Exhibit 99.1
NII HOLDINGS REPORTS THIRD QUARTER 2016 RESULTS
| |
| • | Operating revenues of $261 million for the third quarter |
| |
| • | 3G revenues increased 7% year-over-year in local currency |
| |
| • | Operating loss of $1.4 billion for the third quarter, primarily due to a $1.31 billion non-cash asset impairment charge |
| |
| • | Adjusted OIBDA of $16 million for the third quarter, an improvement of $40 million year-over-year |
| |
| • | Third consecutive quarter of positive adjusted OIBDA in Brazil |
| |
| • | Quarter-end cash and short-term investments of $312 million, and $203 million of cash held in escrow |
| |
| • | Third quarter net subscriber losses of 136,000, almost all on the iDEN network |
| |
| • | Third quarter 3G net subscriber losses of 6,000 and migrations from iDEN of 35,000, resulting in an ending base of 2.75 million 3G subscribers, a 1% increase from last quarter |
RESTON, Va., November 14, 2016 - NII Holdings, Inc. [NASDAQ: NIHD] today announced its financial results for the third quarter of 2016. For the quarter, the Company generated consolidated operating revenues of $261 million, consolidated adjusted operating income before depreciation and amortization (adjusted OIBDA) of $16 million and a consolidated operating loss of $1.4 billion. The Company’s consolidated adjusted OIBDA excludes the impact of non-cash asset impairments, restructuring charges and other unusual items. During the third quarter, the Company recorded a $1.31 billion non-cash impairment charge to write down its long-lived assets to fair value. Capital expenditures were $14 million for the quarter. The Company ended the quarter with $312 million in consolidated cash and short-term investments and $203 million of cash held in escrow. The Company reported net subscriber losses of 136,000 in the quarter, which were primarily driven by continued subscriber losses on the Company's iDEN network.
“Our results this quarter reflect the continuation of our strategy to focus on balancing our cost structure with our current revenue stream, which has been adversely effected by the decline in our iDEN subscriber base,” said Steve Shindler, Chief Executive Officer. “We are continuing to focus on attracting 3G and 4G subscribers that generate healthy levels of ARPU, while investing in retention efforts to address the ongoing pressure on churn resulting from the weak economic conditions in Brazil.”
Nextel Brazil's average monthly service revenue per subscriber (ARPU) for the third quarter of 2016 increased 16% on a reported basis, and 7% on a constant currency basis, compared to the same quarter last year. Nextel Brazil's average monthly churn rate for the quarter increased to 3.99 percent in the third quarter of 2016 from 3.54 percent in the same quarter last year due to increases in both 3G and iDEN churn. Nextel Brazil's cost per gross addition (CPGA) was $93 for the third quarter of 2016, an $11 decrease from the same quarter last year, 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. Nextel Brazil's cash cost per user (CCPU) was $18 for the third quarter of 2016, a $1 increase from the same quarter last year.
“We again generated positive adjusted OIBDA and slightly increased our 3G subscriber base this quarter as we continued to focus on managing our costs and protecting our liquidity while maintaining our competitive position in the market,” said Dan Freiman, Chief Financial Officer. “At the same time we are continuing to pursue strategic alternatives that enhance the value of the company.”
