þ
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
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THE SECURITIES EXCHANGE ACT OF 1934
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For the fiscal year ended December 31, 2017
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or
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
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THE SECURITIES EXCHANGE ACT OF 1934
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For the transition period from to
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Commission file number 001-37488
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Delaware
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91-1671412
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(State or other jurisdiction of
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(I.R.S. Employer Identification No.)
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incorporation or organization)
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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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Large accelerated filer
o
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Accelerated filer
þ
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Non-accelerated filer
o
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Smaller reporting company
o
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Emerging growth company
o
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(Do not check if a smaller reporting company)
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Number of Shares Outstanding
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Title of Class
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on March 7, 2018
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Common Stock, $0.001 par value per share
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100,479,833
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Item
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Description
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Page
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Item 1.
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Business
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|
•
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mobile telephone voice and wireless data services;
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•
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international voice and data roaming services;
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•
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application-based radio connection; and
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•
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value-added services, including sports, music and entertainment streaming capabilities; online education; and access to national and international WiFi hotspot networks.
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•
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offering a unique and superior customer-centric experience, including a reliable and high quality wireless network and rate plan flexibility;
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•
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continuing to implement cost reduction strategies and redesigning our network architecture in order to lower cash costs per user, outweigh scale disadvantages, create an agile organization and improve overall profitability;
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•
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focusing on higher value customer segments that generate higher average revenue per user, or ARPU, and lower subscriber turnover; and
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•
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building on the strength of the unique positioning of the Nextel brand.
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•
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offering flexible rate plans in order to meet our customers' individualized needs, including various unlimited voice rate plans at competitive prices;
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•
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increased our focus on high value customer segments in order to generate higher levels of ARPU;
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•
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expanding our addressable market;
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•
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providing a superior customer-centric experience that cultivates a long-term relationship with our customers;
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•
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streamlining distribution channels, including closing unprofitable retail stores;
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•
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migrating subscribers from our legacy iDEN network to our WCDMA network; and
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•
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reviewing commission and subsidy strategies.
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Item 1A.
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Risk Factors
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1.
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Because our free cash flow was negative, and is expected to continue to be negative, we will likely need to meet our obligations and fund our working capital with cash on hand and through the recovery of amounts held in escrow.
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2.
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If we are not able to compete effectively in the highly competitive wireless communications industry, our future growth and operating results will suffer.
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a.
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The wireless industry in Brazil is highly competitive, making it difficult for us to attract and retain customers. If we are unable to attract and retain customers, our financial performance will be impaired.
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b.
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Competition and technological changes in the market for wireless services, including competition driven by our competitors' deployment of long-term evolution or other advanced technologies, could negatively affect our average revenue per subscriber, customer turnover, operating costs and our ability to attract new subscribers, resulting in adverse effects on our revenues, future cash flows, growth and profitability. If we do not keep pace with rapid technological changes or if we fail to offer new services in a manner that delivers a quality customer experience, we may not be able to attract and retain customers.
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c.
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Most of our competitors are financially stronger than we are, which limits our ability to compete based on price.
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d.
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We are dependent on our competitors for support services that are critical to our operations.
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e.
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If there is a substantial increase in our customer turnover rate, our business could be negatively affected.
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f.
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If our networks do not perform in a manner that meets subscriber expectations, we will be unable to attract and retain customers.
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g.
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Customer concerns about our financial condition and ability to implement our business plan, including our network development and deployment efforts, may have an additional adverse effect on our ability to attract and retain customers.
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3.
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We operate exclusively in Brazil, and our assets, subscribers and cash flows are concentrated in Brazil, which presents risks to our operating plans.
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a.
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A decline in the foreign exchange rate of the Brazilian real may adversely affect our growth and our operating results.
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b.
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We face economic and political risks operating in Brazil, which may limit our ability to implement our strategy and could negatively impact our financial flexibility, including our ability to repatriate and redeploy profits, and may disrupt our operations or hurt our performance.
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c.
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Our operating company is subject to local laws and government regulations, and we are subject to U.S. laws and regulations, which could limit our growth and strategic plans and negatively impact our financial results.
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•
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affect the terms of interconnection arrangements that allow our subscribers to complete calls to our competitors’ subscribers, including the charges imposed for the completion of those calls;
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•
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establish restrictions that limit or otherwise affect the deployment of transmitter and receiver sites needed to support the coverage and capacity of our networks;
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•
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establish minimum network construction, coverage or quality of service obligations that can result in increased capital investments or require other changes to our business;
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•
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establish prices Nextel Brazil is required to charge for its services or impose other terms of service that can affect our revenues or costs; or
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•
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impose foreign ownership limitations on telecommunications providers that may affect our ability to own and operate our business.
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d.
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We pay significant import duties on our network equipment and handsets, and any increases could impact our financial results.
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e.
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We are subject to taxes, which may reduce the revenues of our operating subsidiary in Brazil, reduce the amounts we receive from Nextel Brazil, increase our tax costs and impact our cash flows.
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f.
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We have entered into a number of agreements that are subject to enforcement in foreign countries, which may limit efficient dispute resolution.
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4.
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The costs we incur to connect our networks with those of other carriers are subject to local laws and may increase, which could adversely impact our financial results.
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5.
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We own Nextel Brazil through a partnership with ice group.
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a.
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Our interests and the interests of our stockholders may not align with the interests of ice group, and actions by ice group could negatively impact our performance.
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•
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we may incur liabilities as a result of an action taken by ice group;
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•
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disputes between us and ice group could arise which could distract management from focusing time and efforts on our business, result in an impasse or ultimately in litigation or arbitration or otherwise have a negative influence on our partnership and our ability to successfully operate Nextel Brazil; and
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•
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the transfer restrictions, rights of first refusal, and “tag along” and “drag along” rights contained in our agreements with ice group could restrict our or ice group's ability to exit the joint venture if desired or discourage a third party transaction that might be in the best interests of stockholders.
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b.
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ice group's second investment in Nextel Holdings was not completed, which could negatively impact us.
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6.
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Our failure to maintain effective internal controls over financial reporting may adversely affect the accuracy and timeliness of our financial reporting.
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7.
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Our business could be negatively impacted by our reliance on indirect distribution channels for a significant portion of our sales.
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8.
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If our licenses to provide mobile services are not renewed, or are modified or revoked, our business may be restricted.
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9.
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If we are not able to manage changes to our business, our operating results will suffer.
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a.
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We may be limited in our ability to grow unless we successfully expand network capacity and launch competitive services.
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•
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secure sufficient transmitter and receiver sites at appropriate locations to meet planned system coverage and capacity targets;
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b.
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Failure to successfully implement core information technology and operating systems may adversely affect our business operations.
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10.
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Any modification or termination of our trademark license with Nextel Communications could increase our costs.
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11.
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Our reputation and business could be negatively impacted by cyber security threats and other material disruptions of our wireless networks.
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12.
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If our stock price does not remain above $1.00, our common stock could be delisted from The NASDAQ Stock Market, which could have a material adverse effect on the liquidity of our common stock.
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13.
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There may be circumstances in which the interests of our significant stockholders could be in conflict with the interests of other stockholders.
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14.
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The price of our common stock may be volatile.
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•
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concentration of our business operations in Brazil;
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•
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low trading volumes for our common stock and the inability to sustain an active trading marketing for our common stock;
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•
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actual or anticipated fluctuations in our quarterly and annual results and those of other public companies in our industry;
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•
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industry cycles and trends;
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•
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mergers and strategic alliances in the telecommunications industry;
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•
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changes in government regulation;
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•
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potential or actual military conflicts or acts of terrorism;
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•
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the failure of securities analysts to publish research about us, or shortfalls in our operating results from levels forecast by securities analysts;
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•
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future sales of our common stock by our stockholders, including in particular, those stockholders whose shares were included in our Registration Statement on Form S-3;
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•
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announcements concerning us or our competitors; and
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•
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the general state of the securities market.
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15.
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Certain provisions of our certificate of incorporation and our bylaws may make it difficult for stockholders to change the composition of our Board and may discourage, delay or prevent a merger or acquisition that some stockholders may consider beneficial.
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•
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authorize our Board to issue preferred stock and to determine the price and other terms, including preferences and voting rights, of those shares without stockholder approval;
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•
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establish advance notice procedures for nominating directors or presenting matters at stockholder meetings; and
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•
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limit the persons who may call special meetings of stockholders.
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Item 1B.
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Unresolved Staff Comments
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Item 2.
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Properties
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Item 3.
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Legal Proceedings
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Item 4.
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Mine Safety Disclosures
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Item 5.
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Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
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1.
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Market for Common Stock
|
2.
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Number of Stockholders of Record
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3.
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Dividends
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4.
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Issuer Purchases of Equity Securities
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Period
|
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Total Number of Shares Purchased
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|
Average Price Per Share
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|
Total Number of Shares Purchased as Part of Program
|
|
Approximate Dollar Value of Shares that May Yet Be Purchased Under the Program
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||||||
October 1, 2017 - October 31, 2017
|
|
78
|
|
(1)
|
$
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0.43
|
|
|
78
|
|
|
|
||
November 1, 2017 - November 30, 2017
|
|
35
|
|
(1)
|
0.36
|
|
|
35
|
|
|
|
|||
December 1, 2017 - December 31, 2017
|
|
—
|
|
(1)
|
—
|
|
|
—
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|
|
|
|||
Total
|
|
113
|
|
(1)
|
0.41
|
|
|
113
|
|
|
$
|
—
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|
I
ndex
|
7/6/2015
|
|
9/30/2015
|
|
12/31/2015
|
|
3/31/2016
|
|
6/30/2016
|
|
9/30/2016
|
|
12/31/2016
|
||||||||||||||
NII Holdings
|
$
|
100.00
|
|
|
$
|
38.57
|
|
|
$
|
29.92
|
|
|
$
|
32.76
|
|
|
$
|
18.84
|
|
|
$
|
19.73
|
|
|
$
|
12.74
|
|
Nasdaq 100
|
$
|
100.00
|
|
|
$
|
94.73
|
|
|
$
|
104.42
|
|
|
$
|
102.25
|
|
|
$
|
100.44
|
|
|
$
|
111.63
|
|
|
$
|
110.28
|
|
Oi S.A.
|
$
|
100.00
|
|
|
$
|
42.39
|
|
|
$
|
28.80
|
|
|
$
|
18.64
|
|
|
$
|
23.72
|
|
|
$
|
51.17
|
|
|
$
|
39.81
|
|
Telefônica Brasil S.A.
|
$
|
100.00
|
|
|
$
|
65.39
|
|
|
$
|
65.22
|
|
|
$
|
90.33
|
|
|
$
|
99.32
|
|
|
$
|
106.84
|
|
|
$
|
96.03
|
|
Index
|
3/31/2017
|
|
6/30/2017
|
|
9/30/2017
|
|
12/31/2017
|
||||||||
NII Holdings
|
$
|
7.70
|
|
|
$
|
4.74
|
|
|
$
|
2.73
|
|
|
$
|
2.49
|
|
Nasdaq 100
|
$
|
124.56
|
|
|
$
|
129.80
|
|
|
$
|
137.35
|
|
|
$
|
146.92
|
|
Oi S.A.
|
$
|
71.35
|
|
|
$
|
59.62
|
|
|
$
|
65.17
|
|
|
$
|
60.50
|
|
Telefônica Brasil S.A.
|
$
|
111.43
|
|
|
$
|
104.93
|
|
|
$
|
121.73
|
|
|
$
|
114.98
|
|
Item 6.
|
Selected Financial Data
|
|
Successor Company
|
|
|
Predecessor Company
|
||||||||||||||||||||
|
Year Ended December 31,
|
|
Year Ended December 31,
|
|
Six Months Ended December 31,
|
|
|
Six Months Ended June 30,
|
|
Year Ended December 31,
|
||||||||||||||
|
2017
|
|
2016
|
|
2015
|
|
|
2015
|
|
2014
|
|
2013
|
||||||||||||
|
|
|
(in thousands, except per share data)
|
|||||||||||||||||||||
Consolidated Statement of Operations Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Operating revenues
|
$
|
869,767
|
|
|
$
|
985,046
|
|
|
$
|
529,434
|
|
|
|
$
|
683,711
|
|
|
$
|
1,848,954
|
|
|
$
|
2,203,040
|
|
Impairment, restructuring and other charges
|
$
|
179,727
|
|
|
$
|
1,384,811
|
|
|
$
|
32,308
|
|
|
|
$
|
36,792
|
|
|
$
|
105,664
|
|
|
$
|
121,578
|
|
Foreign currency transaction (losses) gains, net
|
$
|
(1,271
|
)
|
|
$
|
76,615
|
|
|
$
|
(99,737
|
)
|
|
|
$
|
(63,948
|
)
|
|
$
|
(51,149
|
)
|
|
$
|
(92,456
|
)
|
Net (loss) income from continuing operations
|
$
|
(351,666
|
)
|
|
$
|
(1,533,879
|
)
|
|
$
|
(292,491
|
)
|
|
|
$
|
1,519,401
|
|
|
$
|
(1,224,671
|
)
|
|
$
|
(1,200,425
|
)
|
Net (loss) income from continuing operations per common share, basic
|
$
|
(3.51
|
)
|
|
$
|
(15.32
|
)
|
|
$
|
(2.93
|
)
|
|
|
$
|
8.73
|
|
|
$
|
(7.11
|
)
|
|
$
|
(6.98
|
)
|
Net (loss) income from continuing operations per common share, diluted
|
$
|
(3.51
|
)
|
|
$
|
(15.32
|
)
|
|
$
|
(2.93
|
)
|
|
|
$
|
8.71
|
|
|
$
|
(7.11
|
)
|
|
$
|
(6.98
|
)
|
|
Successor Company
|
|
|
Predecessor Company
|
||||||||||||||||
|
December 31,
|
|
|
December 31,
|
||||||||||||||||
|
2017
|
|
2016
|
|
2015
|
|
|
2014
|
|
2013
|
||||||||||
|
|
|
(in thousands)
|
|||||||||||||||||
Consolidated Balance Sheet Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Total assets
|
$
|
1,105,098
|
|
|
$
|
1,418,509
|
|
|
$
|
2,729,908
|
|
|
|
$
|
5,374,034
|
|
|
$
|
8,679,954
|
|
Long-term debt, including current portion
|
$
|
655,707
|
|
|
$
|
756,316
|
|
|
$
|
665,067
|
|
|
|
$
|
925,271
|
|
|
$
|
5,298,412
|
|
Liabilities subject to compromise
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
$
|
4,593,493
|
|
|
$
|
—
|
|
Item 7.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
INDEX TO MANAGEMENT’S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
|
•
|
our ability to attract and retain customers;
|
•
|
our ability to satisfy the requirements of our debt obligations;
|
•
|
our ability to access sufficient debt or equity capital to meet any future operating and financial needs;
|
•
|
our ability to meet established operating goals and generate cash flow;
|
•
|
the availability of other funding sources, including the proceeds from the sale of Nextel Mexico held in escrow;
|
•
|
risks associated with our partnership with ice group;
|
•
|
general economic conditions in Brazil and in the market segments that we are targeting for our services;
|
•
|
the political and social conditions in Brazil, including political instability, which may affect Brazil's economy and the regulatory environment there;
|
•
|
the impact of foreign currency exchange rate volatility in the local currency in Brazil when compared to the U.S. dollar and the impact of related currency depreciation in Brazil;
|
•
|
our having reasonable access to and the successful performance of the technology being deployed in our service areas, and improvements thereon, including technology deployed in connection with digital two-way mobile data or internet connectivity services in Brazil;
|
•
|
the availability of adequate quantities of system infrastructure and subscriber equipment and components at reasonable pricing to meet our service deployment and marketing plans and customer demand;
|
•
|
risks related to the operation and expansion of our network in Brazil, including the potential need for additional funding to support enhanced coverage and capacity, and the risk that we will not attract enough subscribers to support the related costs of deploying or operating the network;
|
•
|
our ability to successfully scale our billing, collection, customer care and similar back-office operations to keep pace with customer growth as necessary, increased system usage rates and growth or to successfully deploy new systems that support those functions;
|
•
|
future legislation or regulatory actions relating to our services, other wireless communications services or telecommunications generally and the costs and/or potential customer impacts of compliance with regulatory mandates;
|
•
|
the ability to achieve and maintain market penetration and average subscriber revenue levels sufficient to provide financial viability to our business;
|
•
|
the quality and price of similar or comparable wireless communications services offered or to be offered by our competitors, including providers of cellular services and personal communications services;
|
•
|
market acceptance of our new service offerings;
|
•
|
our ability to successfully wind down our legacy iDEN network in Brazil and migrate our iDEN subscriber base to our WCDMA network;
|
•
|
equipment failure, natural disasters, terrorist acts or other breaches of network or information technology security; and
|
•
|
other risks and uncertainties described in Part I, Item 1A. “Risk Factors,” in this annual report on Form 10-K and, from time to time, in our other reports filed with the SEC.
|
•
|
our consolidated financial condition as of December 31, 2017 and 2016 and our consolidated results of operations for the years ended December 31, 2017 and 2016, for the six-month periods ended December 31, 2015 and June 30, 2015 and for the combined twelve-month period ended December 31, 2015; and
|
•
|
significant factors which we believe could affect our prospective financial condition and results of operations.
|
A.
|
Executive Overview
|
•
|
mobile telephone voice and wireless data services;
|
•
|
international voice and data roaming services;
|
•
|
application-based radio connection; and
|
•
|
value-added services, including sports, music and entertainment streaming capabilities; online education; and access to national and international WiFi hotspot networks.
|
•
|
offering a unique and superior customer-centric experience, including a reliable and high quality wireless network and rate plan flexibility;
|
•
|
continuing to implement cost reduction strategies and redesigning our network architecture in order to lower cash costs per user, outweigh scale disadvantages, create an agile organization and improve overall profitability;
|
•
|
focusing on higher value customer segments that generate higher ARPU and lower subscriber turnover; and
|
•
|
building on the strength of the unique positioning of the Nextel brand.
|
B.
|
Results of Operations
|
|
Successor Company
|
|
|
Predecessor Company
|
|
Combined
|
|
|
|
|
|||||||||||
|
Year Ended December 31, 2017
|
|
Year Ended December 31, 2016
|
|
Six Months Ended December 31, 2015
|
|
|
Six Months Ended June 30, 2015
|
|
Year Ended December 31, 2015
|
|
2016 to 2017
Percent Change
|
|
2015 to 2016
Percent Change
|
|||||||
Brazilian real
|
3.19
|
|
|
3.49
|
|
|
3.70
|
|
|
|
2.97
|
|
|
3.33
|
|
|
8.6
|
%
|
|
(4.8
|
)%
|
|
Successor Company
|
|||||||||||||||||||||||||
|
2017
|
|
2016
|
|
2015
|
|||||||||||||||||||||
|
December
|
|
September
|
|
June
|
|
March
|
|
December
|
|
September
|
|
June
|
|
March
|
|
December
|
|||||||||
Brazilian real
|
3.31
|
|
|
3.17
|
|
|
3.31
|
|
|
3.13
|
|
|
3.26
|
|
|
3.25
|
|
|
3.21
|
|
|
3.56
|
|
|
3.90
|
|
1.
|
Year Ended December 31, 2017 vs. Year Ended December 31, 2016
|
a.
|
Consolidated
|
|
Successor Company
|
|
Actual Change from
Previous Year
|
|
Constant Currency Change from Previous Year
|
||||||||||||
|
Year Ended December 31, 2017
|
|
Year Ended December 31, 2016
|
|
Dollars
|
|
B(W) Change
|
|
B(W) Change
|
||||||||
|
(dollars in thousands)
|
|
|
||||||||||||||
Brazil segment (losses) earnings
|
$
|
(31,071
|
)
|
|
$
|
67,186
|
|
|
$
|
(98,257
|
)
|
|
(146
|
)%
|
|
(142
|
)%
|
Corporate segment losses and eliminations
|
(24,174
|
)
|
|
(36,821
|
)
|
|
12,647
|
|
|
34
|
%
|
|
34
|
%
|
|||
Consolidated segment (losses) earnings
|
(55,245
|
)
|
|
30,365
|
|
|
(85,610
|
)
|
|
(282
|
)%
|
|
(251
|
)%
|
|||
Impairment, restructuring and other charges
|
(179,727
|
)
|
|
(1,384,811
|
)
|
|
1,205,084
|
|
|
87
|
%
|
|
88
|
%
|
|||
Depreciation and amortization
|
(37,187
|
)
|
|
(172,383
|
)
|
|
135,196
|
|
|
78
|
%
|
|
80
|
%
|
|||
Operating loss
|
(272,159
|
)
|
|
(1,526,829
|
)
|
|
1,254,670
|
|
|
82
|
%
|
|
84
|
%
|
|||
Interest expense, net
|
(118,605
|
)
|
|
(113,732
|
)
|
|
(4,873
|
)
|
|
(4
|
)%
|
|
9
|
%
|
|||
Interest income
|
41,507
|
|
|
37,689
|
|
|
3,818
|
|
|
10
|
%
|
|
1
|
%
|
|||
Foreign currency transaction (losses) gains, net
|
(1,271
|
)
|
|
76,615
|
|
|
(77,886
|
)
|
|
(102
|
)%
|
|
(102
|
)%
|
|||
Other expense, net
|
(7,930
|
)
|
|
(9,711
|
)
|
|
1,781
|
|
|
18
|
%
|
|
25
|
%
|
|||
Loss from continuing operations before reorganization items and income tax benefit
|
(358,458
|
)
|
|
(1,535,968
|
)
|
|
1,177,510
|
|
|
77
|
%
|
|
79
|
%
|
|||
Reorganization items
|
445
|
|
|
(803
|
)
|
|
1,248
|
|
|
155
|
%
|
|
155
|
%
|
|||
Income tax benefit
|
6,347
|
|
|
2,892
|
|
|
3,455
|
|
|
119
|
%
|
|
119
|
%
|
|||
Net loss from continuing operations
|
(351,666
|
)
|
|
(1,533,879
|
)
|
|
1,182,213
|
|
|
77
|
%
|
|
79
|
%
|
|||
Income (loss) from discontinued operations, net of income taxes
|
1,005
|
|
|
(19,994
|
)
|
|
20,999
|
|
|
105
|
%
|
|
105
|
%
|
|||
Net loss
|
(350,661
|
)
|
|
(1,553,873
|
)
|
|
1,203,212
|
|
|
77
|
%
|
|
79
|
%
|
|||
Net loss attributable to noncontrolling interest
|
(49,647
|
)
|
|
—
|
|
|
(49,647
|
)
|
|
NM
|
|
|
NM
|
|
|||
Net loss attributable to NII Holdings
|
$
|
(301,014
|
)
|
|
$
|
(1,553,873
|
)
|
|
$
|
1,252,859
|
|
|
81
|
%
|
|
82
|
%
|
1.
|
Impairment, restructuring and other charges
|
•
|
$70.5 million in restructuring charges, most of which related to future lease costs for certain transmitter and receiver sites that are no longer required in Nextel Brazil's business;
|
•
|
a $57.9 million non-cash asset impairment charge to reduce the carrying values of Nextel Brazil's long-lived assets to their respective fair values;
|
•
|
$34.2 million in restructuring charges related to a change in the scope of Nextel Brazil's radio access network, or RAN, sharing implementation;
|
•
|
$9.3 million in other non-cash asset impairment charges primarily related to the abandonment of certain transmitter and receiver sites that were no longer required in Nextel Brazil's business; and
|
•
|
$6.5 million in severance and other related costs resulting from the separation of certain executive level employees in Brazil.
|
•
|
$21.4 million in restructuring charges related to the early termination of leases for approximately 600 transmitter and receiver sites in connection with the RAN sharing agreement Nextel Brazil entered into with Telefonica Brazil, S.A., or Telefonica, in May 2016;
|
•
|
$11.0 million in non-cash asset impairment charges primarily related to the abandonment of transmitter and receiver sites in Brazil;
|
•
|
$10.8 million in restructuring charges primarily related to future lease costs for certain transmitter and receiver sites that are no longer required in Nextel Brazil's business and office closures; and
|
•
|
$3.2 million in severance and other related costs at the corporate level as a result of the separation of employees in an effort to further streamline our organizational structure and reduce general and administrative expenses.
|
2.
|
Depreciation and amortization
|
3.
|
Interest expense, net
|
4.
|
Foreign currency transaction (losses) gains, net
|
b.
|
Nextel Brazil
|
|
Successor Company
|
|
Actual Change from
Previous Year
|
|
Constant Currency Change from Previous Year
|
||||||||||||||||||
|
Year Ended December 31, 2017
|
|
% of
Nextel Brazil’s
Operating Revenues
|
|
Year Ended December 31, 2016
|
|
% of
Nextel Brazil’s
Operating Revenues
|
|
Dollars
|
|
B(W) Change
|
|
B(W) Change
|
||||||||||
|
(dollars in thousands)
|
|
|
||||||||||||||||||||
Service and other revenues
|
$
|
847,773
|
|
|
97
|
%
|
|
$
|
963,041
|
|
|
98
|
%
|
|
$
|
(115,268
|
)
|
|
(12
|
)%
|
|
(20
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Handset and accessory revenues
|
21,888
|
|
|
3
|
%
|
|
21,837
|
|
|
2
|
%
|
|
51
|
|
|
—
|
|
|
(8
|
)%
|
|||
Cost of handsets and accessories
|
(40,207
|
)
|
|
(5
|
)%
|
|
(29,273
|
)
|
|
(3
|
)%
|
|
(10,934
|
)
|
|
(37
|
)%
|
|
(26
|
)%
|
|||
Handset and accessory net subsidy
|
(18,319
|
)
|
|
(2
|
)%
|
|
(7,436
|
)
|
|
(1
|
)%
|
|
(10,883
|
)
|
|
(146
|
)%
|
|
(125
|
)%
|
|||
Cost of service (exclusive of depreciation and amortization)
|
(374,637
|
)
|
|
(43
|
)%
|
|
(364,648
|
)
|
|
(37
|
)%
|
|
(9,989
|
)
|
|
(3
|
)%
|
|
6
|
%
|
|||
Selling and marketing expenses
|
(108,490
|
)
|
|
(13
|
)%
|
|
(116,538
|
)
|
|
(12
|
)%
|
|
8,048
|
|
|
7
|
%
|
|
15
|
%
|
|||
General and administrative expenses
|
(377,398
|
)
|
|
(43
|
)%
|
|
(407,233
|
)
|
|
(41
|
)%
|
|
29,835
|
|
|
7
|
%
|
|
15
|
%
|
|||
Segment (losses) earnings
|
$
|
(31,071
|
)
|
|
(4
|
)%
|
|
$
|
67,186
|
|
|
7
|
%
|
|
$
|
(98,257
|
)
|
|
(146
|
)%
|
|
(142
|
)%
|
|
Three Months Ended
|
||||||||||||||||||||||
|
March 31, 2016
|
|
June 30, 2016
|
|
September 30, 2016
|
|
December 31, 2016
|
|
March 31, 2017
|
|
June 30, 2017
|
|
September 30, 2017
|
|
December 31, 2017
|
||||||||
|
(subscribers in thousands)
|
||||||||||||||||||||||
iDEN subscriber units
|
1,552.0
|
|
|
1,315.1
|
|
|
1,127.8
|
|
|
962.1
|
|
|
822.7
|
|
|
686.3
|
|
|
563.3
|
|
|
449.7
|
|
WCDMA subscriber units
|
2,744.7
|
|
|
2,708.7
|
|
|
2,717.1
|
|
|
2,746.3
|
|
|
2,815.2
|
|
|
2,874.6
|
|
|
2,864.8
|
|
|
2,845.8
|
|
Total subscriber units in commercial service — beginning of period
|
4,296.7
|
|
|
4,023.8
|
|
|
3,844.9
|
|
|
3,708.4
|
|
|
3,637.9
|
|
|
3,560.9
|
|
|
3,428.1
|
|
|
3,295.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
iDEN net subscriber losses
|
(195.2
|
)
|
|
(149.7
|
)
|
|
(130.8
|
)
|
|
(110.1
|
)
|
|
(115.4
|
)
|
|
(103.5
|
)
|
|
(100.3
|
)
|
|
(76.6
|
)
|
WCDMA net subscriber (losses) additions
|
(77.7
|
)
|
|
(29.2
|
)
|
|
(5.7
|
)
|
|
39.6
|
|
|
38.4
|
|
|
(29.3
|
)
|
|
(32.3
|
)
|
|
26.8
|
|
Total net subscriber losses
|
(272.9
|
)
|
|
(178.9
|
)
|
|
(136.5
|
)
|
|
(70.5
|
)
|
|
(77.0
|
)
|
|
(132.8
|
)
|
|
(132.6
|
)
|
|
(49.8
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Migrations from iDEN to WCDMA
|
41.7
|
|
|
37.6
|
|
|
34.9
|
|
|
29.3
|
|
|
21.0
|
|
|
19.5
|
|
|
13.3
|
|
|
23.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
iDEN subscriber units
|
1,315.1
|
|
|
1,127.8
|
|
|
962.1
|
|
|
822.7
|
|
|
686.3
|
|
|
563.3
|
|
|
449.7
|
|
|
349.6
|
|
WCDMA subscriber units
|
2,708.7
|
|
|
2,717.1
|
|
|
2,746.3
|
|
|
2,815.2
|
|
|
2,874.6
|
|
|
2,864.8
|
|
|
2,845.8
|
|
|
2,896.1
|
|
Total subscriber units in commercial service — end of period
|
4,023.8
|
|
|
3,844.9
|
|
|
3,708.4
|
|
|
3,637.9
|
|
|
3,560.9
|
|
|
3,428.1
|
|
|
3,295.5
|
|
|
3,245.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Total subscriber turnover
|
4.34
|
%
|
|
3.99
|
%
|
|
3.99
|
%
|
|
3.65
|
%
|
|
3.71
|
%
|
|
3.95
|
%
|
|
4.47
|
%
|
|
3.83
|
%
|
iDEN subscriber turnover
|
4.80
|
%
|
|
4.46
|
%
|
|
4.65
|
%
|
|
4.71
|
%
|
|
5.52
|
%
|
|
5.88
|
%
|
|
6.89
|
%
|
|
6.36
|
%
|
WCDMA subscriber turnover
|
4.10
|
%
|
|
3.78
|
%
|
|
3.73
|
%
|
|
3.31
|
%
|
|
3.23
|
%
|
|
3.53
|
%
|
|
4.04
|
%
|
|
3.47
|
%
|
|
Three Months Ended
|
|
Year Ended
|
|
Three Months Ended
|
|
Year Ended
|
||||||||||||||||||||||
|
March 31, 2016
|
|
June 30,
2016
|
|
September 30, 2016
|
|
December 31, 2016
|
|
December 31, 2016
|
|
March 31, 2017
|
|
June 30, 2017
|
|
September 30, 2017
|
|
December 31, 2017
|
|
December 31, 2017
|
||||||||||
Total service ARPU (US$)
|
16
|
|
|
19
|
|
|
21
|
|
|
20
|
|
|
19
|
|
|
21
|
|
|
19
|
|
|
19
|
|
|
18
|
|
|
19
|
|
WCDMA service ARPU (US$)
|
16
|
|
|
20
|
|
|
21
|
|
|
21
|
|
|
20
|
|
|
22
|
|
|
20
|
|
|
19
|
|
|
18
|
|
|
20
|
|
iDEN service ARPU (US$)
|
15
|
|
|
16
|
|
|
19
|
|
|
18
|
|
|
16
|
|
|
17
|
|
|
15
|
|
|
15
|
|
|
14
|
|
|
16
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total service ARPU (BRL)
|
62
|
|
|
66
|
|
|
67
|
|
|
67
|
|
|
65
|
|
|
65
|
|
|
62
|
|
|
59
|
|
|
57
|
|
|
61
|
|
WCDMA service ARPU (BRL)
|
64
|
|
|
70
|
|
|
69
|
|
|
69
|
|
|
68
|
|
|
68
|
|
|
65
|
|
|
61
|
|
|
58
|
|
|
63
|
|
iDEN service ARPU (BRL)
|
57
|
|
|
56
|
|
|
60
|
|
|
59
|
|
|
58
|
|
|
54
|
|
|
49
|
|
|
47
|
|
|
47
|
|
|
50
|
|
1.
