Sprint - Nextel 2005 Annual Report Download - page 3

Sprint Nextel Annual Report | 2005
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We are proud to report that 2005 was an
outstanding year for Sprint Nextel. We
combined two innovative telecommunica-
tions leaders into one company—uniquely
positioned to help fulfill our customers’
increasing desire to do whatever they
want, whenever they choose, wherever
they are. In 2005, Sprint Nextel delivered
strong revenue and earnings, gained
millions of new wireless subscribers and
laid a foundation on which to build
long-term value for our customers,
employees and shareholders.
And that is exactly why we combined
Sprint and Nextel. With the two companies
together as one, our already strong
prospects for growth are even brighter.
Sprint Nextel enters the marketplace with
established leadership positions in the
markets for fast-growing wireless data and
walkie-talkie services, an enviable base of
key wireless assets that include excellent
spectrum holdings and a global Internet
backbone that provides enhanced wireline
services and supports our wireless services.
With the operational efficiencies that will
come from being one company and the
capital that will be saved by focusing on
just one next-generation high-speed
wireless network, Sprint Nextel has the
strength, scale and resources to compete
and win against our industry’s largest
players and newest entrants.
And we have the combined track record
of two companies that understand the
key to competitive success in this industry
is to offer customers a choice of truly
differentiated services. Sprint Nextel’s
customer-focused “Yes You CanSM”
philosophy captures the essence of our
mission. Driven by our customers’ needs,
we’re erasing the artificial wireline/wireless
barrier to create a new seamless experience
of personalized communications, infor-
mation and entertainment, converging
the speed of computers and the reach
of television into the mobile third screen
that keeps customers connected wherever
they need to be.
Our completion of the merger on
Aug. 12, 2005, was the culmination of a
quick and smooth regulatory review and
extensive integration planning process
that positioned our new company to enter
the marketplace with investment-grade
ratings, a new brand and an expanded
portfolio of products and services.
We hit the ground running, thanks to a
top managementteam and an impressive
team of associates representing the best
talent from both Sprint and Nextel.
We are proud thatour strategy, strong
management team and performance
were recognized by business publications
such as BusinessWeek and Forbes.
Strong 2005 Financial Results
We reported strong 2005 results, including
pro forma revenues—that is, revenues
adjusted to assume that the merger had
taken place at the beginning of the year—
of $44 billion, up 8 percent over 2004
revenues stated on a pro forma basis.
Pro forma diluted earnings per share for
2005 were 54 cents, up from a pro forma
2004 loss per share of 50 cents, and
included strong growth of wireless data
revenues. We also recorded strong growth
in adjusted operating income before depre-
ciation and amortization (OIBDA) and the
highest average revenue per subscriber
unit among major U.S. wireless carriers.
Our focus on customer service and
innovation helped support strong wireless
subscriber growth in 2005, ending with a
combined wireless subscriber base of 47.6
million, a 17 percent increase, compared to
the combined subscriber base of Sprint
and Nextel atthe beginning of the year.
We acquired three Sprint PCS affiliates in
2005, and two other Sprint PCS affiliates
in the first quarter of 2006. In 2005, the
price per share that we will pay to acquire
Nextel Partners was determined, and the
completion of this purchase, expected in
second quarter 2006, will increase our
direct subscriber base. At year-end, our
wireless networks reached areas where
Timothy M. Donahue, Executive Chairman
Gary D. Forsee, President and Chief Executive Officer
Dear Fellow Shareholders: