RESTON, Va., Nov. 8, 2018 /PRNewswire/ -- NII Holdings, Inc. [NASDAQ: NIHD] today announced
its financial results for the third quarter of 2018. For the quarter, the Company generated consolidated operating revenues of
$142 million, consolidated operating income of $1 million and
consolidated adjusted OIBDA of $8 million. The Company's consolidated adjusted OIBDA for the
quarter excludes the impact of non-cash asset impairments and restructuring charges. Capital expenditures were $18 million for the quarter.
For the third quarter of 2018, Nextel Brazil, the Company's operating subsidiary in Brazil,
reported 3G/4G net subscriber additions of 85,700 and 3G/4G churn of 2.68%, a 136-basis point decrease year-over-year.
Additionally, for the third quarter of 2018, Nextel Brazil's average monthly service revenue per subscriber (ARPU) was
$14, cost per gross addition (CPGA) was $55 and cash cost per user
(CCPU) was $11.
"We reported strong operational and financial results as the momentum we built in the first half of the year continued this
quarter," stated Roberto Rittes, Chief Executive Officer of Nextel Brazil. "The combination of subscriber growth and further cost
reductions drove a significant improvement in adjusted OIBDA. With the iDEN wind down behind us, we are focused on continuing to
execute on our 3G/4G growth plan and translating that growth into improving profitability."
At quarter-end, Nextel Brazil's sources of funding totaled $307 million, including $201 million of unrestricted cash and short-term investments and $106 million of
cash held in escrow to secure indemnification obligations in connection with the sale of the Company's operations in Mexico.
"We are pleased with our results to date and the positive operating trends in our business. To prepare for continued growth
next year, we decided to accelerate some capex planned for the first quarter of 2019, which will increase the amount of capex we
will invest this year compared to plan. Otherwise we remain on track to meet or exceed our guidance for the year," stated
Dan Freiman, NII's Chief Financial Officer. "Looking ahead, with a healthy liquidity position and
improving business performance, we are well positioned to continue investing in our growth plan, while staying disciplined in our
spending."
In September 2018, Access Industries, through its affiliate AI Media Holdings, acquired ice
group's 30% equity interest in Nextel Holdings, which owns 100% of the equity interests of Nextel Brazil. The Company and AI
Media are working together to review and agree on continued investments to support Nextel Brazil's growth plans.
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,
2018 filed with the Securities and Exchange Commission today. 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 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
mobile communication services for individual consumers who use our services to meet both professional and personal needs in
Brazil. NII Holdings, operating under the Nextel brand, offers fully integrated wireless
communication tools with digital cellular voice services, data services, international voice and data roaming services and other
value-added services. Visit NII Holdings' website at www.nii.com.
Visit NII Holdings' news room for news and to access our market's news center: 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, 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 fund the business and meet its business plan, customer growth
and retention, pricing, network usage, operating costs, the timing of various events, Access Industries' minority ownership in
Nextel Brazil, the economic and regulatory environment and the foreign currency exchange rates that will prevail during the
remainder of 2018. 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, including the inability to access escrowed funds when expected, the impact of more
intense competitive conditions and changes in economic conditions in Brazil, the performance of
the Company's network, the Company's ability to provide services that customers want or need, 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, 2017 and in NII Holdings' Quarterly Report on Form 10-Q
for the three months ended June 30, 2018, 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.
|
NII HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2018 AND 2017
(in millions, except per share amounts)
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
2018
|
|
2017 (1)
|
|
2018
|
|
2017 (1)
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
Operating revenues
Service and other revenues
|
$
|
138.6
|
|
|
$
|
200.9
|
|
|
$
|
465.6
|
|
|
$
|
664.4
|
|
|
Handset and accessory revenues
|
3.1
|
|
|
4.5
|
|
|
13.4
|
|
|
17.1
|
|
|
141.7
|
|
|
205.4
|
|
|
479.0
|
|
|
681.5
|
|
|
Operating expenses
Cost of service (exclusive of depreciation and
amortization
included below)
|
61.6
|
|
|
91.2
|
|
|
220.3
|
|
|
281.8
|
|
|
Cost of handsets and accessories
|
3.4
|
|
|
8.8
|
|
|
19.5
|
|
|
30.4
|
|
|
Selling, general and administrative
|
68.6
|
|
|
139.0
|
|
|
235.5
|
|
|
403.1
|
|
|
Impairment, restructuring and other (benefits) charges,
net
|
—
|
|
|
34.8
|
|
|
14.1
|
|
|
160.9
|
|
|
Depreciation
|
3.6
|
|
|
2.4
|
|
|
11.6
|
|
|
17.0
|
|
|
Amortization
|
3.2
|
|
|
3.7
|
|
|
10.2
|
|
|
11.5
|
|
|
140.4
|
|
|
279.9
|
|
|
511.2
|
|
|
904.7
|
|
|
Operating income (loss)
|
1.3
|
|
|
(74.5)
|
|
|
(32.2)
|
|
|
(223.2)
|
|
|
Other (expense) income
Interest expense, net
|
(24.3)
|
|
|
(33.3)
|
|
|
(78.9)
|
|
|
(91.2)
|
|
|
Interest income
|
1.9
|
|
|
19.0
|
|
|
8.9
|
|
|
35.9
|
|
|
Foreign currency transaction (losses) gains, net
|
(12.2)
|
|
|
14.2
|
|
|
(60.1)
|
|
|
12.2
|
|
|
Other expense, net
|
(16.4)
|
|
|
(10.9)
|
|
|
(26.0)
|
|
|
(5.1)
|
|
|
(51.0)
|
|
|
(11.0)
|
|
|
(156.1)
|
|
|
(48.2)
|
|
|
Loss from continuing operations before income tax benefit
|
(49.7)
|
|
|
(85.5)
|
|
|
(188.3)
|
|
|
(271.4)
|
|
|
Income tax benefit
|
—
|
|
|
—
|
|
|
—
|
|
|
5.8
|
|
|
Net loss from continuing operations
|
(49.7)
|
|
|
(85.5)
|
|
|
(188.3)
|
|
|
(265.6)
|
|
|
(Loss) income from discontinued operations, net of income
taxes
|
(0.2)
|
|
|
(0.1)
|
|
|
(3.0)
|
|
|
2.6
|
|
|
Net loss
|
(49.9)
|
|
|
(85.6)
|
|
|
(191.3)
|
|
|
(263.0)
|
|
|
Net loss attributable to noncontrolling interest
|
(8.9)
|
|
|
(24.6)
|
|
|
(47.9)
|
|
|
(24.6)
|
|
|
Net loss attributable to NII Holdings
|
$
|
(41.0)
|
|
|
$
|
(61.0)
|
|
|
$
|
(143.4)
|
|
|
$
|
(238.4)
|
|
|
|
|
|
|
|
|
|
|
Net loss from continuing operations per common share,
basic and diluted
|
$
|
(0.50)
|
|
|
$
|
(0.85)
|
|
|
$
|
(1.88)
|
|
|
$
|
(2.65)
|
|
|
Net (loss) income from discontinued operations per common
share, basic and diluted
|
—
|
|
|
—
|
|
|
(0.03)
|
|
|
0.03
|
|
|
Net loss per common share, basic and diluted
|
$
|
(0.50)
|
|
|
$
|
(0.85)
|
|
|
$
|
(1.91)
|
|
|
$
|
(2.62)
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of common shares outstanding,
basic and diluted
|
100.6
|
|
|
100.4
|
|
|
100.5
|
|
|
100.3
|
|
|
|
|
(1)
|
2017 amounts include the impact of the revision of certain immaterial
errors. For more information, see our Quarterly Report on
Form 10-Q for the three months ended September 30, 2018.
|
|
CONSOLIDATED BALANCE SHEETS
(in millions, except par values)
|
|
|
|
|
|
September 30,
2018
|
|
December 31,
2017 (1)
|
|
|
|
|
|
ASSETS
|
|
Current assets
|
|
|
|
|
Cash and cash equivalents
|
$
|
152.7
|
|
|
$
|
193.9
|
|
|
Short-term investments
|
48.4
|
|
|
16.7
|
|
|
Accounts receivable, net of allowance for doubtful accounts of $22.1 and
$42.0
|
97.4
|
|
|
106.7
|
|
|
Handset and accessory inventory
|
2.3
|
|
|
3.1
|
|
|
Prepaid expenses and other
|
234.8
|
|
|
264.1
|
|
|
Total current assets
|
535.6
|
|
|
584.5
|
|
|
Property, plant and equipment, net
|
121.6
|
|
|
117.3
|
|
|
Intangible assets, net
|
158.4
|
|
|
191.7
|
|
|
Other assets
|
224.0
|
|
|
220.0
|
|
|
Total assets
|
$
|
1,039.6
|
|
|
$
|
1,113.5
|
|
|
LIABILITIES
AND STOCKHOLDERS' DEFICIT
|
|
Current liabilities
|
|
|
|
|
Accounts payable
|
$
|
45.1
|
|
|
$
|
42.3
|
|
|
Accrued expenses and other
|
265.2
|
|
|
308.1
|
|
|
Current portion of long-term debt
|
21.8
|
|
|
8.0
|
|
|
Total current liabilities
|
332.1
|
|
|
358.4
|
|
|
Long-term debt
|
623.3
|
|
|
647.7
|
|
|
Other long-term liabilities
|
271.2
|
|
|
218.6
|
|
|
Total liabilities
|
1,226.6
|
|
|
1,224.7
|
|
|
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, 100.7 shares
issued and outstanding — 2018, 100.4 shares issued and outstanding — 2017
|
0.1
|
|
|
0.1
|
|
|
Paid-in capital
|
2,141.1
|
|
|
2,139.3
|
|
|
Accumulated deficit
|
(2,237.2)
|
|
|
(2,127.9)
|
|
|
Accumulated other comprehensive loss
|
(1.8)
|
|
|
(47.3)
|
|
|
Total stockholders' deficit
|
(97.8)
|
|
|
(35.8)
|
|
|
Noncontrolling interest
|
(89.2)
|
|
|
(75.4)
|
|
|
Total deficit
|
(187.0)
|
|
|
(111.2)
|
|
|
Total liabilities and stockholders' deficit
|
$
|
1,039.6
|
|
|
$
|
1,113.5
|
|
|
CONSOLIDATED CASH FLOW DATA
(in millions)
|
|
|
|
|
|
Nine Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
2018
|
|
2017 (1)
|
|
|
|
|
|
Cash, cash equivalents and restricted cash, beginning of period
|
$
|
305.8
|
|
|
$
|
422.2
|
|
|
Net cash used in operating activities
|
(96.9)
|
|
|
(62.7)
|
|
|
Net cash (used in) provided by investing activities
|
(46.4)
|
|
|
28.2
|
|
|
Net cash provided by (used in) financing activities
|
99.8
|
|
|
(41.2)
|
|
|
Effect of exchange rate changes on cash, cash equivalents and restricted
cash
|
(1.5)
|
|
|
0.5
|
|
|
Cash, cash equivalents and restricted cash, end of period
|
$
|
260.8
|
|
|
$
|
347.0
|
|
|
|
|
(1)
|
2017 amounts include the impact of the revision of certain immaterial
errors. For more information, see our
Quarterly Report on Form 10-Q for the three months ended September 30, 2018.
