
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 in a registered transaction, 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 September 30, 2015
	Parent/Issuer		Subsidiary Guarantor		Non-Guarantor Subsidiaries		Eliminations			Consolidated
	(in millions)
ASSETS
Current assets:
Cash and cash equivalents	$	—	$	1,513	$	459	$	—		$	1,972
Short-term investments	—		103		—		—			103
Accounts and notes receivable, net	87		67		1,980		(154		)	1,980
Device and accessory inventory	—		—		889		—			889
Deferred tax assets	—		—		63		—			63
Prepaid expenses and other current assets	—		14		2,075		—			2,089
Total current assets	87		1,697		5,466		(154		)	7,096
Investments in subsidiaries	21,159		22,442		—		(43,601		)	—
Property, plant and equipment, net	—		—		21,061		—			21,061
Due from consolidated affiliate	50		22,226		—		(22,276		)	—
Note receivable from consolidated affiliate	10,500		459		—		(10,959		)	—
Intangible assets
Goodwill	—		—		6,575		—			6,575
FCC licenses and other	—		—		40,025		—			40,025
Definite-lived intangible assets, net	—		—		5,155		—			5,155
Other assets	132		1,255		703		(1,151		)	939
Total assets	$	31,928	$	48,079	$	78,985	$	(78,141	)	$	80,851

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	—	$	—	$	3,527	$	—		$	3,527
Accrued expenses and other current liabilities	139		523		3,825		(154		)	4,333
Current portion of long-term debt, financing and capital lease obligations	—		500		895		—			1,395
Total current liabilities	139		1,023		8,247		(154		)	9,255
Long-term debt, financing and capital lease obligations	10,500		14,446		8,643		(1,019		)	32,570
Deferred tax liabilities	—		—		13,929		—			13,929
Note payable due to consolidated affiliate	—		10,500		459		(10,959		)	—
Other liabilities	—		951		2,989		—			3,940
Due to consolidated affiliate	132		—		22,276		(22,408		)	—
Total liabilities	10,771		26,920		56,543		(34,540		)	59,694
Commitments and contingencies
Total stockholders' equity	21,157		21,159		22,442		(43,601		)	21,157
Total liabilities and stockholders' equity	$	31,928	$	48,079	$	78,985	$	(78,141	)	$	80,851

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 September 30, 2015
	Parent/Issuer			Subsidiary Guarantor			Non-Guarantor Subsidiaries			Eliminations			Consolidated
	(in millions)
Net operating revenues	$	—		$	—		$	7,975		$	—		$	7,975
Net operating expenses:
Cost of services (exclusive of depreciation and amortization included below)	—			—			2,453			—			2,453
Cost of products (exclusive of depreciation and amortization included below)	—			—			1,290			—			1,290
Selling, general and administrative	—			—			2,224			—			2,224
Impairments	—			—			85			—			85
Severance and exit costs	—			—			25			—			25
Depreciation	—			—			1,412			—			1,412
Amortization	—			—			331			—			331
Other, net	—			—			157			—			157
	—			—			7,977			—			7,977
Operating loss	—			—			(2		)	—			(2		)
Other income (expense):
Interest income	197			40			—			(236		)	1
Interest expense	(197		)	(407		)	(174		)	236			(542		)
(Losses) earnings of subsidiaries	(585		)	(218		)	—			803			—
Other income, net	—			—			4			—			4
	(585		)	(585		)	(170		)	803			(537		)
(Loss) income before income taxes	(585		)	(585		)	(172		)	803			(539		)
Income tax expense	—			—			(46		)	—			(46		)
Net (loss) income	(585		)	(585		)	(218		)	803			(585		)
Other comprehensive (loss) income	(8		)	(8		)	(6		)	14			(8		)
Comprehensive (loss) income	$	(593	)	$	(593	)	$	(224	)	$	817		$	(593	)

CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE (LOSS) INCOME



	For the Three Months Ended September 30, 2014
	Parent/Issuer			Subsidiary Guarantor			Non-Guarantor Subsidiaries			Eliminations			Consolidated
	(in millions)
Net operating revenues	$	—		$	—		$	8,488		$	—		$	8,488
Net operating expenses:
Cost of services (exclusive of depreciation and amortization included below)	—			—			2,429			—			2,429
Cost of products (exclusive of depreciation and amortization included below)	—			—			2,372			—			2,372
Selling, general and administrative	—			—			2,301			—			2,301
Severance and exit costs	—			—			284			—			284
Depreciation	—			—			898			—			898
Amortization	—			—			396			—			396
	—			—			8,680			—			8,680
Operating loss	—			—			(192		)	—			(192		)
Other income (expense):
Interest income	169			23			1			(189		)	4
Interest expense	(169		)	(364		)	(166		)	189			(510		)
(Losses) earnings of subsidiaries	(765		)	(424		)	—			1,189			—
Other income, net	—			—			4			—			4
	(765		)	(765		)	(161		)	1,189			(502		)
(Loss) income before income taxes	(765		)	(765		)	(353		)	1,189			(694		)
Income tax expense	—			—			(71		)	—			(71		)
Net (loss) income	(765		)	(765		)	(424		)	1,189			(765		)
Other comprehensive (loss) income	(7		)	(7		)	(1		)	8			(7		)
Comprehensive (loss) income	$	(772	)	$	(772	)	$	(425	)	$	1,197		$	(772	)

CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE (LOSS) INCOME



	For the Six Months Ended September 30, 2015
	Parent/Issuer			Subsidiary Guarantor			Non-Guarantor Subsidiaries			Eliminations			Consolidated
	(in millions)
Net operating revenues	$	—		$	—		$	16,002		$	—		$	16,002
Net operating expenses:
Cost of services (exclusive of depreciation and amortization included below)	—			—			4,846			—			4,846
Cost of products (exclusive of depreciation and amortization included below)	—			—			2,655			—			2,655
Selling, general and administrative	—			—			4,411			—			4,411
Impairments	—			—			85			—			85
Severance and exit costs	—			—			38			—			38
Depreciation	—			—			2,653			—			2,653
Amortization	—			—			678			—			678
Other, net	—			—			137			—			137
	—			—			15,503			—			15,503
Operating income	—			—			499			—			499
Other income (expense):
Interest income	395			79			1			(471		)	4
Interest expense	(395		)	(814		)	(346		)	471			(1,084		)
(Losses) earnings of subsidiaries	(605		)	130			—			475			—
Other income, net	—			—			5			—			5
	(605		)	(605		)	(340		)	475			(1,075		)
(Loss) income before income taxes	(605		)	(605		)	159			475			(576		)
Income tax expense	—			—			(29		)	—			(29		)
Net (loss) income	(605		)	(605		)	130			475			(605		)
Other comprehensive (loss) income	(4		)	(4		)	(2		)	6			(4		)
Comprehensive (loss) income	$	(609	)	$	(609	)	$	128		$	481		$	(609	)

CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE (LOSS) INCOME



	For the Six Months Ended September 30, 2014
	Parent/Issuer			Subsidiary Guarantor			Non-Guarantor Subsidiaries			Eliminations			Consolidated
	(in millions)
Net operating revenues	$	—		$	—		$	17,277		$	—		$	17,277
Net operating expenses:
Cost of services (exclusive of depreciation and amortization included below)	—			—			4,949			—			4,949
Cost of products (exclusive of depreciation and amortization included below)	—			—			4,530			—			4,530
Selling, general and administrative	—			—			4,585			—			4,585
Severance and exit costs	—			—			311			—			311
Depreciation	—			—			1,766			—			1,766
Amortization	—			—			809			—			809
	—			—			16,950			—			16,950
Operating income	—			—			327			—			327
Other income (expense):
Interest income	338			46			1			(378		)	7
Interest expense	(338		)	(732		)	(330		)	378			(1,022		)
(Losses) earnings of subsidiaries	(742		)	(56		)	—			798			—
Other income, net	—			—			2			—			2
	(742		)	(742		)	(327		)	798			(1,013		)
(Loss) income before income taxes	(742		)	(742		)	—			798			(686		)
Income tax expense	—			—			(56		)	—			(56		)
Net (loss) income	(742		)	(742		)	(56		)	798			(742		)
Other comprehensive (loss) income	(7		)	(7		)	(1		)	8			(7		)
Comprehensive (loss) income	$	(749	)	$	(749	)	$	(57	)	$	806		$	(749	)

