JP Morgan 32 nd Annual Technology & Telecom Conference. Howard Janzen. President Sprint Business Solutions

Size: px

Start display at page:

Download "JP Morgan 32 nd Annual Technology & Telecom Conference. Howard Janzen. President Sprint Business Solutions"

Chad Stanley
5 years ago
Views:

1 JP Morgan 32 nd Annual Technology & Telecom Conference Howard Janzen President Sprint Business Solutions

2 Cautionary Statement Regarding Forward-Looking Information The information highlighted in this presentation includes selected financial information and should be read in conjunction with our consolidated financial statements and notes and the Cautionary Statements Regarding Forward-Looking Information included in our press release dated April 20, 2004, which is posted on Sprint s website at < as well as our consolidated financial statements and notes, the trends and risk factors affecting us and other information provided in our annual, quarterly and current reports, proxy statement, and other filings made with the Securities and Exchange Commission under Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of This presentation includes "forward-looking statements" within the meaning of securities laws. The statements in this presentation 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," "intend," "expect," "believe," "target" and similar expressions identify forward-looking statements, which are estimates and projections reflecting management's judgments 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. Forward-looking statements speak only as of the date indicated. Sprint is not obligated to publicly release any revisions to forward-looking statements to reflect events after the date of any news release or unforeseen events. With respect to these forward-looking statements, Sprint has made assumptions regarding, among other things, customer and network usage, customer growth and retention, pricing, costs to acquire customers and to provide services, the timing of various events and the economic environment. This presentation contains certain non-gaap financial measures as well as reconciliations to the most directly comparable GAAP financial measures. Definitions of these non-gaap financial measures are available in the April 20, 2004, First Quarter Investor Update located at 2

3 Differentiated Integrated Telecom Provider Ownership and expertise in local, LD and wireless Ideally structured to address customer needs and deliver distinctive services Expanding prospects through strategic alliances More than 26 million customers served by an employee base playing to win Culture of innovation 1Q04 results a great start to

4 Sprint Consolidated Financial Results 1Q04 1Q03 % Net Operating Revenues $6.7B $6.3B 6% Adjusted Operating Income $744M $614M 21% Adjusted EBITDA $2.0B $1.9B 7% Adjusted Earnings Per Share $0.17 $ % Growth in revenues and profits Strong free cash flow Solid customer gains Growth in wireless data 4

Customer Centric Structure Business Sprint Business Solutions Customer Centric Sprint Consumer Solutions Consumer Network and IT Corporate Staff Local Consumer Solutions

5 Customer Centric Structure Business Sprint Business Solutions Customer Centric Sprint Consumer Solutions Consumer Network and IT Corporate Staff Local Consumer Solutions Structure in-line with how customers buy Sales force energized, trained and focused Integrated organizations leverage expertise Shared services support entire product portfolio 5

6 Our New Financial Profile 1Q04 MBU Revenue Contribution* 1Q04 Adjusted EBITDA Contribution LCS 10% SBS 45% LTD 37% PCS 46% SCS 45% GMG 17% 1Q04 Product Revenue Contribution* LTD 22% PCS 50% 1Q04 Adjusted EBITDA Less Capex Contribution LTD 40% PCS 38% GMG 28% *1Q04 before inter-group eliminations GMG 22% 6

7 SBS Strategic Priorities Deepen Relationships with Customers to Grow Revenue and Profits Increase share of wallet within our existing base Broaden our customer base Focus on system integrator, cable and indirect channel opportunities International expansion Be the Leader in Wireless, Wireline Integrated Solutions Equip employees to successfully sell and deliver integrated solutions Create powerful and unique integrated solutions Be the Easiest to do Business With Make loyalty easy for customers Eliminate barriers that make it hard to do business with Sprint Link processes and systems to customer impact Shift culture to customer focus We Make Business Work 7

8 Deepen Relationships with Customers Grow share of wallet within the base Grow the base through acquisition Leverage single source advantage Capitalize on broader role for indirect channels, systems integrators & cable ventures 8

