<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:) December 23, 1999
<TABLE>
<S> <C> <C>
---------------
Iridium LLC
Delaware 0-22637-01 52-1984342
(State or other (Commission File Number) (I.R.S. Employer Identification
jurisdiction of Number)
organization)
1575 Eye Street, N.W., Washington, DC 20005
(202) 408-3800
---------------
Iridium Operating LLC
Delaware 0-22637-02 52-2066319
(State or other (Commission File Number) (I.R.S. Employer Identification
jurisdiction of Number)
organization)
1575 Eye Street, N.W., Washington, DC 20005
(202) 408-3800
---------------
Iridium World Communications Ltd.
Bermuda 0-22637 52-2025291
(State or other (Commission File Number) (I.R.S. Employer Identification
jurisdiction of Number)
organization)
Clarendon House, 2 Church Street, Hamilton HM 11, Bermuda
(441) 295-5950
--------------
Iridium Capital Corporation
Delaware 333-31741-03 52-2048739
(State or other (Commission File Number) (I.R.S. Employer Identification
jurisdiction of Number)
organization)
1575 Eye Street, N.W., Washington, DC 20005
(202) 408-3800
---------------
Iridium IP LLC
Delaware 333-31741-01 52-2048736
(State or other (Commission File Number) (I.R.S. Employer Identification
jurisdiction of Number)
organization)
1575 Eye Street, N.W., Washington, DC 20005
(202) 408-3800
---------------
Iridium Roaming LLC
Delaware 333-31741-02 52-2048734
(State or other (Commission File Number) (I.R.S. Employer Identification
jurisdiction of Number)
organization)
1575 Eye Street, N.W., Washington, DC 20005
(202) 408-3800
---------------
Iridium Facilities Corporation
Delaware 33-44349-04 52-2083969
(State or other (Commission File Number) (I.R.S. Employer Identification
jurisdiction of Number)
organization)
1575 Eye Street, N.W., Washington, DC 20005
(202) 408-3800
---------------
</TABLE>
<PAGE> 2
This current report on 8-K is filed jointly by Iridium LLC (the "Parent"),
Iridium Operating LLC ("Operating"), Iridium World Communications Ltd. ("IWCL"),
Iridium Capital Corporation ("Capital"), Iridium Roaming LLC ("Roaming"),
Iridium IP LLC ("IP") and Iridium Facilities Corporation ("Facilities").
IWCL acts as a member of the Parent and has no other business. Operating is a
wholly-owned subsidiary of the Parent. The business of Operating, operating the
Iridium system and offering Iridium services, constitutes substantially all of
the business of the Parent. Capital, Roaming, IP and Facilities are wholly-owned
subsidiaries of Operating.
Item 5. Other Events
On December 23, 1999 Parent and IWCL filed Monthly Operating Statements for the
period November 1, 1999 through November 30, 1999 with the United States
Bankruptcy Court in the Southern District of New York, copies of which are
attached hereto as Exhibits 99.1 and 99.2.
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 Iridium LLC Monthly Operating Statement for the period
November 1, 1999 through November 30, 1999
99.2 IWCL Monthly Operating Statement for the period
November 1, 1999 through November 30, 1999
</TABLE>
SIGNATURES*
Pursuant to the requirements of the Securities Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Iridium World Communications Ltd.
- --------------------------------------------------------------------------------
By /s/ F. Thomas Tuttle
- --------------------------------------------------------------------------------
Name: F. Thomas Tuttle
- --------------------------------------------------------------------------------
Title: Secretary
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Iridium LLC
- --------------------------------------------------------------------------------
By /s/ F. Thomas Tuttle
- --------------------------------------------------------------------------------
Name: F. Thomas Tuttle
- --------------------------------------------------------------------------------
Title: Secretary
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Iridium Operating LLC
- --------------------------------------------------------------------------------
By /s/ F. Thomas Tuttle
- --------------------------------------------------------------------------------
Name: F. Thomas Tuttle
- --------------------------------------------------------------------------------
Title: Secretary
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Iridium Capital Corporation
- --------------------------------------------------------------------------------
By /s/ F. Thomas Tuttle
- --------------------------------------------------------------------------------
Name: F. Thomas Tuttle
- --------------------------------------------------------------------------------
Title: Secretary
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Iridium IP LLC
- --------------------------------------------------------------------------------
By /s/ F. Thomas Tuttle
- --------------------------------------------------------------------------------
Name: F. Thomas Tuttle
- --------------------------------------------------------------------------------
<PAGE> 3
Title: acting secretary
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Iridium Roaming LLC
- --------------------------------------------------------------------------------
By /s/ F. Thomas Tuttle
- --------------------------------------------------------------------------------
Name: F. Thomas Tuttle
- --------------------------------------------------------------------------------
Title: acting secretary
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Iridium Facilities Corporation
- --------------------------------------------------------------------------------
By /s/ F. Thomas Tuttle
- --------------------------------------------------------------------------------
Name: F. Thomas Tuttle
- --------------------------------------------------------------------------------
Title: Secretary
- --------------------------------------------------------------------------------
Date: December 28, 1999
<PAGE> 1
WILMER, CUTLER & PICKERING
COUNSEL FOR DEBTORS AND DEBTORS-IN-POSSESSION
WASHINGTON, D.C. 20037-1420
(202) 663-6000
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF NEW YORK
IN RE:
IRIDIUM LLC
IRIDIUM OPERATING LLC CASE NO. 99-45005-CB
IRIDIUM IP LLC (JOINTLY ADMINISTERED)
IRIDIUM CAPITAL CORPORATION CHAPTER 11
IRIDIUM ROAMING LLC
IRIDIUM (POTOMAC) LLC
MONTHLY OPERATING STATEMENT
FOR THE PERIOD NOVEMBER 1, 1999 THROUGH NOVEMBER 30, 1999
<TABLE>
<S> <C>
DISBURSEMENTS: (IN THOUSANDS)
IRIDIUM LLC $1,126
--------------------
IRIDIUM OPERATING LLC $15,024
--------------------
OPERATING LOSS: (IN THOUSANDS) $114,214
--------------------
</TABLE>
THIS OPERATING STATEMENT MUST BE SIGNED BY A REPRESENTATIVE OF THE DEBTORS
THE UNDERSIGNED, HAVING REVIEWED THE ATTACHED AND BEING FAMILIAR WITH THE
DEBTORS' FINANCIAL AFFAIRS, VERIFIES UNDER THE PENALTY OF THE PERJURY, THAT THE
INFORMATION CONTAINED THEREIN IS COMPLETE, ACCURATE AND TRUTHFUL TO THE BEST OF
MY KNOWLEDGE.
