RESTON, Va., Nov. 5, 2015 /PRNewswire/ -- NII Holdings,
Inc. (NASDAQ: NIHD) today announced its financial results for the
third quarter of 2015. The Company reported 27,000 net subscriber
additions for the quarter as it continued to gain traction on its
3G platform. The Company ended the quarter with 4.5 million total
subscribers, a four percent increase from a year ago. For the
quarter, the Company generated consolidated operating revenues of
$285 million, a consolidated adjusted
OIBDA loss of $25 million and a
consolidated operating loss of $78
million. The Company's consolidated adjusted OIBDA excludes
the impact of non-cash asset impairments, restructuring charges and
other unusual items. Capital expenditures were $48 million for the quarter. The Company ended
the quarter with $448 million in
consolidated cash and short-term investments and $277 million of restricted cash. The Company's
results in Argentina for the
current and prior periods are presented as discontinued operations
resulting from the strategic partnership formed on September 11, 2015 in which Grupo Clarin acquired 49% of the equity of
Nextel Argentina and a call option for the remaining 51% of the
equity for $178 million.
"We continued to experience good performance in our 3G business
in Brazil during the quarter and
our 3G subscriber base has nearly doubled over the past year," said
Steve Shindler, NII Holdings' chief
executive officer. "We achieved this growth while facing a
challenging macroeconomic environment and deteriorating foreign
currency exchange rates, which significantly impacted our reported
results. Our new leadership team in Brazil is now in place and in the process of
implementing changes to our business designed to continue the
progress we have made on our 3G platform while protecting our
liquidity position. To that end, our focus going forward will be on
attracting the most profitable 3G customers in the market, while
cutting our spending across several areas. We believe this approach
will allow us to continue to compete effectively in the current
macroeconomic environment while preserving our liquidity. In
addition, we are taking steps to further streamline the expenses
incurred at our corporate headquarters by shifting costs and
associated responsibilities to Nextel Brazil."
NII Holdings' consolidated average monthly service revenue per
subscriber (ARPU) was $18 for the
third quarter of 2015, down from $30
in the same quarter last year, due primarily to a 56% year over
year decline in the average value of the Brazilian real. The
Company's consolidated average monthly churn rate for the quarter
increased to 3.47 percent from 2.28 percent in the third quarter
last year due primarily to an increase in iDEN subscriber churn in
Brazil but also resulting from
higher churn on the Company's 3G platform. Consolidated cost per
gross addition (CPGA) was $104 for
the third quarter of 2015, a $148
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. Consolidated cash cost per
user (CCPU) was $18 for the third
quarter, an $11 decrease from the
same period last year primarily resulting from a decline in local
currency exchange rates.
"Our focus on liquidity coupled with the implementation of a new
operating plan should result in improvements to our business going
forward," said Dan Freiman, NII
Holdings' vice president and chief financial officer. "While
our cash burn during the third quarter was high due to a number of
non-recurring items, we expect to see an improvement starting in
the fourth quarter when we project to spend under $100 million. We expect that the operational
changes we are making to the business in Brazil and at our headquarters in the U.S.
will allow us to fund the business for the next two years using our
current cash and investments and assuming we receive the funds
currently held in escrow from the sales of our operations in
Mexico and Peru."
The Company will not host a financial results conference call
for the third quarter of 2015, but 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
including a more detailed explanation on local currency operating
metrics are included in the Company's Quarterly Report on Form 10-Q
for the third 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, CCPU, 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,
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: nii.com/newsroom.