9 Lead in Wireless/Wireline Integrated Solutions Remote Access Solutions Business Continuity and Security Emerging Voice Services Complete Access (ILS) 9

10 Be the easiest to do business with Make loyalty easy for customers Shift culture to a customer focus Integrate sales into single point of contact Link processes and systems to customer impact 10

Business & Wholesale Markets Aggressive pricing continues industrywide Corporate investment lagging improving economy Product integration means differentiation

11 Business & Wholesale Markets Aggressive pricing continues industrywide Corporate investment lagging improving economy Product integration means differentiation Integrated sales force is delivering on multi-product sales objectives Significant business wins to date and more pending Alliances expected to provide future revenue support 11

12 Better Wireline Revenue Results 1Q04 GMG y-o-y revenue results outperform competitors Global Markets Revenue Mix GMG 6.5% decline AT&T 11.1% decline Retail business voice volumes increased both sequentially and y-o-y 100% 90% 80% 70% 60% 50% 40% 30% 20% Consumer voice is now less than 20% of total voice 10% 0% 1Q03 4Q03 1Q04 Consumer % Business & Wholesale % 12

13 Improving Business Wireless Results Wireless is an important differentiator from competitors Improved business gross adds 5% increase sequentially 28% increase y-o-y Business Vision results impressive 30% increase sequentially Over 300% increase y-o-y Business churn lower than reported churn 13

14 Sprint: Unrecognized Value Portfolio breadth and depth Premium data position Strong progress on growth and efficiency Consistent, strong Free Cash Flow Attractively priced 14

15 Questions & Answers 15

16 Reconciliation of non-gaap Liquidity Measures Year-to-date March 31, 2004 Global (millions) PCS FON Local Markets Consolidated Eliminations Group Group Division Division Other Operating income (loss) $ 714 $ 10 $ 257 $ 447 $ 446 $ 11 $ (10) Special items Adjusted Operating Income (Loss) (10) Depreciation and amortization 1, Adjusted EBITDA 1, ,062 $ 728 $ 343 $ (9) Adjust for special items (30) - (4) (26) Other operating activities, net (1) (913) (10) (268) (635) Cash provided by operating activities-gaap 1, Capital expenditures (689) - (412) (277) Dividends paid (116) - (4) (112) Investments in affilates, net (2) - (2) - Other investing activities, net Free Cash Flow Discontinued operation Decrease in debt, net (22) - (20) (2) Investments in debt securities Other financing activities, net Change in cash and equivalents - GAAP $ 304 $ - $ 213 $ 91 Year-to-date March 31, 2003 Global PCS FON Local Markets Consolidated Eliminations Group Group Division Division Other Operating income (loss) $ 604 $ 10 $ 140 $ 454 $ 462 $ 4 $ (12) Special items Adjusted Operating Income (Loss) (12) Depreciation and amortization 1, Adjusted EBITDA* 1, ,082 $ 727 $ 365 $ (10) Adjust for special items (10) - (10) - Other operating activities, net (1) (782) (10) (462) (310) Cash provided by operating activities-gaap 1, Capital expenditures (547) - (187) (360) Dividends paid (114) - (4) (110) Investments in affilates, net (12) - (12) - Other investing activities, net Free Cash Flow Discontinued operation 2, ,215 Increase/(decrease) in debt, net (1,555) - (21) (1,534) Other financing activities, net Change in cash and equivalents - GAAP $ 1,060 $ - $ 63 $ 997 (1) Other operating activities, net includes the change in working capital, change in deferred income taxes, miscellaneous operating activities and non-operating items in income (loss) from continuing operations. 16

Credit Suisse First Boston Media & Telecom Conference Bob Dellinger CFO

Credit Suisse First Boston Media & Telecom Conference Bob Dellinger CFO Cautionary statement regarding forward-looking information The information highlighted in this presentation includes selected financial