Sprint Nextel Reports Fourth Quarter and Full Year 2012 Results

  Sprint Nextel Reports Fourth Quarter and Full Year 2012 Results

  *Full year 2012 consolidated net operating revenue of $35.3 billion rose 5
    percent year-over-year; annual Sprint platform wireless service revenue of
    $27.1 billion is the highest ever and increased nearly 15 percent
    year-over-year; record 2012 Sprint platform postpaid ARPU of $63.05 grew
    more than 5 percent over 2011
  *Annual Operating Loss of $1.8 billion, includes accelerated depreciation
    of $2.1 billion; annual Adjusted OIBDA* of $4.8 billion; fourth quarter
    Adjusted OIBDA* of $860 million up 2 percent year-over-year
  *2012 Sprint platform postpaid net additions up 18 percent year-over-year
    and highest since 2007
  *Strong postpaid and prepaid Nextel recapture rates

       *2012 postpaid recapture rate of 55 percent
       *Fourth quarter postpaid recapture rate of 51 percent
       *Best ever quarterly prepaid recapture rate of 50 percent

  *Annual smartphone sales of nearly 20 million

       *2012 iPhone^® sales of more than 6.6 million – 40 percent to new
         customers
       *Best ever quarterly iPhone sales of approximately 2.2 million – 38
         percent to new customers
       *89 percent of quarterly Sprint platform postpaid handset sales were
         smartphones

  *Network Vision sites on air nearly doubled in last 90 days

       *4G LTE now launched in 58 cities with nearly 170 more expected in
         coming months
       *Construction started in more than 450 cities
       *More than 19,500 sites now ready for construction
       *Average current new sites on air per week have grown 83 percent from
         third quarter
       *More than 8,000 sites on air

The company’s fourth quarter 2012 earnings conference call will be held at 8
a.m. ET today. Participants may dial 800-938-1120 in the U.S. or Canada
(706-634-7849 internationally) and provide the following ID: 87240993 or may
listen via the Internet at www.sprint.com/investors.

Additional information about results can be found in the “Quarterly Investor
Update” posted on our Investor Relations website at www.sprint.com/investors.

Business Wire

OVERLAND PARK, Kan. -- February 7, 2013

Sprint Nextel Corp. (NYSE: S) today reported fourth quarter consolidated net
operating revenue of $9 billion and full year 2012 consolidated net operating
revenue of $35.3 billion. Sprint reported record quarterly and annual Sprint
platform wireless service revenues of nearly $7 billion and $27.1 billion,
respectively. Driven by increasing postpaid ARPU and continued Sprint platform
subscriber growth, wireless service revenues for the Sprint platform grew 12
percent year-over-year for the quarter and nearly 15 percent for the full
year.

The company reported a net loss of $1.3 billion and a diluted net loss of $.44
per share for the fourth quarter of 2012 as compared to a net loss of $1.3
billion and a diluted net loss of $.43 per share in the fourth quarter of
2011. Sprint’s fourth quarter 2012 results include accelerated depreciation of
approximately $400 million, or negative $.13 per share (pre-tax), primarily
related to Network Vision, including the expected shutdown of the Nextel
platform, and $45 million or negative $.01 per share (pre-tax) related to
impacts from Hurricane Sandy.

The Sprint platform postpaid subscriber base grew for the eleventh consecutive
quarter, with net additions of 401,000 driven by a postpaid Nextel recapture
rate of 51 percent, or 333,000 subscribers, and strong 4G LTE smartphone
sales. Sprint platform prepaid net additions equaled 525,000 due in part to
the best ever quarterly prepaid Nextel recapture rate of 50 percent, or
188,000 subscribers. Sprint sold approximately 2.2 million iPhones in the
fourth quarter with 38 percent purchased by new customers. As of the end of
the fourth quarter, Sprint had sold more than 4 million 4G LTE smartphones.

“Sprint’s strong performance was fueled by record wireless service revenue on
the Sprint platform due to year-over-year postpaid ARPU growth and Sprint
platform net additions,” said Dan Hesse, Sprint CEO. “As a result, quarterly
Adjusted OIBDA* performance improved year-over-year in spite of significant
cost increases related to Network Vision and the iPhone, both of which are key
investments for our business that we expect will improve the customer
experience and lead to growth in the years ahead.”

NETWORK VISION HIGHLIGHTS

Sprint continues to make significant progress on Network Vision deployment.
The number of sites that are either ready for construction or already underway
has grown to more than 19,500 – approximately half the total number of sites
to be upgraded. To date more than 8,000 sites are on air and meeting speed and
coverage enhancement targets. Recent weekly construction starts are up 56
percent from the third quarter. Sprint continues to expect to have 12,000
sites on air by the end of the first quarter of 2013.

As part of Network Vision, Sprint has launched 4G LTE in 58 cities and expects
that 4G LTE will be available in nearly 170 additional cities in the coming
months. During 2012 Sprint launched 15 4G LTE devices including Apple iPad
mini and iPad with Retina Display, LG Optimus G™ and Samsung Galaxy Note^® II
in the fourth quarter.

CUSTOMER EXPERIENCE AND BRAND HIGHLIGHTS

During the fourth quarter, Sprint received the Frost & Sullivan North American
Customer Value Enhancement Award in Mobile Communications and Collaboration.
Sprint was also named to Connected World magazine’s  annual list of the 100
most important and influential providers of machine-to-machine services and is
number 16 on Chief Executive magazine’s 2013 Best Companies for Leaders list.
For the fourth straight year, Newsweek’s annual Green Rankings recognized
Sprint as one of the greenest companies in the U.S., ranking the company third
among the greenest companies in America in its 2012 report. Finally, the
Global Reporting Initiative verified Sprint is the first U.S. telecom company
to deliver an “A+” Corporate Responsibility Performance Report.

During the fourth quarter, Sprint introduced a variety of products and
services that benefit customers across its brands. Sprint launched Pinsight
Media+™, a new advertising service that gives advertisers the power to reach
consumers on their mobile device in a more personalized way. Sprint unveiled
Sprint Velocity^SM, a pioneering capability that encompasses the development,
integration and marketing of in-vehicle communications systems. Automakers can
use Sprint Velocity as a complete turnkey solution or on a modular basis to
suit their customized needs. Sprint’s Global Wholesale & Emerging Solutions
group introduced two new products: Sprint Phone Connect for Wholesale, a
plug-and-play device product that allows mobile virtual network operators to
provide their customers with a low-cost, high-quality home phone service
without the need for a landline or broadband service, and Mobile Broadband on
Demand, which allows international, retail, travel and hospitality companies
to generate new revenue streams through the sale or rental of mobile broadband
devices on Sprint’s trusted networks. Sprint’s Assurance Wireless^® brand for
eligible low-income consumers, launched service in Idaho and New Mexico in the
fourth quarter and its Virgin Mobile USA prepaid brand began offering the
award-winning Samsung Galaxy S^® II 4G.

CAPITAL STRUCTURE

During the fourth quarter, Sprint raised additional debt financing of nearly
$2.3 billion and used the proceeds to retire nearly $1.2 billion of 2014 debt
maturities and more than $1.1 billion of 2015 maturities. The remaining
outstanding principal balances of Sprint’s 2013, 2014 and 2015 maturities are
$366 million, $247 million and $566 million, respectively. Sprint also
received $3.1 billion from SoftBank in exchange for a newly issued 1 percent,
seven-year convertible bond related to the companies’ pending merger.

As of December 31, 2012, the company’s liquidity was approximately $9.5
billion consisting of $8.2 billion in cash, cash equivalents and short-term
investments and $1.3 billion of undrawn borrowing capacity available under its
revolving bank credit facility. Additionally, the company has borrowed $296
million to-date of available funding under the secured equipment credit
facility, reducing the remaining undrawn availability to $704 million. Sprint
generated $216 million of cash flow from operating activities and negative
Free Cash Flow* of $1.3 billion in the quarter.

FORECAST

The company expects 2013 Adjusted OIBDA* to be between $5.2 billion and $5.5
billion.

                                                              
Wireless
Operating
Statistics
(Unaudited)
               Quarter To Date                           Year To Date
               12/31/12   9/30/12   12/31/11        12/31/12   12/31/11 
Net
Additions
(Losses) (in
thousands)
Sprint
platform:
Postpaid^(2)   401          410         539              1,516        1,283
Prepaid^(3)    525          459         899              2,305        4,293
Wholesale
and           (243     )  14        954             944        2,697    
affiliate
Total Sprint   683          883         2,392            4,765        8,273
platform
Nextel
platform:
Postpaid^(2)   (644     )   (866    )   (378     )       (2,653   )   (1,381   )
Prepaid^(3)   (376     )  (440    )  (392     )       (1,507   )  (1,781   )
Total Nextel   (1,020   )   (1,306  )   (770     )       (4,160   )   (3,162   )
platform
                                                                                 
Total retail
postpaid net   (243     )   (456    )   161              (1,137   )   (98      )
(losses)
additions
Total retail
prepaid net    149          19          507              798          2,512
additions
Total
wholesale
and           (243     )  14        954             944        2,697    
affiliate
net (losses)
additions
Total
Wireless Net  (337     )  (423    )  1,622           605        5,111    
(Losses)
Additions
                                                                                 
End of
Period
Subscribers
(in
thousands)
Sprint
platform:
Postpaid^(2)   30,245       29,844      28,729           30,245       28,729
Prepaid^(3)    15,133       14,608      12,828           15,133       12,828
Wholesale
and           8,162      8,405     7,218           8,162      7,218    
affiliate
Total Sprint   53,540       52,857      48,775           53,540       48,775
platform
Nextel
platform:
Postpaid^(2)   1,632        2,276       4,285            1,632        4,285
Prepaid^(3)   454        830       1,961           454        1,961    
Total Nextel   2,086        3,106       6,246            2,086        6,246
platform
                                                                                 
