Delivered positive net postpaid subscriber growth on the CDMA network and for the Sprint brand; best ever year-over-year improvement in net postpaid subscriber results

Achieved tenth consecutive quarter of improvement in Customer Care Satisfaction and First Call Resolution; recognized by American Customer Satisfaction Index as most improved company in customer satisfaction, across all industries, in the last two years

Generated consolidated Adjusted OIBDA* of $1.5 billion in the quarter; maintained strong liquidity with a cash and cash equivalents balance of $4.3 billion after retiring all 2010 note maturities; year-to-date Free Cash Flow* of $1.2 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 $8.0 billion for the quarter were approximately 1 percent lower than in the second quarter of 2009 and the first quarter of 2010. The year-over-year decline is primarily due to lower postpaid wireless service revenues and wireline revenues, partially offset by increases from fourth quarter 2009 acquisitions, prepaid Boost service revenues and total equipment revenues. The sequential decline is primarily due to lower postpaid wireless service revenues and wireline revenues.

Adjusted OIBDA* was $1.5 billion for the quarter, compared to $1.8 billion for the second quarter of 2009 and $1.5 billion for the first quarter of 2010. The year-over-year decline in Adjusted OIBDA* was primarily due to lower postpaid wireless service and wireline revenues and higher subsidy costs resulting from improvement in retail subscriber gross additions, as well as a greater mix of postpaid smartphones sold, which on average carry a higher subsidy rate. Sequentially, Adjusted OIBDA* remained relatively flat as continued improvement in SG&A expenses offset the decline in net operating revenues.

Capital expenditures were $437 million in the quarter, compared to $321 million in the second quarter of 2009 and $419 million in the first quarter of 2010. Wireless capital expenditures were $319 million in the second quarter of 2010, compared to $227 million in the second quarter of 2009 and $311 million in the first 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 $49 million in the second quarter of 2010, compared to $47 million in the second quarter of 2009 and $56 million in the first quarter of 2010.

Free Cash Flow* was $709 million for the quarter, compared to $676 million for the second quarter of 2009 and $506 million for the first quarter of 2010. In June, the company repaid $750 million of floating rate notes, as scheduled. There are no additional note maturities during 2010.

Net operating revenues

Adjusted OIBDA*

Adjusted OIBDA margin*

Capital Expenditures ⁽¹⁾

The company served 48.2 million customers at the end of the second quarter of 2010. This includes 33.2 million postpaid subscribers (26.2 million via the Sprint brand on CDMA, 6.4 million on iDEN, and 517,000 Power Source users who utilize both networks), 11.2 million prepaid subscribers (5.2 million on iDEN and 6.0 million on CDMA) and approximately 3.8 million wholesale and affiliate subscribers, all of whom utilize our CDMA network.

For the quarter, Sprint added a total of 111,000 net wireless customers consisting of net retail subscriber declines of approximately 55,000 and net additions of 166,000 wholesale and affiliate subscribers.

Net postpaid subscriber losses of 228,000, improved year-over-year and sequentially as the company lost 763,000 fewer subscribers than in the second quarter of 2009 and lost 350,000 fewer subscribers than in the first quarter of 2010.

The CDMA network added almost 136,000 postpaid customers while iDEN lost almost 364,000 customers.

The company gained a net 173,000 prepaid subscribers, which includes net additions of 638,000 CDMA customers, offset by net losses of 465,000 iDEN customers.

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

Approximately 9 percent of postpaid customers upgraded their handsets during the second quarter, resulting in continued strength in contract renewals.

Best ever postpaid churn of 1.85 percent in the quarter, compared to 2.05 percent in the year-ago period and 2.15 percent in the first quarter of 2010. The year-over-year improvement in postpaid churn is primarily due to a better customer experience resulting in higher levels of customer satisfaction at every touch point. Sequentially, postpaid churn benefited from historical second quarter seasonality, along with better retention performance.

Prepaid churn in the second quarter of 2010 was 5.61 percent, compared to 6.38 percent in the year-ago period and 5.74 percent in the first quarter of 2010. The year-over-year improvement in prepaid churn is primarily due to the inclusion of Virgin Mobile 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.

Retail wireless service revenues of $6.4 billion for the quarter increased by less than 1 percent, compared to the second quarter of 2009 and decreased by less than 1 percent compared to the first 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 and the acquisition of Virgin Mobile, partially offset by losses of postpaid subscribers since the second quarter 2009. Sequentially, retail wireless service revenues declined as a result of fewer postpaid subscribers, partially offset by higher prepaid service revenue.

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 as a result of greater popularity of fixed-rate bundle plans, partially offset by reductions in credits issued to customers resulting from an improved customer experience.

