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, 2019 and 2018 there were non-cash equity distributions from the non-guarantor subsidiaries to Subsidiary Guarantor of approximately $874 million and $12.8 billion, respectively, as a result of organizational restructuring for tax purposes. As of March 31, 2019, there were $24.0 billion of intercompany notes issued by the Subsidiary Guarantor to the non-guarantor subsidiaries. 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 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 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. 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 for additional information.

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

CONDENSED CONSOLIDATING BALANCE SHEET



	March 31, 2019
	Parent/Issuer		Subsidiary Guarantor		Non-Guarantor Subsidiaries		Eliminations			Consolidated
	(in millions)
ASSETS
Current assets:
Cash and cash equivalents	$	—	$	6,605	$	377	$	—		$	6,982
Short-term investments	—		67		—		—			67
Accounts and notes receivable, net	96		233		3,554		(329		)	3,554
Current portion of notes receivable from consolidated affiliates	—		424		—		(424		)	—
Device and accessory inventory	—		—		999		—			999
Prepaid expenses and other current assets	—		9		1,280		—			1,289
Total current assets	96		7,338		6,210		(753		)	12,891
Investments in subsidiaries	25,785		17,363		—		(43,148		)	—
Property, plant and equipment, net	—		—		21,201		—			21,201
Costs to acquire a customer contract	—		—		1,559		—			1,559
Due from consolidated affiliates	288		2,418		—		(2,706		)	—
Notes receivable from consolidated affiliates	11,883		23,567		—		(35,450		)	—
Intangible assets
Goodwill	—		—		4,598		—			4,598
FCC licenses and other	—		—		41,465		—			41,465
Definite-lived intangible assets, net	—		—		1,769		—			1,769
Other assets	—		52		1,066		—			1,118
Total assets	$	38,052	$	50,738	$	77,868	$	(82,057	)	$	84,601

LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	—	$	—	$	3,961	$	—		$	3,961
Accrued expenses and other current liabilities	97		230		3,599		(329		)	3,597
Current portion of long-term debt, financing and capital lease obligations	—		1,373		3,184		—			4,557
Current portion of notes payable to consolidated affiliates	—		—		424		(424		)	—
Total current liabilities	97		1,603		11,168		(753		)	12,115
Long-term debt, financing and capital lease obligations	11,883		10,660		12,823		—			35,366
Notes payable to consolidated affiliates	—		11,883		23,567		(35,450		)	—
Deferred tax liabilities	—		—		7,556		—			7,556
Other liabilities	—		807		2,630		—			3,437
Due to consolidated affiliates	—		—		2,706		(2,706		)	—
Total liabilities	11,980		24,953		60,450		(38,909		)	58,474
Commitments and contingencies
Total stockholders' equity	26,072		25,785		17,363		(43,148		)	26,072
Noncontrolling interests	—		—		55		—			55
Total equity	26,072		25,785		17,418		(43,148		)	26,127
Total liabilities and equity	$	38,052	$	50,738	$	77,868	$	(82,057	)	$	84,601

CONDENSED CONSOLIDATING BALANCE SHEET



	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		)	—
Notes 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 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 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 STATEMENT OF COMPREHENSIVE (LOSS) INCOME



	Year Ended March 31, 2019
	Parent/Issuer			Subsidiary Guarantor			Non-Guarantor Subsidiaries			Eliminations			Consolidated
	(in millions)
Net operating revenues:
Service	$	—		$	—		$	22,857		$	—		$	22,857
Equipment sales	—			—			5,606			—			5,606
Equipment rentals	—			—			5,137			—			5,137
	—			—			33,600			—			33,600
Net operating expenses:
Cost of services (exclusive of depreciation and amortization included below)	—			—			6,664			—			6,664
Cost of equipment sales	—			—			6,082			—			6,082
Cost of equipment rentals (exclusive of depreciation below)	—			—			643			—			643
Selling, general and administrative	—			—			7,774			—			7,774
Depreciation - network and other	—			—			4,245			—			4,245
Depreciation - equipment rentals	—			—			4,538			—			4,538
Amortization	—			—			608			—			608
Goodwill impairment	—			—			2,000			—			2,000
Other, net	—			—			648			—			648
	—			—			33,202			—			33,202
Operating income	—			—			398			—			398
Other income (expense):
Interest income	905			2,166			682			(3,584		)	169
Interest expense	(905		)	(2,315		)	(2,927		)	3,584			(2,563		)
(Losses) earnings of subsidiaries	(1,943		)	(1,811		)	—			3,754			—
Other income, net	—			17			1			—			18
	(1,943		)	(1,943		)	(2,244		)	3,754			(2,376		)
(Loss) income before income taxes	(1,943		)	(1,943		)	(1,846		)	3,754			(1,978		)
Income tax benefit	—			—			35			—			35
Net (loss) income	(1,943		)	(1,943		)	(1,811		)	3,754			(1,943		)
Less: Net income attributable to noncontrolling interests	—			—			—			—			—
Net (loss) income attributable to Sprint Corporation	(1,943		)	(1,943		)	(1,811		)	3,754			(1,943		)
Other comprehensive (loss) income	(71		)	(71		)	(49		)	120			(71		)
Comprehensive (loss) income	$	(2,014	)	$	(2,014	)	$	(1,860	)	$	3,874		$	(2,014	)

