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Share Name | Share Symbol | Market | Type |
---|---|---|---|
NII Holdings Inc | NASDAQ:NIHD | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 2.17 | 2.15 | 2.22 | 0 | 01:00:00 |
þ
|
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
|
THE SECURITIES EXCHANGE ACT OF 1934
|
||
|
|
|
For the quarterly period ended September 30, 2019
|
||
or
|
||
o
|
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
|
THE SECURITIES EXCHANGE ACT OF 1934
|
||
|
|
|
For the transition period from to
|
||
|
|
|
Commission file number 001-37488
|
Delaware
|
|
91-1671412
|
(State or other jurisdiction of
|
|
(I.R.S. Employer Identification No.)
|
incorporation or organization)
|
|
|
12110 Sunset Hills Road, Suite 600
Reston, Virginia
(Address of principal executive offices)
|
|
20190
(Zip Code)
|
Title of Each Class
|
Trading Symbol(s)
|
Name of Each Exchange on Which Registered
|
Common Stock, par value $0.001 per share
|
NIHD
|
Nasdaq Global Select Market
|
Large accelerated filer o
|
|
Accelerated filer þ
|
|
Non-accelerated filer o
|
|
Smaller reporting company o
|
|
Emerging growth company o
|
|
Number of Shares Outstanding
|
Title of Class
|
on October 30, 2019
|
Common Stock, $0.001 par value per share
|
102,835,848
|
|
|
Page
|
|
||
|
||
|
||
|
||
|
||
|
|
|
NII HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except par values)
Unaudited
|
|||||||
|
September 30, 2019
|
|
December 31, 2018
|
||||
|
|
|
|
||||
ASSETS
|
|||||||
Current assets
|
|
|
|
|
|
||
Cash and cash equivalents
|
$
|
29,331
|
|
|
$
|
93,881
|
|
Cash in escrow
|
103,435
|
|
|
106,089
|
|
||
Prepaid expenses and other
|
3,258
|
|
|
1,435
|
|
||
Assets held for sale
|
281,950
|
|
|
321,160
|
|
||
Total current assets
|
417,974
|
|
|
522,565
|
|
||
Other assets
|
2,136
|
|
|
1,244
|
|
||
Assets held for sale
|
833,199
|
|
|
536,021
|
|
||
Total assets
|
$
|
1,253,309
|
|
|
$
|
1,059,830
|
|
|
|
|
|
||||
LIABILITIES AND STOCKHOLDERS’ DEFICIT
|
|||||||
Current liabilities
|
|
|
|
|
|
||
Accounts payable, accrued expenses and other
|
$
|
21,083
|
|
|
$
|
12,772
|
|
Liabilities held for sale
|
348,878
|
|
|
346,715
|
|
||
Total current liabilities
|
369,961
|
|
|
359,487
|
|
||
Long-term debt
|
77,301
|
|
|
72,264
|
|
||
Other long-term liabilities
|
400
|
|
|
33,977
|
|
||
Liabilities held for sale
|
1,032,801
|
|
|
775,671
|
|
||
Total liabilities
|
1,480,463
|
|
|
1,241,399
|
|
||
Commitments and contingencies (Note 1)
|
|
|
|
|
|
||
Stockholders’ deficit
|
|
|
|
|
|
||
Undesignated preferred stock, par value $0.001, 10,000 shares authorized, no shares issued or outstanding
|
—
|
|
|
—
|
|
||
Common stock, par value $0.001, 140,000 shares authorized, 102,836 shares issued and outstanding — 2019, 101,323 shares issued and outstanding — 2018
|
103
|
|
|
101
|
|
||
Paid-in capital
|
2,129,087
|
|
|
2,143,240
|
|
||
Accumulated deficit
|
(2,287,782
|
)
|
|
(2,236,883
|
)
|
||
Accumulated other comprehensive income (loss)
|
4,955
|
|
|
(8,435
|
)
|
||
Total NII Holdings stockholders’ deficit
|
(153,637
|
)
|
|
(101,977
|
)
|
||
Noncontrolling interest
|
(73,517
|
)
|
|
(79,592
|
)
|
||
Total deficit
|
(227,154
|
)
|
|
(181,569
|
)
|
||
Total liabilities and stockholders’ deficit
|
$
|
1,253,309
|
|
|
$
|
1,059,830
|
|
NII HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(in thousands, except per share amounts)
Unaudited
|
