WEST CORP

Assets Held for Sale—On June 21, 2016, we completed the sale of land, buildings and improvements which were previously classified as held for sale. Proceeds from the sale were $38.8 million, excluding related expenses. In connection with this sale, we realized a pre-tax gain of approximately $19.0 million. We also entered into a 12-year leaseback agreement for one of the buildings. This lease is classified as an operating lease and the related $6.1 million gain, included in the $19.0 million realized gain is being deferred and recognized over the lease term.

Any notional shares accrued under the West Corporation Nonqualified Deferred Compensation Plan will be valued based on the Merger Consideration and will be notionally reinvested in one or more other “measurement funds” (as defined under the West Corporation Nonqualified Deferred Compensation Plan) as determined by the Company prior to the effective time of the Merger until such accounts are distributed to participants in connection with the termination and pay-out of the Company’s existing account balance deferred compensation plans on the later to occur of (i) December 31, 2017 and (ii) the closing date, in accordance with the terms of such plan and applicable law or such other date as may be established by the Company in accordance with such plan and applicable law.

In connection with the transactions contemplated by the Merger Agreement between the Company and affiliates of certain funds managed by affiliates of Apollo Global Management, LLC, five putative class action lawsuits were filed between June 26, 2017 and June 29, 2017 in the United States District Court for the District of Nebraska: Scarantino v. West Corp., et al., 4:17-cv-03080-JMG-CRZ (D. Neb.); Wyant v. West Corp., et al., 4:17-cv-03081-JMG-CRZ (D. Neb.); Wilson v. West Corp., et al., 8:17-cv-00228-JMG-CRZ (D. Neb.); Bushansky v. West Corp., et al., 4:17-cv-03083-JMG-CRZ (D. Neb.); and Katz v. West Corp. et al., 4:17-cv-03084-JMG-CRZ (D. Neb.).  The lawsuits were each filed against West and the members of the Board, and two of the lawsuits were additionally filed against Apollo Global Management and certain affiliates of funds managed by Apollo Global Management, Mount Olympus Holdings, Inc. and Olympus Merger Sub, Inc. Each alleges that the proxy statement filed in connection with the Merger violated federal securities laws in purportedly omitting to disclose information necessary to make the statements therein not materially false or misleading, including, among other things, certain financial information. One of the lawsuits additionally alleges that our directors breached their fiduciary duties in, among other things, purportedly conducting an inadequate sales process that resulted in an offer that purportedly undervalues the Company, and in filing the purportedly misleading proxy statement. On July 19, 2017, West supplemented its disclosures with respect to the transaction. On July 19, 2017, the plaintiffs in these five actions entered into a Memorandum of Understanding with the defendants that provides for, among other things, the voluntary dismissal of the actions on mootness grounds with prejudice as to the named plaintiffs.

These forward-looking statements are only predictions. These statements relate to future events or our future financial performance and involve known and unknown risks, uncertainties and other important factors that may cause our actual results, levels of activity, performance or achievements to materially differ from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to, the risk that the proposed transaction with affiliates of Apollo Global Management, LLC may not be completed in a timely manner, or at all, which may adversely affect our business and the price of our common stock; the failure to satisfy the conditions to the consummation of the proposed transaction, including the receipt of certain governmental and regulatory approvals; the occurrence of any event, change or other circumstance that could give rise to the termination of the Merger Agreement (as defined below); the effect of the announcement or pendency of the proposed transaction on our business relationships, operating results, and business generally; risks that the proposed transaction disrupts our current plans and operations and potential difficulties in our employee retention as a result of the proposed transaction; risks related to diverting management’s attention from our ongoing business operations; the outcome of any legal proceedings that may be instituted against us, our officers or directors related to the Merger Agreement or the proposed transaction; the possibility that competing offers or acquisition proposals for us will be made; risks regarding the failure to obtain the necessary financing to complete the proposed transaction; and risks related to the equity and debt financing and related guarantee arrangements entered into in connection with the proposed transaction; as well as those described in the “Risk Factors” section contained in our Annual Report on Form 10-K for the year ended December 31, 2016 the principal risks and uncertainties that we believe could cause actual results to differ from these forward-looking statements. Because forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified, you should not rely on these forward-looking statements as guarantees of future events.

SG&A expenses increased by $17.6 million, or 4.1%, to $448.3 million for the six months ended June 30, 2017 from $430.7 million for the six months ended June 30, 2016. SG&A expenses during the six months ended June 30, 2016 included a gain on the sale of buildings that were previously occupied by the businesses we divested in 2015. The increase in SG&A expenses during the six months ended June 30, 2017 included an increase in corporate unallocated expenses due to the mark-to-market adjustment for the increase in the value of investments in our non-qualified retirement plans and foreign exchange rate losses, acquisition costs incurred for the pending acquisition of West Corporation by certain funds managed by affiliates of Apollo Global Management, LLC,, and severance expense related to workforce adjustments. As a percentage of revenue, SG&A expenses increased to 39.1% for the six months ended June 30, 2017 compared to 37.4% for the six months ended June 30, 2016. As discussed above, the following table summarizes the primary changes in SG&A expenses for the six months ended June 30, 2017: