Delivered the fourth consecutive quarter of positive net postpaid subscriber growth for the Sprint brand; second best postpaid churn result ever

Achieved eleventh consecutive quarter of improvement in Customer Care Satisfaction and First Call Resolution

Grew quarterly total net operating revenues sequentially and year-over-year

Maintained strong liquidity with cash and cash equivalents balance of $4.7 billion; year-to-date Free Cash Flow* of $1.6 billion

Net operating revenues

Adjusted OIBDA*

Adjusted OIBDA margin*

Net loss ^(a)

Diluted loss per common share ^(a)

Capital Expenditures ⁽¹⁾

Free Cash Flow*

Consolidated net operating revenues of $8.2 billion for the quarter were approximately 1 percent higher than in the third quarter of 2009 and almost 2 percent higher than in the second quarter of 2010. The year-over-year improvement was primarily due to increases from fourth quarter 2009 acquisitions, equipment revenues, and prepaid Boost service revenues partially offset by lower postpaid wireless service revenues and wireline revenues. The sequential improvement was primarily due to higher wireless equipment revenues.

Adjusted OIBDA* was $1.3 billion for the quarter, compared to $1.5 billion for the third quarter of 2009 and $1.5 billion for the second quarter of 2010. The year-over-year decline in Adjusted OIBDA* was primarily due to higher subsidy costs due to increased volume of handset sales and sales expenses resulting from improvement in retail subscriber gross additions. Sequentially, Adjusted OIBDA* declined primarily due to higher subsidy and selling costs resulting from continued improvement in retail subscriber gross additions, as well as seasonally higher cost of service.

Capital expenditures were $462 million in the quarter, compared to $431 million in the third quarter of 2009 and $437 million in the second quarter of 2010. Wireless capital expenditures were $341 million in the third quarter of 2010, compared to $310 million in the third quarter of 2009 and $319 million in the second quarter of 2010. During the quarter, the company invested in coverage and data capacity to maintain a competitive position in mobile broadband and overall network quality. Wireline capital expenditures were $59 million in the third quarter of 2010, compared to $72 million in the third quarter of 2009 and $49 million in the second quarter of 2010.

Free Cash Flow* was $384 million for the quarter, compared to $664 million for the third quarter of 2009 and $709 million for the second quarter of 2010. Year-over-year Free Cash Flow* decreased primarily due to a reduction in net cash provided by operating activities, increased capital expenditures, and proceeds from the exchange of spectrum in the third quarter 2009. The sequential decline was primarily due to a reduction in net cash provided by operating activities and increased capital expenditures as compared to the second quarter 2010.

Net operating revenues

Adjusted OIBDA*

Adjusted OIBDA margin*

Capital Expenditures ⁽¹⁾

The company served 48.8 million customers at the end of the third quarter of 2010. This includes 33.1 million postpaid subscribers (26.6 million via the Sprint brand on CDMA, 6.1 million on iDEN, and 440,000 PowerSource users who utilize both networks), 11.6 million prepaid subscribers (7.1 million on CDMA and 4.5 million on iDEN) and approximately 4.1 million wholesale and affiliate subscribers, all of whom utilize our CDMA network.

For the quarter, Sprint added a total of 644,000 net wireless customers including net additions of approximately 364,000 retail subscribers and net additions of 280,000 wholesale and affiliate subscribers.

Net postpaid subscriber losses of 107,000 during the quarter improved 87 percent year-over-year and 53 percent sequentially. The company reduced net subscriber losses by 694,000 compared to third quarter of 2009 and 121,000 compared to second quarter of 2010.

The CDMA network added approximately 276,000 postpaid customers during the quarter, which includes net losses of 78,000 Nextel PowerSource customers. Excluding Nextel PowerSource customer losses, the Sprint brand gained 354,000 total postpaid wireless subscribers. The iDEN network lost more than 383,000 customers during the quarter.

The company gained a net 471,000 prepaid subscribers during the quarter, which includes net additions of almost 1.2 million prepaid CDMA customers, offset by net losses of 700,000 prepaid iDEN customers.

The credit quality of Sprint’s end-of-period postpaid customers remained strong year-over-year and sequentially at 84 percent prime.

Postpaid churn in the quarter was 1.93 percent, compared to 2.17 percent in the year-ago period and 1.85 percent in the second quarter of 2010. The company continues to differentiate itself by offering customers value and simplicity. As a result, the year-over-year improvement in postpaid churn is primarily due to a better customer experience resulting in a higher level of customer satisfaction at every touch point. Sequentially, postpaid churn was impacted by historical third quarter seasonality.

Almost 10 percent of postpaid customers upgraded their handsets during the third quarter, reflecting strong demand for Sprint’s 4G handsets and continued strength in contract renewals.

Prepaid churn in the third quarter of 2010 was 5.32 percent, compared to 6.65 percent in the year-ago period and 5.61 percent in the second quarter of 2010. The year-over-year improvement in prepaid churn is primarily due to the inclusion of Virgin Mobile and Assurance Wireless^SM customers who have lower churn on average than that of Boost Mobile customers. Sequentially, prepaid churn improved as a result of the continued growth of Boost Monthly Unlimited subscribers on the CDMA network and Assurance Wireless^SM customers, as well as the success in the re-launch of the Virgin Mobile brand with new offers and marketing campaigns.

Retail wireless service revenues of $6.4 billion for the quarter increased by almost 2 percent compared to the third quarter of 2009 and decreased by less than 1 percent compared to the second quarter of 2010. The year-over-year improvement is primarily due to an increased number of prepaid subscribers as a result of the success of the Boost Monthly Unlimited offering, the fourth quarter 2009 acquisition of Virgin Mobile and subsequent brand launches associated with the company’s prepaid multi-brand strategy, partially offset by net losses of postpaid subscribers since the third quarter 2009. Sequentially, retail wireless service revenues declined as a result of fewer postpaid subscribers.

Wireless postpaid ARPU of approximately $55 for the quarter declined year-over-year from $56, but remained flat sequentially. The year-over-year decline is due to lower overage, casual data and text revenues, offset by higher monthly recurring revenue as a result of the greater popularity of fixed-rate bundle plans.

Prepaid ARPU in the quarter was approximately $28, compared to $35 in the year-ago period and $28 in the second quarter of 2010. The year-over-year decline is due to the inclusion of Virgin Mobile and Assurance Wireless customers who have lower ARPU than that of Boost Mobile customers.

Wholesale, affiliate and other revenues were down $86 million, compared to the year-ago period, and increased slightly sequentially. Service revenues in wholesale, affiliate and other revenues declined year-over-year as revenues from Virgin Mobile and iPCS, Inc. are now included in wireless retail revenues following the acquisitions in the fourth quarter of 2009. The year-over-year decline is also due to the loss of two large wholesale customers throughout 2009 and was completed in the fourth quarter of 2009.

Total wireless operating expenses were $7.5 billion in the third quarter, compared to $7.4 billion in the year-ago period and $7.3 billion in the second quarter of 2010.

Wireless equipment subsidy in the third quarter was almost $1.1 billion (equipment revenue of $740 million, less cost of products of $1.81 billion), compared to approximately $950 million in the year-ago period and approximately $1.0 billion in the second quarter of 2010. The year-over-year increase in subsidy is a combination of improvement in postpaid gross additions, an increase in postpaid handsets sold with a greater mix of smartphones, which on average carry a higher subsidy rate per handset, and an increase in the number of prepaid handsets sold primarily as a result of the acquisition of Virgin Mobile and subsequent brand launches associated with the company’s prepaid multi-brand strategy. Sequentially, subsidy increased as retail subscriber gross additions continue to improve.

Wireless SG&A expenses increased approximately 3 percent year-over-year and increased approximately 1 percent sequentially. Year-over-year SG&A expenses increased primarily due to increased gross additions, a reduction of other variable costs reflected in third quarter 2009, and the increased customer base resulting from the acquisition of Virgin Mobile. Sequentially, SG&A increased as a result of increased prepaid marketing spend and increased sales expenses as a result of higher gross additions.

Adjusted OIBDA* of $1.1 billion in the third quarter of 2010 compares to $1.2 billion in the third quarter of 2009 and $1.2 billion in the second quarter of 2010. The year-over-year decline in Adjusted OIBDA* was primarily due to lower postpaid service revenues and higher subsidy costs, partially offset by higher prepaid service revenues. Sequentially, Adjusted OIBDA* declined primarily as a result of higher subsidy costs and seasonally higher cost of service.

Net operating revenues

Adjusted OIBDA*

Adjusted OIBDA margin*

Capital Expenditures ⁽¹⁾

Wireline revenues of $1.2 billion for the quarter declined almost 12 percent year-over-year as a result of reduced voice volume and rate and reduced rates for both data and IP services. Sequentially, wireline revenues were 2 percent lower primarily due to reductions in voice volume and rate and adjustments associated with carrier disputes, partially offset by an increase in equipment sales.

Total operating expenses were $1.1 billion in the third quarter of 2010. Total operating expenses declined 8 percent year-over-year due to declines in costs of service as IP becomes a larger percent of the Wireline base, and improvement in SG&A expenses. Sequentially, operating expenses increased approximately 6 percent as a result of a reduction in access costs recognized in the second quarter of 2010.