|
|
NII HOLDINGS, INC. AND SUBSIDIARIES
OPERATING RESULTS AND METRICS
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2018 AND 2017 (1)
(UNAUDITED)
|
|
|
Nextel Brazil
|
|
(dollars in millions, except ARPU and CPGA, and subscribers in
thousands)
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
|
2018
|
|
2017 (2)
|
|
2018
|
|
2017 (2)
|
|
|
Service and other revenues
|
$
|
138.6
|
|
|
$
|
200.9
|
|
|
$
|
465.6
|
|
|
$
|
664.4
|
|
|
|
|
|
|
|
|
|
|
|
|
Handset and accessory revenues
|
3.1
|
|
|
4.5
|
|
|
13.4
|
|
|
17.1
|
|
|
|
Cost of handsets and accessories
|
(3.4)
|
|
|
(8.8)
|
|
|
(19.5)
|
|
|
(30.4)
|
|
|
|
Handset and accessory net subsidy
|
(0.3)
|
|
|
(4.3)
|
|
|
(6.1)
|
|
|
(13.3)
|
|
|
|
Cost of service (exclusive of depreciation and amortization)
|
(61.6)
|
|
|
(91.2)
|
|
|
(220.3)
|
|
|
(281.8)
|
|
|
|
Selling, general and administrative
|
(63.9)
|
|
|
(132.7)
|
|
|
(222.8)
|
|
|
(381.1)
|
|
|
|
Adjusted operating income (loss) before depreciation and
amortization
|
$
|
12.8
|
|
|
$
|
(27.3)
|
|
|
$
|
16.4
|
|
|
$
|
(11.8)
|
|
|
|
|
|
|
|
|
|
|
|
|
Subscriber units
|
|
|
|
|
|
|
|
|
|
WCDMA
|
3,206.7
|
|
|
2,845.8
|
|
|
|
|
|
|
|
iDEN
|
—
|
|
|
449.7
|
|
|
|
|
|
|
|
Total subscriber units in commercial service (as of
September 30)
|
3,206.7
|
|
|
3,295.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
WCDMA net subscriber additions (losses)
|
85.7
|
|
|
(32.3)
|
|
|
|
|
|
|
|
iDEN net subscriber losses
|
—
|
|
|
(100.3)
|
|
|
|
|
|
|
|
Total net subscriber additions (losses)
|
85.7
|
|
|
(132.6)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Migrations from iDEN to WCDMA
|
—
|
|
|
13.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
WCDMA subscriber churn
|
2.68
|
%
|
|
4.04
|
%
|
|
|
|
|
|
|
iDEN subscriber churn
|
—
|
|
|
6.89
|
%
|
|
|
|
|
|
|
Churn (%)
|
2.68
|
%
|
|
4.47
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ARPU (1)
|
$
|
14
|
|
|
$
|
19
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CPGA (1)
|
$
|
55
|
|
|
$
|
100
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CCPU (1)
|
$
|
11
|
|
|
$
|
20
|
|
|
|
|
|
|
|
|
|
(1)
|
For information regarding ARPU, CPGA and CCPU, see "Non-GAAP and Other
Reconciliations for the Three and
Nine Months Ended September 30, 2018 and 2017" included in this release.
|
|
|
|
(2)
|
2017 amounts include the impact of the revision of certain immaterial
errors. For more information, see our Quarterly Report on Form 10-Q for the three months ended September 30,
2018.
|
NON-GAAP AND OTHER RECONCILIATIONS
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2018 AND 2017
(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
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
|
2018
|
|
2017 (1)
|
|
2018
|
|
2017 (1)
|
|
Consolidated operating income (loss)
|
$
|
1.3
|
|
|
$
|
(74.5)
|
|
|
$
|
(32.2)
|
|
|
$
|
(223.2)
|
|
|
Consolidated depreciation
|
3.6
|
|
|
2.4
|
|
|
11.6
|
|
|
17.0
|
|
|
Consolidated amortization
|
3.2
|
|
|
3.7
|
|
|
10.2
|
|
|
11.5
|
|
|
Consolidated OIBDA
|
8.1
|
|
|
(68.4)
|
|
|
(10.4)
|
|
|
(194.7)
|
|
|
Asset impairment charges (benefits), net
|
1.1
|
|
|
(5.1)
|
|
|
1.6
|
|
|
63.5
|
|
|
Restructuring (benefits) charges
|
(1.1)
|
|
|
39.9
|
|
|
12.5
|
|
|
97.4
|
|
|
Consolidated adjusted OIBDA
|
$
|
8.1
|
|
|
$
|
(33.6)
|
|
|
$
|
3.7
|
|
|
$
|
(33.8)
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
2017 amounts include the impact of the revision of certain immaterial
errors. For more information,
see our Quarterly Report on Form 10-Q for the three months ended September 30, 2018.