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 September 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
1000
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 MONTHS ENDED SEPTEMBER 30, 2015
(SUCCESSOR COMPANY), THE SIX MONTHS ENDED JUNE 30, 2015
(PREDECESSOR COMPANY), THE THREE MONTHS ENDED SEPTEMBER
30, 2014 (PREDECESSOR COMPANY) AND THE NINE MONTHS ENDED
SEPTEMBER 30, 2014 (PREDECESSOR COMPANY) (1) (2) (in
millions, except per share amounts)
|
|
Successor
Company
|
|
|
Predecessor
Company
|
|
Three Months
Ended
September 30,
|
|
|
Six Months
Ended
June 30,
|
|
Three Months
Ended
September 30,
|
|
Nine Months
Ended
September 30,
|
|
2015
|
|
|
2015
|
|
2014
|
|
2014
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
Operating
revenues
Service and
other revenues
|
$
|
266.5
|
|
|
|
$
|
643.9
|
|
|
$
|
435.7
|
|
|
$
|
1,288.1
|
|
Handset and
accessory revenues
|
18.2
|
|
|
|
39.8
|
|
|
40.6
|
|
|
128.8
|
|
|
284.7
|
|
|
|
683.7
|
|
|
476.3
|
|
|
1,416.9
|
|
Operating
expenses
Cost of
service (exclusive of depreciation and amortization
included below)
|
112.2
|
|
|
|
256.1
|
|
|
172.1
|
|
|
532.5
|
|
Cost of
handsets and accessories
|
28.3
|
|
|
|
121.1
|
|
|
87.5
|
|
|
311.7
|
|
Selling,
general and administrative
|
168.9
|
|
|
|
419.7
|
|
|
246.9
|
|
|
767.2
|
|
Impairment and
restructuring charges
|
4.7
|
|
|
|
36.8
|
|
|
81.6
|
|
|
99.0
|
|
Depreciation
|
36.4
|
|
|
|
126.8
|
|
|
83.6
|
|
|
265.0
|
|
Amortization
|
11.9
|
|
|
|
27.1
|
|
|
17.2
|
|
|
38.4
|
|
|
362.4
|
|
|
|
987.6
|
|
|
688.9
|
|
|
2,013.8
|
|
Operating
loss
|
(77.7)
|
|
|
|
(303.9)
|
|
|
(212.6)
|
|
|
(596.9)
|
|
Other (expense)
income
Interest
expense, net
|
(28.9)
|
|
|
|
(82.8)
|
|
|
(107.9)
|
|
|
(338.4)
|
|
Interest
income
|
8.6
|
|
|
|
15.3
|
|
|
7.2
|
|
|
22.5
|
|
Foreign
currency transaction losses, net
|
(106.6)
|
|
|
|
(64.0)
|
|
|
(45.0)
|
|
|
(16.9)
|
|
Other income
(expense), net
|
1.0
|
|
|
|
(0.1)
|
|
|
1.7
|
|
|
(1.0)
|
|
|
(125.9)
|
|
|
|
(131.6)
|
|
|
(144.0)
|
|
|
(333.8)
|
|
Loss from
continuing operations before reorganization items and income tax
provision
|
(203.6)
|
|
|
|
(435.5)
|
|
|
(356.6)
|
|
|
(930.7)
|
|
Reorganization
items
|
2.1
|
|
|
|
1,956.9
|
|
|
(58.6)
|
|
|
(58.6)
|
|
Income tax
provision
|
(0.4)
|
|
|
|
(2.0)
|
|
|
(1.0)
|
|
|
(3.5)
|
|
Net (loss) income
from continuing operations
|
(201.9)
|
|
|
|
1,519.4
|
|
|
(416.2)
|
|
|
(992.8)
|
|
Income (loss) from
discontinued operations, net of income
taxes
|
12.5
|
|
|
|
221.1
|
|
|
(27.2)
|
|
|
(450.0)
|
|
Net (loss)
income
|
$
|
(189.4)
|
|
|
|
$
|
1,740.5
|
|
|
$
|
(443.4)
|
|
|
$
|
(1,442.8)
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income
from continuing operations per common
share,
basic
|
$
|
(2.02)
|
|
|
|
$
|
8.73
|
|
|
$
|
(2.41)
|
|
|
$
|
(5.77)
|
|
Net income (loss)
from discontinued operations per
common
share, basic
|
0.12
|
|
|
|
1.27
|
|
|
(0.16)
|
|
|
(2.61)
|
|
Net (loss) income
per common share, basic
|
$
|
(1.89)
|
|
|
|
$
|
10.00
|
|
|
$
|
(2.57)
|
|
|
$
|
(8.38)
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income
from continuing operations per common
share,
diluted
|
$
|
(2.02)
|
|
|
|
$
|
8.71
|
|
|
$
|
(2.41)
|
|
|
$
|
(5.77)
|
|
Net income (loss)
from discontinued operations per
common
share, diluted
|
0.12
|
|
|
|
1.27
|
|
|
(0.16)
|
|
|
(2.61)
|
|
Net (loss) income
per common share, diluted
|
$
|
(1.89)
|
|
|
|
$
|
9.98
|
|
|
$
|
(2.57)
|
|
|
$
|
(8.38)
|
|
|
|
|
|
|
|
|
|
|
Weighted average
number of common shares outstanding,
basic
|
100.0
|
|
|
|
172.4
|
|
|
