sprint nextel Quarterly Presentations 2006 1st

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sprint nextel Quarterly Presentations 2006 1st

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  30. 30. % 9 . $6 . '5 5 (millions) Long Other & For the Quarter Ended March 31, 2006 Consolidated Wireless Distance Local Elim inations $ 863 $ 441 $ 105 $ 423 $ (106) Operating Income Special items Restructuring and asset impairments 67 28 10 29 - Merger and integration expense 105 - - - 105 1,035 469 115 452 (1) Adjusted Operating Income Depreciation and amortization 2,606 2,222 121 263 - 3,641 2,691 236 715 (1) Adjusted OIBDA Capital expenditures 1,422 1,071 92 179 80 $ 2,219 $ 1,620 $ 144 $ 536 $ (81) Adjusted OIBDA less Capex Long Other & For the Quarter Ended March 31, 2005 Consolidated Wireless Distance Local Elim inations $ 1,036 $ 455 $ 146 $ 435 $ - Operating Income Special items Restructuring and asset impairments - 2 (3) 1 - Merger and integration expense - - - - - 1,036 457 143 436 - Adjusted Operating Income Depreciation and amortization 1,036 644 117 276 (1) 2,072 1,101 260 712 (1) Adjusted OIBDA Capital expenditures 659 418 65 152 24 $ 1,413 $ 683 $ 195 $ 560 $ (25) Adjusted OIBDA less Capex #A
  31. 31. % 9 . $6 . '5 5 Pro form a Pro form a Long Other & For the Quarter Ended March 31, 2005 Consolidated Wireless Distance Local Elim inations $ 1,009 $ 438 $ 146 $ 435 $ (10) Operating Income Special items Restructuring and asset impairments - 2 (3) 1 - Merger and integration expense 10 - - - 10 1,019 440 143 436 - Adjusted Operating Income Depreciation and amortization 2,292 1,900 117 276 (1) 3,311 2,340 260 712 (1) Adjusted OIBDA Capital expenditures 1,433 1,192 65 152 24 $ 1,878 $ 1,148 $ 195 $ 560 $ (25) Adjusted OIBDA less Capex Long Other & For the Quarter Ended December 31, 2005 Consolidated Wireless Distance Local Elim inations $ 671 $ 512 $ 102 $ 407 $ (350) Operating income (loss) Special items 423 3 (15) 87 348 1,094 515 87 494 (2) Adjusted operating income Depreciation and amortization 2,438 2,043 136 259 - $ 3,532 $ 2,558 $ 223 $ 753 $ (2) Adjusted OIBDA Capital expenditures 2,150 1,535 166 303 146 $ 1,382 $ 1,023 $ 57 $ 450 $ (148) Adjusted OIBDA less Capex #
  32. 32. % 9 . $6 . '5 5 Consolidated Free Cash Flow Quarter Ended March 31, March 31, 2006 2005 (millions) $ 3,641 $ 2,072 Adjusted OIBDA Adjust for special items (172) - Other operating activities, net (a) (502) (688) Capital expenditures (1,728) (659) Dividends paid (76) (187) Proceeds from sales of assets 123 8 Other investing activities, net (85) (14) 1,201 532 Free Cash Flow Business acquisitions, net of cash acquired (3,399) - Payments on debt (868) (1,012) Retirement of redeemable preferred stock (247) - Proceeds from maturities and sales of marketable securities 830 (80) Proceeds from common stock issued 185 58 Other financing activities, net - 13 $ (2,298) $ (489) Change in cash and cash equivalents - GAAP March 31, 2006 Total Debt $ 25,950 Less: Cash and cash equivalents (6,604) Marketable securities (909) $ 18,437 Net Debt* Other operating activities, net includes the change in w orking capital, change in deferred income taxes, miscellaneous operating (a) activities and non-operating items in net income. ##
  33. 33. % 9 . $6 . '5 5 Quarter Ended (millions) March 31, December 31, March 31, 2006 2005 2005 Wireless Pro Forma Adjusted OIBDA $ 2,691 $ 2,558 $ 2,340 Service, wholesale, affiliate and other net operating revenues 7,685 7,388 6,841 Adjusted OIBDA margin 35.0% 34.6% 34.2% Operating income $ 441 $ 512 $ 438 Operating income margin 5.7% 6.9% 6.4% Long Distance Adjusted OIBDA $ 236 $ 223 $ 260 Total net operating revenues 1,669 1,662 1,715 Adjusted OIBDA margin 14.1% 13.4% 15.2% Operating income $ 105 $ 102 $ 146 Operating income margin 6.3% 6.1% 8.5% Local Adjusted OIBDA $ 715 $ 753 $ 712 Total net operating revenues 1,620 1,667 1,597 Adjusted OIBDA margin 44.1% 45.2% 44.6% Operating income $ 423 $ 407 $ 435 Operating income margin 26.1% 24.4% 27.2% Consolidated Adjusted OIBDA $ 3,641 Total net operating revenues 11,548 Adjusted OIBDA margin 31.5% Operating income $ 863 Operating income margin 7.5% < . ?F !8 * 1 7 * #P