Prepaid ARPU in the quarter was approximately $28, compared to $34 in the year-ago period and $27 in the first quarter of 2010. The year-over-year decline is due to the inclusion of Virgin Mobile and Assurance Wireless customers who have lower ARPU on average than that of Boost Mobile customers. Sequentially, prepaid ARPU improved as a result of continued popularity of the Boost Monthly Unlimited offering on the CDMA network.

Wholesale, affiliate and other revenues were down $90 million, compared to the year-ago period, and increased slightly sequentially. Service revenues from Virgin Mobile and iPCS, Inc., subsequent to the fourth quarter 2009 acquisitions, are reported as wireless retail service revenues, resulting in a decline in wholesale, affiliate and other revenues year-over-year. The year-over-year decline is also due to the loss of two large wholesale customers.

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

Wireless equipment subsidy in the second quarter was approximately $1.0 billion (equipment revenue of $566 million, less cost of products of $1.58 billion), compared to almost $850 million in the year-ago period and almost $1.0 billion in the first quarter of 2010. The year-over-year increase in subsidy is a combination of an increase in postpaid handsets sold with a greater mix of smartphones, which on average carry a higher subsidy rate, and an increase in the number of prepaid handsets sold primarily as a result of the acquisition of Virgin Mobile. Sequentially, the increase in postpaid subsidy is partially offset by lower prepaid subsidy primarily due to rate improvement as a result of greater mix of CDMA prepaid handsets sold.

Wireless SG&A expenses remained relatively flat year-over-year and declined approximately 4 percent sequentially. Year-over-year, improvements in postpaid marketing and customer care expenses offset higher prepaid expenses as a result of the acquisition of Virgin Mobile. The sequential improvement is primarily due to reduced marketing program spend and customer care expenses.

Adjusted OIBDA* of $1.2 billion in the second quarter of 2010 compares to $1.4 billion in the second quarter of 2009 and $1.2 billion in the first 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.

Net operating revenues

Adjusted OIBDA*

Adjusted OIBDA margin*

Capital Expenditures ⁽¹⁾

Wireline revenues of $1.3 billion for the quarter declined 11 percent year-over-year as a result of reduced voice volume and rate, and customer migrations from legacy data to lower rate IP services. Sequentially, wireline revenues were 2 percent lower, primarily due to reductions in voice volume.

Total operating expenses were $1.0 billion in the second quarter of 2010. Total operating expenses improved 14 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 declined almost 9 percent as a result of a reduction in expected access costs associated with prior periods, related to favorable current period developments, and lower SG&A expenses.

Wireline Adjusted OIBDA* was $273 million for the quarter, compared to $352 million in the second quarter of 2009 and $279 million reported for the first quarter of 2010. Wireline Adjusted OIBDA* decreased year-over-year and sequentially primarily as a result of revenue declines partially offset by SG&A improvements.

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 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 businesses and assets of Virgin Mobile USA, Inc. and iPCS, Inc., including the risk that these difficulties may limit our ability to fully integrate the operations of these businesses and the risk that we may be unable to continue to retain key employees;

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 June 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⁾

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Basic and Diluted Loss Per Common Share

Weighted Average Common Shares outstanding

Effective Tax Rate ⁽³⁾

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Interest expense, net

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

OIBDA*

Severance and exit costs ⁽⁴⁾

Access costs ⁽⁵⁾

Adjusted OIBDA*

Capital expenditures ⁽¹⁾

Adjusted OIBDA* less Capex

Adjusted OIBDA Margin*

Selected items (net of taxes, if applicable) ⁽⁶⁾:

Deferred tax asset valuation allowance ⁽³⁾

Severance and exit costs ⁽⁴⁾

Access costs ⁽⁵⁾

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

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Total net operating expenses

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NON-GAAP RECONCILIATION

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Severance and exit costs ⁽⁴⁾

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)

Hours per subscriber

Wholesale and Affiliate Subscribers

Net additions (losses) (in thousands)

End of period subscribers (in thousands)

Total Subscribers

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Net Operating Revenues

Voice

Data

Internet

Other

Total net operating revenues

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Costs of services and products

Selling, general and administrative

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Total net operating expenses

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NON-GAAP RECONCILIATION

Operating Income

Severance and exit costs ⁽⁴⁾

Access costs ⁽⁵⁾

Depreciation

Adjusted OIBDA*

Capital expenditures ⁽¹⁾

Adjusted OIBDA* less Capex

Adjusted OIBDA Margin*

Operating Activities

Net loss

Depreciation and amortization

Provision for losses on accounts receivable

Share-based compensation expense

Deferred and other income taxes

Equity in losses of unconsolidated investments and other, net

Other, net

Net cash provided by operating activities

Investing Activities

Capital expenditures

Expenditures relating to FCC licenses