DATE: DECEMBER 23, 1999 /s/ DAVID R. GIBSON
------------------------- -------------------------------------------
DAVID R. GIBSON, CHIEF FINANCIAL OFFICER
INDICATE IF THIS IS AN AMENDED STATEMENT BY CHECKING HERE:
AMENDED STATEMENT___________
<PAGE> 2
HEADNOTE
These unaudited consolidated financial statements have been prepared for the
purpose of filing with the United States Bankruptcy Court for the Southern
District of New York. These consolidated financial statements have not been
prepared in accordance with generally accepted accounting principles ("GAAP")
because Statement of Financial Accounting Standards No. 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of"
("SFAS 121") has not been applied, and certain other disclosures required under
GAAP have been omitted. The Company expects that, upon application of SFAS 121,
the carrying amount of its long-lived assets will be written down by a material
amount; however, at this time it is not possible to determine such amount. In
the opinion of management, all other accounting principles applicable to the
Company have been applied in the accompanying consolidated financial statements
and all adjustments necessary for a fair presentation of such information have
been made. However, there could also be year-end audit adjustments and
adjustments as a result of the Company's filing for protection under Chapter 11
of the United States Bankruptcy Code.
IRIDIUM LLC
(DEBTOR-IN-POSSESSION)
(A DEVELOPMENT STAGE LIMITED LIABILITY COMPANY)
UNAUDITED CONSOLIDATED BALANCE SHEET
(IN THOUSANDS)
<TABLE>
<CAPTION>
11/30/1999
-----------
<S> <C>
ASSETS
Current assets:
Cash and cash equivalents (Note 3) $ 181,584
Accounts receivable, net of allowance 2,302
Due from Affiliates, net of allowance 1,184
Prepaid expenses and other current assets 18,638
-----------
Total current assets 203,708
Property and equipment, net 3,059,072
Other assets 19,064
-----------
Total assets $ 3,281,844
===========
LIABILITIES AND MEMBERS' DEFICIT
Liabilities not subject to compromise
Current liabilities:
Accounts payable and accrued expenses $ 14,456
Due to Member 164,147
Due to Affiliates 2,889
Senior Secured Bank Facility 800,000
-----------
Total current liabilities 981,492
Deferred liabilities 61,638
Liabilities subject to compromise
Senior Notes A, B, C and D 1,450,000
Senior Subordinated Notes 377,060
Due to Member 1,311,047
Due to Affiliates 600
Pre-petition interest payable 104,601
Pre-petition accounts payable - trade 12,960
Pre-petition accrued liabilities 3,451
-----------
3,259,719
-----------
Total Liabilities 4,302,849
-----------
Members' Deficit
Class 2 Interests 50,258
Class 1 Interests 2,352,821
Adjustment for minimum pension liability (1,812)
Deficit accumulated during the development stage (3,422,272)
-----------
Total members' deficit (1,021,005)
-----------
Total liabilities and members' deficit $ 3,281,844
===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE> 3
HEADNOTE
These unaudited consolidated financial statements have been prepared for the
purpose of filing with the United States Bankruptcy Court for the Southern
District of New York. These consolidated financial statements have not been
prepared in accordance with generally accepted accounting principles ("GAAP")
because Statement of Financial Accounting Standards No. 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of"
("SFAS 121") has not been applied, and certain other disclosures required under
GAAP have been omitted. The Company expects that, upon application of SFAS 121,
the carrying amount of its long-lived assets will be written down by a material
amount; however, at this time it is not possible to determine such amount. In
the opinion of management, all other accounting principles applicable to the
Company have been applied in the accompanying consolidated financial statements
and all adjustments necessary for a fair presentation of such information have
been made. However, there could also be year-end audit adjustments and
adjustments as a result of the Company's filing for protection under Chapter 11
of the United States Bankruptcy Code.
