Achieved positive net post-paid subscriber growth for Sprint-branded services⁺, leading to best sequential and year-over-year improvement in net post-paid subscriber results in Sprint Nextel history

Free Cash Flow* of $666 million in the fourth quarter and $2.8 billion for 2009; highest annual Free Cash Flow* in Sprint Nextel history

Eight consecutive quarters of improvement in Customer Care Satisfaction and First Call Resolution

Invested more than $1.1 billion of additional funding in Clearwire; extended 4G leadership into 27 markets

Completed acquisitions of Virgin Mobile USA, Inc. and iPCS, Inc.

Consolidated net operating revenues of $7.9 billion for the quarter were 7% lower than in the fourth quarter of 2008 and 2% lower than in the third quarter of 2009. The year-over-year decline is primarily due to a lower contribution from post-paid wireless service revenues as well as wireline revenues, partially offset by an increase in prepaid wireless service and equipment revenues.

Adjusted OIBDA* was $1.4 billion for the quarter, compared to $1.7 billion for the fourth quarter of 2008 and $1.5 billion for the third quarter of 2009. The year-over-year decline in Adjusted OIBDA* was due to revenue declines as a result of fewer post-paid subscribers, partially offset by lower cost of service and lower SG&A expenses. Sequentially, Adjusted OIBDA* decreased due to the decline in operating revenue, increased customer acquisition expenses related to higher sequential gross adds and increased variable costs that exceeded the reduction in cost of service.

Capital expenditures were $554 million in the quarter, compared to $548 million in the fourth quarter of 2008 and $431 million in the third quarter of 2009.

Free Cash Flow* was $666 million for the quarter, compared to $536 million for the fourth quarter of 2008 and $664 million for the third quarter of 2009. Third quarter 2009 Free Cash Flow* reflected a $200 million cash contribution to Sprint’s defined benefit pension plan. During the fourth quarter, the company repaid in full $1.0 billion of the outstanding borrowings under its $4.5 billion revolving credit facility, provided $1.1 billion additional investment in Clearwire and paid $560 million in net cash as part of the purchase price to acquire Virgin Mobile USA, Inc. and iPCS, Inc.

The company served 48.1 million customers at the end of the fourth quarter of 2009, compared to 48.3 million at the end of the third quarter of 2009. This includes 34.0 million post-paid subscribers (26.0 million on CDMA, 7.3 million on iDEN, and 725,000 Power Source users who utilize both networks), 10.7 million prepaid subscribers (5.7 million on iDEN and 5.0 million on CDMA) and almost 3.5 million wholesale and affiliate subscribers, all of whom utilize our CDMA network.

On November 24, 2009, Sprint completed the acquisition of Virgin Mobile USA, Inc. at which time 4.5 million, or 58%, of Sprint’s wholesale customers became retail prepaid customers and 104,000, or 1%, became retail post-paid customers. On December 4, 2009, Sprint completed its acquisition of iPCS, Inc. at which time 731,000, or 75%, of Sprint’s affiliate customers became retail post-paid customers. Total transfers of subscribers from wholesale and affiliates to retail during the quarter as a result of the acquisitions were 5.4 million.

For the quarter, net retail subscribers, excluding transfers from business combinations, declined by a total of 69,000, and net wireless customers declined by approximately 148,000, including net losses of 504,000 post-paid customers.

The Sprint CDMA network gained more than 3,000 post-paid customers (after a net transfer of 93,000 customers from the iDEN network), the first net subscriber gain in six quarters; while iDEN lost 507,000 customers (including transfers to the CDMA network).

The company gained a net 483,500 prepaid iDEN customers, offset by net losses of 48,500 prepaid CDMA customers. The company also experienced a net loss of 79,000 wholesale and affiliate subscribers as a result of subscriber losses from its mobile virtual network operators.

The credit quality of our post-paid customers remained relatively flat sequentially at over 84% prime and improved slightly year-over-year from the fourth quarter of 2008.

More than 9% of post-paid customers upgraded their handsets during the fourth quarter, resulting in continued strength in contract renewals.

During the fourth quarter, the company added to its device line-up with the HTC Hero™, Samsung Intrepid™, Motorola Debut™, Samsung Moment™, Palm^® Pixi™ and Blackberry^® Curve™ 8530. In January, Sprint launched the Overdrive^TM 3G/4G Mobile Hotspot by Sierra Wireless, LG Lotus Elite™, Motorola Brute^TM i680 and announced availability of LG Rumor Touch™. In addition, Skiff has signed a multi-year agreement with Sprint to provide 3G connectivity for Skiff’s dedicated e-reading devices in the United States.

Post-paid churn in the quarter was 2.11% compared to 2.16% in the year-ago period and 2.17% in the third quarter of 2009. The year-over-year improvement in churn is primarily due to improved credit quality of our customer base. The sequential improvement in churn is mostly due to seasonality.

