<PAGE> 1
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) January 25, 1999
---------------
Iridium World Communications Ltd.
(Exact name of registrant as specified in its charter)
Bermuda 0-22637 52-2025291
(State or other (Commission File (I.R.S. Employer
jurisdiction of Number) Identification
organization) Number)
Clarendon House, 2 Church Street, Hamilton HM 11, Bermuda
(441) 295-5950
(Address, including zip code, and telephone number, including area code,
of Registrant's principal executive offices)
---------------
Iridium LLC
(Exact name of registrant as specified in its charter)
Delaware 0-22637-01 52-1984342
(State or other (Commission File (I.R.S. Employer
jurisdiction of Number) Identification
organization) Number)
1575 Eye Street, N.W., Washington, DC 20005
(202) 408-3800
(Address, including zip code, and telephone number, including area code,
of Registrant's principal executive offices)
---------------
<PAGE> 2
Iridium Operating LLC
(Exact name of registrant as specified in its charter)
Delaware 0-22637-02 52-2066319
(State or other (Commission File (I.R.S. Employer
jurisdiction of Number) Identification
organization) Number)
1575 Eye Street, N.W., Washington, DC 20005
(202) 408-3800
(Address, including zip code, and telephone number, including area code,
of Registrant's principal executive offices)
---------------
Iridium Capital Corporation
(Exact name of registrant as specified in its charter)
Delaware 333-31741-03 52-2048739
(State or other (Commission File (I.R.S. Employer
jurisdiction of Number) Identification
organization) Number)
1575 Eye Street, N.W., Washington, DC 20005
(202) 408-3800
---------------
Iridium IP LLC
(Exact name of registrant as specified in its charter)
Delaware 333-31741-01 52-2048736
(State or other (Commission File (I.R.S. Employer
jurisdiction of Number) Identification
organization) Number)
1575 Eye Street, N.W., Washington, DC 20005
(202) 408-3800
---------------
Iridium Roaming LLC
(Exact name of registrant as specified in its charter)
Delaware 333-31741-02 52-2048734
(State or other (Commission File (I.R.S. Employer
jurisdiction of Number) Identification
organization) Number)
1575 Eye Street, N.W., Washington, DC 20005
(202) 408-3800
<PAGE> 3
---------------
Iridium Facilities Corporation
(Exact name of registrant as specified in its charter)
Delaware 333-44349-04 52-2083969
(State or other (Commission File (I.R.S. Employer
jurisdiction of Number) Identification
organization) Number)
1575 Eye Street, N.W., Washington, DC 20005
(202) 408-3800
<PAGE> 4
Item 5. Other Events
On January 25, 1999, Iridium LLC issued a press release, a copy of
which is attached hereto as Exhibit 99.1. The attachment contains forward
looking statements, regarding the registrants' expected funding requirements,
sources of funds and uses of funds for 1999 and thereafter. These forward
looking statements are based on a number of assumptions, including the
expectations of the Parent and Operating about their ability to generate
revenues from operations, and should be viewed in light of, among other things,
the following facts: (i) the Parent and Operating have no meaningful history of
operations or revenues and there is no operational service that provides a
direct comparison to the Iridium services; (ii) the estimates of the Parent and
Operating assume, among other things, that Operating will transition smoothly
from a development stage company into an operating company; (iii) the
availability of the additional sources of funding the Parent and Operating
expect to be able to use is not completely within their control and is
conditioned upon the satisfaction of certain conditions (including obtaining
and retaining customers and generating revenues); and (iv) the Parent and
Operating face many challenges and risks. It is likely that there would be a
material adverse effect on the Parent and Operating if actual funding
requirements (net of revenues from operations) significantly exceed current
estimates. For a discussion of some of the factors that could cause actual
results to differ from those expressed or implied by the forward looking
statements included in this report, consult the registrants' other filings with
the Securities and Exchange Commission, including Exhibit 99 to their report on
Form 10-Q for the period ended September 30, 1998.
Item 7. Financial Statements, Pro Forma Financial Statements and
Exhibits.
(c) The following exhibits are filed herewith.
<TABLE>
<CAPTION>
Exhibit Number Description
<S> <C>
99.1 Press release dated January 25, 1999.
99.2 Certain Factors Which May Affect Forward Looking Statements: Incorporated by reference to
Exhibit 99 to the Annual Report on Form 10-K of Iridium World Communications Ltd.
("IWCL") and Iridium LLC for the fiscal year ended December 31, 1997.
99.3 Certain Factors Which May Affect Forward Looking Statements: Incorporated by reference
</TABLE>
1
<PAGE> 5
to Exhibit 99.1 to the Quarterly Report
on Form 10-Q of IWCL and Iridium LLC
for the quarter ended September 30,
1998.
2
<PAGE> 6
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
each registrant has duly caused this report to be signed on its behalf by the
undersigned, hereunto duly authorized.