IRIDIUM LLC
(DEBTOR-IN-POSSESSION)
(A DEVELOPMENT STAGE LIMITED LIABILITY COMPANY)
UNAUDITED CONSOLIDATED STATEMENT OF LOSS
(IN THOUSANDS)
<TABLE>
<CAPTION>
PERIOD FROM
NOVEMBER 1, 1999
THROUGH NOVEMBER 30, 1999
-------------------------
<S> <C>
Revenue $ 1,277
Costs and expenses:
Sales, general and administrative 10,754
Operations and maintenance expense 25,209
Depreciation and amortization 69,144
Interest expense, net 7,391
---------
112,498
---------
Loss before reorganization items 111,221
---------
Reorganization expense items:
Professional fees 1,212
Employee retention costs 2,374
Workforce reduction costs (6)
Interest earned on accumulated cash resulting from Chapter 11 proceeding (587)
---------
2,993
---------
Net Loss $ 114,214
=========
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE> 4
HEADNOTE
These unaudited consolidated financial statements have been prepared for the
purpose of filing with the United States Bankruptcy Court for the Southern
District of New York. These consolidated financial statements have not been
prepared in accordance with generally accepted accounting principles ("GAAP")
because Statement of Financial Accounting Standards No. 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of"
("SFAS 121") has not been applied, and certain other disclosures required under
GAAP have been omitted. The Company expects that, upon application of SFAS 121,
the carrying amount of its long-lived assets will be written down by a material
amount; however, at this time it is not possible to determine such amount. In
the opinion of management, all other accounting principles applicable to the
Company have been applied in the accompanying consolidated financial statements
and all adjustments necessary for a fair presentation of such information have
been made. However, there could also be year-end audit adjustments and
adjustments as a result of the Company's filing for protection under Chapter 11
of the United States Bankruptcy Code.
IRIDIUM LLC
(DEBTOR-IN-POSSESSION)
(A DEVELOPMENT STAGE LIMITED LIABILITY COMPANY)
UNAUDITED CONSOLIDATED STATEMENT OF CASH FLOWS
(IN THOUSANDS)
<TABLE>
<CAPTION>
PERIOD FROM
NOVEMBER 1, 1999
THROUGH
NOVEMBER 30, 1999
-----------------
<S> <C>
Cash flows from operating activities:
Net loss before reorganization items $(111,221)
Adjustments to reconcile net loss before reorganization items to net cash used:
Depreciation and amortization 69,144
Amortization of financing costs 1,306
Changes in assets and liabilities:
Decrease in accounts receivable 655
Decrease in prepaid expenses and other current assets 1,762
Decrease in due to/from affiliates 1,540
Decrease in other assets 32
Increase in accounts payable and accrued expenses 21,884
Increase in other liabilities 3,391
---------
(11,507)
---------
Net loss from reorganization items (2,993)
Adjustments to reconcile net loss from reorganization items to net cash used:
Changes in assets and liabilities:
Increase in accounts payable and accrued expenses 663
---------
(2,330)
---------
Net cash used in operating activities (13,837)
---------
Cash flows from investing activities:
Purchases of property and equipment (20)
---------
Net cash used in investing activities (20)
---------
Cash flows from financing activities:
Reorganization items -
---------
Net cash provided by financing activities -
---------
Decreased in cash and cash equivalents (13,857)
Cash and cash equivalents, beginning of period 195,441
---------
Cash and cash equivalents, end of period $ 181,584
=========
Supplemental disclosures of cash flow information:
Interest paid 6,632
Cash paid for reorganization items:
Professional fees 843
Workforce reduction costs 464
Employee retention program 1,610
Interest earned on accumulated cash resulting from Chapter 11 proceeding (587)
---------
2,330
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE> 5
NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
1. ORGANIZATION AND BUSINESS
Iridium LLC (the "Parent" or the "Company") and its subsidiaries have completed
their efforts to develop and deploy a global wireless personal communication
system (the "Iridium System"). Iridium commenced commercial satellite phone
service on November 1, 1998 and commercial satellite paging service on November
15, 1998. The Parent's transition from a development stage limited liability
company to an operating limited liability company has been adversely affected by
various factors, including much slower than expected subscriber growth. As a
result of these factors, on August 13, 1999, bankruptcy petitions were filed
with respect to the Parent and certain of their affiliates. See Note 3 for a
description of the bankruptcy proceedings.
2. BASIS OF PRESENTATION
The unaudited consolidated financial statements include the accounts of the
Parent and its wholly-owned subsidiaries, Iridium Operating LLC ("Iridium"),
Iridium Geolink LLC, Iridium Promotions Inc. and Iridium Aero Acquisition Sub,
Inc. and Iridium's wholly-owned subsidiaries, Iridium Capital Corporation,
Iridium Roaming LLC, Iridium IP LLC, Iridium (Potomac) LLC, Iridium Facilities
Corporation and Iridium Canada Facilities, Inc. All significant intercompany
transactions have been eliminated.
