Sprint - Nextel 2005 Annual Report Download - page 4

Sprint Nextel Annual Report | 2005 2
more than 275 million people live or work,
more than 90 percent of the U.S. population.
Our long distance business also remained
strong and by the year’s end served 826,000
customers who are buying wireline services
through cable network operators.
Importantly, we are confident that we
remain on track to meet our merger
synergy target of $14.5 billion, including
2006 goals of nearly $1 billion in operating
synergies, and $300 million to $500 million
in capital synergies. We’re aggressively
moving forward on a series of initiatives
to renegotiate vendor and service provider
contracts, streamline our sales force and
distribution channels and cross-sell more
products and services to existing customers.
Most capital synergy for 2006 is expected
to result from savings driven by our ability
to focus our investment on a single
next-generation platform.
We ended the year on solid financial
footing, with total assets of $103 billion,
and shareholders’ equity of $52 billion.
Cash and marketable securities totaled
$10.7 billion, while gross debt stood at
$25.7 billion. We also put a new credit
facility in place in the fourth quarter, which
included better economic terms and
increased our available credit by $2 billion.
Central to our strategy of focusing on
wireless and broadband opportunities,
Sprint Nextel has been preparing to
spin off our local telecommunications
operations into an independent company,
which will operate under a new brand–
EMBARQ.TM In 2005, the local telecommuni-
cations operations generated $6.5 billion
in net operating revenues, and at year’s
end provided service on 7.4 million access
lines. The separation is expected to occur
in mid-2006.
Culture and Core Values
A key component of our integration
planning effort was early attention
to establishing our company’s culture
and gaining the commitment of our
employees to our core values of integrity,
customer service, delivery of results,
teamwork, respect for each other and
leadership by example. In support of
these values, the Sprint Nextel Code of
Conduct sets forth our philosophy and
commitment to the ethical business
practices and culture benefiting our
employees, subscribers, stakeholders
and the communities in which we do
business. The principal foundations of
our values-based approach to integrity,
personal accountability and judgment are
reinforced through operational policies,
training and objective evaluation. And our
Corporate Governance and Ethics organi-
zation is functionally independent and
provides an enhanced level of visibility
into the organization for all of our
stakeholders.
Our merger also generated momentum
in the workplace and in the marketplace.
Our Sept. 1 brand launch included a
new logo and a sweeping overnight retail
makeover of 1,600 Sprint and Nextel
stores. And in the largest immersion
advertising campaign ever launched by
either company, America encountered
the new Sprint brand more than
10 billion times.
As new and different as we have become,
we will never change our traditional
commitment to supporting the commu-
nities in which we work and live. That’s
why within two weeks of our merger, our
company and employees immediately
rallied to aid those impacted by
Hurricanes Katrina, Rita and Wilma.
Donations from the Sprint Foundation
and employees, together with in-kind
giving, exceeded $10 million.
And, most importantly, we will always
remain driven by and responsive to the
needs of our consumer, business and
government customers. In that regard,
2005 provided just a glimpse of what lies
in store, as we begin delivering on our
vision of the new and simpler wireless
experience, enabling us to improve their
lives at home, at work and on the go.
Left to Right: William G. Arendt, Senior Vice President and Controller; Kathryn A. Walker, Chief Network Officer; Barry J. West, Chief Technology Officer; Len J. Lauer,
Chief Operating Officer; Paul N. Saleh, Chief Financial Officer; Daniel R. Hesse, Chief Executive Officer, Local Telecommunications Division; Richard T.C. LeFave, Chief
Information Officer; Mark A. Schweitzer, Chief Marketing Officer; Richard S. Lindahl, Vice President and Treasurer