|
Service and other revenues
|
2.
|
Handset and accessory net subsidy
|
3.
|
Cost of service
|
4.
|
Selling and marketing expenses
|
5.
|
General and administrative expenses
|
c.
|
Corporate
|
|
Successor Company
|
|
Actual Change from
Previous Year
|
|||||||||||
|
Year Ended December 31, 2017
|
|
Year Ended December 31, 2016
|
|
Dollars
|
|
B(W) Change
|
|||||||
|
(dollars in thousands)
|
|||||||||||||
Service and other revenues
|
$
|
106
|
|
|
$
|
168
|
|
|
$
|
(62
|
)
|
|
(37
|
)%
|
Selling, general and administrative expenses
|
(24,280
|
)
|
|
(36,989
|
)
|
|
12,709
|
|
|
34
|
%
|
|||
Segment losses
|
$
|
(24,174
|
)
|
|
$
|
(36,821
|
)
|
|
$
|
12,647
|
|
|
34
|
%
|
2.
|
Year Ended December 31, 2016 vs. Combined Period Ended December 31, 2015
|
a.
|
Consolidated
|
|
Successor Company
|
|
|
Predecessor Company
|
|
Combined
|
|
Actual Change from
Previous Year
|
|
Constant Currency Change from Previous Year
|
||||||||||||||||
|
Year Ended December 31, 2016
|
|
Six Months Ended December 31, 2015
|
|
|
Six Months Ended June 30, 2015
|
|
Year Ended December 31, 2015
|
|
Dollars
|
|
B(W) Change
|
|
B(W) Change
|
||||||||||||
|
(dollars in thousands)
|
|
|
|||||||||||||||||||||||
Brazil segment earnings (losses)
|
$
|
67,186
|
|
|
$
|
(15,925
|
)
|
|
|
$
|
(75,234
|
)
|
|
$
|
(91,159
|
)
|
|
$
|
158,345
|
|
|
174
|
%
|
|
177
|
%
|
Corporate segment losses and eliminations
|
(36,821
|
)
|
|
(26,100
|
)
|
|
|
(37,982
|
)
|
|
(64,082
|
)
|
|
27,261
|
|
|
43
|
%
|
|
43
|
%
|
|||||
Consolidated segment earnings (losses)
|
30,365
|
|
|
(42,025
|
)
|
|
|
(113,216
|
)
|
|
(155,241
|
)
|
|
185,606
|
|
|
120
|
%
|
|
120
|
%
|
|||||
Impairment, restructuring and other charges
|
(1,384,811
|
)
|
|
(32,308
|
)
|
|
|
(36,792
|
)
|
|
(69,100
|
)
|
|
(1,315,711
|
)
|
|
NM
|
|
|
NM
|
|
|||||
Depreciation and amortization
|
(172,383
|
)
|
|
(85,364
|
)
|
|
|
(153,878
|
)
|
|
(239,242
|
)
|
|
66,859
|
|
|
28
|
%
|
|
25
|
%
|
|||||
Operating loss
|
(1,526,829
|
)
|
|
(159,697
|
)
|
|
|
(303,886
|
)
|
|
(463,583
|
)
|
|
(1,063,246
|
)
|
|
(229
|
)%
|
|
(242
|
)%
|
|||||
Interest expense, net
|
(113,732
|
)
|
|
(55,563
|
)
|
|
|
(82,820
|
)
|
|
(138,383
|
)
|
|
24,651
|
|
|
18
|
%
|
|
13
|
%
|
|||||
Interest income
|
37,689
|
|
|
17,200
|
|
|
|
15,327
|
|
|
32,527
|
|
|
5,162
|
|
|
16
|
%
|
|
21
|
%
|
|||||
Foreign currency transaction gains (losses), net
|
76,615
|
|
|
(99,737
|
)
|
|
|
(63,948
|
)
|
|
(163,685
|
)
|
|
240,300
|
|
|
147
|
%
|
|
149
|
%
|
|||||
Other expense, net
|
(9,711
|
)
|
|
(1,176
|
)
|
|
|
(137
|
)
|
|
(1,313
|
)
|
|
(8,398
|
)
|
|
NM
|
|
|
NM
|
|
|||||
Loss from continuing operations before reorganization items and income tax benefit (provision)
|
(1,535,968
|
)
|
|
(298,973
|
)
|
|
|
(435,464
|
)
|
|
(734,437
|
)
|
|
(801,531
|
)
|
|
(109
|
)%
|
|
(118
|
)%
|
|||||
Reorganization items
|
(803
|
)
|
|
1,467
|
|
|
|
1,956,874
|
|
|
1,958,341
|
|
|
(1,959,144
|
)
|
|
(100
|
)%
|
|
(100
|
)%
|
|||||
Income tax benefit (provision)
|
2,892
|
|
|
5,015
|
|
|
|
(2,009
|
)
|
|
3,006
|
|
|
(114
|
)
|
|
(4
|
)%
|
|
6
|
%
|
|||||
Net (loss) income from continuing operations
|
(1,533,879
|
)
|
|
(292,491
|
)
|
|
|
1,519,401
|
|
|
1,226,910
|
|
|
(2,760,789
|
)
|
|
(225
|
)%
|
|
(222
|
)%
|
|||||
Income (loss) from discontinued operations, net of income taxes
|
(19,994
|
)
|
|
11,608
|
|
|
|
221,114
|
|
|
232,722
|
|
|
(252,716
|
)
|
|
(109
|
)%
|
|
(109
|
)%
|
|||||
Net (loss) income
|
$
|
(1,553,873
|
)
|
|
$
|
(280,883
|
)
|
|
|
$
|
1,740,515
|
|
|
$
|
1,459,632
|
|
|
$
|
(3,013,505
|
)
|
|
(206
|
)%
|
|
(204
|
)%
|
1.
|
Impairment, restructuring and other charges
|
•
|
$21.4 million in restructuring charges related to the early termination of leases for approximately 600 transmitter and receiver sites in connection with the RAN sharing agreement Nextel Brazil entered into with Telefonica Brazil, S.A., or Telefonica, in May 2016;
|
•
|
$11.0 million in non-cash asset impairment charges primarily related to the abandonment of transmitter and receiver sites in Brazil;
|
•
|
$10.8 million in restructuring charges primarily related to future lease costs for certain transmitter and receiver sites that are no longer required in Nextel Brazil's business and office closures; and
|
•
|
$3.2 million in severance and other related costs at the corporate level as a result of the separation of employees in an effort to further streamline our organizational structure and reduce general and administrative expenses.
|
•
|
$43.7 million in non-cash asset impairment charges, the majority of which related to the shutdown or abandonment of transmitter and receiver sites and the discontinuation of certain information technology projects in Brazil;
|
•
|
$14.4 million in severance and other related costs incurred in Brazil and at the corporate level resulting from the separation of employees in an effort to streamline our organizational structure and reduce general and administrative expenses; and
|
•
|
$8.4 million in restructuring charges in Brazil related to future lease costs for certain transmitter and receiver sites that are no longer necessary in our business plan.
|
2.
|
Depreciation and amortization
|
3.
|
Interest expense, net
|
4.
|
Foreign currency transaction gains (losses), net
|
5.
|
Reorganization items
|
|
Successor Company
|
|
|
Predecessor Company
|
|
Combined
|
|
Actual Change from
Previous Year
|
|
Constant Currency Change from Previous Year
|
||||||||||||||||||||||
|
Year Ended December 31, 2016
|
|
% of
Nextel Brazil’s
Operating Revenues
|
|
Six Months Ended December 31, 2015
|
|
|
Six Months Ended June 30, 2015 |
|
Year Ended December 31, 2015
|
|
% of
Nextel Brazil’s
Operating Revenues
|
|
Dollars
|
|
B(W) Change
|
|
B(W) Change
|
||||||||||||||
|
(dollars in thousands)
|
|
|
|||||||||||||||||||||||||||||
Service and other revenues
|
$
|
963,041
|
|
|
98
|
%
|
|
$
|
501,028
|
|
|
|
$
|
643,804
|
|
|
$
|
1,144,832
|
|
|
94
|
%
|
|
$
|
(181,791
|
)
|
|
(16
|
)%
|
|
(12
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Handset and accessory revenues
|
21,837
|
|
|
2
|
%
|
|
28,304
|
|
|
|
39,807
|
|
|
68,111
|
|
|
6
|
%
|
|
(46,274
|
)
|
|
(68
|
)%
|
|
(66
|
)%
|
|||||
Cost of handsets and accessories
|
(29,273
|
)
|
|
(3
|
)%
|
|
(46,904
|
)
|
|
|
(121,143
|
)
|
|
(168,047
|
)
|
|
(14
|
)%
|
|
138,774
|
|
|
83
|
%
|
|
82
|
%
|
|||||
Handset and accessory net subsidy
|
(7,436
|
)
|
|
(1
|
)%
|
|
(18,600
|
)
|
|
|
(81,336
|
)
|
|
(99,936
|
)
|
|
(8
|
)%
|
|
92,500
|
|
|
93
|
%
|
|
92
|
%
|
|||||
Cost of service (exclusive of depreciation and amortization)
|
(364,648
|
)
|
|
(37
|
)%
|
|
(212,866
|
)
|
|
|
(256,153
|
)
|
|
(469,019
|
)
|
|
(39
|
)%
|
|
104,371
|
|
|
22
|
%
|
|
19
|
%
|
|||||
Selling and marketing expenses
|
(116,538
|
)
|
|
(12
|
)%
|
|
(71,557
|
)
|
|
|
(105,357
|
)
|
|
(176,914
|
)
|
|
(15
|
)%
|
|
60,376
|
|
|
34
|
%
|
|
31
|
%
|
|||||
General and administrative expenses
|
(407,233
|
)
|
|
(41
|
)%
|
|
(213,930
|
)
|
|
|
(276,192
|
)
|
|
(490,122
|
)
|
|
(40
|
)%
|
|
82,889
|
|
|
17
|
%
|
|
13
|
%
|
|||||
Segment earnings (losses)
|
$
|
67,186
|
|
|
7
|
%
|
|
$
|
(15,925
|
)
|
|
|
$
|
(75,234
|
)
|
|
$
|
(91,159
|
)
|
|
(8
|
)%
|
|
$
|
158,345
|
|
|
174
|
%
|
|
177
|
%
|
1.
|
Service and other revenues
|
2.
|
Handset and accessory net subsidy
|
3.
|
Cost of service
|
4.
|
Selling and marketing expenses
|
5.
|
General and administrative expenses
|
c.
|
Corporate
|
|
Successor Company
|
|
|
Predecessor Company
|
|
Combined
|
|
Actual Change from
Previous Year
|
|||||||||||||||
|
Year Ended December 31, 2016
|
|
Six Months Ended December 31, 2015
|
|
|
Six Months Ended June 30, 2015 |
|
Year Ended December 31, 2015
|
|
Dollars
|
|
B(W) Change
|
|||||||||||
|
(dollars in thousands)
|
||||||||||||||||||||||
Service and other revenues
|
$
|
168
|
|
|
$
|
116
|
|
|
|
$
|
168
|
|
|
$
|
284
|
|
|
$
|
(116
|
)
|
|
(41
|
)%
|
Selling, general and administrative expenses
|
(36,989
|
)
|
|
(26,216
|
)
|
|
|
(39,071
|
)
|
|
(65,287
|
)
|
|
28,298
|
|
|
43
|
%
|
|||||
Segment losses
|
$
|
(36,821
|
)
|
|
$
|
(26,100
|
)
|
|
|
$
|
(38,903
|
)
|
|
$
|
(65,003
|
)
|
|
$
|
28,182
|
|
|
43
|
%
|
C.
|
Liquidity and Capital Resources
|
|
Successor Company
|
|
|
Predecessor Company
|
||||||||||||||||
|
Year Ended December 31,
|
|
Year Ended December 31,
|
|
Six Months Ended December 31,
|
|
|
Six Months Ended June 30,
|
|
Combined Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
|
|
2015
|
|
2015
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents, beginning of period
|
$
|
257,380
|
|
|
$
|
342,184
|
|
|
$
|
423,135
|
|
|
|
$
|
334,194
|
|
|
$
|
334,194
|
|
Net cash used in operating activities
|
(87,138
|
)
|
|
(45,205
|
)
|
|
(78,485
|
)
|
|
|
(254,757
|
)
|
|
(333,242
|
)
|
|||||
Net cash provided by (used in) investing activities
|
71,795
|
|
|
54,450
|
|
|
(976
|
)
|
|
|
1,027,821
|
|
|
1,026,845
|
|
|||||
Net cash used in financing activities
|
(48,690
|
)
|
|
(93,004
|
)
|
|
(25,068
|
)
|
|
|
(778,231
|
)
|
|
(803,299
|
)
|
|||||
Effect of exchange rate changes on cash and cash equivalents
|
541
|
|
|
(1,045
|
)
|
|
916
|
|
|
|
(9,152
|
)
|
|
(8,236
|
)
|
|||||
Change in cash and cash equivalents related to discontinued operations
|
—
|
|
|
—
|
|
|
22,662
|
|
|
|
103,260
|
|
|
125,922
|
|
|||||
Cash and cash equivalents, end of period
|
$
|
193,888
|
|
|
$
|
257,380
|
|
|
$
|
342,184
|
|
|
|
$
|
423,135
|
|
|
$
|
342,184
|
|
D.
|
Future Capital Needs and Resources
|
•
|
the amount of revenue we are able to generate and collect from our subscribers, including our ability to increase the size of our subscriber base;
|
•
|
the amount of operating expenses required to provide our services;
|
•
|
the cost of acquiring and retaining subscribers, including the subsidies we incur to provide handsets to both our new and existing subscribers; and
|
•
|
changes in foreign currency exchange rates.
|
•
|
operating expenses and capital expenditures relating to our existing network and the continued deployment of LTE in São Paulo;
|
•
|
payments in connection with previous spectrum purchases and ongoing spectrum license fees;
|
•
|
debt service requirements;
|
•
|
obligations relating to our tower financing arrangements and capital lease obligations;
|
•
|
cash taxes; and
|
•
|
other general corporate expenditures.
|
|
Payments due by Period
|
||||||||||||||||||
|
Less than
|
|
|
|
|
|
More than
|
|
|
||||||||||
C
ontractual Obligations
|
1 Year
|
|
1-3 Years
|
|
3-5 Years
|
|
5 Years
|
|
Total
|
||||||||||
|
(in thousands)
|
||||||||||||||||||
Capital leases and tower financing obligations (1)
|
$
|
48,354
|
|
|
$
|
85,916
|
|
|
$
|
84,314
|
|
|
$
|
621,495
|
|
|
$
|
840,079
|
|
Operating leases (2)
|
127,430
|
|
|
213,871
|
|
|
168,047
|
|
|
151,364
|
|
|
660,712
|
|
|||||
Equipment financing (3)
|
14,421
|
|
|
23,767
|
|
|
79,059
|
|
|
195,953
|
|
|
313,200
|
|
|||||
Bank loans (4)
|
18,684
|
|
|
37,045
|
|
|
82,180
|
|
|
171,917
|
|
|
309,826
|
|
|||||
Spectrum financing (5)
|
—
|
|
|
63,239
|
|
|
74,263
|
|
|
85,288
|
|
|
222,790
|
|
|||||
Purchase obligations (6)
|
57,081
|
|
|
54,224
|
|
|
20,335
|
|
|
—
|
|
|
131,640
|
|
|||||
Other long-term obligations (7)
|
1,682
|
|
|
395
|
|
|
1,490
|
|
|
105,270
|
|
|
108,837
|
|
|||||
Total contractual commitments
|
$
|
267,652
|
|
|
$
|
478,457
|
|
|
$
|
509,688
|
|
|
$
|
1,331,287
|
|
|
$
|
2,587,084
|
|
(1)
|
These amounts represent principal and interest payments due under our co-location agreements, our tower financing arrangements and our sale of towers in Brazil in 2013, which are guaranteed by NIIT.
