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Sprint Updates 2004 Financial Guidance and Provides Preliminary Forecast for 2005

Posted on: Monday, 20 December 2004, 09:00 CST

OVERLAND PARK, Kan., Dec. 20 /PRNewswire-FirstCall/ -- Sprint today announced updated 2004 financial guidance and provided a preliminary financial forecast for 2005. Sprint has scheduled its fourth-quarter earnings release for Feb. 3, 2005, and expects to provide a detailed discussion of its expectations for 2005 financial performance at an investment community meeting scheduled for Feb. 10, 2005.

(Logo: http://www.newscom.com/cgi-bin/prnh/20001013/SPRINTLOGO )

Sprint expects full-year 2004 financial performance to be in line with prior guidance.

In the fourth quarter, Sprint's wireless business is continuing to experience high levels of voice and data customer usage and solid customer growth. Moreover, Sprint's local business is continuing to see strong demand for broadband services and bundled offerings. In the business market, Sprint continues to see good momentum with wireless and long-distance bundled sales.

Sprint is also providing a preliminary financial outlook for 2005. Sprint expects full-year consolidated 2005 revenues to grow at a low single-digit percentage rate, reflecting strong growth in wireless, steady performance in local and continuing top-line pressures in long distance. Sprint expects full- year Adjusted EBITDA* to be in a range of $8.5 billion to $8.7 billion with annual growth being driven by wireless. Sprint expects full-year overall capital spending to be $4.0 billion to $4.2 billion. Roughly two-thirds of the capital investment will be directed at wireless. This guidance does not consider any impacts of the announced merger with Nextel and proposed spin-off of the local business. The merger is currently expected to close in the second half of 2005.

*Financial Measures

Sprint provides readers 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. Because Sprint 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 does not provide reconciliations to GAAP of its forward-looking financial measures. The financial measures used in this release include the following:

Adjusted EBITDA is defined as operating income plus depreciation and 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 cash flows.

Adjusted earnings per share is defined as diluted earnings per share from continuing operations plus 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.

Adjusted Operating Income is defined as operating income plus 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.

Free Cash Flow is defined as the change in cash and equivalents less the change in discontinued operations, debt, investment in debt securities, proceeds from common stock and other financing activities, net. 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.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION:

This news release includes "forward-looking statements" within the meaning of the securities laws. The statements in this news release regarding the business outlook and expected performance, 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 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 ensured. Actual results may differ materially from those in the forward-looking statements. Some factors that could cause actual results to differ include:

-- Any impact of the announcement of the proposed merger with Nextel or

spin-off of Local;

-- the effects of vigorous competition and the overall demand for Sprint's

service offerings in the markets in which Sprint operates;

-- the costs and business risks associated with providing new services and

entering new markets;

-- adverse change in the ratings afforded our debt securities by ratings

agencies;

-- the ability of Wireless to continue to grow and improve profitability;

-- the ability of Local and Long Distance to maintain cash flow

generation;

-- the effects of mergers and consolidations in the telecommunications

industry and unexpected announcements or developments from others in

the telecommunications industry;

-- the uncertainties related to bankruptcies affecting the

telecommunications industry;

-- the impact of financial difficulties of third-party affiliates on

Wireless network coverage;

-- the uncertainties related to Sprint's investments in networks, systems

and other businesses;

-- the uncertainties related to the implementation of Sprint's business

strategies, including our initiative to realign services to enhance the

focus on business and consumer customers;

-- the impact of new, emerging and competing technologies on Sprint's

business;

-- unexpected results of litigation filed against Sprint;

-- the risk of equipment failure, natural disasters, terrorist acts, or

other breaches of network or information technology security;

-- the possibility of one or more of the markets in which Sprint competes

being impacted by changes in political or other factors such as

monetary policy, legal and regulatory changes or other external

factors over which Sprint has no control; and

-- other risks referenced from time to time in Sprint's filings with the

Securities and Exchange Commission (SEC).

Sprint 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 is not obligated to publicly release any revisions to forward-looking statements to reflect events after the date of this release or unforeseen events. Unless specifically discussed in this release, no forward-looking statements made by Sprint before the date of this release should be deemed to be reiterated, confirmed or updated by any statement in this release. Sprint provides a detailed discussion of risk factors in various SEC filings, including its 2003 Form 10-K/A, and you are encouraged to review these filings.

About Sprint

Sprint is a global integrated communications provider serving more than 26 million customers in over 100 countries. With more than $26 billion in annual revenues in 2003, Sprint is widely recognized for developing, engineering and deploying state-of-the-art network technologies, including the United States' first nationwide all-digital, fiber-optic network and an award-winning Tier 1 Internet backbone. Sprint provides local communications services in 39 states and the District of Columbia and operates the largest 100-percent digital, nationwide PCS wireless network in the United States. For more information, visit http://www.sprint.com/.

Photo: NewsCom: http://www.newscom.com/cgi-bin/prnh/20001013/SPRINTLOGOAP Archive: http://photoarchive.ap.org/PRN Photo Desk, photodesk@prnewswire.com

Sprint

CONTACT: Media, Scott Stoffel, +1-913-794-3603,scott.e.stoffel@mail.sprint.com, or Investor Relations, Kurt Fawkes,+1-913-794-1126, Investorrelation.sprintcom@mail.sprint.com, both of Sprint

Web site: http://www.sprint.com/

Source: PRNewswire-FirstCall

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