RESTON, Va., May 12, 2014 /PRNewswire/ -- NII Holdings,
Inc. [NASDAQ: NIHD] today announced its consolidated financial
results for the first quarter of 2014. The Company reported a net
loss of 52,000 subscribers for the quarter, bringing its
quarter-end subscriber base to 9.4 million, a 4 percent decrease
from a year ago. Financial results for the first quarter include
consolidated operating revenues of $970
million, a 27 percent decrease compared to the first quarter
of 2013; consolidated adjusted OIBDA loss, which excludes the
impact of non-cash asset impairments, restructuring charges and
other unusual items, of $84 million;
and a consolidated operating loss of $239
million. For the first quarter 2014, the Company generated a
net loss from continuing operations of $376
million, or $2.19 per basic
share. Capital expenditures were $118
million for the period.
"Our focus for 2014 is to drive better operational and financial
results by stabilizing our operations in Mexico and investing in subscriber growth in
Brazil," said Steve Shindler, NII Holdings' chief executive
officer. "Our 3G net subscriber additions in Brazil more than doubled this quarter from the
fourth quarter of 2013, but were not enough to offset the continued
subscriber losses in Mexico. We
continue to believe that our focus on our core markets in
Brazil and Mexico and our high quality networks, combined
with aggressive rate plan offers and an increasing portfolio of
smartphones, position us to attract customers and improve our
results over the long term."
NII Holdings' consolidated average monthly service revenue per
subscriber (ARPU) was $29 for the
first quarter of 2014, down from $39
in the prior year. The Company also reported consolidated average
monthly churn of 3.42 percent for the period, compared to 2.42
percent in the first quarter of 2013. Consolidated cost per
gross add (CPGA) was $290 for the
first quarter 2014, a $13 increase
from the year ago period.
The Company ended the first quarter with $5.9 billion in total debt and $1.7 billion in consolidated cash and short-term
investments, resulting in $4.2
billion of net debt.
"Although our cash use is typically higher in the first half of
the year, it was particularly high in the first quarter of 2014 due
in part to the required prepayment of $135
million in annual spectrum fees in Mexico that have historically been due in the
second quarter of the year. We also increased handset inventories
by approximately $68 million,
primarily in Mexico and
Brazil, as we expanded our
portfolio and prepared for the launch of iconic handsets in both
markets," said Juan Figuereo NII Holdings executive vice president
and chief financial officer. "With revenue generation falling short
of our expectations and the need to continue to invest in
subscriber growth, we are increasing the intensity of our focus on
balancing investments with preserving liquidity."
Additional information relating to NII Holdings' first quarter
2014 results will be provided on the Company's earnings call on
Monday, May 12, 2014 from
8:30 AM to 9:15 AM EDT. The
call is available via webcast, online at www.nii.com on the
Investor Relations page or by phone at the numbers below.
Phone:
Domestic
1 800 741 4871 pass-code: NII HOLDINGS
International
+1 212 231 2914 pass-code: NII HOLDINGS
Please click here for additional Global Access Numbers
All participants are asked to dial in 10-15 minutes prior to the
start of the conference call. If you are unable to participate, a
rebroadcast of the conference call will be available for two weeks
following the call. The call will also be available via webcast,
online at www.nii.com on the Investor Relations page.
Conference Call Replay:
Domestic
1 800 633 8284 pass-code: 21715400
International
+1 402 977 9140 pass-code: 21715400
In addition to the preliminary results prepared in accordance
with accounting principles generally accepted in the United States (GAAP) provided throughout
this press release, NII Holdings has presented consolidated
adjusted OIBDA, ARPU, CPGA and Net Debt. 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 table. To view these and other reconciliations
of non-GAAP financial measures that the Company uses and
information about how to access the conference call discussing NII
Holdings' first quarter 2014 results, 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, Mexico, Argentina and Chile, offers fully integrated wireless
communications tools with digital cellular voice services, data
services, wireless Internet access and Nextel Direct
Connect® and International Direct ConnectSM,
a digital two-way radio. NII Holdings is a Fortune 500 and
Barron's 500 company, and has also
been named one of the best places to work among multinationals in
Latin America by the Great Place
to Work® Institute. The Company trades on the NASDAQ
market under the symbol NIHD. 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 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 and maintain compliance with financial covenants
under its existing operating company debt obligations, customer
growth and retention, pricing, network usage, operating costs, the
timing of various events, the economic and regulatory environment
and the foreign exchange rates that will prevail during 2014.
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 on our financial results,
not meeting our business plans or failing to meet our financial
covenants on the required testing dates; the impact of more intense
competitive conditions and changes in economic conditions in the
markets we serve; the risk that our network technologies will not
perform properly or support the services our customers want or
need; the risk that customers in the markets we serve will not find
our services attractive; potential reductions in the recorded value
of our assets that may result from fluctuations in foreign currency
exchange rates and, in particular, fluctuations in the relative
values of the currencies of the countries in which we operate
compared to the U.S. dollar; unexpected results of litigation; and
the additional risks and uncertainties that are described in NII
Holdings' Annual Report on Form 10-K for the fiscal year ended
December 31, 2013, 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 Relations: Tahmin
Clarke
(703) 390-7174
tahmin.clarke@nii.com
Media Relations: Claudia
Restrepo
(786) 251-7020
claudia.restrepo@nii.com
NII HOLDINGS, INC.
AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 2014 AND
2013 (in millions, except per share
amounts)
|
|
|
Three Months
Ended
March
31,
|
|
2014
|
|
|
2013
|
|
|
(unaudited)
|
|
|
|
|
|
|
|
Operating
revenues
Service and
other revenues
|
$
|
913.9
|
|
|
$
|
1,283.1
|
|
Handset and
accessory revenues
|
56.3
|
|
|
47.7
|
|
|
970.2
|
|
|
1,330.8
|
|
Operating
expenses
Cost of
service (exclusive of depreciation and amortization
included below)
|
337.6
|
|
|
399.1
|
|
Cost of
handset and accessory sales
|
265.8
|
|
|
206.3
|
|
Selling,
general and administrative
|
450.7
|
|
|
497.5
|
|
Impairment and
restructuring (benefits) charges
|
(2.5)
|
|
|
124.6
|
|
Depreciation
|
140.6
|
|
|
167.5
|
|
Amortization
|
17.1
|
|
|
15.3
|
|
|
1,209.3
|
|
|
1,410.3
|
|
Operating
loss
|
(239.1)
|
|
|
(79.5)
|
|
Other (expense)
income
Interest
expense, net
|
(140.2)
|
|
|
(109.7)
|
|
Interest
income
|
20.1
|
|
|
6.5
|
|
Foreign
currency transaction (losses) gains, net
|
(7.2)
|
|
|
23.2
|
|
Other expense,
net
|
(4.7)
|
|
|
(4.7)
|
|
|
(132.0)
|
|
|
(84.7)
|
|
Loss from
continuing operations before income tax provision
|
(371.1)
|
|
|
(164.2)
|
|
Income tax
provision
|
(5.0)
|
|
|
(21.6)
|
|
Net loss from
continuing operations
|
(376.1)
|
|
|
(185.8)
|
|
Loss from
discontinued operations, net of income
taxes
|
—
|
|
|
(21.7)
|
|
Net
loss
|
$
|
(376.1)
|
|
|
$
|
(207.5)
|
|
|
|
|
|
|
|
Net loss from
continuing operations, per common
share,
basic and diluted
|
$
|
(2.19)
|
|
|
$
|
(1.08)
|
|
Net loss from
discontinued operations, per common share,
basic and
diluted
|
—
|
|
|
(0.13)
|
|
Net loss, per
common share, basic and diluted
|
$
|
(2.19)
|
|
|
$
|
(1.21)
|
|
|
|
|
|
|
|
Weighted average
