RESTON, Va., Aug. 7, 2015 /PRNewswire/ -- NII Holdings,
Inc. (NASDAQ: NIHD) today announced its consolidated financial
results for the second quarter of 2015. The Company reported a net
loss of 64,000 subscribers for the quarter as iDEN subscriber
losses in Brazil and Argentina exceeded 3G net additions in
Brazil. The Company ended the quarter with 6.3 million total
subscribers, a 2 percent increase from a year ago. For the quarter,
the Company generated consolidated operating revenues of
$421 million, a consolidated adjusted
OIBDA loss of $75 million, and a
consolidated operating loss of $179
million. Capital expenditures were $58 million for the quarter. The Company's
consolidated adjusted OIBDA excludes the impact of non-cash asset
impairments, restructuring charges and other unusual items.
The Company ended the quarter with $672
million in consolidated cash, cash equivalents and
short-term investments. The Company's results for the second
quarter of 2015 exclude the Company's operations in Mexico that were sold to AT&T on
April 30, 2015 and reflect the
implementation of fresh start accounting in connection with its
emergence from bankruptcy on June 26,
2015.
"We are disappointed in our performance during the second
quarter including the sequential decline in our adjusted OIBDA,
which fell short of our expectations due to our inability to
deliver on our revenue growth goals," said Steve Shindler, NII Holdings' chief executive
officer. "Subscriber growth on our 3G network in Brazil was offset by iDEN subscriber losses in
both Brazil and Argentina. Our results reflect the impact of a
challenging macroeconomic environment that is affecting the entire
wireless industry as well as the deterioration in foreign currency
exchange rates that are expected to continue to affect our
businesses in Brazil and
Argentina for the remainder of
2015. Our results to date and the negative economic outlook put us
well behind the goals we set for ourselves in the business plan
that was developed last year in connection with our Chapter 11
restructuring process. We are implementing contingency plans
designed to help us reach our long-term goals, but our focus for
the remainder of this year will be to build our 3G subscriber base
in Brazil and pursue cost saving
strategies to help improve our profitability."
NII Holdings' consolidated average monthly service revenue per
subscriber (ARPU) was $19 for the
second quarter of 2015, down from $25
in the same quarter last year, due to the year over year decline in
local currency values. The Company's consolidated average monthly
churn rate for the quarter increased to 3.69 percent from 3.30
percent in the second quarter last year due to an increase in iDEN
subscriber churn in both Brazil
and Argentina. Consolidated cost
per gross addition (CPGA) was $176
for the second quarter of 2015, a $34
decrease from the year ago period, primarily due to an increase in
new 3G postpaid subscribers in Brazil who use their own handsets rather than
purchasing a new one from the Company.
"During the quarter we successfully emerged from bankruptcy as a
more streamlined company focused on creating value through driving
quality subscriber growth," said Juan
Figuereo, NII Holdings' executive vice president and chief
financial officer. "We believe in the long-term opportunity
in Brazil, but anticipate that our
financial results will continue to be volatile in the near-term as
we strive to capture that opportunity in an uncertain economic
environment. We will deal with that volatility using the same
disciplined process that we used to manage our liquidity during our
restructuring process, prioritizing our investments while
delivering an outstanding customer experience using our high
quality network in Brazil."
The Company will not provide a financial outlook and will not
host financial results conference calls for the remainder of 2015
due to the challenging economic conditions, foreign currency
exchange rate volatility, and the recently announced transitions in
its management team. The Company currently expects to be in a
position to provide additional details about its business outlook
in connection with its report of fourth quarter and year-end 2015
results. Additional details regarding the Company's results
are included in the Company's Quarterly Report on Form 10-Q for the
second quarter that was filed with the Securities and Exchange
Commission today. Additional operational and financial
details are also available under the Investor Relations link at
www.nii.com.
In addition to the financial results prepared in accordance with
accounting principles generally accepted in the United States (GAAP) provided throughout
this press release and in the attached financial tables, NII
Holdings has presented consolidated adjusted OIBDA, ARPU, and CPGA.
These measures are non-GAAP financial measures and should be
considered in addition to, but not as substitutes for, the
information prepared in accordance with GAAP. Reconciliations from
GAAP results to these non-GAAP financial measures are provided in
the notes to the attached financial tables. To view these and other
reconciliations of non-GAAP financial measures that the Company
uses, visit the investor relations link at www.nii.com.
About NII Holdings, Inc.
NII Holdings, Inc., a publicly held company based in
Reston, VA, is a provider of
differentiated mobile communication services for businesses and
high value consumers in Latin
America. NII Holdings, operating under the Nextel brand in
Brazil and Argentina, offers fully integrated wireless
communications tools with digital cellular voice services, data
services and wireless Internet access. Visit the Company's website
at www.nii.com.
Nextel, the Nextel logo and Nextel Direct Connect are
trademarks and/or service marks of Nextel Communications,
Inc.
Visit NII Holdings' news room for news and to access our
markets' news centers: www.nii.com/newsroom.html.
