NII HOLDINGS, INC. RESTON, Va., Aug. 9, 2017 /PRNewswire/ -- NII Holdings, Inc. (NASDAQ: NIHD) today announced its financial results for the second quarter of 2017. For the quarter, the Company generated consolidated operating revenues of $225 million, a consolidated operating loss of $69 million and consolidated adjusted OIBDA loss of $5 million. The Company's consolidated adjusted OIBDA excludes the impact of non-cash asset impairments, restructuring charges and other unusual items. Capital expenditures were $9 million for the quarter. The Company reported 29,000 3G net subscriber losses in the quarter and 104,000 subscriber losses on the Company's iDEN network.
"We significantly improved our operational free cash flow this quarter, which resulted from our continued focus on preserving our liquidity," said Roberto Rittes, Nextel Brazil's Chief Executive Officer. "Our revenues and adjusted OIBDA for this quarter were impacted by the continued decline in our iDEN subscriber base. In addition, during the quarter, other operators introduced more aggressive rate plans that affected our subscriber growth and churn. In response to this development, in August, we introduced new rate plans that we believe will compete well against the new offers in the market."
Nextel Brazil's average monthly service revenue per subscriber (ARPU) for the second quarter of 2017 was $19, relatively flat on a reported basis, and a 6% decrease on a constant currency basis, compared to the same quarter last year. Nextel Brazil's average monthly churn rate for the second quarter of 2017 was 3.95%, a 4 basis point decrease compared to the same quarter last year. Nextel Brazil's cost per gross addition (CPGA) was $103 for the second quarter of 2017, a $4 increase on a reported basis, and a 5% decrease on a constant currency basis, compared to the same quarter last year. Nextel Brazil's cash cost per user (CCPU) was $18 for the second quarter of 2017, a $2 increase on a reported basis, and a 2% increase on a constant currency basis, compared to the same quarter last year.
At quarter-end, the Company's sources of funding included $282 million of unrestricted cash and short-term investments, $114 million of cash held in escrow to secure indemnification obligations in connection with the sale of Nextel Mexico and $49 million in cash pledged as collateral to secure certain performance bonds in Brazil.
The Company reported net cash used in operating activities of $1 million for the second quarter, resulting in net cash used in operating activities of $46 million for the six months ended June 30, 2017. In light of these results, the Company updated its guidance for operational free cash burn for the full year 2017 from a range of $200 to $250 million to a range of $150 to $200 million.
In August, the Company announced that the lenders of Nextel Brazil's local bank loans have agreed to extend their standstill agreements with Nextel Brazil to October 31, 2017, during which time no amortization payments will be required with respect to the related loans. In addition, upon making the next semi-annual principal payment to the lender of Nextel Brazil's equipment financing facility, which is due in August, Nextel Brazil agreed to pay the lenders of its local bank loans the principal payments that were deferred under the original standstill agreement.
The Company also announced that it reached preliminary non-binding agreements with its bank lenders on the key terms for loan amendments. Among other changes, these terms provide for the deferral of principal payments until the end of 2021 and a holiday for financial covenant compliance until June 30, 2020. In exchange for these changes, Nextel Brazil would grant additional security interests to the bank lenders in the form of preferential rights to amounts held in certain of Nextel Brazil's bank accounts, among other things. These terms must be finalized in formal amendment agreements, and the final amendments remain subject to review and approval by the banks. There is no guarantee that the Company will be able to finalize these amendments on acceptable terms or at all. The Company believes that it remains on track to complete the process in time for AINMT to exercise its option to invest an additional $150 million should AINMT choose to do so.
"We are pleased with the progress we have made and the support we have received from all of our lenders to amend our local agreements, which is a key priority for us," said Dan Freiman, the Company's Chief Financial Officer. "With the closing of AINMT's first investment of $50 million, we are focused on completing these amendments and meeting all of the other conditions for AINMT's second investment of $150 million, if AINMT chooses to execute its option, which will enable us to pursue a new growth strategy for Nextel Brazil going forward."
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 June 30, 2017 that was 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 ARPU, CCPU, and CPGA. These measures are non-GAAP financial measures and should be considered in addition to, but not as substitutes for, the information prepared in accordance with GAAP. Reconciliations from GAAP results to these non-GAAP financial measures are provided in the notes to the attached financial tables. To view these and other reconciliations of non-GAAP financial measures that the Company uses, visit the investor relations link at www.nii.com.
