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Guarantor Financial Information
9 Months Ended
Dec. 31, 2016
Condensed Financial Information of Parent Company Only Disclosure [Abstract]  
Guarantor Financial Information
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% 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.
During the nine-month period ended December 31, 2016, there was a non-cash equity contribution from the Subsidiary Guarantor to the non-guarantor subsidiaries primarily as a result of organizational restructuring for tax purposes of approximately $600 million.
Under the Subsidiary Guarantor's revolving bank credit facility and certain other finance agreements, the Subsidiary Guarantor is currently restricted from paying cash dividends to the Parent/Issuer because the ratio of total indebtedness to adjusted EBITDA (each as defined in the applicable agreement) exceeds 2.5 to 1.0.
Sprint has a Receivables Facility providing for the sale of eligible wireless service, installment and certain future lease receivables. In November 2015, Sprint entered into the Tranche 1 transaction to sell and leaseback certain leased devices, which was subsequently terminated in December 2016. In April 2016, Sprint entered into the Tranche 2 transaction to sell and leaseback certain leased devices and a Network Equipment Sale-Leaseback to sell and leaseback certain network equipment. In connection with the Receivables Facility, Tranches 1 and 2 and the Network Equipment Sale-Leaseback, Sprint formed certain wholly-owned consolidated bankruptcy-remote SPEs and SPE Lessees that are included in the non-guarantor subsidiaries condensed consolidated financial information. Each SPE and SPE Lessee is a separate legal entity with its own separate creditors who will be entitled, prior to and upon the liquidation of the SPE or SPE Lessee, to be satisfied out of the SPE or SPE Lessee’s assets prior to any assets in the SPE and SPE Lessee becoming available to Sprint (see Note 3. Funding Sources).
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 December 31, 2016
 
Parent/Issuer
 
Subsidiary Guarantor
 
Non-Guarantor
Subsidiaries
 
Eliminations
 
Consolidated
 
(in millions)
ASSETS
Current assets:
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
$
—

 
$
3,117

 
$
590

 
$
—

 
$
3,707

Short-term investments
—

 
2,329

 
20

 
—

 
2,349

Accounts and notes receivable, net
195

 
1

 
1,235

 
(195
)
 
1,236

Device and accessory inventory
—

 
—

 
1,296

 
—

 
1,296

Prepaid expenses and other current assets
—

 
15

 
1,969

 
—

 
1,984

Total current assets
195

 
5,462

 
5,110

 
(195
)
 
10,572

Investments in subsidiaries
18,988

 
23,932

 
—

 
(42,920
)
 
—

Property, plant and equipment, net
—

 
—

 
19,333

 
—

 
19,333

Due from consolidated affiliate
25

 
13,125

 
—

 
(13,150
)
 
—

Note receivable from consolidated affiliate
10,390

 
575

 
—

 
(10,965
)
 
—

Intangible assets
 
 
 
 
 
 
 
 
 
Goodwill
—

 
—

 
6,579

 
—

 
6,579

FCC licenses and other
—

 
—

 
40,556

 
—

 
40,556

Definite-lived intangible assets, net
—

 
—

 
3,582

 
—

 
3,582

Other assets
—

 
103

 
570

 
—

 
673

Total assets
$
29,598

 
$
43,197

 
$
75,730

 
$
(67,230
)
 
$
81,295

 
 
 
 
 
 
 
 
 
 
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
 
 
 
 
 
 
 
 
 
Accounts payable
$
—

 
$
—

 
$
2,894

 
$
—

 
$
2,894

Accrued expenses and other current liabilities
212

 
560

 
3,612

 
(195
)
 
4,189

Current portion of long-term debt, financing and capital lease obligations
—

 
2,583

 
3,971

 
—

 
6,554

Total current liabilities
212

 
3,143

 
10,477

 
(195
)
 
13,637

Long-term debt, financing and capital lease obligations
10,390

 
9,773

 
10,596

 
—

 
30,759

Deferred tax liabilities
—

 
—

 
14,238

 
—

 
14,238

Note payable due to consolidated affiliate
—

 
10,390

 
575

 
(10,965
)
 
—

Other liabilities
—

 
903

 
2,762

 
—

 
3,665

Due to consolidated affiliate
—

 
—

 
13,150

 
(13,150
)
 
—

Total liabilities
10,602

 
24,209

 
51,798

 
(24,310
)
 