|
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
|
|
|
|
|
|
|
Three Months Ended
September 30,
|
|
|
2018
|
|
2017 (1)
|
|
|
US$
|
|
|
Handset and accessory revenues
|
$
|
3.1
|
|
|
$
|
4.5
|
|
|
|
Less: cost of handsets and accessories
|
3.4
|
|
|
8.8
|
|
|
|
Handset subsidy costs
|
0.3
|
|
|
4.3
|
|
|
|
Selling and marketing *
|
18.9
|
|
|
28.3
|
|
|
|
Costs per statement of operations
|
19.2
|
|
|
32.6
|
|
|
|
Less: costs unrelated to initial customer acquisition
|
(0.5)
|
|
|
(0.9)
|
|
|
|
Customer acquisition costs
|
$
|
18.7
|
|
|
$
|
31.7
|
|
|
|
|
|
|
|
|
Cost per Gross Add
|
$
|
55
|
|
|
$
|
100
|
|
|
|
|
|
|
|
|
Nextel Brazil
|
|
|
|
|
|
|
Three Months Ended
September 30,
|
|
|
2018
|
|
2017 (1)
|
|
|
BRL R$
|
|
|
Handset and accessory revenues
|
$
|
12.2
|
|
|
$
|
14.2
|
|
|
|
Less: cost of handsets and accessories
|
13.6
|
|
|
27.6
|
|
|
|
Handset subsidy costs
|
1.4
|
|
|
13.4
|
|
|
|
Selling and marketing *
|
74.5
|
|
|
89.4
|
|
|
|
Costs per statement of operations
|
75.9
|
|
|
102.8
|
|
|
|
Less: costs unrelated to initial customer acquisition
|
(1.8)
|
|
|
(3.0)
|
|
|
|
Customer acquisition costs
|
$
|
74.1
|
|
|
$
|
99.8
|
|
|
|
|
|
|
|
|
Cost per Gross Add
|
$
|
218
|
|
|
$
|
316
|
|
|
|
|
|
|
|
|
|
|
*
|
The adoption of Accounting Standards Codification, or ASC,
No. 606, resulted in the capitalization of both direct and indirect
commissions beginning on January 1, 2018 compared to the
expensing of these types of commissions during the third quarter
of 2017, which resulted in a decrease in selling and marketing
expenses from the third quarter of 2017 to the third quarter of 2018.
|
|
|
|
(1)
|
2017 amounts include the impact of the revision of certain immaterial
errors. For more information, see our Quarterly Report on Form 10-Q
for the three months ended September 30, 2018.
