Delaware
(State or other jurisdiction
of incorporation)
|
001-37488
(Commission File Number)
|
91-1671412
(IRS Employer
Identification No.)
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|
|
|
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12110 Sunset Hills Road, Suite 600
Reston, Virginia
(Address of principal executive offices)
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20190
(Zip Code)
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Title of Each Class
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Trading Symbol(s)
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Name of Each Exchange on Which Registered
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Common Stock, par value $0.001 per share
|
NIHD
|
Nasdaq Global Select Market
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Exhibit No.
|
|
Description
|
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4.1
|
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10.1
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10.2
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99.1
|
|
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99.2
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|
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99.3
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NII HOLDINGS, INC.
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|
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(Registrant)
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|
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Dated: December 18, 2019
|
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By: /s/ SHANA C. SMITH
|
|
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Shana C. Smith
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General Counsel and Secretary
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By:
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Name: Shana C. Smith Title: Vice President, General Counsel and Corporate Secretary |
By:
|
Name: Title: |
(i)
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which is equal to the sum of (A) the aggregate principal amount of the Notes outstanding, (B) accrued and unpaid interest on the Notes (to but not including) the date hereof; (C) the maximum amount of interest payable to holders of the Notes through the Maturity Date (the “Note Escrow Amount”); and
|
(ii)
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which is equal to the sum of any fees to be owed to the Escrow Agent, the Trustee and their respective agents and counsel through the Maturity Date (including those incurred in connection with the negotiation and delivery of this Agreement), including a reserve amount for the payment of additional amounts that may become due to the Escrow Agent, the Trustee, or their respective agents and counsel under this Agreement or the Indenture, as applicable (the “Expense Reserve Amount”). The Expense Reserve Amount shall be in addition to (and shall not in any way limit) the obligations that the Company may have under this Escrow Agreement or the Indenture to the Trustee or to the Escrow Agent.
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(b)
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As security for the due and punctual performance of any and all of the Company’s obligations under the Indenture and to the Escrow Agent hereunder, now or hereafter arising, the Company, hereby pledges, assigns and grants to the Trustee, for the benefit of the Holders (defined in the Indenture), Trustee and Escrow Agent a continuing security interest in, and a lien on and right of setoff against, the Escrow Property and all distributions thereon or additions thereto (whether such additions are the result of deposits by the Company or otherwise). If any fees, expenses or costs incurred by, or any obligations owed to, the Trustee or Escrow Agent under the Indenture or hereunder are not promptly paid when due, the Escrow Agent may reimburse the Trustee and itself therefor from the Escrow Property, and may sell, convey or otherwise dispose of any Escrow Property for such purpose. The security interest and setoff rights of the Trustee, for the benefit of the Holders, Trustee and Escrow Agent shall at all times be valid, perfected and enforceable by the Escrow Agent against the Parties and all third parties in accordance with the terms of this Escrow Agreement.
|
(c)
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The Escrow Agent and the Parties agree that the Escrow Account is a “deposit account” within the meaning of Article 9 of the Uniform Commercial Code of the State of Delaware (the “UCC”). It is the intent of the parties to this Agreement that the Trustee shall have control over the Escrow Account within the meaning of Section 9-104 of the UCC. Upon receipt of a Trustee Written Direction, the Escrow Agent agrees to comply with written instructions or directions concerning the Escrow Account or the disposition of funds in the Escrow Account originated by the Trustee without further consent by the Company.