About NII Holdings, Inc.
NII Holdings, Inc., a publicly held company based in Reston, Virginia, is a provider of differentiated mobile communication services for businesses and high value consumers in Brazil. NII Holdings, operating under the Nextel brand, offers fully integrated wireless communication tools with digital cellular voice services, data services and wireless Internet access. Visit the Company's website at www.nii.com.
Nextel, the Nextel logo and Nextel Direct Connect are trademarks and/or service marks of Nextel Communications, Inc.
Visit NII Holdings' news room for news and to access our markets' news centers: nii.com/newsroom.
Safe Harbor Statement
"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995. This news release includes "forward-looking statements" within the meaning of the securities laws. The statements in this news release regarding the business and economic outlook, future performance, modifications to loan agreements, the completion of AINMT's second investment and 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 fund the business and meet its business plans, customer growth and retention, pricing, network usage, operating costs, the timing of various events, the economic and regulatory environment and the foreign currency exchange rates that will prevail during the remainder of 2017. 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 and pledged funds when expected, our ability to reach agreement with lenders on amendments to the terms of our financing arrangements, a decision by AINMT not to exercise its option, failing to meet the closing conditions necessary to complete AINMT's investment, the impact of more intense competitive conditions and changes in economic conditions in Brazil, the performance of the Company's networks, the Company's ability to provide services that customers want or need, the ability of the Company to continue as a going concern, the Company's ability to execute its business plan, and the additional risks and uncertainties that are described in NII Holdings' Annual Report on Form 10-K for the year ended December 31, 2016 and the Quarterly Report on Form 10-Q for the period ended June 30, 2017, 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 SIX MONTHS ENDED JUNE 30, 2017 AND 2016
(in millions, except per share amounts)
Three Months Ended Six Months Ended
June 30, June 30,
2017 2016 2017 2016
---- ---- ---- ----
(unaudited)
Operating revenues $220.1 $243.1 $463.6 $463.7
Service and other revenues
Handset and accessory revenues 5.0 6.1 12.5 12.0
--- --- ---- ----
225.1 249.2 476.1 475.7
----- ----- ----- -----
Operating expenses 87.9 81.9 190.6 171.9
Cost of service (exclusive of depreciation and amortization
included below)
Cost of handsets and accessories 13.0 8.9 21.7 20.0
Selling, general and administrative 129.6 135.9 264.1 269.3
Impairment, restructuring and other charges 54.2 10.6 126.2 16.5
Depreciation 5.7 29.7 14.6 59.8
Amortization 3.6 11.0 7.7 21.0
--- ---- --- ----
294.0 278.0 624.9 558.5
----- ----- ----- -----
Operating loss (68.9) (28.8) (148.8) (82.8)
----- ----- ------ -----
Other (expense) income (29.9) (27.2) (61.4) (52.4)
Interest expense, net
Interest income 7.8 10.8 16.9 20.5
Foreign currency transaction (losses) gains, net (13.4) 43.4 (2.0) 83.0
Other income (expense), net 10.7 (2.4) 8.9 (4.9)
---- ---- --- ----
(24.8) 24.6 (37.6) 46.2
----- ---- ----- ----
Loss from continuing operations before reorganization (93.7) (4.2) (186.4) (36.6)
items and income tax provision
Reorganization items 0.4 (0.2) 0.4 (0.6)
Income tax benefit (provision) 5.8 (0.4) 5.8 (0.4)
--- ---- --- ----
Net loss from continuing operations (87.5) (4.8) (180.2) (37.6)
Net income (loss) from discontinued operations, net of 2.7 (5.1) 2.7 (8.9)
income taxes
Net loss $(84.8) $(9.9) $(177.5) $(46.5)
====== ===== ======= ======
