<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:) February 28, 2000
<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.
The Parent noted that recent trading in the stock of its public investment
vehicle, IWCL, does not reflect the reality of its financial situation. The
stock of IWCL was de-listed by NASDAQ on November 19, 1999 and is now trading
on the "pink sheets." The Parent is in a Chapter 11 bankruptcy reorganization
proceeding and, based on its debt level in excess of $4 billion and the legal
priorities in bankruptcy, the Parent believes that any reorganization or
liquidation will not result in any value remaining from the bankruptcy estate
for holders of publicly traded equity.
Item 5. Other Events
On February 28, 2000 Parent and IWCL filed Monthly Operating Statements for the
period January 1, 2000 through January 31, 2000 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
January 1, 2000 through January 31, 2000
99.2 IWCL Monthly Operating Statement for the period
January 1, 2000 through January 31, 2000
</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: February 29, 2000
<PAGE> 1
EXHIBIT 99.1
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:
<TABLE>
<S> <C>
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
</TABLE>
MONTHLY OPERATING STATEMENT
FOR THE PERIOD JANUARY 1, 2000 THROUGH JANUARY 31, 2000
<TABLE>
<CAPTION>
Disbursements: (in thousands)
<S> <C>
Iridium LLC $93
--------------------------
Iridium Operating LLC $13,852
--------------------------
Operating Loss: (in thousands) $112,588
--------------------------
</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.
<TABLE>
<S> <C>
DATE: FEBRUARY 28, 2000 /s/ DAVID R. GIBSON
---------------------------------------- ----------------------------------------------------------
David R. Gibson, Chief Financial Officer
</TABLE>
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>
JANUARY 31, 2000
----------------
<S> <C>
ASSETS
Current assets:
Cash and cash equivalents (Note 3) $ 6,422
Restricted cash (Note 3) 167,260
Accounts receivable, net of allowance 3,752
Due from Affiliates, net of allowance 1,352
Prepaid expenses and other current assets 16,942
----------------
Total current assets 195,728
Property and equipment, net 2,963,558
Other assets 16,014
----------------
Total assets $ 3,175,300
================
LIABILITIES AND MEMBERS' DEFICIT
Liabilities not subject to compromise
Current liabilities
Accounts payable and accrued expenses $ 16,980
Due to Member 277,385
Due to Affiliates 3,200
Senior Secured Bank Facility 800,000
----------------
Total current liabilities 1,097,565
Deferred liabilities 54,159
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 605
Pre-petition interest payable 104,601
Pre-petition accounts payable-trade 13,213
Pre-petition accrued liabilities 3,534
Accrued pension liabilities 11,616
----------------
3,271,676
----------------
Total Liabilities 4,423,400
================
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 (3,649,367)
----------------
Total members' deficit (1,248,100)
----------------
Total liabilities and members' deficit $ 3,175,300
================
</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
JANUARY 1, 2000
THROUGH JANUARY 31, 2000
------------------------
<S> <C>
Revenue $ 1,548
Costs and expenses:
Sales, general and administrative 8,009
Operations and maintenance expense 25,209
Depreciation and amortization 68,739
Interest expense 8,574
------------------------
110,531
------------------------
Loss before reorganization items 108,983
------------------------
Reorganization expense items:
Professional fees 2,241
Employee retention costs 2,176
Interest income (812)
------------------------
3,605
------------------------
Net Loss $ 112,588
========================
</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 JANUARY 1, 2000
THROUGH JANUARY 31, 2000
---------------------------
<S> <C>
Cash flows from operating activities:
Net loss before reorganization items $ (108,983)
Adjustments to reconcile net loss before reorganization items to net cash used:
Depreciation and amortization 68,739
Amortization of financing costs 1,306
Loss on disposal of assets 109
Changes in assets and liabilities:
Increase in accounts receivable (1,348)
Decrease in prepaid expenses and other current assets 1,526
Increase in due to/from affiliates 811
Decrease in other assets 24
Increase in accounts payable and accrued expenses 26,647
Increase in other liabilities 1,751
---------------------------
(9,418)
---------------------------
Net loss from reorganization items (3,605)
Adjustments to reconcile net loss from reorganization items to net cash used:
Changes in assets and liabilities:
Increase in accounts payable and accrued expenses 698
---------------------------
(2,907)
---------------------------
Net cash used in operating activities (12,325)
---------------------------
Cash flows from investing activities:
Purchases of property and equipment (5)
---------------------------
Net cash used in investing activities (5)
---------------------------
Cash flows from financing activities:
Reorganization item:
Proceeds from restricted cash 2,861
---------------------------
Net cash provided by financing activities 2,861
---------------------------
Increase (decrease) in cash and cash equivalents (9,469)
Cash and cash equivalents, beginning of period 15,891
---------------------------
Cash and cash equivalents, end of period $ 6,422
===========================
Supplemental disclosures of cash flow information:
Interest paid 3,937
Cash paid for reorganization items:
Professional fees 382
Workforce reduction costs 31
Employee retention program 3,306
Interest earned on accumulated cash resulting from Chapter 11 proceeding (812)
---------------------------
2,907
</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).