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 three months ended September 30, 2016 that was filed with the Securities and Exchange Commission today. In 2015, the Company sold its operations in Mexico and Argentina, and as a result, all results presented in this press release reflect these markets as discontinued operations. Additional operational and financial details, including a quarterly earnings presentation, are also available under the Company's 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, as well as Nextel Brazil's 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, Virginia, is a provider of differentiated mobile communication services for businesses and high value consumers in Brazil. NII Holdings, operating under the Nextel brand, offers fully integrated wireless communication 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 2016. 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 Brazil, 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' Annual Report on Form 10-K for the year ended December 31, 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, Virginia 20190
(703) 390-5100
www.nii.com
Investor and Media Relations: Dan Freiman
(703) 547-5209
dan.freiman@nii.com
NII HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2016 (SUCCESSOR COMPANY),
THE THREE MONTHS ENDED SEPTEMBER 30, 2015 (SUCCESSOR COMPANY) AND
THE SIX MONTHS ENDED JUNE 30, 2015 (PREDECESSOR COMPANY) (1) (2)
(in millions, except per share amounts)
|
| | | | | | | | | | | | | | | | |
| | Successor Company | | | Predecessor Company |
| | Three Months Ended
September 30, | | Nine Months Ended September 30. | | Three Months Ended
September 30, | | | Six Months Ended June 30, |
| | 2016 | | 2016 | | 2015 | | | 2015 |
| | (unaudited) |
| | | | | | | | | |
Operating revenues Service and other revenues | $ | 255.7 |
| | $ | 719.4 |
| | $ | 266.5 |
| | | $ | 643.9 |
|
| Handset and accessory revenues | 5.1 |
| | 17.2 |
| | 18.2 |
| | | 39.8 |
|
| | 260.8 |
| | 736.6 |
| | 284.7 |
| | | 683.7 |
|
Operating expenses Cost of service (exclusive of depreciation and amortization included below) | 96.5 |
| | 268.5 |
| | 112.2 |
| | | 256.1 |
|
| Cost of handsets and accessories | 5.8 |
| | 25.8 |
| | 28.3 |
| | | 121.1 |
|
| Selling, general and administrative | 142.8 |
| | 412.1 |
| | 168.9 |
| | | 419.7 |
|
| Impairment, restructuring and other charges | 1,324.2 |
| | 1,340.7 |
| | 4.7 |
| | | 36.8 |
|
| Depreciation | 66.3 |
| | 126.1 |
| | 36.4 |
| | | 126.8 |
|
| Amortization | 11.9 |
| | 32.9 |
| | 11.9 |
| | | 27.1 |
|
| | 1,647.5 |
| | 2,206.1 |
| | 362.4 |
| | | 987.6 |
|
| Operating loss | (1,386.7 | ) | | (1,469.5 | ) | | (77.7 | ) | | | (303.9 | ) |
Other (expense) income Interest expense, net | (29.5 | ) | | (81.9 | ) | | (28.9 | ) | | | (82.8 | ) |
| Interest income | 9.2 |
| | 29.7 |
| | 8.6 |
| | | 15.3 |
|
| Foreign currency transaction (losses) gains, net | (5.2 | ) | | 77.8 |
| | (106.6 | ) | | | (64.0 | ) |
| Other (expense) income, net | (2.1 | ) | | (7.0 | ) | | 1.0 |
| | | (0.1 | ) |
| | (27.6 | ) | | 18.6 |
| | (125.9 | ) | | | (131.6 | ) |
Loss from continuing operations before reorganization items and income tax provision | (1,414.3 | ) | | (1,450.9 | ) | | (203.6 | ) | | | (435.5 | ) |
| Reorganization items | (0.1 | ) | | (0.7 | ) | | 2.1 |
| | | 1,956.9 |
|
| Income tax benefit (provision) | 2.8 |
| | 2.5 |
| | (0.4 | ) | | | (2.0 | ) |
| Net (loss) income from continuing operations | (1,411.6 | ) | | (1,449.1 | ) | | (201.9 | ) | | | 1,519.4 |
|
Net (loss) income from discontinued operations, net of income taxes | (7.4 | ) | | (16.2 | ) | | 12.5 |
| | | 221.1 |
|
| Net (loss) income | $ | (1,419.0 | ) | | $ | (1,465.3 | ) | | $ | (189.4 | ) | | | $ | 1,740.5 |
|
| | | | | | | | | |
Net (loss) income from continuing operations per common share, basic | $ | (14.10 | ) | | $ | (14.49 | ) | | $ | (2.02 | ) | | | $ | 8.73 |
|
Net (loss) income from discontinued operations per common share, basic | (0.07 | ) | | (0.16 | ) | | 0.12 |
| | | 1.27 |
|
| Net (loss) income per common share, basic | $ | (14.17 | ) | | $ | (14.65 | ) | | $ | (1.89 | ) | | | $ | 10.00 |
|
| | | | | | | | | |
Net (loss) income from continuing operations per common share, diluted | $ | (14.10 | ) | | $ | (14.49 | ) | | $ | (2.02 | ) | | | $ | 8.71 |
|
Net (loss) income from discontinued operations per common share, diluted | (0.07 | ) | | (0.16 | ) | | 0.12 |
| | | 1.27 |
|
| Net (loss) income per common share, diluted | $ | (14.17 | ) | | $ | (14.65 | ) | | $ | (1.89 | ) | | | $ | 9.98 |
|
| | | | | | | | | |
Weighted average number of common shares outstanding, basic | 100.1 |
| | 100.1 |
| | 100.0 |
| | | 172.4 |
|
| | | | | | | | | |
Weighted average number of common shares outstanding,
diluted | 100.1 |
| | 100.1 |
| | 100.0 |
| | | 172.7 |
|
CONSOLIDATED BALANCE SHEETS (1) (2)
(in millions, except par values)
|
| | | | | | | |
| | Successor Company |
| | September 30, 2016 | | December 31, 2015 |
| | | | |
| ASSETS |
| Current assets | |
| | |
|
| Cash and cash equivalents | $ | 289.7 |
| | $ | 342.2 |
|
| Short-term investments | 22.0 |
| | 84.3 |
|
| Accounts receivable, net of allowance for doubtful accounts of $55.0 and $39.0 | 162.9 |
| | 144.6 |
|
| Handset and accessory inventory | 12.4 |
| | 24.4 |
|
| Prepaid expenses and other | 294.1 |
| | 132.5 |
|
| Total current assets | 781.1 |
| | 728.0 |
|
| Property, plant and equipment, net | 121.1 |
| | 555.0 |
|
| Intangible assets, net | 269.4 |
| | 892.6 |
|
| Other assets | 305.3 |
| | 554.3 |
|
| Total assets | $ | 1,476.9 |
| | $ | 2,729.9 |
|
| LIABILITIES AND STOCKHOLDERS’ EQUITY |
| Current liabilities | |
| | |
| Accounts payable | $ | 49.1 |
| | $ | 43.8 |
|
| Accrued expenses and other | 390.8 |
| | 268.8 |
|
| Deferred revenues | 8.4 |
| | 10.4 |
|
| Current portion of long-term debt | 560.1 |
| | 582.4 |
|
| Total current liabilities | 1,008.4 |
| | 905.4 |
|
| Long-term debt | 96.7 |
| | 82.6 |
|
| Other long-term liabilities | 117.6 |
| | 197.9 |
|
| Total liabilities | 1,222.7 |
| | 1,185.9 |
|
| Stockholders’ deficit | | | |
Undesignated preferred stock, par value $0.001, 10.0 shares authorized, no shares issued or outstanding | — |
| | — |
|
| Common stock, par value $0.001, 140.0 shares authorized, 100.1 shares issued and outstanding — 2016, 100.0 shares issued and outstanding — 2015 | 0.1 |
| | 0.1 |
|
| Paid-in capital | 2,075.1 |
| | 2,070.5 |
|
| Accumulated deficit | (1,746.2 | ) | | (280.9 | ) |
| Accumulated other comprehensive loss | (74.8 | ) | | (245.7 | ) |
| Total stockholders’ equity | 254.2 |
| | 1,544.0 |
|
| Total liabilities and stockholders’ equity | $ | 1,476.9 |
| | $ | 2,729.9 |
|
CONSOLIDATED CASH FLOW DATA (1) (2)
(in millions)
|
| | | | | | | | | | | | |
| | Successor Company | | | Predecessor Company |
| | Nine Months Ended September 30, | | Three Months Ended September 30 | | | Six Months Ended June 30, |
| | 2016 | | 2015 | | | 2015 |
| | | | | | | |
| Cash and cash equivalents, beginning of period | $ | 342.2 |
| | $ | 423.1 |
| | | $ | 334.2 |
|
| Net cash used in operating activities | (74.9 | ) | | (64.9 | ) | | | (254.8 | ) |
| Net cash provided by investing activities | 96.9 |
| | 37.2 |
| | | 1,027.8 |
|
| Net cash used in financing activities | (72.9 | ) | | (25.2 | ) | | | (778.2 | ) |
| Effect of exchange rate changes on cash and cash equivalents | (1.6 | ) | | 0.6 |
| | | (9.2 | ) |
Change in cash and cash equivalents related to discontinued operations | — |
| | 22.7 |
| | | 103.3 |
|
| Cash and cash equivalents, end of period | $ | 289.7 |
| | $ | 393.5 |
| | | $ | 423.1 |
|
(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 September 11, 2015, we entered into a binding agreement relating to the sale of all of the outstanding equity interests of Nextel Argentina. On January 27, 2016, the agreement was amended to permit Grupo Clarin or any of its affiliates to exercise the right to acquire the remaining 51% equity interest prior to receiving regulatory approval, and Grupo Clarin and its affiliate immediately acquired the remaining 51% of Nextel Argentina for no additional proceeds. In connection with this sale, we have reported the results for Nextel Argentina as discontinued operations throughout this document.