Total retail
postpaid end   31,877       32,120      33,014           31,877       33,014
of period
subscribers
Total retail
prepaid end    15,587       15,438      14,789           15,587       14,789
of period
subscribers
Total
wholesale
and
affiliate     8,162      8,405     7,218           8,162      7,218    
end of
period
subscribers
Total End of
Period        55,626     55,963    55,021          55,626     55,021   
Subscribers
                                                                                 
Supplemental
Data -
Connected
Devices
End of
Period
Subscribers
(in
thousands)
Retail         813          817         783              813          783
postpaid
Wholesale
and           2,670      2,542     2,077           2,670      2,077    
affiliate
Total         3,483      3,359     2,860           3,483      2,860    
                                                                                 
Churn
Sprint
platform:
Postpaid       1.98     %   1.88    %   1.99     %       1.89     %   1.85     %
Prepaid        3.02     %   2.93    %   3.07     %       3.01     %   3.28     %
Nextel
platform:
Postpaid       5.27     %   4.38    %   1.89     %       3.24     %   1.92     %
Prepaid        9.79     %   9.39    %   7.18     %       8.55     %   7.10     %
                                                                                 
Total retail
postpaid       2.18     %   2.09    %   1.98     %       2.02     %   1.86     %
churn
Total retail
prepaid        3.30     %   3.37    %   3.68     %       3.45     %   4.05     %
churn
                                                                                 
ARPU ^(a)
Sprint
platform:
Postpaid       $ 63.04      $ 63.21     $ 61.22          $ 63.05      $ 59.76
Prepaid        $ 26.30      $ 26.19     $ 25.16          $ 25.92      $ 25.43
Nextel
platform:
Postpaid       $ 37.27      $ 38.65     $ 41.91          $ 39.65      $ 43.25
Prepaid        $ 35.59      $ 34.73     $ 34.91          $ 35.91      $ 35.17
                                                                                 
Total retail
postpaid       $ 61.47      $ 61.18     $ 58.59          $ 60.84      $ 57.27
ARPU
Total retail   $ 26.69      $ 26.77     $ 26.62          $ 26.72      $ 27.40
prepaid ARPU
                                                                                 
Nextel
Platform
Subscriber
Recaptures
Subscribers
(in
thousands)
^(4):
Postpaid       333          516         168              1,508        508
Prepaid        188          152         152              620          724
Rate ^(5):
Postpaid       51       %   59      %   39       %       55       %   30       %
Prepaid        50       %   34      %   25       %       33       %   24       %


^(a) ARPU is calculated by dividing service revenue by the sum of the average
number of subscribers in the applicable service category. Changes in average
monthly service revenue reflect subscribers for either the postpaid or prepaid
service category who change rate plans, the level of voice and data usage, the
amount of service credits which are offered to subscribers, plus the net
effect of average monthly revenue generated by new subscribers and
deactivating subscribers.

                                                                
CONDENSED
CONSOLIDATED
STATEMENTS OF
OPERATIONS
(Unaudited)
(Millions,
except per
Share Data)
                 Quarter To Date                           Year To Date
                 12/31/12    9/30/12    12/31/11        12/31/12    12/31/11
                                                                                   
Net Operating   $ 9,005    $ 8,763   $ 8,722         $ 35,345   $ 33,679 
Revenues
Net Operating
Expenses
Cost of            2,659        2,702       2,788            10,936       10,958
services
Cost of            2,993        2,391       2,631            9,905        8,057
products
Selling,
general and        2,557        2,391       2,461            9,765        9,592
administrative
Depreciation
and                1,493        1,488       1,174            6,543        4,858
amortization
Other, net       8         22       106            16        106    
Total net
operating        9,710     8,994    9,160          37,165    33,571 
expenses
Operating        (705   )   (231  )   (438   )        (1,820 )   108    
(Loss) Income
Interest           (432   )     (377  )     (287   )         (1,428 )     (1,011 )
expense
Equity in
losses of
unconsolidated   (140   )   (112  )   (472   )        (923   )   (1,733 )
investments
and other, net
^(6)
Loss before        (1,277 )     (720  )     (1,197 )         (4,171 )     (2,636 )
Income Taxes
Income tax       (44    )   (47   )   (106   )        (154   )   (254   )
expense
Net Loss ^ (7)  $ (1,321 )  $ (767  )  $ (1,303 )       $ (4,325 )  $ (2,890 )
                                                                                   
Basic and
Diluted Net
Loss Per        $ (0.44  )  $ (0.26 )  $ (0.43  )       $ (1.44  )  $ (0.96  )
Common Share ^
(7)
Weighted
Average Common     3,007        3,003       2,997            3,002        2,995
Shares
outstanding
Effective Tax    -3.4   %   -6.5  %   -8.9   %        -3.7   %   -9.6   %
Rate
                                                                                   