|
(2)
|
These amounts principally include future lease costs related to our transmitter and receiver sites and switches, as well as our office facilities.
|
(3)
|
These amounts represent principal and interest payments associated with a U.S. dollar-denominated loan agreement with the China Development Bank in Brazil to finance infrastructure equipment, which is guaranteed by Nextel Holdings.
|
(4)
|
These amounts represent principal and interest payments associated with Nextel Brazil's bank loans.
|
(5)
|
These amounts represent principal and interest payments in connection with the amount Nextel Brazil borrowed to acquire 30MHz of spectrum in the 1.8 GHz band in July 2016.
|
(6)
|
These amounts include maximum contractual purchase obligations under various agreements with our vendors, including the roaming and RAN sharing agreements that Nextel Brazil entered into with Telefonica in May 2016. See Note 9 to our consolidated financial statements for more information regarding these agreements.
|
(7)
|
These amounts include our current estimates of asset retirement obligations based on our expectations as to future retirement costs, inflation rates and timing of retirements, as well as amounts related to our uncertain income tax positions.
|
•
|
the amount we spend to enhance our WCDMA network in Brazil and deploy LTE;
|
•
|
the extent to which we expand the coverage of our network in new or existing market areas;
|
•
|
the number of additional transmitter and receiver sites we build in order to increase system capacity, maintain system quality and meet our regulatory requirements, as well as the costs associated with the installation of network infrastructure and switching equipment; and
|
•
|
the costs we incur in connection with non-network related information technology projects.
|
•
|
cash and cash equivalents on hand and short-term investments available to fund our operations;
|
•
|
restricted cash currently held in escrow to secure our indemnification obligations in connection with the sale of Nextel Mexico;
|
•
|
expected cash flows from our operations in Brazil;
|
•
|
the timing of spectrum payments, including ongoing fees for spectrum use;
|
•
|
our anticipated level of capital expenditures;
|
•
|
our scheduled debt service obligations;
|
•
|
our other contractual obligations; and
|
•
|
cash income and other taxes.
|
•
|
based on the continued development of our business plans and strategy;
|
•
|
if currency values in Brazil depreciate or appreciate relative to the U.S. dollar in a manner that is more significant than we currently expect and assume as part of our plans;
|
•
|
if economic conditions in Brazil do not improve or worsen;
|
•
|
if competitive practices in the mobile wireless telecommunications industry in Brazil change materially from those currently prevailing or from those now anticipated; or
|
•
|
if other presently unexpected circumstances arise that have a material effect on the cash flow or profitability of our business, such as contingencies.
|
E.
|
Effect of Inflation and Foreign Currency Exchange
|
F.
|
Effect of New Accounting Standards
|
•
|
a net contract asset related to the portion of our revenues associated with service plans that are sold concurrently with a subsidized handset; and
|
•
|
an asset related to costs incurred to acquire a contract, which primarily relates to the deferral of commission expenses.
|
Item 7A.
|
Quantitative and Qualitative Disclosures About Market Risk
|
|
Successor Company
|
||||||||||||||||||||||||||||||||||||||
|
Year of Maturity
|
|
2017
|
|
2016
|
||||||||||||||||||||||||||||||||||
|
1 Year
|
|
2 Years
|
|
3 Years
|
|
4 Years
|
|
5 Years
|
|
Thereafter
|
|
Total
|
|
Fair Value
|
|
Total
|
|
Fair Value
|
||||||||||||||||||||
|
(dollars in thousands)
|
||||||||||||||||||||||||||||||||||||||
Fixed Rate (BRL)
|
$
|
4,478
|
|
|
$
|
24,510
|
|
|
$
|
25,622
|
|
|
$
|
25,589
|
|
|
$
|
24,900
|
|
|
$
|
122,924
|
|
|
$
|
228,023
|
|
|
$
|
218,449
|
|
|
$
|
222,789
|
|
|
$
|
214,164
|
|
Average Interest Rate
|
99.1
|
%
|
|
22.7
|
%
|
|
25.0
|
%
|
|
24.8
|
%
|
|
22.9
|
%
|
|
49.8
|
%
|
|
39.3
|
%
|
|
|
|
42.1
|
%
|
|
|
||||||||||||
Variable Rate (US$)
|
$
|
1,200
|
|
|
$
|
1,200
|
|
|
$
|
1,200
|
|
|
$
|
1,200
|
|
|
$
|
57,558
|
|
|
$
|
182,267
|
|
|
$
|
244,625
|
|
|
$
|
237,958
|
|
|
$
|
293,550
|
|
|
$
|
280,893
|
|
Average Interest Rate
|
3.7
|
%
|
|
3.7
|
%
|
|
3.7
|
%
|
|
3.7
|
%
|
|
3.7
|
%
|
|
3.7
|
%
|
|
3.7
|
%
|
|
|
|
3.5
|
%
|
|
|
||||||||||||
Variable Rate (BRL)
|
$
|
977
|
|
|
$
|
977
|
|
|
$
|
977
|
|
|
$
|
977
|
|
|
$
|
46,853
|
|
|
$
|
148,370
|
|
|
$
|
199,131
|
|
|
$
|
144,301
|
|
|
$
|
237,235
|
|
|
$
|
221,075
|
|
Average Interest Rate
|
8.8
|
%
|
|
8.8
|
%
|
|
8.8
|
%
|
|
8.8
|
%
|
|
9.6
|
%
|
|
9.6
|
%
|
|
9.6
|
%
|
|
|
|
19.1
|
%
|
|
|
Item 8.
|
Financial Statements and Supplementary Data
|
Item 9.
|
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
|
Item 9A.
|
Controls and Procedures
|
Item 9B.
|
Other Information
|
Item 10.
|
Directors, Executive Officers of the Registrant and Corporate Governance
|
Item 11.
|
Executive Compensation
|
Item 12.
|
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
|
Item 13.
|
Certain Relationships and Related Transactions, and Director Independence
|
Item 14.
|
Principal Accountant Fees and Services
|
Item 15.
|
Exhibits, Financial Statement Schedules.
|
|
Page
|
(2)
|
Financial Statement Schedules. The following financial statement schedules are filed as part of this report. Schedules other than the schedules listed below are omitted because they are either not required or not applicable.
|
(3)
|
List of Exhibits.
|
Exhibit Number
|
|
Exhibit Description
|
|
Form
|
|
Exhibit
|
|
Incorporated by
Reference Filing Date |
|
Filed Herewith
|
2.1
|
|
|
8-K
|
|
2.1
|
|
06/22/15
|
|
|
|
3.1
|
|
|
S-8
|
|
3.1
|
|
06/26/15
|
|
|
|
3.2
|
|
|
S-8
|
|
3.2
|
|
06/26/15
|
|
|
|
4.1
|
|
|
8-K
|
|
10.1
|
|
06/30/15
|
|
|
|
10.1
|
|
|
10-Q
|
|
10.1
|
|
11/08/11
|
|
|
|
10.2
|
|
|
10-K
|
|
10.2
|
|
03/03/16
|
|
|
|
10.3
|
|
|
8-K
|
|
10.1
|
|
01/26/15
|
|
|
|
10.4
|
|
|
8-K
|
|
10.1
|
|
11/01/17
|
|
|
|
10.5
|
|
|
8-K
|
|
10.2
|
|
11/01/17
|
|
|
|
10.6
|
|
|
8-K
|
|
10.4
|
|
11/01/17
|
|
|
|
10.7
|
|
|
10-K
|
|
10.16
|
|
03/03/16
|
|
|
|
10.8
|
|
|
8-K
|
|
10.8
|
|
11/01/17
|
|
|
|
10.9
|
|
|
8-K
|
|
10.6
|
|
11/01/17
|
|
|
|
10.10
|
|
|
8-K
|
|
10.1
|
|
06/06/17
|
|
|
|
10.11
|
|
|
8-K
|
|
10.2
|
|
06/06/17
|
|
|
|
10.12
|
|
|
10-K
|
|
10.16
|
|
02/28/13
|
|
|
|
10.13(+)
|
|
|
8-K
|
|
10.2
|
|
12/22/15
|
|
|
|
10.14(+)
|
|
|
S-8
|
|
4.1
|
|
06/26/15
|
|
|
|
10.15(+)
|
|
|
8-K
|
|
10.3
|
|
06/30/15
|
|
|
|
10.16(+)
|
|
|
8-K
|
|
10.4
|
|
06/30/15
|
|
|
|
10.17(+)
|
|
|
10-K
|
|
10.32
|
|
03/03/16
|
|
|
10.18(+)
|
|
|
|
|
|
|
|
|
*
|
|
10.19(+)
|
|
|
8-K
|
|
10.1
|
|
05/02/13
|
|
|
|
10.20(+)
|
|
|
8-K
|
|
10.1
|
|
07/27/17
|
|
|
|
10.21(+)
|
|
|
8-K
|
|
10.2
|
|
07/27/17
|
|
|
|
10.22(+)
|
|
|
|
|
|
|
|
|
*
|
|
10.23(+)
|
|
|
8-K
|
|
10.3
|
|
07/27/17
|
|
|
|
10.24(+)
|
|
|
8-K
|
|
10.4
|
|
07/27/17
|
|
|
|
10.25(+)
|
|
|
10-K
|
|
10.37
|
|
03/03/16
|
|
|
|
10.26(+)
|
|
|
8-K
|
|
10.1
|
|
05/24/17
|
|
|
|
21.1
|
|
|
|
|
|
|
|
|
*
|
|
23.1
|
|
|
|
|
|
|
|
|
*
|
|
31.1
|
|
|
|
|
|
|
|
|
*
|
|
31.2
|
|
|
|
|
|
|
|
|
*
|
|
32.1
|
|
|
|
|
|
|
|
|
*
|
|
32.2
|
|
|
|
|
|
|
|
|
*
|
|
99.1
|
|
|
8-K
|
|
99.1
|
|
06/07/17
|
|
|
|
99.2
|
|
|
8-K
|
|
99.2
|
|
06/07/17
|
|
|
|
101
|
|
The following materials from the NII Holdings, Inc. Annual Report on Form 10-K for the year ended December 31, 2017 formatted in eXtensible Business Reporting Language (XBRL): (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Comprehensive (Loss) Income, (iii) Consolidated Statements of Changes in Stockholders’ (Deficit) Equity, (iv) Consolidated Statements of Cash Flows and (v) Notes to Consolidated Financial Statements.
|
|
|
|
|
|
|
|
*
|
+
|
Indicates Management Compensatory Plan, Contract or Arrangement.
|
Item 16.
|
Form 10-K Summary.
|
|
By:
|
/s/ TIMOTHY M. MULIERI
|
|
|
Timothy M. Mulieri
Vice President, Corporate Controller
(on behalf of the registrant and as
Principal Accounting Officer)
|
S
ignature
|
|
T
itle
|
|
|
|
|
|
|
/s/ ROBERTO RITTES
|
|
Chief Executive Officer, Nextel Brazil (Principal Executive Officer)
|
Roberto Rittes
|
|
|
|
|
|
/s/ DANIEL E. FREIMAN
|
|
Chief Financial Officer (Principal Financial Officer)
|
Daniel E. Freiman
|
|
|
|
|
|
/s/ KEVIN L. BEEBE
|
|
Chairman of the Board of Directors
|
Kevin L. Beebe
|
|
|
|
|
|
/s/ JAMES V. CONTINENZA
|
|
Director
|
James V. Continenza
|
|
|
|
|
|
/s/ HOWARD S. HOFFMANN
|
|
Director
|
Howard S. Hoffmann
|
|
|
|
|
|
/s/ RICARDO KNOEPFELMACHER
|
|
Director
|
Ricardo Knoepfelmacher
|
|
|
|
|
|
/s/ CHRISTOPHER T. ROGERS
|
|
Director
|
Christopher T. Rogers
|
|
|
|
|
|
/s/ ROBERT A. SCHRIESHEIM
|
|
Director
|
Robert A. Schriesheim
|
|
|
|
|
|
/s/ STEVEN M. SHINDLER
|
|
Director
|
Steven M. Shindler
|
|
|
NII HOLDINGS, INC. AND SUBSIDIARIES
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
AND FINANCIAL STATEMENT SCHEDULES
|
|
CONSOLIDATED FINANCIAL STATEMENTS
|
|
FINANCIAL STATEMENT SCHEDULES
|
|
NII HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except par values)
|
|||||||
|
Successor Company
|
||||||
|
December 31,
2017 |
|
December 31,
2016 |
||||
ASSETS
|
|||||||
Current assets
|
|
|
|
|
|
||
Cash and cash equivalents
|
$
|
193,888
|
|
|
$
|
257,380
|
|
Short-term investments
|
16,711
|
|
|
73,859
|
|
||
Accounts receivable, net of allowance for doubtful accounts of $42,011 and $54,221
|
106,715
|
|
|
153,806
|
|
||
Handset and accessory inventory
|
3,163
|
|
|
8,295
|
|
||
Prepaid expenses and other
|
254,461
|
|
|
280,145
|
|
||
Total current assets
|
574,938
|
|
|
773,485
|
|
||
Property, plant and equipment, net
|
117,262
|
|
|
129,475
|
|
||
Intangible assets, net
|
194,694
|
|
|
243,681
|
|
||
Other assets
|
218,204
|
|
|
271,868
|
|
||
Total assets
|
$
|
1,105,098
|
|
|
$
|
1,418,509
|
|
LIABILITIES AND STOCKHOLDERS’ (DEFICIT) EQUITY
|
|||||||
Current liabilities
|
|
|
|
|
|
||
Accounts payable
|
$
|
42,284
|
|
|
$
|
69,186
|
|
Accrued expenses and other
|
300,815
|
|
|
271,899
|
|
||
Deferred revenues
|
7,314
|
|
|
11,614
|
|
||
Current portion of long-term debt
|
7,990
|
|
|
540,474
|
|
||
Total current liabilities
|
358,403
|
|
|
893,173
|
|
||
Long-term debt
|
647,717
|
|
|
215,842
|
|
||
Other long-term liabilities
|
220,925
|
|
|
143,472
|
|
||
Total liabilities
|
1,227,045
|
|
|
1,252,487
|
|
||
Commitments and contingencies (Note 9)
|
|
|
|
|
|
||
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, 100,384 shares issued and outstanding — 2017, 100,258 shares issued and outstanding — 2016
|
100
|
|
|
100
|
|
||
Paid-in capital
|
2,139,299
|
|
|
2,076,612
|
|
||
Accumulated deficit
|
(2,135,770
|
)
|
|
(1,834,756
|
)
|
||
Accumulated other comprehensive loss
|
(46,903
|
)
|
|
(75,934
|
)
|
||
Total NII Holdings stockholders’ (deficit) equity
|
(43,274
|
)
|
|
166,022
|
|
||
Noncontrolling interest
|
(78,673
|
)
|
|
—
|
|
||
Total (deficit) equity
|
(121,947
|
)
|
|
166,022
|
|
||
Total liabilities and stockholders’ (deficit) equity
|
$
|
1,105,098
|
|
|
$
|
1,418,509
|
|
NII HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME
(in thousands, except per share amounts)
|
||||||||||||||||
|
Successor Company
|
|
|
Predecessor Company
|
||||||||||||
|
Year Ended December 31,
|
|
Six Months Ended December 31,
|
|
|
Six Months Ended June 30,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
|
|
2015
|
||||||||
Operating revenues
|
|
|
|
|
|
|
|
|
|
|
||||||
Service and other revenues
|
$
|
847,879
|
|
|
$
|
963,209
|
|
|
$
|
501,130
|
|
|
|
$
|
643,904
|
|
Handset and accessory revenues
|
21,888
|
|
|
21,837
|
|
|
28,304
|
|
|
|
39,807
|
|
||||
|
869,767
|
|
|
985,046
|
|
|
529,434
|
|
|
|
683,711
|
|
||||
Operating expenses
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Cost of service (exclusive of depreciation and amortization
included below)
|
374,637
|
|
|
364,648
|
|
|
212,852
|
|
|
|
256,085
|
|
||||
Cost of handsets and accessories
|
40,207
|
|
|
29,273
|
|
|
46,904
|
|
|
|
121,143
|
|
||||
Selling, general and administrative
|
510,168
|
|
|
560,760
|
|
|
311,703
|
|
|
|
419,699
|
|
||||
Impairment, restructuring and other charges
|
179,727
|
|
|
1,384,811
|
|
|
32,308
|
|
|
|
36,792
|
|
||||
Depreciation
|
22,192
|
|
|
135,429
|
|
|
64,108
|
|
|
|
126,789
|
|
||||
Amortization
|
14,995
|
|
|
36,954
|
|
|
21,256
|
|
|
|
27,089
|
|
||||
|
1,141,926
|
|
|
2,511,875
|
|
|
689,131
|
|
|
|
987,597
|
|
||||
Operating loss
|
(272,159
|
)
|
|
(1,526,829
|
)
|
|
(159,697
|
)
|
|
|
(303,886
|
)
|
||||