number of common shares outstanding,
basic
and diluted
|
172.1
|
|
|
171.7
|
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
(in millions, except par values)
|
|
|
March 31,
2014
|
|
|
December 31,
2013
|
|
|
(unaudited)
|
|
ASSETS
|
|
|
|
|
|
|
Current
assets
|
|
|
|
Cash and cash
equivalents
|
$
|
1,299.8
|
|
|
$
|
1,733.8
|
|
Short-term
investments
|
305.2
|
|
|
585.8
|
|
Accounts receivable,
less allowance for doubtful accounts of $65.1 and $61.3
|
501.5
|
|
|
522.5
|
|
Handset and accessory
inventory
|
411.1
|
|
|
342.6
|
|
Deferred income
taxes, net
|
110.6
|
|
|
127.4
|
|
Prepaid expenses and
other
|
562.4
|
|
|
436.1
|
|
Total current
assets
|
3,190.6
|
|
|
3,748.2
|
|
Property, plant
and equipment, net
|
3,395.0
|
|
|
3,388.1
|
|
Intangible assets,
net
|
1,013.1
|
|
|
993.7
|
|
Deferred income
taxes, net
|
28.2
|
|
|
26.7
|
|
Other
assets
|
562.8
|
|
|
523.3
|
|
Total
assets
|
$
|
8,189.7
|
|
|
$
|
8,680.0
|
|
LIABILITIES AND
STOCKHOLDERS' (DEFICIT) EQUITY
|
|
|
|
|
|
|
Current
liabilities
|
|
|
|
Accounts
payable
|
$
|
316.1
|
|
|
$
|
369.1
|
|
Accrued expenses and
other
|
857.2
|
|
|
972.5
|
|
Deferred
revenues
|
119.0
|
|
|
128.2
|
|
Current portion of
long-term debt
|
103.5
|
|
|
96.8
|
|
Deposits related to
2013 sale of towers
|
715.8
|
|
|
720.0
|
|
Total current
liabilities
|
2,111.6
|
|
|
2,286.6
|
|
Long-term
debt
|
5,749.3
|
|
|
5,696.6
|
|
Deferred
revenues
|
10.6
|
|
|
11.3
|
|
Deferred income
tax liabilities
|
97.3
|
|
|
109.0
|
|
Other long-term
liabilities
|
229.7
|
|
|
221.1
|
|
Total
liabilities
|
8,198.5
|
|
|
8,324.6
|
|
Commitments and
contingencies
|
|
|
|
|
|
Stockholders'
(deficit) equity
|
|
|
|
Undesignated
preferred stock, par value $0.001, 10.0 shares authorized, no
shares issued or outstanding
|
—
|
|
|
—
|
|
Common stock, par
value $0.001, 600.0 shares authorized, 172.1 shares issued and
outstanding
|
0.2
|
|
|
0.2
|
|
Paid-in
capital
|
1,508.3
|
|
|
1,504.3
|
|
Accumulated
deficit
|
(569.1)
|
|
|
(193.0)
|
|
Accumulated other
comprehensive loss
|
(948.2)
|
|
|
(956.1)
|
|
Total stockholders'
(deficit) equity
|
(8.8)
|
|
|
355.4
|
|
Total liabilities and
stockholders' (deficit) equity
|
$
|
8,189.7
|
|
|
$
|
8,680.0
|
|
CONDENSED
CONSOLIDATED CASH FLOW DATA (in millions)
|
|
|
Three Months
Ended
March
31,
|
|
2014
|
|
|
2013
|
|
|
(unaudited)
|
Cash and cash
equivalents, beginning of period
|
$
|
1,733.8
|
|
|
$
|
1,371.2
|
|
Net cash used in
operating activities
|
(485.6)
|
|
|
(142.6)
|
|
Net cash provided by
(used in) investing activities
|
90.4
|
|
|
(121.5)
|
|
Net cash (used in)
provided by financing activities
|
(4.6)
|
|
|
762.8
|
|
Effect of exchange
rate changes on cash and cash equivalents
|
(34.2)
|
|
|
2.2
|
|
Change in cash and
cash equivalents held for sale
|
—
|
|
|
4.0
|
|
Cash and cash
equivalents, end of period
|
$
|
1,299.8
|
|
|
$
|
1,876.1
|
|
NII HOLDINGS, INC.
