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8-K - FORM 8-K - NII HOLDINGS INC | w81743e8vk.htm |
Exhibit 99.1
NII Holdings, Inc.
1875 Explorer Street, Suite 1000
Reston, VA. 20190
(703) 390-5100
http://www.nii.com
1875 Explorer Street, Suite 1000
Reston, VA. 20190
(703) 390-5100
http://www.nii.com
Investor Relations: Tim Perrott
(703) 390-5113
tim.perrott@nii.com
(703) 390-5113
tim.perrott@nii.com
Media Relations: Claudia E. Restrepo
(786) 251-7020
claudia.restrepo@nii.com
(786) 251-7020
claudia.restrepo@nii.com
NII HOLDINGS DELIVERS OUTSTANDING PERFORMANCE FOR
2010
2010
Company announces fourth quarter and full year 2010 results
and provides guidance for 2011
and provides guidance for 2011
| Full year 2010 net subscriber additions of 1,641,000 resulting in an ending subscriber base of 9.0 million a 22% increase over the subscriber base at the end of 2009. Net subscriber additions of 436,000 in the fourth quarter. | ||
| Full year 2010 consolidated operating revenues of $5.6 billion a 27% increase over 2009. Consolidated fourth quarter operating revenues of $1.52 billion. | ||
| Full year 2010 consolidated operating income before depreciation and amortization (OIBDA) of $1.43 billion a 29% increase over 2009. Consolidated fourth quarter OIBDA of $379 million. |
RESTON, Va. February 24, 2011 NII Holdings, Inc. [NASDAQ: NIHD] today announced its
consolidated financial results for the fourth quarter and full year 2010. For the full year 2010,
the Company added 1,641,000 net subscribers to its network, bringing its total year-end subscriber
base to 9.0 million, a 22% increase over year-end 2009. Financial results for the full year 2010
included consolidated operating revenues of $5.6 billion, a 27% increase compared to last year;
consolidated operating income before depreciation and amortization, or OIBDA, of $1.43 billion, a
29% increase compared to last year; and consolidated operating income of $877 million, a 30%
increase compared to last year. For the full year 2010, the Company generated net income of $341
million, or $2.03 per basic share. Capital expenditures were $876 million for full year 2010.
For the fourth quarter of 2010, the Company added slightly more than 436,000 net subscribers to its
network. Financial results for the fourth quarter of 2010 included consolidated operating revenues
of $1.52 billion, a 23% increase over the same period last year, consolidated OIBDA of $379
million, a 27% increase over the same period last year, and consolidated operating income of $229
million, a 31% increase over the same period last year. Consolidated OIBDA results for the fourth
quarter of 2010 include an out of period adjustment of $26 million in additional expense resulting
from a change in Brazilian tax law that reduced Nextel Brazils expected recovery
relating to prepaid Value Added Taxes imposed on handset sales. This out of period
adjustment was offset by a benefit of $9 million relating to an operating tax credit in Brazil that
was discussed on our third quarter results call but was subsequently excluded from the Companys
reported results for that period. The net effect of these items is a $17 million reduction in the
Companys reported fourth quarter OIBDA.
NII delivered strong growth and profitability in 2010, exceeding our goals for net subscriber
additions, revenues, and OIBDA that we outlined for the year, said Steve Dussek, NII Holdings
Chief Executive Officer. In 2010, we grew our subscriber base by 22%, increased our revenues by
27% and increased our OIBDA by 29%. During 2010, we also successfully bid for 3G spectrum in our
largest markets, Mexico and Brazil. We believe our plans to deploy 3G networks will position us to
pursue more profitable growth in the future by enabling us to target additional customer segments
and provide innovative broadband wireless services to our high value customer base.
NII Holdings consolidated average monthly service revenue per subscriber (ARPU) increased to $48
for the full year 2010 from $45 in 2009, with the increase resulting primarily from higher average
currency exchange rates. The Company also reported consolidated churn of 1.66% for the full year
2010, a 35 basis point decrease from the 2.01% churn rate for the full year 2009. Consolidated
churn of 1.60% in the fourth quarter was down 25 basis points relative to the same period last
year. Consolidated cost per gross add, or CPGA, was $286 for full year 2010, a $10 increase from
2009 levels, resulting primarily from higher average currency exchange rates.