Safe Harbor Statement
"Safe Harbor" Statement under the Private Securities Litigation
Reform Act of 1995. This news release includes
"forward-looking statements" within the meaning of the securities
laws. The statements in this news release regarding the business
and economic outlook, future performance and forward-looking
guidance, as well as other statements that are not historical
facts, are forward-looking statements. Forward-looking
statements are estimates and projections reflecting management's
judgment based on currently available information and involve a
number of risks and uncertainties that could cause actual results
to differ materially from those suggested by the forward-looking
statements. With respect to these forward-looking statements,
management has made assumptions regarding, among other things, the
Company's ability to meet its business plans, customer growth and
retention, pricing, network usage, operating costs, the timing of
various events, the economic and regulatory environment and the
foreign currency exchange rates that will prevail during
2015. Future performance cannot be assured and actual results
may differ materially from those in the forward-looking statements.
Some factors that could cause actual results to differ include the
risks and uncertainties relating to: the impact of liquidity
constraints, the impact of more intense competitive conditions and
changes in economic conditions in the markets the Company
serves, the performance of the Company's networks, the
Company's ability to provide services that customers want or need,
the ability of the Company to continue as a going concern, the
Company's ability to execute its business plan, and the
additional risks and uncertainties that are described in NII
Holdings' Quarterly Report on Form 10-Q for the fiscal quarter
ended June 30, 2015, as well as in
other reports filed from time to time by NII Holdings with the
Securities and Exchange Commission. This press release speaks only
as of its date, and NII Holdings disclaims any duty to update the
information herein.
Media Contacts:
NII Holdings, Inc.
1875 Explorer Street, Suite 800
Reston, VA. 20190
(703) 390-5100
www.nii.com
Investor and Media Relations: Tahmin Clarke
(703) 390-7174
tahmin.clarke@nii.com
NII HOLDINGS, INC.
AND SUBSIDIARIES
|
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
FOR THE THREE AND
SIX MONTHS ENDED JUNE 30, 2015 AND 2014 (1) (2)
|
(in millions,
except per share amounts)
|
|
Predecessor
Company
|
|
Three Months
Ended
June 30,
|
|
Six Months
Ended
June 30,
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
Operating
revenues
Service and
other revenues
|
$
|
394.2
|
|
|
$
|
523.3
|
|
|
$
|
822.2
|
|
|
$
|
1,050.0
|
|
Handset and
accessory revenues
|
26.6
|
|
|
63.6
|
|
|
61.0
|
|
|
111.5
|
|
|
420.8
|
|
|
586.9
|
|
|
883.2
|
|
|
1,161.5
|
|
Operating
expenses
Cost of
service (exclusive of depreciation and amortization
included below)
|
151.9
|
|
|
218.9
|
|
|
307.1
|
|
|
413.9
|
|
Cost of
handsets and accessories
|
78.1
|
|
|
128.3
|
|
|
153.2
|
|
|
257.0
|
|
Selling,
general and administrative
|
265.6
|
|
|
316.3
|
|
|
498.1
|
|
|
607.7
|
|
Impairment and
restructuring charges
|
29.5
|
|
|
19.4
|
|
|
36.8
|
|
|
17.4
|
|
Depreciation
|
61.5
|
|
|
111.3
|
|
|
128.1
|
|
|
195.3
|
|
Amortization
|
13.2
|
|
|
11.3
|
|
|
27.5
|
|
|
21.7
|
|
|
599.8
|
|
|
805.5
|
|
|
1,150.8
|
|
|
1,513.0
|
|
Operating
loss
|
(179.0)
|
|
|
(218.6)
|
|
|
(267.6)
|
|
|
(351.5)
|
|
Other (expense)
income
Interest
expense, net
|
(48.0)
|
|
|
(105.0)
|
|
|
(82.4)
|
|
|
(230.2)
|
|
Interest
income
|
11.3
|
|
|
11.4
|
|
|
19.6
|
|
|
28.5
|
|
Foreign
currency transaction gains (losses), net
|
14.4
|
|
|
7.0
|
|
|
(64.5)
|
|
|
9.5
|
|
Other
(expense) income, net
|
(8.9)
|
|
|
1.5
|
|
|
1.1
|
|
|
(2.5)
|
|
|
(31.2)
|
|
|
(85.1)
|
|
|
(126.2)
|
|
|
(194.7)
|
|
Loss from
continuing operations before reorganization items and income tax
provision
|
(210.2)
|
|
|
(303.7)
|
|
|
(393.8)
|
|
|
(546.2)
|
|
Reorganization
items
|
1,970.5
|
|
|
—
|
|
|
1,956.9
|
|
|
—
|
|
Income tax
provision
|
(9.0)
|
|
|
(6.8)
|
|
|
(15.6)
|
|
|
(12.3)
|
|
Net income (loss)
from continuing operations
|
1,751.3
|
|
|
(310.5)
|
|
|
1,547.5
|
|
|
(558.5)
|
|
Income (loss) from
discontinued operations, net of income
taxes
|
298.7
|
|
|
(312.8)
|
|
|
193.0
|
|
|
(440.9)
|
|
Net income
(loss)
|
$
|
2,050.0
|
|
|
$
|
(623.3)
|
|
|
$
|
1,740.5
|
|
|
$
|
(999.4)
|
|
|
|
|
|
|
|
|
|
Net income (loss)
from continuing operations per common
share, basic
|
$
|
10.12
|
|
|
$
|
(1.80)
|
|
|
$
|
8.89
|
|
|
$
|
(3.24)
|
|
Net income (loss)
from discontinued operations per common
share, basic
|
1.72
|
|
|
(1.82)
|
|
|
1.11
|
|
|
(2.56)
|
|
Net income (loss)
per common share, basic
|
$
|
11.84
|
|
|
$
|
(3.62)
|
|
|
$
|
10.00
|
|
|
$
|
(5.80)
|
|
|
|
|
|
|
|
|
|
Net income (loss)
from continuing operations per common
share, diluted
|
$
|
10.11
|
|
|
$
|
(1.80)
|
|
|
$
|
8.88
|
|
|
$
|
(3.24)
|
|
Net income (loss)
from discontinued operations per common
share, diluted
|
1.72
|
|
|
(1.82)
|
|
|
1.10
|
|
|
(2.56)
|
|
Net income (loss)
per common share, diluted
|
$
|
11.83
|
|
|
$
|
(3.62)
|
|
|
$
|
9.98
|
|
|
$
|
(5.80)
|
|
|
|
|
|
|
|
|
|
Weighted average
number of common shares outstanding,
basic
|
172.4
|
|
|
172.3
|
|
|
172.4
|
|
|
172.2
|
|
|
|
|
|
|
|
|
|
Weighted average
number of common shares outstanding,
diluted
|
172.6
|
|
|
172.3
|
|
|
172.7
|
|
|
172.2
|
|
CONSOLIDATED
BALANCE SHEETS (1) (2)
|
(in millions,
except par values)
|
|
|
Successor
Company
|
|
|
Predecessor
Company
|
|
June 30,
2015
|
|
|
December 31,
2014
|
|
(unaudited)
|
|
|
|
ASSETS
|
Current
assets
|
|
|
|
|
Cash and cash
equivalents
|
$
|
508.5
|
|
|
|
$
|
419.7
|
|
Short-term
investments
|
163.5
|
|
|
|
153.6
|
|
Accounts receivable,
net of allowance for doubtful accounts of $41.0 —
Predecessor
Company
|
229.7
|
|
|
|
302.2
|
|
Handset and accessory
inventory
|
88.8
|
|
|
|
121.3
|
|
Deferred income
taxes, net
|
8.0
|
|
|
|
39.1
|
|
Prepaid expenses and
other
|
152.3
|
|
|
|
215.2
|
|
Assets related to
discontinued operations
|
—
|
|
|
|
462.3
|
|
Total current
assets
|
1,150.8
|
|
|
|
1,713.4
|
|
Property, plant
and equipment, net
|
693.6
|
|
|
|
1,373.2
|
|
Intangible assets,
net
|
1,147.1
|
|
|
|
694.0
|
|
Other
assets
|
513.1
|
|
|
|
374.2
|
|
Assets related to
discontinued operations
|
—
|
|
|
|
1,275.8
|
|
Total
assets
|
$
|
3,504.6
|
|
|
|
$
|
5,430.6
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
|
Current
liabilities
|
|
|
|
|
Accounts
payable
|
$
|
111.9
|
|
|
|
$
|
167.0
|
|
Accrued expenses and
other
|
393.5
|
|
|
|
409.1
|
|
Deferred
revenues
|
27.1
|
|
|
|
42.0
|
|
Current portion of
long-term debt
|
674.6
|
|
|
|
717.4
|
|
Liabilities related
to discontinued operations
|
—
|
|
|
|
373.9
|
|
Total current
liabilities
|
1,207.1
|
|
|
|
1,709.4
|
|
Long-term
debt
|
92.1
|
|
|
|
207.9
|
|
Deferred income
tax liabilities
|
10.9
|
|
|
|
40.9
|
|
Other long-term
liabilities
|
126.8
|
|
|
|
213.1
|
|
Liabilities
related to discontinued operations
|
—
|
|
|
|
630.6
|
|
Total
liabilities
|
1,436.9
|
|
|
|
2,801.9
|
|
Liabilities
subject to compromise
|
—
|
|
|
|
4,593.5
|
|
Commitments and
contingencies
|
|
|
|
|
Stockholders'
deficit
|