172.4
|
|
|
172.3
|
|
|
|
|
|
|
|
|
|
|
Weighted average
number of common shares outstanding,
diluted
|
100.0
|
|
|
|
172.7
|
|
|
172.4
|
|
|
172.3
|
|
CONSOLIDATED
BALANCE SHEETS (1) (2) (in millions, except par
values)
|
|
Successor
Company
|
|
|
Predecessor
Company
|
|
September 30,
2015
|
|
|
December 31,
2014
|
|
(unaudited)
|
|
|
|
ASSETS
|
Current
assets
|
|
|
|
|
Cash and cash
equivalents
|
$
|
393.5
|
|
|
|
$
|
334.2
|
|
Short-term
investments
|
54.6
|
|
|
|
110.1
|
|
Accounts receivable,
net of allowance for doubtful accounts of $28.7 —
Successor
Company and $30.7 — Predecessor Company
|
179.3
|
|
|
|
256.1
|
|
Handset and accessory
inventory
|
33.3
|
|
|
|
65.9
|
|
Deferred income
taxes, net
|
38.6
|
|
|
|
39.1
|
|
Prepaid expenses and
other
|
118.4
|
|
|
|
198.5
|
|
Assets related to
discontinued operations
|
—
|
|
|
|
709.5
|
|
Total current
assets
|
817.7
|
|
|
|
1,713.4
|
|
Property, plant
and equipment, net
|
563.6
|
|
|
|
1,352.7
|
|
Intangible assets,
net
|
889.8
|
|
|
|
688.2
|
|
Other
assets
|
571.7
|
|
|
|
373.0
|
|
Assets related to
discontinued operations
|
—
|
|
|
|
1,303.3
|
|
Total
assets
|
$
|
2,842.8
|
|
|
|
$
|
5,430.6
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY (DEFICIT)
|
Current
liabilities
|
|
|
|
|
Accounts
payable
|
$
|
64.7
|
|
|
|
$
|
132.6
|
|
Accrued expenses and
other
|
236.7
|
|
|
|
337.7
|
|
Deferred
revenues
|
12.3
|
|
|
|
28.9
|
|
Current portion of
long-term debt
|
582.8
|
|
|
|
717.4
|
|
Liabilities related
to discontinued operations
|
—
|
|
|
|
492.8
|
|
Total current
liabilities
|
896.5
|
|
|
|
1,709.4
|
|
Long-term
debt
|
87.5
|
|
|
|
207.8
|
|
Deferred income
tax liabilities
|
41.5
|
|
|
|
40.9
|
|
Other long-term
liabilities
|
198.7
|
|
|
|
207.6
|
|
Liabilities
related to discontinued operations
|
—
|
|
|
|
636.2
|
|
Total
liabilities
|
1,224.2
|
|
|
|
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
|
2,069.8
|
|
|
|
—
|
|
Paid-in capital -
Predecessor Company
|
—
|
|
|
|
1,517.1
|
|
Accumulated
deficit
|
(189.4)
|
|
|
|
(2,150.7)
|
|
Accumulated other
comprehensive loss
|
(261.9)
|
|
|
|
(1,331.4)
|
|
Total stockholders'
equity (deficit)
|
1,618.6
|
|
|
|
(1,964.8)
|
|
Total liabilities and
stockholders' equity (deficit)
|
$
|
2,842.8
|
|
|
|
$
|
5,430.6
|
|
CONSOLIDATED CASH
FLOW DATA (1) (2) (in millions)
|
|
Successor
Company
|
|
|
Predecessor
Company
|
|
Three Months
Ended
September 30,
|
|
|
Six Months
Ended
June 30,
|
|
Nine Months
Ended
September 30,
|
|
2015
|
|
|
2015
|
|
2014
|
|
(unaudited)
|
|
|
(unaudited)
|
Cash and cash
equivalents, beginning of period
|
$
|
423.1
|
|
|
|
$
|
334.2
|
|
|
$
|
1,147.7
|
|
Net cash used in
operating activities
|
(64.9)
|
|
|
|
(254.8)
|
|
|
(796.2)
|
|
Net cash provided by
(used in) investing activities
|
37.2
|
|
|
|
1,027.8
|
|
|
(170.7)
|
|
Net cash used in by
financing activities
|
(25.2)
|
|
|
|
(778.2)
|
|
|
(84.5)
|
|
Effect of exchange
rate changes on cash and cash equivalents
|
0.6
|
|
|
|
(9.2)
|
|
|
(40.9)
|
|
Change in cash and
cash equivalents related to discontinued operations
|
22.7
|
|
|
|
103.3
|
|
|
306.3
|
|
Cash and cash
equivalents, end of period
|
$
|
393.5
|
|
|
|
$
|
423.1
|
|
|
$
|
361.7
|
|
|
(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 addition, On September 11,
2015, we entered into a binding agreement relating to the sale of
all of the outstanding equity interests of Nextel Argentina. In
connection with these sales, we have reported Nextel Mexico's and
Nextel Argentina's results as discontinued operations throughout
this document.