Net loss from continuing operations per common share, $(0.87) $(0.05) $(1.80) $(0.37)
basic and diluted
Net income (loss) from discontinued operations per common 0.02 (0.05) 0.03 (0.09)
share, basic and diluted
Net loss per common share, basic and diluted $(0.85) $(0.10) $(1.77) $(0.46)
====== ====== ====== ======
Weighted average number of common shares outstanding, 100.3 100.0 100.3 100.0
basic and diluted
CONSOLIDATED BALANCE SHEETS
(in millions, except par values)
June 30, December 31,
2017 2016
---- ----
ASSETS
Current assets
Cash and cash equivalents $219.6 $257.4
Short-term investments 62.8 73.9
Accounts receivable, net of allowance for doubtful accounts of $56.5 and $54.2 138.1 153.8
Handset and accessory inventory 3.3 8.3
Prepaid expenses and other 234.9 280.1
----- -----
Total current assets 658.7 773.5
Property, plant and equipment, net 104.8 129.5
Intangible assets, net 196.8 243.7
Other assets 237.7 271.8
----- -----
Total assets $1,198.0 $1,418.5
======== ========
LIABILITIES AND STOCKHOLDERS' (DEFICIT) EQUITY
Current liabilities
Accounts payable $54.6 $69.2
Accrued expenses and other 240.4 271.9
Deferred revenues 7.6 11.6
Current portion of long-term debt 495.9 540.5
----- -----
Total current liabilities 798.5 893.2
Long-term debt 208.3 215.8
Other long-term liabilities 194.8 143.5
----- -----
Total liabilities 1,201.6 1,252.5
Stockholders' equity
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, 100.4 shares issued and 0.1 0.1
outstanding - 2017, 100.3 shares issued and outstanding - 2016
Paid-in capital 2,079.6 2,076.6
Accumulated deficit (2,012.2) (1,834.8)
Accumulated other comprehensive loss (71.1) (75.9)
----- -----
Total stockholders' (deficit) equity (3.6) 166.0
---- -----
Total liabilities and stockholders' (deficit) equity $1,198.0 $1,418.5
======== ========
CONSOLIDATED CASH FLOW DATA
(in millions)
Six Months Six Months
Ended June 30, Ended June 30,
-------------- --------------
2017 2016
---- ----
Cash and cash equivalents, beginning of period $257.4 $342.2
Net cash (used in) provided by operating activities (46.4) 8.0
Net cash provided by investing activities 52.7 17.0
Net cash used in financing activities (44.3) (28.5)
Effect of exchange rate changes on cash and cash equivalents 0.2 (0.6)
---
Cash and cash equivalents, end of period $219.6 $338.1
====== ======
NII HOLDINGS, INC. AND SUBSIDIARIES
OPERATING RESULTS AND METRICS
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2017 AND 2016 (1)
(UNAUDITED)
Nextel Brazil
-------------
(dollars in millions, except ARPU and CPGA, and subscribers in thousands)
Three Months Ended Six Months Ended
June 30, June 30,
2017 2016 2017 2016
---- ---- ---- ----
Service and other revenues $220.1 $243.1 $463.6 $463.6
Handset and accessory revenues 5.0 6.1 12.5 12.0
Cost of handsets and accessories (13.0) (8.9) (21.7) (20.0)
----- ---- ----- -----
Handset and accessory net subsidy (8.0) (2.8) (9.2) (8.0)
Cost of service (exclusive of depreciation and amortization) (87.9) (81.9) (190.6) (171.9)
Selling, general and administrative (121.1) (126.1) (248.3) (247.7)
Segment earnings 3.1 32.3 15.5 36.0
Reversal of accrued tax contingency - (8.1) - (8.1)
Adjusted operating income before depreciation and $3.1 $24.2 $15.5 $27.9
amortization
Subscriber units
----------------
iDEN 563.3 1,127.8
WCDMA 2,864.8 2,717.1
------- -------
Total subscriber units in commercial service (as of June 30) 3,428.1 3,844.9
iDEN net subscriber losses (103.5) (149.7)
WCDMA net subscriber losses (29.3) (29.2)
----- -----
Total net subscriber losses (132.8) (178.9)
Migrations from iDEN to WCDMA 19.5 37.6
iDEN subscriber churn 5.88% 4.46%
WCDMA subscriber churn 3.53% 3.78%
Churn (%) 3.95% 3.99%
ARPU (1) $19 $19
CPGA (1) $103 $99
CCPU (1) $18 $16
------- --- ---
(1) For information regarding ARPU, CPGA and CCPU, see "Non-GAAP Reconciliations for the Three and Six Months Ended June 30, 2017 and 2016" included
in this release.