  34. 34. % 9 . $6 . '5 5 Pro Forma (c) As Reported Quarter Ended Quarter Ended March 31, March 31, March 31, 2006 2005 2005 (millions, except per share data) $ 417 $ 470 $ 378 Earnings Available to Common Shareholders Preferred stock dividends paid 2 2 2 419 472 380 Net Income Special items (net of taxes) (a) Restructuring and asset impairments 41 - - Merger integration expense 64 - 6 Net gains on investment activities (55) - - Premium on early retirement of debt - - 22 $ 469 $ 472 $ 408 Adjusted Net Income Amortization (net of taxes) 564 2 494 $ 1,033 $ 474 $ 902 Adjusted Net Income before Amortization $ 0.14 $ 0.31 $ 0.13 Diluted Earnings Per Share $ 0.14 $ 0.31 0.13 Earnings Per Share from Continuing Operations Special items 0.02 - 0.01 (b) Adjusted Earnings Per Share $ 0.16 $ 0.31 $ 0.14 Amortization (net of taxes) 0.19 - 0.17 (b) Adjusted Earnings Per Share before Amortization $ 0.35 $ 0.31 $ 0.31 See accompanying Notes to Financial Data for more information on special items. (a) Earnings per share data may not add due to rounding. (b) Pro forma consolidated information has been presented as if the Sprint Nextel merger occurred at the beginning of 2005. The 2006 first quarter reflects actual results. (c) #C
  35. 35. % 9 . $6 . '5 5 Quarter Ended March 31, March 31, 2006 2005 (millions, except per share data) $ 11,548 $ 10,586 Net Operating Revenues Operating Expenses Costs of services and products 4,541 4,094 Selling, general and administrative 3,471 3,191 (includes $105 & $10 of merger and integration) Restructuring and asset impairments 67 - Depreciation 1,668 1,470 Amortization 938 822 Total operating expenses 10,685 9,577 863 1,009 Operating Income Interest expense (408) (427) Interest income 84 36 Equity in earnings of unconsolidated subsidiaries 20 8 Other, net 108 (25) Income before income taxes 667 601 Income tax expense (248) (221) 419 380 Net Income Preferred stock dividends paid (2) (2) $ 417 $ 378 Earnings Available to Common Shareholders (a) Diluted Earnings Per Common Share Diluted earnings per share $ 0.14 $ 0.13 Special items 0.02 0.01 (a) Adjusted EPS $ 0.16 $ 0.14 Diluted weighted average common shares 2,992.8 2,944.8 (a) Earnings per share data may not add due to rounding. Pro forma consolidated statements of operations have been presented as if the Sprint Nextel merger occurred at the beginning of 2005. Because the merger occurred in the third quarter of 2005, the first quarter of 2006 reflects actual results. The pro forma results do not include any Affiliate results prior to the dates of their respective acquisitions because they do not significantly affect reported results. #
  36. 36. % 9 . $6 . '5 5 (millions) Local Telephone North Intercompany * Local Quarter Ended 3/31/2006 Operations Supply Eliminations Division $ 1,467 $ 243 $ (90) $ 1,620 Net Operating Revenues Operating Expenses Costs of services and products 460 229 (90) 599 Selling, general and administrative 287 19 - 306 Depreciation and amortization 265 5 (7) 263 Restructuring and asset impairments 26 3 - 29 Total operating expenses 1,038 256 (97) 1,197 $ 429 $ (13) $ 7$ 423 Operating Income (Loss) $ 720 $ (5) $ - $ 715 Adjusted OIBDA $ 179 $ - $ - $ 179 Capex $ 429 $ (13) Operating Income (Loss) Special Items 26 3 $ 455 $ (10) Adjusted Operating Income (Loss) Depreciation and amortization 265 5 $ 720 $ (5) Adjusted OIBDA 49% -2% Adjusted OIBDA Margin Operating Income Margin 29% -5% #N
  37. 37. % 9 . $6 . '5 5 Local Telephone North Intercompany * Local Quarter Ended 3/31/2005 Operations Supply Eliminations Division $ 1,498 $ 186 $ (87) $ 1,597 Net Operating Revenues Operating Expenses Costs of services and products 482 165 (83) 564 Selling, general and administrative 293 27 1 321 Depreciation and amortization 277 5 (6) 276 Restructuring and asset impairments 1 - - 1 Total operating expenses 1,053 197 (88) 1,162 $ 445 $ (11) $ 1$ 435 Operating Income (Loss) $ 723 $ (6) $ (5) $ 712 Adjusted OIBDA* $ 156 $ 1$ (5) $ 152 Capex $ 445 $ (11) Operating Income (Loss) Special Items 1 - $ 446 $ (11) Adjusted Operating Income (Loss)* Depreciation and amortization 277 5 $ 723 $ (6) Adjusted OIBDA* 48% -3% Adjusted OIBDA Margin* Operating Income Margin 30% -6% * Intercompany eliminations also include certain immaterial rounding differences #:
  38. 38. % 9 . $6 . '5 5 March 31, 2006 (millions) Adjusted OIBDA $ 3,641 Annualized Adjusted OIBDA $ 14,564 Total debt $ 25,950 Debt-to-annualized Adjusted OIBDA 1.8 #@

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