UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________

FORM 8-K


CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): August 14, 2014
___________

NII HOLDINGS, INC.
(Exact name of registrant as specified in its charter)

Delaware
(State or other jurisdiction
of incorporation)
000-32421
(Commission File Number)
91-1671412 
(IRS Employer
Identification No.)
 
 
 
1875 Explorer Street, Suite 1000
Reston, Virginia
 (Address of principal executive offices)

20190
(Zip Code)

Registrant's telephone number, including area code: (703) 390-5100

Not Applicable
(Former name or former address, if changed since last report)


Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨    Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨    Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨    Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨    Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
                                                                                                            









Item 2.01.    Completion of Acquisition or Disposition of Assets.
On August 14, 2014, NII Holdings, Inc. (the “Company”) announced that the Company's wholly-owned subsidiaries NII Mercosur Telecom, S.L., NII Mercosur Móviles, S.L and NII International Telecom S.C.A. entered into a Stock Purchase Agreement with Fucata S.A., a sociedad anónima existing under the Oriental Republic of Uruguay ("Fucata"), a venture comprised of Grupo Veintitrés, Optimum Advisors and ISM Capital, pursuant to which Fucata purchased all of the outstanding equity interests in Nextel Chile S.A., the Company's Chilean operating company for a de minimus amount.

Item 9.01.     Financial Statements and Exhibits.     
    
(d)     Exhibits.
Exhibit No.
 
Description
 
 
 
99.1
 
Unaudited Pro Forma Financial Information.
 






SIGNATURES


Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

                        
 
 
NII HOLDINGS, INC.
 
 
(Registrant)
 
 
 
 
 
 
Dated: August 20, 2014
 
By: /s/ SHANA C. SMITH                    
 
 
Shana C. Smith
 
 
Vice President, Deputy General Counsel





EXHIBIT INDEX

Exhibit No.
 
Description
 
 
 
99.1
 
Unaudited Pro Forma Financial Information.



Chile Pro Forma Exhibit 99.1

Exhibit 99.1


NII HOLDINGS, INC. AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION
Unaudited

The following unaudited pro forma condensed consolidated financial information is based on the historical consolidated financial statements of NII Holdings, Inc., which we refer to as NII Holdings or the Company, including certain pro forma adjustments, and has been prepared to illustrate the pro forma effect of the Company's entry into a stock purchase agreement, collectively with its wholly-owned subsidiaries NII Mercosur Telecom, S.L., NII Mercosur Móviles, S.L. and NII International Telecom S.C.A., pursuant to which Fucata S.A., a sociedad anónima existing under the Oriental Republic of Uruguay, a venture comprised of Grupo Veintitrés, Optimum Advisors and ISM Capital, collectively known as Fucata, purchased all of the outstanding equity interests of its wholly-owned subsidiary Nextel Chile S.A., or Nextel Chile.

This unaudited pro forma condensed consolidated financial information gives effect to the pro forma adjustments necessary to reflect the sale of Nextel Chile as if it had occurred as of the beginning of the earliest period presented in the pro forma condensed consolidated statements of operations for the six months ended June 30, 2014 and for each of the years ended December 31, 2013, 2012 and 2011, and as of June 30, 2014 in the pro forma condensed consolidated balance sheet.

The unaudited pro forma condensed consolidated financial information contained herein has been prepared based upon available information and management estimates. Actual amounts may differ from these estimated amounts. In addition, this unaudited pro forma condensed consolidated financial information is not necessarily indicative of the financial position or results of operations that might have occurred had the sale of Nextel Chile occurred as of January 1, 2011 or June 30, 2014, respectively.

This unaudited pro forma condensed consolidated financial information should be read in conjunction with the consolidated financial statements, notes to the consolidated financial statements and Management's Discussion and Analysis of Financial Condition and Results of Operations contained in our annual report on Form 10-K for the year ended December 31, 2013 and our quarterly reports on Form 10-Q for the quarterly periods ended March 31, 2014 and June 30, 2014.


