|
NII HOLDINGS, INC.
AND SUBSIDIARIES OPERATING RESULTS AND
METRICS FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2015
(SUCCESSOR COMPANY), THE SIX MONTHS ENDED JUNE 30, 2015
(PREDECESSOR COMPANY), THE THREE MONTHS ENDED SEPTEMBER
30, 2014 (PREDECESSOR COMPANY) AND THE NINE MONTHS ENDED
SEPTEMBER 30, 2014 (PREDECESSOR
COMPANY) (UNAUDITED)
|
|
Nextel
Brazil
|
(dollars in
millions, except ARPU and CPGA, and subscribers in
thousands)
|
|
|
|
|
|
|
|
Successor
Company
|
|
|
Predecessor
Company
|
|
|
Three Months
Ended
September 30,
|
|
|
2015
|
|
|
2014
|
|
Service and other
revenues
|
$
|
266.4
|
|
|
|
$
|
435.8
|
|
|
|
|
|
|
|
|
Handset and accessory
revenues
|
18.2
|
|
|
|
40.6
|
|
|
Cost of handsets and
accessories
|
(28.3)
|
|
|
|
(87.3)
|
|
|
Handset and accessory
net subsidy
|
(10.1)
|
|
|
|
(46.7)
|
|
|
Cost of service
(exclusive of depreciation and amortization)
|
(112.2)
|
|
|
|
(172.4)
|
|
|
Selling, general and
administrative
|
(154.9)
|
|
|
|
(215.8)
|
|
|
Segment (losses)
income
|
$
|
(10.8)
|
|
|
|
$
|
0.9
|
|
|
|
|
|
|
|
|
iDEN
|
1,857.8
|
|
|
|
2,942.5
|
|
|
WCDMA
|
2,605.0
|
|
|
|
1,333.8
|
|
|
Total
subscriber units in commercial service (as of September
30)
|
4,462.8
|
|
|
|
4,276.3
|
|
|
|
|
|
|
|
|
iDEN net subscriber
losses
|
(203.5)
|
|
|
|
(97.3)
|
|
|
WCDMA net subscriber
additions
|
230.8
|
|
|
|
185.3
|
|
|
Total
net subscriber additions
|
27.3
|
|
|
|
88.0
|
|
|
|
|
|
|
|
|
Migrations from
iDEN to WCDMA
|
116.2
|
|
|
|
97.9
|
|
|
|
|
|
|
|
|
iDEN customer
churn
|
3.83
|
%
|
|
|
2.32
|
%
|
|
WCDMA customer
churn
|
3.16
|
%
|
|
|
2.16
|
%
|
|
Churn
(%)
|
3.47
|
%
|
|
|
2.28
|
%
|
|
|
|
|
|
|
|
ARPU
(1)
|
$
|
18
|
|
|
|
$
|
30
|
|
|
|
|
|
|
|
|
CPGA
(1)
|
$
|
104
|
|
|
|
$
|
250
|
|
|
|
|
|
|
|
|
CCPU
(1)
|
$
|
17
|
|
|
|
$
|
27
|
|
|
|
(1) For information
regarding ARPU, CPGA and CCPU, see "Non-GAAP Reconciliations for
the Three Months Ended September 30, 2015 (Successor Company), the
Six Months Ended June 30, 2015 (Predecessor Company), Three Months
Ended September 30, 2014 (Predecessor Company) and Nine Months
Ended September 30, 2014 (Predecessor Company)" included in this
release.