62,299

Commitments and contingencies
 
 
 
 
 
 
 
 
 
Total stockholders' equity
18,996

 
18,988

 
23,932

 
(42,920
)
 
18,996

Total liabilities and stockholders' equity
$
29,598

 
$
43,197

 
$
75,730

 
$
(67,230
)
 
$
81,295



CONDENSED CONSOLIDATING BALANCE SHEET
 
As of March 31, 2016
 
Parent/Issuer
 
Subsidiary Guarantor
 
Non-Guarantor
Subsidiaries
 
Eliminations
 
Consolidated
 
(in millions)
ASSETS
Current assets:
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
$
—

 
$
2,154

 
$
487

 
$
—

 
$
2,641

Accounts and notes receivable, net
87

 
27

 
1,099

 
(114
)
 
1,099

Device and accessory inventory
—

 
—

 
1,173

 
—

 
1,173

Prepaid expenses and other current assets
—

 
12

 
1,908

 
—

 
1,920

Total current assets
87

 
2,193

 
4,667

 
(114
)
 
6,833

Investments in subsidiaries
19,783

 
23,129

 
—

 
(42,912
)
 
—

Property, plant and equipment, net
—

 
—

 
20,297

 
—

 
20,297

Due from consolidated affiliate
50

 
19,518

 
—

 
(19,568
)
 
—

Note receivable from consolidated affiliate
10,377

 
245

 
—

 
(10,622
)
 
—

Intangible assets
 
 
 
 
 
 
 
 
 
Goodwill
—

 
—

 
6,575

 
—

 
6,575

FCC licenses and other
—

 
—

 
40,073

 
—

 
40,073

Definite-lived intangible assets, net
—

 
—

 
4,469

 
—

 
4,469

Other assets
—

 
1,127

 
620

 
(1,019
)
 
728

Total assets
$
30,297

 
$
46,212

 
$
76,701

 
$
(74,235
)
 
$
78,975

 
 
 
 
 
 
 
 
 
 
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
 
 
 
 
 
 
 
 
 
Accounts payable
$
—

 
$
—

 
$
2,899

 
$
—

 
$
2,899

Accrued expenses and other current liabilities
137

 
531

 
3,820

 
(114
)
 
4,374

Current portion of long-term debt, financing and capital lease obligations
—

 
3,065

 
1,625

 
—

 
4,690

Total current liabilities
137

 
3,596

 
8,344

 
(114
)
 
11,963

Long-term debt, financing and capital lease obligations
10,377

 
11,495

 
8,415

 
(1,019
)
 
29,268

Deferred tax liabilities
—

 
—

 
13,959

 
—

 
13,959

Note payable due to consolidated affiliate
—

 
10,377

 
245

 
(10,622
)
 
—

Other liabilities
—

 
961

 
3,041

 
—

 
4,002

Due to consolidated affiliate
—

 
—

 
19,568

 
(19,568
)
 
—

Total liabilities
10,514

 
26,429

 
53,572

 
(31,323
)
 
59,192

Commitments and contingencies
 
 
 
 
 
 
 
 
 
Total stockholders' equity
19,783

 
19,783

 
23,129

 
(42,912
)
 
19,783

Total liabilities and stockholders' equity
$
30,297

 
$
46,212

 
$
76,701

 
$
(74,235
)
 
$
78,975


CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE (LOSS) INCOME
 
For the Three Months Ended December 31, 2016
 
Parent/Issuer
 
Subsidiary Guarantor
 
Non-Guarantor
Subsidiaries
 
Eliminations
 
Consolidated
 
(in millions)
Net operating revenues
$
—

 
$
—

 
$
8,549

 
$
—

 
$
8,549

Net operating expenses:
 
 
 
 
 
 
 
 
 
Cost of services (exclusive of depreciation and amortization included below)
—

 
—

 
1,925

 
—

 
1,925

Cost of products (exclusive of depreciation and amortization included below)
—

 
—

 
1,985

 
—

 
1,985

Selling, general and administrative
—

 
—

 
2,080

 
—

 
2,080

Severance and exit costs
—

 
—

 
19

 
—

 
19

Depreciation
—

 
—

 
1,837

 
—

 
1,837

Amortization
—

 
—

 
255

 
—

 
255

Other, net
—

 
—

 
137

 
—

 
137

 
—

 
—

 
8,238

 
—

 
8,238

Operating income
—

 
—

 
311

 
—

 
311

Other income (expense):
 
