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, and on February 20, 2018, Sprint Corporation issued $1.5 billion aggregate principal amount of 7.625% senior notes due 2026, which are fully and unconditionally guaranteed by Sprint Communications.

During the years ended March 31, 2018 and 2017 there were non-cash equity distributions from Non-Guarantor Subsidiaries to Subsidiary Guarantor of approximately $12.8 billion and non-cash equity contributions from Subsidiary Guarantor to Non-Guarantor Subsidiaries of approximately $450 million, respectively, as a result of organizational restructuring for tax purposes. We also replaced $24.4 billion of short-term payables with intercompany notes issued by the Subsidiary Guarantor to the Non-Guarantor Subsidiaries during the year ended March 31, 2018. 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 7. 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



	As of March 31, 2018
	Parent/Issuer		Subsidiary Guarantor		Non-Guarantor Subsidiaries		Eliminations			Consolidated
	(in millions)
ASSETS
Current assets:
Cash and cash equivalents	$	—	$	6,222	$	388	$	—		$	6,610
Short-term investments	—		2,354		—		—			2,354
Accounts and notes receivable, net	99		248		3,711		(347		)	3,711
Current portion of notes receivable from consolidated affiliates	—		424		—		(424		)	—
Device and accessory inventory	—		—		1,003		—			1,003
Prepaid expenses and other current assets	5		9		561		—			575
Total current assets	104		9,257		5,663		(771		)	14,253
Investments in subsidiaries	26,351		18,785		—		(45,136		)	—
Property, plant and equipment, net	—		—		19,925		—			19,925
Due from consolidated affiliates	1		—		594		(595		)	—
Note receivable from consolidated affiliates	11,887		23,991		—		(35,878		)	—
Intangible assets
Goodwill	—		—		6,586		—			6,586
FCC licenses and other	—		—		41,309		—			41,309
Definite-lived intangible assets, net	—		—		2,465		—			2,465
Other assets	—		185		736		—			921
Total assets	$	38,343	$	52,218	$	77,278	$	(82,380	)	$	85,459

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	—	$	—	$	3,409	$	—		$	3,409
Accrued expenses and other current liabilities	100		341		3,868		(347		)	3,962
Current portion of long-term debt, financing and capital lease obligations	—		1,832		1,597		—			3,429
Current portion of notes payable to consolidated affiliates	—		—		424		(424		)	—
Total current liabilities	100		2,173		9,298		(771		)	10,800
Long-term debt, financing and capital lease obligations	11,887		10,381		15,195		—			37,463
Notes payable due to consolidated affiliates	—		11,887		23,991		(35,878		)	—
Deferred tax liabilities	—		—		7,294		—			7,294
Other liabilities	—		831		2,652		—			3,483
Due to consolidated affiliates	—		595		—		(595		)	—
Total liabilities	11,987		25,867		58,430		(37,244		)	59,040
Commitments and contingencies
Total stockholders' equity	26,356		26,351		18,785		(45,136		)	26,356
Noncontrolling interests	—		—		63		—			63
Total equity	26,356		26,351		18,848		(45,136		)	26,419
Total liabilities and equity	$	38,343	$	52,218	$	77,278	$	(82,380	)	$	85,459

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 affiliates	25		13,032		—		(13,057		)	—
Note receivable from consolidated affiliates	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 affiliates	—		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)