|
Nextel
Brazil
|
(dollars in
millions, except ARPU and CPGA, and subscribers in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
Successor
Company
|
|
|
Predecessor
Company
|
|
Combined
|
|
Predecessor
Company
|
|
|
Three Months
Ended
September 30,
|
|
|
Six Months
Ended June
30,
|
|
Nine Months
Ended
September 30,
|
|
Nine Months
Ended
September 30,
|
|
|
2015
|
|
|
2015
|
|
2015
|
|
2014
|
|
Service and other
revenues
|
$
|
266.4
|
|
|
|
$
|
643.8
|
|
|
$
|
910.2
|
|
|
$
|
1,290.5
|
|
|
|
|
|
|
|
|
|
|
|
|
Handset and accessory
revenues
|
18.2
|
|
|
|
39.8
|
|
|
58.0
|
|
|
126.5
|
|
|
Cost of handsets and
accessories
|
(28.3)
|
|
|
|
(121.1)
|
|
|
(149.4)
|
|
|
(311.4)
|
|
|
Handset and accessory
net subsidy
|
(10.1)
|
|
|
|
(81.3)
|
|
|
(91.4)
|
|
|
(184.9)
|
|
|
Cost of service
(exclusive of depreciation and
amortization)
|
(112.2)
|
|
|
|
(256.2)
|
|
|
(368.4)
|
|
|
(532.9)
|
|
|
Selling, general and
administrative
|
(154.9)
|
|
|
|
(381.5)
|
|
|
(536.4)
|
|
|
(657.1)
|
|
|
Segment
losses
|
$
|
(10.8)
|
|
|
|
$
|
(75.2)
|
|
|
$
|
(86.0)
|
|
|
$
|
(84.4)
|
|
|
|
|
|
|
|
|
|
|
|
|
NON-GAAP RECONCILIATIONS
FOR THE
THREE MONTHS ENDED SEPTEMBER 30, 2015
(SUCCESSOR COMPANY),
THE SIX MONTHS ENDED JUNE 30, 2015 (PREDECESSOR
COMPANY),
THE THREE MONTHS ENDED SEPTEMBER 30, 2014 (PREDECESSOR COMPANY)
AND
THE NINE MONTHS ENDED SEPTEMBER 30, 2014 (PREDECESSOR
COMPANY)
(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
|
|
|
Successor
Company
|
|
|
Predecessor
Company
|
|
Three Months
Ended
September
30,
|
|
2015
|
|
|
2014
|
Consolidated
operating loss
|
$
|
(77.7)
|
|
|
|
$
|
(212.6)
|
|
Consolidated
depreciation
|
36.4
|
|
|
|
83.6
|
|
Consolidated
amortization
|
11.9
|
|
|
|
17.2
|
|
Consolidated
operating loss before
depreciation and amortization
|
(29.4)
|
|
|
|
(111.8)
|
|
Asset impairment
charges
|
4.0
|
|
|
|
70.4
|
|
Restructuring
charges
|
0.7
|
|
|
|
11.2
|
|
Costs related to
Chapter 11 filing
|
—
|
|
|
|
9.4
|
|
Consolidated adjusted
operating loss
before
depreciation and amortization
|
$
|
(24.7)
|
|
|
|
$
|
(20.8)
|
|
|
|
|
|
|
NII Holdings,
Inc
|
|
|
|
|
|
|
|
|
|
|
Successor
Company
|
|
|
Predecessor
Company
|
|
Combined
|
|
Predecessor
Company
|
|
Three Months
Ended
September 30,
|
|
|
Six Months
Ended June 30,
|
|
Nine Months
Ended
September 30,
|
|
Nine Months
Ended
September 30,
|
|
2015
|
|
|
2015
|
|
2015
|
|
2014
|
Consolidated
operating loss
|
$
|
(77.7)
|
|
|
|
$
|
(303.9)
|
|
|
$
|
(381.6)
|
|
|
$
|
(596.9)
|
|
Consolidated
depreciation
|
36.4
|
|
|
|
126.8
|
|
|
163.2
|
|
|
265.0
|
|
Consolidated
amortization
|
11.9
|
|
|
|
27.1
|
|
|
39.0
|
|
|
38.4
|
|
Consolidated
operating loss before
depreciation and amortization
|
(29.4)
|
|
|
|
(150.0)
|
|
|
(179.4)
|
|
|
(293.5)
|
|
Asset impairment
charges
|
4.0
|
|
|
|
31.2
|
|
|
35.2
|
|
|
74.8
|
|
Restructuring
charges
|
0.7
|
|
|
|
5.7
|
|
|
6.4
|
|
|
24.2
|
|
Costs related to
Chapter 11 filing
|
—
|
|
|
|
—
|
|
|
—
|
|
|
22.6
|
|
Consolidated adjusted
operating loss
before
depreciation and
amortization
|
$
|
(24.7)
|
|
|
|