|||||||||||||||
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
September 30,
|
|
September 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Operating expenses
|
|
|
|
|
|
|
|
|
|
||||||
Selling, general and administrative
|
$
|
3,834
|
|
|
$
|
4,080
|
|
|
$
|
12,785
|
|
|
$
|
12,230
|
|
Restructuring charges, net
|
139
|
|
|
—
|
|
|
139
|
|
|
352
|
|
||||
|
3,973
|
|
|
4,080
|
|
|
12,924
|
|
|
12,582
|
|
||||
Operating loss
|
(3,973
|
)
|
|
(4,080
|
)
|
|
(12,924
|
)
|
|
(12,582
|
)
|
||||
Other (expense) income
|
|
|
|
|
|
|
|
|
|
||||||
Interest expense
|
(3,018
|
)
|
|
(1,341
|
)
|
|
(8,744
|
)
|
|
(1,341
|
)
|
||||
Other income (expense), net
|
199
|
|
|
(13,217
|
)
|
|
34,630
|
|
|
(13,041
|
)
|
||||
|
(2,819
|
)
|
|
(14,558
|
)
|
|
25,886
|
|
|
(14,382
|
)
|
||||
(Loss) income from continuing operations before income taxes
|
(6,792
|
)
|
|
(18,638
|
)
|
|
12,962
|
|
|
(26,964
|
)
|
||||
Income taxes
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Net (loss) income from continuing operations
|
(6,792
|
)
|
|
(18,638
|
)
|
|
12,962
|
|
|
(26,964
|
)
|
||||
Loss from discontinued operations, net of income taxes
|
(27,693
|
)
|
|
(31,246
|
)
|
|
(65,423
|
)
|
|
(164,360
|
)
|
||||
Net loss
|
(34,485
|
)
|
|
(49,884
|
)
|
|
(52,461
|
)
|
|
(191,324
|
)
|
||||
Net loss attributable to noncontrolling interest
|
(4,581
|
)
|
|
(8,866
|
)
|
|
(13,952
|
)
|
|
(47,965
|
)
|
||||
Net loss attributable to NII Holdings
|
$
|
(29,904
|
)
|
|
$
|
(41,018
|
)
|
|
$
|
(38,509
|
)
|
|
$
|
(143,359
|
)
|
|
|
|
|
|
|
|
|
||||||||
Net (loss) income from continuing operations per common share, basic
|
$
|
(0.07
|
)
|
|
$
|
(0.19
|
)
|
|
$
|
0.12
|
|
|
$
|
(0.28
|
)
|
Net loss from discontinued operations per common share, basic
|
(0.27
|
)
|
|
(0.31
|
)
|
|
(0.64
|
)
|
|
(1.63
|
)
|
||||
Net loss per common share, basic
|
$
|
(0.34
|
)
|
|
$
|
(0.50
|
)
|
|
$
|
(0.52
|
)
|
|
$
|
(1.91
|
)
|
|
|
|
|
|
|
|
|
||||||||
Net (loss) income from continuing operations per common share, diluted
|
$
|
(0.07
|
)
|
|
$
|
(0.19
|
)
|
|
$
|
0.12
|
|
|
$
|
(0.28
|
)
|
Net loss from discontinued operations per common share, diluted
|
(0.27
|
)
|
|
(0.31
|
)
|
|
(0.64
|
)
|
|
(1.63
|
)
|
||||
Net loss per common share, diluted
|
$
|
(0.34
|
)
|
|
$
|
(0.50
|
)
|
|
$
|
(0.52
|
)
|
|
$
|
(1.91
|
)
|
|
|
|
|
|
|
|
|
||||||||
Weighted average number of common shares outstanding, basic
|
102,043
|
|
|
100,592
|
|
|
101,689
|
|
|
100,458
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Weighted average number of common shares outstanding, diluted
|
102,043
|
|
|
100,592
|
|
|
102,712
|
|
|
100,458
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Comprehensive loss, net of income taxes
|
|
|
|
|
|
|
|
||||||||
Foreign currency translation adjustment
|
$
|
15,939
|
|
|
$
|
7,386
|
|
|
$
|
13,340
|
|
|
$
|
45,453
|
|
Other comprehensive income
|
15,939
|
|
|
7,386
|
|
|
13,340
|
|
|
45,453
|
|
||||
Net loss attributable to NII Holdings
|
(29,904
|
)
|
|
(41,018
|
)
|
|
(38,509
|
)
|
|
(143,359
|
)
|
||||
Total comprehensive loss
|
$
|
(13,965
|
)
|
|
$
|
(33,632
|
)
|
|
$
|
(25,169
|
)
|
|
$
|
(97,906
|
)
|
NII HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT
(in thousands)
Unaudited
|
||||||||||||||||||||||||||||||
|
Common Stock
|
|
Paid-in Capital
|
|
Accumulated Deficit
|
|
Accumulated Other Comprehensive (Loss) Income
|
|
Total NII Holdings Stockholders’ Deficit