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	$	—		$	—		$	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 included 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
Depreciation - network and other	—			—			3,976			—			3,976
Depreciation - equipment rentals	—			—			3,792			—			3,792
Amortization	—			—			812			—			812
Other, net	—			(55		)	(336		)	—			(391		)
	—			(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 (LOSS) INCOME



	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 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 included 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
Depreciation - network and other	—			—			3,982			—			3,982
Depreciation - equipment rentals	—			—			3,116			—			3,116
Amortization	—			—			1,052			—			1,052
Other, net	—			—			20			—			20
	—			—			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 CASH FLOWS



	Year Ended March 31, 2019
	Parent/Issuer			Subsidiary Guarantor			Non-Guarantor Subsidiaries			Eliminations			Consolidated
	(in millions)
Cash flows from operating activities:
Net cash (used in) provided by operating activities	$	—		$	(243	)	$	10,672		$	—		$	10,429
Cash flows from investing activities:
Capital expenditures - network and other	—			—			(4,963		)	—			(4,963		)
Capital expenditures - leased devices	—			—			(7,441		)	—			(7,441		)
Expenditures relating to FCC licenses	—			—			(163		)	—			(163		)
Proceeds from sales and maturities of short-term investments	—			7,197			—			—			7,197
Purchases of short-term investments	—			(5,165		)	—			—			(5,165		)
Change in amounts due from/due to consolidated affiliates	(267		)	(2,060		)	—			2,327			—
Proceeds from sales of assets and FCC licenses	—			—			591			—			591
Proceeds from deferred purchase price from sale of receivables	—			—			223			—			223
Proceeds from corporate owned life insurance policies	—			110			—			—			110
Proceeds from intercompany note advance to consolidated affiliate	—			424			—			(424		)	—
Other, net	—			—			69			—			69
Net cash (used in) provided by investing activities	(267		)	506			(11,684		)	1,903			(9,542		)
Cash flows from financing activities:
Proceeds from debt and financings	—			2,000			7,307			—			9,307
Repayments of debt, financing and capital lease obligations	—			(1,798		)	(7,966		)	—			(9,764		)
Debt financing costs	(28		)	(81		)	(212		)	—			(321		)
Proceeds from issuance of common stock, net	291			—			—			—			291
Change in amounts due from/due to consolidated affiliates	—			—			2,327			(2,327		)	—
Repayments of intercompany note advance from parent	—			—			(424		)	424			—
Other, net	4			—			—			—			4
Net cash provided by (used in) financing activities	267			121			1,032			(1,903		)	(483		)
Net increase in cash, cash equivalents and restricted cash	—			384			20			—			404
Cash, cash equivalents and restricted cash, beginning of period	—			6,222			437			—			6,659
Cash, cash equivalents and restricted cash, end of period	$	—		$	6,606		$	457		$	—		$	7,063

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
Proceeds from corporate owned life insurance policies	—			2			—			—			2
Intercompany note advance to consolidated affiliate	(1,476		)	—			—			1,476			—
Other, net	—			—			1			—			1
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		)
Proceeds from issuance of common stock, net	—			21			—			—			21
Change in amounts due from/due to consolidated affiliates	—			2,730			—			(2,730		)	—
Intercompany note advance from parent	—			1,476			—			(1,476		)	—
Other, net	—			—			(18		)	—			(18		)
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) provided by 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
Proceeds from corporate owned life insurance policies	—		11			—			—			11
Intercompany note advance to consolidated affiliate	—		(414		)	—			414			—
Proceeds from intercompany note advance to consolidated affiliate	—		84			—			(84		)	—
Other, net	—		—			30			—			30
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 and capital lease obligations	—		(3,250		)	(2,167		)	—			(5,417		)
Debt financing costs	—		(187		)	(171		)	—			(358		)
Proceeds from issuance of common stock, net	—		50			—			—			50
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	—		—			45			—			45
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