These unaudited consolidated financial statements have been prepared for the
purpose of filing with the United States Bankruptcy Court for the Southern
District of New York. These consolidated financial statements have not been
prepared in accordance with generally accepted accounting principles ("GAAP")
because Statement of Financial Accounting Standards No. 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed of"
("SFAS 121") has not been applied, and certain other disclosures required under
GAAP have been omitted.
SFAS 121 requires the Company to evaluate the recoverability of its long-lived
assets whenever events or circumstances indicate that the carrying amount of
such assets may be impaired. If considered impaired, SFAS 121 requires that the
long-lived assets be written down to fair value. The Company's long-lived assets
are comprised of the Iridium Space System and related assets. The Company
expects that, upon application of SFAS 121, the carrying amount of its
long-lived assets will be written down by a material amount; however, at this
time it is not possible to determine such amount. The accompanying unaudited
consolidated financial statements also omit certain disclosures required under
GAAP, including inception-to-date financial information for development stage
enterprises and earnings (loss) per membership interest data.
With the exceptions described above, in the opinion of management, all other
accounting principles applicable to the Company have been applied in the
accompanying unaudited consolidated financial statements and all adjustments
necessary for a fair presentation of such information have been made. However,
there could also be year-end audit adjustments and adjustments to certain other
accounts as a result of the Company's filing for protection under Chapter 11 of
the United States Bankruptcy Code.
In connection with the bankruptcy proceedings the Company has adopted AICPA
Statement of Position 90-7, "Financial Reporting by Entities in Reorganization
Under the Bankruptcy Code" ("SOP 90-7"). SOP 90-7 requires entities in
bankruptcy to present their pre-petition liabilities on the basis of the
expected amount of allowed claims in accordance with Statement of Financial
Accounting Standards No. 5, "Accounting for Contingencies".
<PAGE> 6
3. BANKRUPTCY FILING
On August 13, 1999 (the "Petition Date"), certain creditors of Iridium and
Iridium Capital Corporation filed involuntary bankruptcy petitions against them
in the United States Bankruptcy Court for the Southern District of New York (the
"Court"). Also, on August 13, 1999, the Parent, Iridium, Iridium Capital
Corporation and Iridium World Communications Ltd. ("IWCL"), a member of the
Parent, filed voluntary petitions in the United States Bankruptcy Court for the
District of Delaware. On August 16, 1999, the Court entered an order, which,
among other things, stayed the Delaware petitions. On September 13, 1999 (the
"Conversion Date"), the Court entered an order granting the Parent, Iridium,
IWCL (whose estate is being separately administered) and Iridium Capital
Corporation relief under Chapter 11 of Title 11 of the US Bankruptcy Code (the
"Bankruptcy Code"). Additionally, on the Conversion Date, three additional
Iridium subsidiaries, Iridium IP LLC, Iridium (Potomac) LLC and Iridium Roaming
LLC and on December 16, 1999 Iridium Promotions, Inc. (together and collectively
with the other companies the "Debtors") filed voluntary petitions for relief
under Chapter 11 of the Bankruptcy Code.
In Chapter 11 bankruptcy proceedings, certain claims in existence prior to the
order of relief, including pending litigation against the Company are stayed
while the Company continues its business operations as a debtor-in-possession.
These accrued claims are reflected in the balance sheets as "Liabilities Subject
to Compromise". Additional liabilities subject to compromise may arise
subsequent to the filing date resulting from rejection of executory contracts,
including leases, and from the determination by the Court (or agreed to by
parties in interest) of allowed claims for contingencies and other disputed
amounts. Prior to the Conversion Date, the Debtors continued to pay expenses and
claims, including pre-petition claims. The Debtors received approval from the
Bankruptcy Court, effective September 13, 1999, to pay certain of its
pre-petition and pre-conversion obligations, including employee wages and
related taxes and gap period claims (those claims incurred between the Debtors'
Petition Date and the Conversion Date).
Substantially all liabilities of Parent as of the Petition Date are subject to
compromise or other treatment under a plan of reorganization that must be
confirmed by the Court after a vote of impaired claimants. The ultimate effects
of the Chapter 11 bankruptcy proceedings on each of the various constituencies
will depend on a variety of factors, including, without limitation, the specific
terms of a confirmed plan of reorganization and the relative rank of each claim
among the priorities established by the Bankruptcy Code. In addition, there can
be no assurance that the Debtors will successfully reorganize under the Chapter
11 proceeding. Accordingly, the ultimate effects on various claimants are not
currently determinable.
From the Conversion Date until December 15, 1999, the Debtors' operations were
funded pursuant to cash collateral orders agreed to by the lenders and approved
by the Court. On December 15, 1999, the Court approved an extension of the use
of cash collateral through February 15, 2000, provided, however, that all cash
subject to the bank lien be used only to pay interest to the lenders and certain
other limited expenses. To fund ongoing operations and restructuring costs,
current investors, led by Motorola, agreed to provide the Company $20 million to
continue its operations through February 15, 2000.
In addition to the interim funding of Iridium, Motorola has continued to operate
and maintain the satellite constellation without any cash payment for this
service. Motorola will be under no obligation to provide this service after
February 15, 2000 unless it is paid for the service on a current basis in cash.
