
Note 16.	Guarantor Financial Information

On September 11, 2013, Sprint Corporation issued $2.25 billion aggregate principal amount of 7.250% notes due 2021 and $4.25 billion aggregate principal amount of 7.875% notes due 2023 in a private placement transaction with registration rights. On December 12, 2013, Sprint Corporation issued $2.5 billion aggregate principal amount of 7.125% notes due 2024 in a private placement transaction with registration rights. Each of these issuances is fully and unconditionally guaranteed by Sprint Communications, Inc. (Subsidiary Guarantor), which is a 100 percent owned subsidiary of Sprint Corporation (Parent/Issuer). In connection with the foregoing, the registration rights agreements with respect to the notes required the Company and Sprint Communications, Inc. to use their reasonable best efforts to cause an offer to exchange the notes for a new issue of substantially identical exchange notes registered under the Securities Act of 1933. Accordingly, in November 2014, we completed an exchange offer for these notes in compliance with our registration obligations. We did not receive any proceeds from this exchange offer. In addition, on February 24, 2015, Sprint Corporation issued $1.5 billion aggregate principal amount of 7.625% notes due 2025, which are fully and unconditionally guaranteed by Sprint Communications, Inc.

Under the Subsidiary Guarantor's revolving bank credit facility and certain other agreements, the Subsidiary Guarantor is currently restricted from paying cash dividends to the Parent/Issuer or any Non-Guarantor Subsidiary because the ratio of total indebtedness to adjusted EBITDA (each as defined in the applicable agreement) exceeds 2.5 to 1.0.

In May 2014, certain wholly-owned subsidiaries of Sprint entered into a Receivables Facility arrangement to sell certain accounts receivable on a revolving basis, subject to a maximum funding limit. The Receivables Facility was amended in April 2015, which, among other things, extended the expiration date to March 31, 2017 and increased the maximum funding limit to $3.3 billion. In connection with this arrangement, Sprint formed certain wholly-owned subsidiaries, which are bankruptcy remote SPEs and are included in the Non-Guarantor Subsidiaries condensed consolidated financial information (see Note 3. Accounts Receivable Facility). We have accounted for investments in subsidiaries using the equity method. Presented below is the condensed consolidating financial information.

CONDENSED CONSOLIDATING BALANCE SHEET



	As of June 30, 2015
	Parent/Issuer		Subsidiary Guarantor		Non-Guarantor Subsidiaries		Eliminations			Consolidated
	(in millions)
ASSETS
Current assets:
Cash and cash equivalents	$	—	$	1,521	$	539	$	—		$	2,060
Short-term investments	—		163		40		—			203
Accounts and notes receivable, net	193		177		3,683		(240		)	3,813
Device and accessory inventory	—		—		949		—			949
Deferred tax assets	—		—		87		—			87
Prepaid expenses and other current assets	—		17		656		—			673
Total current assets	193		1,878		5,954		(240		)	7,785
Investments in subsidiaries	21,727		22,778		—		(44,505		)	—
Property, plant and equipment, net	—		—		20,563		—			20,563
Due from consolidated affiliate	68		22,434		—		(22,502		)	—
Note receivable from consolidated affiliate	10,500		513		—		(11,013		)	—
Intangible assets
Goodwill	—		—		6,575		—			6,575
FCC licenses and other	—		—		40,013		—			40,013
Definite-lived intangible assets, net	—		—		5,516		—			5,516
Other assets	135		1,259		747		(1,154		)	987
Total assets	$	32,623	$	48,862	$	79,368	$	(79,414	)	$	81,439

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	—	$	—	$	3,272	$	—		$	3,272
Accrued expenses and other current liabilities	263		669		3,766		(240		)	4,458
Current portion of long-term debt, financing and capital lease obligations	—		500		884		—			1,384
Total current liabilities	263		1,169		7,922		(240		)	9,114
Long-term debt, financing and capital lease obligations	10,500		14,511		8,754		(1,019		)	32,746
Deferred tax liabilities	—		—		13,913		—			13,913
Note payable due to consolidated affiliate	—		10,500		513		(11,013		)	—
Other liabilities	—		955		2,986		—			3,941
Due to consolidated affiliate	135		—		22,502		(22,637		)	—
Total liabilities	10,898		27,135		56,590		(34,909		)	59,714
Commitments and contingencies
Total stockholders' equity	21,725		21,727		22,778		(44,505		)	21,725
Total liabilities and stockholders' equity	$	32,623	$	48,862	$	79,368	$	(79,414	)	$	81,439

