Filed by Sprint Corporation
Pursuant to Rule 425 under the Securities Act of 1933
and Deemed Filed under Rule 14a -12 of the
Exchange Act of 1934
Subject Company: Sprint Corporation
Commission File No. 001-04721
Creating
America’s Premier Communications Company
December 15, 2004
Safe Harbor
“Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995. A number of the matters discussed in this presentation that are not historical or current facts deal with potential future circumstances and developments, in particular, information regarding the new company, including expected synergies resulting from the merger of Sprint and Nextel, combined operating and financial data, future technology plans, and whether and when the transactions contemplated by the merger agreement will be consummated. The discussion of such matters is qualified by the inherent risks and uncertainties surrounding future expectations generally, and also may materially differ from actual future experience involving any one or more of such matters. Such risks and uncertainties include: the failure to realize capital and operating expense synergies; the result of the review of the proposed merger by various regulatory agencies, and any conditions imposed on the new company in connection with consummation of the merger; approval of the merger by the stockholders of Sprint and Nextel and satisfaction of various other conditions to the closing of the merger contemplated by the merger agreement; and the risks that are described from time to time in Sprint’s and Nextel’s respective reports filed with the SEC, including each companies annual report on Form 10-K for the year ended December 31, 2003 and quarterly report on Form 10-Q for the quarterly period ended September 30, 2004 as such reports may have been amended. This presentation speaks only as of its date, and Sprint and Nextel each disclaims any duty to update the information herein.
Additional Information and Where to Find It
In connection with the proposed transaction, a registration statement on Form S-4 will be filed with the SEC. SHAREHOLDERS OF SPRINT AND SHAREHOLDERS OF NEXTEL ARE ENCOURAGED TO READ THE REGISTRATION STATEMENT AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC, INCLUDING THE JOINT PROXY STATEMENT/ PROSPECTUS THAT WILL BE PART OF THE REGISTRATION STATEMENT, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE COMBINATION. The final joint proxy statement/prospectus will be mailed to shareholders of Sprint and shareholders of Nextel. Investors and security holders will be able to obtain the documents free of charge at the SEC’s web site, www.sec.gov, from Sprint Investor Relations at, 913-794 -1126, or from Nextel Investor Relations at, 703-433-4300.
Participants In Solicitation
Sprint, Nextel and their respective directors and executive officers and other members of management and employees may be deemed to be participants in the solicitation of proxies in respect of the combination. Information concerning Sprint’s participants is set forth in the proxy statement, dated, March 16, 2004, for Sprint’s 2004 annual meeting of shareholders as filed with the SEC on Schedule 14A. Information concerning Nextel’s participants is set forth in the proxy statement, dated April 2, 2004, for Nextel’s 2004 annual meeting of shareholders as filed with the SEC on Schedule 14A. Additional information regarding the interests of participants of Sprint and Nextel in the solicitation of proxies in respect of the combination will be included in the registration statement and joint proxy statement/prospectus to be filed with the SEC.
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Tim Donahue
President and CEO Nextel
Gary Forsee
Chairman and CEO
Sprint
Building Strength on Strength
Merger accelerates and expands growth prospects Assets and service capabilities align with industry growth Benefit from complementary operational strengths, compatible corporate cultures and strong management teams Realize substantial synergies and accelerate cash flow growth Capitalize on best practices and systems from each company Significant value in largest independent local telecommunications company
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Transaction Summary
Structure
$ 71 billion stock-for-stock merger of equals
Consideration
Sprint and Nextel equally valued
Sprint shares will be Sprint Nextel shares
Nextel shareholders receive value equivalent to 1.3 shares of Sprint Nextel
Required Approvals
Shareholders, FCC, DOJ, state PUC’s
Timeline
Expected closing second half 2005
After closing, tax-free spin off of LEC to Sprint Nextel shareholders
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Broad Scale and Scope
Sprint Nextel Sprint Nextel Sprint Local
Subscribers (M) 20.11 15.3 35.4 7.7 (lines)
LTM Revenue (B) $27 $13 $34 $6
LTM OIBDA (B) $8.1 $5.0 $10.2 $2.9
Last 12 Months Revenue Mix (LTM)
Local 22%
LD/Data 27%
Wireless 51%
WIreless 100%
LD/Data 22%
Wireless
78%
Local 100%
1 Includes 17.3mm direct customers and 2.8mm wholesale customers
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High Growth Profile
LTM Revenue Growth
15% 10% 5% 0% (5)% (10)%
13%
3%
1%
1%
(1)%
Sprint Nextel
ALLTEL Verizon BellSouth SBC
LTM OIBDA Growth
20% 15% 10% 5% 0% (5)% (10)% (15)%
16%
3%
(7)%
(5)%
(11)%
Sprint Nextel
ALLTEL Verizon BellSouth SBC
Note: Revenue and OIBDA numbers are for the 12 months ending 9/30/04 and exclude Sprint’s Local Exchange Carrier business. BellSouth numbers are pro forma for sale of Latin America business. BellSouth and SBC numbers assume proportionate consolidation of wireless assets. Cingular numbers are pro forma for AWE acquisition. Verizon numbers assume proportionate consolidation of wireless assets.
