Sprint $29.5 Billion Loss Q4 2007 - Hopes Unlimited Plans Will Help

• Wireless profitability declines; increased contribution from
  Wireline
• Growth in Wireless data and Internet services offset by lower
  voice revenues
• Full-year revenues of $40.1 billion, free cash flow* of $2.2
  billion
• Goodwill impairment charge of $29.7 billion recorded in fourth
  quarter
• Company takes actions to increase financial flexibility

Segment Results

Wireline

• Fourth quarter revenues were $1.6 billion, a modest sequential
  increase and a decline of 1% compared to the fourth quarter of
  2006. Internet Protocol (IP) revenues increased 11%
  sequentially and 42% on an annual basis. Full-year 2007
  revenues were $6.5 billion compared to $6.6 billion in 2006.
• Adjusted Operating Income* in the fourth quarter was $178
  million compared to $158 million in the third quarter and $116
  million in the fourth quarter of 2006. Profitability in the
  quarter partially benefited from a patent licensing agreement.
• Fourth quarter Adjusted OIBDA* of $320 million compares with
  $290 million in the third quarter and $263 million in the same
  period a year ago. Adjusted OIBDA* exceeded capital
  expenditures by more than $100 million for the quarter and
  more than $400 million for the full year.

OVERLAND PARK, Kan.--(BUSINESS WIRE)--Feb. 28, 2008--Sprint Nextel
Corp. (NYSE: S) today reported fourth quarter and full-year 2007
financial results. Consolidated net operating revenues in the quarter
were $9.8 billion, compared to $10.4 billion in the fourth quarter of
2006. Full-year 2007 revenues were $40.1 billion versus $41.0 billion
in 2006. In the quarter, the company recorded a non-cash goodwill
impairment charge of $29.7 billion. The net loss for the quarter was
$29.5 billion or $10.36 diluted loss per share compared to net income
of $261 million or 9 cents diluted earnings per share in the fourth
quarter a year ago.

After adjusting for the goodwill impairment charge, as well as the
effects of other special items and merger-related amortization costs,
Adjusted EPS before Amortization* was 21 cents in the fourth quarter
of 2007, compared to 29 cents in the fourth quarter of 2006. The
decline in earnings is due to a reduced contribution from Wireless,
partially offset by an improved contribution from Wireline, an
investment gain and an income tax benefit in the fourth quarter of
2007.

As previously reported, wireless subscribers declined 108,000 in
the fourth quarter, due to gains in wholesale and Boost Unlimited
subscribers offset by decreases in iDEN post-paid and traditional
Boost pre-paid users. For the quarter, post-paid churn was 2.3%,
matching the third quarter of 2007 and the fourth quarter of 2006.
Wireless post-paid ARPU in the quarter was a little more than $58, a
1% sequential decline and a 4% decrease compared to the fourth quarter
of 2006. ARPU continues to be pressured by lower voice contributions,
partially offset by growth in data services.

"The fourth quarter financial results reflect the challenges
facing our Wireless business," said Dan Hesse, Sprint Nextel CEO. "We
are making significant changes across the organization in an effort to
improve execution, stabilize our customer base and deliver on the
opportunity provided by our assets. Given current deteriorating
business conditions, which are more difficult than what I had expected
to encounter, these changes will take time to produce improved
operating performance, and our near-term subscriber and financial
results will continue to be pressured. Additionally, in light of
current capital market conditions, we are taking steps to increase our
financial flexibility and mitigate refinancing risk by borrowing funds
from a revolving credit facility and discontinuing declaring a
dividend for the foreseeable future.

"Internally, we have rolled out a unified company culture focused
on accountability and on providing a superior customer experience. We
plan to share some of our initiatives for improving the customer
experience and operations next quarter. Strategic assessments and
changes may take longer to complete," Hesse said.

C

The following is a discussion of consolidated results:

• Lower revenues in the quarter are principally due to a decline
  in Wireless contribution.
• In the quarter, net special items reduced reported GAAP losses
  by $10.42 per share. In addition to the goodwill impairment
  charge, special items include pre-tax charges of $119 million
  for merger and integration costs related to the Sprint-Nextel
  merger and associated acquisitions, $56 million for severance,
  exit costs and asset impairments, pre-tax gains of $44 million
  from litigation and insurance settlements, and $60 million
  from an investment. Special items are detailed in the Notes to
  Financial Data.
• Adjusted OIBDA* exceeded capital expenditures by $446 million
  in the fourth quarter and $4.3 billion for the full year.
• Consolidated results for the fourth quarter of 2007 include
  $98 million in operating expenses and $250 million in capital
  investments associated with the WiMAX initiative. For the
  full-year 2007, WiMAX operating expenses were $193 million,
  and capital expenditures were $384 million.
• Interest expense, net of interest income, was $306 million,
  compared to $333 million in the fourth quarter a year ago.
• The company had an effective income tax benefit rate of 1% in
  the quarter compared to an effective income tax expense rate
  of 31% in the year-ago period. The 2007 effective tax rate was
  impacted by the goodwill impairment charge and a $105 million
  benefit related to state income tax law changes.
• Net debt* at the end of the fourth quarter of 2007 was $19.7
  billion. This compares to $19.9 billion at the end of the
  third quarter and $20.1 billion at the end of 2006.
• Fourth quarter non-cash compensation expense was $68 million
  compared to $80 million in 2006.
• On Feb. 27, 2008, Sprint Nextel borrowed $2.5 billion in
  principal amount under its revolving credit facility. The
  company has no immediate need for additional liquidity, but in
  light of current market conditions borrowed the funds to
  provide greater financial flexibility and to mitigate any
  potential financing risk related to $1.25 billion in bonds
  that mature in November 2008, as well as the approximately
  $400 million outstanding under our commercial paper program,
  and $600 million of bonds that mature in May, 2009. The
  company has no other material refinancing scheduled until
  2010. About $500 million of borrowing capacity remains
  available under the revolving credit facility.
• Sprint Nextel's Board of Directors has determined that the
  company will not declare a dividend for the foreseeable
  future, in an effort to retain greater financial flexibility.
• The company did not make any purchases under its $6 billion
  stock buyback authorization in the fourth quarter of 2007 or
  in the first quarter of 2008. This authorization expired in
  January 2008.

WIRELESS RESULTS

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

                          Quarter Ended          Year-to-Date
                          December 31,           December 31,
                         ---------------   %   -----------------   %
Financial Data            2007    2006    +/-    2007     2006    +/-
                         ------- ------- ----- -------- -------- -----
Net operating revenues   $8,497  $9,001   (6)% $34,700  $35,101   (1)%
Adjusted operating
 income*                    168     652  (74)%   1,429    2,592  (45)%
Adjusted OIBDA*           2,245   2,909  (23)%   9,914   11,678  (15)%
Adjusted OIBDA margin*     28.7%   35.5%          30.9%    36.6%
Capex(1)                 $1,404  $2,238  (37)% $ 4,991  $ 5,846  (15)%

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

The following is a discussion of Wireless results:

Subscribers

• Wireless had 53.8 million total subscribers at the end of
  2007. This compares with 53.1 million subscribers at the end
  of 2006. The net growth of 700,000 subscribers for the year
  reflects a gain of 1.9 million subscribers in prepaid and
  wholesale segments, offset by a net decline of 1.2 million in
  direct and affiliate post-paid subscribers.
• At the end of the fourth quarter, Sprint Nextel served a
  little more than 35 million subscribers on the CDMA platform,
  17.3 million on iDEN and 1.4 million PowerSource subscribers
  who access both platforms.
• The year-end subscriber base consists of approximately 76%
  post-paid users, 9% prepaid, and 15% in wholesale and
  affiliates.
• In the fourth quarter, total post-paid subscribers declined
  683,000 due to a loss of iDEN users. In the third quarter of
  2007, post-paid subscribers declined by 337,000. The increased
  loss of post-paid subscribers in the fourth quarter reflects
  lower gross additions, partially offset by fewer
  deactivations.
• Prepaid net additions for the quarter were 55,000. Prepaid
  includes 257,000 net additions on the Boost Unlimited plan,
  and a decline of 202,000 traditional Boost prepaid users.
  Boost Unlimited is now available to about a third of the U.S.
  population.
• Wholesale channels added 500,000 subscribers in the quarter.
• In the fourth quarter, Sprint Nextel enhanced its device
  lineup with the addition of the Touch by HTC(TM) , the
  Rumor(TM) by LG(R), The Buzz+(TM) ic602 by Motorola, the
  Centro(TM) by Palm(R), the BlackBerry(R) Pearl(TM) 8130 and
  two new USB connection cards.

Churn

• Overall, post-paid churn was 2.3% in the quarter.
• In the fourth quarter, the post-paid churn rate was flat with
  the third quarter for both the iDEN and CDMA bases.
• Boost pre-paid churn was 7.5% compared to 6.2% in the third
  quarter of 2007 and 6.5% in the fourth quarter of 2006.