Other (expense) income
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Interest expense, net
|
(118,605
|
)
|
|
(113,732
|
)
|
|
(55,563
|
)
|
|
|
(82,820
|
)
|
||||
Interest income
|
41,507
|
|
|
37,689
|
|
|
17,200
|
|
|
|
15,327
|
|
||||
Foreign currency transaction (losses) gains, net
|
(1,271
|
)
|
|
76,615
|
|
|
(99,737
|
)
|
|
|
(63,948
|
)
|
||||
Other expense, net
|
(7,930
|
)
|
|
(9,711
|
)
|
|
(1,176
|
)
|
|
|
(137
|
)
|
||||
|
(86,299
|
)
|
|
(9,139
|
)
|
|
(139,276
|
)
|
|
|
(131,578
|
)
|
||||
Loss from continuing operations before reorganization items and income tax benefit (provision)
|
(358,458
|
)
|
|
(1,535,968
|
)
|
|
(298,973
|
)
|
|
|
(435,464
|
)
|
||||
Reorganization items (Note 3)
|
445
|
|
|
(803
|
)
|
|
1,467
|
|
|
|
1,956,874
|
|
||||
Income tax benefit (provision) (Note 11)
|
6,347
|
|
|
2,892
|
|
|
5,015
|
|
|
|
(2,009
|
)
|
||||
Net (loss) income from continuing operations
|
(351,666
|
)
|
|
(1,533,879
|
)
|
|
(292,491
|
)
|
|
|
1,519,401
|
|
||||
Income (loss) from discontinued operations, net of income taxes
(Note 6)
|
1,005
|
|
|
(19,994
|
)
|
|
11,608
|
|
|
|
221,114
|
|
||||
Net (loss) income
|
(350,661
|
)
|
|
(1,553,873
|
)
|
|
(280,883
|
)
|
|
|
1,740,515
|
|
||||
Net loss attributable to noncontrolling interest
|
(49,647
|
)
|
|
—
|
|
|
—
|
|
|
|
—
|
|
||||
Net (loss) income attributable to NII Holdings
|
$
|
(301,014
|
)
|
|
$
|
(1,553,873
|
)
|
|
$
|
(280,883
|
)
|
|
|
$
|
1,740,515
|
|
|
|
|
|
|
|
|
|
|
||||||||
Net (loss) income from continuing operations per common share, basic
|
$
|
(3.51
|
)
|
|
$
|
(15.32
|
)
|
|
$
|
(2.93
|
)
|
|
|
$
|
8.73
|
|
Net income (loss) from discontinued operations per common share, basic
|
0.01
|
|
|
(0.20
|
)
|
|
0.12
|
|
|
|
1.27
|
|
||||
Net (loss) income attributable to NII Holdings per common share, basic
|
$
|
(3.50
|
)
|
|
$
|
(15.52
|
)
|
|
$
|
(2.81
|
)
|
|
|
$
|
10.00
|
|
Net (loss) income from continuing operations per common share,
diluted
|
$
|
(3.51
|
)
|
|
$
|
(15.32
|
)
|
|
$
|
(2.93
|
)
|
|
|
$
|
8.71
|
|
Net income (loss) from discontinued operations per common share, diluted
|
0.01
|
|
|
(0.20
|
)
|
|
0.12
|
|
|
|
1.27
|
|
||||
Net (loss) income attributable to NII Holdings per common share, diluted
|
$
|
(3.50
|
)
|
|
$
|
(15.52
|
)
|
|
$
|
(2.81
|
)
|
|
|
$
|
9.98
|
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted average number of common shares outstanding, basic
|
100,332
|
|
|
100,098
|
|
|
100,000
|
|
|
|
172,363
|
|
||||
Weighted average number of common shares outstanding, diluted
|
100,332
|
|
|
100,098
|
|
|
100,000
|
|
|
|
172,691
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Comprehensive (loss) income, net of income taxes
|
|
|
|
|
|
|
|
|
||||||||
Foreign currency translation adjustment
|
$
|
7,696
|
|
|
$
|
169,785
|
|
|
$
|
(248,781
|
)
|
|
|
$
|
(205,899
|
)
|
Reclassification adjustment for sale of Nextel Argentina, Nextel Mexico and Nextel Chile (Note 6)
|
—
|
|
|
—
|
|
|
(1,672
|
)
|
|
|
421,953
|
|
||||
Other
|
—
|
|
|
—
|
|
|
4,734
|
|
|
|
2,956
|
|
||||
Other comprehensive income (loss)
|
7,696
|
|
|
169,785
|
|
|
(245,719
|
)
|
|
|
219,010
|
|
||||
Net (loss) income attributable to NII Holdings
|
(301,014
|
)
|
|
(1,553,873
|
)
|
|
(280,883
|
)
|
|
|
1,740,515
|
|
||||
Total comprehensive (loss) income attributable to NII Holdings
|
$
|
(293,318
|
)
|
|
$
|
(1,384,088
|
)
|
|
$
|
(526,602
|
)
|
|
|
$
|
1,959,525
|
|
NII HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ (DEFICIT) EQUITY
(in thousands)
|
||||||||||||||||||||||||||||||
|
Common Stock
|
|
Paid-in Capital
|
|
Accumulated Deficit
|
|
Accumulated Other Comprehensive Loss
|
|
Total Stockholders’ (Deficit) Equity
|
|
Noncontrolling Interest
|
|
Total (Deficit) Equity
|
|||||||||||||||||
|
Shares
|
|
Amount
|
|
|
|
|
|
|
|||||||||||||||||||||
Balance, January 1, 2015
—
Predecessor Company
|
172,363
|
|
|
$
|
172
|
|
|
$
|
1,517,081
|
|
|
$
|
(2,150,664
|
)
|
|
$
|
(1,331,353
|
)
|
|
$
|
(1,964,764
|
)
|
|
$
|
—
|
|
|
$
|
(1,964,764
|
)
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
1,740,515
|
|
|
—
|
|
|
1,740,515
|
|
|
—
|
|
|
1,740,515
|
|
|||||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
219,010
|
|
|
219,010
|
|
|
—
|
|
|
219,010
|
|
|||||||
Share-based compensation activity
|
—
|
|
|
—
|
|
|
5,239
|
|
|
—
|
|
|
—
|
|
|
5,239
|
|
|
—
|
|
|
5,239
|
|
|||||||
Balance, June 30, 2015
—
Predecessor Company
|
172,363
|
|
|
172
|
|
|
1,522,320
|
|
|
(410,149
|
)
|
|
(1,112,343
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Elimination of Predecessor Company's equity
|
(172,363
|
)
|
|
(172
|
)
|
|
(1,522,320
|
)
|
|
410,149
|
|
|
1,112,343
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Issuance of Successor Company's common stock
|
100,000
|
|
|
100
|
|
|
2,067,565
|
|
|
—
|
|
|
—
|
|
|
2,067,665
|
|
|
—
|
|
|
2,067,665
|
|
|||||||
Balance, July 1, 2015
—
Successor Company
|
100,000
|
|
|
100
|
|
|
2,067,565
|
|
|
—
|
|
|
—
|
|
|
2,067,665
|
|
|
—
|
|
|
2,067,665
|
|
|||||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(280,883
|
)
|
|
—
|
|
|
(280,883
|
)
|
|
—
|
|
|
(280,883
|
)
|
|||||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(245,719
|
)
|
|
(245,719
|
)
|
|
—
|
|
|
(245,719
|
)
|
|||||||
Share-based compensation activity
|
1
|
|
|
—
|
|
|
2,932
|
|
|
—
|
|
|
—
|
|
|
2,932
|
|
|
—
|
|
|
2,932
|
|
|||||||
Balance, December 31, 2015
—
Successor Company
|
100,001
|
|
|
100
|
|
|
2,070,497
|
|
|
(280,883
|
)
|
|
(245,719
|
)
|
|
1,543,995
|
|
|
—
|
|
|
1,543,995
|
|
|||||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,553,873
|
)
|
|
—
|
|
|
(1,553,873
|
)
|
|
—
|
|
|
(1,553,873
|
)
|
|||||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
169,785
|
|
|
169,785
|
|
|
—
|
|
|
169,785
|
|
|||||||
Share-based compensation activity
|
257
|
|
|
—
|
|
|
6,115
|
|
|
—
|
|
|
—
|
|
|
6,115
|
|
|
—
|
|
|
6,115
|
|
|||||||
Balance, December 31, 2016
—
Successor Company
|
100,258
|
|
|
100
|
|
|
2,076,612
|
|
|
(1,834,756
|
)
|
|
(75,934
|
)
|
|
166,022
|
|
|
—
|
|
|
166,022
|
|
|||||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(301,014
|
)
|
|
—
|
|
|
(301,014
|
)
|
|
(49,647
|
)
|
|
(350,661
|
)
|
|||||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7,696
|
|
|
7,696
|
|
|
1,604
|
|
|
9,300
|
|
|||||||
Share-based compensation activity
|
126
|
|
|
—
|
|
|
4,797
|
|
|
—
|
|
|
—
|
|
|
4,797
|
|
|
170
|
|
|
4,967
|
|
|||||||
Sale of noncontrolling interest
|
—
|
|
|
—
|
|
|
57,890
|
|
|
—
|
|
|
21,335
|
|
|
79,225
|
|
|
(30,800
|
)
|
|
48,425
|
|
|||||||
Balance, December 31, 2017
—
Successor Company
|
100,384
|
|
|
$
|
100
|
|
|
$
|
2,139,299
|
|
|
$
|
(2,135,770
|
)
|
|
$
|
(46,903
|
)
|
|
$
|
(43,274
|
)
|
|
$
|
(78,673
|
)
|
|
$
|
(121,947
|
)
|
NII HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
|
||||||||||||||||
|
Successor Company
|
|
|
Predecessor Company
|
||||||||||||
|
Year Ended December 31,
|
|
Year Ended December 31,
|
|
Six Months Ended December 31,
|
|
|
Six Months Ended June 30,
|
||||||||
|
2017
|
|
2016
|
|
2015
|
|
|
2015
|
||||||||
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
|
|
||||||
Net (loss) income
|
$
|
(350,661
|
)
|
|
$
|
(1,553,873
|
)
|
|
$
|
(280,883
|
)
|
|
|
$
|
1,740,515
|
|
Adjustments to reconcile net (loss) income to net cash used in operating activities:
|
|
|
|
|
|
|
|
|
|
|||||||
(Income) loss from discontinued operations
|
(1,005
|
)
|
|
19,994
|
|
|
(11,608
|
)
|
|
|
(221,114
|
)
|
||||
Amortization of debt (premiums) discounts and financing costs
|
(3,297
|
)
|
|
(4,570
|
)
|
|
181
|
|
|
|
18,753
|
|
||||
Depreciation and amortization
|
37,187
|
|
|
172,383
|
|
|
85,364
|
|
|
|
153,878
|
|
||||
Provision for losses on accounts receivable
|
76,518
|
|
|
77,883
|
|
|
32,279
|
|
|
|
65,396
|
|
||||
Provision for inventory obsolescence
|
1,033
|
|
|
1,731
|
|
|
2,156
|
|
|
|
—
|
|
||||
Foreign currency transaction losses (gains), net
|
1,271
|
|
|
(76,615
|
)
|
|
99,737
|
|
|
|
63,948
|
|
||||
Impairment charges, restructuring charges and losses on disposal of fixed assets
|
68,529
|
|
|
1,352,667
|
|
|
13,354
|
|
|
|
31,471
|
|
||||
Deferred income tax (benefit) provision
|
(568
|
)
|
|
(3,183
|
)
|
|
(2,513
|
)
|
|
|
905
|
|
||||
Share-based compensation expense
|
4,967
|
|
|
6,076
|
|
|
2,923
|
|
|
|
5,239
|
|
||||
Reorganization items in connection with emergence from Chapter 11
|
—
|
|
|
—
|
|
|
—
|
|
|
|
(1,775,787
|
)
|
||||
Fresh start adjustments, net
|
—
|
|
|
—
|
|
|
—
|
|
|
|
(248,709
|
)
|
||||
Other, net
|
2,636
|
|
|
1,898
|
|
|
(3,829
|
)
|
|
|
(11,083
|
)
|
||||
Changes in assets and liabilities:
|
|
|
|
|
|
|
|
|
|
|||||||
Accounts receivable
|
(30,534
|
)
|
|
(58,951
|
)
|
|
(38,756
|
)
|
|
|
(35,013
|
)
|
||||
Prepaid value-added taxes
|
13,879
|
|
|
15,894
|
|
|
9,311
|
|
|
|
50,564
|
|
||||
Handset and accessory inventory
|
4,139
|
|
|
17,273
|
|
|
13,940
|
|
|
|
7,513
|
|
||||
Prepaid expenses and other
|
(13,358
|
)
|
|
8,903
|
|
|
(21,027
|
)
|
|
|
(26,688
|
)
|
||||
Other long-term assets
|
(5,341
|
)
|
|
(41,447
|
)
|
|
20,981
|
|
|
|
47,253
|
|
||||
Accrued value-added taxes
|
19,211
|
|
|
(7,565
|
)
|
|
(285
|
)
|
|
|
(7,941
|
)
|
||||
Other long-term liabilities
|
88,460
|
|
|
41,851
|
|
|
23,876
|
|
|
|
(32,819
|
)
|
||||
Accounts payable, accrued expenses and other
|
(204
|
)
|
|
(15,554
|
)
|
|
(46,674
|
)
|
|
|
18,565
|
|
||||
Total operating cash used in continuing operations
|
(87,138
|
)
|
|
(45,205
|
)
|
|
(101,473
|
)
|
|
|
(155,154
|
)
|
||||
Total operating cash provided by (used in) discontinued operations
|
—
|
|
|
—
|
|
|
22,988
|
|
|
|
(99,603
|
)
|
||||
Net cash used in operating activities
|
(87,138
|
)
|
|
(45,205
|
)
|
|
(78,485
|
)
|
|
|
(254,757
|
)
|
||||
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
|||||||
Capital expenditures
|
(66,536
|
)
|
|
(61,291
|
)
|
|
(76,630
|
)
|
|
|
(88,485
|
)
|
||||
Purchases of investments
|
(629,364
|
)
|
|
(1,075,119
|
)
|
|
(558,883
|
)
|
|
|
(757,714
|
)
|
||||
Proceeds from sales of investments
|
688,714
|
|
|
1,102,492
|
|
|
575,838
|
|
|
|
756,546
|
|
||||
Purchase of licenses
|
(2,289
|
)
|
|
(16,936
|
)
|
|
(4,018
|
)
|
|
|
(5,391
|
)
|
||||
Change in restricted cash and other deposits
|
27,516
|
|
|
67,894
|
|
|
(51,235
|
)
|
|
|
(57,074
|
)
|
||||
Other, net
|
275
|
|
|
(2,243
|
)
|
|
4,697
|
|
|
|
3,501
|
|
||||
Total investing cash provided by (used in) continuing operations
|
18,316
|
|
|
14,797
|
|
|
(110,231
|
)
|
|
|
(148,617
|
)
|
||||
Total investing cash provided by discontinued operations
|
53,479
|
|
|
39,653
|
|
|
109,255
|
|
|
|
1,176,438
|
|
||||
Net cash provided by (used in) investing activities
|
71,795
|
|
|
54,450
|
|
|
(976
|
)
|
|
|
1,027,821
|
|
||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
|||||||
Proceeds from partnership agreement
|
50,000
|
|
|
—
|
|
|
—
|
|
|
|
—
|
|
||||
Repayments under equipment financing facility and bank loans
|
(85,949
|
)
|
|
(90,843
|
)
|
|
(24,452
|
)
|
|
|
(124
|
)
|
||||
Repayments under capital leases and other
|
(9,522
|
)
|
|
(2,161
|
)
|
|
(616
|
)
|
|
|
(1,884
|
)
|
||||
Claims paid to senior noteholders
|
—
|
|
|
—
|
|
|
—
|
|
|
|
(745,221
|
)
|
||||
Net proceeds from debtor-in-possession loan
|
—
|
|
|
—
|
|
|
—
|
|
|
|
340,375
|
|
||||
Repayment of debtor-in-possession loan
|
—
|
|
|
—
|
|
|
—
|
|
|
|
(340,375
|
)
|
||||
Other, net
|
(3,219
|
)
|
|
—
|
|
|
—
|
|
|
|
(4,291
|
)
|
||||
Total financing cash used in continuing operations
|
(48,690
|
)
|
|
(93,004
|
)
|
|
(25,068
|
)
|
|
|
(751,520
|
)
|
||||
Total financing cash used in discontinued operations
|
—
|
|
|
—
|
|
|
—
|
|
|
|
(26,711
|
)
|
||||
Net cash used in financing activities
|
(48,690
|
)
|
|
(93,004
|
)
|
|
(25,068
|
)
|
|
|
(778,231
|
)
|
||||
Effect of exchange rate changes on cash and cash equivalents
|
541
|
|
|
(1,045
|
)
|
|
916
|
|
|
|
(9,152
|
)
|
||||
Change in cash and cash equivalents related to discontinued operations
|
—
|
|
|
—
|
|
|
22,662
|
|
|
|
103,260
|
|
||||
Net (decrease) increase in cash and cash equivalents
|
(63,492
|
)
|
|
(84,804
|
)
|
|
(80,951
|
)
|
|
|
88,941
|
|
||||
Cash and cash equivalents, beginning of period
|
257,380
|
|
|
342,184
|
|
|
423,135
|
|
|
|
334,194
|
|
||||
Cash and cash equivalents, end of period
|
$
|
193,888
|
|
|
$
|
257,380
|
|
|
$
|
342,184
|
|
|
|
$
|
423,135
|
|
•
|
mobile telephone voice and wireless data services;
|
•
|
international voice and data roaming services;
|
•
|
application-based radio connection; and
|
•
|
value-added services, including sports, music and entertainment streaming capabilities; online education; and access to national and international WiFi hotspot networks.