4. USE OF ESTIMATES
<PAGE> 7
The preparation of financial statements in accordance with GAAP requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosures of contingent assets and liabilities at
the date of the financial statements and the reported amounts of revenue and
expenses during the reporting period. Actual results could differ from those
estimates.
5. LIABILITIES SUBJECT TO COMPROMISE
Obligations classified in the November 30, 1999 balance sheet as liabilities
subject to compromise are those obligations that were incurred prior to the
Petition Date. The ultimate disposition of such liabilities is not currently
determinable.
6. GUARANTEED BANK FACILITY
On November 15, 1999, Motorola paid the banks approximately $743 million to
satisfy all of its guarantee obligations under the Parent's Guaranteed Bank
Facility. Pursuant to the Motorola Memorandum of Understanding between Motorola
and the Parent, the Parent is obligated to compensate Motorola for this payment
to the banks. Any such obligation to Motorola for the payment thereof is subject
to compromise under the Chapter 11 proceedings.
<PAGE> 8
IRIDIUM LLC
(DEBTOR-IN-POSSESSION)
SCHEDULE OF TAXES PAID
FOR THE PERIOD FROM NOVEMBER 1, 1999 THROUGH NOVEMBER 30, 1999
<TABLE>
<CAPTION>
Pay Period Amount
---------- ------
<S> <C> <C>
Gross Wages and Salaries paid 15-Nov-99 $ 3,025,501 (includes $1,499,688 of retention and $222,734 of severance)
30-Nov-99 $ 1,495,739 (includes $46,426 of retention and $223,329 of severance)
============
$ 4,521,240
============
</TABLE>
<TABLE>
<CAPTION>
Payroll Employer
Pay Period Withholding Contribution Amount Date Paid
---------- ----------- ------------ ------ ---------
<S> <C> <C> <C> <C> <C>
Payroll Taxes:
Federal Withholding 15-Nov-99 $ 707,048 $ - $ 707,048 15-Nov-99
Federal Withholding 30-Nov-99 $ 305,888 $ - $ 305,888 30-Nov-99
State Withholding 15-Nov-99 $ 175,088 $ - $ 175,088 15-Nov-99
State Withholding 30-Nov-99 $ 86,998 $ - $ 86,998 30-Nov-99
FICA and Medicare 15-Nov-99 $ 90,483 $ 90,483 $ 180,966 15-Nov-99
FICA and Medicare 30-Nov-99 $ 50,481 $ 50,481 $ 100,962 30-Nov-99
Federal Unemployment Taxes 15-Nov-99 $ - $ 153 $ 153 15-Nov-99
Federal Unemployment Taxes 30-Nov-99 $ - $ 71 $ 71 30-Nov-99
State Unemployment Taxes 15-Nov-99 $ - $ 577 $ 577 15-Nov-99
State Unemployment Taxes 30-Nov-99 $ - $ 365 $ 365 30-Nov-99
===============================================
$1,415,986 $ 142,130 $1,558,116
===============================================
</TABLE>
<TABLE>
<CAPTION>
Period
Covered Accrued Date Paid
------- ------- ---------
<S> <C> <C> <C>
Sales, Use and Excise Taxes:
Use Taxes paid - District of Columbia 11/01 - 11/30 $ 11,524 Due 12/20/99
Use Taxes paid - Virginia 11/01 - 11/30 $ -
Use Taxes paid - Arizona 11/01 - 11/30 $ -
Property Taxes:
District of Columbia $ 159,940 Due 7/31/2000
Virginia $ 142,274 Due 9/30/2000
</TABLE>
Page 6
<PAGE> 9
IRIDIUM LLC
(DEBTOR-IN-POSSESSION)
PAYMENTS TO PROFESSIONALS UNDER CODE SECTION 327
<TABLE>
<CAPTION>
INVOICE
---------------------------------------------------------------
PERIOD
PROFESSIONAL DESCRIPTION OF SERVICES COVERED FEES HOLDBACK EXPENSES TOTAL PAID
------------ ----------------------- ------- ---- -------- -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
September 14 - 30 Payments
- ----------------------------
Subtotal - - - -
---------- ---------- ------------ ---------
October Payments
- ----------------
Subtotal - - - -
--------- ---------- ------------ ---------
November Payments
- -----------------
Donaldson, Lufkin & Jenrette Debtor Financial Advisors 9/15 - 400,000 - 93,603 493,603
11/15 ---------- ---------- ------------ ---------
Subtotal 400,000 - 93,603 493,603
---------- ---------- ------------ ---------
Total $ 400,000 $ - $ 93,603 $ 493,603
========== ========== ============ =========
</TABLE>
<PAGE> 10
IRIDIUM LLC
(DEBTOR-IN-POSSESSION)
CASE NUMBER 99-45005(CB)
INSURANCE
I, David R. Gibson, Chief Financial Officer of Iridium LLC, the debtor and
debtor-in-possession, verify to the best of my knowledge that all insurance
policies are fully paid for the current period, and that amounts for workers
compensation and disability insurance have been paid.
/s/ DAVID R. GIBSON
---------------------------
DAVID R. GIBSON
CHIEF FINANCIAL OFFICER
DATE: DECEMBER 23, 1999
<PAGE> 1
SHEARMAN & STERLING
COUNSEL FOR DEBTOR AND DEBTOR-IN-POSSESSION
NEW YORK, NY 10022-6069
(212) 848-4000
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF NEW YORK
IN RE:
IRIDIUM WORLD COMMUNICATIONS LTD.
CASE NO. 99-45759-CB
CHAPTER 11
MONTHLY OPERATING STATEMENT
FOR THE PERIOD NOVEMBER 1, 1999 THROUGH NOVEMBER 30, 1999
DISBURSEMENTS: (IN THOUSANDS) $0
-------------
OPERATING LOSS: (IN THOUSANDS) $79
-------------
THIS OPERATING STATEMENT MUST BE SIGNED BY A REPRESENTATIVE OF THE DEBTORS
THE UNDERSIGNED, HAVING REVIEWED THE ATTACHED AND BEING FAMILIAR WITH THE
DEBTORS' FINANCIAL AFFAIRS, VERIFIES UNDER THE PENALTY OF THE PERJURY, THAT THE
INFORMATION CONTAINED THEREIN IS COMPLETE, ACCURATE AND TRUTHFUL TO THE BEST OF
MY KNOWLEDGE.
DATE: DECEMBER 23, 1999 /s/ F. THOMAS TUTTLE
----------------------- -----------------------------------
F. THOMAS TUTTLE, SECRETARY
INDICATE IF THIS IS AN AMENDED STATEMENT BY CHECKING HERE:
AMENDED STATEMENT ________
<PAGE> 2
HEADNOTE
These unaudited condensed financial statements have been prepared for the
purpose of filing with the United States Bankruptcy Court for the Southern
District of New York. These condensed financial statements have not been
prepared in accordance with generally accepted accounting principles ("GAAP")
because Statement of Financial Accounting Standards No. 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of"
("SFAS 121") has not been applied to Iridium LLC, the investee entity, and
certain other disclosures required under GAAP have been omitted. The Company
expects that, upon application of SFAS 121, the carrying amount of Iridium LLC's
long-lived assets will be written down by a material amount; however, at this
time it is not possible to determine such amount. In the opinion of management,
all other accounting principles applicable to the Company have been applied in
the accompanying consolidated financial statements and all adjustments necessary
for a fair presentation of such information have been made. However, there could
also be year-end audit adjustments and adjustments as a result of the Company's
filing for protection under Chapter 11 of the United States Bankruptcy Code.
IRIDIUM WORLD COMMUNICATIONS LTD.
(DEBTOR-IN-POSSESSION)
UNAUDITED CONDENSED BALANCE SHEET
(IN THOUSANDS)
<TABLE>
<CAPTION>
11/30/1999
----------
<S> <C>
ASSETS
Cash $ -
Investment in Iridium LLC -
----------
Total assets $ -
==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities not subject to compromise $ -
Liabilities subject to compromise -
==========
Total liabilities -
Stockholders' equity
Common stock 197
Additional paid-in capital 489,439
Accumulated deficit (489,636)
----------
Total stockholders' equity -
----------
Total liabilities and stockholders' equity $ -
==========
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE> 3
HEADNOTE
These unaudited condensed financial statements have been prepared for the
purpose of filing with the United States Bankruptcy Court for the Southern
District of New York. These condensed financial statements have not been
prepared in accordance with generally accepted accounting principles ("GAAP")
because Statement of Financial Accounting Standards No. 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of"
("SFAS 121") has not been applied to Iridium LLC, the investee entity, and
certain other disclosures required under GAAP have been omitted. The Company
expects that, upon application of SFAS 121, the carrying amount of Iridium LLC's
long-lived assets will be written down by a material amount; however, at this
time it is not possible to determine such amount. In the opinion of management,
all other accounting principles applicable to the Company have been applied in
the accompanying consolidated financial statements and all adjustments necessary
for a fair presentation of such information have been made. However, there could
also be year-end audit adjustments and adjustments as a result of the Company's
filing for protection under Chapter 11 of the United States Bankruptcy Code.
IRIDIUM WORLD COMMUNICATIONS LTD.
(DEBTOR-IN-POSSESSION)
UNAUDITED CONDENSED STATEMENT OF LOSS
(IN THOUSANDS)
<TABLE>
<CAPTION>
PERIOD FROM
NOVEMBER 1, 1999
THROUGH
NOVEMBER 30, 1999
-----------------
<S> <C>
Equity in loss of Iridium LLC $ -
-----------
Loss before reorganization items -
-----------
Reorganization expense items:
Professional fees 79
-----------
79
-----------
Loss before income taxes 79
Income taxes -
-----------
Net Loss $ 79
===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE> 4
HEADNOTE
These unaudited condensed financial statements have been prepared for the
purpose of filing with the United States Bankruptcy Court for the Southern
District of New York. These condensed financial statements have not been
prepared in accordance with generally accepted accounting principles ("GAAP")
because Statement of Financial Accounting Standards No. 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of"
("SFAS 121") has not been applied to Iridium LLC, the investee entity, and
certain other disclosures required under GAAP have been omitted. The Company
expects that, upon application of SFAS 121, the carrying amount of Iridium LLC's
long-lived assets will be written down by a material amount; however, at this
time it is not possible to determine such amount. In the opinion of management,
all other accounting principles applicable to the Company have been applied in
the accompanying consolidated financial statements and all adjustments necessary
for a fair presentation of such information have been made. However, there could
also be year-end audit adjustments and adjustments as a result of the Company's
filing for protection under Chapter 11 of the United States Bankruptcy Code.