$
|
(113.1)
|
|
|
$
|
(137.8)
|
|
|
$
|
(171.9)
|
|
|
|
|
|
|
|
|
|
|
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
|
|
|
|
|
|
|
|
Successor
Company
|
|
|
Predecessor
Company
|
|
|
Three Months
Ended
September 30,
|
|
|
2015
|
|
|
2014
|
|
|
|
|
|
|
|
Service and other
revenues
|
$
|
266.5
|
|
|
|
$
|
435.7
|
|
|
Less: other
revenues
|
(31.5)
|
|
|
|
(51.8)
|
|
|
Total subscriber
revenues
|
$
|
235.0
|
|
|
|
$
|
383.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ARPU
calculated with subscriber revenues
|
$
|
18
|
|
|
|
$
|
30
|
|
|
|
|
|
|
|
|
ARPU
calculated with service and other revenues
|
$
|
20
|
|
|
|
$
|
34
|
|
|
|
|
|
|
|
|
Nextel
Brazil
|
|
|
|
|
|
|
|
Successor
Company
|
|
|
Predecessor
Company
|
|
|
Three Months
Ended
September 30,
|
|
|
2015
|
|
|
2014
|
|
|
|
|
|
|
|
Service and other
revenues
|
$
|
266.4
|
|
|
|
$
|
435.8
|
|
|
Less: other
revenues
|
(31.5)
|
|
|
|
(52.1)
|
|
|
Total subscriber
revenues
|
$
|
234.9
|
|
|
|
$
|
383.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ARPU
calculated with subscriber revenues
|
$
|
18
|
|
|
|
$
|
30
|
|
|
|
|
|
|
|
|
ARPU
calculated with service and other revenues
|
$
|
20
|
|
|
|
$
|
34
|
|
|
|
|
|
|
|
|
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
|
|
|
|
|
|
|
|
Successor
Company
|
|
|
Predecessor
Company
|
|
|
Three Months
Ended
September 30,
|
|
|
2015
|
|
|
2014
|
|
|
|
|
|
|
|
Consolidated handset
and accessory revenues
|
$
|
18.2
|
|
|
|
$
|
40.6
|
|
|
Less: consolidated
uninsured handset replacement revenues
|
(0.1)
|
|
|
|
(3.0)
|
|
|
Consolidated handset
and accessory revenues, net
|
18.1
|
|
|
|
37.6
|
|
|
Less: consolidated
cost of handsets and accessories
|
28.3
|
|
|
|
87.5
|
|
|
Consolidated handset subsidy costs
|
10.2
|
|
|
|
49.9
|
|
|
Consolidated selling
and marketing
|
44.3
|
|
|
|
62.0
|
|
|
Costs per statement
of operations
|
54.5
|
|
|
|
111.9
|
|
|
Less: consolidated
costs unrelated to initial customer acquisition
|
(3.8)
|
|
|
|
(16.7)
|
|
|
Customer acquisition costs
|
$
|
50.7
|
|
|
|
$
|
95.2
|
|
|
|
|
|
|
|
|
Cost per Gross
Add
|
$
|
104
|
|
|
|
$
|
252
|
|
|
|
|
|
|
|
|
Nextel
Brazil
|
|
|
|
|
|
|
|
Successor
Company
|
|
|
Predecessor
Company
|
|
|
Three Months
Ended
September 30,
|
|
|
2015
|
|
|
2014
|
|
|
|
|
|
|
|
Handset and accessory
revenues
|
$
|
18.2
|
|
|
|
$
|
40.6
|
|
|
Less: uninsured
handset replacement revenues
|
(0.1)
|
|
|
|
(3.0)
|
|
|
Handset and accessory
revenues, net
|
18.1
|
|
|
|
37.6
|
|
|
Less: cost of
handsets and accessories
|
28.3
|
|
|
|
87.3
|
|
|
Handset subsidy costs
|
10.2
|
|
|
|
49.7
|
|
|
Selling and
marketing
|
44.2
|
|
|
|
61.4
|
|
|
Costs per statement
of operations
|
54.4
|
|
|
|
111.1
|
|
|
Less: costs unrelated
to initial customer acquisition
|
(3.8)
|
|
|
|
(16.7)
|
|
|
Customer acquisition costs
|
$
|
50.6
|
|
|
|
$
|
94.4
|
|
|
|
|
|
|
|
|
Cost per Gross
Add
|
$
|
104
|
|
|
|
$
|
250
|
|
|
|
|
|
|
|
|
Cash Cost per Handset/Unit
Cash cost per handset/unit, or CCPU, represents the sum of cost
of service, general and administrative expenses and customer