Our team delivered outstanding results in 2010, capitalizing on a solid rebound in economic
activity and driving growth, while generating record levels of profitability, said Gokul Hemmady,
NIIs Executive Vice President and Chief Financial Officer. The strength of our underlying
operations, combined with our plans to use our recently acquired spectrum to deploy new 3G
networks, has positioned us to drive success as we compete in a broadband centric world. In 2011,
we will commit substantial time and resources to capture this opportunity by building our planned
3G networks, but we will not lose focus on what brought us to where we are today delivering high
quality services that meet the needs of our customers. We believe that our strong liquidity
position and flexible capital structure puts us in a great position to execute on all of these
opportunities, while maintaining our disciplined approach to capital that has enabled us to be
successful in the past.
The Company ended the year with $2.9 billion in total long-term debt, which includes $1.3 billion
in senior notes; $1.1 billion in convertible notes; $194 million in syndicated loan facilities; and
$302 million in local currency tower financing obligations, capital leases and other obligations.
With year-end consolidated cash and cash equivalents and short-term investments of $2.3 billion,
the Companys net debt at the end of the year was approximately $600 million.
2011 Outlook
The Company announced the following outlook for 2011:
| Total net subscriber additions of approximately 1.7 million. | ||
| Consolidated operating revenues of approximately $6.6 billion. | ||
| Consolidated OIBDA of approximately $1.6 billion, which includes the impact of approximately $50 million of non-cash equity compensation expense. The OIBDA outlook also includes the impact of start up costs related to the development and launch of 3G networks and costs related to support the Companys 3G initiatives, including marketing related costs and investment in I.T. and other systems to support the expansion of the customer segments targeted for 3G services. |
| Consolidated capital expenditures of approximately $1.6 billion, which includes investments relating to the development and launch of the Companys 3G networks, costs related to the development of the technology to support high-performance push to talk services on W-CDMA, and the enhancement of the coverage and capacity of the Companys iDEN networks to support customer growth. |
The Companys 2011 outlook is predicated on a number of assumptions including the assumption that
foreign exchange rates and general economic conditions in its markets will remain relatively stable
during the year.
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 has presented
consolidated 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 NIIs fourth quarter and full year 2010 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 leading provider of mobile
communications for business customers in Latin America. NII Holdings, Inc. has operations in
Brazil, Mexico, Argentina, Peru and Chile offering a fully integrated wireless communications tool
with digital cellular voice services, data services, wireless Internet access and Nextel Direct
Connect® and International Direct ConnectSM, a digital two-way radio feature. NII
Holdings, Inc., a Fortune 500 company, trades on the NASDAQ market under the symbol NIHD and is a
member of the NASDAQ 100 Index. Visit the Companys website at www.nii.com.
Nextel, the Nextel logo, and Nextel Direct Connect are trademarks and/or service marks of
Nextel Communications, Inc.
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. The words estimate, project, forecast, intend, expect,
believe, target, plan, providing guidance and similar expressions are intended to identify
forward-looking statements. Forward-looking statements are estimates and projections reflecting
managements 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, network usage, customer growth and retention, pricing,
