales of investments and
   assets                                           157           221
  Other investing activities, net                    (6)            5
                                           ---------------------------
Free Cash Flow*                                   1,971         2,338
                                           ---------------------------

  Increase (decrease) in debt, net                    -        (5,746)
  Purchase of common shares                      (1,833)       (1,523)
  Retirement of redeemable preferred
   shares                                             -          (247)
  Acquisitions net of cash acquired                (287)      (10,483)
  Proceeds from spin-off of local
   communications business and proceeds
   from sale of Embarq notes                          -         6,268
  Discontinued operations activity, net               -           367
  Change in restricted cash                           -            93
  Investments, net                                    9         1,128
  Proceeds from common shares issued                337           372
  Other financing activities, net                     -            12
                                           ---------------------------
Change in cash and cash equivalents - GAAP  $       197   $    (7,421)
                                           ---------------------------


----------------------------------------------------------------------
(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
              CONDENSED CONSOLIDATED BALANCE SHEETS (1)
                              (Millions)
TABLE NO. 10                                (Unaudited)
----------------------------------------------------------------------
                                           September 30, December 31,
                                               2007          2006
                                           ------------- ------------
Assets
  Current assets
    Cash and cash equivalents                   $ 2,243      $ 2,046
    Accounts receivable, net                      4,693        4,690
    Inventories                                     876        1,176
    Deferred tax assets                             398          923
    Prepaid expenses and other current
     assets                                         710        1,469
                                           ------------- ------------
    Total current assets                          8,920       10,304

  Investments                                       173          253
  Property, plant and equipment, net             26,017       25,868
  Goodwill                                       30,718       30,904
  FCC licenses and other                         20,501       19,935
  Customer relationships, net                     4,866        7,256
  Other definite lived intangible assets,
   net                                            1,880        1,962
  Other assets                                      851          679
                                           ------------- ------------

  Total                                         $93,926      $97,161
                                           ------------- ------------

Liabilities and Shareholders' Equity
  Current liabilities
    Accounts payable                            $ 3,320      $ 3,265
    Accrued expenses and other liabilities        4,540        5,390
    Current portion of long-term debt and
     capital lease obligations                      429        1,143
                                           ------------- ------------
    Total current liabilities                     8,289        9,798

  Long-term debt and capital lease
   obligations                                   21,723       21,011
  Deferred tax liabilities                        9,043       10,095
  Pension and postemployment benefit
   obligations                                      278          312
  Other liabilities                               3,322        2,814
                                           ------------- ------------
    Total liabilities                            42,655       44,030

  Shareholders' equity
    Common shares                                 5,902        5,902
    Additional paid in capital                   46,585       46,664
    Retained earnings                             1,197        1,638
    Treasury shares, at cost                     (2,279)        (925)
    Accumulated other comprehensive (loss)         (134)        (148)
                                           ------------- ------------
    Total shareholders' equity                   51,271       53,131
                                           ------------- ------------

  Total                                         $93,926      $97,161
----------------------------------------------------------------------

(1) See accompanying Notes to Financial Data.

                         NET DEBT (NON-GAAP)
                              (Millions)
TABLE NO. 11
----------------------------------------------------------------------
                                           September 30, December 31,
                                               2007          2006
                                           --------------------------
Total Debt                                      $22,152      $22,154
  Less: Cash and cash equivalents                (2,243)      (2,046)
  Less: Current marketable securities                 -          (15)
                                           ------------- ------------
Net Debt*                                       $19,909      $20,093
                                           ============= ============

Adjusted OIBDA* for the three months ended      $ 2,880      $ 3,174
                                                     x 4          x 4
                                           ------------- ------------
Annualized Adjusted OIBDA*                      $11,520      $12,696
                                           ============= ============

Net Debt / Annualized Adjusted OIBDA*               1.7 X        1.6 X
                      Sprint Nextel Corporation
                 NOTES TO FINANCIAL DATA (Unaudited)

(1)Certain prior period amounts have been reclassified to conform to
    current period presentation.

(2)In the third quarter and for the nine months ended September 30,
    2007, we recorded merger and integration costs of $135 million
    pre-tax ($84 million, net of tax) and $397 million pre-tax ($244
    million, net of tax), respectively. In the third quarter and for
    the nine months ended September 30, 2006, we recorded merger and
    integration costs of $107 million pre-tax ($66 million, net of
    tax) and $296 million pre-tax ($181 million, net of tax),
    respectively.

   All merger costs were related to the Sprint-Nextel merger and/or
    the PCS Affiliates and Nextel Partners' acquisitions. Merger and
    integration costs are generally non-recurring in nature and
    primarily include costs to prepare systems for the launch of
    common customer interfacing systems, processes and other
    integration and planning activities, certain costs to provide
    wireless devices that operate seamlessly between the CDMA and iDEN
    networks, certain customer care costs, costs to retain employees,
    costs related to re-branding, and other costs. Merger and
    integration costs related to wireless devices that operate
    seamlessly between the CDMA and iDEN networks were $36 million for
    the third quarter 2007 and $113 million for the nine months ended
    September 30, 2007.

   Merger and integration expenses which are solely and directly
    attributable to the Wireless segment have been allocated to that
    segment. These expenses are classified as selling, general and
    administrative, cost of products, or equipment revenues as
    appropriate on our consolidated statement of operations. Merger
    and integration expenses that are not solely and directly
    attributable to the Wireless segment are included in the Corporate
    segment and are classified as selling, general and administrative
    expenses on our consolidated statement of operations. In the
    second quarter of 2007, we reclassified certain historical merger
    and integration expenses from the Corporate segment to the
    Wireless segment to conform with the policies described above.

(3)In the third quarter ended September 30, 2007, we recorded
    severance, exit costs and asset impairment charges of $125 million
    pre-tax ($78 million, net of tax), which consists of $57 million
    ($35 million, net of tax) work force reductions, lease termination
    charges, and $68 million ($43 million, net of tax) of asset
    impairments due to the abandonment of various assets during the
    period. For the nine months ended September 30, 2007, we recorded
    severance, exit costs and asset impairment charges of $384 million
    pre-tax ($239 million, net of tax), which consists of $266 million
    related to work force reductions and lease termination charges,
    and $118 million of asset impairments primarily related to the
    abandonment of various assets year to date. Severance, lease exit
    costs and asset impairment charges are allocated to the
    appropriate segment results.

   In the third quarter ended September 30, 2006, we recorded
    severance, exit costs and asset impairment charges of $50 million
    pre-tax ($31 million, net of tax), which consists of $31 million
    in severance and related costs associated with work force
    reductions of legacy Sprint employees and $19 million of asset
    impairments primarily related to software asset impairment and
    abandonment. For the nine months ended September 30, 2006, we
    recorded severance, exit costs and asset impairment charges of
    $128 million pre-tax ($77 million, net of tax), which consists of
    about $67 million in severance and related costs associated with
    work force reductions of legacy Sprint employees and $61 million
    of asset impairments primarily related to software asset
    impairment and abandonment. Severance, exit costs and asset
    impairment charges are allocated to the appropriate segment
    results.

(4)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 January 1, 2006.

(5)Contingencies and other includes a charge associated with legal
    contingencies and net costs associated with the 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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