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 years ended March 31, 2017 and 2016 there were non-cash equity contributions from the Subsidiary Guarantor to the Non-Guarantor Subsidiaries as a result of organizational restructuring for tax purposes of approximately $450 million and $1.5 billion, respectively.

Under the Subsidiary Guarantor's secured revolving bank credit facility, 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.

Sprint has a Receivables Facility providing for the sale of eligible wireless service, installment and certain future lease receivables. In November 2015, Sprint also entered into the Tranche 1 transaction to sell and lease-back 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 March 31, 2017
	Parent/Issuer		Subsidiary Guarantor		Non-Guarantor Subsidiaries		Eliminations			Consolidated
	(in millions)
ASSETS
Current assets:
Cash and cash equivalents	$	—	$	2,461	$	409	$	—		$	2,870
Short-term investments	—		5,444		—		—			5,444
Accounts and notes receivable, net	86		1		4,137		(86		)	4,138
Device and accessory inventory	—		—		1,064		—			1,064
Prepaid expenses and other current assets	—		11		590		—			601
Total current assets	86		7,917		6,200		(86		)	14,117
Investments in subsidiaries	18,800		23,854		—		(42,654		)	—
Property, plant and equipment, net	—		—		19,209		—			19,209
Due from consolidated affiliate	25		13,032		—		(13,057		)	—
Note receivable from consolidated affiliate	10,394		575		—		(10,969		)	—
Intangible assets
Goodwill	—		—		6,579		—			6,579
FCC licenses and other	—		—		40,585		—			40,585
Definite-lived intangible assets, net	—		—		3,320		—			3,320
Other assets	—		134		1,179		—			1,313
Total assets	$	29,305	$	45,512	$	77,072	$	(66,766	)	$	85,123

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	—	$	—	$	3,281	$	—		$	3,281
Accrued expenses and other current liabilities	103		478		3,646		(86		)	4,141
Current portion of long-term debt, financing and capital lease obligations	—		1,356		3,680		—			5,036
Total current liabilities	103		1,834		10,607		(86		)	12,458
Long-term debt, financing and capital lease obligations	10,394		13,647		11,837		—			35,878
Note payable due to consolidated affiliate	—		10,394		575		(10,969		)	—
Deferred tax liabilities	—		—		14,416		—			14,416
Other liabilities	—		837		2,726		—			3,563
Due to consolidated affiliate	—		—		13,057		(13,057		)	—
Total liabilities	10,497		26,712		53,218		(24,112		)	66,315
Commitments and contingencies
Total stockholders' equity	18,808		18,800		23,854		(42,654		)	18,808
Total liabilities and stockholders' equity	$	29,305	$	45,512	$	77,072	$	(66,766	)	$	85,123

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
Note payable due to consolidated affiliate	—		10,377		245		(10,622		)	—
Deferred tax liabilities	—		—		13,959		—			13,959
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



	Year Ended March 31, 2017
	Parent/Issuer			Subsidiary Guarantor			Non-Guarantor Subsidiaries			Eliminations			Consolidated
	(in millions)
Net operating revenues:
Service	$	—		$	—		$	25,368		$	—		$	25,368
Equipment	—			—			7,979			—			7,979
	—			—			33,347			—			33,347
Net operating expenses:
Cost of services (exclusive of depreciation and amortization below)	—			—			7,861			—			7,861
Cost of products (exclusive of depreciation and amortization below)	—			—			7,077			—			7,077
Selling, general and administrative	—			—			7,994			—			7,994
Severance and exit costs	—			—			66			—			66
Depreciation	—			—			7,098			—			7,098
Amortization	—			—			1,052			—			1,052
Other, net	—			—			435			—			435
	—			—			31,583			—			31,583
Operating income	—			—			1,764			—			1,764
Other (expense) income:
Interest income	790			145			21			(896		)	60
Interest expense	(790		)	(1,675		)	(926		)	896			(2,495		)
(Losses) earnings of subsidiaries	(1,206		)	402			—			804			—
Other expense, net	—			(78		)	(22		)	—			(100		)
	(1,206		)	(1,206		)	(927		)	804			(2,535		)
(Loss) income before income taxes	(1,206		)	(1,206		)	837			804			(771		)
Income tax expense	—			—			(435		)	—			(435		)
Net (loss) income	(1,206		)	(1,206		)	402			804			(1,206		)
Other comprehensive income (loss)	35			35			42			(77		)	35
Comprehensive (loss) income	$	(1,171	)	$	(1,171	)	$	444		$	727		$	(1,171	)

CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE LOSS



	Year Ended March 31, 2016
	Parent/Issuer			Subsidiary Guarantor			Non-Guarantor Subsidiaries			Eliminations			Consolidated
	(in millions)
Net operating revenues:
Service	$	—		$	—		$	27,174		$	—		$	27,174
Equipment	—			—			5,006			—			5,006
	—			—			32,180			—			32,180
Net operating expenses:
Cost of services (exclusive of depreciation and amortization below)	—			—			9,439			—			9,439
Cost of products (exclusive of depreciation and amortization below)	—			—			5,795			—			5,795
Selling, general and administrative	—			—			8,479			—			8,479
Severance and exit costs	—			—			409			—			409
Depreciation	—			—			5,794			—			5,794
Amortization	—			—			1,294			—			1,294
Other, net	—			—			660			—			660
	—			—			31,870			—			31,870
Operating income	—			—			310			—			310
Other (expense) income:
Interest income	790			165			5			(949		)	11
Interest expense	(790		)	(1,624		)	(717		)	949			(2,182		)
(Losses) earnings of subsidiaries	(1,997		)	(538		)	—			2,535			—
Other income, net	—			—			7			—			7
	(1,997		)	(1,997		)	(705		)	2,535			(2,164		)
(Loss) income before income taxes	(1,997		)	(1,997		)	(395		)	2,535			(1,854		)
Income tax benefit (expense)	2			—			(143		)	—			(141		)
Net (loss) income	(1,995		)	(1,997		)	(538		)	2,535			(1,995		)
Other comprehensive (loss) income	(31		)	(31		)	(21		)	52			(31		)
Comprehensive (loss) income	$	(2,026	)	$	(2,028	)	$	(559	)	$	2,587		$	(2,026	)

CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE LOSS



	Year Ended March 31, 2015
	Parent/Issuer			Subsidiary Guarantor			Non-Guarantor Subsidiaries			Eliminations			Consolidated
	(in millions)
Net operating revenues:
Service	$	—		$	—		$	29,542		$	—		$	29,542
Equipment	—			—			4,990			—			4,990
	—			—			34,532			—			34,532
Net operating expenses:
Cost of services (exclusive of depreciation and amortization below)	—			—			9,660			—			9,660
Cost of products (exclusive of depreciation and amortization below)	—			—			9,309			—			9,309
Selling, general and administrative	—			—			9,563			—			9,563
Impairments	—			—			2,133			—			2,133
Severance and exit costs	—			—			304			—			304
Depreciation	—			—			3,797			—			3,797
Amortization	—			—			1,552			—			1,552
Other, net	—			1			108			—			109
	—			1			36,426			—			36,427
Operating loss	—			(1		)	(1,894		)	—			(1,895		)
Other (expense) income:
Interest income	687			146			3			(824		)	12
Interest expense	(687		)	(1,521		)	(667		)	824			(2,051		)
(Losses) earnings of subsidiaries	(3,345		)	(1,970		)	—			5,315			—
Other income, net	—			1			14			—			15
	(3,345		)	(3,344		)	(650		)	5,315			(2,024		)
(Loss) income before income taxes	(3,345		)	(3,345		)	(2,544		)	5,315			(3,919		)
Income tax benefit	—			—			574			—			574
Net (loss) income	(3,345		)	(3,345		)	(1,970		)	5,315			(3,345		)
Other comprehensive (loss) income	(365		)	(365		)	(355		)	720			(365		)
Comprehensive (loss) income	$	(3,710	)	$	(3,710	)	$	(2,325	)	$	6,035		$	(3,710	)

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS



	Year Ended March 31, 2017
	Parent/Issuer		Subsidiary Guarantor			Non-Guarantor Subsidiaries			Eliminations			Consolidated
	(in millions)
Cash flows from operating activities:
Net cash (used in) provided by operating activities	$	—	$	(1,629	)	$	5,996		$	(199	)	$	4,168
Cash flows from investing activities:
Capital expenditures - network and other	—		—			(1,950		)	—			(1,950		)
Capital expenditures - leased devices	—		—			(1,925		)	—			(1,925		)
Expenditures relating to FCC licenses	—		—			(83		)	—			(83		)
Proceeds from sales and maturities of short-term investments	—		4,566			55			—			4,621
Purchases of short-term investments	—		(10,010		)	(55		)	—			(10,065		)
Change in amounts due from/due to consolidated affiliates	—		7,097			—			(7,097		)	—
Proceeds from sales of assets and FCC licenses	—		—			219			—			219
Intercompany note advance to consolidated affiliate	—		(414		)	—			414			—
Proceeds from intercompany note advance to consolidated affiliate	—		84			—			(84		)	—
Other, net	—		—			(42		)	—			(42		)
Net cash provided by (used in) investing activities	—		1,323			(3,781		)	(6,767		)	(9,225		)
Cash flows from financing activities:
Proceeds from debt and financings	—		4,000			6,966			—			10,966
Repayments of debt, financing and capital lease obligations	—		(3,250		)	(2,167		)	—			(5,417		)
Debt financing costs	—		(187		)	(171		)	—			(358		)
Intercompany dividends paid to consolidated affiliate	—		—			(199		)	199			—
Change in amounts due from/due to consolidated affiliates	—		—			(7,097		)	7,097			—
Intercompany note advance from parent	—		—			414			(414		)	—
Repayments of intercompany note advance from parent	—		—			(84		)	84			—
Other, net	—		50			45			—			95
Net cash provided by (used in) financing activities	—		613			(2,293		)	6,966			5,286
Net increase (decrease) in cash and cash equivalents	—		307			(78		)	—			229
Cash and cash equivalents, beginning of period	—		2,154			487			—			2,641
Cash and cash equivalents, end of period	$	—	$	2,461		$	409		$	—		$	2,870