 
 
 
 
 
 
 
 
Interest income
198

 
43

 
4

 
(233
)
 
12

Interest expense
(198
)
 
(409
)
 
(245
)
 
233

 
(619
)
(Losses) earnings of subsidiaries
(479
)
 
(38
)
 
—

 
517

 
—

Other (expense) income, net
—

 
(75
)
 
3

 
—

 
(72
)
 
(479
)
 
(479
)
 
(238
)
 
517

 
(679
)
(Loss) income before income taxes
(479
)
 
(479
)
 
73

 
517

 
(368
)
Income tax expense
—

 
—

 
(111
)
 
—

 
(111
)
Net (loss) income
(479
)
 
(479
)
 
(38
)
 
517

 
(479
)
Other comprehensive (loss) income
(5
)
 
(5
)
 
(4
)
 
9

 
(5
)
Comprehensive (loss) income
$
(484
)
 
$
(484
)
 
$
(42
)
 
$
526

 
$
(484
)
CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE (LOSS) INCOME
 
For the Three Months Ended December 31, 2015
 
Parent/Issuer
 
Subsidiary Guarantor
 
Non-Guarantor
Subsidiaries
 
Eliminations
 
Consolidated
 
(in millions)
Net operating revenues
$
—

 
$
—

 
$
8,107

 
$
—

 
$
8,107

Net operating expenses:
 
 
 
 
 
 
 
 
 
Cost of services (exclusive of depreciation and amortization included below)
—

 
—

 
2,348

 
—

 
2,348

Cost of products (exclusive of depreciation and amortization included below)
—

 
—

 
1,589

 
—

 
1,589

Selling, general and administrative
—

 
—

 
2,129

 
—

 
2,129

Severance and exit costs
—

 
—

 
209

 
—

 
209

Depreciation
—

 
—

 
1,549

 
—

 
1,549

Amortization
—

 
—

 
316

 
—

 
316

Other, net
—

 
—

 
164

 
—

 
164

 
—

 
—

 
8,304

 
—

 
8,304

Operating loss
—

 
—

 
(197
)
 
—

 
(197
)
Other income (expense):
 
 
 
 
 
 
 
 
 
Interest income
198

 
39

 
2

 
(236
)
 
3

Interest expense
(198
)
 
(406
)
 
(178
)
 
236

 
(546
)
(Losses) earnings of subsidiaries
(838
)
 
(471
)
 
—

 
1,309

 
—

Other income, net
—

 
—

 
1

 
—

 
1

 
(838
)
 
(838
)
 
(175
)
 
1,309

 
(542
)
(Loss) income before income taxes
(838
)
 
(838
)
 
(372
)
 
1,309

 
(739
)
Income tax benefit (expense)
2

 
—

 
(99
)
 
—

 
(97
)
Net (loss) income
(836
)
 
(838
)
 
(471
)
 
1,309

 
(836
)
Other comprehensive (loss) income
(7
)
 
(7
)
 
(4
)
 
11

 
(7
)
Comprehensive (loss) income
$
(843
)
 
$
(845
)
 
$
(475
)
 
$
1,320

 
$
(843
)

CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE (LOSS) INCOME
 
For the Nine Months Ended December 31, 2016
 
Parent/Issuer
 
Subsidiary Guarantor
 
Non-Guarantor Subsidiaries
 
Eliminations
 
Consolidated
 
(in millions)
Net operating revenues
$
—

 
$
—

 
$
24,808

 
$
—

 
$
24,808

Net operating expenses:
 
 
 
 
 
 
 
 
 
Cost of services (exclusive of depreciation and amortization included below)
—

 
—

 
6,125

 
—

 
6,125

Cost of products (exclusive of depreciation and amortization included below)
—

 
—

 
5,097

 
—

 
5,097

Selling, general and administrative
—

 
—

 
5,992

 
—

 
5,992

Severance and exit costs
—

 
—

 
30

 
—

 
30

Depreciation
—

 
—

 
5,227

 
—

 
5,227

Amortization
—

 
—

 
813

 
—

 
813

Other, net
—

 
—

 
230

 
—

 
230

 
—

 
—

 
23,514

 
—

 
23,514

Operating income
—

 
—

 
1,294

 
—

 
1,294

Other income (expense):
 