|
Balance, January 1, 2016 — Successor Company
|
|
$
|
19,642
|
|
New asset retirement obligations
|
|
198
|
|
|
Change in assumptions
|
|
(1,619
|
)
|
|
Accretion
|
|
2,552
|
|
|
Settlement of asset retirement obligations
|
|
(441
|
)
|
|
Foreign currency translation and other
|
|
7,274
|
|
|
Balance, December 31, 2016 — Successor Company
|
|
27,606
|
|
|
New asset retirement obligations
|
|
486
|
|
|
Change in assumptions
|
|
(9,181
|
)
|
|
Accretion
|
|
1,677
|
|
|
Settlement of asset retirement obligations
|
|
(9,375
|
)
|
|
Foreign currency translation and other
|
|
112
|
|
|
Balance, December 31, 2017 — Successor Company
|
|
$
|
11,325
|
|
•
|
a net contract asset related to the portion of our revenues associated with service plans that are sold concurrently with a subsidized handset; and
|
•
|
an asset related to costs incurred to acquire a contract, which primarily relates to the deferral of commission expenses.
|
•
|
NII Holdings canceled all shares of its common stock, preferred stock and other equity interests that existed prior to June 26, 2015;
|
•
|
NII Holdings amended and restated its Bylaws and filed an Amended and Restated Certificate of Incorporation authorizing the Company to issue up to
140,000,000
shares of common stock, par value
$0.001
per share, and up to
10,000,000
shares of undesignated preferred stock, par value
$0.001
per share;
|
•
|
NII Holdings issued
99,999,992
shares of new common stock, with a per share value of
$20.68
, and distributed cash of
$776.3 million
to the holders of claims and service providers in comprehensive settlement of numerous integrated claims and disputes approved by the Bankruptcy Court in connection with the confirmation of the Plan of Reorganization;
|
•
|
In accordance with the Plan of Reorganization, all of the obligations of the Debtors with respect to the following indebtedness were canceled:
|
•
|
$700.0 million
aggregate principal amount of
7.875%
senior notes due 2019 issued by NIIT pursuant to an indenture, dated as of May 23, 2013, among NIIT (as issuer), the Company (as guarantor), and Wilmington Trust National Association (as trustee) and all amendments, supplements or modifications thereto and extensions thereof;
|
•
|
$900.0 million
aggregate principal amount of
11.375%
senior notes due 2019 issued by NIIT pursuant to an indenture, dated as of February 19, 2013, among NIIT (as issuer), the Company (as guarantor), and Wilmington Trust National Association (as trustee) and all amendments, supplements or modifications thereto and extensions thereof;
|
•
|
$1.45 billion
aggregate principal amount of
7.625%
senior notes due 2021 issued by NII Capital Corp. pursuant to an indenture, dated as of March 29, 2011, among NII Capital Corp. (as issuer), each of the guarantors party thereto and Wilmington Savings Fund Society, FSB (as successor trustee) and all amendments, supplements or modifications thereto and extensions thereof;
|
•
|
$500.0 million
aggregate principal amount of
8.875%
senior notes due 2019 issued by NII Capital Corp. pursuant to an indenture, dated as of December 15, 2009, among NII Capital Corp. (as issuer), each of the guarantors party thereto and U.S. Bank National Association (as successor trustee) and all amendments, supplements or modifications thereto and extensions thereof; and
|
•
|
$800.0 million
aggregate principal amount of
10.0%
senior notes due 2016 issued by NII Capital Corp. pursuant to an indenture, dated as of August 18, 2009, among NII Capital Corp. (as issuer), each of the guarantors party thereto and Wilmington Savings Fund Society, FSB (as successor trustee) and all amendments, supplements or modifications thereto and extensions thereof.
|
|
Successor Company
|
|
|
Predecessor Company
|
||||||||||||
|
Year Ended
|
|
Six Months Ended
|
|
|
Six Months Ended
|
||||||||||
|
December 31, 2017
|
|
December 31, 2016
|
|
December 31, 2015
|
|
|
June 30, 2015
|
||||||||
Gain on settlement of liabilities subject to compromise
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
$
|
1,775,787
|
|
Net gain on fresh start fair value adjustments
|
—
|
|
|
—
|
|
|
—
|
|
|
|
261,772
|
|
||||
Reorganization-related professional fees and other costs
|
445
|
|
|
(803
|
)
|
|
1,467
|
|
|
|
(80,685
|
)
|
||||
Total reorganization items
|
$
|
445
|
|
|
$
|
(803
|
)
|
|
$
|
1,467
|
|
|
|
$
|
1,956,874
|
|
•
|
approximately
45
employees at the corporate level, all of whom were notified in the fourth quarter of 2015 of their severance date; and
|
•
|
approximately
700
employees in Brazil, all of whom were severed in the second half of 2015.
|
|
Successor Company
|
|
|
Predecessor Company
|
||||||||||||
|
Year Ended December 31,
|
|
Six Months Ended December 31,
|
|
|
Six Months Ended June 30,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
|
|
2015
|
||||||||
Brazil
|
$
|
178,467
|
|
|
$
|
1,340,610
|
|
|
$
|
23,968
|
|
|
|
$
|
28,072
|
|
Corporate
|
1,260
|
|
|
44,201
|
|
|
8,340
|
|
|
|
8,720
|
|
||||
Total impairment, restructuring and other charges
|
$
|
179,727
|
|
|
$
|
1,384,811
|
|
|
$
|
32,308
|
|
|
|
$
|
36,792
|
|
Balance, January 1, 2017 — Successor Company
|
$
|
24,103
|
|
Restructuring charges
|
95,363
|
|
|
Cash payments and other
|
(6,315
|
)
|
|
Foreign currency translation adjustment
|
(3,380
|
)
|
|
Balance, December 31, 2017
—
Successor Company
|
$
|
109,771
|
|
|
Successor Company
|
||||||
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
|
(in thousands)
|
||||||
Cash in escrow
|
$
|
110,024
|
|
|
$
|
163,435
|
|
Cash collateral related to performance bonds
|
50,340
|
|
|
30,928
|
|
||
Brazil judicial deposits
|
43,648
|
|
|
—
|
|
||
Value-added taxes
|
27,635
|
|
|
29,829
|
|
||
Prepayment for roaming and RAN sharing agreements
|
4,586
|
|
|
27,731
|
|
||
Other prepaid assets
|
14,231
|
|
|
23,020
|
|
||
Other current assets
|
3,997
|
|
|
5,202
|
|
||
|
$
|
254,461
|
|
|
$
|
280,145
|
|
|
Successor Company
|
||||||
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
|
(in thousands)
|
||||||
Land
|
$
|
489
|
|
|
$
|
675
|
|
Building and leasehold improvements
|
935
|
|
|
1,489
|
|
||
Network equipment, communication towers and network software
|
82,493
|
|
|
95,298
|
|
||
Software, office equipment, furniture and fixtures and other
|
22,498
|
|
|
10,952
|
|
||
Less: Accumulated depreciation and amortization
|
(11,461
|
)
|
|
—
|
|
||
|
94,954
|
|
|
108,414
|
|
||
Construction in progress
|
22,308
|
|
|
21,061
|
|
||
|
$
|
117,262
|
|
|
$
|
129,475
|
|
|
|
|
Successor Company
|
||||||||||||||||||||||
|
|
|
December 31, 2017
|
|
December 31, 2016
|
||||||||||||||||||||
|
Average Useful Life (Years)
|
|
Gross Carrying
Value
|
|
Accumulated
Amortization
|
|
Net Carrying
Value
|
|
Gross Carrying
Value
|
|
Accumulated
Amortization
|
|
Net Carrying
Value
|
||||||||||||
|
|
|
(in thousands)
|
||||||||||||||||||||||
Amortizable intangible assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Licenses
|
26
|
|
$
|
189,920
|
|
|
$
|
(5,426
|
)
|
|
$
|
184,494
|
|
|
$
|
226,426
|
|
|
$
|
—
|
|
|
$
|
226,426
|
|
Customer relationships
|
4
|
|
15,300
|
|
|
(5,100
|
)
|
|
10,200
|
|
|
17,255
|
|
|
—
|
|
|
17,255
|
|
||||||
|
|
|
$
|
205,220
|
|
|
$
|
(10,526
|
)
|
|
$
|
194,694
|
|
|
$
|
243,681
|
|
|
$
|
—
|
|
|
$
|
243,681
|
|
Y
ears
|
Estimated Amortization Expense
|
||
2018
|
$
|
14,464
|
|
2019
|
11,064
|
|
|
2020
|
7,664
|
|
|
2021
|
7,664
|
|
|
2022
|
7,664
|
|
|
Successor Company
|
||||||
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
|
(in thousands)
|
||||||
Brazil judicial deposits
|
$
|
110,758
|
|
|
$
|
85,123
|
|
Prepayment for roaming and RAN sharing agreements
|
23,747
|
|
|
37,433
|
|
||
Cash collateral related to performance bonds
|
—
|
|
|
56,523
|
|
||
Other
|
83,699
|
|
|
92,789
|
|
||
|
$
|
218,204
|
|
|
$
|
271,868
|
|
|
Successor Company
|
||||||
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
|
(in thousands)
|
||||||
Contingencies
|
$
|
78,006
|
|
|
$
|
56,171
|
|
Network system and information technology
|
48,702
|
|
|
50,286
|
|
||
Payroll related items and commissions
|
32,613
|
|
|
45,187
|
|
||
Non-income based taxes
|
30,044
|
|
|
28,158
|
|
||
Capital expenditures
|
10,198
|
|
|
17,514
|
|
||
Other
|
101,252
|
|
|
74,583
|
|
||
|
$
|
300,815
|
|
|
$
|
271,899
|
|
|
Successor Company
|
||||||
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
|
(in thousands)
|
||||||
Accrued lease termination and other restructuring charges
|
$
|
92,463
|
|
|
$
|
31,365
|
|
Non-current withholding taxes
|
67,356
|
|
|
55,078
|
|
||
Other
|
61,106
|
|
|
57,029
|
|
||
|
$
|
220,925
|
|
|
$
|
143,472
|
|
|
Successor Company
|
|
|
Predecessor Company
|
||||||||||||
|
Year Ended December 31,
|
|
Year Ended December 31,
|
|
Six Months Ended December 31,
|
|
|
Six Months Ended June 30,
|
||||||||
|
2017
|
|
2016
|
|
2015
|
|
|
2015
|
||||||||
|
(in thousands)
|
|||||||||||||||
Capital expenditures
|
|
|
|
|
|
|
|
|
|
|
||||||
Cash paid for capital expenditures, including capitalized interest
|
$
|
66,536
|
|
|
$
|
61,291
|
|
|
$
|
76,630
|
|
|
|
$
|
88,485
|
|
Change in capital expenditures accrued and unpaid or financed, including accreted interest capitalized
|
(15,433
|
)
|
|
(9,984
|
)
|
|
(4,018
|
)
|
|
|
(19,282
|
)
|
||||
|
$
|
51,103
|
|
|
$
|
51,307
|
|
|
$
|
72,612
|
|
|
|
$
|
69,203
|
|
Interest costs
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Interest expense, net
|
$
|
118,605
|
|
|
$
|
113,732
|
|
|
$
|
55,563
|
|
|
|
$
|
82,820
|
|
Interest capitalized
|
1,669
|
|
|
283
|
|
|
2,142
|
|
|
|
2,556
|
|
||||
|
$
|
120,274
|
|
|
$
|
114,015
|
|
|
$
|
57,705
|
|
|
|
$
|
85,376
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Cash paid for interest, net of amounts capitalized
|
$
|
91,297
|
|
|
$
|
105,636
|
|
|
$
|
59,914
|
|
|
|
$
|
65,598
|
|
•
|
$2,067.7 million
in Successor Company common stock that we issued in partial satisfaction of certain claims that were settled in connection with our emergence from Chapter 11 (see Note 3 for more information); and
|
•
|
$187.5 million
in restricted cash that we received, which represents cash placed in escrow to secure our indemnification obligations in connection with the sale of Nextel Mexico.