retention and other costs divided by average handsets in service
during the period and divided by the number of months in the
period. CCPU is not a measurement under accounting principles
generally accepted in the United
States, may not be similar to CCPU measures of other
companies and should not be considered in addition to, but not as a
substitute for, the information contained in our statements of
operations. We believe CCPU is a measure of the recurring
costs we incur on a monthly basis to provide service to our
subscribers. Consolidated CCPU can be reconciled to our
consolidated statements of operations as follows (in thousands,
except CCPU):
NII Holdings,
Inc
|
|
|
|
|
|
|
|
Successor
Company
|
|
|
Predecessor
Company
|
|
|
Three Months
Ended
September 30,
|
|
|
2015
|
|
|
2014
|
|
|
|
|
|
|
|
Selling, general and
administrative expenses
|
$
|
168.8
|
|
|
|
$
|
246.9
|
|
|
Less: selling and
marketing expenses
|
(44.3)
|
|
|
|
(62.0)
|
|
|
General and
administrative expenses
|
124.5
|
|
|
|
184.9
|
|
|
Cost of
Service
|
112.2
|
|
|
|
172.1
|
|
|
Customer retention
costs and other
|
3.8
|
|
|
|
16.7
|
|
|
Total
|
240.5
|
|
|
|
373.7
|
|
|
|
|
|
|
|
|
Cash Cost per
Unit
|
$
|
18
|
|
|
|
$
|
29
|
|
|
|
|
|
|
|
|
Nextel
Brazil
|
|
|
|
|
|
|
|
Successor
Company
|
|
|
Predecessor
Company
|
|
|
Three Months
Ended
September 30,
|
|
|
2015
|
|
|
2014
|
|
|
|
|
|
|
|
Selling, general and
administrative expenses
|
$
|
154.9
|
|
|
|
$
|
215.8
|
|
|
Less: selling and
marketing expenses
|
(44.2)
|
|
|
|
(61.4)
|
|
|
General and
administrative expenses
|
110.7
|
|
|
|
154.4
|
|
|
Cost of
Service
|
112.2
|
|
|
|
172.3
|
|
|
Customer retention
costs and other
|
3.8
|
|
|
|
16.7
|
|
|
Total
|
226.7
|
|
|
|
343.4
|
|
|
|
|
|
|
|
|
Cash Cost per
Unit
|
$
|
17
|
|
|
|
$
|
27
|
|
|
|
|
|
|
|
|
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 nine months ended September 30,
2014 compared to the three- and combined nine-months ended
September 30, 2015 by (i) adjusting
the relevant measures for the three and nine months ended
September 30, 2014 to levels that
would have resulted if the average foreign currency exchange rates
for the three and nine months ended September 30, 2014 were the same as the average
foreign currency exchange rates that were in effect for the three-
and combined nine-months ended September 30,
2015; and (ii) comparing the actual and adjusted financial
measures for the three and nine months ended September 30, 2014 to the similar financial
measures for the three- and nine-months ended September 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, 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 combined nine-months ended September 30, 2015 and the three and nine months
ended September 30, 2014. The average
foreign currency exchange rates for each of the relevant currencies
during each of the three- and combined nine-months ended
September 30, 2015 and the three and
nine months ended September 30, 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 combined nine-months ended September 30, 2015 compared to the three and nine