                                                                                   
NON-GAAP RECONCILIATION - NET LOSS TO ADJUSTED OIBDA* (Unaudited)
(Millions)
                 Quarter To Date                           Year To Date
                 12/31/12    9/30/12    12/31/11         12/31/12    12/31/11
                                                                                   
Net Loss^(7)    $ (1,321 )  $ (767  )  $ (1,303 )       $ (4,325 )  $ (2,890 )
Income tax       (44    )   (47   )   (106   )        (154   )   (254   )
expense
Loss before        (1,277 )     (720  )     (1,197 )         (4,171 )     (2,636 )
Income Taxes
Equity in
losses of
unconsolidated     140          112         472              923          1,733
investments
and other, net
^(6)
Interest         432       377      287            1,428     1,011  
expense
Operating        (705   )   (231  )   (438   )        (1,820 )   108    
(Loss) Income
Depreciation
and              1,493     1,488    1,174          6,543     4,858  
amortization
OIBDA*           788       1,257    736            4,723     4,966  
Severance and
lease exit         (10    )     22          28               196          28
costs ^(8)
Gains from
asset
dispositions       -            -           -                (29    )     -
and
exchanges^(9)
Asset
impairments
and                18           -           78               36           78
abandonments
^(10)
Spectrum
hosting
contract           -            -           -                (170   )     -
termination,
net ^(11)
Access costs ^     -            -           -                (17    )     -
(12)
Business
combinations       19           -           -                19           -
^(13)
Hurricane        45        -        -              45        -      
Sandy ^(14)
Adjusted         860       1,279    842            4,803     5,072  
OIBDA*
Capital
expenditures     1,923     1,489    900            5,370     2,855  
^(1)
Adjusted
OIBDA* less     $ (1,063 )  $ (210  )  $ (58    )       $ (567   )  $ 2,217  
Capex
                                                                                   
Adjusted OIBDA     10.7   %     16.0  %     10.8   %         15.0   %     16.5   %
Margin*
                                                                                   
                                                                                   
Selected item:
Deferred tax
asset            $ 546        $ 308       $ 569            $ 1,756      $ 1,223
valuation
allowance
                                                                                   

                                                               
WIRELESS
STATEMENTS OF
OPERATIONS
(Unaudited)
(Millions)
                 Quarter To Date                          Year To Date
                 12/31/12    9/30/12    12/31/11        12/31/12    12/31/11
Net Operating
Revenues
Service
revenue
Sprint
platform:
Postpaid ^(2)    $ 5,674      $ 5,625     $ 5,217         $ 22,247     $ 20,052
Prepaid ^(3)       1,170        1,127       929             4,377        3,325
Wholesale,
affiliate and    135       121      74            483       261    
other
Total Sprint     6,979     6,873    6,220         27,107    23,638 
platform
Nextel
platform:
Postpaid ^(2)      218          311         563             1,454        2,582
Prepaid ^(3)     68        108      227           525       1,170  
Total Nextel     286       419      790           1,979     3,752  
platform
                                                                                  
Equipment        1,010     750      910           3,248     2,911  
revenue
Total net
operating        8,275     8,042    7,920         32,334    30,301 
revenues
                                                                                  
Net Operating
Expenses
Cost of            2,210        2,256       2,291           9,034        8,907
services
Cost of            2,993        2,391       2,631           9,905        8,057
products
Selling,
general and        2,436        2,277       2,330           9,290        9,070
administrative
Depreciation
and                1,391        1,377       1,070           6,128        4,425
amortization
Other, net       3         22       98            28        98     
Total net
operating        9,033     8,323    8,420         34,385    30,557 
expenses
Operating Loss  $ (758   )  $ (281  )  $ (500  )       $ (2,051 )  $ (256   )
                                                                                  
Supplemental
Revenue Data
Total retail
service          $ 7,130      $ 7,171     $ 6,936         $ 28,603     $ 27,129
revenue
Total service    $ 7,265      $ 7,292     $ 7,010         $ 29,086     $ 27,390
revenue
                                                                                  
                                                                                  
                                                                                  
WIRELESS
NON-GAAP
RECONCILIATION
(Unaudited)
(Millions)
                 Quarter To Date                          Year To Date
                 12/31/12    9/30/12    12/31/11        12/31/12    12/31/11
                                                                                  
Operating Loss   $ (758   )   $ (281  )   $ (500  )       $ (2,051 )   $ (256   )
Severance and
lease exit         (10    )     22          25              196          25
costs ^(8)
Gains from
asset
dispositions       -            -           -               (29    )     -
and exchanges
^ (9)
Asset
impairments
and                13           -           73              31           73
abandonments
^(10)
Spectrum
hosting
contract           -            -           -               (170   )     -
termination,
net ^(11)
Hurricane          42           -           -               42           -
Sandy ^(14)
Depreciation
and              1,391     1,377    1,070         6,128     4,425  
amortization
Adjusted         678       1,118    668           4,147     4,267  
OIBDA*
Capital
expenditures     1,786     1,376    774           4,884     2,416  
^(1)
Adjusted
OIBDA* less     $ (1,108 )  $ (258  )  $ (106  )       $ (737   )  $ 1,851  
Capex
                                                                                  