operating costs, the timing of various events, the economic and regulatory environment and the
foreign currency exchange rates that will prevail during 2011. 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 more intense competitive conditions and changes in economic conditions in the markets
we serve; the impact on our financial results, and 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; the risk that our network technologies will not perform
properly or support the services our customers want or need, including the risk that technology
developments to support our services will not be timely delivered; the risk that customers in the
markets we serve will not find our services attractive; unexpected results of litigation; and the
additional risks and uncertainties that are described from in NII Holdings Annual Report on Form 10-K for the fiscal year ended December 31, 2009, and,
when filed, our Annual Report on Form 10-K for the fiscal year ended December 31, 2010, 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 YEARS AND THREE MONTHS ENDED DECEMBER 31, 2010 AND 2009
(in millions, except per share amounts)
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEARS AND THREE MONTHS ENDED DECEMBER 31, 2010 AND 2009
(in millions, except per share amounts)
Year Ended | Three Months Ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
2010 | 2009 | 2010 | 2009 | |||||||||||||
Operating revenues |
||||||||||||||||
Service and other revenues |
$ | 5,347.7 | $ | 4,153.5 | $ | 1,490.0 | $ | 1,172.7 | ||||||||
Digital handset and accessory revenues |
253.6 | 244.1 | 30.1 | 62.3 | ||||||||||||
5,601.3 | 4,397.6 | 1,520.1 | 1,235.0 | |||||||||||||
Operating expenses |
||||||||||||||||
Cost of service (exclusive of depreciation and
amortization included
below) |
1,506.0 | 1,225.2 | 415.3 | 363.2 | ||||||||||||
Cost of digital handset and accessory sales |
723.1 | 623.7 | 181.4 | 151.0 | ||||||||||||
Selling, general and administrative |
1,941.8 | 1,438.5 | 544.8 | 422.6 | ||||||||||||
Depreciation |
518.8 | 404.1 | 138.8 | 115.1 | ||||||||||||
Amortization |
34.2 | 29.2 | 10.6 | 7.9 | ||||||||||||
4,723.9 | 3,720.7 | 1,290.9 | 1,059.8 | |||||||||||||
Operating income |
877.4 | 676.9 | 229.2 | 175.2 | ||||||||||||
Other income (expense) |
||||||||||||||||
Interest expense |
(342.2 | ) | (218.9 | ) | (79.7 | ) | (73.6 | ) | ||||||||
Interest income |
28.8 | 25.6 | 5.0 | 5.9 | ||||||||||||
Foreign currency transaction gains, net |
52.4 | 104.9 | 25.0 | 3.6 | ||||||||||||
Other expense, net |
(18.7 | ) | (2.3 | ) | (7.3 | ) | (6.6 | ) | ||||||||
(279.7 | ) | (90.7 | ) | (57.0 | ) | (70.7 | ) | |||||||||
Income before income tax provision |
597.7 | 586.2 | 172.2 | 104.5 | ||||||||||||
Income tax provision |
(256.6 | ) | (204.7 | ) | (73.6 | ) | (44.9 | ) | ||||||||
Net income |
$ | 341.1 | $ | 381.5 | $ | 98.6 | $ | 59.6 | ||||||||
Net income per common share, basic |
$ | 2.03 | $ | 2.30 | $ | 0.58 | $ | 0.36 | ||||||||
Net income per common share, diluted |
$ | 1.99 | $ | 2.27 | $ | 0.57 | $ | 0.35 | ||||||||
Weighted average number of common shares outstanding, basic |
168.2 | 166.0 | 169.3 | 166.3 | ||||||||||||
Weighted average number of common shares outstanding,
diluted |
175.7 | 174.0 | 172.2 | 169.0 | ||||||||||||
CONSOLIDATED BALANCE SHEET DATA
(in millions)
(in millions)
December 31, | December 31, | |||||||
2010 | 2009 | |||||||
Cash and cash equivalents |
$ | 1,767.5 | $ | 2,504.1 | ||||
Short-term investments |
537.5 | 116.3 | ||||||
Accounts receivable, less allowance for
doubtful accounts of $41.3 and $35.1 |
788.0 | 613.6 | ||||||
Property, plant and equipment, net |
2,960.0 | 2,502.2 | ||||||
Intangible assets, net |
433.2 | 337.2 | ||||||
Total assets |
8,190.7 | 7,554.7 | ||||||
Long-term debt, including current portion |
3,265.4 | 3,580.8 | ||||||
Total liabilities |
4,871.1 | 4,807.9 | ||||||
Stockholders equity |
3,319.6 | 2,746.8 |
NII HOLDINGS, INC. AND SUBSIDIARIES
OPERATING RESULTS AND METRICS
FOR THE YEAR AND THREE MONTHS ENDED DECEMBER 31, 2010 AND 2009
(UNAUDITED)
OPERATING RESULTS AND METRICS
FOR THE YEAR AND THREE MONTHS ENDED DECEMBER 31, 2010 AND 2009
(UNAUDITED)
NII Holdings, Inc.
(subscribers in thousands)
(subscribers in thousands)
Year Ended | Three Months Ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
2010 | 2009 | 2010 | 2009 | |||||||||||||
Total digital subscribers (as of December 31) |
9,027.5 | 7,384.5 | 9,027.5 | 7,384.5 | ||||||||||||
Net subscriber additions |
1,641.3 | 1,185.0 | 436.1 | 347.0 | ||||||||||||
Churn (%) |
1.66 | % | 2.01 | % | 1.60 | % | 1.85 | % | ||||||||
Average monthly revenue per handset/unit in
service (ARPU) (1) |
$ | 48 | $ | 45 | $ | 50 | $ | 48 | ||||||||
Cost per gross add (CPGA) (1) |
$ | 286 | $ | 276 | $ | 313 | $ | 305 |
Nextel Brazil
(dollars in millions, except ARPU and CPGA, and subscribers in thousands)
(dollars in millions, except ARPU and CPGA, and subscribers in thousands)
Year Ended | Three Months Ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
2010 | 2009 | 2010 | 2009 | |||||||||||||
Operating revenues |
||||||||||||||||
Service and other revenues |
$ | 2,504.5 | $ | 1,631.1 | $ | 738.0 | $ | 527.7 | ||||||||
Digital handset and accessory revenues |
86.8 | 103.5 | (10.6 | ) | 27.1 | |||||||||||
2,591.3 | 1,734.6 | 727.4 | 554.8 | |||||||||||||
Operating expenses |
||||||||||||||||
Cost of service (exclusive of depreciation
and amortization included
below) |
822.3 | 588.1 | 216.2 | 187.9 | ||||||||||||
Cost of digital handset and accessory sales |
177.2 | 139.5 | 44.9 | 25.9 | ||||||||||||
Selling, general and administrative |
786.1 | 511.7 | 225.7 | 167.1 | ||||||||||||
Segment earnings |
805.7 | 495.3 | 240.6 | 173.9 | ||||||||||||
Management fee and other |
29.0 | 20.0 | 4.1 | 20.0 | ||||||||||||
Depreciation and amortization |
253.3 | 180.8 | 71.9 | 56.5 | ||||||||||||
Operating income |
$ | 523.4 | $ | 294.5 | $ | 164.6 | $ | 97.4 | ||||||||
Total digital subscribers (as of December 31) |
3,319.1 | 2,482.7 | 3,319.1 | 2,482.7 | ||||||||||||
Net subscriber additions |
836.5 | 670.9 | 206.6 | 191.7 | ||||||||||||
Churn (%) |
1.35 | % | 1.33 | % | 1.37 | % | 1.22 | % | ||||||||
ARPU (1) |
$ | 63 | $ | 55 | $ | 67 | $ | 64 | ||||||||
CPGA (1) |
$ | 250 | $ | 234 | $ | 292 | $ | 267 |
Nextel Mexico
(dollars in millions, except ARPU and CPGA, and subscribers in thousands)
(dollars in millions, except ARPU and CPGA, and subscribers in thousands)
Year Ended | Three Months Ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
2010 | 2009 | 2010 | 2009 | |||||||||||||
Operating revenues |
||||||||||||||||
Service and other revenues |
$ | 2,023.1 | $ | 1,785.2 | $ | 529.1 | $ | 456.5 | ||||||||
Digital handset and accessory revenues |
90.7 | 76.6 | 21.0 | 18.5 | ||||||||||||
2,113.8 | 1,861.8 | 550.1 | 475.0 | |||||||||||||
Operating expenses |
||||||||||||||||
Cost of service (exclusive of depreciation
and amortization included
below) |
391.7 | 360.7 | 121.8 | 98.4 | ||||||||||||
Cost of digital handset and accessory sales |
402.7 | 359.4 | 98.8 | 92.2 | ||||||||||||
Selling, general and administrative |
574.2 | 488.6 | 156.3 | 129.6 | ||||||||||||
Segment earnings |
745.2 | 653.1 | 173.2 | 154.8 | ||||||||||||
Management fee and other |
119.7 | 48.7 | 40.9 | 24.9 | ||||||||||||
Depreciation and amortization |
190.6 | 168.7 | 48.4 | 44.8 | ||||||||||||
Operating income |
$ | 434.9 | $ | 435.7 | $ | 83.9 | $ | 85.1 | ||||||||
Total digital subscribers (as of December 31) |
3,361.3 | 2,987.4 | 3,361.3 | 2,987.4 | ||||||||||||
Net subscriber additions |
373.9 | 261.1 | 89.4 | 77.7 | ||||||||||||
Churn (%) |
1.84 | % | 2.38 | % | 1.77 | % | 2.18 | % | ||||||||
ARPU (1) |
$ | 47 | $ | 47 | $ | 47 | $ | 47 | ||||||||
CPGA (1) |
$ | 395 | $ | 357 | $ | 432 | $ | 404 |
Nextel Argentina
(dollars in millions, except ARPU and CPGA, and subscribers in thousands)
(dollars in millions, except ARPU and CPGA, and subscribers in thousands)
Year Ended | Three Months Ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
2010 | 2009 | 2010 | 2009 | |||||||||||||
Operating revenues |
||||||||||||||||
Service and other revenues |
$ | 517.5 | $ | 483.0 | $ | 140.9 | $ | 121.5 | ||||||||