AND SUBSIDIARIES OPERATING RESULTS AND
METRICS FOR THE THREE MONTHS ENDED MARCH 31, 2014 AND
2013 (UNAUDITED)
|
|
NII Holdings,
Inc
|
(subscribers in
thousands)
|
|
|
|
|
|
|
|
Three Months
Ended
March
31,
|
|
2014
|
|
|
2013
|
|
iDEN
|
7,101.1
|
|
|
9,403.1
|
|
WCDMA
|
2,336.2
|
|
|
410.7
|
|
Total
subscriber units in commercial service (as of March
31)
|
9,437.3
|
|
|
9,813.8
|
|
|
|
|
|
|
|
iDEN
|
(405.1)
|
|
|
(7.7)
|
|
WCDMA
|
353.1
|
|
|
119.5
|
|
Total
net subscriber (losses) additions
|
(52.0)
|
|
|
111.8
|
|
|
|
|
|
|
|
Migrations from
iDEN to WCDMA
|
241.0
|
|
|
87.0
|
|
|
|
|
|
|
|
iDEN customer
churn
|
3.74
|
%
|
|
2.38
|
%
|
WCDMA customer
churn
|
2.24
|
%
|
|
4.17
|
%
|
Churn
(%)
|
3.42
|
%
|
|
2.42
|
%
|
|
|
|
|
|
|
Average monthly
revenue per handset/unit in service (ARPU) (1)
|
$
|
29
|
|
|
$
|
39
|
|
|
|
|
|
|
|
Cost per gross add
(CPGA) (1)
|
$
|
290
|
|
|
$
|
277
|
|
Nextel
Brazil
|
(dollars in
millions, except ARPU and CPGA, and subscribers in
thousands)
|
|
|
Three Months
Ended
March
31,
|
|
2014
|
|
|
2013
|
|
Operating
revenues
Service and
other revenues
|
$
|
425.8
|
|
|
$
|
616.6
|
|
Handset and
accessory revenues
|
35.4
|
|
|
19.3
|
|
|
461.2
|
|
|
635.9
|
|
Operating
expenses
Cost of
service (exclusive of depreciation and amortization
included
below)
|
168.2
|
|
|
217.4
|
|
Cost of
handset and accessory sales
|
111.7
|
|
|
50.6
|
|
Selling,
general and administrative
|
210.4
|
|
|
210.3
|
|
Segment (losses)
earnings
|
$
|
(29.1)
|
|
|
$
|
157.6
|
|
|
|
|
|
|
|
iDEN
|
3,484.3
|
|
|
3,806.8
|
|
WCDMA
|
645.1
|
|
|
77.9
|
|
Total
subscriber units in commercial service (as of March
31)
|
4,129.4
|
|
|
3,884.7
|
|
|
|
|
|
|
|
iDEN
|
(88.3)
|
|
|
(39.5)
|
|
WCDMA
|
259.5
|
|
|
77.9
|
|
Total
net subscriber additions
|
171.2
|
|
|
38.4
|
|
|
|
|
|
|
|
Migrations from
iDEN to WCDMA
|
47.7
|
|
|
—
|
|
|
|
|
|
|
|
iDEN customer
churn
|
2.53
|
%
|
|
2.34
|
%
|
WCDMA customer
churn
|
1.47
|
%
|
|
NM
|
Churn
(%)
|
2.39
|
%
|
|
2.34
|
%
|
|
|
|
|
|
|
ARPU
(1)
|
$
|
31
|
|
|
$
|
47
|
|
|
|
|
|
|
|
CPGA
(1)
|
$
|
272
|
|
|
$
|
204
|
|
Nextel
Mexico
|
(dollars in
millions, except ARPU and CPGA, and subscribers in
thousands)
|
|
|
Three Months
Ended
March
31,
|
|
2014
|
|
|
2013
|
|
Operating
revenues
Service and
other revenues
|
$
|
373.3
|
|
|
$
|
501.0
|
|
Handset and
accessory revenues
|
8.5
|
|
|
13.0
|
|
|
381.8
|
|
|
514.0
|
|
Operating
expenses
Cost of
service (exclusive of depreciation and amortization
included
below)
|
124.8
|
|
|
123.2
|
|
Cost of
handset and accessory sales
|
133.3
|
|
|
128.5
|
|
Selling,
general and administrative
|
136.2
|
|
|
161.1
|
|
Segment (losses)
earnings
|
$
|
(12.5)
|
|
|
$
|
101.2
|
|
|
|
|
|
|
|
iDEN
|
1,593.8
|
|
|
3,729.1
|
|
WCDMA
|
1,458.4
|
|
|
188.5
|
|
Total
subscriber units in commercial service (as of March
31)
|
3,052.2
|
|
|
3,917.6
|
|
|
|
|
|
|
|
iDEN
|
(289.1)
|
|
|
(29.0)
|
|
WCDMA
|
76.8
|
|
|
44.8
|
|
Total
net subscriber (losses) additions
|
(212.3)
|
|
|
15.8
|
|
|
|
|
|
|
|
Migrations from
iDEN to WCDMA
|
191.7
|
|
|
84.7
|
|
|
|
|
|
|
|
iDEN customer
churn
|