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS



	For the Six Months Ended September 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	$	—		$	(759	)	$	2,670		$	(114	)	$	1,797
Cash flows from investing activities:
Capital expenditures - network and other	—			—			(2,964		)	—			(2,964		)
Capital expenditures - leased devices	—			—			(1,117		)	—			(1,117		)
Expenditures relating to FCC licenses	—			—			(45		)	—			(45		)
Proceeds from sales and maturities of short-term investments	—			219			60			—			279
Purchases of short-term investments	—			(176		)	(40		)	—			(216		)
Change in amounts due from/due to consolidated affiliates	1			(1,270		)	—			1,269			—
Proceeds from sales of assets and FCC licenses	—			—			4			—			4
Intercompany note advance to consolidated affiliate	—			(55		)	—			55			—
Proceeds from intercompany note advance to consolidated affiliate	—			54			—			(54		)	—
Other, net	—			—			(21		)	—			(21		)
Net cash provided by (used in) investing activities	1			(1,228		)	(4,123		)	1,270			(4,080		)
Cash flows from financing activities:
Proceeds from debt and financings	—			—			434			—			434
Repayments of debt, financing and capital lease obligations	—			—			(206		)	—			(206		)
Proceeds from issuance of common stock, net	—			8			—			—			8
Intercompany dividends paid to parent	—			—			(114		)	114			—
Change in amounts due from/due to consolidated affiliates	—			—			1,269			(1,269		)	—
Intercompany note advance from parent	—			—			55			(55		)	—
Repayments of intercompany note advance from parent	—			—			(54		)	54			—
Other, net	(1		)	—			10			—			9
Net cash (used in) provided by financing activities	(1		)	8			1,394			(1,156		)	245
Net decrease in cash and cash equivalents	—			(1,979		)	(59		)	—			(2,038		)
Cash and cash equivalents, beginning of period	—			3,492			518			—			4,010
Cash and cash equivalents, end of period	$	—		$	1,513		$	459		$	—		$	1,972

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS



	For the Six Months Ended September 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	$	—	$	(679	)	$	2,586		$	(200	)	$	1,707
Cash flows from investing activities:
Capital expenditures - network and other	—		—			(2,389		)	—			(2,389		)
Expenditures relating to FCC licenses	—		—			(79		)	—			(79		)
Reimbursements relating to FCC licenses	—		—			95			—			95
Proceeds from sales and maturities of short-term investments	—		1,842			—			—			1,842
Purchases of short-term investments	—		(1,754		)	(35		)	—			(1,789		)
Change in amounts due from/due to consolidated affiliates	—		(92		)	—			92			—
Proceeds from sales of assets and FCC licenses	—		—			101			—			101
Other, net	—		—			(6		)	—			(6		)
Net cash (used in) provided by investing activities	—		(4		)	(2,313		)	92			(2,225		)
Cash flows from financing activities:
Repayments of debt, financing and capital lease obligations	—		—			(363		)	—			(363		)
Proceeds from issuance of common stock, net	—		46			—			—			46
Intercompany dividends paid to parent	—		—			(200		)	200			—
Change in amounts due from/due to consolidated affiliates	—		—			92			(92		)	—
Net cash provided by (used in) financing activities	—		46			(471		)	108			(317		)
Net decrease in cash and cash equivalents	—		(637		)	(198		)	—			(835		)
Cash and cash equivalents, beginning of period	—		4,125			845			—			4,970
Cash and cash equivalents, end of period	$	—	$	3,488		$	647		$	—		$	4,135