NII HOLDINGS, INC. AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
AS OF JUNE 30, 2014
(in thousands, except par values)
Unaudited

 
Historical
 
Pro Forma Adjustments for Activity of Business and Net Assets Disposed
 
Unaudited Pro Forma
 
 
 
 
 
 
ASSETS
Current assets
 

 
 

 
 
Cash and cash equivalents
$
814,023

 
$
(10,210
)
(a)
$
803,813

Short-term investments
132,590

 
—

 
132,590

Accounts receivable, less allowance for doubtful accounts of $66,200
485,185

 
(10,712
)
(b)
474,473

Handset and accessory inventory
373,565

 
—

 
373,565

Deferred income taxes, net
98,671

 
—

 
98,671

Prepaid expenses and other
668,943

 
(8,240
)
(b)
660,703

Total current assets
2,572,977

 
(29,162
)
 
2,543,815

Property, plant and equipment, net
3,259,529

 
(4,553
)
(b)
3,254,976

Intangible assets, net
1,019,548

 
—

 
1,019,548

Deferred income taxes, net
9,514

 
—

 
9,514

Other assets
577,218

 
—

 
577,218

Total assets
$
7,438,786

 
$
(33,715
)
 
$
7,405,071

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
 

 
 

 
 
Accounts payable
$
264,508

 
$
(15,099
)
(b)
$
249,409

Accrued expenses and other
804,483

 
(12,609
)
(b)
791,874

Deferred revenues
111,728

 
(395
)
(b)
111,333

Current portion of long-term debt
5,555,298

 
—

 
5,555,298

Deposits related to 2013 sale of towers
725,611

 
—

 
725,611

Total current liabilities
7,461,628

 
(28,103
)
 
7,433,525

Long-term debt
221,598

 
—

 
221,598

Deferred revenues
9,923

 
—

 
9,923

Deferred income tax liabilities
89,285

 
—

 
89,285

Other long-term liabilities
239,899

 
(5,239
)
(b)
234,660

Total liabilities
8,022,333

 
(33,342
)
 
7,988,991

Stockholders’ deficit
 

 
 

 
 
Undesignated preferred stock, par value $0.001, 10,000 shares authorized, no shares issued or outstanding 
—

 
—

 
—

Common stock, par value $0.001, 600,000 shares authorized, 172,362
  shares issued and outstanding
172

 
—

 
172

Paid-in capital
1,511,845

 
—

 
1,511,845

Accumulated deficit
(1,192,356
)
 
29,072

(c)
(1,163,284
)
Accumulated other comprehensive loss
(903,208
)
 
(29,445
)
(b)
(932,653
)
Total stockholders’ deficit
(583,547
)
 
(373
)
 
(583,920
)
Total liabilities and stockholders’ deficit
$
7,438,786

 
$
(33,715
)
 
$
7,405,071





NII HOLDINGS, INC. AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2014
(in thousands, except per share amounts)
Unaudited
 
Historical
 
Pro Forma Adjustments for Activity of Business and Net Assets Disposed
 
Unaudited Pro Forma
Operating revenues
 

 
 

 
 
Service and other revenues
$
1,807,030

 
$
(29,793
)
(d)
$
1,777,237

Handset and accessory revenues
131,936

 
(1,410
)
(d)
130,526

 
1,938,966

 
(31,203
)
 
1,907,763

Operating expenses
 

 
 

 
 
Cost of service (exclusive of depreciation and amortization included below)
704,492

 
(36,137
)
(e)
668,355

Cost of handsets and accessories
539,864

 
(9,823
)
(e)
530,041

Selling, general and administrative
934,272

 
(35,017
)
(f)
899,255

Impairment and restructuring charges
157,743

 
(127,515
)
(e)
30,228

Depreciation
310,890

 
(3,281
)
(e)
307,609

Amortization
35,167

 
(369
)
(e)
34,798

 
2,682,428

 
(212,142
)
 
2,470,286

Operating loss
(743,462
)
 
180,939

 
(562,523
)
Other expense
 

 
 

 
 
Interest expense, net
(260,606
)
 
40

(g)
(260,566
)
Interest income
32,870

 
(32
)
(d)
32,838

Foreign currency transaction gains, net
2,537

 
11,489

(d)
14,026

Other expense, net
(2,970
)
 
(26
)
(e)
(2,996
)
 
(228,169
)
 
11,471

 
(216,698
)
Loss from continuing operations before income tax provision
(971,631
)
 
192,410

 
(779,221
)
Income tax provision
(33,711
)
 
—

 
(33,711
)
Net loss from continuing operations
$
(1,005,342
)
 
$
192,410

 
$
(812,932
)
 
 
 
 
 
 
Net loss from continuing operations per common share, basic and diluted
$
(5.84
)
 
$
1.11

(h)
$
(4.73
)
 
 
 
 
 