5.68
|
%
|
|
2.15
|
%
|
WCDMA customer
churn
|
2.40
|
%
|
|
0.17
|
%
|
Churn
(%)
|
4.30
|
%
|
|
2.08
|
%
|
|
|
|
|
|
|
ARPU
(1)
|
$
|
35
|
|
|
$
|
38
|
|
|
|
|
|
|
|
CPGA
(1)
|
$
|
578
|
|
|
$
|
487
|
|
Nextel
Argentina
|
(dollars in
millions, except ARPU and CPGA, and subscribers in
thousands)
|
|
|
Three Months
Ended
March 31,
|
|
2014
|
|
|
2013
|
|
Operating
revenues
Service and
other revenues
|
$
|
100.9
|
|
|
$
|
153.1
|
|
Handset and
accessory revenues
|
11.8
|
|
|
13.9
|
|
|
112.7
|
|
|
167.0
|
|
Operating
expenses
Cost of
service (exclusive of depreciation and amortization
included
below)
|
26.9
|
|
|
40.1
|
|
Cost of
handset and accessory sales
|
16.1
|
|
|
21.2
|
|
Selling,
general and administrative
|
42.7
|
|
|
53.4
|
|
Segment
earnings
|
$
|
27.0
|
|
|
$
|
52.3
|
|
|
|
|
|
|
|
iDEN
|
1,996.7
|
|
|
1,819.2
|
|
WCDMA
|
—
|
|
|
—
|
|
Total
subscriber units in commercial service (as of March
31)
|
1,996.7
|
|
|
1,819.2
|
|
|
|
|
|
|
|
iDEN
|
(26.4)
|
|
|
63.6
|
|
WCDMA
|
—
|
|
|
—
|
|
Total
net subscriber (losses) additions
|
(26.4)
|
|
|
63.6
|
|
|
|
|
|
|
|
iDEN customer
churn
|
4.16
|
%
|
|
2.93
|
%
|
WCDMA customer
churn
|
—
|
|
|
—
|
|
Churn
(%)
|
4.16
|
%
|
|
2.93
|
%
|
|
|
|
|
|
|
ARPU
(1)
|
$
|
15
|
|
|
$
|
25
|
|
|
|
|
|
|
|
CPGA
(1)
|
$
|
66
|
|
|
$
|
94
|
|
|
|
(1)
|
For information
regarding ARPU and CPGA, see "Non-GAAP Reconciliations for the
Three Months Ended March 31, 2014 and 2013" included in this
release.
|
NON-GAAP RECONCILIATIONS
FOR THE
THREE MONTHS ENDED MARCH 31, 2014 AND
2013
(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 non-cash 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
|
|
|
Three Months
Ended
March
31,
|
|
2014
|
|
|
2013
|
|
Consolidated
operating loss
|
$
|
(239.1)
|
|
|
$
|
(79.5)
|
|
Consolidated
depreciation
|
140.6
|
|
|
167.5
|
|
Consolidated
amortization
|
17.1
|
|
|
15.3
|
|
Consolidated
operating (loss) income
before
depreciation and amortization
|
(81.4)
|
|
|
103.3
|
|
Non-cash asset
impairment charges
|
—
|
|
|
85.3
|
|
Restructuring
(benefits) charges
|
(2.5)
|
|
|
39.3
|
|
Consolidated adjusted
operating (loss)
income before
depreciation and
amortization
|
$
|
(83.9)
|
|
|
$
|
227.9
|
|
|
|
|
|
|
|
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
|
|
|
|
|
|
|
|
|
Three Months
Ended
March
31,
|
|
|
2014
|
|
|
2013
|
|
|
|
|
|
Consolidated service
and other revenues
|
$
|
913.9
|
|
|
$
|
1,283.1
|
|
|
Less: consolidated
other revenues
|
(105.5)
|
|
|
(147.5)
|
|
|
Total consolidated
subscriber revenues
|
$
|
808.4
|
|
|
$
|
1,135.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ARPU
calculated with subscriber revenues
|
$
|
29
|
|
|
$
|
39
|
|
|
|
|
|
|
|
|
|
ARPU
calculated with service and other revenues
|
$
|
32
|
|
|
$
|
44
|
|
|
|
|
|
|
|
|
|
Nextel
Brazil
|
|
|
|
|
|
|
|
|
Three Months
Ended
March
31,
|
|
|
2014
|
|
|
2013
|
|
|
|
|
|
Service and other
revenues
|
$
|
425.8
|
|
|
$
|
616.6
|
|
|
Less: other
revenues
|
(51.6)
|
|
|
(73.5)
|
|
|
Total subscriber
revenues
|
$
|
374.2
|
|
|
$
|
543.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ARPU