Digital handset and accessory revenues |
46.0 | 36.7 | 11.7 | 9.4 | ||||||||||||
563.5 | 519.7 | 152.6 | 130.9 | |||||||||||||
Operating expenses |
||||||||||||||||
Cost of service (exclusive of depreciation
and amortization included
below) |
178.3 | 176.0 | 46.7 | 46.2 | ||||||||||||
Cost of digital handset and accessory sales |
74.8 | 65.1 | 18.2 | 17.7 | ||||||||||||
Selling, general and administrative |
161.5 | 129.8 | 45.8 | 36.2 | ||||||||||||
Segment earnings |
148.9 | 148.8 | 41.9 | 30.8 | ||||||||||||
Management fee and other |
16.9 | 12.3 | 2.3 | 12.3 | ||||||||||||
Depreciation and amortization |
39.8 | 38.5 | 10.3 | 9.6 | ||||||||||||
Operating income |
$ | 92.2 | $ | 98.0 | $ | 29.3 | $ | 8.9 | ||||||||
Total digital subscribers (as of December 31) |
1,153.9 | 1,030.1 | 1,153.9 | 1,030.1 | ||||||||||||
Net subscriber additions |
123.8 | 63.1 | 36.5 | 26.4 | ||||||||||||
Churn (%) |
1.61 | % | 2.18 | % | 1.42 | % | 1.97 | % | ||||||||
ARPU (1) |
$ | 34 | $ | 35 | $ | 36 | $ | 34 | ||||||||
CPGA (1) |
$ | 217 | $ | 207 | $ | 235 | $ | 215 |
Nextel Peru
(dollars in millions, except ARPU and CPGA, and subscribers in thousands)
(dollars in millions, except ARPU and CPGA, and subscribers in thousands)
Year Ended | Three Months Ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
2010 | 2009 | 2010 | 2009 | |||||||||||||
Operating revenues |
||||||||||||||||
Service and other revenues |
$ | 282.0 | $ | 241.3 | $ | 75.8 | $ | 63.0 | ||||||||
Digital handset and accessory revenues |
30.0 | 27.1 | 8.0 | 7.2 | ||||||||||||
312.0 | 268.4 | 83.8 | 70.2 | |||||||||||||
Operating expenses |
||||||||||||||||
Cost of service (exclusive of depreciation
and amortization included
below) |
100.0 | 92.0 | 25.5 | 27.5 | ||||||||||||
Cost of digital handset and accessory sales |
62.8 | 56.2 | 17.8 | 14.3 | ||||||||||||
Selling, general and administrative |
126.9 | 105.6 | 38.8 | 33.4 | ||||||||||||
Segment earnings |
22.3 | 14.6 | 1.7 | (5.0 | ) | |||||||||||
Management fee and other |
22.4 | 21.4 | 8.3 | 21.4 | ||||||||||||
Depreciation and amortization |
52.7 | 32.1 | 14.4 | 9.0 | ||||||||||||
Operating loss |
$ | (52.8 | ) | $ | (38.9 | ) | $ | (21.0 | ) | $ | (35.4 | ) | ||||
Total digital subscribers (as of December 31) |
1,128.2 | 840.6 | 1,128.2 | 840.6 | ||||||||||||
Net subscriber additions |
285.8 | 171.9 | 99.4 | 45.0 | ||||||||||||
Churn (%) |
2.01 | % | 2.26 | % | 1.93 | % | 2.35 | % | ||||||||
ARPU (1) |
$ | 22 | $ | 25 | $ | 22 | $ | 23 | ||||||||
CPGA (1) |
$ | 159 | $ | 173 | $ | 165 | $ | 185 |
(1) | For information regarding ARPU and CPGA, see Non-GAAP Reconciliations for the Year and Three Months Ended December 31, 2010 and 2009 included in this release. |
NON-GAAP RECONCILIATIONS
FOR THE YEAR AND THREE MONTHS ENDED DECEMBER 31, 2010 AND 2009
(UNAUDITED)
FOR THE YEAR AND THREE MONTHS ENDED DECEMBER 31, 2010 AND 2009
(UNAUDITED)
Operating Income Before Depreciation and Amortization
Consolidated operating income before depreciation and amortization, or OIBDA, represents operating
income before depreciation and amortization expense. Consolidated OIBDA is not a measurement under
accounting principles generally accepted in the United States, may not be similar to consolidated
OIBDA measures of other companies and should be considered in addition to, but not as a substitute
for, the information contained in our statements of operations. We believe that consolidated OIBDA
provides useful information to investors because it is an indicator of operating performance,
especially in a capital intensive industry such as ours, since it excludes items that are not
directly attributable to ongoing business operations. Our consolidated OIBDA calculations are
commonly used as some of the bases for investors, analysts and credit rating agencies to evaluate
and compare the periodic and future operating performance and value of companies within the
wireless telecommunications industry. Consolidated OIBDA can be reconciled to our consolidated
statements of operations as follows (in millions):
NII Holdings, Inc.