CONDENSED CONSOLIDATING BALANCE SHEET



	As of March 31, 2015
	Parent/Issuer		Subsidiary Guarantor		Non-Guarantor Subsidiaries		Eliminations			Consolidated
	(in millions)
ASSETS
Current assets:
Cash and cash equivalents	$	—	$	3,492	$	518	$	—		$	4,010
Short-term investments	—		146		20		—			166
Accounts and notes receivable, net	84		157		2,160		(111		)	2,290
Device and accessory inventory	—		—		1,359		—			1,359
Deferred tax assets	—		—		62		—			62
Prepaid expenses and other current assets	—		13		1,877		—			1,890
Total current assets	84		3,808		5,996		(111		)	9,777
Investments in subsidiaries	21,712		22,413		—		(44,125		)	—
Property, plant and equipment, net	—		—		19,721		—			19,721
Due from consolidated affiliate	68		20,934		—		(21,002		)	—
Note receivable from consolidated affiliate	10,500		458		—		(10,958		)	—
Intangible assets
Goodwill	—		—		6,575		—			6,575
FCC licenses and other	—		—		39,987		—			39,987
Definite-lived intangible assets, net	—		—		5,893		—			5,893
Other assets	139		1,260		836		(1,158		)	1,077
Total assets	$	32,503	$	48,873	$	79,008	$	(77,354	)	$	83,030

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	—	$	—	$	4,347	$	—		$	4,347
Accrued expenses and other current liabilities	154		625		4,625		(111		)	5,293
Current portion of long-term debt, financing and capital lease obligations	—		500		800		—			1,300
Total current liabilities	154		1,125		9,772		(111		)	10,940
Long-term debt, financing and capital lease obligations	10,500		14,576		8,474		(1,019		)	32,531
Deferred tax liabilities	—		—		13,898		—			13,898
Note payable due to consolidated affiliate	—		10,500		458		(10,958		)	—
Other liabilities	—		960		2,991		—			3,951
Due to consolidated affiliate	139		—		21,002		(21,141		)	—
Total liabilities	10,793		27,161		56,595		(33,229		)	61,320
Commitments and contingencies
Total stockholders' equity	21,710		21,712		22,413		(44,125		)	21,710
Total liabilities and stockholders' equity	$	32,503	$	48,873	$	79,008	$	(77,354	)	$	83,030

CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE (LOSS) INCOME



	For the Three Months Ended June 30, 2015
	Parent/Issuer			Subsidiary Guarantor			Non-Guarantor Subsidiaries			Eliminations			Consolidated
	(in millions)
Net operating revenues	$	—		$	—		$	8,027		$	—		$	8,027
Net operating expenses:
Cost of services (exclusive of depreciation and amortization included below)	—			—			2,393			—			2,393
Cost of products (exclusive of depreciation and amortization included below)	—			—			1,365			—			1,365
Selling, general and administrative	—			—			2,187			—			2,187
Depreciation	—			—			1,241			—			1,241
Amortization	—			—			347			—			347
Other, net	—			—			(7		)	—			(7		)
	—			—			7,526			—			7,526
Operating income	—			—			501			—			501
Other income (expense):
Interest income	198			39			1			(235		)	3
Interest expense	(198		)	(407		)	(172		)	235			(542		)
(Losses) earnings of subsidiaries	(20		)	348			—			(328		)	—
Other income, net	—			—			1			—			1
	(20		)	(20		)	(170		)	(328		)	(538		)
(Loss) income before income taxes	(20		)	(20		)	331			(328		)	(37		)
Income tax benefit	—			—			17			—			17
Net (loss) income	(20		)	(20		)	348			(328		)	(20		)
Other comprehensive income (loss)	4			4			4			(8		)	4
Comprehensive (loss) income	$	(16	)	$	(16	)	$	352		$	(336	)	$	(16	)

CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME (LOSS)