calculated with subscriber revenues
|
$
|
31
|
|
|
$
|
47
|
|
|
|
|
|
|
|
|
|
ARPU
calculated with service and other revenues
|
$
|
35
|
|
|
$
|
53
|
|
|
|
|
|
|
|
|
|
Nextel
Mexico
|
|
|
|
|
|
|
|
|
Three Months
Ended
March
31,
|
|
|
2014
|
|
|
2013
|
|
|
|
|
|
Service and other
revenues
|
$
|
373.3
|
|
|
$
|
501.0
|
|
|
Less: other
revenues
|
(42.2)
|
|
|
(53.4)
|
|
|
Total subscriber
revenues
|
$
|
331.1
|
|
|
$
|
447.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ARPU
calculated with subscriber revenues
|
$
|
35
|
|
|
$
|
38
|
|
|
|
|
|
|
|
|
|
ARPU
calculated with service and other revenues
|
$
|
39
|
|
|
$
|
43
|
|
|
|
|
|
|
|
|
|
Nextel
Argentina
|
|
|
|
|
|
|
|
|
Three Months
Ended
March 31,
|
|
|
2014
|
|
|
2013
|
|
|
|
|
|
Service and other
revenues
|
$
|
100.9
|
|
|
$
|
153.1
|
|
|
Less: other
revenues
|
(11.1)
|
|
|
(19.8)
|
|
|
Total subscriber
revenues
|
$
|
89.8
|
|
|
$
|
133.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ARPU
calculated with subscriber revenues
|
$
|
15
|
|
|
$
|
25
|
|
|
|
|
|
|
|
|
|
ARPU
calculated with service and other revenues
|
$
|
17
|
|
|
$
|
29
|
|
|
|
|
|
|
|
|
|
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
|
|
|
|
|
|
|
|
|
Three Months
Ended
March 31,
|
|
|
2014
|
|
|
2013
|
|
|
|
|
|
Consolidated handset
and accessory revenues
|
$
|
56.3
|
|
|
$
|
47.7
|
|
|
Less: consolidated
uninsured handset replacement revenues
|
(5.2)
|
|
|
(4.2)
|
|
|
Consolidated handset
and accessory revenues, net
|
51.1
|
|
|
43.5
|
|
|
Less: consolidated
cost of handset and accessory sales
|
265.8
|
|
|
206.3
|
|
|
Consolidated handset subsidy costs
|
214.7
|
|
|
162.8
|
|
|
Consolidated selling
and marketing
|
148.6
|
|
|
144.1
|
|
|
Costs per statement
of operations
|
363.3
|
|
|
306.9
|
|
|
Less: consolidated
costs unrelated to initial customer acquisition
|
(97.0)
|
|
|
(79.1)
|
|
|
Customer acquisition costs
|
$
|
266.3
|
|
|
$
|
227.8
|
|
|
|
|
|
|
|
|
|
Cost per Gross
Add
|
$
|
290
|
|
|
$
|
277
|
|
|
|
|
|
|
|
|
|
Nextel
Brazil
|
|
|
|
|
|
|
|
|
Three Months
Ended
March 31,
|
|
|
2014
|
|
|
2013
|
|
|
|
|
|
Handset and accessory
revenues
|
$
|
35.4
|
|
|
$
|
19.3
|
|
|
Less: uninsured
handset replacement revenues
|
(2.1)
|
|
|
(1.9)
|
|
|
Handset and accessory
revenues, net
|
33.3
|
|
|
17.4
|
|
|
Less: cost of handset
and accessory sales
|
111.7
|
|
|
50.6
|
|
|
Handset subsidy costs
|
78.4
|
|
|
33.2
|
|
|
Selling and
marketing
|
68.8
|
|
|
44.9
|
|
|
Costs per statement
of operations
|
147.2
|
|
|
78.1
|
|
|
Less: costs unrelated
to initial customer acquisition
|
(21.7)
|
|
|
(15.1)
|
|
|
Customer acquisition costs
|
$
|
125.5
|
|
|
$
|
63.0
|
|
|
|
|
|
|
|
|
|
Cost per Gross
Add
|
$
|
272
|
|
|
$
|
204
|
|
|
|
|
|
|
|
|
|
Nextel
Mexico
|
|
|
|
|
|
|
|
|
Three Months
Ended
March 31,
|
|
|
2014
|
|
|
2013
|
|
|
|
|
|
Handset and accessory
revenues
|
$
|
8.5
|
|
|
$
|
13.0
|
|
|
Less: uninsured
handset replacement revenues
|
(3.0)
|
|
|
(2.3)
|
|
|
Handset and accessory
revenues, net
|
5.5
|
|
|
10.7
|
|
|
Less: cost of handset
and accessory sales
|
133.3
|
|
|
128.5
|
|
|
Handset subsidy costs
|
127.8
|
|
|
117.8
|
|
|
Selling and
marketing
|
59.0
|
|
|
71.7
|
|
|
Costs per statement
of operations
|
186.8
|
|
|
189.5
|
|
|
Less: costs unrelated
to initial customer acquisition
|
(74.0)
|
|
|
(62.8)
|
|
|
Customer acquisition costs
|
$
|
112.8
|
|
|
$
|
126.7
|
|
|
|
|
|
|
|
|
|
Cost per Gross
Add
|
$
|
578
|
|
|
$
|
487
|
|
|
|
|
|
|
|
|
|
Nextel
Argentina
|
|
|
|
|
|
|
|
|
Three Months
Ended
March 31,
|
|
|
2014
|
|
|
2013
|
|
|
|
|
|
Handset and accessory
revenues
|
$
|
11.8
|
|
|
$
|
13.9
|
|
|
Less: uninsured
handset replacement revenues
|
—
|
|
|
—
|
|
|
Handset and accessory
revenues, net
|
11.8
|
|
|
13.9
|
|
|
Less: cost of
handsets and accessories
|
16.1
|
|
|
21.2
|
|
|
Handset subsidy costs
|
4.3
|
|
|
7.3
|
|
|
Selling and
marketing
|
11.2
|
|
|
14.4
|
|
|
Costs per statement
of operations
|
15.5
|
|
|
21.7
|
|
|
Less: costs unrelated
to initial customer acquisition
|
(0.6)
|
|
|
(1.0)
|
|
|
Customer acquisition costs
|
$
|
14.9
|
|
|
$
|
20.7
|
|
|
|
|
|
|
|
|
|
Cost per Gross
Add
|
$
|
66
|
|
|
$
|
94
|
|
|
|
|
|
|
|
|
|
Net Debt
Net debt represents total debt less cash, cash equivalents,
short-term and long-term investments and restricted cash. Net debt
is not a measurement under accounting principles generally accepted
in the United States, may not be
similar to net debt measures of other companies and should be
considered in addition to, but not as a substitute for, the
information contained in our balance sheets. We believe that net
debt provides useful information concerning our liquidity and
leverage. Net debt as of March 31,
2014 can be calculated as follows (in millions):
NII Holdings,
Inc
|
Total debt
|
$
|
5,852.8
|
|
Add: debt
discounts
|
10.0
|
|
Less: cash and cash
equivalents
|
1,299.8
|
|
Less: short-term
investments
|
305.2
|
|
Less: long-term
investments
|
13.8
|
|
Less: restricted
cash
|
93.3
|
|
Net debt
|
$
|
4,150.7
|
|
|
|
|
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
months ended March 31, 2014 compared
to the same period in 2013 by (i) adjusting the relevant measures
for three months ended March 31, 2013
to levels that would have resulted if the average foreign currency
exchange rates for the three months ended March 31, 2013 were the same as the average
foreign currency exchange rates that were in effect for the three
months ended March 31, 2014; and (ii)
comparing the actual and adjusted financial measures for the three
months ended March 31, 2013 to the
similar financial measures for the three months ended March 31, 2014 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, Nextel Mexico 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 months ended
March 31, 2014 and 2013. The average
foreign currency exchange rates for each of the relevant currencies
during each of the three months ended March
31, 2014 and 2013 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 months ended March 31, 2014 compared to the same period in
2013 by removing the impact of the significant difference in the
average foreign currency exchange rates in effect for the
period.