	Year Ended March 31, 2018
	Parent/Issuer			Subsidiary Guarantor			Non-Guarantor Subsidiaries			Eliminations			Consolidated
	(in millions)
Net operating revenues:
Service revenue	$	—		$	—		$	23,834		$	—		$	23,834
Equipment sales	—			—			4,524			—			4,524
Equipment rentals	—			—			4,048			—			4,048
	—			—			32,406			—			32,406
Net operating expenses:
Cost of services (exclusive of depreciation and amortization below)	—			—			6,801			—			6,801
Cost of equipment sales	—			—			6,109			—			6,109
Cost of equipment rentals (exclusive of depreciation below)	—			—			493			—			493
Selling, general and administrative	—			—			8,087			—			8,087
Severance and exit costs	—			—			80			—			80
Depreciation - network and other	—			—			3,976			—			3,976
Depreciation - equipment rentals	—			—			3,792			—			3,792
Amortization	—			—			812			—			812
Other, net	—			(55		)	(416		)	—			(471		)
	—			(55		)	29,734			—			29,679
Operating income	—			55			2,672			—			2,727
Other income (expense):
Interest income	802			1,289			11			(2,017		)	85
Interest expense	(802		)	(1,643		)	(1,937		)	2,017			(2,365		)
Earnings (losses) of subsidiaries	7,389			7,784			—			(15,173		)	—
Other expense, net	—			(96		)	(48		)	—			(144		)
	7,389			7,334			(1,974		)	(15,173		)	(2,424		)
Income (loss) before income taxes	7,389			7,389			698			(15,173		)	303
Income tax benefit	—			—			7,074			—			7,074
Net income (loss)	7,389			7,389			7,772			(15,173		)	7,377
Less: Net loss attributable to noncontrolling interests	—			—			12			—			12
Net income (loss) attributable to Sprint Corporation	7,389			7,389			7,784			(15,173		)	7,389
Other comprehensive income (loss)	31			31			48			(79		)	31
Comprehensive income (loss)	$	7,420		$	7,420		$	7,820		$	(15,252	)	$	7,408

CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME (LOSS)



	Year Ended March 31, 2017
	Parent/Issuer			Subsidiary Guarantor			Non-Guarantor Subsidiaries			Eliminations			Consolidated
	(in millions)
Net operating revenues:
Service revenue	$	—		$	—		$	25,368		$	—		$	25,368
Equipment sales	—			—			4,684			—			4,684
Equipment rentals	—			—			3,295			—			3,295
	—			—			33,347			—			33,347
Net operating expenses:
Cost of services (exclusive of depreciation and amortization below)	—			—			7,861			—			7,861
Cost of equipment sales	—			—			6,583			—			6,583
Cost of equipment rentals (exclusive of depreciation below)	—			—			975			—			975
Selling, general and administrative	—			—			7,994			—			7,994
Severance and exit costs	—			—			66			—			66
Depreciation - network and other	—			—			3,982			—			3,982
Depreciation - equipment rentals	—			—			3,116			—			3,116
Amortization	—			—			1,052			—			1,052
Other, net	—			—			(46		)	—			(46		)
	—			—			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 INCOME (LOSS)



	Year Ended March 31, 2016
	Parent/Issuer			Subsidiary Guarantor			Non-Guarantor Subsidiaries			Eliminations			Consolidated
	(in millions)
Net operating revenues:
Service revenue	$	—		$	—		$	27,174		$	—		$	27,174
Equipment sales	—			—			3,168			—			3,168
Equipment rentals	—			—			1,838			—			1,838
	—			—			32,180			—			32,180
Net operating expenses:
Cost of services (exclusive of depreciation and amortization below)	—			—			9,439			—			9,439
Cost of equipment sales	—			—			5,518			—			5,518
Cost of equipment rentals (exclusive of depreciation below)	—			—			598			—			598
Selling, general and administrative	—			—			8,479			—			8,479
Severance and exit costs	—			—			409			—			409
Depreciation - network and other	—			—			4,013			—			4,013
Depreciation - equipment rentals	—			—			1,781			—			1,781
Amortization	—			—			1,294			—			1,294
Other, net	—			—			339			—			339
	—			—			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 CASH FLOWS