Wireline Adjusted OIBDA* was $271 million for the quarter, compared to $324 million in the third quarter of 2009 and $273 million reported for the second quarter of 2010. Wireline Adjusted OIBDA* decreased year-over-year as a result of revenue declines partially offset by a reduction in cost of service.

our ability to attract and retain subscribers;

the effects of vigorous competition on a highly penetrated market, including the impact of competition on the price we are able to charge subscribers for services and equipment we provide and our ability to attract new subscribers and retain existing subscribers; the overall demand for our service offerings, including the impact of decisions of new subscribers between our postpaid and prepaid services offerings and between our two network platforms; and the impact of new, emerging and competing technologies on our business;

the effect of limiting or reducing capital and operating expenditures on our ability to improve and enhance our networks and service offerings, implement our business strategies and provide competitive new technologies;

our ability to obtain additional financing on terms acceptable to us, or at all;

volatility in the trading price of our common stock, current economic conditions and our ability to access capital;

the impact of unrelated parties not meeting our business requirements, including a significant adverse change in the ability or willingness of such parties to provide handset devices or infrastructure equipment for our CDMA network, or Motorola, Inc.’s ability or willingness to provide related handset devices, infrastructure equipment and software applications, or to develop new technologies and devices or features, for our iDEN network;

the costs and business risks associated with providing new technologies and services and entering new geographic markets;

the financial performance of Clearwire and its deployment of a 4G network;

the impact of difficulties we may encounter in connection with the integration of the business and assets of Virgin Mobile USA, Inc., including the risk that these difficulties may limit our ability to fully integrate the operations of this business;

the effects of mergers and consolidations and new entrants in the communications industry and unexpected announcements or developments from others in the communications industry;

unexpected results of litigation filed against us or our suppliers or vendors;

the impact of adverse network performance;

the costs and/or potential customer impacts of compliance with regulatory mandates;

equipment failure, natural disasters, terrorist acts, or other breaches of network or information technology security;

one or more of the markets in which we compete being impacted by changes in political, economic or other factors such as monetary policy, legal and regulatory changes or other external sociological factors over which we have no control; and

other risks referenced from time to time in this report and other filings of ours with the Securities and Exchange Commission, including in Part I, Item IA “Risk Factors” of our annual report on Form 10-K for the year ended December 31, 2009 and, when filed, in Part II, Item 1A “Risk Factors” of our quarterly report on Form 10-Q for the period ended September 30, 2010.

Net Operating Revenues

Net Operating Expenses

Cost of services

Cost of products

Selling, general and administrative

Depreciation

Amortization

Other, net

Total net operating expenses

Operating Loss

Interest expense, net

Equity in losses of unconsolidated investments and other, net ⁽²⁾

Loss before Income Taxes

Income tax (expense) benefit ⁽³⁾

Net Loss

Basic and Diluted Loss Per Common Share

Weighted Average Common Shares outstanding

Effective Tax Rate ⁽³⁾

Net Loss

Income tax (expense) benefit ⁽³⁾

Loss before Income Taxes

Depreciation

Amortization

Interest expense, net

Equity in losses of unconsolidated investments and other, net ⁽²⁾

OIBDA*

Severance and exit costs ⁽⁴⁾

Gains from asset dispositions and exchanges ⁽⁵⁾

Access costs ⁽⁶⁾

Adjusted OIBDA*

Capital expenditures ⁽¹⁾

Adjusted OIBDA* less Capex

Adjusted OIBDA Margin*

Selected items (net of taxes, if applicable) ⁽⁷⁾:

Deferred tax asset valuation allowance ⁽³⁾

Severance and exit costs ⁽⁴⁾

Gains from asset dispositions and exchanges ⁽⁵⁾

Access costs ⁽⁶⁾

Asset impairments and abandonments

Amortization

Equity in losses of unconsolidated investments and other, net ⁽²⁾

Net Operating Revenues

Retail service revenue

Wholesale, affiliate and other service revenue

Equipment revenue

Total net operating revenues

Net Operating Expenses

Cost of services

Cost of products

Selling, general and administrative

Depreciation

Amortization

Other, net

Total net operating expenses

Operating Loss

NON-GAAP RECONCILIATION

Operating Loss

Severance and exit costs ⁽⁴⁾

Gains from asset dispositions and exchanges ⁽⁵⁾

Depreciation

Amortization

Adjusted OIBDA*

Capital expenditures ⁽¹⁾

Adjusted OIBDA* less Capex

Adjusted OIBDA Margin*

OPERATING STATISTICS

Retail Postpaid Subscribers

Service revenue (in millions)

ARPU

Churn

Net losses (in thousands)

End of period subscribers (in thousands)

Hours per subscriber

Retail Prepaid Subscribers

Service revenue (in millions)

ARPU

Churn

Net additions (in thousands)

End of period subscribers (in thousands) ^(a)

Hours per subscriber

Wholesale and Affiliate Subscribers

Net additions (losses) (in thousands)

End of period subscribers (in thousands) ^(a)

Total Subscribers

Net additions (losses) (in thousands)

End of period subscribers (in thousands)

End of period subscribers reflect the sale and transfer of 49,000 subscribers which are not included in net additions, in the third quarter 2010, from Retail Prepaid to Wholesale and Affiliate prospectively from the date of sale.

Net Operating Revenues

Voice

Data

Internet

Other

Total net operating revenues

Net Operating Expenses

Costs of services and products

Selling, general and administrative

Depreciation

Other, net

Total net operating expenses

Operating Income

NON-GAAP RECONCILIATION

Operating Income

Severance and exit costs ⁽⁴⁾

Access costs ⁽⁶⁾

Depreciation

Adjusted OIBDA*

Capital expenditures ⁽¹⁾

Adjusted OIBDA* less Capex

Adjusted OIBDA Margin*