 
 
 
 
 
 
 
 
Interest income
593

 
105

 
13

 
(674
)
 
37

Interest expense
(593
)
 
(1,271
)
 
(674
)
 
674

 
(1,864
)
(Losses) earnings of subsidiaries
(923
)
 
320

 
—

 
603

 
—

Other expense, net
—

 
(77
)
 
(27
)
 
—

 
(104
)
 
(923
)
 
(923
)
 
(688
)
 
603

 
(1,931
)
(Loss) income before income taxes
(923
)
 
(923
)
 
606

 
603

 
(637
)
Income tax expense
—

 
—

 
(286
)
 
—

 
(286
)
Net (loss) income
(923
)
 
(923
)
 
320

 
603

 
(923
)
Other comprehensive income (loss)
2

 
2

 
3

 
(5
)
 
2

Comprehensive (loss) income
$
(921
)
 
$
(921
)
 
$
323

 
$
598

 
$
(921
)


CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE (LOSS) INCOME
 
For the Nine Months Ended December 31, 2015
 
Parent/Issuer
 
Subsidiary Guarantor
 
Non-Guarantor Subsidiaries
 
Eliminations
 
Consolidated
 
(in millions)
Net operating revenues
$
—

 
$
—

 
$
24,109

 
$
—

 
$
24,109

Net operating expenses:
 
 
 
 
 
 
 
 
 
Cost of services (exclusive of depreciation and amortization included below)
—

 
—

 
7,194

 
—

 
7,194

Cost of products (exclusive of depreciation and amortization included below)
—

 
—

 
4,244

 
—

 
4,244

Selling, general and administrative
—

 
—

 
6,540

 
—

 
6,540

Severance and exit costs
—

 
—

 
247

 
—

 
247

Depreciation
—

 
—

 
4,202

 
—

 
4,202

Amortization
—

 
—

 
994

 
—

 
994

Other, net
—

 
—

 
386

 
—

 
386

 
—

 
—

 
23,807

 
—

 
23,807

Operating income
—

 
—

 
302

 
—

 
302

Other income (expense):
 
 
 
 
 
 
 
 
 
Interest income
593

 
118

 
3

 
(707
)
 
7

Interest expense
(593
)
 
(1,220
)
 
(524
)
 
707

 
(1,630
)
(Losses) earnings of subsidiaries
(1,443
)
 
(341
)
 
—

 
1,784

 
—

Other income, net
—

 
—

 
6

 
—

 
6

 
(1,443
)
 
(1,443
)
 
(515
)
 
1,784

 
(1,617
)
(Loss) income before income taxes
(1,443
)
 
(1,443
)
 
(213
)
 
1,784

 
(1,315
)
Income tax benefit (expense)
2

 
—

 
(128
)
 
—

 
(126
)
Net (loss) income
(1,441
)
 
(1,443
)
 
(341
)
 
1,784

 
(1,441
)
Other comprehensive (loss) income
(11
)
 
(11
)
 
(6
)
 
17

 
(11
)
Comprehensive (loss) income
$
(1,452
)
 
$
(1,454
)
 
$
(347
)
 
$
1,801

 
$
(1,452
)



CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
 
For the Nine Months Ended December 31, 2016
 
Parent/Issuer
 
Subsidiary Guarantor
 
Non-Guarantor
Subsidiaries
 
Eliminations
 
Consolidated
 
(in millions)
Cash flows from operating activities:
 
 
 
 
 
 
 
 
 
Net cash (used in) provided by operating activities
$
—

 
$
(1,168
)
 
$
4,186

 
$
(118
)
 
$
2,900

Cash flows from investing activities:
 
 
 
 
 
 
 
 
 
Capital expenditures - network and other
—

 
—

 
(1,421
)
 
—

 
(1,421
)
Capital expenditures - leased devices
—

 
—

 
(1,530
)
 
—

 
(1,530
)
Expenditures relating to FCC licenses
—

 
—

 
(46
)
 
—

 
(46
)
Proceeds from sales and maturities of short-term investments
—

 
2,614

 
35

 
—

 
2,649

Purchases of short-term investments
—

 
(4,943
)
 
(55
)
 
—

 
(4,998
)
Change in amounts due from/due to consolidated affiliates
—

 
6,865

 
—

 
(6,865
)
 