Prepaid churn in the fourth quarter of 2009 was 5.56%, compared to 8.20% in the year-ago period and 6.65% in the third quarter of 2009. The year-over-year improvement in churn is due to increased subscriber additions related to our national Boost Monthly Unlimited offering. Prepaid churn benefited from the inclusion of Virgin Mobile customers since the acquisition as Virgin Mobile customers on average have lower churn than that of Boost Mobile customers. The sequential improvement in prepaid churn is also due to reductions in deactivations of Boost customers as a result of enhanced retention offers in response to competitors’ holiday promotions.

Wireless service revenues of $6.2 billion for the quarter declined 5% year-over-year and less than 1% sequentially. The year-over-year and sequential decline is primarily due to fewer post-paid subscribers, partially offset by the increased number of prepaid subscribers.

Wireless post-paid ARPU for the quarter declined year-over-year and sequentially from approximately $56 to approximately $55. The year-over-year decline is due to declines in usage and roaming, partially offset by reductions in credits issued to customers resulting from an improved customer experience. The sequential decline is due to lower casual text and data usage and lower overage revenues as a result of greater popularity of fixed-rate bundle plans and seasonality.

Data revenues contributed more than $16.75 to overall post-paid ARPU in the fourth quarter, led by growth in CDMA data ARPU⁺⁺. CDMA data ARPU increased to greater than $19.50, an industry-best that now represents more than 35% of total CDMA ARPU.

Prepaid ARPU in the quarter was approximately $31 compared to $30 in the year-ago period and $35 in the third quarter of 2009. The year-over-year increase reflects a growing contribution from prepaid subscribers on unlimited plans. Sequentially, prepaid ARPU was negatively impacted by the inclusion of Virgin Mobile customers since the acquisition as Virgin Mobile customers on average have lower ARPU than that of Boost Mobile customers.

Wholesale, affiliate and other revenues were down 48% compared to the year-ago period and down 28% sequentially. Service revenues from Virgin Mobile USA, Inc. and iPCS, Inc., subsequent to their respective acquisition dates, are reported as wireless service revenues, resulting in a decline in wholesale, affiliate and other revenues. The year-over-year decline is also due to subscriber losses from two of our large telecom carrier customers.

Total Wireless operating expenses were $7.5 billion in the fourth quarter, compared to $9.0 billion in the year-ago period and $7.4 billion in the third quarter of 2009.

Wireless Equipment subsidy in the fourth quarter was approximately $960 million (equipment revenue of $475 million, less cost of products of $1.43 billion) as compared to approximately $800 million in the year-ago period and approximately $950 million in the third quarter of 2009. The year-over-year increase in subsidy is a combination of a greater mix of post-paid handsets sold with higher functionality, and an increase in the number of prepaid handsets sold as a result of the national Boost Monthly Unlimited offering.

Wireless SG&A expenses declined 4% year-over-year from the fourth quarter of 2008, and increased 6% sequentially from the third quarter of 2009. The year-over-year improvement is due to lower customer care and labor expenses. On a sequential basis, the SG&A expenses increased primarily due to higher variable costs.

Adjusted OIBDA* of $1.2 billion in the fourth quarter of 2009 compares to $1.5 billion in the fourth quarter of 2008 and $1.2 billion in the third quarter of 2009. The year-over-year decline in Adjusted OIBDA* was primarily due to fewer post-paid subscribers, partially offset by more prepaid subscribers and an improvement of over $100 million in SG&A expenses. Sequentially, Adjusted OIBDA* was $32 million lower as a result of a decline in service revenue and higher SG&A expenses, partially offset by seasonally lower cost of service.

Wireline revenues of $1.3 billion for the quarter declined 13% year-over-year and were 6% lower sequentially primarily associated with reductions in rate and volume.

Internet revenues grew almost 7% in 2009, reflecting strong enterprise demand for Global MPLS services and the slight increase in the base of cable subscribers who utilize our VoIP services. While customer migrations to IP services have slowed, Internet revenues as a percent of wireline revenues have increased from 34% in 2008 to 41% in 2009.

Total operating expenses were $1.2 billion in the fourth quarter of 2009. Year-over-year, total operating expenses improved 9% due to declines in costs of service as IP becomes a larger percent of the Wireline base, and improvement in SG&A expenses. Total operating expenses were flat sequentially.

Wireline Adjusted OIBDA* was $259 million compared to $326 million in the fourth quarter of 2008 and $324 million reported for the third quarter of 2009.

Wireline capital expenditures were $62 million in the fourth quarter of 2009, compared to $110 million in the fourth quarter of 2008 and $72 million in the third quarter of 2009. The company made significant capital investments in prior years to build out its IP network, and less capital was required year-over-year.

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 post-paid 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 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, including at the expiration of our current credit facility, which expires in December 2010;

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 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 WiMAX 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, 2008 and, when filed, our Form 10-K for the year ended December 31, 2009.

Due to the acquisitions of Virgin Mobile USA, Inc. and iPCS, Inc. during the quarter ended December 31, 2009, end of period subscribers reflect the transfer of subscribers from Wholesale and Affiliate to Retail Post-paid and Prepaid prospectively from the date of each acquisition.