|
|
Noncontrolling Interest
|
|
Total Deficit
|
|||||||||||||||||
|
Shares
|
|
Amount
|
|
|
|
|
|
|
|||||||||||||||||||||
Balance, December 31, 2018
|
101,323
|
|
|
$
|
101
|
|
|
$
|
2,143,240
|
|
|
$
|
(2,236,883
|
)
|
|
$
|
(8,435
|
)
|
|
$
|
(101,977
|
)
|
|
$
|
(79,592
|
)
|
|
$
|
(181,569
|
)
|
Implementation of lease accounting standard
|
—
|
|
|
—
|
|
|
—
|
|
|
(12,390
|
)
|
|
—
|
|
|
(12,390
|
)
|
|
(5,273
|
)
|
|
(17,663
|
)
|
|||||||
Net income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
4,905
|
|
|
—
|
|
|
4,905
|
|
|
(5,763
|
)
|
|
(858
|
)
|
|||||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
820
|
|
|
820
|
|
|
443
|
|
|
1,263
|
|
|||||||
Share-based compensation activity
|
258
|
|
|
1
|
|
|
239
|
|
|
—
|
|
|
—
|
|
|
240
|
|
|
89
|
|
|
329
|
|
|||||||
Balance, March 31, 2019
|
101,581
|
|
|
102
|
|
|
2,143,479
|
|
|
(2,244,368
|
)
|
|
(7,615
|
)
|
|
(108,402
|
)
|
|
(90,096
|
)
|
|
(198,498
|
)
|
|||||||
Noncontrolling interest investment
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,700
|
|
|
2,700
|
|
|||||||
Loss on dilution of noncontrolling interest
|
—
|
|
|
—
|
|
|
(5,096
|
)
|
|
—
|
|
|
381
|
|
|
(4,715
|
)
|
|
4,715
|
|
|
—
|
|
|||||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(13,510
|
)
|
|
—
|
|
|
(13,510
|
)
|
|
(3,608
|
)
|
|
(17,118
|
)
|
|||||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,419
|
)
|
|
(3,419
|
)
|
|
(1,319
|
)
|
|
(4,738
|
)
|
|||||||
Share-based compensation activity
|
94
|
|
|
—
|
|
|
474
|
|
|
—
|
|
|
—
|
|
|
474
|
|
|
(13
|
)
|
|
461
|
|
|||||||
Balance, June 30, 2019
|
101,675
|
|
|
102
|
|
|
2,138,857
|
|
|
(2,257,878
|
)
|
|
(10,653
|
)
|
|
(129,572
|
)
|
|
(87,621
|
)
|
|
(217,193
|
)
|
|||||||
Loss on dilution of noncontrolling interest
|
—
|
|
|
—
|
|
|
(11,581
|
)
|
|
—
|
|
|
(331
|
)
|
|
(11,912
|
)
|
|
11,912
|
|
|
—
|
|
|||||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(29,904
|
)
|
|
—
|
|
|
(29,904
|
)
|
|
(4,581
|
)
|
|
(34,485
|
)
|
|||||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
15,939
|
|
|
15,939
|
|
|
6,619
|
|
|
22,558
|
|
|||||||
Share-based compensation activity
|
1,161
|
|
|
1
|
|
|
1,811
|
|
|
—
|
|
|
—
|
|
|
1,812
|
|
|
154
|
|
|
1,966
|
|
|||||||
Balance, September 30, 2019
|
102,836
|
|
|
$
|
103
|
|
|
$
|
2,129,087
|
|
|
$
|
(2,287,782
|
)
|
|
$
|
4,955
|
|
|
$
|
(153,637
|
)
|
|
$
|
(73,517
|
)
|
|
$
|
(227,154
|
)
|
|
Common Stock
|
|
Paid-in Capital
|
|
Accumulated Deficit
|
|
Accumulated Other Comprehensive Loss
|
|
Total NII Holdings Stockholders’ Deficit
|
|
Noncontrolling Interest
|
|
Total Deficit
|
|||||||||||||||||
|
Shares
|
|
Amount
|
|
|
|
|
|
|
|||||||||||||||||||||
Balance, December 31, 2017
|
100,384
|
|
|
$
|
100
|
|
|
$
|
2,139,299
|
|
|
$
|
(2,127,903
|
)
|
|
$
|
(47,239
|
)
|
|
$
|
(35,743
|
)
|
|
$
|
(75,445
|
)
|
|
$
|
(111,188
|
)
|
Implementation of revenue recognition accounting standard
|
—
|
|
|
—
|
|
|
—
|
|
|
34,100
|
|
|
—
|
|
|
34,100
|
|
|
14,603
|
|
|
48,703
|
|
|||||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(30,896
|
)
|
|
—
|
|
|
(30,896
|
)
|
|
(11,256
|
)
|
|
(42,152
|
)
|
|||||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,549
|
|
|
1,549
|
|
|
676
|
|
|
2,225
|
|
|||||||
Share-based compensation activity
|
1
|
|
|
—
|
|
|
586
|
|
|
—
|
|
|
—
|
|
|
586
|
|
|
109
|
|
|
695
|
|
|||||||
Balance, March 31, 2018
|
100,385
|
|
|
100
|
|
|
2,139,885
|
|
|