|
|
|
|
Undesignated
preferred stock, par value $0.001, 10.0 shares authorized, no
shares
issued or
outstanding - Successor Company
|
—
|
|
|
|
—
|
|
Undesignated
preferred stock, par value $0.001, 10.0 shares authorized, no
shares
issued or outstanding - Predecessor Company
|
—
|
|
|
|
—
|
|
Common stock, par
value $0.001, 140.0 shares authorized, 100.0 shares issued and
outstanding — Successor Company
|
0.1
|
|
|
|
—
|
|
Common stock, par
value $0.001, 600.0 shares authorized, 172.4 shares issued and
outstanding — Predecessor Company
|
—
|
|
|
|
0.2
|
|
Paid-in capital -
Successor Company
|
2,067.6
|
|
|
|
—
|
|
Paid-in capital -
Predecessor Company
|
—
|
|
|
|
1,517.1
|
|
Accumulated
deficit
|
—
|
|
|
|
(2,150.7)
|
|
Accumulated other
comprehensive loss
|
—
|
|
|
|
(1,331.4)
|
|
Total stockholders'
equity (deficit)
|
2,067.7
|
|
|
|
(1,964.8)
|
|
Total liabilities and
stockholders' equity (deficit)
|
$
|
3,504.6
|
|
|
|
$
|
5,430.6
|
|
CONSOLIDATED CASH
FLOW DATA (1) (2)
|
(in
millions)
|
|
|
Predecessor
Company
|
|
Six Months
Ended
June 30,
|
|
2015
|
|
2014
|
|
(unaudited)
|
Cash and cash
equivalents, beginning of period
|
$
|
419.7
|
|
|
$
|
1,315.6
|
|
Net cash used in
operating activities
|
(254.8)
|
|
|
(803.0)
|
|
Net cash provided by
(used in) investing activities
|
1,027.8
|
|
|
(57.0)
|
|
Net cash used in by
financing activities
|
(778.2)
|
|
|
(24.4)
|
|
Effect of exchange
rate changes on cash and cash equivalents
|
(9.1)
|
|
|
(35.3)
|
|
Change in cash and
cash equivalents related to discontinued operations
|
103.1
|
|
|
282.1
|
|
Cash and cash
equivalents, end of period
|
$
|
508.5
|
|
|
$
|
678.0
|
|
|
(1) In
accordance with the requirements of reorganization accounting, we
adopted the provisions of fresh start accounting as of
June 30, 2015 and became a new entity for financial reporting
purposes. References to the "Successor Company" relate to NII
Holdings on or subsequent to June 30, 2015. References to the
"Predecessor Company" relate to NII Holdings prior to June 30,
2015
|
|
(2) On April
30, 2015, we completed the sale of our operations in Mexico to an
indirect subsidiary of AT&T, Inc. In connection
with this sale, we have reported Nextel Mexico's results as
discontinued operations throughout this document.
|
NII HOLDINGS, INC.
AND SUBSIDIARIES
|
OPERATING RESULTS
AND METRICS
|
FOR THE THREE AND
SIX MONTHS ENDED JUNE 30, 2015 AND 2014
|
(UNAUDITED)
|
|
NII Holdings,
Inc. (1)
|
(subscribers in
thousands)
|
|
|
|
|
|
|
Three Months
Ended
June 30,
|
|
|
2015
|
|
2014
|
|
iDEN
|
4,005.3
|
|
|
5,114.0
|
|
|
WCDMA
|
2,258.0
|
|
|
1,050.5
|
|
|
Total
subscriber units in commercial service (as of June
30)
|
6,263.3
|
|
|
6,164.5
|
|
|
|
|
|
|
|
iDEN net subscriber
losses
|
(291.0)
|
|
|
(195.6)
|
|
|
WCDMA net subscriber
additions
|
226.8
|
|
|
234.0
|
|
|
Total
net subscriber (losses) additions
|
(64.2)
|
|
|
38.4
|
|
|
|
|
|
|
|
Migrations from
iDEN to WCDMA
|
59.3
|
|
|
142.8
|
|
|
|
|
|
|
|
iDEN customer
churn
|
4.00
|
%
|
|
3.54
|
%
|
|
WCDMA customer
churn
|
3.09
|
%
|
|
1.86
|
%
|
|
Churn
(%)
|
3.69
|
%
|
|
3.30
|
%
|
|
|
|
|
|
|
Average monthly
revenue per handset/unit in service (ARPU) (2)
|
$
|
19
|
|
|
$
|
25
|
|
|
|
|
|
|
|
Cost per gross add
(CPGA) (2)
|
$
|
176
|
|
|
$
|
210
|
|
|
|
(1) All
operating results and metrics presented herein have been adjusted
to exclude the results of Nextel Mexico and Nextel
Chile, which have been accounted for as discontinued
operations.
|
|
(2) For information
regarding ARPU and CPGA, see "Non-GAAP Reconciliations for the
Three and Six Months Ended June 30, 2015 and 2014" included in this
release.