|
|
Successor Company
|
|
|
Predecessor Company
|
||||||||||||
|
Year Ended December 31,
|
|
Year Ended December 31,
|
|
Six Months Ended December 31,
|
|
|
Six Months Ended June 30,
|
||||||||
|
2017
|
|
2016
|
|
2015
|
|
|
2015
|
||||||||
Operating revenues
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
75,450
|
|
|
|
$
|
599,038
|
|
Operating expenses
|
—
|
|
|
—
|
|
|
(60,863
|
)
|
|
|
(675,245
|
)
|
||||
Other income (expense), net
|
—
|
|
|
—
|
|
|
1,159
|
|
|
|
(49,974
|
)
|
||||
Income (loss) before income tax provision
|
—
|
|
|
—
|
|
|
15,746
|
|
|
|
(126,181
|
)
|
||||
Income tax provision
|
—
|
|
|
—
|
|
|
(4,770
|
)
|
|
|
(8,065
|
)
|
||||
|
—
|
|
|
—
|
|
|
10,976
|
|
|
|
(134,246
|
)
|
||||
Income (loss) on disposal of Nextel Argentina, Nextel Mexico and Nextel Peru
|
1,005
|
|
|
(19,994
|
)
|
|
632
|
|
|
|
355,360
|
|
||||
Income (loss) from discontinued operations, net of income taxes
|
$
|
1,005
|
|
|
$
|
(19,994
|
)
|
|
$
|
11,608
|
|
|
|
$
|
221,114
|
|
|
Successor Company
|
||||||
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
|
(in thousands)
|
||||||
Brazil equipment financing
|
$
|
242,883
|
|
|
$
|
291,597
|
|
Brazil bank loans
|
200,567
|
|
|
242,076
|
|
||
Brazil spectrum financing
|
122,044
|
|
|
125,684
|
|
||
Brazil capital lease and tower financing obligations
|
90,213
|
|
|
96,722
|
|
||
Other
|
—
|
|
|
237
|
|
||
Total debt
|
655,707
|
|
|
756,316
|
|
||
Less: current portion
|
(7,990
|
)
|
|
(540,474
|
)
|
||
|
$
|
647,717
|
|
|
$
|
215,842
|
|
Year
|
Principal Repayments
|
||
2018
|
$
|
6,655
|
|
2019
|
26,687
|
|
|
2020
|
27,799
|
|
|
2021
|
27,766
|
|
|
2022
|
129,311
|
|
|
Thereafter
|
453,561
|
|
|
Total
|
$
|
671,779
|
|
|
Successor Company
|
||||||||||||||
|
December 31,
|
||||||||||||||
|
2017
|
|
2016
|
||||||||||||
|
Carrying
Amount
|
|
Estimated
Fair Value
|
|
Carrying
Amount
|
|
Estimated
Fair Value
|
||||||||
|
(in thousands)
|
||||||||||||||
Brazil equipment financing
|
$
|
242,883
|
|
|
$
|
237,958
|
|
|
$
|
291,597
|
|
|
$
|
280,893
|
|
Bank loans and other
|
200,567
|
|
|
144,312
|
|
|
242,313
|
|
|
221,458
|
|
||||
Brazil spectrum financing
|
122,044
|
|
|
128,225
|
|
|
125,684
|
|
|
117,059
|
|
||||
|
$
|
565,494
|
|
|
$
|
510,495
|
|
|
$
|
659,594
|
|
|
$
|
619,410
|
|
|
Capital
Leases
|
|
Operating
Leases
|
|
Total
|
||||||
2018
|
$
|
48,354
|
|
|
$
|
127,430
|
|
|
$
|
175,784
|
|
2019
|
43,026
|
|
|
112,280
|
|
|
155,306
|
|
|||
2020
|
42,890
|
|
|
101,591
|
|
|
144,481
|
|
|||
2021
|
43,016
|
|
|
90,622
|
|
|
133,638
|
|
|||
2022
|
41,298
|
|
|
77,425
|
|
|
118,723
|
|
|||
Thereafter
|
621,495
|
|
|
151,364
|
|
|
772,859
|
|
|||
Total minimum lease payments
|
840,079
|
|
|
660,712
|
|
|
1,500,791
|
|
|||
Less: imputed interest
|
(749,866
|
)
|
|
—
|
|
|
(749,866
|
)
|
|||
Total
|
$
|
90,213
|
|
|
$
|
660,712
|
|
|
$
|
750,925
|
|
|
Successor Company
|
|
|
Predecessor Company
|
||||||||||||
|
Year Ended December 31,
|
|
Year Ended December 31,
|
|
Six Months Ended December 31,
|
|
|
Six Months Ended June 30,
|
||||||||
|
2017
|
|
2016
|
|
2015
|
|
|
2015
|
||||||||
U.S.
|
$
|
(41,143
|
)
|
|
$
|
(53,843
|
)
|
|
$
|
(1,820
|
)
|
|
|
$
|
1,745,628
|
|
Non-U.S.
|
(316,870
|
)
|
|
(1,482,928
|
)
|
|
(295,686
|
)
|
|
|
(224,218
|
)
|
||||
Total
|
$
|
(358,013
|
)
|
|
$
|
(1,536,771
|
)
|
|
$
|
(297,506
|
)
|
|
|
$
|
1,521,410
|
|
|
Successor Company
|
|
|
Predecessor Company
|
||||||||||||
|
Year Ended December 31,
|
|
Year Ended December 31,
|
|
Six Months Ended December 31,
|
|
|
Six Months Ended June 30,
|
||||||||
|
2017
|
|
2016
|
|
2015
|
|
|
2015
|
||||||||
Current:
|
|
|
|
|
|
|
|
|
|
|
||||||
Federal
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
$
|
—
|
|
Foreign
|
5,779
|
|
|
(291
|
)
|
|
2,502
|
|
|
|
(1,104
|
)
|
||||
Total current income tax benefit (provision)
|
5,779
|
|
|
(291
|
)
|
|
2,502
|
|
|
|
(1,104
|
)
|
||||
Deferred:
|
|
|
|
|
|
|
|
|
|
|
||||||
Federal
|
—
|
|
|
2,864
|
|
|
(403
|
)
|
|
|
(814
|
)
|
||||
State, net of Federal tax benefit (provision)
|
—
|
|
|
319
|
|
|
(45
|
)
|
|
|
(91
|
)
|
||||
Foreign
|
568
|
|
|
—
|
|
|
2,961
|
|
|
|
—
|
|
||||
Total deferred income tax benefit (provision)
|
568
|
|
|
3,183
|
|
|
2,513
|
|
|
|
(905
|
)
|
||||
Total income tax benefit (provision)
|
$
|
6,347
|
|
|
$
|
2,892
|
|
|
$
|
5,015
|
|
|
|
$
|
(2,009
|
)
|
|
Successor Company
|
|
|
Predecessor Company
|
||||
|
Year Ended December 31,
|
|
Year Ended December 31,
|
|
Six Months Ended December 31,
|
|
|
Six Months Ended June 30,
|
|
2017
|
|
2016
|
|
2015
|
|
|
2015
|
Statutory Federal tax rate
|
35%
|
|
35%
|
|
35%
|
|
|
35%
|
Reorganization items
|
—
|
|
—
|
|
—
|
|
|
(46)
|
Effect of foreign operations
|
—
|
|
(2)
|
|
(12)
|
|
|
—
|
Effect of statutory Federal tax rate change on deferred tax asset
|
(37)
|
|
—
|
|
—
|
|
|
—
|
Change in deferred tax asset valuation allowance
|
16
|
|
(32)
|
|
(20)
|
|
|
9
|
Effect of permanent differences
|
(12)
|
|
—
|
|
—
|
|
|
—
|
Other, net
|
—
|
|
(1)
|
|
(1)
|
|
|
2
|
Effective tax rate
|
2%
|
|
—
|
|
2%
|
|
|
—
|
|
Successor Company
|
||||||
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
|
(in thousands)
|
||||||
Deferred tax assets:
|
|
|
|
|
|
||
Net operating losses and capital loss carryforwards
|
$
|
6,509,165
|
|
|
$
|
6,363,915
|
|
Allowance for doubtful accounts
|
20,122
|
|
|
17,867
|
|
||
Accrued expenses
|
53,867
|
|
|
54,263
|
|
||
Accrual for contingent liabilities
|
27,016
|
|
|
24,669
|
|
||
Intangible assets
|
121,122
|
|
|
130,983
|
|
||
Property, plant and equipment
|
143,701
|
|
|
253,882
|
|
||
Leasing related activity
|
27,519
|
|
|
25,822
|
|
||
Equity compensation
|
1,151
|
|
|
1,182
|
|
||
Long term debt
|
55,146
|
|
|
53,159
|
|
||
Inventory reserve
|
717
|
|
|
1,729
|
|
||
Other
|
1,004
|
|
|
17,573
|
|
||
|
6,960,530
|
|
|
6,945,044
|
|
||
Valuation allowance
|
(6,957,569
|
)
|
|
(6,945,044
|
)
|
||
Total deferred tax asset
|
2,961
|
|
|
—
|
|
||
Deferred tax liabilities:
|
|
|
|
||||
Other
|
2,432
|
|
|
—
|
|
||
Total deferred tax liability
|
2,432
|
|
|
—
|
|
||
Net deferred tax asset
|
$
|
529
|
|
|
$
|
—
|
|
|
Successor Company
|
||||||
|
2017
|
|
2016
|
||||
|
(in millions)
|
||||||
Brazil
|
$
|
1,162.5
|
|
|
$
|
1,089.9
|
|
U.S.
|
240.4
|
|
|
367.2
|
|
||
Luxembourg
|
5,313.7
|
|
|
5,275.9
|
|
||
Spain
|
241.0
|
|
|
212.0
|
|
||
Total
|
$
|
6,957.6
|
|
|
$
|
6,945.0
|
|
•
|
In response to the reduction in the U.S. Federal tax rate to 21%, which was effective January 1, 2018, we have recorded our deferred tax asset and corresponding valuation allowance as of December 31, 2017 at the 21% tax rate with no impact to our income tax expense;
|
•
|
We have determined that no tax liability needs to be recorded for the one-time transition tax as our international subsidiaries have negative cumulative foreign earnings; and
|
•
|
We are electing to treat the tax on global intangible low-taxed income as an expense in the period in which we become liable for this tax and are not currently recording a deferred tax liability for this item.
|
|
Number of
Options
|
|
Weighted Average
Exercise Price
per Option
|
|
Weighted Average
Remaining Life
|
|
Aggregate Intrinsic
Value
|
||||
Outstanding, December 31, 2016
|
3,276,105
|
|
|
$
|
10.14
|
|
|
|
|
|
|
Granted
|
2,250,000
|
|
|
$
|
0.58
|
|
|
|
|
|
|
Exercised
|
—
|
|
|
—
|
|
|
|
|
|
||
Forfeited
|
(2,168,407
|
)
|
|
$
|
11.02
|
|
|
|
|
|
|
Outstanding, December 31, 2017
|
3,357,698
|
|
|
$
|
3.16
|
|
|
8.83
|
|
—
|
|
Exercisable, December 31, 2017
|
660,677
|
|
|
$
|
9.02
|
|
|
7.48
|
|
—
|
|
|
Successor Company
|
||||
|
Year Ended
|
|
Period from June 26, 2015
|
||
|
December 31, 2017
|
|
December 31, 2016
|
|
to December 31, 2015
|
Risk free interest rate
|
1.53%
|
|
1.53% - 1.90%
|
|
1.71% - 2.05%
|
Expected stock price volatility
|
40.87%
|
|
40.71% - 40.87%
|
|
31.73% - 41.92%
|
Expected term in years
|
5.16
|
|
5.16
|
|
5.16 - 6.00
|
Expected dividend yield
|
—
|
|
—
|
|
—
|
|
Number of
Shares
|
|
Weighted Average
Grant Date
Fair Value
Per Share
|
|
Restricted stock awards as of December 31, 2016
|
522,442
|
|
|
$10.65
|
Granted
|
—
|
|
|
—
|
Vested
|
(185,387
|
)
|
|
$12.06
|
Forfeited
|
(239,705
|
)
|
|
$7.38
|
Restricted stock awards as of December 31, 2017
|
97,350
|
|
|
$15.99
|
|
Brazil
|
|
Corporate and Eliminations
|
|
Consolidated
|
||||||
|
(in thousands)
|
||||||||||
Year Ended December 31, 2017 - Successor Company
|
|
|
|
|
|
||||||
Operating revenues
|
$
|
869,661
|
|
|
$
|
106
|
|
|
$
|
869,767
|
|
Segment losses
|
$
|
(31,071
|
)
|
|
$
|
(24,174
|
)
|
|
$
|
(55,245
|
)
|
Less:
|
|
|
|
|
|
|
|||||
Impairment, restructuring and other charges
|
|
|
|
|
(179,727
|
)
|
|||||
Depreciation and amortization
|
|
|
|
|
(37,187
|
)
|
|||||
Foreign currency transaction losses, net
|
|
|
|
|
(1,271
|
)
|
|||||
Interest expense and other, net
|
|
|
|
|
(85,028
|
)
|
|||||
Loss from continuing operations before reorganization items and income tax provision
|
|
|
|
|
$
|
(358,458
|
)
|
||||
Capital expenditures
|
$
|
51,103
|
|
|
$
|
—
|
|
|
$
|
51,103
|
|
Year Ended December 31, 2016 - Successor Company
|
|
|
|
|
|
||||||
Operating revenues
|
$
|
984,878
|
|
|
$
|
168
|
|
|
$
|
985,046
|
|
Segment earnings (losses)
|
$
|
67,186
|
|
|
$
|
(36,821
|
)
|
|
$
|
30,365
|
|
Less:
|
|
|
|
|
|
|
|||||
Impairment, restructuring and other charges
|
|
|
|
|
(1,384,811
|
)
|
|||||
Depreciation and amortization
|
|
|
|
|
(172,383
|
)
|
|||||
Foreign currency transaction gains, net
|
|
|
|
|
76,615
|
|
|||||
Interest expense and other, net
|
|
|
|
|
(85,754
|
)
|
|||||
Loss from continuing operations before reorganization items and income tax provision
|
|
|
|
|
$
|
(1,535,968
|
)
|
||||
Capital expenditures
|
$
|
51,307
|
|
|
$
|
—
|
|
|
$
|
51,307
|
|
Six Months Ended December 31, 2015 - Successor Company
|
|
|
|
|
|
|
|
|
|||
Operating revenues
|
$
|
529,332
|
|
|
$
|
102
|
|
|
$
|
529,434
|
|
Segment losses
|
$
|
(15,925
|
)
|
|
$
|
(26,100
|
)
|
|
$
|
(42,025
|
)
|
Less:
|
|
|
|
|
|
|
|||||
Impairment, restructuring and other charges
|
|
|
|
|
(32,308
|
)
|
|||||
Depreciation and amortization
|
|
|
|
|
(85,364
|
)
|
|||||
Foreign currency transaction losses, net
|
|
|
|
|
(99,737
|
)
|
|||||
Interest expense and other, net
|
|
|
|
|
(39,539
|
)
|
|||||
Loss from continuing operations before reorganization items and income tax provision
|
|
|
|
|
$
|
(298,973
|
)
|
||||
Capital expenditures
|
$
|
72,112
|
|
|
$
|
500
|
|
|
$
|
72,612
|
|
Six Months Ended June 30, 2015 - Predecessor Company
|
|
|
|
|
|
|
|
|
|||
Operating revenues
|
$
|
683,611
|
|
|
$
|
100
|
|
|
$
|
683,711
|
|
Segment losses
|
$
|
(75,234
|
)
|
|
$
|
(37,982
|
)
|
|
$
|
(113,216
|
)
|
Less:
|
|
|
|
|
|
|
|||||
Impairment, restructuring and other charges
|
|
|
|
|
(36,792
|
)
|
|||||
Depreciation and amortization
|
|
|
|
|
(153,878
|
)
|
|||||
Foreign currency transaction losses, net
|
|
|
|
|
(63,948
|
)
|
|||||
Interest expense and other, net
|
|
|
|
|
(67,630
|
)
|
|||||
Loss from continuing operations before reorganization items and income tax provision
|
|
|
|
|
$
|
(435,464
|
)
|
||||
Capital expenditures
|
$
|
68,385
|
|
|
$
|
818
|
|
|
$
|
69,203
|
|
December 31, 2017 - Successor Company
|
|
|
|
|
|
|
|||||
Identifiable assets
|
$
|
957,495
|
|
|
$
|
147,603
|
|
|
$
|
1,105,098
|
|
December 31, 2016 - Successor Company
|
|
|
|
|
|
|
|||||
Identifiable assets
|
$
|
1,000,098
|
|
|
$
|
418,411
|
|
|
$
|
1,418,509
|
|
|
Successor Company
|
||||||||||||||
|
First
|
|
Second
|
|
Third
|
|
Fourth
|
||||||||
|
(in thousands, except per share amounts)
|
||||||||||||||
2017
|
|
|
|
|
|
|
|
|
|
|
|
||||
Operating revenues
|
$
|
250,955
|
|
|
$
|
225,134
|
|
|
$
|
204,808
|
|
|
$
|
188,870
|
|
Operating loss
|
(79,849
|
)
|
|
(68,931
|
)
|
|
(83,372
|
)
|
|
(40,007
|
)
|
||||
Net loss from continuing operations
|
(92,675
|
)
|
|
(87,467
|
)
|
|
(94,428
|
)
|
|
(77,096
|
)
|
||||
Net (loss) income from discontinued operations
|
(38
|
)
|
|
2,697
|
|
|
(92
|
)
|
|
(1,562
|
)
|
||||
Net loss from continuing operations, per common share, basic
|
$
|
(0.92
|
)
|
|
$
|
(0.87
|
)
|
|
$
|
(0.94
|
)
|
|
$
|
(0.77
|
)
|
Net income (loss) from discontinued operations, per common share, basic
|
$
|
—
|
|
|
$
|
0.02
|
|
|
$
|
—
|
|
|
$
|
(0.02
|
)
|
Net loss from continuing operations, per common share, diluted
|
$
|
(0.92
|
)
|
|
$
|
(0.87
|
)
|
|
$
|
(0.94
|
)
|
|
$
|
(0.77
|
)
|
Net income (loss) from discontinued operations, per common share, diluted
|
$
|
—
|
|
|
$
|
0.02
|
|
|
$
|
—
|
|
|
$
|
(0.02
|
)
|
|
Successor Company
|
||||||||||||||
|
First
|
|
Second
|
|
Third
|
|
Fourth
|
||||||||
|
(in thousands, except per share amounts)
|
||||||||||||||
2016
|
|
|
|
|
|
|
|
|
|
|
|
||||
Operating revenues
|
$
|
226,557
|
|
|
$
|
249,213
|
|
|
$
|
260,836
|
|
|
$
|
248,440
|
|
Operating loss
|
(54,064
|
)
|
|
(28,751
|
)
|
|
(1,386,696
|
)
|
|
(57,318
|
)
|
||||
Net loss from continuing operations
|
(32,807
|
)
|
|
(4,796
|
)
|
|
(1,411,554
|
)
|
|
(84,722
|
)
|
||||
Net loss from discontinued operations
|
(3,781
|
)
|
|
(5,075
|
)
|
|
(7,389
|
)
|
|
(3,749
|
)
|
||||
Net loss from continuing operations, per common share, basic
|
$
|
(0.33
|
)
|
|
$
|
(0.05
|
)
|
|
$
|
(14.10
|
)
|
|
$
|
(0.84
|
)
|
Net loss from discontinued operations, per common share, basic
|
$
|
(0.04
|
)
|
|
$
|
(0.05
|
)
|
|
$
|
(0.07
|
)
|
|
$
|
(0.04
|
)
|
Net loss from continuing operations, per common share, diluted
|
$
|
(0.33
|
)
|
|
$
|
(0.05
|
)
|
|
$
|
(14.10
|
)
|
|
$
|
(0.84
|
)
|
Net loss from discontinued operations, per common share, diluted
|
$
|
(0.04
|
)
|
|
$
|
(0.05
|
)
|
|
$
|
(0.07
|
)
|
|
$
|
(0.04
|
)
|
NII HOLDINGS, INC.