NII HOLDINGS, INC. AND SUBSIDIARIES
OPERATING RESULTS AND METRICS
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2016 (SUCCESSOR COMPANY),
THE THREE MONTHS ENDED SEPTEMBER 30, 2015 (SUCCESSOR COMPANY) AND
THE SIX MONTHS ENDED JUNE 30, 2015 (PREDECESSOR COMPANY)
(UNAUDITED)
|
| | | | | | | | |
| Nextel Brazil |
| (dollars in millions, except ARPU and CPGA, and subscribers in thousands) |
| | | | | |
| | Successor Company | |
| | Three Months Ended
September 30, | |
| | 2016 | | 2015 | |
| Service and other revenues | $ | 255.7 |
| | $ | 266.4 |
| |
| | | | | |
| Handset and accessory revenues | 5.1 |
| | 18.2 |
| |
| Cost of handsets and accessories | (5.8 | ) | | (28.3 | ) | |
| Handset and accessory net subsidy | (0.7 | ) | | (10.1 | ) | |
| Cost of service (exclusive of depreciation and amortization) | (96.5 | ) | | (112.2 | ) | |
| Selling, general and administrative | (134.9 | ) | | (154.9 | ) | |
Adjusted operating income (loss) before depreciation and amortization | $ | 23.6 |
| | $ | (10.8 | ) | |
| | | | | |
| Subscriber units | | | | |
| iDEN | 962.1 |
| | 1,842.0 |
| |
| WCDMA | 2,746.3 |
| | 2,597.7 |
| |
| Total subscriber units in commercial service (as of September 30) | 3,708.4 |
| | 4,439.7 |
| |
| | | | | |
| iDEN net subscriber losses | (130.8 | ) | | (208.1 | ) | |
| WCDMA net subscriber (losses) additions | (5.7 | ) | | 227.3 |
| |
| Total net subscriber (losses) additions | (136.5 | ) | | 19.2 |
| |
| | | | | |
| Migrations from iDEN to WCDMA | 34.9 |
| | 116.2 |
| |
| | | | | |
| iDEN subscriber churn | 4.65 | % | | 3.94 | % | |
| WCDMA subscriber churn | 3.73 | % | | 3.21 | % | |
| Churn (%) | 3.99 | % | | 3.54 | % | |
| | | | | |
| ARPU (1) | $ | 21 |
| | $ | 18 |
| |
| | | | | |
| CPGA (1) | $ | 93 |
| | $ | 104 |
| |
| | | | | |
| CCPU (1) | $ | 18 |
| | $ | 17 |
| |
(1) For information regarding ARPU, CPGA and CCPU, see “Non-GAAP Reconciliations for the Three and Nine Months Ended September 30, 2016 (Successor Company), the Three Months Ended September 30, 2015 (Successor Company) and the Six Months Ended June 30, 2015 (Predecessor Company)” included in this release.
|
| | | | | | | | | | | | | | | | | |
| Nextel Brazil |
| (dollars in millions, except ARPU and CPGA, and subscribers in thousands) |
| | | | | | | | | | |
| | Successor Company | | | Predecessor Company | | Combined | |
| | Nine Months Ended September 30, | | Three Months Ended September 30, | | | Six Months Ended June 30, | | Nine Months Ended September 30, | |
| | 2016 | | 2015 | | | 2015 | | 2015 | |
| Service and other revenues | $ | 719.3 |
| | $ | 266.4 |
| | | $ | 643.8 |
| | $ | 910.2 |
| |
| | | | | | | | | | |
| Handset and accessory revenues | 17.2 |
| | 18.2 |
| | | 39.8 |
| | 58.0 |
| |
| Cost of handsets and accessories | (25.8 | ) | | (28.3 | ) | | | (121.1 | ) | | (149.4 | ) | |
| Handset and accessory net subsidy | (8.6 | ) | | (10.1 | ) | | | (81.3 | ) | | (91.4 | ) | |
Cost of service (exclusive of depreciation and amortization) | (268.5 | ) | | (112.2 | ) | | | (256.2 | ) | | (368.4 | ) | |
| Selling, general and administrative | (382.5 | ) | | (154.9 | ) | | | (381.5 | ) | | (536.4 | ) | |
| Segment earnings (losses) | 59.7 |
| | (10.8 | ) | | | (75.2 | ) | | (86.0 | ) | |
| Reversal of accrued tax contingency | (8.1 | ) | | — |
| | | — |
| | — |
| |
Adjusted operating income (loss) before depreciation and amortization | $ | 51.6 |
| | $ | (10.8 | ) | | | $ | (75.2 | ) | | $ | (86.0 | ) | |
| | | | | | | | | | |
NON-GAAP RECONCILIATIONS
FOR THE THREE AND SIX MONTHS ENDED SEPTEMBER 30, 2016 (SUCCESSOR COMPANY),
THE THREE MONTHS ENDED SEPTEMBER 30, 2015 (SUCCESSOR COMPANY) AND
THE SIX MONTHS ENDED JUNE 30, 2015 (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 |
| | Three Months Ended September 30, |
| | 2016 | | 2015 |
| Consolidated operating loss | $ | (1,386.7 | ) | | $ | (77.7 | ) |
| Consolidated depreciation | 66.3 |
| | 36.4 |
|
| Consolidated amortization | 11.9 |
| | 11.9 |
|
| Consolidated OIBDA | (1,308.5 | ) | | (29.4 | ) |
| Asset impairment charges | 1,317.6 |
| | 4.0 |
|
| Restructuring charges | 6.6 |
| | 0.7 |
|
| Consolidated adjusted OIBDA | $ | 15.7 |
| | $ | (24.7 | ) |
| | | | |
|
| | | | | | | | | | | | | | | | |
| NII Holdings, Inc. |
| | | | | | | | | |
| | Successor Company | | | Predecessor Company | | Combined |
| | Nine Months Ended September 30, | | Three Months Ended September 30, | | | Six Months Ended June 30, | | Nine Months Ended September 30, |
| | 2016 | | 2015 | | | 2015 | | 2015 |
| Consolidated operating loss | $ | (1,469.5 | ) | | $ | (77.7 | ) | | | $ | (303.9 | ) | | $ | (381.6 | ) |
| Consolidated depreciation | 126.1 |
| | 36.4 |
| | | 126.8 |
| | 163.2 |
|
| Consolidated amortization | 32.9 |
| | 11.9 |
| | | 27.1 |
| | 39.0 |
|
| Consolidated OIBDA | (1,310.5 | ) | | (29.4 | ) | | | (150.0 | ) | | (179.4 | ) |
| Reversal of accrued tax contingency | (8.1 | ) | | — |
| | | — |
| | — |
|
| Asset impairment charges | 1,325.8 |
| | 4.0 |
| | | 31.2 |
| | 35.2 |
|
| Restructuring charges | 14.9 |
| | 0.7 |
| | | 5.7 |
| | 6.4 |
|
| Consolidated adjusted OIBDA | $ | 22.1 |
| | $ | (24.7 | ) | | | $ | (113.1 | ) | | $ | (137.8 | ) |
| | | | | | | | | |
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 as follows (in millions, except ARPU):
|
| | | | | | | | | |
| Nextel Brazil |
| | | | | | |
| | Successor Company | | | Predecessor Company | |
| | Three Months Ended
September 30, | |
| | 2016 | | | 2015 | |
| | | | | | |
| Service and other revenues | $ | 255.7 |
| | | $ | 266.4 |
| |
| Less: other revenues | (22.9 | ) | | | (31.5 | ) | |
| Total subscriber revenues | $ | 232.8 |
| | | $ | 234.9 |
| |
| | | | | | |
| | | | | | |
ARPU calculated with subscriber revenues | $ | 21 |
| | | $ | 18 |
| |
| | | | | | |
ARPU calculated with service and other revenues | $ | 23 |
| | | $ | 20 |
| |
| | | | | | |
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 as follows (in millions, except CPGA):
|
| | | | | | | | | |
| Nextel Brazil |
| | | | | | |
| | Successor Company | | | Predecessor Company | |
| | Three Months Ended
September 30, | |
| | 2016 | | | 2015 | |
| | | | | | |
| Consolidated handset and accessory revenues | $ | 5.1 |
| | | $ | 18.2 |
| |
Less: consolidated uninsured handset replacement revenues | (0.1 | ) | | | (0.1 | ) | |
| Consolidated handset and accessory revenues, net | 5.0 |
| | | 18.1 |
| |
| Less: consolidated cost of handsets and accessories | 5.8 |
| | | 28.3 |
| |
| Consolidated handset subsidy costs | 0.8 |
| | | 10.2 |
| |
| Consolidated selling and marketing | 30.4 |
| | | 44.2 |
| |
| Costs per statement of operations | 31.2 |
| | | 54.4 |
| |
Less: consolidated costs unrelated to initial customer acquisition | (2.0 | ) | | | (3.8 | ) | |
| Customer acquisition costs | $ | 29.2 |
| | | $ | 50.6 |
| |
| | | | | | |
| Cost per Gross Add | $ | 93 |
| | | $ | 104 |
| |
| | | | | | |
Cash Cost per Handset/User
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. The CCPU calculation excludes material asset impairments, severance costs associated with publicly announced restructuring plans and other material non-recurring or unusual charges and is calculated as follows (in thousands, except CCPU):
|
| | | | | | | | | |
| Nextel Brazil |
| | | | | | |
| | Successor Company | | | Predecessor Company | |
| | Three Months Ended
September 30, | |
| | 2016 | | | 2015 | |
| | | | | | |
| Total selling, general and administrative expenses | $ | 134.9 |
| | | $ | 154.9 |
| |
| Less: selling and marketing expenses | (30.4 | ) | | | (44.2 | ) | |
| General and administrative expenses | 104.5 |
| | | 110.7 |
| |
| Cost of service | 96.5 |
| | | 112.2 |
| |
| Customer retention costs and other | 1.9 |
| | | 3.8 |
| |
| Total | $ | 202.9 |
| | | $ | 226.7 |
| |
| | | | | | |
| Cash Cost per User | $ | 18 |
| | | $ | 17 |
| |
| | | | | | |
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 combined nine-month periods ended September 30, 2015 compared to the same periods in 2016 by (i) adjusting the relevant measures for the three- and combined nine-month periods ended September 30, 2015 to levels that would have resulted if the average foreign currency exchange rates for the three- and combined-months ended September 30, 2015 were the same as the average foreign currency exchange rates that were in effect for the three and nine months ended September 30, 2016; and (ii) comparing the actual and adjusted financial measures for the three- and combined nine-month periods ended September 30, 2015 to the similar financial measures for the three and nine months ended September 30, 2016 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-month periods ended September 30, 2016 and 2015. The average foreign currency exchange rates for each of the relevant currencies during each of the three and nine months ended September 30, 2016 and the three- and combined nine-month periods ended September 30, 2015 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 nine months ended September 30, 2016 compared to the three- and combined nine-month periods ended September 30, 2015 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) |
| | | | | | | | | |
| | Successor Company | | | Successor Company | | |
| | Three Months Ended September 30, | | |
| | 3Q 2015 Actual |
3Q 2015 Adjustment (1) |
3Q 2015 Normalized (1) | | | 3Q 2016 Actual | 3Q 2015 to 3Q 2016 Actual B(W) Growth (2) | 3Q 2015 to 3Q 2016 Normalized B(W) Growth (3) |
| | | | | | | | | |
| Consolidated: | | | | | | | | |
| Operating revenues | $ | 284,652 |
| $ | 26,271 |
| $ | 310,923 |
| | | $ | 260,836 |
| (8)% | (16)% |
| Adjusted OIBDA | (24,638 | ) | (998 | ) | (25,636 | ) | | | 15,714 |
| 164% | 161% |
| Nextel Brazil: | | | | | | | | |
| Operating revenues | $ | 284,606 |
| $ | 26,271 |
| $ | 310,877 |
| | | $ | 260,798 |
| (8)% | (16)% |
| Adjusted OIBDA | (10,808 | ) | (998 | ) | (11,806 | ) | | | 23,636 |
| 319% | 300% |
|
| | | | | | | | | | | | | | | | |
| NII Holdings, Inc. |
| (dollars in thousands) |
| | | | | | | | | |
| | Combined Predecessor and Successor Company | | | Successor Company | | |
| | Nine Months Ended September 30, | | |
| | YTD 2015 Actual |
YTD 2015 Adjustment (1) |
YTD 2015 Normalized (1) | | | YTD 2016 Actual | YTD 2015 to YTD 2016 B(W) Growth (2) | YTD 2015 to YTD 2016 Normalized B(W) Growth (3) |
| | | | | | | | | |
| Consolidated: | | | | | | | | |
| Operating revenues | $ | 968,363 |
| $ | (108,788 | ) | $ | 859,575 |
| | | $ | 736,606 |
| (24)% | (14)% |
| Adjusted OIBDA | (137,854 | ) | 9,668 |
| (128,186 | ) | | | 22,057 |
| 116% | 117% |
| Nextel Brazil: | | | | | | | | |
| Operating revenues | $ | 968,217 |
| $ | (108,788 | ) | $ | 859,429 |
| | | $ | 736,469 |
| (24)% | (14)% |
| Adjusted OIBDA | (86,042 | ) | 9,668 |
| (76,374 | ) | | | 51,519 |
| 160% | 167% |
| |
| (1) | The "3Q 2015 Normalized" and "YTD 2015 Normalized" amounts reflect the impact of applying the average foreign currency exchange rates for the three and months ended September 30, 2016 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 combined nine-month periods ended September 30, 2015, 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 2015 Adjustment" and "YTD 2015 Adjustment" reflect the amount determined by subtracting the "3Q 2015 Normalized" and "YTD 2015 Normalized" amounts calculated as described in the preceding sentence from the "3Q 2015 Actual" and "YTD 2015 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, 2016. The average foreign currency exchange rates for each of the relevant currencies during the three and nine months ended September 30, 2016 and three- and combined nine-month periods ended September 30, 2015 for purposes of these calculations were as follows: |
|
| | | | | | | |
| | Successor Company | | Combined |
| | Three Months Ended September 30, | | Nine Months Ended September 30, |
| | 2016 | | 2015 | | 2016 | | 2015 |
| Brazilian real | 3.25 | | 3.55 | | 3.56 | | 3.16 |
| |
| (2) | The percentage amounts in these columns reflect the better, or B, or worse, or W, growth rates for each of the financial measures comparing the amounts in the "3Q 2016 Actual" and "YTD 2016 Actual" columns with those in the "3Q 2015 Actual" and "YTD 2015 Actual" columns. |
| |
| (3) | The percentage amounts in these columns reflect the better, or B, or worse, or W, growth rates for each of the financial measures comparing the amounts in the "3Q 2016 Actual" and "YTD 2016 Actual" columns with those in the "3Q 2015 Normalized" and "YTD 2015 Normalized" columns. |