(2,124,699
|
)
|
|
(45,690
|
)
|
|
(30,404
|
)
|
|
(71,313
|
)
|
|
(101,717
|
)
|
|||||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(71,445
|
)
|
|
—
|
|
|
(71,445
|
)
|
|
(27,843
|
)
|
|
(99,288
|
)
|
|||||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
34,569
|
|
|
34,569
|
|
|
14,814
|
|
|
49,383
|
|
|||||||
Share-based compensation activity
|
71
|
|
|
—
|
|
|
856
|
|
|
—
|
|
|
—
|
|
|
856
|
|
|
101
|
|
|
957
|
|
|||||||
Balance, June 30, 2018
|
100,456
|
|
|
100
|
|
|
2,140,741
|
|
|
(2,196,144
|
)
|
|
(11,121
|
)
|
|
(66,424
|
)
|
|
(84,241
|
)
|
|
(150,665
|
)
|
|||||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(41,018
|
)
|
|
—
|
|
|
(41,018
|
)
|
|
(8,866
|
)
|
|
(49,884
|
)
|
|||||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9,335
|
|
|
9,335
|
|
|
3,788
|
|
|
13,123
|
|
|||||||
Share-based compensation activity
|
288
|
|
|
1
|
|
|
338
|
|
|
—
|
|
|
—
|
|
|
339
|
|
|
76
|
|
|
415
|
|
|||||||
Balance, September 30, 2018
|
100,744
|
|
|
$
|
101
|
|
|
$
|
2,141,079
|
|
|
$
|
(2,237,162
|
)
|
|
$
|
(1,786
|
)
|
|
$
|
(97,768
|
)
|
|
$
|
(89,243
|
)
|
|
$
|
(187,011
|
)
|
NII HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
Unaudited
|
|||||||
|
Nine Months Ended September 30,
|
||||||
|
2019
|
|
2018
|
||||
|
|
|
|
||||
Cash flows from operating activities:
|
|
|
|
||||
Net loss
|
$
|
(52,461
|
)
|
|
$
|
(191,324
|
)
|
Adjustments to reconcile net loss to net cash used in operating activities:
|
|
|
|
||||
Loss from discontinued operations
|
65,423
|
|
|
164,360
|
|
||
Amortization of debt discounts and financing costs
|
5,037
|
|
|
758
|
|
||
Share-based payment expense
|
1,373
|
|
|
1,826
|
|
||
(Gain) loss on derivatives
|
(33,577
|
)
|
|
11,739
|
|
||
Change in assets and liabilities:
|
|
|
|
||||
Prepaid expenses and other long-term assets
|
(1,237
|
)
|
|
(160
|
)
|
||
Accounts payable, accrued expenses and other
|
(539
|
)
|
|
901
|
|
||
Total operating cash used in continuing operations
|
(15,981
|
)
|
|
(11,900
|
)
|
||
Total operating cash used in discontinued operations
|
(32,480
|
)
|
|
(84,985
|
)
|
||
Net cash used in operating activities
|
(48,461
|
)
|
|
(96,885
|
)
|
||
Cash flows from investing activities:
|
|
|
|
||||
Purchase of foreign currency call option
|
(1,885
|
)
|
|
—
|
|
||
Total investing cash used in continuing operations
|
(1,885
|
)
|
|
—
|
|
||
Total investing cash used in discontinued operations
|
(50,033
|
)
|
|
(46,420
|
)
|
||
Net cash used in investing activities
|
(51,918
|
)
|
|
(46,420
|
)
|
||
Cash flows from financing activities:
|
|
|
|
||||
Gross proceeds from issuance of convertible notes
|
—
|
|
|
115,000
|
|
||
Payments of debt financing costs
|
—
|
|
|
(5,170
|
)
|
||
Other
|
(244
|
)
|
|
361
|
|
||
Total financing cash (used in) provided by continuing operations
|
(244
|
)
|
|
110,191
|
|
||
Total financing cash used in discontinued operations
|
(12,203
|
)
|
|
(10,324
|
)
|
||
Net cash (used in) provided by financing activities
|
(12,447
|
)
|
|
99,867
|
|
||
Effect of exchange rate changes on cash, cash equivalents and restricted cash
|
(286
|
)
|
|
(1,536
|
)
|
||
Net decrease in cash, cash equivalents and restricted cash
|
(113,112
|
)
|
|
(44,974
|
)
|
||
Cash, cash equivalents and restricted cash, beginning of period
|
250,739
|
|
|
305,778
|
|
||
Cash, cash equivalents and restricted cash, end of period
|
$
|
137,627
|
|
|
$
|
260,804
|
|
Note 1.
