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 (Subsidiary Guarantor), which is a 100% owned subsidiary of Sprint Corporation (Parent/Issuer). In connection with the foregoing, in November 2014, the Company and Sprint Communications completed an offer to exchange the notes for a new issue of substantially identical exchange notes registered under the Securities Act of 1933. 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.

During the nine-month periods ended December 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 $4.7 billion and $563 million, respectively. We also replaced $22.9 billion of short-term payables with intercompany notes issued by the Subsidiary Guarantor to the Non-Guarantor Subsidiaries during the nine-month period ended December 31, 2017. The notes are subordinated to all unaffiliated third party obligations of Sprint Corporation and its subsidiaries.

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 April 2016, Sprint entered into the Tranche 2 transaction to sell and leaseback certain leased devices and a separate network equipment sale-leaseback transaction to sell and leaseback certain network equipment. In October 2016, Sprint transferred certain directly held and third-party leased spectrum licenses to wholly-owned bankruptcy-remote special purpose entities as part of the spectrum financing transaction. In connection with each of the Receivables Facility, Tranche 2, and the spectrum financing transaction, Sprint formed certain wholly-owned bankruptcy-remote subsidiaries that are included in the non-guarantor subsidiaries' condensed consolidated financial information. In addition, the bankruptcy-remote special purpose entities formed in connection with the network equipment sale-leaseback transaction, but which are not Sprint subsidiaries, are included in the non-guarantor subsidiaries' condensed consolidated financial information. Each of these is a separate legal entity with its own separate creditors who will be entitled, prior to and upon its liquidation, to be satisfied out of its assets prior to any assets becoming available to Sprint (see Note 8. Long-Term Debt, Financing and Capital Lease Obligations).

We have accounted for investments in subsidiaries using the equity method. Presented below is the condensed consolidating financial information.

CONDENSED CONSOLIDATING BALANCE SHEET



	December 31, 2017
	Parent/Issuer		Subsidiary Guarantor		Non-Guarantor Subsidiaries		Eliminations			Consolidated
	(in millions)
ASSETS
Current assets:
Cash and cash equivalents	$	—	$	3,948	$	492	$	—		$	4,440
Short-term investments	—		173		—		—			173
Accounts and notes receivable, net	196		445		3,917		(641		)	3,917
Current portion of notes receivable from consolidated affiliate	—		424		—		(424		)	—
Device and accessory inventory	—		—		1,009		—			1,009
Prepaid expenses and other current assets	1		8		617		—			626
Total current assets	197		4,998		6,035		(1,065		)	10,165
Investments in subsidiaries	26,233		36,237		—		(62,470		)	—
Property, plant and equipment, net	—		—		19,712		—			19,712
Due from consolidated affiliates	1		—		13,776		(13,777		)	—
Notes receivable from consolidated affiliate	10,407		22,491		—		(32,898		)	—
Intangible assets
Goodwill	—		—		6,586		—			6,586
FCC licenses and other	—		—		41,222		—			41,222
Definite-lived intangible assets, net	—		—		2,667		—			2,667
Other assets	—		196		871		—			1,067
Total assets	$	36,838	$	63,922	$	90,869	$	(110,210	)	$	81,419

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	—	$	—	$	3,176	$	—		$	3,176
Accrued expenses and other current liabilities	196		383		3,921		(641		)	3,859
Current portion of long-term debt, financing and capital lease obligations	—		1,895		2,141		—			4,036
Current portion of notes payable to consolidated affiliate	—		—		424		(424		)	—
Total current liabilities	196		2,278		9,662		(1,065		)	11,071
Long-term debt, financing and capital lease obligations	10,407		10,407		12,011		—			32,825
Notes payable to consolidated affiliate	—		10,407		22,491		(32,898		)	—
Deferred tax liabilities	—		—		7,709		—			7,709
Other liabilities	—		820		2,689		—			3,509
Due to consolidated affiliates	—		13,777		—		(13,777		)	—
Total liabilities	10,603		37,689		54,562		(47,740		)	55,114
Commitments and contingencies
Total stockholders' equity	26,235		26,233		36,237		(62,470		)	26,235
Noncontrolling interests	—		—		70		—			70
Total equity	26,235		26,233		36,307		(62,470		)	26,305
Total liabilities and equity	$	36,838	$	63,922	$	90,869	$	(110,210	)	$	81,419

CONDENSED CONSOLIDATING BALANCE SHEET



	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 affiliates	25		13,032		—		(13,057		)	—
Notes 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
Notes payable 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 affiliates	—		—		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 STATEMENT OF COMPREHENSIVE INCOME (LOSS)