—

Proceeds from sales of assets and FCC licenses
—

 
—

 
126

 
—

 
126

Intercompany note advance to consolidated affiliate
—

 
(392
)
 
—

 
392

 
—

Proceeds from intercompany note advance to consolidated affiliate
—

 
62

 
—

 
(62
)
 
—

Other, net
—

 
—

 
26

 
—

 
26

Net cash provided by (used in) investing activities
—

 
4,206

 
(2,865
)
 
(6,535
)
 
(5,194
)
Cash flows from financing activities:
 
 
 
 
 
 
 
 
 
Proceeds from debt and financings
—

 
—

 
6,830

 
—

 
6,830

Repayments of debt, financing and capital lease obligations
—

 
(2,000
)
 
(1,266
)
 
—

 
(3,266
)
Debt financing costs
—

 
(110
)
 
(162
)
 
—

 
(272
)
Intercompany dividends paid to parent
—

 
—

 
(118
)
 
118

 
—

Change in amounts due from/due to consolidated affiliates
—

 
—

 
(6,865
)
 
6,865

 
—

Intercompany note advance from parent
—

 
—

 
392

 
(392
)
 
—

Repayments of intercompany note advance from parent
—

 
—

 
(62
)
 
62

 
—

Other, net
—

 
35

 
33

 
—

 
68

Net cash (used in) provided by financing activities
—

 
(2,075
)
 
(1,218
)
 
6,653

 
3,360

Net increase in cash and cash equivalents
—

 
963

 
103

 
—

 
1,066

Cash and cash equivalents, beginning of period
—

 
2,154

 
487

 
—

 
2,641

Cash and cash equivalents, end of period
$
—

 
$
3,117

 
$
590

 
$
—

 
$
3,707

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
 
For the Nine Months Ended December 31, 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
$
—

 
$
(1,029
)
 
$
3,800

 
$
(168
)
 
$
2,603

Cash flows from investing activities:
 
 
 
 
 
 
 
 
 
Capital expenditures - network and other
—

 
—

 
(3,958
)
 
—

 
(3,958
)
Capital expenditures - leased devices
—

 
—

 
(1,724
)
 
—

 
(1,724
)
Expenditures relating to FCC licenses
—

 
—

 
(75
)
 
—

 
(75
)
Proceeds from sales and maturities of short-term investments
—

 
317

 
60

 
—

 
377

Purchases of short-term investments
—

 
(197
)
 
(55
)
 
—

 
(252
)
Change in amounts due from/due to consolidated affiliates
1

 
(568
)
 
—

 
567

 
—

Proceeds from sales of assets and FCC licenses
—

 
—

 
36

 
—

 
36

Proceeds from sale-leaseback transaction
—

 
—

 
1,136

 
—

 
1,136

Intercompany note advance to consolidated affiliate
—

 
(159
)
 
—

 
159

 
—

Proceeds from intercompany note advance to consolidated affiliate
—

 
54

 
—

 
(54
)
 
—

Other, net
—

 
—

 
(25
)
 
—

 
(25
)
Net cash provided by (used in) investing activities
1

 
(553
)
 
(4,605
)
 
672

 
(4,485
)
Cash flows from financing activities:
 
 
 
 
 
 
 
 
 
Proceeds from debt and financings
—

 
250

 
505

 
—

 
755

Repayments of debt, financing and capital lease obligations
—

 
(500
)
 
(227
)
 
—

 
(727
)
Debt financing costs
(1
)
 
—

 
—

 
—

 
(1
)
Intercompany dividends paid to parent
—

 
—

 
(168
)
 
168

 
—

Change in amounts due from/due to consolidated affiliates
—

 
—

 
567

 
(567
)
 
—

Intercompany note advance from parent
—

 
—

 
159

 
(159
)
 
—

Repayments of intercompany not advance from parent
—

 
—

 
(54
)
 
54

 
—

Other, net
—

 
10

 
10

 
—

 
20

Net cash (used in) provided by financing activities
(1
)
 
(240
)
 
792

 
(504
)
 
47

Net decrease in cash and cash equivalents
—

 
(1,822
)
 
(13
)
 
—

 
(1,835
)
Cash and cash equivalents, beginning of period
—

 
3,492

 
518

 
—

 
4,010

Cash and cash equivalents, end of period
$
—

 
$
1,670

 
$
505

 
$
—

 
$
2,175