|
Basis of Presentation
|
|
September 30,
|
|
December 31,
|
||||||||||||
|
2019
|
|
2018
|
|
2018
|
|
2017
|
||||||||
|
(in thousands)
|
|
|
||||||||||||
Cash and cash equivalents
|
$
|
29,331
|
|
|
$
|
131,479
|
|
|
$
|
93,881
|
|
|
$
|
34,553
|
|
Cash in escrow
|
103,435
|
|
|
106,071
|
|
|
106,089
|
|
|
110,024
|
|
||||
Cash and cash equivalents included in current assets held for sale
|
2,684
|
|
|
21,233
|
|
|
48,605
|
|
|
159,335
|
|
||||
Restricted cash included in non-current assets held for sale
|
2,177
|
|
|
2,021
|
|
|
2,164
|
|
|
1,866
|
|
||||
Cash, cash equivalents and restricted cash
|
$
|
137,627
|
|
|
$
|
260,804
|
|
|
$
|
250,739
|
|
|
$
|
305,778
|
|
Note 2.
|
Leases
|
|
December 31, 2018
|
|
Impact of ASC 842 Adoption
|
|
January 1, 2019
|
||||||
Current assets held for sale
|
$
|
321,160
|
|
|
$
|
—
|
|
|
$
|
321,160
|
|
Other current assets
|
201,405
|
|
|
—
|
|
|
201,405
|
|
|||
Non-current assets held for sale
|
536,021
|
|
|
375,917
|
|
|
911,938
|
|
|||
Other non-current assets
|
1,244
|
|
|
—
|
|
|
1,244
|
|
|||
Total assets
|
$
|
1,059,830
|
|
|
$
|
375,917
|
|
|
$
|
1,435,747
|
|
|
|
|
|
|
|
||||||
Current liabilities held for sale
|
$
|
346,715
|
|
|
$
|
44,784
|
|
|
$
|
391,499
|
|
Other current liabilities
|
12,772
|
|
|
—
|
|
|
12,772
|
|
|||
Long-term liabilities held for sale
|
775,671
|
|
|
348,796
|
|
|
1,124,467
|
|
|||
Other long-term liabilities
|
106,241
|
|
|
—
|
|
|
106,241
|
|
|||
Total liabilities
|
1,241,399
|
|
|
393,580
|
|
|
1,634,979
|
|
|||
|
|
|
|
|
|
||||||
Total stockholders' deficit
|
(181,569
|
)
|
|
(17,663
|
)
|
|
(199,232
|
)
|
|||
Total liabilities and stockholders' deficit
|
$
|
1,059,830
|
|
|
$
|
375,917
|
|
|
$
|
1,435,747
|
|
Note 3.
|
Discontinued Operations
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
September 30,
|
|
September 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Operating revenues
|
$
|
145,884
|
|
|
$
|
141,736
|
|
|
$
|
437,531
|
|
|
$
|
478,963
|
|
Cost of revenues and selling, general and administrative
|
(105,758
|
)
|
|
(129,509
|
)
|
|
(366,374
|
)
|
|
(463,049
|
)
|
||||
Segment earnings
|
40,126
|
|
|
12,227
|
|
|
71,157
|
|
|
15,914
|
|
||||
Impairment, restructuring and other charges, net
|
(7,613
|
)
|
|
3
|
|
|
(16,432
|
)
|
|
(13,717
|
)
|
||||
Depreciation and amortization
|
722
|
|
|
(6,805
|
)
|
|
(14,827
|
)
|
|
(21,855
|
)
|
||||
Operating income (loss)
|
33,235
|
|
|
5,425
|
|
|
39,898
|
|
|
(19,658
|
)
|
||||
Interest expense and other, net
|
(48,957
|
)
|
|
(36,508
|
)
|
|
(91,311
|
)
|
|
(141,756
|
)
|
||||
Loss before income taxes
|
(15,722
|
)
|
|
(31,083
|
)
|
|
(51,413
|
)
|
|
(161,414
|
)
|
||||
Income taxes
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Loss from Nextel Brazil discontinued operations, net of income taxes
|
(15,722
|
)
|
|
(31,083
|
)
|
|
(51,413
|
)
|
|
(161,414
|
)
|
||||
Loss on disposal of Nextel Mexico
|
(11,971
|
)
|
|
(163
|
)
|
|
(14,010
|
)
|
|
(2,946
|
)
|
||||
Loss from discontinued operations, net of income taxes
|
$
|
(27,693
|
)
|
|
$
|
(31,246
|
)
|
|
$
|
(65,423
|
)
|
|
$
|
(164,360
|
)
|
|
|
|
|
|
|
|
|
||||||||
Loss from discontinued operations attributable to noncontrolling interest
|
$
|
(4,581
|
)
|
|
$
|
(8,866
|
)
|
|
$
|
(13,952
|
)
|
|
$
|
(47,965
|
)
|
Loss from discontinued operations attributable to NII Holdings
|
(23,112
|
)
|
|
(22,380
|
