
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.

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 a Handset Sale-Leaseback transaction to sell and lease-back certain leased devices. In connection with the Receivables Facility and the Handset 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, 2015
	Parent/Issuer		Subsidiary Guarantor		Non-Guarantor Subsidiaries		Eliminations			Consolidated
	(in millions)
ASSETS
Current assets:
Cash and cash equivalents	$	—	$	1,670	$	505	$	—		$	2,175
Short-term investments	—		26		15		—			41
Accounts and notes receivable, net	196		6		1,033		(202		)	1,033
Device and accessory inventory	—		—		995		—			995
Prepaid expenses and other current assets	—		17		2,300		—			2,317
Total current assets	196		1,719		4,848		(202		)	6,561
Investments in subsidiaries	20,333		22,524		—		(42,857		)	—
Property, plant and equipment, net	—		—		20,645		—			20,645
Due from consolidated affiliate	50		20,920		—		(20,970		)	—
Note receivable from consolidated affiliate	10,500		563		—		(11,063		)	—
Intangible assets
Goodwill	—		—		6,575		—			6,575
FCC licenses and other	—		—		40,052		—			40,052
Definite-lived intangible assets, net	—		—		4,807		—			4,807
Other assets	127		1,254		676		(1,146		)	911
Total assets	$	31,206	$	46,980	$	77,603	$	(76,238	)	$	79,551

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	—	$	—	$	3,078	$	—		$	3,078
Accrued expenses and other current liabilities	246		571		3,859		(202		)	4,474
Deferred tax liabilities	—		—		186		—			186
Current portion of long-term debt, financing and capital lease obligations	—		2,034		1,290		—			3,324
Total current liabilities	246		2,605		8,413		(202		)	11,062
Long-term debt, financing and capital lease obligations	10,500		12,594		8,354		(1,019		)	30,429
Deferred tax liabilities	—		—		13,773		—			13,773
Note payable due to consolidated affiliate	—		10,500		563		(11,063		)	—
Other liabilities	—		948		3,006		—			3,954
Due to consolidated affiliate	127		—		20,970		(21,097		)	—
Total liabilities	10,873		26,647		55,079		(33,381		)	59,218
Commitments and contingencies
Total stockholders' equity	20,333		20,333		22,524		(42,857		)	20,333
Total liabilities and stockholders' equity	$	31,206	$	46,980	$	77,603	$	(76,238	)	$	79,551

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 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 Three Months Ended December 31, 2014
	Parent/Issuer			Subsidiary Guarantor			Non-Guarantor Subsidiaries			Eliminations			Consolidated
	(in millions)
Net operating revenues	$	—		$	—		$	8,973		$	—		$	8,973
Net operating expenses:
Cost of services (exclusive of depreciation and amortization included below)	—			—			2,330			—			2,330
Cost of products (exclusive of depreciation and amortization included below)	—			—			2,952			—			2,952
Selling, general and administrative	—			—			2,647			—			2,647
Impairments	—			—			2,133			—			2,133
Severance and exit costs	—			—			22			—			22
Depreciation	—			—			940			—			940
Amortization	—			—			380			—			380
Other, net	—			1			108			—			109
	—			1			11,512			—			11,513
Operating loss	—			(1		)	(2,539		)	—			(2,540		)
Other income (expense):
Interest income	169			22			1			(189		)	3
Interest expense	(169		)	(360		)	(166		)	189			(506		)
(Losses) earnings of subsidiaries	(2,379		)	(2,041		)	—			4,420			—
Other income, net	—			1			6			—			7
	(2,379		)	(2,378		)	(159		)	4,420			(496		)
(Loss) income before income taxes	(2,379		)	(2,379		)	(2,698		)	4,420			(3,036		)
Income tax benefit	—			—			657			—			657
Net (loss) income	(2,379		)	(2,379		)	(2,041		)	4,420			(2,379		)
Other comprehensive (loss) income	(220		)	(220		)	(208		)	428			(220		)
Comprehensive (loss) income	$	(2,599	)	$	(2,599	)	$	(2,249	)	$	4,848		$	(2,599	)

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 COMPREHENSIVE (LOSS) INCOME



	For the Nine Months Ended December 31, 2014
	Parent/Issuer			Subsidiary Guarantor			Non-Guarantor Subsidiaries			Eliminations			Consolidated
	(in millions)
Net operating revenues	$	—		$	—		$	26,250		$	—		$	26,250
Net operating expenses:
Cost of services (exclusive of depreciation and amortization included below)	—			—			7,279			—			7,279
Cost of products (exclusive of depreciation and amortization included below)	—			—			7,482			—			7,482
Selling, general and administrative	—			—			7,232			—			7,232
Severance and exit costs	—			—			333			—			333
Impairments	—			—			2,133			—			2,133
Depreciation	—			—			2,706			—			2,706
Amortization	—			—			1,189			—			1,189
Other, net	—			1			108			—			109
	—			1			28,462			—			28,463
Operating loss	—			(1		)	(2,212		)	—			(2,213		)
Other income (expense):
Interest income	507			68			2			(567		)	10
Interest expense	(507		)	(1,092		)	(496		)	567			(1,528		)
(Losses) earnings of subsidiaries	(3,121		)	(2,097		)	—			5,218			—
Other income, net	—			1			8			—			9
	(3,121		)	(3,120		)	(486		)	5,218			(1,509		)
(Loss) income before income taxes	(3,121		)	(3,121		)	(2,698		)	5,218			(3,722		)
Income tax benefit	—			—			601			—			601
Net (loss) income	(3,121		)	(3,121		)	(2,097		)	5,218			(3,121		)
Other comprehensive (loss) income	(227		)	(227		)	(209		)	436			(227		)
Comprehensive (loss) income	$	(3,348	)	$	(3,348	)	$	(2,306	)	$	5,654		$	(3,348	)

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		)
Proceeds from issuance of common stock, net	—			10			—			—			10
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 note advance from parent	—			—			(54		)	54			—
Other, net	—			—			10			—			10
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

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS



	For the Nine Months Ended December 31, 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	$	—		$	(735	)	$	2,409		$	(200	)	$	1,474
Cash flows from investing activities:
Capital expenditures - network and other	—			—			(3,814		)	—			(3,814		)
Capital expenditures - leased devices	—			—			(143		)	—			(143		)
Expenditures relating to FCC licenses	—			—			(121		)	—			(121		)
Reimbursements relating to FCC licenses	—			—			95			—			95
Proceeds from sales and maturities of short-term investments	—			2,878			35			—			2,913
Purchases of short-term investments	—			(1,857		)	(90		)	—			(1,947		)
Change in amounts due from/due to consolidated affiliates	—			(1,933		)	—			1,933			—
Proceeds from sales of assets and FCC licenses	—			—			114			—			114
Other, net	—			—			(9		)	—			(9		)
Net cash (used in) provided by investing activities	—			(912		)	(3,933		)	1,933			(2,912		)
Cash flows from financing activities:
Proceeds from debt and financings	—			300			—			—			300
Repayments of debt, financing and capital lease obligations	—			—			(390		)	—			(390		)
Debt financing costs	(1		)	(5		)	(31		)	—			(37		)
Proceeds from issuance of common stock, net	—			50			—			—			50
Intercompany dividends paid to parent	—			—			(200		)	200			—
Change in amounts due from/due to consolidated affiliates	1			—			1,932			(1,933		)	—
Net cash provided by (used in) financing activities	—			345			1,311			(1,733		)	(77		)
Net decrease in cash and cash equivalents	—			(1,302		)	(213		)	—			(1,515		)
Cash and cash equivalents, beginning of period	—			4,125			845			—			4,970
Cash and cash equivalents, end of period	$	—		$	2,823		$	632		$	—		$	3,455