IRIDIUM WORLD COMMUNICATIONS LTD.
(DEBTOR-IN-POSSESSION)
UNAUDITED CONDENSED STATEMENT OF CASH FLOWS
(IN THOUSANDS)
<TABLE>
<CAPTION>
PERIOD FROM
NOVEMBER 1, 1999
THROUGH
NOVEMBER 30, 1999
-------------------
<S> <C>
Cash flows from operating activities:
Net loss before reorganization items $ -
Adjustments to reconcile net loss before
reorganization items to net cash used:
Equity in loss of Iridium LLC -
-------------
-
-------------
Net loss from reorganization items (79)
Professional fees to be paid for by Iridium LLC 79
-------------
-
-------------
Net cash used in operating activities -
-------------
Cash flows from investing activities:
Net cash used in investing activities -
-------------
Cash flows from financing activities:
Net cash provided by financing activities -
-------------
Increase (decrease) in cash and cash equivalents -
Cash and cash equivalents, beginning of period -
-------------
Cash and cash equivalents, end of period $ -
=============
Supplemental disclosures of cash flow information:
Cash paid for reorganization items:
Professional fees -
=============
-
=============
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE> 5
NOTES TO THE UNAUDITED FINANCIAL STATEMENTS
1. ORGANIZATION AND BUSINESS
Iridium World Communications Ltd. ("IWCL", the "Debtor" or the "Company") was
incorporated under the laws of Bermuda on December 12, 1996. At inception, IWCL
was wholly owned by Iridium LLC ("ILLC"), a Delaware limited liability company.
In June 1997, IWCL consummated an initial public offering and issued 12,000,000
shares of Class A Common Stock. Pursuant to the 1997 Subscription Agreement
between IWCL and ILLC, approximately $225 million in net proceeds from the
Offering were invested in 12,000,000 Class 1 Membership Interests of ILLC (Class
1 Interests), at which time the outstanding shares of Class A Common Stock held
by ILLC were retired, and IWCL became a member of ILLC.
On January 21, 1999, IWCL issued 7,500,000 shares of Class A Common Stock in a
public offering resulting in net proceeds of $242,400,000. Pursuant to the Share
Issuance Agreement between IWCL and ILLC, such proceeds were used by IWCL to
purchase 7,500,000 Class 1 Interests in ILLC.
ILLC through its wholly-owned subsidiary Iridium Operating LLC ("IOLLC"), a
Delaware limited liability company, has completed its efforts to develop and
deploy a global wireless personal communications system. IOLLC commenced
commercial satellite phone service on November 1, 1998 and commercial satellite
paging service on November 15, 1998. ILLC's transition from a development stage
limited liability company to an operating limited liability company has been
adversely affected by various factors, including much slower than expected
subscriber growth. As a result of these factors, on August 13, 1999, bankruptcy
petitions were filed with respect to ILLC and certain of their affiliates. See
Note 3 for a description of the bankruptcy proceedings.
IWCL's sole asset is its investment in ILLC. As of November 30, 1999, IWCL owned
19,753,238 Class 1 Interests, representing approximately 13.25% of the total
outstanding Class 1 Interests in ILLC.
2. BASIS OF PRESENTATION
These unaudited financial statements have been prepared for the purpose of
filing with the United States Bankruptcy Court for the Southern District of New
York. These unaudited financial statements have not been prepared in accordance
with generally accepted accounting principles ("GAAP") because Statement of
Financial Accounting Standards No. 121, "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to be Disposed of" ("SFAS 121") has
not been applied by ILLC, and certain other disclosures required under GAAP have
been omitted.
SFAS 121 requires a company to evaluate the recoverability of its long-lived
assets whenever events or circumstances indicate that the carrying amount of
such assets may be impaired. If considered impaired, SFAS 121 requires that the
long-lived assets be written down to fair value. ILLC's long-lived assets are
comprised of the Iridium Space System and related assets. The Company expects
that, upon application of SFAS 121, the carrying amount of ILLC's long-lived
assets will be written down by a material amount; however, at this time it is
not possible to determine such amount. The accompanying unaudited financial
statements also omit certain disclosures required under GAAP, including earnings
(loss) per share data.
With the exceptions described above, in the opinion of management, all other
accounting principles applicable to the Company have been applied in the
accompanying unaudited financial statements and all adjustments necessary for a
fair presentation of such information have been
<PAGE> 6
made. However, there could also be year-end audit adjustments and adjustments to
certain other accounts as a result of the Company's filing for protection under
Chapter 11 of the United States Bankruptcy Code.
In connection with the bankruptcy proceedings the Company has adopted AICPA
Statement of Position 90-7, "Financial Reporting by Entities in Reorganization
Under the Bankruptcy Code" ("SOP 90-7"). SOP 90-7 requires entities in
bankruptcy to present their pre-petition liabilities on the basis of the
expected amount of allowed claims in accordance with Statement of Financial
Accounting Standards No. 5, "Accounting for Contingencies".