|
•
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Aggregate purchase price of $948.5 million after adjustments
|
•
|
NII received a total of $329.2 million of net sale proceeds, including $30.0 million placed in indemnification escrow and $134.8 million placed in convertible notes escrow
|
|
As Filed
|
|
Pro Forma Adjustments for Activity of Business and Net Assets Disposed
|
|
Unaudited Pro Forma
|
||||||
|
|
|
|
|
|
||||||
ASSETS
|
|||||||||||
Current assets
|
|
|
|
|
|
|
|
||||
Cash and cash equivalents
|
$
|
29,331
|
|
|
$
|
166,925
|
|
(a)
|
$
|
196,256
|
|
Cash in escrow
|
103,435
|
|
|
—
|
|
|
103,435
|
|
|||
Prepaid expenses and other
|
3,258
|
|
|
(600
|
)
|
(b)
|
2,658
|
|
|||
Assets held for sale
|
281,950
|
|
|
(281,950
|
)
|
(c)
|
—
|
|
|||
Total current assets
|
417,974
|
|
|
(115,625
|
)
|
|
302,349
|
|
|||
Other assets
|
2,136
|
|
|
164,750
|
|
(d)
|
166,886
|
|
|||
Assets held for sale
|
833,199
|
|
|
(833,199
|
)
|
(c)
|
—
|
|
|||
Total assets
|
$
|
1,253,309
|
|
|
$
|
(784,074
|
)
|
|
$
|
469,235
|
|
|
|
|
|
|
|
||||||
LIABILITIES AND STOCKHOLDERS’ (DEFICIT) EQUITY
|
|||||||||||
Current liabilities
|
|
|
|
|
|
|
|
||||
Accounts payable, accrued expenses and other
|
$
|
21,083
|
|
|
$
|
28,792
|
|
(e)
|
$
|
49,875
|
|
Current portion of long-term debt
|
—
|
|
|
115,000
|
|
(f)
|
115,000
|
|
|||
Liabilities held for sale
|
348,878
|
|
|
(348,878
|
)
|
(c)
|
—
|
|
|||
Total current liabilities
|
369,961
|
|
|
(205,086
|
)
|
|
164,875
|
|
|||
Long-term debt
|
77,301
|
|
|
(77,301
|
)
|
(g)
|
—
|
|
|||
Other long-term liabilities
|
400
|
|
|
—
|
|
|
400
|
|
|||
Liabilities held for sale
|
1,032,801
|
|
|
(1,032,801
|
)
|
(c)
|
—
|
|
|||
Total liabilities
|
1,480,463
|
|
|
(1,315,188
|
)
|
|
165,275
|
|
|||
Stockholders’ (deficit) equity
|
|
|
|
|
|
|
|
||||
Undesignated preferred stock, par value $0.001, 10,000 shares authorized, no shares issued or outstanding
|
—
|
|
|
—
|
|
|
—
|
|
|||
Common stock, par value $0.001, 140,000 shares authorized, 102,836
shares issued and outstanding
|
103
|
|
|
—
|
|
|
103
|
|
|||
Paid-in capital
|
2,129,087
|
|
|
3,325
|
|
(h)
|
2,132,412
|
|
|||
Accumulated deficit
|
(2,287,782
|
)
|
|
459,227
|
|
(i)
|
(1,828,555
|
)
|
|||
Accumulated other comprehensive loss
|
4,955
|
|
|
(4,955
|
)
|
(j)
|
—
|
|
|||
Total NII stockholders’ (deficit) equity
|
(153,637
|
)
|
|
457,597
|
|
|
303,960
|
|
|||
Noncontrolling interest
|
(73,517
|
)
|
|
73,517
|
|
|
—
|
|
|||
Total (deficit) equity
|
(227,154
|
)
|
|
531,114
|
|
|
303,960
|
|
|||
Total liabilities and stockholders’ (deficit) equity
|
$
|
1,253,309
|
|
|
$
|
(784,074
|
)
|
|
$
|
469,235
|
|
|
As Filed
|
|
Pro Forma Adjustments for Activity of Business and Net Assets Disposed
|
|
Unaudited Pro Forma
|
||||||
Operating revenues
|
|
|
|
|
|
|
|
||||
Service and other revenues
|
$
|