|
Nextel
Brazil
|
(dollars in
millions, except ARPU and CPGA, and subscribers in
thousands)
|
|
|
|
|
|
|
|
|
|
|
Predecessor
Company
|
|
|
Three Months
Ended
June 30,
|
|
Six Months
Ended
June 30,
|
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
Service and other
revenues
|
$
|
303.2
|
|
|
$
|
429.0
|
|
|
$
|
643.8
|
|
|
$
|
854.7
|
|
|
|
|
|
|
|
|
|
|
|
Handset and accessory
revenues
|
17.1
|
|
|
50.4
|
|
|
39.8
|
|
|
85.9
|
|
|
Cost of handsets and
accessories
|
(65.4)
|
|
|
(112.3)
|
|
|
(121.1)
|
|
|
(224.1)
|
|
|
Handset and accessory
net subsidy
|
(48.3)
|
|
|
(61.9)
|
|
|
(81.3)
|
|
|
(138.2)
|
|
|
Cost of service
(exclusive of depreciation and amortization)
|
(126.0)
|
|
|
(192.4)
|
|
|
(256.2)
|
|
|
(360.5)
|
|
|
Selling, general and
administrative
|
(207.7)
|
|
|
(230.9)
|
|
|
(381.5)
|
|
|
(441.3)
|
|
|
Segment
losses
|
$
|
(78.8)
|
|
|
$
|
(56.2)
|
|
|
$
|
(75.2)
|
|
|
$
|
(85.3)
|
|
|
|
|
|
|
|
|
|
|
|
iDEN
|
2,177.4
|
|
|
3,137.7
|
|
|
|
|
|
|
WCDMA
|
2,258.0
|
|
|
1,050.6
|
|
|
|
|
|
|
Total
subscriber units in commercial service (as of June
30)
|
4,435.4
|
|
|
4,188.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
iDEN net subscriber
losses
|
(184.0)
|
|
|
(175.1)
|
|
|
|
|
|
|
WCDMA net subscriber
additions
|
226.8
|
|
|
234.0
|
|
|
|
|
|
|
Total
net subscriber additions
|
42.8
|
|
|
58.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Migrations from
iDEN to WCDMA
|
59.3
|
|
|
142.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
iDEN customer
churn
|
3.46
|
%
|
|
3.05
|
%
|
|
|
|
|
|
WCDMA customer
churn
|
3.09
|
%
|
|
1.86
|
%
|
|
|
|
|
|
Churn
(%)
|
3.28
|
%
|
|
2.81
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ARPU
(2)
|
$
|
20
|
|
|
$
|
30
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CPGA
(2)
|
$
|
207
|
|
|
$
|
291
|
|
|
|
|
|
|
Nextel
Argentina
|
(dollars in
millions, except ARPU and CPGA, and subscribers in
thousands)
|
|
|
|
|
|
|
|
|
|
|
Predecessor
Company
|
|
|
Three Months
Ended
June 30,
|
|
Six Months
Ended
June 30,
|
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
Service and other
revenues
|
$
|
91.0
|
|
|
$
|
96.6
|
|
|
$
|
178.3
|
|
|
$
|
197.6
|
|
|
|
|
|
|
|
|
|
|
|
Handset and accessory
revenues
|
9.5
|
|
|
11.5
|
|
|
21.2
|
|
|
23.2
|
|
|
Cost of handsets and
accessories
|
(12.8)
|
|
|
(16.6)
|
|
|
(32.0)
|
|
|
(32.7)
|
|
|
Handset and accessory
net subsidy
|
(3.3)
|
|
|
(5.1)
|
|
|
(10.8)
|
|
|
(9.5)
|
|
|
Cost of service
(exclusive of depreciation and amortization)
|
(25.9)
|
|
|
(26.6)
|
|
|
(51.0)
|
|
|
(53.5)
|
|
|
Selling, general and
administrative
|
(41.3)
|
|
|
(43.6)
|
|
|
(77.8)
|
|
|
(86.3)
|
|
|
Segment
earnings
|
$
|
20.5
|
|
|
$
|
21.3
|
|
|
$
|
38.7
|
|
|
$
|
48.3
|
|
|
|
|
|
|
|
|
|
|
|
iDEN
|
1,827.9
|
|
|
1,976.3
|
|
|
|
|
|
|
WCDMA
|
—
|
|
|
—
|
|
|
|
|
|
|
Total
subscriber units in commercial service (as of June
30)
|
1,827.9
|
|
|
1,976.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
iDEN net subscriber
losses
|
(107.0)
|
|
|
(20.5)
|
|
|
|
|
|
|
WCDMA net subscriber
additions
|
—
|
|
|
—
|
|
|
|
|
|
|
Total
net subscriber losses
|
(107.0)
|
|
|
(20.5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
iDEN customer
churn
|
4.66
|
%
|
|
4.35
|
%
|
|
|
|
|
|
WCDMA customer
churn
|
—
|
|
|
—
|
|
|
|
|
|
|
Churn
(%)
|
4.66
|
%
|
|
4.35
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ARPU
(2)
|
$
|
15
|
|
|
$
|
15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CPGA
(2)
|
$
|
81
|
|
|
$
|
72
|
|
|
|
|
|
|
NON-GAAP RECONCILIATIONS
FOR THE
THREE AND SIX MONTHS ENDED JUNE 30,
2015 AND 2014
(UNAUDITED)
Consolidated
OIBDA and Consolidated Adjusted OIBDA
Consolidated operating income before depreciation and
amortization, or OIBDA, represents operating income before
depreciation and amortization expense. Consolidated adjusted
operating income before depreciation and amortization, or adjusted
OIBDA, represents consolidated operating income before depreciation
expense, amortization expense, material asset impairments,
severance costs associated with publicly announced restructuring
plans and other material non-recurring or unusual charges.