Adjusted OIBDA     9.3    %     15.3  %     9.5   %         14.2   %     15.6   %
Margin*
                                                                                  

WIRELINE
STATEMENTS OF                                                           
OPERATIONS
(Unaudited)
(Millions)
                 Quarter To Date                                 Year To Date
                  12/31/12    9/30/12    12/31/11         12/31/12    12/31/11 
Net Operating
Revenues
Voice            $ 385          $ 399         $ 475              $ 1,627        $ 1,915
Data               96             95            103                398            460
Internet           451            428           459                1,781          1,878
Other            17          17         17               75          73       
Total net
operating        949         939        1,054            3,881       4,326    
revenues
                                                                                             
Net Operating
Expenses
Costs of
services and       671            667           748                2,784          3,005
products
Selling,
general and        100            114           128                451            521
administrative
Depreciation       102            106           109                412            431
Other, net       5           -          9                (12      )   9        
Total net
operating        878         887        994              3,635       3,966    
expenses
Operating       $ 71         $ 52        $ 60              $ 246        $ 360      
Income
                                                                                             
                                                                                             
WIRELINE
NON-GAAP
RECONCILIATION
(Unaudited)
(Millions)
                 Quarter To Date                                 Year To Date
                  12/31/12    9/30/12    12/31/11         12/31/12    12/31/11 
                                                                                             
Operating        $ 71           $ 52          $ 60               $ 246          $ 360
Income
Severance and
lease exit         -              -             3                  -              3
costs ^(8)
Asset
impairments
and                5              -             6                  5              6
abandonments
^(10)
Access costs ^     -              -             -                  (17      )     -
(12)
Hurricane          3              -             -                  3              -
Sandy ^(14)
Depreciation     102         106        109              412         431      
Adjusted         181         158        178              649         800      
OIBDA*
Capital
expenditures     58          60         34               242         158      
^(1)
Adjusted
OIBDA* less     $ 123        $ 98        $ 144             $ 407        $ 642      
Capex
                                                                                             
Adjusted OIBDA     19.1     %     16.8    %     16.9     %         16.7     %     18.5     %
Margin*

                                                                      
CONDENSED CONSOLIDATED CASH FLOW INFORMATION (Unaudited)
(Millions)
                                                             Year to Date
                                                              12/31/12    12/31/11 
Operating
Activities
Net loss                                                     $ (4,325   )   $ (2,890   )
Depreciation
and                                                            6,543          4,858
amortization
Provision for
losses on                                                      561            559
accounts
receivable
Share-based
compensation                                                   82             73
expense
Deferred                                                       209            231
income taxes
Equity in
losses of
unconsolidated                                                 923            1,733
investments
and other, net
^(6)
Contribution
to pension                                                     (108     )     (136     )
plan
Spectrum
hosting
contract                                                       (170     )     -
termination,
net^(11)
Other working
capital                                                        (802     )     (877     )
changes, net
Other, net                                             86          140      
Net cash
provided by                                            2,999       3,691    
operating
activities
                                                                                         
Investing
Activities
Capital
expenditures                                                   (4,261   )     (3,130   )
^(1)
Expenditures
relating to                                                    (198     )     (258     )
FCC licenses
Reimbursements
relating to                                                    -              135
FCC licenses
^(15)
Change in
short-term                                                     (1,699   )     150
investments,
net
Investment in                                                  (228     )     (331     )
Clearwire
Other, net                                             11          (9       )
Net cash used
in investing                                           (6,375   )   (3,443   )
activities
                                                                                         
Financing
Activities
Proceeds from
debt and                                                       9,176          4,000
financings
Debt financing                                                 (134     )     (86      )
costs
Repayments of
debt and                                                       (4,791   )     (3,906   )
capital lease
obligations
Other, net                                             29          18       
Net cash
provided by                                            4,280       26       
financing
activities
                                                                                         
Net Increase
in Cash and                                                    904            274
Cash
Equivalents
                                                                                         
Cash and Cash
Equivalents,                                           5,447       5,173    
beginning of
period
                                                                                         
Cash and Cash
Equivalents,                                                 $ 6,351        $ 5,447
end of period
                                                                                         
                                                                                         
RECONCILIATION TO CONSOLIDATED FREE CASH FLOW* (NON-GAAP) (Unaudited)
(Millions)
                 Quarter Ended                               Year to Date
                  12/31/12    9/30/12    12/31/11     12/31/12    12/31/11 
                                                                                         
Net Cash
Provided by      $ 216          $ 628         $ 1,089        $ 2,999        $ 3,691
Operating
Activities
                                                                                         
Capital
expenditures       (1,477   )     (1,073  )     (909     )     (4,261   )     (3,130   )
^(1)
Expenditures
relating to        (46      )     (45     )     76             (198     )     (123     )
FCC licenses,
net ^(15)
Other
investing        (2       )   3          1            11          (9       )
activities,
net
Free Cash        (1,309   )   (487    )   257          (1,449   )   429      
Flow*
                                                                                         
Debt financing     (44      )     (33     )     (83      )     (134     )     (86      )
costs
Increase in
debt and           3,316          73            1,749          4,385          94
other, net
Investment in      (100     )     -             (331     )     (228     )     (331     )
Clearwire
Other
financing        8           14         4            29          18       
activities,
net
Net Increase
(Decrease) in
Cash, Cash
Equivalents     $ 1,871      $ (433    )  $ 1,596       $ 2,603      $ 124      
and Short-Term
Investments



                                                             
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(Millions)
                                                  12/31/12    12/31/11 
Assets
Current assets
Cash and cash equivalents                        $ 6,351        $ 5,447
Short-term investments                             1,849          150
Accounts and notes receivable, net                 3,658          3,206
Device and accessory inventory                     1,200          913
Deferred tax assets                                1              130
Prepaid expenses and other current assets        700         491      
Total current assets                               13,759         10,337
                                                                             
Investments and other assets                       1,833          2,609
Property, plant and equipment, net                 13,607         14,009
Goodwill                                           359            359
FCC licenses and other                             20,677         20,453
Definite-lived intangible assets, net            1,335       1,616    
Total                                           $ 51,570     $ 49,383   
                                                                             
Liabilities and Shareholders' Equity
Current liabilities
Accounts payable                                 $ 3,487        $ 2,348
Accrued expenses and other current liabilities     5,008          4,143
Current portion of long-term debt, financing     379         8        
and capital lease obligations
Total current liabilities                          8,874          6,499
                                                                             
Long-term debt, financing and capital lease        23,962         20,266
obligations
Deferred tax liabilities                           7,047          6,986
Other liabilities                                4,600       4,205    
Total liabilities                                44,483      37,956   
                                                                             
Shareholders' equity
Common shares                                      6,019          5,992
Paid-in capital                                    47,016         46,716
Accumulated deficit                                (44,815  )     (40,489  )
Accumulated other comprehensive loss             (1,133   )   (792     )
Total shareholders' equity                       7,087       11,427   
Total                                           $ 51,570     $ 49,383   
                                                                             
                                                                             
NET DEBT* (NON-GAAP) (Unaudited)
(Millions)
                                                  12/31/12    12/31/11 
                                                                             
Total Debt                                       $ 24,341       $ 20,274
Less: Cash and cash equivalents                    (6,351   )     (5,447   )
Less: Short-term investments                     (1,849   )   (150     )
Net Debt*                                       $ 16,141     $ 14,677   
                                                                             

                                                               
SCHEDULE OF DEBT (Unaudited)
(Millions)
                                                                   12/31/12
ISSUER                                    COUPON   MATURITY     PRINCIPAL
Sprint Nextel Corporation
Export Development Canada Facility         5.393%    12/15/2015    $ 500
(Tranche 2)
6% Senior Notes due 2016                   6.000%    12/01/2016    2,000
9.125% Senior Notes due 2017               9.125%    03/01/2017    1,000
8.375% Senior Notes due 2017               8.375%    08/15/2017    1,300
9% Guaranteed Notes due 2018               9.000%    11/15/2018    3,000
1% Convertible Bond due 2019               1.000%    10/15/2019    3,100
7% Guaranteed Notes due 2020               7.000%    03/01/2020    1,000
7% Senior Notes due 2020                   7.000%    08/15/2020    1,500
11.5% Senior Notes due 2021                11.500%   11/15/2021    1,000
9.25% Debentures due 2022                  9.250%    04/15/2022    200
6% Senior Notes due 2022                  6.000%   11/15/2022   2,280
Sprint Nextel Corporation                                     16,880
                                                                             
Sprint Capital Corporation
6.9% Senior Notes due 2019                 6.900%    05/01/2019    1,729
6.875% Senior Notes due 2028               6.875%    11/15/2028    2,475
8.75% Senior Notes due 2032               8.750%   03/15/2032   2,000
Sprint Capital Corporation                                    6,204
                                                                             
iPCS Inc.
First Lien Senior Secured Floating Rate    2.438%    05/01/2013    300
Notes due 2013
Second Lien Senior Secured Floating Rate  3.563%   05/01/2014   181
Notes due 2014
iPCS Inc.                                                     481
                                                                             
EKN Secured Equipment Facility             2.030%    03/30/2017    296
                                                                             
Tower financing obligation                 9.500%    01/15/2030    698
Capital lease obligations and other               2014 - 2022  74
TOTAL PRINCIPAL                                               24,633
                                                                             
