Virgin Mobile USA Reports $115 Million in Adjusted EBITDA Excluding Transition and Restructuring Costs(1) for the Full Year 2008

Market Wire, March, 2009

Virgin Mobile USA, Inc. (NYSE: VM), a leading national provider of wireless communications services, today reported its financial and operational results for the fourth quarter and full year ended December 31, 2008.

Full year 2008 highlights(2):

--  End of period subscribers of 5.4 million, up 6% year over year

--  Total operating revenues of $1.3 billion, Net service revenues of $1.2
    billion; both flat year over year

--  Adjusted EBITDA of $101.1 million; Adjusted EBITDA excluding
    transition and restructuring costs of $115.2 million, up 16% year over
    year(1)

--  Net income of $7.9 million versus net income of $4.2 million, up 88%
    year over year

--  Diluted earnings per share of $0.13; Adjusted earnings per share of
    $0.26(1) compared to pro forma earnings per diluted share of $0.06(3) for
    2007

--  Free cash flow of $25.7 million up 130% from 2007; Unlevered free cash
    flow of $57.8 million
    

Fourth quarter 2008 highlights(2):

--  Total operating revenues of $347.1 million, Net service revenues of
    $326.7 million; up 5% and 10% year over year, respectively

--  Adjusted EBITDA of $12.6 million; Adjusted EBITDA excluding transition
    and restructuring costs of $18.0 million, up 84% year over year(1)

--  Gross customer additions of 960,421, flat year over year

--  Net customer additions of 216,005, up 3% year over year

--  Net loss of ($4.4) million compared to net loss of ($14.7) million in
    the fourth quarter 2007

--  Diluted loss per share of ($0.12); Adjusted net loss per share of
    $(0.05); compared to pro forma loss per diluted share of ($0.28)(3) in the
    fourth quarter of 2007
    

(1) Excludes transition and restructuring costs related to the acquisition of Helio, the outsourcing of IT services to IBM and workforce reductions totaling approximately $5.4 million in the fourth quarter and $14.1 million in the full year 2008. Adjusted earnings (loss) per share also excludes the amortization of intangibles associated with the acquisition of Helio. Adjustments to earnings (loss) per share are net of minority interest and taxes.

(2) All highlights include the impact of the acquisition of Helio, which closed on August 22, 2008.

(3) Pro forma earnings (loss) per diluted share reflects the shares issued in the IPO as outstanding for all of 2007.

"Our fourth quarter results reflect the positive benefits of the strategic initiatives executed throughout the year," said Dan Schulman, Chief Executive Officer, Virgin Mobile USA. "The popularity of our postpaid and renewed hybrid service plans, launched midyear, contributed to growth in ARPU in the second half of the year while reducing churn. The operational efficiencies we've implemented have allowed us to grow Adjusted EBITDA in the fourth quarter by 84% year over year, excluding transition and restructuring costs from the acquisition of Helio and our outsourcing of IT services to IBM."

Schulman continued, "During difficult economic times, we believe that our service plans are even more relevant to consumers searching for value and flexibility. Our full year results reflect the strength of our offer and the resilience of our business model in this environment. In a challenging year, we produced $115.2 million in Adjusted EBITDA excluding transition and restructuring costs, and $25.7 million in free cash flow, reflecting strong growth in both metrics. The intrinsic value of our service plans, combined with our lean cost structure and our continued ability to innovate, position us for continued growth in these metrics in 2009."

Overview and Basis of Presentation

Financial results for Helio are included in Virgin Mobile USA's results beginning on August 22, 2008. The financial results for the fourth quarter and full year ended December 31, 2007 presented in this release reflect the retroactive consolidation of Virgin Mobile USA, Inc., Virgin Mobile USA, L.P., and Bluebottle USA Investments L.P. Virgin Mobile USA, Inc. is a holding company formed for the purpose of an initial public offering, or IPO, that was completed on October 16, 2007. Virgin Mobile USA is also presenting its earnings per share for the fourth quarter and full year ended December 31, 2007 on a pro forma basis which reflects the shares issued in the IPO as outstanding for all of 2007.

This press release uses several financial performance metrics, including Adjusted EBITDA, Adjusted EBITDA margin, ARPU, CCPU, CPGA, free cash flow, unlevered free cash flow, Adjusted EBITDA excluding transition and restructuring costs and Adjusted EBITDA margin excluding transition and restructuring costs, Adjusted earnings (loss) per share excluding the amortization of intangibles and Adjusted earnings (loss) per share excluding the amortization of intangibles, and transition and restructuring costs which are not calculated in accordance with GAAP. The Company believes that these non-GAAP financial metrics are helpful in understanding its operating performance from period to period and, although not every wireless company defines these metrics in the same way, believes that these metrics as used by Virgin Mobile USA facilitate comparisons with other wireless service providers. These metrics should not be considered substitutes for any performance metrics determined in accordance with GAAP. For a reconciliation of non-GAAP financial measures, please refer to the section entitled "Definition of Terms and Reconciliation of Non-GAAP Financial Measures" included at the end of this release.