Consolidated OIBDA and consolidated adjusted OIBDA are not
measurements under accounting principles generally accepted in
the United States, may not be
similar to consolidated OIBDA and consolidated adjusted OIBDA
measures of other companies and should be considered in addition
to, but not as substitutes for, the information contained in our
statements of operations. We believe that consolidated OIBDA and
consolidated adjusted OIBDA provide useful information to investors
because they are indicators of our operating performance,
especially in a capital intensive industry such as ours, since they
exclude items that are not directly attributable to ongoing
business operations. Consolidated OIBDA and consolidated adjusted
OIBDA can be reconciled to our consolidated statements of
operations as follows (in millions):
NII Holdings,
Inc
|
|
|
|
|
|
|
Predecessor
Company
|
|
Three Months
Ended
June
30,
|
|
Six Months
Ended
June
30,
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
Consolidated
operating loss
|
$
|
(179.0)
|
|
|
$
|
(218.6)
|
|
|
$
|
(267.6)
|
|
|
$
|
(351.5)
|
|
Consolidated
depreciation
|
61.5
|
|
|
111.3
|
|
|
128.1
|
|
|
195.3
|
|
Consolidated
amortization
|
13.2
|
|
|
11.3
|
|
|
27.5
|
|
|
21.7
|
|
Consolidated
operating loss before
depreciation and amortization
|
(104.3)
|
|
|
(96.0)
|
|
|
(112.0)
|
|
|
(134.5)
|
|
Asset impairment
charges
|
25.2
|
|
|
7.5
|
|
|
31.2
|
|
|
7.5
|
|
Restructuring
charges
|
4.2
|
|
|
11.8
|
|
|
5.7
|
|
|
10.0
|
|
Costs related to
Chapter 11 filing
|
—
|
|
|
4.1
|
|
|
—
|
|
|
13.2
|
|
Consolidated adjusted
operating loss
before
depreciation and amortization
|
$
|
(74.9)
|
|
|
$
|
(72.6)
|
|
|
$
|
(75.1)
|
|
|
$
|
(103.8)
|
|
|
|
|
|
|
|
|
|
Average Monthly Revenue Per Handset/Unit in Service
(ARPU)
Average monthly revenue per subscriber unit in service, or ARPU,
is an industry term that measures service revenues, which we refer
to as subscriber revenues, per period from our customers divided by
the weighted average number of subscriber units in commercial
service during that period. ARPU is not a measurement under
accounting principles generally accepted in the United States, may not be similar to ARPU
measures of other companies and should be considered in addition,
but not as a substitute for, the information contained in our
statements of operations. We believe that ARPU provides
useful information concerning the appeal of our rate plans and
service offerings and our performance in attracting and retaining
high value customers. Other revenue includes revenues for
such services as roaming, handset maintenance, cancellation fees,
analog and other. ARPU can be calculated and reconciled to
our consolidated statement of operations as follows (in millions,
except ARPU):
NII Holdings,
Inc
|
|
|
|
|
|
|
Predecessor
Company
|
|
|
Three Months
Ended
June 30,
|
|
|
2015
|
|
2014
|
|
|
|
|
Service and other
revenues
|
$
|
394.2
|
|
|
$
|
523.3
|
|
|
Less: other
revenues
|
(42.3)
|
|
|
(60.1)
|
|
|
Total subscriber
revenues
|
$
|
351.9
|
|
|
$
|
463.2
|
|
|
|
|
|
|
|
|
|
|
|
|
ARPU
calculated with subscriber revenues
|
$
|
19
|
|
|
$
|
25
|
|
|
|
|
|
|
|
ARPU
calculated with service and other revenues
|
$
|
21
|
|
|
$
|
28
|
|
|
|
|
|
|
|
Nextel
Brazil
|
|
|
|
|
|
|
Predecessor
Company
|
|
|
Three Months
Ended
June 30,
|
|
|
2015
|
|
2014
|
|
|
|
|
Service and other
revenues
|
$
|
303.2
|
|
|
$
|
429.0
|
|
|
Less: other
revenues
|
(34.3)
|
|
|
(52.7)
|
|
|
Total subscriber
revenues
|
$
|
268.9
|
|
|
$
|
376.3
|
|
|
|
|
|
|
|
|
|
|
|
|
ARPU
calculated with subscriber revenues
|
$
|
20
|
|
|
$
|
30
|
|
|
|
|
|
|
|
ARPU
calculated with service and other revenues
|
$
|
23
|
|
|
$
|
34
|
|
|
|
|
|
|
|
Nextel
Argentina
|
|
|
|
|
|
|
Predecessor
Company
|
|
|
Three Months
Ended
June 30,
|
|
|
2015
|
|
2014
|
|
|
|
|
Service and other
revenues
|
$
|
91.0
|
|
|
$
|
96.6
|
|
|
Less: other
revenues
|
(8.0)
|
|
|
(9.8)
|
|
|
Total subscriber
revenues
|
$
|
83.0
|
|
|
$
|
86.8
|
|
|
|
|
|
|
|
|
|
|
|
|
ARPU
calculated with subscriber revenues
|
$
|
15
|
|
|
$
|
15
|
|
|
|
|
|
|
|
ARPU
calculated with service and other revenues
|
$
|
16
|
|
|
$
|
16
|
|
|
|
|
|
|
|
Cost per Gross Add (CPGA)
Cost per gross add, or CPGA, is an industry term that is
calculated by dividing our selling, marketing and handset and
accessory subsidy costs, excluding costs unrelated to initial
customer acquisition, by our new subscribers during the period, or
gross adds. CPGA is not a measurement under accounting
principles generally accepted in the
United States, may not be similar to CPGA measures of other
companies and should be considered in addition, but not as a