	For the Three Months Ended June 30, 2014
	Parent/Issuer			Subsidiary Guarantor			Non-Guarantor Subsidiaries			Eliminations			Consolidated
	(in millions)
Net operating revenues	$	—		$	—		$	8,789		$	—		$	8,789
Net operating expenses:
Cost of services (exclusive of depreciation and amortization included below)	—			—			2,520			—			2,520
Cost of products (exclusive of depreciation and amortization included below)	—			—			2,158			—			2,158
Selling, general and administrative	—			—			2,284			—			2,284
Severance and exit costs	—			—			27			—			27
Depreciation	—			—			868			—			868
Amortization	—			—			413			—			413
	—			—			8,270			—			8,270
Operating loss	—			—			519			—			519
Other income (expense):
Interest income	169			23			—			(189		)	3
Interest expense	(169		)	(368		)	(164		)	189			(512		)
Earnings (losses) of subsidiaries	23			368			—			(391		)	—
Other expense, net	—			—			(2		)	—			(2		)
	23			23			(166		)	(391		)	(511		)
Income (loss) before income taxes	23			23			353			(391		)	8
Income tax benefit	—			—			15			—			15
Net income (loss)	23			23			368			(391		)	23
Other comprehensive income (loss)	—			—			—			—			—
Comprehensive income (loss)	$	23		$	23		$	368		$	(391	)	$	23

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS



	For the Three Months Ended June 30, 2015
	Parent/Issuer			Subsidiary Guarantor			Non-Guarantor Subsidiaries			Eliminations			Consolidated
	(in millions)
Cash flows from operating activities:
Net cash (used in) provided by operating activities	$	—		$	(405	)	$	533		$	—		$	128
Cash flows from investing activities:
Capital expenditures - network and other	—			—			(1,802		)	—			(1,802		)
Capital expenditures - leased devices	—			—			(544		)	—			(544		)
Expenditures relating to FCC licenses	—			—			(26		)	—			(26		)
Proceeds from sales and maturities of short-term investments	—			118			20			—			138
Purchases of short-term investments	—			(135		)	(40		)	—			(175		)
Change in amounts due from/due to consolidated affiliates	1			(1,498		)	—			1,497			—
Proceeds from sales of assets and FCC licenses	—			—			1			—			1
Intercompany note advance to consolidated affiliate	—			(55		)	—			55			—
Other, net	—			—			(3		)	—			(3		)
Net cash provided by (used in) investing activities	1			(1,570		)	(2,394		)	1,552			(2,411		)
Cash flows from financing activities:
Proceeds from debt and financings	—			—			346			—			346
Repayments of debt, financing and capital lease obligations	—			—			(26		)	—			(26		)
Proceeds from issuance of common stock, net	—			4			—			—			4
Change in amounts due from/due to consolidated affiliates	—			—			1,497			(1,497		)	—
Intercompany note advance from parent	—			—			55			(55		)	—
Other, net	(1		)	—			10			—			9
Net cash (used in) provided by financing activities	(1		)	4			1,882			(1,552		)	333
Net (decrease) increase in cash and cash equivalents	—			(1,971		)	21			—			(1,950		)
Cash and cash equivalents, beginning of period	—			3,492			518			—			4,010
Cash and cash equivalents, end of period	$	—		$	1,521		$	539		$	—		$	2,060

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS



	For the Three Months Ended June 30, 2014
	Parent/Issuer		Subsidiary Guarantor			Non-Guarantor Subsidiaries			Eliminations			Consolidated
	(in millions)
Cash flows from operating activities:
Net cash (used in) provided by operating activities	$	—	$	(429	)	$	1,108		$	—		$	679
Cash flows from investing activities:
Capital expenditures - network and other	—		—			(1,246		)	—			(1,246		)
Expenditures relating to FCC licenses	—		—			(41		)	—			(41		)
Reimbursements relating to FCC licenses	—		—			95			—			95
Proceeds from sales and maturities of short-term investments	—		900			—			—			900
Purchases of short-term investments	—		(1,002		)	—			—			(1,002		)
Change in amounts due from/due to consolidated affiliates	—		(58		)	—			58			—
Proceeds from sales of assets and FCC licenses	—		—			20			—			20
Other, net	—		—			(3		)	—			(3		)
Net cash (used in) provided by investing activities	—		(160		)	(1,175		)	58			(1,277		)
Cash flows from financing activities:
Repayments of debt, financing and capital lease obligations	—		—			(210		)	—			(210		)
Proceeds from issuance of common stock, net	—		9			—			—			9
Change in amounts due from/due to consolidated affiliates	—		—			58			(58		)	—
Net cash provided by (used in) financing activities	—		9			(152		)	(58		)	(201		)
Net decrease in cash and cash equivalents	—		(580		)	(219		)	—			(799		)
Cash and cash equivalents, beginning of period	—		4,125			845			—			4,970
Cash and cash equivalents, end of period	$	—	$	3,545		$	626		$	—		$	4,171