)
|
|
(51,471
|
)
|
|
(116,395
|
)
|
||||
Loss from discontinued operations, net of income taxes
|
$
|
(27,693
|
)
|
|
$
|
(31,246
|
)
|
|
$
|
(65,423
|
)
|
|
$
|
(164,360
|
)
|
|
September 30, 2019
|
|
December 31, 2018
|
||||
ASSETS
|
|||||||
Current assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
2,684
|
|
|
$
|
48,605
|
|
Short-term investments
|
48,780
|
|
|
32,329
|
|
||
Accounts receivable, net of allowance for doubtful accounts of $27,116 and $19,637
|
98,138
|
|
|
99,867
|
|
||
Prepaid expenses and other
|
132,348
|
|
|
140,359
|
|
||
Total current assets
|
281,950
|
|
|
321,160
|
|
||
Property, plant and equipment, net
|
154,535
|
|
|
143,930
|
|
||
Intangible assets, net
|
146,286
|
|
|
162,156
|
|
||
Operating lease right-of-use assets
|
329,117
|
|
|
—
|
|
||
Other assets
|
203,261
|
|
|
229,935
|
|
||
Total assets
|
$
|
1,115,149
|
|
|
$
|
857,181
|
|
|
|
|
|
||||
LIABILITIES
|
|||||||
Current liabilities
|
|
|
|
|
|||
Accounts payable, accrued expenses, operating lease liabilities and other
|
$
|
322,058
|
|
|
$
|
325,365
|
|
Current portion of long-term debt
|
26,820
|
|
|
21,350
|
|
||
Total current liabilities
|
348,878
|
|
|
346,715
|
|
||
Long-term debt
|
512,934
|
|
|
560,593
|
|
||
Long-term operating lease liabilities
|
325,485
|
|
|
—
|
|
||
Other long-term liabilities
|
194,382
|
|
|
215,078
|
|
||
Total liabilities
|
$
|
1,381,679
|
|
|
$
|
1,122,386
|
|
Note 4.
|
Debt, Derivatives and Fair Value Measurements
|
Note 5.
|
Income Taxes
|
Item 2.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
•
|
our consolidated financial condition as of September 30, 2019 and December 31, 2018 and our consolidated results of operations for the three and nine months ended September 30, 2019 and 2018; and
|
•
|
significant factors that we believe could affect our prospective financial condition and results of operations.
|
•
|
foreign currency; and
|
•
|
income taxes.
|
|
||||||||||||||
|
September 30,
|
|
Actual Change from Previous Year
|
|||||||||||
Three Months Ended
|
2019
|
|
2018
|
|
Dollars
|
|
B(W) Change
|
|||||||
Operating expenses
|
|
|
|
|
|
|
|
|
|
|||||
Selling, general and administrative
|
$
|
(3,834
|
)
|
|
$
|
(4,080
|
)
|
|
$
|
246
|
|
|
6
|
%
|
Restructuring charges, net
|
(139
|
)
|
|
—
|
|
|
(139
|
)
|
|
NM
|
|
|||
|
(3,973
|
)
|
|
(4,080
|
)
|
|
107
|
|
|
3
|
%
|
|||
Operating loss
|
(3,973
|
)
|
|
(4,080
|
)
|
|
107
|
|
|
3
|
%
|
|||
Other (expense) income
|
|
|
|
|
|
|
|
|
|
|
||||
Interest expense
|
(3,018
|
)
|
|
(1,341
|
)
|
|
(1,677
|
)
|
|
(125
|
)%
|
|||
Other income (expense), net
|
199
|
|
|
(13,217
|
)
|
|
13,416
|
|
|
102
|
%
|
|||
|
(2,819
|
)
|
|
(14,558
|
)
|
|
11,739
|
|
|
81
|
%
|
|||
Loss from continuing operations before income taxes
|
(6,792
|
)
|
|
(18,638
|
)
|
|
11,846
|
|
|
64
|
%
|
|||
Income taxes
|
—
|
|
|
—
|
|
|
—
|
|
|
NM
|
|
|||
Net loss from continuing operations
|
(6,792
|
)
|
|
(18,638
|
)
|
|
11,846
|
|
|
64
|
%
|
|||
Loss from discontinued operations, net of income taxes
|
(27,693
|
)
|
|
(31,246
|
)
|
|
3,553
|
|
|
11
|
%
|
|||
Net loss
|
(34,485
|
)
|
|
(49,884
|
)
|
|
15,399
|
|
|
31
|
%
|
|||
Net loss attributable to noncontrolling interest
|
(4,581
|
)
|
|
(8,866
|
)
|
|
4,285
|
|
|
48
|
%
|
|||
Net loss attributable to NII Holdings
|
$
|
(29,904
|
)
|
|
$
|
(41,018
|
)
|
|
$
|
11,114
|
|
|
27
|
%
|
|
|
|
|
|
|
|
|
|||||||