	Three Months Ended December 31, 2017
	Parent/Issuer			Subsidiary Guarantor			Non-Guarantor Subsidiaries			Eliminations			Consolidated
	(in millions)
Net operating revenues	$	—		$	—		$	8,239		$	—		$	8,239
Net operating expenses:
Cost of services (exclusive of depreciation and amortization included below)	—			—			1,733			—			1,733
Cost of products (exclusive of depreciation and amortization included below)	—			—			1,673			—			1,673
Selling, general and administrative	—			—			2,108			—			2,108
Severance and exit costs	—			—			13			—			13
Depreciation	—			—			1,977			—			1,977
Amortization	—			—			196			—			196
Other, net	—			—			(188		)	—			(188		)
	—			—			7,512			—			7,512
Operating income	—			—			727			—			727
Other income (expense):
Interest income	198			458			1			(643		)	14
Interest expense	(198		)	(382		)	(644		)	643			(581		)
Earnings (losses) of subsidiaries	7,162			7,088			—			(14,250		)	—
Other expense, net	—			(2		)	(54		)	—			(56		)
	7,162			7,162			(697		)	(14,250		)	(623		)
Income (loss) before income taxes	7,162			7,162			30			(14,250		)	104
Income tax benefit	—			—			7,052			—			7,052
Net income (loss)	7,162			7,162			7,082			(14,250		)	7,156
Less: Net loss attributable to noncontrolling interests	—			—			6			—			6
Net income (loss) attributable to Sprint Corporation	7,162			7,162			7,088			(14,250		)	7,162
Other comprehensive income (loss)	26			26			6			(32		)	26
Comprehensive income (loss)	$	7,188		$	7,188		$	7,088		$	(14,282	)	$	7,182

CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE (LOSS) INCOME



	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 (expense) income:
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 INCOME (LOSS)



	Nine Months Ended December 31, 2017
	Parent/Issuer			Subsidiary Guarantor			Non-Guarantor Subsidiaries			Eliminations			Consolidated
	(in millions)
Net operating revenues	$	—		$	—		$	24,323		$	—		$	24,323
Net operating expenses:
Cost of services (exclusive of depreciation and amortization included below)	—			—			5,140			—			5,140
Cost of products (exclusive of depreciation and amortization included below)	—			—			4,622			—			4,622
Selling, general and administrative	—			—			6,059			—			6,059
Severance and exit costs	—			—			13			—			13
Depreciation	—			—			5,693			—			5,693
Amortization	—			—			628			—			628
Other, net	—			(55		)	(268		)	—			(323		)
	—			(55		)	21,887			—			21,832
Operating income	—			55			2,436			—			2,491
Other income (expense):
Interest income	593			783			10			(1,320		)	66
Interest expense	(593		)	(1,171		)	(1,345		)	1,320			(1,789		)
Earnings (losses) of subsidiaries	7,320			7,722			—			(15,042		)	—
Other expense, net	—			(69		)	(47		)	—			(116		)
	7,320			7,265			(1,382		)	(15,042		)	(1,839		)
Income (loss) before income taxes	7,320			7,320			1,054			(15,042		)	652
Income tax benefit	—			—			6,662			—			6,662
Net income (loss)	7,320			7,320			7,716			(15,042		)	7,314
Less: Net loss attributable to noncontrolling interests	—			—			6			—			6
Net income (loss) attributable to Sprint Corporation	7,320			7,320			7,722			(15,042		)	7,320
Other comprehensive income (loss)	38			38			18			(56		)	38
Comprehensive income (loss)	$	7,358		$	7,358		$	7,734		$	(15,098	)	$	7,352

CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE (LOSS) INCOME



	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 (expense) income:
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 CASH FLOWS



	Nine Months Ended December 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	$	—	$	(1,143	)	$	5,548		$	—		$	4,405
Cash flows from investing activities:
Capital expenditures - network and other	—		—			(2,499		)	—			(2,499		)
Capital expenditures - leased devices	—		—			(1,787		)	—			(1,787		)
Expenditures relating to FCC licenses	—		—			(92		)	—			(92		)
Proceeds from sales and maturities of short-term investments	—		7,113			—			—			7,113
Purchases of short-term investments	—		(1,842		)	—			—			(1,842		)
Change in amounts due from/due to consolidated affiliates	—		—			689			(689		)	—
Proceeds from sales of assets and FCC licenses	—		—			367			—			367
Proceeds from intercompany note advance to consolidated affiliate	—		575			—			(575		)	—
Other, net	—		—			16			—			16
Net cash provided by (used in) investing activities	—		5,846			(3,306		)	(1,264		)	1,276
Cash flows from financing activities:
Proceeds from debt and financings	—		—			3,073			—			3,073
Repayments of debt, financing and capital lease obligations	—		(2,530		)	(4,629		)	—			(7,159		)
Debt financing costs	—		(9		)	(10		)	—			(19		)
Change in amounts due from/due to consolidated affiliates	—		(689		)	—			689			—
Repayments of intercompany note advance from parent	—		—			(575		)	575			—
Other, net	—		12			(18		)	—			(6		)
Net cash used in financing activities	—		(3,216		)	(2,159		)	1,264			(4,111		)
Net increase in cash and cash equivalents	—		1,487			83			—			1,570
Cash and cash equivalents, beginning of period	—		2,461			409			—			2,870
Cash and cash equivalents, end of period	$	—	$	3,948		$	492		$	—		$	4,440

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS



	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 consolidated affiliate	—		—			(118		)	118			—
Change in amounts due from/due to consolidated affiliates	—		—			(6,865		)	6,865			—
Intercompany note advance from consolidated affiliate	—		—			392			(392		)	—
Repayments of intercompany note advance from consolidated affiliate	—		—			(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