months ended September 30, 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
|
|
|
Successor
Company
|
|
|
|
Three Months Ended
September 30,
|
|
|
|
3Q 2014
Actual
|
3Q 2014
Adjustment
(1)
|
3Q 2014
Normalized
(1)
|
|
|
3Q 2015
Actual
|
3Q
2014
to 3Q
2015
Actual
Growth
Rate
(2)
|
3Q
2014
to 3Q
2015
Normalized
Growth Rate
(3)
|
|
|
|
|
|
|
|
|
|
Consolidated:
|
|
|
|
|
|
|
|
|
Operating
revenues
|
$
|
476,264
|
|
$
|
(170,424)
|
|
$
|
305,840
|
|
|
|
$
|
284,652
|
|
(40)%
|
(7)%
|
Adjusted operating
loss before
depreciation and
amortization
|
(20,837)
|
|
(328)
|
|
(21,165)
|
|
|
|
(24,638)
|
|
(18)%
|
(16)%
|
Nextel
Brazil:
|
|
|
|
|
|
|
|
|
Operating
revenues
|
$
|
476,382
|
|
$
|
(170,424)
|
|
$
|
305,958
|
|
|
|
$
|
284,606
|
|
(40)%
|
(7)%
|
Segment
earnings (losses)
|
919
|
|
(31,566)
|
|
(30,647)
|
|
|
|
(10,808)
|
|
NM
|
(65)%
|
NII Holdings,
Inc
|
(dollars in
thousands)
|
|
|
|
|
|
|
|
|
|
|
Predecessor
Company
|
|
|
Combined
Predecessor
and Successor
Company
|
|
|
|
Nine Months Ended
September 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
|
$
|
1,416,949
|
|
$
|
(390,416)
|
|
$
|
1,026,533
|
|
|
|
$
|
968,363
|
|
(32)%
|
(6)%
|
Adjusted
operating loss before
depreciation and
amortization
|
(171,879)
|
|
23,266
|
|
(148,613)
|
|
|
|
(137,854)
|
|
(20)%
|
(7)%
|
Nextel
Brazil:
|
|
|
|
|
|
|
|
|
Operating
revenues
|
$
|
1,416,979
|
|
$
|
(390,118)
|
|
$
|
1,026,861
|
|
|
|
$
|
968,217
|
|
(32)%
|
(6)%
|
Segment
losses
|
(84,377)
|
|
(62,503)
|
|
(146,880)
|
|
|
|
(86,042)
|
|
2%
|
(41)%
|
|
(1) The
"3Q 2014 Normalized" and "YTD 2014 Normalized" amounts reflect the
impact of applying the average foreign currency exchange rates for
the three and nine months ended September 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 nine months ended September 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 "3Q 2014 Adjustment" and "YTD 2014 Adjustment"
reflect the amount determined by subtracting the "3Q 2014
Normalized" and "YTD 2014 Normalized" amounts calculated as
described in the preceding sentence from the "3Q 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 nine
months ended September 30, 2015. The average foreign currency
exchange rates for each of the relevant currencies during the three
and nine months ended September 30, 2015 and 2014 for purposes of
these calculations were as follows:
|
|
Successor
Company
|
|
Predecessor
Company
|
|
Combined
|
|
Predecessor
Company
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
Brazilian
real
|
3.55
|
|
2.28
|
|
3.16
|
|
2.29
|
|
(2) The percentage amounts in
these columns reflect the growth rates for each of the financial
measures comparing the amounts in the "3Q 2015 Actual" and "YTD
2015 Actual" columns with those in the "3Q 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 "3Q 2015 Actual" and "YTD
2015 Actual" columns with those in the "3Q 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-third-quarter-2015-results-300173132.html
SOURCE NII Holdings, Inc.