Nine Months Ended
|
|
|
|
|
|
|
|
|||||||
Operating expenses
|
|
|
|
|
|
|
|
|
|
|||||
Selling, general and administrative
|
$
|
(12,785
|
)
|
|
$
|
(12,230
|
)
|
|
$
|
(555
|
)
|
|
(5
|
)%
|
Restructuring charges, net
|
(139
|
)
|
|
(352
|
)
|
|
213
|
|
|
61
|
%
|
|||
|
(12,924
|
)
|
|
(12,582
|
)
|
|
(342
|
)
|
|
(3
|
)%
|
|||
Operating loss
|
(12,924
|
)
|
|
(12,582
|
)
|
|
(342
|
)
|
|
(3
|
)%
|
|||
Other (expense) income
|
|
|
|
|
|
|
|
|
|
|||||
Interest expense
|
(8,744
|
)
|
|
(1,341
|
)
|
|
(7,403
|
)
|
|
NM
|
|
|||
Other income (expense), net
|
34,630
|
|
|
(13,041
|
)
|
|
47,671
|
|
|
NM
|
|
|||
|
25,886
|
|
|
(14,382
|
)
|
|
40,268
|
|
|
280
|
%
|
|||
Income (loss) from continuing operations before income taxes
|
12,962
|
|
|
(26,964
|
)
|
|
39,926
|
|
|
148
|
%
|
|||
Income taxes
|
—
|
|
|
—
|
|
|
—
|
|
|
NM
|
|
|||
Net income (loss) from continuing operations
|
12,962
|
|
|
(26,964
|
)
|
|
39,926
|
|
|
148
|
%
|
|||
Loss from discontinued operations, net of income taxes
|
(65,423
|
)
|
|
(164,360
|
)
|
|
98,937
|
|
|
60
|
%
|
|||
Net loss
|
(52,461
|
)
|
|
(191,324
|
)
|
|
138,863
|
|
|
73
|
%
|
|||
Net loss attributable to noncontrolling interest
|
(13,952
|
)
|
|
(47,965
|
)
|
|
34,013
|
|
|
71
|
%
|
|||
Net loss attributable to NII Holdings
|
$
|
(38,509
|
)
|
|
$
|
(143,359
|
)
|
|
$
|
104,850
|
|
|
73
|
%
|
•
|
$16.0 million, or 40%, and $39.9 million, or 28%, decreases in transmitter and receiver site and switch costs, respectively, $8.9 million of which in both periods related to the cessation of amortization on right-of-use assets due to the classification of these assets as held-for-sale;
|
•
|
lower mobile termination rates;
|
•
|
lower customer contingencies related to fewer claims in 2019;
|
•
|
the reversal of $6.9 million related to a previously recorded accrual for certain long distance calls that were the result of fraudulent network usage not considered billable to Nextel Brazil as the loss was no longer probable; and
|
•
|
a $10.8 million increase in tax credits from the nine months ended September 30, 2018 to the same period in 2019; partially offset by
|
•
|
$4.6 million, or 64%, and $10.4 million, or 38%, increases in bad debt expense from the three and nine months ended September 30, 2018 to the same periods in 2019.
|
|
Nine Months Ended
|
||||||
|
September 30,
|
||||||
|
2019
|
|
2018
|
||||
|
|
|
|
||||
Cash, cash equivalents and restricted cash, beginning of period
|
$
|
250,739
|
|
|
$
|
305,778
|
|
Net cash used in operating activities
|
(48,461
|
)
|
|
(96,885
|
)
|
||
Net cash used in investing activities
|
(51,918
|
)
|
|
(46,420
|
)
|
||
Net cash (used in) provided by financing activities
|
(12,447
|
)
|
|
99,867
|
|
||
Effect of exchange rate changes on cash, cash equivalents and restricted cash
|
(286
|
)
|
|
(1,536
|
)
|
||
Cash, cash equivalents and restricted cash, end of period
|
$
|
137,627
|
|
|
$
|
260,804
|
|
•
|
the amount of revenue Nextel Brazil is able to generate and collect from its subscribers, including its ability to increase the size of its subscriber base;
|
•
|
the amount of operating expenses required to provide Nextel Brazil's services;
|
•
|
the cost of acquiring and retaining subscribers, including the subsidies Nextel Brazil incurs to provide handsets to both its new and existing subscribers; and
|
•
|
changes in foreign currency exchange rates.