The equity and liabilities of Parent as of the Petition Date are subject to
compromise or other treatment as determined by the Court. The ultimate effects
of the bankruptcy proceedings on each of the various constituencies will depend
on a variety of factors, including, without limitation, the amount of proceeds
realized by the Company on the sale of its assets, the validity or perfection of
security interests granted to certain lenders and the amount and relative rank
of each claim among the priorities established by the Bankruptcy Code. The stock
of IWCL was de-listed by NASDAQ on November 19, 1999 and is now trading on the
"pink sheets." Based on the Company's debt level in excess of $4 billion and the
legal priorities in bankruptcy, the Company believes that any reorganization or
liquidation will not result in any value remaining from the bankruptcy estate
for holders of publicly traded equity. The Company currently expects to sell all
or substantially all of its operating assets in a sale under Court supervision;
however, there can be no assurance that any such sale will be consumated.
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. As a result, approximately $167 million of cash subject
to the bank lien has been recognized as restricted cash in the accompanying
financial statements. To fund ongoing operations and restructuring costs,
current investors, led by Motorola, agreed to provide the Company a non-interest
bearing loan of $20 million to continue its operations through February 15,
2000. The loan funded certain expenditures incurred through February 15, 2000.
On February 14, 2000, the loan was extended through February 18, 2000 and on
February 17, 2000 the loan was increased by $5 million and extended through
March 6, 2000. The remaining outstanding portion of the loan will be treated as
a post-petition liability subordinate to other post-petition liabilities and the
$800 million Senior Secured
<PAGE> 7
Bank Facility. As of January 31, 2000 the loan is classified under Liabilities
Not Subject to Compromise - Due to Member.
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
March 6, 2000 unless it is paid for the service on a current basis in cash.
4. USE OF ESTIMATES
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 January 31, 2000 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.
<PAGE> 8
IRIDIUM LLC
(DEBTOR-IN-POSSESSION)
SCHEDULE OF TAXES PAID
FOR THE PERIOD FROM JANUARY 1, 2000 THROUGH JANUARY 31, 2000
<TABLE>
<CAPTION>
Pay Period Amount
---------- ------
<S> <C> <C>
Gross Wages and Salaries paid 15-Jan-00 $ 4,059,995 (includes $2,894,395 of retention and $23,688 of severance)
31-Jan-00 1,139,328 (includes $2,848 of retention and $5,271 of severance)
--------------------
$ 5,199,323
====================
</TABLE>
<TABLE>
<CAPTION>
Payroll Employer
Pay Period Withholding Contribution Amount Date Paid
---------- ----------- ------------ ------ ---------
<S> <C> <C> <C> <C> <C>
Payroll Taxes:
Federal Withholding 15-Jan-00 $ 933,791 $ - $ 933,791 15-Jan-00
Federal Withholding 31-Jan-00 206,798 - 206,798 31-Jan-00
State Withholding 15-Jan-00 225,456 - 225,456 15-Jan-00
State Withholding 31-Jan-00 59,993 - 59,993 31-Jan-00
FICA and Medicare 15-Jan-00 305,960 305,960 611,921 15-Jan-00
FICA and Medicare 31-Jan-00 83,179 83,178 166,357 31-Jan-00
Federal Unemployment Taxes 15-Jan-00 - 14,629 14,629 15-Jan-00
Federal Unemployment Taxes 31-Jan-00 - 1,033 1,033 31-Jan-00
State Unemployment Taxes 15-Jan-00 - 53,970 53,970 15-Jan-00
State Unemployment Taxes 31-Jan-00 - 4,806 4,806 31-Jan-00
-------------------------------------------------------------
$ 1,815,176 $ 463,577 $ 2,278,753
=============================================================
</TABLE>
<TABLE>
<CAPTION>
Period
Covered Amount Date Paid
------- ------ ---------
<S> <C> <C> <C>
Sales, Use and Excise Taxes:
Use Taxes paid -
District of Columbia None
Use Taxes paid - Virginia 12/01 - 12/31 $ 106 1/21/2000
Use Taxes paid - Arizona None
Property Taxes:
District of Columbia None
Virginia None
</TABLE>
<PAGE> 9
IRIDIUM LLC
(DEBTOR-IN-POSSESSION)
SCHEDULE OF PAYMENTS TO PROFESSIONALS UNDER CODE SECTION 327
FOR THE PERIOD FROM JANUARY 1, 2000 THROUGH JANUARY 31, 2000
<TABLE>
<CAPTION>
AMOUNTS PAID
---------------------------------------------------------------
RETAINER
PROFESSIONAL DESCRIPTION OF SERVICES PERIOD COVERED FEES HOLDBACK DEDUCTION
- ------------ ----------------------- -------------- ---- -------- ---------
<S> <C> <C> <C> <C> <C>
Donaldson, Lufkin & Jenrette Debtor Financial Advisors 1/1/00 - 1/31/00 $ 200,000 $ - $ -
Young, Conway & Stargatt Debtor Legal Counsel 8/14/99 - 8/31/99 16,940 - (20,649)
------------ ------------- --------------
Total $ 216,940 $ - $ (20,649)
============ ============= ==============
<CAPTION>
AMOUNTS PAID
---------------------------
PROFESSIONAL DESCRIPTION OF SERVICES EXPENSES TOTAL PAID
- ------------ ----------------------- -------- ----------
<S> <C> <C> <C>
Donaldson, Lufkin & Jenrette Debtor Financial Advisors $ 57,379 $ 257,379
Young, Conway & Stargatt Debtor Legal Counsel 3,709 -
------------ ------------
Total $ 61,088 $ 257,379
============ ============
</TABLE>
<PAGE> 10
IRIDIUM LLC
(DEBTOR-IN-POSSESSION)
CASE NUMBER 99-450005(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: FEBRUARY 28, 2000
<PAGE> 1
EXHIBIT 99.2
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:
<TABLE>
<S> <C>
Iridium World Communications Ltd.
Case No. 99-45759-CB
Chapter 11
</TABLE>
MONTHLY OPERATING STATEMENT
FOR THE PERIOD JANUARY 1, 2000 THROUGH JANUARY 31, 2000
<TABLE>
<S> <C>
Disbursements: (in thousands) $0
--------------------------
Operating Loss: (in thousands) $100
--------------------------
</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.
<TABLE>
<S> <C>
DATE: February 28, 2000 /s/ F. THOMAS TUTTLE
----------------------------------- -----------------------------------------------
F. Thomas Tuttle, Secretary
</TABLE>
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>
JANUARY 31, 2000
----------------
<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 489,639
Accumulated deficit (489,836)
----------------
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 JANUARY 1, 2000
THROUGH JANUARY 31, 2000
------------------------
<S> <C>
Equity in loss of Iridium LLC $ -
------------------------
Loss before reorganization item -
------------------------
Reorganization expense item:
Professional fees 100
------------------------
100
------------------------
Loss before income taxes 100
Income taxes -
------------------------
Net Loss $ 100
========================
</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 JANUARY 1, 2000
THROUGH JANAURY 31, 2000
---------------------------
<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 item (100)
Professional fees to be paid for by Iridium LLC 100
---------------------------
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 item:
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 January 31, 2000, 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, 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 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 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).
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 with a non-interest bearing
loan of $20 million to continue its operations through February 15, 2000. The
loan funded certain expenditures incurred through February 15, 2000. On February
14, 2000 the loan was extended through February 18, 2000 and on February 17,
2000 the loan was increased by $5 million and extended through March 6, 2000.
The remaining outstanding portion of the loan will be treated as a post-petition
liability subordinate to other post-petition liabilities and the $800 million
Senior Secured Bank Facility.
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
March 6, 2000 unless it is paid for the service on a current basis in cash.
<PAGE> 7
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 and pays the costs related to the bankruptcy
proceedings. ILLC receives no fees or reimbursement from IWCL for these
services.
4. INVESTMENT IN IRIDIUM LLC
IWCL's sole asset is its investment in Iridium LLC. For the period from January
1 through January 31, 2000, IWCL's equity in losses of ILLC were approximately
$14.9 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.
The equity and liabilities of ILLC and its subsidiaries are subject to
compromise or other treatment as determined by the Court. The ultimate effect of
the bankruptcy proceedings on each of the various claimants will depend on a
variety of factors, including, without limitation, the amount of proceeds
realized by ILLC on the sale of its assets, the validity or perfection of
security interests granted to certain lenders and the amount and relative rank
of each claim among the priorities established by the Bankruptcy Code. The stock
of IWCL was de-listed by NASDAQ on November 19, 1999 and is now trading on the
"pink sheets." Based on ILLC's debt level in excess of $4 billion and the legal
priorities in bankruptcy, ILLC believes that any reorganization or liquidation
will not result in any value remaining from the bankruptcy estate for holders of
publicly traded equity. ILLC currently expects to sell all or substantially all
of its operating assets in a sale under Court supervision; however, there can be
no assurance that any such sale will be consumated.
<PAGE> 8
Iridium World Communications Ltd.
(Debtor-in-Possession)
Schedule of Taxes Paid
For the period from January 1, 2000 through January 31, 2000
<TABLE>
<S> <C>
Payroll Taxes: Not applicable
Sales, Use and Excise Taxes: Not applicable
Property Taxes: Not applicable
</TABLE>
Page 6
<PAGE> 9
IRIDIUM WORLD COMMUNICATIONS LTD.
(DEBTOR-IN-POSSESSION)
CASE NUMBER 99-B-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: February 28, 2000
