Sprint Nextel (S)

Earnings per Share

Basic earnings per common share is calculated by dividing earnings applicable to common stock by the weighted average number of common shares outstanding during the period. Diluted earnings per common share adjusts basic earnings per common share for the effects of potentially dilutive common shares. Potentially dilutive common shares primarily include the dilutive effects of shares issuable under Sprint Nextel’s equity plans computed using the treasury stock method, and the dilutive effects of shares issuable upon the conversion of Sprint Nextel’s convertible senior notes computed using the if-converted method.

Dilutive securities consisting of shares issuable under Sprint Nextel’s equity plans used in calculating earnings per common share were 24.6 million shares for the 2005 third quarter and 19.9 million for the 2005 year-to-date periods. All 10.3 million shares issuable upon the assumed conversion of Sprint Nextel’s convertible

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SPRINT NEXTEL CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(Unaudited)

senior notes could potentially dilute earnings per share in the future but were excluded from the calculation of diluted earnings per common share for the 2005 third quarter and year-to-date periods due to their antidilutive effects. Additionally, about 54.5 million average shares and 52.9 million average shares issuable under the equity plans that could also potentially dilute earnings per share in the future were excluded from the calculation of diluted earnings per common share for the 2005 third quarter and year-to-date periods as the exercise prices exceeded the average market price during these periods.

Dilutive securities used in calculating earnings per share for the 2004 third quarter and the 2004 year-to-date periods were antidilutive in calculating loss per share because Sprint Nextel incurred net losses. About 87.7 million and 89.4 million average shares issuable under the equity plans that could potentially dilute earnings per share in the future were excluded from the calculation of diluted earnings per common share for the 2004 third quarter and the 2004 year-to-date periods as the exercise prices exceeded the average market price during these periods.

Earnings per Share

Sprint’s dilutive securities consist of options, restricted stock units and Employee Stock Purchase Plan (ESPP). In 2004 and 2003, dilutive securities were antidilutive in calculating loss per share because Sprint incurred losses from continuing operations. Although not used in the determination of earnings per share for 2004 and 2003, Sprint’s dilutive securities totaled 12.3 million shares in 2004 and 3.0 million shares in 2003. Sprint’s dilutive securities totaled 3.8 million shares in 2002.

Certain options have been granted with exercise prices which are currently higher than market. These options are considered antidilutive and have not been included in the dilutive calculation. Sprint’s antidilutive securities totaled 88 million shares in 2004, 103 million shares in 2003, and 119 million shares in 2002.

Earnings per Share

Sprint’s dilutive securities consist of options, restricted stock units and Employee Stock Purchase Plan (ESPP). In 2004 and 2003, dilutive securities were antidilutive in calculating loss per share because Sprint incurred losses from continuing operations. Although not used in the determination of earnings per share for 2004 and 2003, Sprint’s dilutive securities totaled 12.3 million shares in 2004 and 3.0 million shares in 2003. Sprint’s dilutive securities totaled 3.8 million shares in 2002.

Certain options have been granted with exercise prices which are currently higher than market. These options are considered antidilutive and have not been included in the dilutive calculation. Sprint’s antidilutive securities totaled 88 million shares in 2004, 103 million shares in 2003, and 119 million shares in 2002.