3. BANKRUPTCY FILING
On August 13, 1999 (the "Petition Date"), certain creditors of IOLLC and its
subsidiary, Iridium Capital Corporation filed involuntary bankruptcy petitions
against them in the United States Bankruptcy Court for the Southern District of
New York (the "Court"). Also, on August 13, 1999, the ILLC, IOLLC, Iridium
Capital Corporation and IWCL filed voluntary petitions in the United States
Bankruptcy Court for the District of Delaware. On August 16, 1999, the Court
entered an order, which, among other things, stayed the Delaware petitions. On
September 13, 1999 (the "Conversion Date"), the Court entered an order granting
the ILLC, IOLLC, IWCL and Iridium Capital Corporation relief under Chapter 11 of
Title 11 of the US Bankruptcy Code (the "Bankruptcy Code"). Additionally, on the
Conversion Date, three additional IOLLC subsidiaries, Iridium IP LLC, Iridium
(Potomac) LLC and Iridium Roaming LLC and on December 16, 1999 Iridium
Promotions, Inc. (together and collectively with the other companies the
"Debtors") filed voluntary petitions for relief under Chapter 11 of the
Bankruptcy Code.
In Chapter 11 bankruptcy proceedings, certain claims in existence prior to the
order of relief, including pending litigation against the Company are stayed
while the Company continues it's business operations as a debtor-in-possession.
These accrued claims are reflected in the balance sheets as "Liabilities Subject
to Compromise". Additional liabilities subject to compromise may arise
subsequent to the filing date resulting from rejection of executory contracts,
including leases, and from the determination by the Court (or agreed to by
parties in interest) of allowed claims for contingencies and other disputed
amounts. Prior to the Conversion Date, the Debtors continued to pay expenses and
claims, including pre-petition claims. The Debtors received approval from the
Bankruptcy Court, effective September 13, 1999, to pay certain of its
pre-petition and pre-conversion obligations, including employee wages and
related taxes and gap period claims (those claims incurred between the Debtors'
Petition Date and the Conversion Date).
From the Conversion Date until December 15, 1999, ILLC's operations were funded
pursuant to cash collateral orders agreed to by the lenders and approved by the
Court. On December 15, 1999, the Court approved an extension of the use of cash
collateral through February 15, 2000, provided, however, that all cash subject
to the bank lien be used only to pay interest to the lenders and certain other
limited expenses. To fund ongoing operations and restructuring costs, current
investors, led by Motorola, agreed to provide ILLC $20 million to continue its
operations through February 15, 2000.
In addition to the interim funding of ILLC, Motorola has continued to operate
and maintain the satellite constellation without any cash payment for this
service. Motorola will be under no obligation to provide this service after
February 15, 2000 unless it is paid for the service on a current basis in cash.
IWCL and ILLC operate under a Management Services Agreement, whereby, ILLC
manages the day-to-day operations of IWCL, including, but not limited to, the
treasury and accounting functions. ILLC receives no fees or reimbursement from
IWCL for these services.
<PAGE> 7
4. INVESTMENT IN IRIDIUM LLC
IWCL's sole asset is its investment in Iridium LLC. For the period from November
1 through November 30, 1999, IWCL's equity in losses of ILLC were approximately
$15.1 million. Because IWCL has recognized losses to date that equal IWCL's
investment in ILLC and since IWCL has no commitment to fund losses of ILLC
beyond its investment, losses of ILLC otherwise attributable to IWCL have not
been recognized to the extent such losses exceed IWCL's investment in ILLC.
Substantially all liabilities of ILLC and its subsidiaries are subject to
compromise or other treatment under a plan of reorganization that must be
confirmed by the Court after a vote of ILLC and subsidiaries' impaired
claimants. The ultimate effect of the Chapter 11 bankruptcy proceedings on each
of the various claimants will depend on a variety of factors, including, without
limitation, the specific terms of a confirmed plan of reorganization and the
relative rank of each claim among the priorities established by the Bankruptcy
Code. In addition, there can be no assurance that ILLC and its subsidiaries will
successfully reorganize under the Chapter 11 proceeding. Accordingly, the
ultimate effect of ILLC's bankruptcy proceeding on IWCL, is not currently
determinable.
<PAGE> 8
IRIDIUM WORLD COMMUNICATIONS LTD.
(DEBTOR-IN-POSSESSION)
SCHEDULE OF TAXES PAID
FOR THE PERIOD FROM NOVEMBER 1, 1999 THROUGH NOVEMBER 30, 1999
Payroll Taxes: Not applicable
Sales, Use and Excise Taxes: Not applicable
Property Taxes: Not applicable
Page 6
<PAGE> 9
IRIDIUM WORLD COMMUNICATIONS LTD.
(DEBTOR-IN-POSSESSION)
CASE NUMBER 99-45759(CB)
INSURANCE
I, F. Thomas Tuttle, Secretary of Iridium World Communications Ltd., the debtor
and debtor-in-possession, verify that to the best of my knowledge all insurance
policies are fully paid for the current period.
/s/ F. THOMAS TUTTLE
-----------------------------
F. THOMAS TUTTLE
SECRETARY
DATE: DECEMBER 23, 1999