 
Weighted average number of common shares outstanding, basic and diluted
172,201

 
—

 
172,201





NII HOLDINGS, INC. AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2013
(in thousands, except per share amounts)
Unaudited
 
Historical
 
Pro Forma Adjustments for Activity of Business and Net Assets Disposed
 
Unaudited Pro Forma
Operating revenues
 

 
 

 
 
Service and other revenues
$
4,573,879

 
$
(56,726
)
(d)
$
4,517,153

Handset and accessory revenues
198,685

 
(15,952
)
(d)
182,733

 
4,772,564

 
(72,678
)
 
4,699,886

Operating expenses
 

 
 

 
 
Cost of service (exclusive of depreciation and amortization included below)
1,472,320

 
(80,180
)
(e)
1,392,140

Cost of handsets and accessories
911,635

 
(39,694
)
(e)
871,941

Selling, general and administrative
1,913,454

 
(83,143
)
(f)
1,830,311

Provision for doubtful accounts
116,619

 
(5,159
)
(e)
111,460

Impairment and restructuring charges
171,047

 
(36,004
)
(e)
135,043

Depreciation
634,199

 
(4,596
)
(e)
629,603

Amortization
64,148

 
(824
)
(e)
63,324

 
5,283,422

 
(249,600
)
 
5,033,822

Operating loss
(510,858
)
 
176,922

 
(333,936
)
Other expense
 

 
 

 
 
Interest expense, net
(539,159
)
 
12,629

(g)
(526,530
)
Interest income
43,379

 
(52
)
(d)
43,327

Foreign currency transaction losses, net
(143,745
)
 
20,376

(d)
(123,369
)
Other expense, net
(12,982
)
 
124

(e)
(12,858
)
 
(652,507
)
 
33,077

 
(619,430
)
Loss from continuing operations before income tax provision
(1,163,365
)
 
209,999

 
(953,366
)
Income tax provision
(446,052
)
 
—

 
(446,052
)
Net loss from continuing operations
$
(1,609,417
)
 
$
209,999

 
$
(1,399,418
)
 
 
 
 
 
 
Net loss from continuing operations per common share, basic and diluted
$
(9.36
)
 
$
1.23

(h)
$
(8.13
)
 
 
 
 
 
 
Weighted average number of common shares outstanding, basic and diluted
171,912

 
—

 
171,912




NII HOLDINGS, INC. AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2012
(in thousands, except per share amounts)
Unaudited

 
Historical
 
Pro Forma Adjustments for Activity of Business and Net Assets Disposed
 
Unaudited Pro Forma
Operating revenues
 

 
 

 
 
Service and other revenues
$
5,465,120

 
$
(40,354
)
(d)
$
5,424,766

Handset and accessory revenues
278,002

 
(9,532
)
(d)
268,470

 
5,743,122

 
(49,886
)
 
5,693,236

Operating expenses
 

 
 

 
 
Cost of service (exclusive of depreciation and amortization included below)
1,574,327

 
(64,785
)
(e)
1,509,542

Cost of handsets and accessories
829,859

 
(37,392
)
(e)
792,467

Selling, general and administrative
2,167,688

 
(120,220
)
(f)
2,047,468

Provision for doubtful accounts
217,315

 
(2,861
)
(e)
214,454

Impairment and restructuring charges
329,767

 
(299,366
)
(e)
30,401

Depreciation
601,769

 
(43,545
)
(e)
558,224

Amortization
47,776

 
(838
)
(e)
46,938

 
5,768,501

 
(569,007
)
 
5,199,494

Operating (loss) income
(25,379
)
 
519,121

 
493,742

Other expense
 

 
 

 
 
Interest expense, net
(365,521
)
 
5,727

(g)
(359,794
)
Interest income
33,862

 
(77
)
(d)
33,785

Foreign currency transaction losses, net
(53,957
)
 
(9,372
)
(d)
(63,329
)
Other expense, net
(28,340
)
 
242

(e)
(28,098
)
 
(413,956
)
 
(3,480
)
 
(417,436
)
(Loss) income from continuing operations before income tax provision
(439,335
)
 
515,641

 
76,306

Income tax provision
(158,144
)
 
—

 
(158,144
)
Net loss from continuing operations
$
(597,479
)
 
$
515,641

 
$
(81,838
)
 
 
 
 
 
 
Net loss from continuing operations per common share, basic and diluted
$
(3.48
)
 
$
3.00

(h)
$
(0.48
)
 
 
 
 
 
