1. NEXTEL COMMUNICATIONS INC.
Louise Philbrick
David Guerra
Keith Grant

2. Overview Current Condition Possible Strategies
Vision and Mission Recommendations
External Factors Evaluation
CPM
EFE
Internal Factors
IFE
Analysis
Key Ratios
SWOT Matrix
Space Matrix
BCG
IE Matrix
GSM
QSPM

3. Nextel Overview
Nextel Communications Inc. is a provider of communications services with three operating segments:
Digital Cellular
Customers receive crystal clear calls and guaranteed message delivery in a secure environment, within the Nextel National Network.
Walkie-Talkie Services
Direct Connect®, Nationwide Direct Connect™, and International Direct Connect™ services allow communication without having to dial a number.

4. Nextel Overview Continued
Wireless Data Services
Customers can access the wireless web, , instant messages, text messages, and multimedia messages. They can also customize their phones with Java™ applications, wallpapers, ring tones, and alerts with sports, news, and weather information.

5. Nextel History Founded as Fleet Call in April of 1987
Fleet Call was founded as a two-way radio service.
Fleet Call issued their IPO in 1992
Nextel first recorded profit in 2002

6. Stock Price Performance
Graphic source: cbs.marketwatch.com

7. Nextel Today 8.2% Market share 14.1% of new wireless subscribers
Nextel Direct Connect®
Nextel trades on the NASDAQ National Market under the symbol NXTL

8. Key Facts 95 % of Fortune 500 companies are Nextel customers
Currently in 297of the top 300 US markets
Nextel is tied with Verizon for the lowest customer churn rate.
36% sales growth over the past 5 years
In 2003 Nextel won the naming rights to NASCAR racing series

9. Goals and Objectives
Provide individualized packages of wireless services
combine multiple wireless communication options in single wireless telephones
Target Business Customers
focus on business customers will emanate a higher monthly average revenue per unit and lower average monthly service cancellations or terminations

10. Goals and Objectives Concluded
Rapid deployment of robust networks
create vigorous wireless systems that cover all key areas of a given market before introduction of network in that market.
Operate in Mid-sized and smaller markets
this strategy would allow Nextel to impulsively increase penetration within our targeted segment

11. Vision Statement
Enhancing the diversity of Nextel’s workforce and promoting an inclusive work environment to better serve our diverse employees, customers, suppliers, and business partners.
Graphic obtained from: Nextel.com
Source: Nextel. COM

12. Nextel Mission statement
We will achieve our vision statement by incorporating inclusion into all that we do.
Recruiting and retaining a talented, diverse employee base
Recognizing and appreciating all employee’s perspective and talents
Fostering an environment that enables all employees to reach their highest potential
Building diversity awareness throughout the organization
Promoting supplier diversity
Source: Nextel. COM

13. Nationwide Direct Connect® Coverage
Graphic obtained from: Nextel.com

14. External Audit

15. EFE Matrix

16. Competitive Profile Matrix

17. Internal Audit

18. IFE Matrix

19. Key Ratios Growth Rates Nextel Industry Sector S&P 500
Sales (MRQ) vs. Qtr 1yr ago
28.96
2.36
14.39
13.40
Sales (TTM) vs. TTM 1yr ago
24.07
3.55
15.92
11.90
Sales- 5yr growth rate
36.36
12.49
17.25
9.30
EPS (MRQ) vs. Qtr 1yr ago
-59.68
-17.21
15.43
28.69
EPS (TTM) vs. TTM 1yr ago
-9.51
-4.84
16.37
21.92
EPS- 5yr growth rate NM
-1.81
15.23
12.15
Capital spending- 5yr growth rate
-4.35
-2.37
2.61
4.06

20. Nextel Industry Sector S&P 500
Valuation Ratios
P/E Ratio (TTM)
18.27
27.90
28.90
24.01
P/E 5 yr high
N/A
36.84
48.47
45.41
P/E 5 yr low
10.16
16.09
16.26
Beta
2.14
1.28
.96
1.00
Price to sales (TTM)
2.47
1.93
2.80
3.33
Price to Book (MRQ)
4.63
2.59
3.89
4.29
Price to tangible book (MRQ)
4.36
6.60
7.56
Price to cash flow (TTM)
8.43
6.92
17.03
17.32
Price to free cash flow (TTM)
21.18
16.18
33.11
28.97
% Owned institutions
76.07
38.23
50.48
64.19