|
Cash Cost per Handset/User
Cash cost per handset/user, 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
|
|
|
|
|
|
|
Three Months Ended
September 30,
|
|
|
2018
|
|
2017 (1)
|
|
|
US$
|
|
|
Total selling, general and administrative expenses
|
$
|
63.9
|
|
|
$
|
132.7
|
|
|
|
Less: selling and marketing expenses *
|
(18.9)
|
|
|
(28.3)
|
|
|
|
General and administrative expenses
|
45.0
|
|
|
104.4
|
|
|
|
Cost of service
|
61.6
|
|
|
91.2
|
|
|
|
Customer retention costs and other
|
0.5
|
|
|
1.0
|
|
|
|
Total
|
$
|
107.1
|
|
|
$
|
196.6
|
|
|
|
|
|
|
|
|
Cash Cost per User
|
$
|
11
|
|
|
$
|
20
|
|
|
|
|
|
|
|
|
Nextel Brazil
|
|
|
|
|
|
|
Three Months Ended
September 30,
|
|
|
2018
|
|
2017 (1)
|
|
|
BRL R$
|
|
|
Total selling, general and administrative expenses
|
$
|
252.6
|
|
|
$
|
419.5
|
|
|
|
Less: selling and marketing expenses *
|
(74.5)
|
|
|
(89.4)
|
|
|
|
General and administrative expenses
|
178.1
|
|
|
330.1
|
|
|
|
Cost of service
|
243.2
|
|
|
288.7
|
|
|
|
Customer retention costs and other
|
1.8
|
|
|
3.0
|
|
|
|
Total
|
$
|
423.1
|
|
|
$
|
621.8
|
|
|
|
|
|
|
|
|
Cash Cost per User
|
$
|
45
|
|
|
$
|
62
|
|
|
|
|
|
|
|
|
|
|
*
|
The adoption of Accounting Standards Codification, or ASC, No. 606,
resulted
in the capitalization of both direct and indirect commissions beginning on
January 1, 2018 compared to the expensing of these types of commissions
during the third quarter of 2017, which resulted in a decrease in selling and
marketing expenses from the third quarter of 2017 to the third quarter of 2018.
|
|
|
|
(1)
|
2017 amounts include the impact of the revision of certain immaterial
errors.
For more information, see our Quarterly Report on Form 10-Q for the three
months ended September 30, 2018.
|
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, 2017 compared to the same periods in 2018 by (i) adjusting the
relevant measures for the three and nine months ended September 30, 2017 to levels that would have
resulted if the average foreign currency exchange rates for the three and nine months ended September 30,
2017 were the same as the average foreign currency exchange rates that were in effect for the three and nine months ended
September 30, 2018; and (ii) comparing the actual and adjusted financial measures for the three and
nine months ended September 30, 2017 to the similar financial measures for the three and nine
months ended September 30, 2018 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
nine months ended September 30, 2018 and 2017. The average foreign currency exchange rates for each
of the relevant currencies during each of the three and nine months ended September 30, 2018 and
2017 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, 2018 compared to the same periods in 2017 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)
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30,
|
|
|
|
3Q 2017
Actual *
|
3Q 2017
Adjustment
(1)
|
3Q 2017
Normalized
(1)
|
|
3Q 2018
Actual
|
3Q 2017
to 3Q 2018
Actual B(W)
Growth (2)
|
3Q 2017
to 3Q 2018
Normalized
B(W)
Growth (3)
|
|
|
|
|
|
|
|
|
|
Consolidated:
|
|
|
|
|
|
|
|
|
Operating revenues
|
$
|
205,423
|
|
$
|
(41,226)
|
|
$
|
164,197
|
|
|
$
|
141,737
|
|
(31)%
|
(14)%
|
|
Adjusted OIBDA
|
(33,547)
|
|
5,473
|
|
(28,074)
|
|
|
8,148
|
|
124%
|
129%
|
|
Nextel Brazil:
|
|
|
|
|
|
|
|
|
Operating revenues
|
$
|
205,399
|
|
$
|
(41,226)
|
|
$
|
164,173
|
|
|
$
|
141,737
|
|
(31)%
|
(14)%
|
|
Adjusted OIBDA
|
(27,266)
|
|
5,473
|
|
(21,793)
|
|
|
12,749
|
|
147%
|
158%
|
|
NII Holdings, Inc
|
|
(dollars in thousands)
|
|
|
|
|
|
|
|
|
|
Nine Months Ended September 30,
|
|
|
|
YTD 2017
Actual *
|
YTD 2017
Adjustment
(1)
|
YTD 2017
Normalized
(1)
|
|
YTD 2018
Actual
|
YTD 2017
to YTD 2018
B(W) Growth
(2)
|
YTD 2017
to YTD 2018
Normalized
B(W) Growth
(3)
|
|
|
|
|
|
|
|
|
|
Consolidated:
|
|
|
|
|
|
|
|
|
Operating revenues
|
$
|
681,512
|
|
$
|
(83,244)
|
|
$
|
598,268
|
|
|
$
|
478,986
|
|
(30)%
|
(20)%
|
|
Adjusted OIBDA
|
(33,793)
|
|
1,443
|
|
(32,350)
|
|
|
3,685
|
|
111%
|
111%
|
|
Nextel Brazil:
|
|
|
|
|
|
|
|
|
Operating revenues
|
$
|
681,429
|
|
$
|
(83,244)
|
|
$
|
598,185
|
|
|
$
|
478,964
|
|
(30)%
|
(20)%
|
|
Adjusted OIBDA
|
(11,813)
|
|
1,443
|
|
(10,370)
|
|
|
16,436
|
|
239%
|
258%
|
_______________________________________
|
*
|
2017 amounts include the impact of the revision of certain immaterial
errors. For more information, see our Quarterly Report on Form 10-Q for the three months ended September 30,
2018.