Revenues/ARPU

• Net operating revenues declined 2% sequentially and 6%
  compared to the fourth quarter of 2006. Service revenues
  declined 3% sequentially and 5% year-over-year due to lower
  average revenue per customer and a smaller base of post-paid
  customers. Equipment revenues declined 15% compared to the
  year-ago period, but were up 2% sequentially. The annual
  decline reflects more aggressive market pricing and increased
  sales of lower-priced handsets. The sequential increase is due
  to higher average priced handset sales.
• Post-paid ARPU was a little more than $58 in the quarter,
  compared to $59 in the third quarter and a little more than
  $60 in the fourth quarter of 2006. CDMA post-paid ARPU
  decreased a little under 1% from both the year-ago period and
  sequentially. iDEN post-paid ARPU was 7% below the prior year
  and declined 3% sequentially. The post-paid ARPU decline
  reflects lower voice revenues, partially offset by increased
  data revenues.
• Data contributed more than $11 to overall post-paid ARPU in
  the quarter. Data ARPU on the post-paid CDMA base was more
  than $14, an increase of 21% from the year-ago period. Data
  contributed more than $5 to iDEN ARPU, an increase of 10% from
  the year-ago period.
• Pre-paid ARPU was a little under $28 in the fourth quarter,
  compared to a little over $30 in the third quarter and a
  little under $32 in the fourth quarter of 2006. The sequential
  decline is in part due to a one-time revenue benefit in the
  third quarter and lower average usage. The annual comparison
  reflects a decline in average usage. Boost Unlimited was a
  minor contributor to prepaid revenues in the quarter.

Operating Expenses

• Total operating expenses for the quarter were $8.3 billion
  after normalizing for special items. This compares with
  normalized operating expenses of $8.2 billion in the third
  quarter and $8.3 billion in the fourth quarter of 2006.
• Costs of services increased 3% annually and 1% sequentially.
  The growth is primarily due to a larger number of cell sites
  on air.
• Cost of products was 7% below the fourth quarter of 2006 due
  to the decrease in the cost we pay for handsets. Cost of
  products in the quarter was flat with the third quarter.
• SG+A expenses increased 6% compared to the fourth quarter of
  2006 and 5% sequentially. The year-over-year increase is due
  to increased customer care costs and higher bad debt expense,
  partially offset by lower sales costs associated with lower
  gross additions. The quarter-over-quarter comparison reflects
  increases in customer care and bad debt and an adjustment to
  variable compensation that benefited the third quarter.

Capital Spending

Wireless capital expenditures totaled $1.4 billion in the fourth
quarter and were $5.0 billion for the full year, or a little over 14%
of annual revenues. In 2007, the majority of capital was deployed to
increase capacity, enhance and expand the network footprint and triple
the footprint of EV-DO Rev. A coverage to areas where 222 million
people live and work.

The following is a discussion of Wireline results.

• Wireline revenues reflect growth in Internet Protocol (IP)
  services, offset by declines in voice and legacy data
  services.
• IP revenues increased 42% annually and 11% sequentially,
  driven by growth in demand from cable partners and enterprise
  customers. In the fourth quarter, the company added 700,000
  new cable customer lines in service. Sprint Nextel is now
  serving 3.3 million lines for cable partners and has service
  agreements with cable companies that collectively pass 31
  million households.
• Voice revenues decreased 9% compared to the fourth quarter of
  2006 and 4% sequentially. The annual decline was due to
  ongoing pressures in consumer and business segments, partially
  offset by increased sales to Wireless. Sequentially, voice
  revenues were down in all segments.
• Data revenues from legacy technologies, including private
  line, frame relay and ATM, declined 17% year-over-year and 2%
  sequentially. Legacy data revenues continue to be impacted, in
  part by customer migrations to IP services. The transition to
  an all-IP network is ahead of schedule, and customer
  satisfaction with IP migrations remains very high.
• After normalizing for special items, total operating expenses
  were 5% below the fourth quarter of 2006 and declined 1%
  sequentially. Normalized SG+A expenses includes a $40 million
  credit in the quarter due to prepaid licenses for the use of
  certain patents.
• Full-year capital expenditures of $632 million were
  approximately 10% of revenues.

Forward-Looking Guidance

Sprint Nextel is currently assessing a reorganization of its
business model, associated sales, distribution and marketing plans,
and its financial outlook. The company expects to provide an update
when these plans are finalized. In the first quarter of 2008, Sprint
Nextel currently expects to report a sequential increase in post-paid
churn and a decline in Wireless post-paid subscribers of approximately
1.2 million customers, which is unlikely to improve in the second
quarter. We also expect continued downward pressure on postpaid ARPU
in the first quarter. First quarter Adjusted OIBDA* is projected to be
in the range of $1.8 billion to $1.9 billion.

*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 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, 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 and regulatory 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 continue to 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
  provide wireless PCS under the Sprint(R) brand name, that we
  have acquired, including the risk that these difficulties may
  limit our ability to fully integrate the operations of these
  businesses 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 the ability of any of our
  handset suppliers to provide devices, or Motorola, Inc.'s
  ability or willingness to provide 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, economic 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 and our upcoming
  Form 10-K for the year ended December 31, 2007, 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 fourth 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.