Beneficial conversion feature on                                   (247)
convertible bond
Net discounts                                                 (45)
TOTAL DEBT                                                    $ 24,341
                                                                             

NOTES TO THE FINANCIAL INFORMATION (Unaudited)

^(1) Capital expenditures is an accrual based amount that includes the changes
in unpaid capital expenditures and excludes capitalized interest. Cash paid
for capital expenditures includes total capitalized interest of $9 million,
$52 million and $278 million for the fourth and third quarters and
year-to-date periods of 2012, respectively, and $109 million and $413 million
for the fourth quarter and year-to-date periods of 2011, and can be found in
the Condensed Consolidated Cash Flow Information and the Reconciliation to
Free Cash Flow*.

^(2) Postpaid subscribers on the Sprint platform are defined as retail
postpaid subscribers on the CDMA network, including subscribers with
PowerSource devices, and those utilizing WiMax and LTE technology. Postpaid
subscribers on the Nextel platform are defined as retail postpaid subscribers
on the iDEN network.

^(3) Prepaid subscribers on the Sprint platform are defined as retail prepaid
subscribers and session-based tablet users who utilize CDMA and WiMax
technology via our multi-brand offerings. Prepaid subscribers on the Nextel
platform are defined as retail prepaid subscribers who utilize iDEN
technology.

^(4) Nextel Subscriber Recaptures are defined as the number of subscribers
that deactivated service from the postpaid or prepaid Nextel platform, as
applicable, during each period but remained with the Company as subscribers on
the postpaid or prepaid Sprint platform, respectively. Subscribers that
deactivate service from the Nextel platform and activate service on the Sprint
platform are included in the Sprint platform net additions for the applicable
period.

^(5) The Postpaid and Prepaid Nextel Recapture Rates are defined as the
portion of total subscribers that left the postpaid or prepaid Nextel
platform, as applicable, during the period and were retained on the postpaid
or prepaid Sprint platform, respectively.

^(6) The second quarter of 2012 includes a non-cash impairment of $204 million
to reflect a reduction of our investment in Clearwire to its estimated fair
value at June 30, 2012. The fourth quarter of 2011 includes a non-cash
impairment of $135 million to reflect a reduction of our investment in
Clearwire to its estimated fair value at December 31, 2011, and a dilution
loss of approximately $27 million associated with the fourth quarter reduction
of Sprint's economic interest from 53.5% to 51.5% as a result of Clearwire's
fourth quarter 2011 equity offering.

^(7) Results include pre-tax, non-cash "Equity in losses of unconsolidated
investments and other, net" of $140 million ($.05 per share), $112 million
($.04 per share) and $923 million ($.31 per share) in the fourth and third
quarters and year-to-date periods of 2012, respectively, and $472 million
($.16 per share) and $1.7 billion ($.58 per share) in the fourth quarter and
year-to-date periods of 2011.

^(8) For the fourth and third quarters and year-to-date periods of 2012, lease
exit costs are primarily associated with taking Nextel platform sites off air.
For the fourth quarter and year-to-date periods of 2011, severance and exit
costs are primarily related to work force reductions, lease termination
charges, and organizational realignment initiatives.

^(9) For the year-to-date period of 2012, gains from asset dispositions and
exchanges are primarily due to spectrum exchange transactions.

^(10) For the year-to-date period of 2012, asset impairments and abandonments
include $18 million related to a change in our backhaul architecture in
connection to our Network Vision design from microwave to a more cost
effective fiber backhaul. The remaining 2012 activity of $18 million, as well
as the year-to-date 2011 activity of $78 million, is primarily related to
network asset equipment in our Wireless segment, no longer necessary for
management's strategic plans.

^(11) On March 16, 2012, we elected to terminate the arrangement with
LightSquared LP and LightSquared, Inc. (LightSquared). As we have no future
service obligations with respect to the arrangement with LightSquared, we
recognized $236 million of the advanced payments as other operating income in
the first quarter of 2012. As a result of the termination of the hosting
agreement, we impaired capitalized costs specific to LightSquared's 1.6 GHz
spectrum that the company no longer intends to deploy which totaled $66
million.

^(12) Favorable developments during the first quarter of 2012 relating to
disagreements with local exchange carriers resulted in a reduction in expected
access costs of $17 million.

^(13) For the fourth quarter and year-to-date periods of 2012, included in
selling, general and administrative expenses are fees paid to unrelated
parties necessary for the proposed transactions with SoftBank and our
acquisition of Clearwire.

^(14) Hurricane Sandy charges for the fourth quarter and year-to-date periods
of 2012, represent estimated hurricane-related charges of $45 million,
consisting of customer credits, incremental roaming costs, network repairs and
replacements.