Year Ended | Three Months Ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
2010 | 2009 | 2010 | 2009 | |||||||||||||
Consolidated operating income |
$ | 877.4 | $ | 676.9 | $ | 229.2 | $ | 175.2 | ||||||||
Consolidated depreciation |
518.8 | 404.1 | 138.8 | 115.1 | ||||||||||||
Consolidated amortization |
34.2 | 29.2 | 10.6 | 7.9 | ||||||||||||
Consolidated operating income before
depreciation and amortization |
$ | 1,430.4 | $ | 1,110.2 | $ | 378.6 | $ | 298.2 | ||||||||
NII Holdings, Inc.
Guidance | ||||
Estimate* | ||||
Year Ending | ||||
December 31, | ||||
2011 | ||||
Consolidated operating income |
$ | 1,350.0 | ||
Consolidated depreciation |
240.0 | |||
Consolidated amortization |
10.0 | |||
Consolidated operating income before
depreciation and amortization |
$ | 1,600.0 | ||
* | The Companys guidance estimate for OIBDA for the year ending December 31, 2011 includes the impact of approximately $48 million of non-cash equity compensation expense. This estimate is predicated on a number of assumptions, including the assumption that foreign currency exchange rates and general economic conditions in its markets will remain relatively stable during the year. The information regarding the Companys outlook and objectives for 2011, including its guidance estimate for OIBDA for the year ending December 31, 2011, is forward looking and is based upon managements current beliefs, as well as a number of assumptions concerning future events, and as such, should be taken in the context of the risks and uncertainties identified in the Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995 included above and of the risks and uncertainties outlined in the SEC filings of NII Holdings, Inc., including the Companys Annual Report on Form 10-K for the year ended December 31, 2009 and, when filed, its Annual Report on Form 10-K for the year ended December 31, 2010, as well as its other filings with the SEC. |
Average Monthly Revenue Per Handset/Unit in Service (ARPU)
Average monthly revenue per handset/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 handsets 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.
Year Ended | Three Months Ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
2010 | 2009 | 2010 | 2009 | |||||||||||||
(unaudited) | ||||||||||||||||
Consolidated service and other revenues |
$ | 5,347.7 | $ | 4,153.5 | $ | 1,490.0 | $ | 1,172.7 | ||||||||
Less: consolidated analog revenues |
(1.8 | ) | (2.5 | ) | (0.5 | ) | (0.4 | ) | ||||||||
Less: consolidated other revenues |
(667.4 | ) | (488.7 | ) | (182.1 | ) | (139.7 | ) | ||||||||
Total consolidated subscriber revenues |
$ | 4,678.5 | $ | 3,662.3 | $ | 1,307.4 | $ | 1,032.6 | ||||||||
ARPU calculated with subscriber revenues |
$ | 48 | $ | 45 | $ | 50 | $ | 48 | ||||||||
ARPU calculated with service and other revenues |
$ | 55 | $ | 51 | $ | 56 | $ | 54 | ||||||||
Nextel Brazil
Year Ended | Three Months Ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
2010 | 2009 | 2010 | 2009 | |||||||||||||
(unaudited) | ||||||||||||||||
Service and other revenues |
$ | 2,504.5 | $ | 1,631.1 | $ | 738.0 | $ | 527.7 | ||||||||
Less: analog revenues |
(0.1 | ) | (0.9 | ) | | | ||||||||||
Less: other revenues |
(328.4 | ) | (227.6 | ) | (92.4 | ) | (72.2 | ) | ||||||||
Total subscriber revenues |
$ | 2,176.0 | $ | 1,402.6 | $ | 645.6 | $ | 455.5 | ||||||||
ARPU calculated with subscriber revenues |
$ | 63 | $ | 55 | $ | 67 | $ | 64 | ||||||||
ARPU calculated with service and other revenues |
$ | 72 | $ | 64 | $ | 76 | $ | 74 | ||||||||
Nextel Mexico
Year Ended | Three Months Ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
2010 | 2009 | 2010 | 2009 | |||||||||||||
(unaudited) | ||||||||||||||||
Service and other revenues |
$ | 2,023.1 | $ | 1,785.2 | $ | 529.1 | $ | 456.5 | ||||||||
Less: analog revenues |
(1.4 | ) | (1.5 | ) | (0.3 | ) | (0.4 | ) | ||||||||
Less: other revenues |
(239.6 | ) | (170.1 | ) | (63.2 | ) | (44.3 | ) | ||||||||
Total subscriber revenues |
$ | 1,782.1 | $ | 1,613.6 | $ | 465.6 | $ | 411.8 | ||||||||
ARPU calculated with subscriber revenues |
$ | 47 | $ | 47 | $ | 47 | $ | 47 | ||||||||
ARPU calculated with service and other revenues |
$ | 53 | $ | 52 | $ | 53 | $ | 52 | ||||||||
Nextel Argentina
Year Ended | Three Months Ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
2010 | 2009 | 2010 | 2009 | |||||||||||||
(unaudited) | ||||||||||||||||
Service and other revenues |
$ | 517.5 | $ | 483.0 | $ | 140.9 | $ | 121.5 | ||||||||
Less: other revenues |
(73.8 | ) | (69.6 | ) | (19.7 | ) | (17.5 | ) | ||||||||
Total subscriber revenues |
$ | 443.7 | $ | 413.4 | $ | 121.2 | $ | 104.0 | ||||||||
ARPU calculated with subscriber revenues |
$ | 34 | $ | 35 | $ | 36 | $ | 34 | ||||||||
ARPU calculated with service and other revenues |
$ | 40 | $ | 41 | $ | 41 | $ | 40 | ||||||||
Nextel Peru
Year Ended | Three Months Ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
2010 | 2009 | 2010 | 2009 | |||||||||||||
(unaudited) | ||||||||||||||||
Service and other revenues |
$ | 282.0 | $ | 241.3 | $ | 75.8 | $ | 63.0 | ||||||||
Less: other revenues |
(23.1 | ) | (20.2 | ) | (6.1 | ) | (5.3 | ) | ||||||||
Total subscriber revenues |
$ | 258.9 | $ | 221.1 | $ | 69.7 | $ | 57.7 | ||||||||
ARPU calculated with subscriber revenues |
$ | 22 | $ | 25 | $ | 22 | $ | 23 | ||||||||
ARPU calculated with service and other revenues |
$ | 24 | $ | 27 | $ | 24 | $ | 26 | ||||||||
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.
Year Ended | Three Months Ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
2010 | 2009 | 2010 | 2009 | |||||||||||||
(unaudited) | ||||||||||||||||
Consolidated digital handset and accessory revenues |
$ | 253.4 | $ | 243.9 | $ | 30.1 | $ | 62.3 | ||||||||
Less: consolidated uninsured replacement revenues |
(18.8 | ) | (16.1 | ) | (5.4 | ) | (4.6 | ) | ||||||||
Consolidated digital handset and accessory
revenues, net |
234.6 | 227.8 | 24.7 | 57.7 | ||||||||||||
Less: consolidated cost of handset and accessory sales |
722.4 | 623.3 | 181.2 | 151.0 | ||||||||||||
Consolidated handset subsidy costs |
487.8 | 395.5 | 156.5 | 93.3 | ||||||||||||
Consolidated selling and marketing |
679.5 | 535.3 | 194.8 | 165.3 | ||||||||||||
Costs per statement of operations |
1,167.3 | 930.8 | 351.3 | 258.6 | ||||||||||||
Less: consolidated costs unrelated to initial customer
acquisition |
(231.8 | ) | (156.0 | ) | (82.3 | ) | (30.0 | ) | ||||||||
Customer acquisition costs |
$ | 935.5 | $ | 774.8 | $ | 269.0 | $ | 228.6 | ||||||||
Cost per Gross Add |
$ | 286 | $ | 276 | $ | 313 | $ | 305 | ||||||||
Nextel Brazil
Year Ended | Three Months Ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
2010 | 2009 | 2010 | 2009 | |||||||||||||
(unaudited) | ||||||||||||||||
Digital handset and accessory revenues |
$ | 86.8 | $ | 103.5 | $ | (10.6 | ) | $ | 27.1 | |||||||
Less: uninsured replacement revenues |
(9.5 | ) | (7.3 | ) | (2.6 | ) | (2.3 | ) | ||||||||
Digital handset and accessory revenues, net |
77.3 | 96.2 | (13.2 | ) | 24.8 | |||||||||||
Less: cost of handset and accessory sales |
177.2 | 139.5 | 44.9 | 25.9 | ||||||||||||
Handset subsidy costs |
99.9 | 43.3 | 58.1 | 1.1 | ||||||||||||
Selling and marketing |
273.8 | 198.1 | 77.6 | 65.2 | ||||||||||||
Costs per statement of operations |
373.7 | 241.4 | 135.7 | 66.3 | ||||||||||||
Less: costs unrelated to initial customer acquisition |
(48.0 | ) | (4.5 | ) | (36.8 | ) | 8.2 | |||||||||
Customer acquisition costs |
$ | 325.7 | $ | 236.9 | $ | 98.9 | $ | 74.5 | ||||||||
Cost per Gross Add |
$ | 250 | $ | 234 | $ | 292 | $ | 267 | ||||||||
Nextel Mexico
Year Ended | Three Months Ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