21. Dividends
Nextel
Industry
Sector
S&P 500
Dividend Yield
N/A
4.20
2.14
2.04
Dividend yield 5yr Average
0.00
2.34
1.43
1.48
Dividend 5yr Growth rate NM
-0.87
-0.89
6.48
Pay out ratio (TTM)
33.73
15.54
26.78
Financial Strengths
Quick ratio (MRQ)
1.15
1.01
0.93
1.26
Current ratio (MRQ)
1.31
1.22
1.47
1.76
LT Debt to equity (MRQ)
1.64
0.84
0.74
0.68
Total debt to equity (MRQ)
1.72
0.95
0.82
0.85
Interest coverage (TTM)
2.70
3.18
7.84
11.86

22. Nextel Industry Sector S&P 500
Profitability Ratios %
Nextel
Industry
Sector
S&P 500
Gross Margin (TTM)
70.88
60.97
42.84
47.32
Gross Margin-% Yr Average
65.00
54.17
42.06
47.01
EBITD Margin (TTM)
36.70
31.75
22.32
20.79
EBTID 5 Yr Average
22.30
30.70
21.97
20.82
Operating Margin (TTM)
21.04
12.99
12.90
20.33
Operating Margin- 5Yr Average
1.24
13.72
11.21
18.35
Pre-tax Margin (TTM)
15.25
10.68
10.37
17.27
Pre-tax Margin 5yr Average
-9.88
10.57
11.77
17.54
Net Profit Margin (TTM)
14.21
7.03
7.54
13.12
Net Profit Margin 5 Yr Average
-10.37
5.18
7.62
11.59
Effective tax Rate (TTM)
6.85
29.08
32.18
31.31
Effective Tax Rate 5Yr Average
14.43
35.99
36.04
34.20

23. Nextel Industry Sector S&P 500
Management Effectiveness %
Nextel
Industry
Sector
S&P 500
Return on assets (TTM)
7.24
3.21
5.91
6.40
Return on assets 5yr Average
-2.10
2.87
5.49
6.79
ROI (TTM)
8.44
3.84
7.98
9.97
ROI 5Yr Avg
-2.46
3.70
7.59
10.93
ROE (TTM)
36.82
13.28
13.51
18.71
ROE 5Yr Avg
-4.79
9.79
13.18
19.22
Efficiency
Revenue/Employee (TTM)
636,471
405,314
479,338
622,866
NI/Employee (TTM)
90,412
102,467
90,606
81,707
Receivable Turnover (TTM)
9.45
7.39
17.23
9.76
Inventory Turnover (TTM)
14.39
21.63
17.53
10.46
Asset Turnover (TTM)
0.51
0.47
1.17
0.29

25. Space Matrix
Y axis: Financial Strength worst to +6 best Y axis: 1.2
Environmental Stability best to -6 worst X axis: 2
X axis: Industry Strength worst to +6 best
Competitive Advantage best to -6 worst

26. BCG Stars Question Marks Cash Cows Dogs High Medium Low 1.0 0.5 0.0
High
Stars
Question Marks
18% New Subscribers
10% Wireless
Cash Cows
Dogs
Medium 0
Low

27. IE Matrix

28. Grand Strategy Matrix Market Development Market Penetration
Product Development
Forward Integration
Backward Integration
Horizontal Integration
Concentric Diversification

29. QSPM

30. QSPM

31. Possible Strategies Expand coverage in underdeveloped rural areas
Expand and strengthen international markets i.e. Latin America
Penetrate the foreign market
Use advertising leverage with NASCAR to diversify markets
Focus on retaining current customers while attracting new customers

32. Decisions Primary Possibilities
Concentrate on gaining more market share in the U.S. by achieving a merger with another wireless provider such as Sprint.
Possibilities
Progress into Foreign Market
Expand Target Market

33. Implementation Aims Increase income by 55% within the next 3 years
Increase revenue by 25% within the next 3 years
Decrease long-term debt by 30% within the next 3 years
Match industry averages within the next 3 years
Increase research and development in order to maintain competitive advantage

34. 2004 Financial Statistics Operating Revenues $3,000.0 million
Net Income $3,000.0 million
EPS $2.62
Capital Expenditures $(2513.0) million
Total Debt $13,336.0 million
Cash Flow from Operating Activities
$4,288.0 million
Weighted Average Shares Outstanding
$1,124.0 million

35. Press Releases November 12, 2004 Nextel Gets Perfect Score
Nextel Awarded With The Best Sports Business Integration
December 7, 2004
Boost Mobile Passes One Million Customer Mark
December 15, 2004
Sprint and Nextel to Combine in Merger of Equals