^(15) $135 million in reimbursements were received in the fourth quarter of
2011 from the mobile satellite service (MSS) entrants for their pro rata share
of our costs of clearing a portion of the 1.9 GHz spectrum related to spectrum
reconfiguration under the FCC's Report and Order.

Supplemental information:

The Company had $1.3 billion of borrowing capacity available under our
revolving bank credit facility as of December 31, 2012. Our revolving bank
credit facility expires in October 2013.

In May 2012, certain of our subsidiaries entered into a $1.0 billion secured
equipment credit facility to finance equipment-related purchases for Network
Vision. The facility is equally divided into two consecutive tranches of $500
million, with the drawdown availability contingent upon Sprint's acquisition
of equipment-related purchases from Ericsson, up to the maximum of each
tranche, ending on May 31, 2013 and May 31, 2014, for the first and second
tranche, respectively. Interest and principal are payable semi-annually with a
final maturity of March 2017 for both tranches.

*FINANCIAL MEASURES

Sprint Nextel provides financial measures determined in accordance with
accounting principles generally accepted in the United States (GAAP) and
adjusted 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
measurements should be considered in addition to, but not as a substitute for,
financial information 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:

OIBDA is operating income/(loss) before depreciation and amortization.
Adjusted OIBDA is OIBDA excluding severance, exit costs, and other 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 Wireline. 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 GAAP, these expenses primarily represent
non-cash current period costs associated with the use of long-lived tangible
and definite-lived intangible assets. 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 the cash provided by operating activities less the cash used
in investing activities other than short-term investments and equity method
investments during the period. 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, if any, 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, short-term investments and if any, restricted cash. 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 release includes “forward-looking statements” within the meaning of the
securities laws. The words “may,” “could,” “should,” “estimate,” “project,”
“forecast,” “intend,” “expect,” “anticipate,” “believe,” “target,” “plan,”
“providing guidance,” and similar expressions are intended to identify
information that is not historical in nature. All statements that address
operating performance, events or developments that we expect or anticipate
will occur in the future — including statements relating to network
performance, subscriber growth, and liquidity, and statements expressing
general views about future operating results — are 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, development and deployment of new technologies;
efficiencies and cost savings of multimode technologies; customer and network
usage; customer growth and retention; service, coverage and quality;
availability of devices; the timing of various events and the economic
environment. 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 when made. Sprint Nextel undertakes no obligation to publicly update or
revise any forward-looking statements, whether as a result of new information,
future events or otherwise, except as required by law. In addition,
forward-looking statements are subject to certain risks and uncertainties that
could cause actual results to differ materially from our company's historical
experience and our present expectations or projections. Factors that might
cause such differences include, but are not limited to, those discussed in the
company’s Annual Report on Form 10-K for the year ended December 31, 2011 and
Quarterly Reports on Form 10-Q for the quarter ended September 30, 2012, which
are filed with the U.S. Securities and Exchange Commission and are
incorporated herein by reference and when filed Part I, Item IA “Risk Factors”
of our Annual Report on Form 10-K for the year ended December 31, 2012. You
should understand that it is not possible to predict or identify all such
factors. Consequently, you should not consider any such list to be a complete
set of all potential risks or uncertainties.

Clearwire’s fourth quarter 2012 results from operations have not yet been
finalized. As a result, the amount reflected for Sprint’s share of Clearwire’s
results of operations for the quarter and year-to-date ended December 31,
2012, is an estimate and, based upon the finalization of Clearwire’s results,
may need to be revised if our estimate materially differs from Clearwire’s
actual results. Changes in our estimate, if any, would affect the carrying
value of our investment in Clearwire, net loss, basic and diluted net loss per
common share, and comprehensive loss but would have no effect on Sprint’s
operating income, OIBDA*, Adjusted OIBDA* or consolidated statement of cash
flows.

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 served more than 55 million
customers at the end of 2012 and is widely recognized for developing,
engineering and deploying innovative technologies, including the first
wireless 4G service from a national carrier in the United States; offering
industry-leading mobile data services, leading prepaid brands including Virgin
Mobile USA, Boost Mobile, and Assurance Wireless; instant national and
international push-to-talk capabilities; and a global Tier 1 Internet
backbone. The American Customer Satisfaction Index rated Sprint No. 1 among
all national carriers in customer satisfaction and most improved, across all
47 industries, during the last four years. Newsweek ranked Sprint No. 3 in
both its 2011 and 2012 Green Rankings, listing it as one of the nation’s
greenest companies, the highest of any telecommunications company. You can
learn more and visit Sprint at www.sprint.com or www.facebook.com/sprint and
www.twitter.com/sprint.

iPad and iPad mini are trademarks of Apple, Inc. LTE is a trademark of ETSI.
Other marks are the property of their respective owners.

Contact:

Sprint Nextel Corp.
Media Relations
Scott Sloat, 240-855-0164
scott.sloat@sprint.com
or
Investor Relations
Brad Hampton, 800-259-3755
investor.relations@sprint.com