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Proven Management Team
President & Chief Executive Officer
Gary Forsee
Office of the Chairman
Chairman
Tim Donahue
Chief Operating Officer
Len Lauer
Chief Financial Officer
Paul Saleh
Local
Staff Functions
Chief Technology Officer
Barry West
Co-Chief Transition Officers
Steve Nielsen/Rick Orchard
Chief Strategy Officer
Tom Kelly
General Counsel
Regulatory & Public Affairs
Robust experience spanning all facets of communications 12 member board with equal representation Two lead independent directors Executive headquarters -Reston, VA
Operational headquarters -Overland Park, KS
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Armed For Success
High-value customer base
Unmatched product and service capabilities Clear vision for technology evolution $12 Billion NPV of achievable synergies Substantial financial strength Strong management team
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High-Value Products, Brands and Distribution Channels
Products & Services
High capacity CDMA High performance PTT -Direct Connect® Distinctive Handsets Sprint PCS Vision Full Range of Enhanced Wireless & Wireline Products
Target Markets & Brands
Enterprise & Government Small and Medium Business Consumer and Youth
Distribution Channels
Dedicated Direct Sales Force Alliance Partners National/local retailers and agents Resellers MVNOs Cable Operators Tele/Web sales 1,500 Company Stores
Serving The Full Range of Communications Users
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Unmatched Services
Industry-leading product and service portfolio Extensive network assets and expertise to deliver bundled and integrated services Enviable spectrum position Unprecedented opportunity for true IP-based broadband wireless services
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Technology Opportunities
Quality
Faster time to market for sites CapEx for capacity and features Leverage wireline reliability
Coverage
Improved from combined cell sites Expand 3G network Develop 800 MHz CDMA Nationwide LD and global IP network
Technology Leadership
Cost
Improved capacity costs for CDMA
Purchasing scale Facilities and interconnection
Innovative Products
Best voice / PTT service Best mobile data services Best data applications
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Network Technology Evolution
iDEN Invest in iDEN network until voice traffic can be supported on CDMA network Maintain iDEN for Push-to-Talk centric customers
Interoperability gateway and potential dual-mode handsets
CDMA Voice Rapid coverage enhancement through use of Nextel sites and spectrum
CDMA EVDO Broadband (3G) Complete Phase 1 EVDO deployment Complete 100% overlay of EVDO Rev. A and introduce Broadband services Launch PTT service on EVDO Rev. A
2005 2006 2007 2008
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Significant Synergies
Revenue & Subscribers
Improved customer retention Up-sell Long Distance Rate plan migration effect
Network Operations
Site opex savings Access and transport Resource efficiencies $12B Billion in NPV
Rev & Subs
Network Ops
SG&A
CapEx
SG&A
Unify back office Sales and distribution efficiency Achieve G&A scale
CapEx
Long term voice and data capacity savings Site co-location savings Systems and applications development
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Integration Costs
New corporate brands
Sprint Nextel
Sprint’s local operations
Back office integration
Facility and contract termination Employee retention Severance
Managed by Co-Chief Transition Officers
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Expected Synergies
($ in billions) 2006 2007 2008
OIBDA Synergies $0.6 – 0.7 $1.0 – 1.2 $1.1 – 1.3
CapEx Synergies $0.6 – 0.8 $(0.2) – (0.3) $0.7 – 0.9
Total Synergies $1.2 – 1.5 $0.8 – 0.9 $1.8 – 2.2
Integration Costs $(1.0) – (1.3) $(0.2) – (0.5) $0
$12B NPV in Synergies Net of Integration Costs
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Financial Strength and Flexibility
Combined entity to maintain investment grade characteristics
Cash and equivalents of $5.7 billion
Net debt to LTM OIBDA of 1.6X
Solid financial profile
Strong free cash flow generation Ample access to liquidity
Bank commitments of more than $20 billion
Note: Pro forma financials as of 9/30/04.
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Sprint’s Local Operations – An Industry Pacesetter
Nation’s largest independent local telephone company Industry-leading provider of bundled service offerings Territory concentrated in high growth geographies Financial leverage and dividend policy aligned with financial prospects
Access Lines millions of lines
9 6 3 0
7.7
3.0
2.3
2.3
Sprint ALLTEL CenturyTel Citizens
Source: Company filings and company press releases as of 9/30/04 millions of lines
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America’s Premier Communications Company
High-value customer base
Unmatched product and service capabilities Clear vision for technology evolution $12 Billion NPV of highly achievable synergies Substantial financial strength Strong management team
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Creating
America’s Premier Communications Company
December 15, 2004