2010 | 2009 | 2010 | 2009 | |||||||||||||
(unaudited) | ||||||||||||||||
Digital handset and accessory revenues |
$ | 90.7 | $ | 76.6 | $ | 21.0 | $ | 18.5 | ||||||||
Less: uninsured replacement revenues |
(9.2 | ) | (8.8 | ) | (2.8 | ) | (2.3 | ) | ||||||||
Digital handset and accessory revenues, net |
81.5 | 67.8 | 18.2 | 16.2 | ||||||||||||
Less: cost of handset and accessory sales |
402.7 | 359.4 | 98.8 | 92.2 | ||||||||||||
Handset subsidy costs |
321.2 | 291.6 | 80.6 | 76.0 | ||||||||||||
Selling and marketing |
275.5 | 235.2 | 76.1 | 69.4 | ||||||||||||
Costs per statement of operations |
596.7 | 526.8 | 156.7 | 145.4 | ||||||||||||
Less: costs unrelated to initial customer acquisition |
(170.9 | ) | (142.7 | ) | (42.1 | ) | (36.1 | ) | ||||||||
Customer acquisition costs |
$ | 425.8 | $ | 384.1 | $ | 114.6 | $ | 109.3 | ||||||||
Cost per Gross Add |
$ | 395 | $ | 357 | $ | 432 | $ | 404 | ||||||||
Nextel Argentina
Year Ended | Three Months Ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
2010 | 2009 | 2010 | 2009 | |||||||||||||
(unaudited) | ||||||||||||||||
Digital handset and accessory revenues, net |
$ | 46.0 | $ | 36.7 | $ | 11.7 | $ | 9.4 | ||||||||
Less: cost of handset and accessory sales |
74.8 | 65.1 | 18.2 | 17.7 | ||||||||||||
Handset subsidy costs |
28.8 | 28.4 | 6.5 | 8.3 | ||||||||||||
Selling and marketing |
51.3 | 43.4 | 15.0 | 11.7 | ||||||||||||
Costs per statement of operations |
80.1 | 71.8 | 21.5 | 20.0 | ||||||||||||
Less: costs unrelated to initial customer acquisition |
(7.9 | ) | (5.2 | ) | (1.6 | ) | (1.4 | ) | ||||||||
Customer acquisition costs |
$ | 72.2 | $ | 66.6 | $ | 19.9 | $ | 18.6 | ||||||||
Cost per Gross Add |
$ | 217 | $ | 207 | $ | 235 | $ | 215 | ||||||||
Nextel Peru
Year Ended | Three Months Ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
2010 | 2009 | 2010 | 2009 | |||||||||||||
(unaudited) | ||||||||||||||||
Digital handset and accessory revenues, net |
$ | 29.8 | $ | 26.9 | $ | 8.0 | $ | 7.1 | ||||||||
Less: cost of handset and accessory sales |
62.1 | 55.8 | 17.6 | 14.1 | ||||||||||||
Handset subsidy costs |
32.3 | 28.9 | 9.6 | 7.0 | ||||||||||||
Selling and marketing |
55.0 | 40.0 | 18.3 | 13.1 | ||||||||||||
Costs per statement of operations |
87.3 | 68.9 | 27.9 | 20.1 | ||||||||||||
Less: costs unrelated to initial customer acquisition |
(4.4 | ) | (3.6 | ) | (1.3 | ) | (0.8 | ) | ||||||||
Customer acquisition costs |
$ | 82.9 | $ | 65.3 | $ | 26.6 | $ | 19.3 | ||||||||
Cost per Gross Add |
$ | 159 | $ | 173 | $ | 165 | $ | 185 | ||||||||
Net Debt
Net debt represents total long-term debt less cash, cash equivalents, short-term and long-term
investments. Net debt to consolidated operating income before depreciation and amortization
represents net debt divided by consolidated operating income before depreciation and amortization.
Prior to 2008, we calculated net debt as total long-term debt less cash and cash equivalents. In
the second quarter of 2010, we extended the permissible investment maturity dates for cash
investments, which resulted in the classification of some of our cash investments as long-term
investments. As a result, we now include the cash in long-term investments to the items subtracted
from long-term debt to calculate net debt. 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 and net debt to consolidated
operating income before depreciation and amortization provide useful information concerning our
liquidity and leverage. Net debt as of December 31, 2010 can be calculated as follows (in
millions):
NII Holdings, Inc.
Total long-term debt |
$ | 2,818.4 | ||
Add: reduction to long-term debt
pursuant to FSP APB 14-1 |
56.7 | |||
Add: debt discounts |
20.5 | |||
Less: cash and cash equivalents |
(1,767.5 | ) | ||
Less: short-term investments |
(537.5 | ) | ||
Net debt |
$ | 590.6 | ||