 
Weighted average number of common shares outstanding, basic and diluted
171,499

 
—

 
171,499




NII HOLDINGS, INC. AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2011
(in thousands, except per share amounts)
Unaudited
 
Historical
 
Pro Forma Adjustments for Activity of Business and Net Assets Disposed
 
Unaudited Pro Forma
Operating revenues
 

 
 

 
 
Service and other revenues
$
6,081,577

 
$
(26,933
)
(d)
$
6,054,644

Handset and accessory revenues
299,240

 
(171
)
(d)
299,069

 
6,380,817

 
(27,104
)
 
6,353,713

Operating expenses
 

 
 

 
 
Cost of service (exclusive of depreciation and amortization included below)
1,681,692

 
(35,714
)
(e)
1,645,978

Cost of handsets and accessories
784,072

 
(4,837
)
(e)
779,235

Selling, general and administrative
2,201,102

 
(61,336
)
(f)
2,139,766

Provision for doubtful accounts
159,201

 
(1,671
)
(e)
157,530

Depreciation
551,463

 
(24,467
)
(e)
526,996

Amortization
36,701

 
(712
)
(e)
35,989

 
5,414,231

 
(128,737
)
 
5,285,494

Operating income
966,586

 
101,633

 
1,068,219

Other expense
 

 
 

 
 
Interest expense, net
(311,735
)
 
2,456

(g)
(309,279
)
Interest income
34,096

 
(268
)
(d)
33,828

Foreign currency transaction losses, net
(37,297
)
 
7,177

(d)
(30,120
)
Other expense, net
(37,750
)
 
(27
)
(e)
(37,777
)
 
(352,686
)
 
9,338

 
(343,348
)
Income from continuing operations before income tax provision
613,900

 
110,971

 
724,871

Income tax provision
(351,206
)
 
—

 
(351,206
)
Net income from continuing operations
$
262,694

 
$
110,971

 
$
373,665

 
 
 
 
 
 
Net income from continuing operations per common share, basic
$
1.53

 
$
0.65

(h)
$
2.18

 
 
 
 
 
 
Net income from continuing operations per common share, diluted
$
1.52

 
$
0.64

(h)
$
2.16

 
 
 
 
 
 
Weighted average number of common shares outstanding, basic
170,601

 
—

 
170,601

Weighted average number of common shares outstanding, diluted
172,781

 
—

 
172,781




Note 1.
Basis of Presentation

The accompanying unaudited pro forma consolidated financial statements give effect to the pro forma adjustments necessary to reflect the sale of Nextel Chile as if it had occurred as of the beginning of the earliest period presented in the pro forma condensed consolidated statements of operations for the six months ended June 30, 2014 and for each of the years ended December 31, 2013, 2012 and 2011, and as of June 30, 2014 in the pro forma condensed consolidated balance sheet.

Note 2.
Pro Forma Adjustments

The unaudited pro forma condensed consolidated statements of operations and pro forma condensed consolidated balance sheet reflect the effect of the following pro forma adjustments:

(a)
Reflects the net effect of the elimination of cash and cash equivalents, a de minimus amount of proceeds received upon completion of the sale of Nextel Chile and an immaterial amount of estimated transaction costs.

(b)
Reflects the elimination of certain of Nextel Chile's assets and liabilities. These adjustments also include the realization of foreign currency translation adjustments related to the historical operations of Nextel Chile.

(c)
Represents the effect on retained earnings as a result of the estimated $29.1 million gain recognized on the sale of Nextel Chile.

(d)
Reflects the elimination of revenue, interest income and other income historically reported by Nextel Chile that the Company would not have recognized if the sale of this operating company had occurred on January 1, 2011.

(e)
Reflects the elimination of expenses as a result of the sale of Nextel Chile. For the indicated line items, all activity historically reported as part of the Nextel Chile business has been eliminated, and no other adjustments or allocations have been assumed.

(f)
Reflects the elimination of selling, general and administrative expenses as a result of the sale of Nextel Chile. This adjustment also includes stock-based compensation expense related to Nextel Chile employees that would not have been recognized if the sale of this operating company had occurred on January 1, 2011.

(g)
Reflects the elimination of interest expense as a result of the sale of Nextel Chile. This adjustment does not include allocations of interest expense related to corporate-level debt obligations.

(h)
Recalculated as the pro forma adjustment to net (loss) income from continuing operations divided by the weighted average number of basic and diluted shares outstanding for the respective period.