substitute for, the information contained in our statements of
operations. We believe CPGA is a measure of the relative cost
of customer acquisition. CPGA can be calculated and
reconciled to our consolidated statements of operations as follows
(in millions, except CPGA):
NII Holdings,
Inc
|
|
|
|
|
|
|
Predecessor
Company
|
|
|
Three Months
Ended
June 30,
|
|
|
2015
|
|
2014
|
|
|
|
|
Consolidated handset
and accessory revenues
|
$
|
26.6
|
|
|
$
|
63.6
|
|
|
Less: consolidated
uninsured handset replacement revenues
|
(0.1)
|
|
|
(1.8)
|
|
|
Consolidated handset
and accessory revenues, net
|
26.5
|
|
|
61.8
|
|
|
Less: consolidated
cost of handsets and accessories
|
78.1
|
|
|
128.3
|
|
|
Consolidated handset subsidy costs
|
51.6
|
|
|
66.5
|
|
|
Consolidated selling
and marketing
|
67.0
|
|
|
89.5
|
|
|
Costs per statement
of operations
|
118.6
|
|
|
156.0
|
|
|
Less: consolidated
costs unrelated to initial customer acquisition
|
(6.7)
|
|
|
(20.0)
|
|
|
Customer acquisition costs
|
$
|
111.9
|
|
|
$
|
136.0
|
|
|
|
|
|
|
|
Cost per Gross
Add
|
$
|
176
|
|
|
$
|
210
|
|
|
|
|
|
|
|
Nextel
Brazil
|
|
|
|
|
|
|
Predecessor
Company
|
|
|
Three Months
Ended
June 30,
|
|
|
2015
|
|
2014
|
|
|
|
|
Handset and accessory
revenues
|
$
|
17.1
|
|
|
$
|
50.4
|
|
|
Less: uninsured
handset replacement revenues
|
(0.1)
|
|
|
(1.8)
|
|
|
Handset and accessory
revenues, net
|
17.0
|
|
|
48.6
|
|
|
Less: cost of
handsets and accessories
|
65.4
|
|
|
112.3
|
|
|
Handset subsidy costs
|
48.4
|
|
|
63.7
|
|
|
Selling and
marketing
|
56.5
|
|
|
75.0
|
|
|
Costs per statement
of operations
|
104.9
|
|
|
138.7
|
|
|
Less: costs unrelated
to initial customer acquisition
|
(5.8)
|
|
|
(19.8)
|
|
|
Customer acquisition costs
|
$
|
99.1
|
|
|
$
|
118.9
|
|
|
|
|
|
|
|
Cost per Gross
Add
|
$
|
207
|
|
|
$
|
291
|
|
|
|
|
|
|
|
Nextel
Argentina
|
|
|
|
|
|
|
Predecessor
Company
|
|
|
Three Months
Ended
June 30,
|
|
|
2015
|
|
2014
|
|
|
|
|
Handset and accessory
revenues
|
$
|
9.5
|
|
|
$
|
11.5
|
|
|
Less: uninsured
handset replacement revenues
|
—
|
|
|
—
|
|
|
Handset and accessory
revenues, net
|
9.5
|
|
|
11.5
|
|
|
Less: cost of
handsets and accessories
|
12.8
|
|
|
16.6
|
|
|
Handset subsidy costs
|
3.3
|
|
|
5.1
|
|
|
Selling and
marketing
|
10.4
|
|
|
12.3
|
|
|
Costs per statement
of operations
|
13.7
|
|
|
17.4
|
|
|
Less: costs unrelated
to initial customer acquisition
|
(1.0)
|
|
|
(0.2)
|
|
|
Customer acquisition costs
|
$
|
12.7
|
|
|
$
|
17.2
|
|
|
|
|
|
|
|
Cost per Gross
Add
|
$
|
81
|
|
|
$
|
72
|
|
|
|
|
|
|
|
Impact of Foreign Currency Fluctuations
The following table shows the impact of changes in foreign
currency exchange rates on certain financial measures for the three
and six months ended June 30, 2014
compared to the same period in 2015 by (i) adjusting the relevant
measures for the three and six months ended June 30, 2014 to levels that would have resulted
if the average foreign currency exchange rates for the three and
six months ended June 30, 2014 were
the same as the average foreign currency exchange rates that were
in effect for the three and six months ended June 30, 2015; and (ii) comparing the actual and
adjusted financial measures for the three and six months ended
June 30, 2014 to the similar
financial measures for the three and six months ended June 30, 2015 to show the percentage change in
those measures before and after taking those adjustments into
account. The amounts reflected in the following table for operating
income before depreciation and amortization on a consolidated basis
and segment earnings for Nextel Brazil and Nextel Argentina, before
the adjustments for changes in foreign currency exchange rates, are
based on the calculations contained elsewhere in these non-GAAP
reconciliations for the three and six months ended June 30, 2015 and 2014. The average foreign
currency exchange rates for each of the relevant currencies during
each of the three and six months ended June
30, 2015 and 2014 are included in the notes to the table
below. The information reflected in the following table is not a
measurement under accounting principles generally accepted in
the United States and should be
considered in addition to, but not as a substitute for, the
information contained in our statements of operations. We believe
that these calculations provide useful information concerning our
relative performance for the three and six months ended
June 30, 2015 compared to the same
period in 2014 by removing the impact of the significant difference
in the average foreign currency exchange rates in effect for those
periods.