605,492
|
|
|
$
|
(605,470
|
)
|
(k)
|
$
|
22
|
|
Handset and accessory revenues
|
15,205
|
|
|
(15,205
|
)
|
(k)
|
—
|
|
|||
|
620,697
|
|
|
(620,675
|
)
|
|
22
|
|
|||
Operating expenses
|
|
|
|
|
|
|
|
||||
Cost of service (exclusive of depreciation and amortization included below)
|
287,598
|
|
|
(287,598
|
)
|
(l)
|
—
|
|
|||
Cost of handsets and accessories
|
18,571
|
|
|
(18,571
|
)
|
(l)
|
—
|
|
|||
Selling, general and administrative
|
308,828
|
|
|
(292,642
|
)
|
(l)
|
16,186
|
|
|||
Impairment, restructuring and other charges, net
|
18,949
|
|
|
(18,597
|
)
|
(l)
|
352
|
|
|||
Depreciation
|
15,119
|
|
|
(15,119
|
)
|
(l)
|
—
|
|
|||
Amortization
|
13,497
|
|
|
(13,497
|
)
|
(l)
|
—
|
|
|||
|
662,562
|
|
|
(646,024
|
)
|
|
16,538
|
|
|||
Operating loss
|
(41,865
|
)
|
|
25,349
|
|
|
(16,516
|
)
|
|||
Other (expense) income
|
|
|
|
|
|
|
|
||||
Interest expense, net
|
(100,513
|
)
|
|
96,306
|
|
(m)
|
(4,207
|
)
|
|||
Interest income
|
12,357
|
|
|
(11,195
|
)
|
(k)
|
1,162
|
|
|||
Foreign currency transaction losses, net
|
(49,008
|
)
|
|
49,003
|
|
(l)
|
(5
|
)
|
|||
Other (expense) income, net
|
(7,217
|
)
|
|
13,549
|
|
(l)
|
6,332
|
|
|||
|
(144,381
|
)
|
|
147,663
|
|
|
3,282
|
|
|||
Loss from continuing operations before income taxes
|
(186,246
|
)
|
|
173,012
|
|
|
(13,234
|
)
|
|||
Income tax benefit
|
—
|
|
|
—
|
|
|
—
|
|
|||
Net loss from continuing operations
|
$
|
(186,246
|
)
|
|
$
|
173,012
|
|
|
$
|
(13,234
|
)
|
|
|
|
|
|
|
||||||
Net loss from continuing operations per common share, basic and diluted
|
$
|
(1.86
|
)
|
|
$
|
1.71
|
|
(o)
|
$
|
(0.15
|
)
|
|
|
|
|
|
|
||||||
Weighted average number of common shares outstanding, basic and diluted
|
100,675
|
|
|
—
|
|
|
100,675
|
|
|
As Filed
|
|
Pro Forma Adjustments for Activity of Business and Net Assets Disposed
|
|
Unaudited Pro Forma
|
||||||
Operating revenues
|
|
|
|
|
|
|
|
||||
Service and other revenues
|
$
|
848,806
|
|
|
$
|
(848,700
|
)
|
(k)
|
$
|
106
|
|
Handset and accessory revenues
|
21,888
|
|
|
(21,888
|
)
|
(k)
|
—
|
|
|||
|
870,694
|
|
|
(870,588
|
)
|
|
106
|
|
|||
Operating expenses
|
|
|
|
|
|
|
|
||||
Cost of service (exclusive of depreciation and amortization included below)
|
370,435
|
|
|
(370,435
|
)
|
(l)
|
—
|
|
|||
Cost of handsets and accessories
|
40,207
|
|
|
(40,207
|
)
|
(l)
|
—
|
|
|||
Selling, general and administrative
|
510,168
|
|
|
(488,050
|
)
|
(l)
|
22,118
|
|
|||
Impairment, restructuring and other charges, net
|
175,358
|
|
|
(174,098
|
)
|
(l)
|
1,260
|
|
|||
Depreciation
|
20,451
|
|
|
(20,451
|
)
|
(l)
|
—
|
|
|||
Amortization
|
14,995
|
|
|
(14,995
|
)
|
(l)
|
—
|
|
|||
|
1,131,614
|
|
|
(1,108,236
|
)
|
|
23,378
|
|
|||
Operating loss
|
(260,920
|
)
|
|
237,648
|
|
|
(23,272
|
)
|
|||
Other (expense) income
|
|
|
|
|
|
|
|
||||
Interest expense, net
|