IRIDIUM WORLD COMMUNICATIONS LTD.
By /s/
----------------------------------
Name: Edward F. Staiano
Title: Chief Executive Officer
IRIDIUM LLC
By /s/
----------------------------------
Name: F. Thomas Tuttle
Title: Secretary
IRIDIUM OPERATING LLC
By /s/
----------------------------------
Name: F. Thomas Tuttle
Title: Secretary
IRIDIUM CAPITAL CORPORATION
By /s/
----------------------------------
Name: F. Thomas Tuttle
Title: Secretary
IRIDIUM ROAMING LLC
By /s/
----------------------------------
Name: F. Thomas Tuttle
Title: acting secretary
IRIDIUM IP LLC
By /s/
----------------------------------
Name: F. Thomas Tuttle
Title: acting secretary
IRIDIUM FACILITIES CORPORATION
By /s/
----------------------------------
Name: F. Thomas Tuttle
Title: Secretary
Date: January 27, 1999
3
<PAGE> 7
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Number Description
<S> <C>
99.1 Press release dated January 25, 1999.
99.2 Certain Factors Which May Affect Forward Looking Statements: Incorporated by reference to Exhibit
99 to the Annual Report on Form 10-K of Iridium World Communications Ltd. ("IWCL") and Iridium LLC
for the fiscal year ended December 31, 1997.
99.3 Certain Factors Which May Affect Forward Looking Statements: Incorporated by reference to Exhibit
99.1 to the Quarterly Report on Form 10-Q of IWCL and Iridium LLC for the quarter ended September
30, 1998.
</TABLE>
<PAGE> 1
[IRIDIUM LETTERHEAD]
PRESS RELEASE
IRIDIUM REPORTS FOURTH QUARTER RESULTS
(NASDAQ; IRIDF)
(WASHINGTON, D.C., January 25, 1999) - Iridium LLC today announced that
revenues for the fourth quarter ending December 31, 1998 were $186,000,
reflecting the five week delay in launching its worldwide commercial service
and a shortage of Iridium telephones and pagers during the first two months of
operations. On December 31, there were approximately 3,000 activated
subscribers on the Iridium system.
"Last quarter, Iridium made history as we achieved our longstanding goal of
launching the first truly global mobile-telephone service," said Edward F.
Staiano, Vice Chairman and Chief Executive Officer. "With our network
performing at a high level of quality, subscriber equipment now widely
available and intensive marketing efforts underway, 1999 will be the year that
the Iridium system transforms from a technological event into a revenue
generator."
The completion of the Iridium system and the November 1st launch of commercial
service were the operational highlights of the fourth quarter. System
performance, already robust at the commencement of commercial service,
continues to improve with ongoing enhancements to the software. Call
establishment over the satellite network is now in excess of 90 percent, with
the dropped call rate at about six percent. The Iridium paging and
cross-protocol cellular roaming services are operating at levels that exceed
performance standards.
Two rocket launches during the fourth quarter ensured a full constellation of
66 low Earth orbiting satellites and enabled Iridium to add further spare
satellites to the constellation. Two satellites were launched on a Chinese
Long March rocket and five on a Boeing Delta II rocket, extending Iridium's
string of consecutive successful launches to 19 over 19 months. The
constellation now includes eight orbiting spare satellites.
<PAGE> 2
[IRIDIUM LOGO]
- more -
While subscriber equipment production delays negatively impacted results,
Motorola significantly increased its production capacity over the last two
months of the quarter. By year-end, Motorola had produced and shipped more
than 35,000 phones and 3,500 pagers, and is now producing nearly 1,000 phones a
day and 8,000 pagers a month. Late in the fourth quarter, Motorola began
commercial shipments of its CDMA/AMPS and GSM cellular cassettes, which enable
Motorola's Iridium phones to operate on terrestrial cellular networks around
the world. Production capacity for these cassettes is now 42,000 a month.
Kyocera pagers are now available to customers, and its single-mode and
dual-mode satellite phones are expected to begin shipping in the first quarter
1999, once testing shows that they meet Iridium's quality standards for
commercial use.
On December 23, Iridium LLC also announced that it had reached an agreement to
purchase Claircom Communications Group, Inc. (Claircom) from AT&T and Rogers
Cantel for $65 million in cash and debt. Claircom's digital air-to-ground
network and in-flight telephone services to more than 1,400 commercial jets and
350 executive aircraft will form an important component of Iridium's overall
aeronautical communications strategy, which is aimed at capturing the growing
business travel market. Following completion of the transaction, which is
subject to regulatory approvals, Claircom's existing seat-back phones will
carry the Iridium brand and will be integrated into Iridium's global wireless
telephony and paging offering.
Iridium made significant progress in its global market access efforts in the
fourth quarter. At year-end, the satellite voice service was authorized in
more than 140 countries and territories, and the paging service was authorized
in more than 200 markets. The company continues to work with its gateway
operators to integrate more than 300 service providers and roaming partners
that have signed up to deliver Iridium products and services to customers
around the world. At the end of the quarter, about 60 service providers were
ready to sell, with more than 100 others undergoing integration. Additionally,
56 of Iridium's 160 roaming partners had launched the Iridium cellular roaming
service and were ready to serve Iridium customers on their local networks.
Together, these networks cover more than 230 major international business
travel destination cities in 38 countries.
<PAGE> 3
[IRIDIUM LOGO]
- more -
The company was successful in the fourth quarter in raising the financing
needed for its initial operations. On December 23, 1998, Iridium secured $1.95
billion of new financing consisting of an $800 million Senior Secured Credit
Facility (the "Secured Bank Facility") and a $750 million Guaranteed Credit
Facility (the "Guaranteed Facility") and $400 million of vendor financing from
Motorola. The borrower under each of these facilities is Iridium Operating
LLC, a wholly owned subsidiary of Iridium LLC.
In addition, on January 21, 1999, Iridium World Communications Ltd. agreed to
sell 7,500,000 shares of its class A common stock in an underwritten public
offering led by Merrill Lynch & Co., Goldman, Sachs & Co., NationsBanc
Montgomery Securities LLC, Salomon Smith Barney and SoundView Technology Group.
The offering price was $33.50 per share. The proceeds from the offering will
be used primarily to fund Iridium's operations. "We are confident that
Iridium's financing, together with projected revenues, is sufficient to meet
our expected funding requirements in 1999. Motorola has committed to provide
an additional $350 million of bank guarantees should they be required," said
Roy Grant, Vice President and CFO of Iridium LLC.
During the fourth quarter of 1998, Iridium began the transition from a
development stage company into an operating company with no significant
revenues expected until the first quarter of 1999. As a result, Iridium LLC
reported a net loss of $440 million or $3.12 loss per Class 1 Interest for the
fourth quarter 1998, and a net loss of $1,259 million or $8.91 per Class 1
Interest for the twelve months ended December 31, 1998. The details of the
results are shown in the accompanying financial table.
Iridium LLC became the world's first global satellite phone and paging company
on November 1, 1998. The network of 66-low earth orbiting satellite s combined
with terrestrial cellular systems, enables subscribers to communicate virtually
anywhere in the world using one phone and pager, one phone number, and
receiving one monthly bill. Customers access participating local cellular
networks when available, and the Iridium satellite network when outside
terrestrial cellular coverage. Iridium World Communications, Ltd. (NASDAQ:
IRIDF) is the public investment vehicle of Iridium LLC.
This release contains forward-looking statements, including statements
regarding projected revenues and subscribers, service enhancements to the
Iridium system and equipment availability. These forward-looking statements
are based on a number of assumptions and actual results may be materially
different from those expressed or implied by such statements.
<PAGE> 4
[IRIDIUM LOGO]
For a description of factors which may cause results for Iridium to differ
materially from those expressed or implied by such forward-looking statements,
please consult the Securities and Exchange Act filings of Iridium World
Communications Ltd. (Nasdaq: IRIDF).
###
Iridium is a registered trademark and service mark of Iridium LLC (C) 1999
<PAGE> 5
[IRIDIUM LOGO]
IRIDIUM LLC
(A DEVELOPMENT STAGE LIMITED LIABILITY COMPANY)
SELECTED FINANCIAL DATA
(DOLLARS IN THOUSANDS EXCEPT PER CLASS 1 INTEREST DATA)
<TABLE>
<CAPTION>
THREE TWELVE
MONTHS ENDED MONTHS ENDED
DECEMBER 31, 1998 DECEMBER 31, 1998
----------------- -----------------
CONSOLIDATED STATEMENT OF LOSS DATA:
<S> <C> <C>
Revenue $ 186 $ 186
Operating expenses $ 174,600 $ 435,861
Depreciation and amortization $ 173,637 $ 551,912
Interest expense, net $ 92,029 $ 265,214
--------------------------- --------------------------
Net loss $ 440,080 $ 1,252,801
=========================== ==========================
Net loss applicable to Class 1 Interests $ 441,609 $ 1,258,910
=========================== ==========================
Net loss per Class 1 Interest $ 3.12 $ 8.91
=========================== ==========================
Weighted average interests used in
computing Net loss per Class 1 Interest 141,419,116 141,322,445
=========================== ==========================
</TABLE>
<TABLE>
<CAPTION>
DECEMBER 31, 1998
-----------------
CONSOLIDATED BALANCE SHEET DATA:
<S> <C>
Cash and cash equivalents $ 24,756
Property and equipment - net $ 3,584,208
Total assets $ 3,738,895
Bank debt $ 1,125,000
Long-term debt (net of discount) $ 1,729,219
Total Members' equity $ 477,163
</TABLE>
###
Iridium is a registered trademark and service mark of Iridium LLC (C) 1999