NII Holdings,
Inc
|
(dollars in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
March 31,
|
|
|
|
1Q 2013
Actual
|
1Q 2013
Adjustment
(1)
|
1Q 2013
Normalized
(1)
|
1Q 2014
Actual
|
1Q
2013 to 1Q
2014 Actual
Growth Rate
(2)
|
1Q
2013
to 1Q
2014
Normalized
Growth Rate
(3)
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated:
|
|
|
|
|
|
|
|
|
|
|
Operating
revenues
|
$
|
1,330,839
|
|
$
|
(181,757)
|
|
$
|
1,149,082
|
|
$
|
970,214
|
|
(27)%
|
(16)%
|
Adjusted
operating income (loss)
before depreciation and
amortization
|
227,913
|
|
(68,293)
|
|
159,620
|
|
(83,931)
|
|
(137)%
|
(153)%
|
Nextel
Brazil:
|
|
|
|
|
|
|
|
|
|
|
Operating
revenues
|
$
|
635,872
|
|
$
|
(98,851)
|
|
$
|
537,021
|
|
$
|
461,224
|
|
(27)%
|
(14)%
|
Segment
earnings (losses)
|
157,643
|
|
(33,936)
|
|
123,707
|
|
(29,145)
|
|
(118)%
|
(124)%
|
Nextel
Mexico:
|
|
|
|
|
|
|
|
|
|
|
Operating
revenues
|
$
|
514,014
|
|
$
|
(22,047)
|
|
$
|
491,967
|
|
$
|
381,844
|
|
(26)%
|
(22)%
|
Segment
earnings (losses)
|
101,229
|
|
(5,901)
|
|
95,328
|
|
(12,540)
|
|
(112)%
|
(113)%
|
Nextel
Argentina:
|
|
|
|
|
|
|
|
|
|
|
Operating
revenues
|
$
|
167,024
|
|
$
|
(57,239)
|
|
$
|
109,785
|
|
$
|
112,680
|
|
(33)%
|
3%
|
Segment
earnings
|
52,341
|
|
(30,488)
|
|
21,853
|
|
26,978
|
|
(48)%
|
23%
|
|
|
(1)
|
The "1Q 2013
Normalized" amount reflects the impact of applying the average
foreign currency exchange rates for the three months ended March
31, 2014 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 months ended March 31, 2013, other than
certain components of those measures consisting of U.S.
dollar-based operating expenses, which were not adjusted. The
amounts included under the column "1Q 2013 Adjustment" reflect the
amount determined by subtracting the "1Q 2013 Normalized" amount
calculated as described in the preceding sentence from the "1Q 2013
Actual" amount and reflects the impact of the year-over-year change
in the average foreign currency exchange rates on each of the
financial measures for the three months ended March 31, 2013. The
average foreign currency exchange rates for each of the relevant
currencies during the three months ended March 31, 2014 and 2013
for purposes of these calculations were as follows:
|
|
|
|
|
|
Three Months Ended
March 31,
|
|
2014
|
|
2013
|
Brazilian
real
|
2.36
|
|
2.00
|
Mexican
peso
|
13.24
|
|
12.66
|
Argentine
peso
|
7.63
|
|
5.02
|
|
|
(2)
|
The percentage
amounts in these columns reflect the growth rates for each of the
financial measures comparing the amounts in the "1Q 2014 Actual"
column with those in the "1Q 2013 Actual" column.
|
(3)
|
The percentage
amounts in these columns reflect the growth rates for each of the
financial measures comparing the amounts in the "1Q 2014 Actual"
column with those in the "1Q 2013 Normalized" column.
|
SOURCE NII Holdings, Inc.