CONDENSED BALANCE SHEETS (PARENT COMPANY ONLY)
(in thousands)
|
|||||||
|
Successor Company
|
||||||
|
December 31,
2017 |
|
December 31,
2016 |
||||
ASSETS
|
|||||||
Current assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
28,167
|
|
|
$
|
54,101
|
|
Short-term intercompany receivables
|
—
|
|
|
1,242
|
|
||
Prepaid expenses and other
|
104
|
|
|
—
|
|
||
Total current assets
|
28,271
|
|
|
55,343
|
|
||
Long-term intercompany receivables
|
15
|
|
|
3,146
|
|
||
Other assets
|
2
|
|
|
112,503
|
|
||
Total assets
|
$
|
28,288
|
|
|
$
|
170,992
|
|
LIABILITIES AND STOCKHOLDERS’ (DEFICIT) EQUITY
|
|||||||
|
|
|
|
||||
Current liabilities
|
|
|
|
||||
Short-term intercompany payables
|
$
|
1,439
|
|
|
$
|
4,570
|
|
Total current liabilities
|
1,439
|
|
|
4,570
|
|
||
Other long-term liabilities
|
148,796
|
|
|
400
|
|
||
Total liabilities
|
150,235
|
|
|
4,970
|
|
||
Total (deficit) equity
|
(121,947
|
)
|
|
166,022
|
|
||
Total liabilities and stockholders’ (deficit) equity
|
$
|
28,288
|
|
|
$
|
170,992
|
|
NII HOLDINGS, INC.
CONDENSED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME (PARENT COMPANY ONLY)
(in thousands)
|
||||||||||||||||
|
Successor Company
|
|
|
Predecessor Company
|
||||||||||||
|
Year Ended December 31,
|
|
Year Ended December 31,
|
|
Six Months Ended December 31,
|
|
|
Six Months Ended June 30,
|
||||||||
|
2017
|
|
2016
|
|
2015
|
|
|
2015
|
||||||||
Operating revenues
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
$
|
—
|
|
Operating expenses
|
|
|
|
|
|
|
|
|
||||||||
Selling, general and administrative
|
—
|
|
|
—
|
|
|
—
|
|
|
|
429
|
|
||||
Impairment, restructuring and other charges
|
—
|
|
|
36,839
|
|
|
—
|
|
|
|
—
|
|
||||
Depreciation and amortization
|
—
|
|
|
1,116
|
|
|
744
|
|
|
|
—
|
|
||||
|
—
|
|
|
37,955
|
|
|
744
|
|
|
|
429
|
|
||||
Operating loss
|
—
|
|
|
(37,955
|
)
|
|
(744
|
)
|
|
|
(429
|
)
|
||||
Other (expense) income
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Interest expense, net
|
—
|
|
|
—
|
|
|
—
|
|
|
|
(119
|
)
|
||||
Intercompany interest expense
|
—
|
|
|
(117,078
|
)
|
|
(118,365
|
)
|
|
|
(159,117
|
)
|
||||
Interest income
|
—
|
|
|
—
|
|
|
—
|
|
|
|
37
|
|
||||
Intercompany interest income
|
231
|
|
|
197
|
|
|
97
|
|
|
|
125
|
|
||||
Equity in (loss) income of affiliates
|
(300,107
|
)
|
|
(1,401,998
|
)
|
|
(167,324
|
)
|
|
|
1,793,151
|
|
||||
Other (expense) income, net
|
(1,138
|
)
|
|
(206
|
)
|
|
(3
|
)
|
|
|
995
|
|
||||
|
(301,014
|
)
|
|
(1,519,085
|
)
|
|
(285,595
|
)
|
|
|
1,635,072
|
|
||||
(Loss) income before reorganization items
and income tax benefit
|
(301,014
|
)
|
|
(1,557,040
|
)
|
|
(286,339
|
)
|
|
|
1,634,643
|
|
||||
Reorganization items
|
—
|
|
|
—
|
|
|
(373
|
)
|
|
|
68,355
|
|
||||
Income tax benefit (provision)
|
—
|
|
|
3,183
|
|
|
(448
|
)
|
|
|
(1,002
|
)
|
||||
Net (loss) income from continuing operations
|
(301,014
|
)
|
|
(1,553,857
|
)
|
|
(287,160
|
)
|
|
|
1,701,996
|
|
||||
(Loss) income from discontinued operations, net of income taxes
|
—
|
|
|
(16
|
)
|
|
6,277
|
|
|
|
38,519
|
|
||||
Net (loss) income
|
$
|
(301,014
|
)
|
|
$
|
(1,553,873
|
)
|
|
$
|
(280,883
|
)
|
|
|
$
|
1,740,515
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Comprehensive (loss) income, net of income
taxes
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Foreign currency translation adjustment
|
$
|
7,696
|
|
|
$
|
169,785
|
|
|
$
|
(248,781
|
)
|
|
|
$
|
(205,899
|
)
|
Reclassification adjustment for sale of Nextel Argentina, Nextel Mexico and Nextel Peru
|
—
|
|
|
—
|
|
|
(1,672
|
)
|
|
|
421,953
|
|
||||
Other
|
—
|
|
|
—
|
|
|
4,734
|
|
|
|
2,956
|
|
||||
Other comprehensive income (loss)
|
7,696
|
|
|
169,785
|
|
|
(245,719
|
)
|
|
|
219,010
|
|
||||
Net (loss) income
|
(301,014
|
)
|
|
(1,553,873
|
)
|
|
(280,883
|
)
|
|
|
1,740,515
|
|
||||
Total comprehensive (loss) income
|
$
|
(293,318
|
)
|
|
$
|
(1,384,088
|
)
|
|
$
|
(526,602
|
)
|
|
|
$
|
1,959,525
|
|
|
|
|
|
|
|
|
|
|
|
NII HOLDINGS, INC.
CONDENSED STATEMENTS OF CASH FLOWS (PARENT COMPANY ONLY)
(in thousands)
|
||||||||||||||||
|
Successor Company
|
|
|
Predecessor Company
|
||||||||||||
|
Year Ended December 31,
|
|
Year Ended December 31,
|
|
Six Months Ended December 31,
|
|
|
Six Months Ended June 30,
|
||||||||
|
2017
|
|
2016
|
|
2015
|
|
|
2015
|
||||||||
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
|
|||||||
Net (loss) income
|
$
|
(301,014
|
)
|
|
$
|
(1,553,873
|
)
|
|
$
|
(280,883
|
)
|
|
|
$
|
1,740,515
|
|
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities
|
284,932
|
|
|
1,554,075
|
|
|
280,910
|
|
|
|
(1,735,521
|
)
|
||||
Net cash (used in) provided by operating activities
|
(16,082
|
)
|
|
202
|
|
|
27
|
|
|
|
4,994
|
|
||||
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
|||||||
Investments in subsidiaries
|
(10,043
|
)
|
|
(36,356
|
)
|
|
(29,690
|
)
|
|
|
(61,405
|
)
|
||||
Return of investments in subsidiaries
|
162
|
|
|
34,260
|
|
|
35,315
|
|
|
|
23
|
|
||||
Other, net
|
—
|
|
|
(16
|
)
|
|
—
|
|
|
|
—
|
|
||||
Net cash (used in) provided by investing activities
|
(9,881
|
)
|
|
(2,112
|
)
|
|
5,625
|
|
|
|
(61,382
|
)
|
||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
|||||||
Other, net
|
29
|
|
|
—
|
|
|
—
|
|
|
|
—
|
|
||||
Net cash provided by financing activities
|
29
|
|
|
—
|
|
|
—
|
|
|
|
—
|
|
||||
Net (decrease) increase in cash and cash equivalents
|
(25,934
|
)
|
|
(1,910
|
)
|
|
5,652
|
|
|
|
(56,388
|
)
|
||||
Cash and cash equivalents, beginning of period
|
54,101
|
|
|
56,011
|
|
|
50,359
|
|
|
|
106,747
|
|
||||
Cash and cash equivalents, end of period
|
$
|
28,167
|
|
|
$
|
54,101
|
|
|
$
|
56,011
|
|
|
|
$
|
50,359
|
|
|
Balance at
Beginning of
Period
|
|
Charged to
Costs and
Expenses
|
|
Deductions
and Other
Adjustments (1)
|
|
Balance at
End of
Period
|
||||||||
Year Ended December 31, 2017 — Successor Company
|
|
|
|
|
|
|
|
||||||||
Allowance for doubtful accounts
|
$
|
54,221
|
|
|
$
|
76,518
|
|
|
$
|
(88,728
|
)
|
|
$
|
42,011
|
|
Valuation allowance for deferred tax assets
|
$
|
6,945,044
|
|
|
$
|
28,637
|
|
|
$
|
(16,112
|
)
|
|
$
|
6,957,569
|
|
Year Ended December 31, 2016
—
Successor Company
|
|
|
|
|
|
|
|
||||||||
Allowance for doubtful accounts
|
$
|
39,033
|
|
|
$
|
77,883
|
|
|
$
|
(62,695
|
)
|
|
$
|
54,221
|
|
Valuation allowance for deferred tax assets
|
$
|
5,290,813
|
|
|
$
|
1,555,006
|
|
|
$
|
99,225
|
|
|
$
|
6,945,044
|
|
Six Months Ended December 31, 2015
—
Successor Company
|
|
|
|
|
|
|
|
|
|
|
|
||||
Allowance for doubtful accounts
|
$
|
—
|
|
|
$
|
32,279
|
|
|
$
|
6,754
|
|
(2)
|
$
|
39,033
|
|
Valuation allowance for deferred tax assets
|
$
|
4,388,792
|
|
|
$
|
1,010,438
|
|
|
$
|
(108,417
|
)
|
|
$
|
5,290,813
|
|
Six Months Ended June 30, 2015
—
Predecessor Company
|
|
|
|
|
|
|
|
|
|
|
|
||||
Allowance for doubtful accounts
|
$
|
30,749
|
|
|
$
|
65,396
|
|
|
$
|
(96,145
|
)
|
(3)
|
$
|
—
|
|
Valuation allowance for deferred tax assets
|
$
|
4,447,133
|
|
|
$
|
22,828
|
|
|
$
|
(81,169
|
)
|
|
$
|
4,388,792
|
|
(1)
|
Includes the impact of foreign currency translation adjustments.
|
(2)
|
Includes the impact of cash collections subsequent to the implementation of fresh start accounting.
|
(3)
|
Includes the impact of a
$50.6 million
reduction to allowance for doubtful accounts resulting from the application of fresh start accounting.
|
Date
|
|
Employee
|
||
|
|
|
|
|
|
|
NII HOLDINGS, INC.
|
||
|
|
|
|
|
March 8, 2018
|
|
By:
|
|
|
/s/ Luana Pedersini de Matos
|
|
NEXTEL TELECOMUNICAÇÕES LTDA.
|
|
/s/ Roberto Rittes
|
|
ROBERTO RITTES
|
1. __________________________
|
|
2. __________________________
|
Nome: / Name:
|
|
Nome: / Name:
|
CPF: / Id#:
|
|
CPF: / Id#:
|
Corporation
|
Jurisdiction of Incorporation
|
Nextel International Services, Ltd.
|
Delaware, USA
|
NII Capital Corp.
|
Delaware, USA
|
NII International Holdings S.à r.l.
|
Luxembourg
|
NII International Services S.à r.l.
|
Luxembourg
|
NII International Telecom
|
Luxembourg
|
NII Mercosur Móviles, S.L
.
|
Spain
|
NII Mercosur Telecom, S.L.
|
Spain
|
NIU Holdings, LLC
|
Delaware, USA
|
Nextel Holdings S.à r.l.
|
Luxembourg
|
NII International Mobile S.à r.l.
|
Luxembourg
|
McCaw International (Brazil), LLC
|
Virginia, USA
|
Airfone Holdings, LLC
|
Delaware, USA
|
Nextel Participações Ltda.
|
Brazil
|
Nextel Telecomunicações Ltda.
|
Brazil
|
Nextel Telecomunicações de Longa Distancia Ltda.
|
Brazil
|
Sunbird Participações Ltda.
|
Brazil
|
Sunbird Telecomunicações Ltda.
|
Brazil
|
1.
|
I have reviewed this annual report on Form 10-K for the period ended
December 31, 2017
of NII Holdings, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
/s/ ROBERTO RITTES
|
|
|
Roberto Rittes
|
|
|
Principal Executive Officer
|
|
1.
|
I have reviewed this annual report on Form 10-K for the period ended
December 31, 2017
of NII Holdings, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
/s/ DANIEL E. FREIMAN
|
|
|
Daniel E. Freiman
|
|
|
Chief Financial Officer
|
|
1.
|
The Report fully complies with the requirements of section 13(a) of the Securities Exchange Act of 1934; and
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
|
/s/ ROBERTO RITTES
|
|
|
Roberto Rittes
|
|
|
Principal Executive Officer
|
|
1.
|
The Report fully complies with the requirements of section 13(a) of the Securities Exchange Act of 1934; and
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
|
/s/ DANIEL E. FREIMAN
|
|
|
Daniel E. Freiman
|
|
|
Chief Financial Officer
|
|