|
|
(1)
|
The "3Q 2017 Normalized" and "YTD 2017 Normalized" amounts reflect
the impact of applying the average foreign currency exchange rates for the three and nine months ended September 30, 2018
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, 2017, 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 2017 Normalized" and "YTD 2017 Normalized" reflect the amount determined by adding the "3Q 2017 Adjustment"
and "YTD 2017 Adjustment" amounts calculated as described in the preceding sentence to the "3Q 2017 Actual" and "YTD 2017
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, 2018. The average foreign currency
exchange rates for each of the relevant currencies during the three and nine months ended September 30, 2018 and 2017 for
purposes of these calculations were as follows:
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
Brazilian real
|
3.96
|
|
3.16
|
|
3.61
|
|
3.17
|
|
(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 2018 Actual" and "YTD 2018 Actual"
columns with those in the "3Q 2017 Actual" and "YTD 2017 Actual" columns.
|
|
(3)
|
The percentage amounts in these columns reflect the the better, or B,
or worse, or W, growth rates for each of the financial measures comparing the amounts in the "3Q 2018 Actual" and "YTD
2018 Actual" columns with those in the "3Q 2017 Normalized" and "YTD 2017 Normalized" columns.
|
Additional Information
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
|
|
|
|
|
|
Three Months Ended
September 30,
|
|
2018
|
|
2017 (1)
|
|
US$
|
|
Service and other revenues
|
$
|
138.6
|
|
|
$
|
200.9
|
|
|
Less: other revenues
|
(4.8)
|
|
|
(14.6)
|
|
|
Total subscriber revenues
|
$
|
133.8
|
|
|
$
|
186.3
|
|
|
|
|
|
|
|
|
|
|
ARPU calculated with subscriber revenues
|
$
|
14
|
|
|
$
|
19
|
|
|
|
|
|
|
ARPU calculated with service and other revenues
|
$
|
15
|
|
|
$
|
20
|
|
|
|
|
|
|
Nextel Brazil
|
|
|
|
|
|
Three Months Ended
September 30,
|
|
2018
|
|
2017 (1)
|
|
BRL R$
|
|
Service and other revenues
|
$
|
548.3
|
|
|
$
|
635.7
|
|
|
Less: other revenues
|
(19.0)
|
|
|
(46.2)
|
|
|
Total subscriber revenues
|
$
|
529.3
|
|
|
$
|
589.5
|
|
|
|
|
|
|
|
|
|
|
ARPU calculated with subscriber revenues
|
$
|
56
|
|
|
$
|
59
|
|
|
|
|
|
|
ARPU calculated with service and other revenues
|
$
|
58
|
|
|
$
|
63
|
|
|
|
|
|
|
|
|
(1)
|
2017 amounts include the impact of the revision of certain immaterial
errors.
For more information, see our Quarterly Report on Form 10-Q for the three
months ended September 30, 2018.
|
View original content:http://www.prnewswire.com/news-releases/nii-holdings-reports-2018-third-quarter-results-300746419.html
SOURCE NII Holdings, Inc.