NII Holdings,
Inc
|
(dollars in
thousands)
|
|
|
|
|
|
|
|
|
Predecessor
Company
|
|
|
|
Three Months Ended
June 30,
|
|
|
|
2Q 2014
Actual
|
2Q 2014
Adjustment
(1)
|
2Q 2014
Normalized
(1)
|
2Q 2015
Actual
|
2Q
2014
to 2Q
2015
Actual
Growth
Rate
(2)
|
2Q
2014
to 2Q
2015
Normalized
Growth Rate
(3)
|
|
|
|
|
|
|
|
Consolidated:
|
|
|
|
|
|
|
Operating
revenues
|
$
|
586,914
|
|
$
|
(142,169)
|
|
$
|
444,745
|
|
$
|
420,765
|
|
(28)%
|
(5)%
|
Adjusted operating
loss before
depreciation and amortization
|
(72,634)
|
|
13,276
|
|
(59,358)
|
|
(74,860)
|
|
3%
|
26%
|
Nextel
Brazil:
|
|
|
|
|
|
|
Operating
revenues
|
$
|
479,373
|
|
$
|
(131,164)
|
|
$
|
348,209
|
|
$
|
320,255
|
|
(33)%
|
(8)%
|
Segment
losses
|
(56,151)
|
|
15,364
|
|
(40,787)
|
|
(78,755)
|
|
40%
|
93%
|
Nextel
Argentina:
|
|
|
|
|
|
|
Operating
revenues
|
$
|
108,109
|
|
$
|
(10,751)
|
|
$
|
97,358
|
|
$
|
100,462
|
|
(7)%
|
3%
|
Segment
earnings
|
21,307
|
|
(2,119)
|
|
19,188
|
|
20,468
|
|
(4)%
|
7%
|
NII Holdings,
Inc
|
(dollars in
thousands)
|
|
|
|
|
|
|
|
|
Predecessor
Company
|
|
|
|
Six Months Ended
June 30,
|
|
|
|
YTD 2014
Actual
|
YTD 2014
Adjustment
(1)
|
YTD 2014
Normalized
(1)
|
YTD 2015
Actual
|
YTD
2014
to YTD
2015
Actual
Growth
Rate
(2)
|
YTD
2014
to YTD
2015
Normalized
Growth Rate
(3)
|
|
|
|
|
|
|
|
Consolidated:
|
|
|
|
|
|
|
Operating
revenues
|
$
|
1,161,474
|
|
$
|
(236,769)
|
|
$
|
924,705
|
|
$
|
883,219
|
|
(24)%
|
(4)%
|
Adjusted
operating loss before
depreciation and
amortization
|
(103,821)
|
|
13,967
|
|
(89,854)
|
|
(75,138)
|
|
(28)%
|
(16)%
|
Nextel
Brazil:
|
|
|
|
|
|
|
Operating
revenues
|
$
|
940,597
|
|
$
|
(212,189)
|
|
$
|
728,408
|
|
$
|
683,611
|
|
(27)%
|
(6)%
|
Segment
losses
|
(85,296)
|
|
19,242
|
|
(66,054)
|
|
(75,234)
|
|
(12)%
|
14%
|
Nextel
Argentina:
|
|
|
|
|
|
|
Operating
revenues
|
$
|
220,789
|
|
$
|
(24,282)
|
|
$
|
196,507
|
|
$
|
199,508
|
|
(10)%
|
2%
|
Segment
earnings
|
48,285
|
|
(5,310)
|
|
42,975
|
|
38,659
|
|
(20)%
|
(10)%
|
(1)
|
The "2Q 2014
Normalized" and "YTD 2014 Normalized" amounts reflect the impact of
applying the average foreign currency exchange rates for the three
and six months ended June 30, 2015 to the operating revenues earned
in foreign currencies and to the other components of each of the
actual financial measures shown above for the three and six months
ended June 30, 2014, other than certain components of those
measures consisting of U.S. dollar-based operating expenses, which
were not adjusted. The amounts included under the columns "2Q 2014
Adjustment" and "YTD 2014 Adjustment" reflect the amount determined
by subtracting the "2Q 2014 Normalized" and "YTD 2014 Normalized"
amounts calculated as described in the preceding sentence from the
"2Q 2014 Actual" and "YTD 2014 Actual" amounts and reflect the
impact of the year-over-year change in the average foreign currency
exchange rates on each of the financial measures for the three and
six months ended June 30, 2015. The average foreign currency
exchange rates for each of the relevant currencies during the three
and six months ended June 30, 2015 and 2014 for purposes of these
calculations were as follows:
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
Brazilian
real
|
3.07
|
|
2.23
|
|
2.97
|
|
2.30
|
Argentine
peso
|
8.95
|
|
8.06
|
|
8.82
|
|
7.85
|
|
(2) The percentage amounts in
these columns reflect the growth rates for each of the financial
measures comparing the amounts in
the "2Q 2015 Actual" and "YTD 2015 Actual" columns with those in
the "2Q 2014 Actual" and "YTD 2014 Actual" columns.
|
|
(3) The percentage amounts in
these columns reflect the growth rates for each of the financial
measures comparing the amounts in the
"2Q 2015 Actual" and "YTD 2015 Actual" columns with those in the
"2Q 2014 Normalized" and "YTD 2014 Normalized" columns.
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/nii-holdings-announces-second-quarter-2015-results-300125651.html
SOURCE NII Holdings, Inc.