	Year Ended March 31, 2018
	Parent/Issuer			Subsidiary Guarantor			Non-Guarantor Subsidiaries			Eliminations			Consolidated
	(in millions)
Cash flows from operating activities:
Net cash (used in) provided by operating activities	$	—		$	(828	)	$	10,890		$	—		$	10,062
Cash flows from investing activities:
Capital expenditures - network and other	—			—			(3,319		)	—			(3,319		)
Capital expenditures - leased devices	—			—			(7,461		)	—			(7,461		)
Expenditures relating to FCC licenses	—			—			(115		)	—			(115		)
Proceeds from sales and maturities of short-term investments	—			7,202			—			—			7,202
Purchases of short-term investments	—			(4,112		)	—			—			(4,112		)
Change in amounts due from/due to consolidated affiliates	—			—			(2,730		)	2,730			—
Proceeds from sales of assets and FCC licenses	—			—			527			—			527
Proceeds from deferred purchase price from sale of receivables	—			—			1,140			—			1,140
Intercompany note advance to consolidated affiliate	(1,476		)	—			—			1,476			—
Other, net	—			2			1			—			3
Net cash (used in) provided by investing activities	(1,476		)	3,092			(11,957		)	4,206			(6,135		)
Cash flows from financing activities:
Proceeds from debt and financings	1,500			—			7,029			—			8,529
Repayments of debt, financing and capital lease obligations	—			(2,587		)	(5,931		)	—			(8,518		)
Debt financing costs	(24		)	(12		)	(57		)	—			(93		)
Call premiums paid on debt redemptions	—			(131		)	—			—			(131		)
Change in amounts due from/due to consolidated affiliates	—			2,730			—			(2,730		)	—
Intercompany note advance from parent	—			1,476			—			(1,476		)	—
Other, net	—			21			(18		)	—			3
Net cash provided by (used in) financing activities	1,476			1,497			1,023			(4,206		)	(210		)
Net increase (decrease) in cash, cash equivalents and restricted cash	—			3,761			(44		)	—			3,717
Cash, cash equivalents and restricted cash, beginning of period	—			2,461			481			—			2,942
Cash, cash equivalents and restricted cash, end of period	$	—		$	6,222		$	437		$	—		$	6,659

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 operating activities	$	—	$	(1,640	)	$	(1,451	)	$	(199	)	$	(3,290	)
Cash flows from investing activities:
Capital expenditures - network and other	—		—			(1,950		)	—			(1,950		)
Capital expenditures - leased devices	—		—			(4,976		)	—			(4,976		)
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
Proceeds from deferred purchase price from sale of receivables	—		—			10,498			—			10,498
Intercompany note advance to consolidated affiliate	—		(414		)	—			414			—
Proceeds from intercompany note advance to consolidated affiliate	—		84			—			(84		)	—
Other, net	—		11			30			—			41
Net cash provided by (used in) investing activities	—		1,334			3,738			(6,767		)	(1,695		)
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, cash equivalents and restricted cash	—		307			(6		)	—			301
Cash, cash equivalents and restricted cash, beginning of period	—		2,154			487			—			2,641
Cash, cash equivalents and restricted cash, end of period	$	—	$	2,461		$	481		$	—		$	2,942

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	$	—		$	(1,422	)	$	1,232		$	(233	)	$	(423	)
Cash flows from investing activities:
Capital expenditures - network and other	—			—			(4,680		)	—			(4,680		)
Capital expenditures - leased devices	—			—			(5,898		)	—			(5,898		)
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 deferred purchase price from sale of receivables	—			—			7,925			—			7,925
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	—			1			(29		)	—			(28		)
Net cash provided by (used in) investing activities	1			324			(1,562		)	(178		)	(1,415		)
Cash flows from financing activities:
Proceeds from debt and financings	—			250			1,105			—			1,355
Repayments of debt 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, cash equivalents and restricted cash	—			(1,338		)	(31		)	—			(1,369		)
Cash, cash equivalents and restricted cash, beginning of period	—			3,492			518			—			4,010
Cash, cash equivalents and restricted cash, end of period	$	—		$	2,154		$	487		$	—		$	2,641