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