SAN FRANCISCO -- Sprint PCS ( PCS) isn't afraid to give the intimate details of its debts and financial needs, but that doesn't mean the information is pretty.

At the Robertson Stephens conference Tuesday, Kurt Fawkes, vice president of investor relations for Sprint ( FON) and Sprint PCS, wasted no time. Before he talked about markets, revenue projections or strategies, he talked about the $3.4 billion Sprint will need to fund both sides of its business in 2002, with the bulk of it needed in the first half of the year that's currently ticking away.

Fawkes explained how the wireless unit will need $1.7 billion this year, after adding $3 billion in credits from EBITDA to $4.7 billion in debits from interest, taxes, dividends and capital expenditures. On the land-line side, he said that EBITDA of $4.6 billion would be exactly enough to pay off the costs of capital expenditures, taxes, dividends and interest.

On top of that, by his estimation, the corporation would need another $1.7 billion to foot refinancing bills. Final tab: $3.4 billion. In case there's some confusion, investors are supposed to feel good about that number, because Sprint feels it is currently able to borrow or raise that much money without overstepping the covenants on its other debt.

Fawkes acknowledged that investors are a little jittery about companies that need to access the debt market. But he also relayed that the company is constantly taking advantage of 2.5% rates in the commercial paper market, which he considers too attractive to pass up.

While Qwest ( Q) has been rumored to have difficulty tapping the debt market, Sprint PCS insists it's still out there racking up deals. Despite being on the S&P's negative watch list and sitting under downgrade review at Moody's, Fawkes stressed that the company would have to be taken down two notches to fall from investment-grade status.

That means he believes the company can hold off liquidity issues, though Sprint has contingency plans in place in case Wall Street's worst nightmares come true. The communications giant has a three-pronged strategy that includes using corporate assets to secure loans, selling off assets and issuing term notes.

There's "no black magic here," Fawkes says. "There's not one specific action that makes the plan; it's a combination of them."

Sprint is considering selling its 8.7% stake in Internet service provider EarthLink ( ELNK), Sprint's yellow-pages business, or both.

Meanwhile, Sprint PCS is cutting costs, closing five support call centers with the likely layoffs of 2,000 people and displacement of another 1,000. Fawkes argued that Sprint PCS can take its cash costs per user down $3 in 2002 by reducing roaming charges through its affiliate network.

Additionally, Sprint PCS will not necessarily incur substantially higher marketing costs with the rollout of data services, because Fawkes said the company is not slated to offer steep phone subsidies at the moment. As for the rest of the business, Fawkes cautioned investors to "stay tuned."

Included in the 2002 calculations for Sprint PCS are $300 million for NextWave investments and an $800 million capital spending outlay used to upgrade the carrier's CDMA network nearer to third-generation speeds with 1xRTT technology. Fawkes says almost all of that $800 million sum will pay for hardware, not installation.

Sprint PCS expects to roll out nationwide next-generation wireless data services midyear, en route to generating $3 billion in projected EBITDA. The executive believes Sprint PCS can prove "a lot of doubting Thomases" wrong by doubling 2001's $1.5 billion in EBITDA, according to the carriers' 2002 plan. That is, if anyone can take their eyes off Sprint's debt long enough to scrutinize its operating performance in the months to come.

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