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS



	Year Ended March 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	$	—		$	(1,421	)	$	5,551		$	(233	)	$	3,897
Cash flows from investing activities:
Capital expenditures - network and other	—			—			(4,680		)	—			(4,680		)
Capital expenditures - leased devices	—			—			(2,292		)	—			(2,292		)
Expenditures relating to FCC licenses	—			—			(98		)	—			(98		)
Proceeds from sales and maturities of short-term investments	—			343			75			—			418
Purchases of short-term investments	—			(197		)	(55		)	—			(252		)
Change in amounts due from/due to consolidated affiliates	1			(36		)	—			35			—
Proceeds from sales of assets and FCC licenses	—			—			62			—			62
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	—			372			—			(372		)	—
Other, net	—			—			(29		)	—			(29		)
Net cash provided by (used in) investing activities	1			323			(5,881		)	(178		)	(5,735		)
Cash flows from financing activities:
Proceeds from debt and financings	—			250			1,105			—			1,355
Repayments of debt, financing and capital lease obligations	—			(500		)	(399		)	—			(899		)
Debt financing costs	(1		)	—			(10		)	—			(11		)
Intercompany dividends paid to consolidated affiliate	—			—			(233		)	233			—
Change in amounts due from/due to consolidated affiliates	—			—			35			(35		)	—
Intercompany note advance from parent	—			—			159			(159		)	—
Repayments of intercompany note advance from parent	—			—			(372		)	372			—
Other, net	—			10			14			—			24
Net cash (used in) provided by financing activities	(1		)	(240		)	299			411			469
Net decrease in cash and cash equivalents	—			(1,338		)	(31		)	—			(1,369		)
Cash and cash equivalents, beginning of period	—			3,492			518			—			4,010
Cash and cash equivalents, end of period	$	—		$	2,154		$	487		$	—		$	2,641

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS



	Year Ended March 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	$	—		$	(750	)	$	3,700		$	(500	)	$	2,450
Cash flows from investing activities:
Capital expenditures - network and other	—			—			(5,422		)	—			(5,422		)
Capital expenditures - leased devices	—			—			(582		)	—			(582		)
Expenditures relating to FCC licenses	—			—			(163		)	—			(163		)
Reimbursements relating to FCC licenses	—			—			95			—			95
Proceeds from sales and maturities of short-term investments	—			3,061			70			—			3,131
Purchases of short-term investments	—			(1,987		)	(90		)	—			(2,077		)
Change in amounts due from/due to consolidated affiliates	—			(2,425		)	—			2,425			—
Proceeds from sales of assets and FCC licenses	—			—			315			—			315
Intercompany note advance to consolidated affiliate	(1,481		)	(343		)	—			1,824			—
Other, net	—			—			(11		)	—			(11		)
Net cash (used in) provided by investing activities	(1,481		)	(1,694		)	(5,788		)	4,249			(4,714		)
Cash flows from financing activities:
Proceeds from debt and financings	1,500			300			130			—			1,930
Repayments of debt and capital lease obligations	—			—			(574		)	—			(574		)
Debt financing costs	(21		)	(5		)	(61		)	—			(87		)
Intercompany dividends paid to consolidated affiliate	—			—			(500		)	500			—
Change in amounts due from/due to consolidated affiliates	2			—			2,423			(2,425		)	—
Intercompany note advance from parent	—			1,481			343			(1,824		)	—
Other, net	—			35			—			—			35
Net cash provided by (used in) financing activities	1,481			1,811			1,761			(3,749		)	1,304
Net decrease in cash and cash equivalents	—			(633		)	(327		)	—			(960		)
Cash and cash equivalents, beginning of period	—			4,125			845			—			4,970
Cash and cash equivalents, end of period	$	—		$	3,492		$	518		$	—		$	4,010