|
•
|
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 related to our discontinued operation in Brazil and expected cash expenditures at our corporate headquarters;
|
•
|
our scheduled debt service obligations; and
|
•
|
our other contractual obligations.
|
•
|
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 we are subject to litigation involving tax and other matters requiring material judicial deposits of cash that will not be released until the pending matter is resolved;
|
•
|
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.
|
•
|
our ability to attract and retain subscribers;
|
•
|
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 timely resolution of claims and receipt of proceeds from the sale of Nextel Mexico held in escrow;
|
•
|
risks associated with our partnership with AI Brazil Holdings;
|
•
|
general economic 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;
|
•
|
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;
|
•
|
potential cash outlays related to certain reasonably possible losses related to matters for which Nextel Brazil has not accrued liabilities, some of which would be covered by judicial deposits of cash;
|
•
|
a requirement to provide material judicial deposits of cash that will not be released until the pending matter is resolved in order for litigation involving tax and other matters to be heard by the courts in Brazil;
|
•
|
equipment failure, natural disasters, terrorist acts or other breaches of network or information technology security;
|
•
|
the possibility that our significant indebtedness, or the incurrence of additional indebtedness, could affect our financial condition; and
|
•
|
other risks and uncertainties described in Part I, Item 1A. "Risk Factors," in our annual report on Form 10-K for the year ended December 31, 2018 and, from time to time, in our other reports filed with the SEC.
|
•
|
the satisfaction of the conditions to consummate the sale of Nextel Brazil, including regulatory approvals;
|
•
|
the occurrence of any event, change or other circumstance that could give rise to the termination of the purchase agreement;
|
•
|
the amount of the costs, fees, expenses and charges related to the sale of Nextel Brazil may be higher than we expect;
|
•
|
the effect the pending sale of Nextel Brazil will have on our management team, customer relationships, operating results and business generally, including the ability to retain key employees;
|
•
|
the cost and outcome of any legal proceedings that may be initiated against us and others following the announcement of the pending sale of Nextel Brazil; and
|
•
|
the timing and amount of cash and other assets available for distribution to our stockholders upon our ultimate windup and dissolution.
|
Item 3.
|
Quantitative and Qualitative Disclosures About Market Risk
|
Item 4.
|
Controls and Procedures
|
Item 1.
|
Legal Proceedings
|
Item 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
Period
|
|
Total Number of Shares Purchased
|
|
Average Price Per Share
|
|
Total Number of Shares Purchased as Part of Program
|
|
Approximate Dollar Value of Shares that May Yet Be Purchased Under the Program
|
||||||
July 1, 2019 — July 31, 2019
|
|
—
|
|
(1)
|
$
|
—
|
|
|
—
|
|
|
|
||
August 1, 2019 — August 31, 2019
|
|
73,687
|
|
(1)
|
1.57
|
|
|
73,687
|
|
|
|
|||
September 1, 2019 — September 30, 2019
|
|
—
|
|
(1)
|
—
|
|
|
—
|
|
|
|
|||
Total
|
|
73,687
|
|
(1)
|
|
|
73,687
|
|
|
$
|
—
|
|
Exhibit Number
|
|
Exhibit Description
|
|
Form
|
|
Exhibit
|
|
Incorporated by Reference Filing Date
|
|
Filed Herewith
|
3.1
|
|
|
|
|
|
|
|
|
*
|
|
3.2
|
|
|
|
|
|
|
|
|
*
|
|
10.1
|
|
|
|
|
|
|
|
|
*
|
|
31.1
|
|
|
|
|
|
|
|
|
*
|
|
31.2
|
|
|
|
|
|
|
|
|
*
|
|
32.1
|
|
|
|
|
|
|
|
|
*
|
|
32.2
|
|
|
|
|
|
|
|
|
*
|
|
101
|
|
The following materials from the NII Holdings, Inc. Quarterly Report on Form 10-Q for the quarter ended September 30, 2019 formatted in eXtensible Business Reporting Language (XBRL): (i) Condensed Consolidated Balance Sheets, (ii) Condensed Consolidated Statements of Comprehensive Loss, (iii) Condensed Consolidated Statements of Changes in Stockholders’ Deficit, (iv) Condensed Consolidated Statements of Cash Flows and (v) Notes to Condensed Consolidated Financial Statements.
|
|
|
|
|
|
|
|
*
|
By:
|
/s/ TIMOTHY M. MULIERI
|
|
|
|
|
|
|
Timothy M. Mulieri
|
|
|
Vice President, Corporate Controller
|
|
|
(on behalf of the registrant and as Principal Accounting Officer)
|
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