(118,605
|
)
|
|
118,605
|
|
(m)
|
—
|
|
|||
Interest income
|
41,507
|
|
|
(40,950
|
)
|
(k)
|
557
|
|
|||
Foreign currency transaction losses, net
|
(1,271
|
)
|
|
1,260
|
|
(l)
|
(11
|
)
|
|||
Other (expense) income, net
|
(7,485
|
)
|
|
7,935
|
|
(l)
|
450
|
|
|||
|
(85,854
|
)
|
|
86,850
|
|
|
996
|
|
|||
Loss from continuing operations before income taxes
|
(346,774
|
)
|
|
324,498
|
|
|
(22,276
|
)
|
|||
Income tax benefit
|
6,347
|
|
|
(568
|
)
|
(n)
|
5,779
|
|
|||
Net loss from continuing operations
|
$
|
(340,427
|
)
|
|
$
|
323,930
|
|
|
$
|
(16,497
|
)
|
|
|
|
|
|
|
||||||
Net loss from continuing operations per common share, basic and diluted
|
$
|
(3.40
|
)
|
|
$
|
3.22
|
|
(o)
|
$
|
(0.18
|
)
|
|
|
|
|
|
|
||||||
Weighted average number of common shares outstanding, basic and diluted
|
100,332
|
|
|
—
|
|
|
100,332
|
|
|
As Filed
|
|
Pro Forma Adjustments for Activity of Business and Net Assets Disposed
|
|
Unaudited Pro Forma
|
||||||
Operating revenues
|
|
|
|
|
|
|
|
||||
Service and other revenues
|
$
|
963,209
|
|
|
$
|
(963,041
|
)
|
(k)
|
$
|
168
|
|
Handset and accessory revenues
|
21,837
|
|
|
(21,837
|
)
|
(k)
|
—
|
|
|||
|
985,046
|
|
|
(984,878
|
)
|
|
168
|
|
|||
Operating expenses
|
|
|
|
|
|
|
|
||||
Cost of service (exclusive of depreciation and amortization included below)
|
364,648
|
|
|
(364,648
|
)
|
(l)
|
—
|
|
|||
Cost of handsets and accessories
|
29,273
|
|
|
(29,273
|
)
|
(l)
|
—
|
|
|||
Selling, general and administrative
|
560,760
|
|
|
(526,097
|
)
|
(l)
|
34,663
|
|
|||
Impairment, restructuring and other charges, net
|
1,384,811
|
|
|
(1,340,610
|
)
|
(l)
|
44,201
|
|
|||
Depreciation
|
135,429
|
|
|
(132,850
|
)
|
(l)
|
2,579
|
|
|||
Amortization
|
36,954
|
|
|
(35,837
|
)
|
(l)
|
1,117
|
|
|||
|
2,511,875
|
|
|
(2,429,315
|
)
|
|
82,560
|
|
|||
Operating loss
|
(1,526,829
|
)
|
|
1,444,437
|
|
|
(82,392
|
)
|
|||
Other (expense) income
|
|
|
|
|
|
|
|
||||
Interest expense, net
|
(113,732
|
)
|
|
113,732
|
|
(m)
|
—
|
|
|||
Interest income
|
37,689
|
|
|
(36,818
|
)
|
(k)
|
871
|
|
|||
Foreign currency transaction gains (losses), net
|
76,615
|
|
|
(78,008
|
)
|
(k)
|
(1,393
|
)
|
|||
Other expense, net
|
(10,514
|
)
|
|
9,613
|
|
(l)
|
(901
|
)
|
|||
|
(9,942
|
)
|
|
8,519
|
|
|
(1,423
|
)
|
|||
Loss from continuing operations before income taxes
|
(1,536,771
|
)
|
|
1,452,956
|
|
|
(83,815
|
)
|
|||
Income tax benefit
|
2,892
|
|
|
2
|
|
(n)
|
2,894
|
|
|||
Net loss from continuing operations
|
$
|
(1,533,879
|
)
|
|
$
|
1,452,958
|
|
|
$
|
(80,921
|
)
|
|
|
|
|
|
|
||||||
Net loss from continuing operations per common share, basic and diluted
|
$
|
(15.32
|
)
|
|
$
|
14.52
|
|
(o)
|
$
|
(0.80
|
)
|
|
|
|
|
|
|
||||||
Weighted average number of common shares outstanding, basic and diluted
|
100,098
|
|
|
—
|
|
|
100,098
|
|
Note 1.
|
Basis of Presentation
|
Note 2.
|
Pro Forma Adjustments
|
(a)
|
Reflects the net effect of the proceeds received upon completion of the sale of Nextel Brazil and includes capital expenditures, working capital adjustments and selling and marketing adjustments, net of a deposit placed into escrow in accordance with the indenture agreement governing our 4.25% convertible senior notes due 2023 and cash placed into escrow to secure specified indemnity obligations.
|
Purchase price
|
$
|
905,000
|
|
Add: capital expenditures reimbursement
|
30,251
|
|
|
Add: net working capital reimbursement
|
16,924
|
|
|
Less: selling and marketing adjustment
|
(3,721
|
)
|
|
Aggregate purchase price
|
948,454
|
|
|
Less: net financial debt, excluding capital leases
|
(491,598
|
)
|
|
Net purchase price
|
456,856
|
|
|
Less: AI Brazil Holdings' preferred share return
|
(2,470
|
)
|
|
Net proceeds to be allocated
|
454,386
|
|
|
NII's portion of purchase price (72.45%)
|
329,192
|
|
|
Less: Escrow related to convertible senior notes
|
(134,750
|
)
|
|
Less: Escrow related to sale
|
(30,000
|
)
|
|
Add: Accrued tax contingencies adjustment
|
1,881
|
|
|
Increase in consolidated cash and cash equivalents
|
$
|
166,323
|
|
(b)
|
Reflects a portion of current director and officer insurance that will be refunded in connection with the closing of the transaction.
|
(c)
|
Reflects the elimination of Nextel Brazil's assets and liabilities previously classified as held for sale.
|
(d)
|
Includes a $134.8 million deposit placed into escrow in accordance with NII's indenture agreement governing our 4.25% convertible senior notes due 2023 and a $30.0 million deposit placed into escrow to secure specified indemnity obligations in connection with the sale of Nextel Brazil.
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(e)
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Includes $14.7 million related to the agreed upon settlement amount that resolves a dispute regarding the investment of funds in Nextel Holdings with AI Brazil. Also includes other liabilities triggered by the sale of Nextel Brazil, primarily certain success fees and severance costs.
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(f)
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Represents the reclassification of long-term debt to current portion of long-term debt, as well as the write-up of debt to its face value due to the acceleration of original issue discount amortization that is triggered by the convertible senior notes becoming immediately puttable upon closing of the sale.
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(g)
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Represents the reclassification of long-term debt to current portion of long-term debt.
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(h)
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Represents the effect on additional paid-in capital of the acceleration of certain stock-based compensation.
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(i)
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Reflects the impacts on accumulated deficit of the completion of the sale of Nextel Brazil, including an estimated $520.0 million gain.
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(j)
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Reflects the reclassification of accumulated other comprehensive loss, primarily related to Nextel Brazil's cumulative foreign currency translation losses.
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(k)
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Reflects the elimination of revenue and interest income historically reported by Nextel Brazil. For the indicated line items, all activity historically reported as part of Nextel Brazil's business has been eliminated.
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(l)
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Reflects the elimination of expenses as a result of the sale of Nextel Brazil. For the indicated line items, all activity historically reported as part of Nextel Brazil's business has been eliminated.
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(m)
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Reflects the elimination of interest expense as a result of the sale of Nextel Brazil.
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(n)
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Reflects the elimination of Nextel Brazil's income tax benefit.
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(o)
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Recalculated as the pro forma adjustment to net loss from continuing operations divided by the weighted average number of basic and diluted shares outstanding for the respective period.
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