NON-GAAP RECONCILIATIONS
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2017 AND 2016
(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 June 30, Six Months Ended June 30,
2017 2016 2017 2016
---- ---- ---- ----
Consolidated operating loss $(68.9) $(28.8) $(148.8) $(82.8)
Consolidated depreciation 5.7 29.7 14.6 59.8
Consolidated amortization 3.6 11.0 7.7 21.0
--- ---- --- ----
Consolidated OIBDA (59.6) 11.9 (126.5) (2.0)
Reversal of accrued tax contingency - (8.1) - (8.1)
Asset impairment charges 0.2 7.3 68.6 8.2
Restructuring charges 54.0 3.3 57.6 8.3
---- --- ---- ---
Consolidated adjusted OIBDA $(5.4) $14.4 $(0.3) $6.4
===== ===== ===== ====
Average Monthly Revenue Per Handset/Unit in Service (ARPU)
Average monthly revenue per subscriber unit in service, or ARPU, is an industry term that measures service revenues, which we refer to as subscriber revenues, per period from our customers divided by the weighted average number of subscriber units in commercial service during that period. ARPU is not a measurement under accounting principles generally accepted in the United States, may not be similar to ARPU measures of other companies and should be considered in addition, but not as a substitute for, the information contained in our statements of operations. We believe that ARPU provides useful information concerning the appeal of our rate plans and service offerings and our performance in attracting and retaining high value customers. Other revenue includes revenues for such services as roaming, handset maintenance, cancellation fees, analog and other. ARPU can be calculated as follows (in millions, except ARPU):
Nextel Brazil
Three Months Ended June 30,
2017 2016
---- ----
US$
Service and other revenues $220.1 $243.1
Less: other revenues (15.8) (22.1)
----- -----
Total subscriber revenues $204.3 $221.0
====== ======
ARPU calculated with subscriber revenues $19 $19
=== ===
ARPU calculated with service and other revenues $21 $21
=== ===
Nextel Brazil
Three Months Ended June 30,
2017 2016
---- ----
BRL R$
Service and other revenues $707.1 $853.0
Less: other revenues (50.5) (77.6)
----- -----
Total subscriber revenues $656.6 $775.4
====== ======
ARPU calculated with
subscriber revenues $62 $66
=== ===
ARPU calculated with service
and other revenues $67 $72
=== ===
Cost per Gross Add (CPGA)
Cost per gross add, or CPGA, is an industry term that is calculated by dividing our selling, marketing and handset and accessory subsidy costs, excluding costs unrelated to initial customer acquisition, by our new subscribers during the period, or gross adds. CPGA is not a measurement under accounting principles generally accepted in the United States, may not be similar to CPGA measures of other companies and should be considered in addition, but not as a substitute for, the information contained in our statements of operations. We believe CPGA is a measure of the relative cost of customer acquisition. CPGA can be calculated as follows (in millions, except CPGA):
Nextel Brazil
Three Months Ended June 30,
2017 2016
---- ----
US$
Consolidated handset
and accessory revenues $5.0 $6.1
Less: consolidated
uninsured handset
replacement revenues - -
--- ---
Consolidated handset
and accessory
revenues, net 5.0 6.1
Less: consolidated cost
of handsets and
accessories 13.0 8.9
---- ---
Consolidated handset
subsidy costs 8.0 2.8
Consolidated selling
and marketing 23.4 28.0
---- ----
Costs per statement of
operations 31.4 30.8
Less: consolidated
costs unrelated to
initial customer (2.3) (1.7)
acquisition
Customer acquisition
costs $29.1 $29.1
===== =====
Cost per Gross Add $103 $99
==== ===
Nextel Brazil
Three Months Ended June 30,
2017 2016
---- ----
BRL R$
Consolidated handset and accessory revenues $16.3 $21.4
Less: consolidated uninsured handset replacement revenues (0.2) (0.1)
---- ----
Consolidated handset and accessory revenues, net 16.1 21.3
Less: consolidated cost of handsets and accessories 42.0 31.5
---- ----
Consolidated handset subsidy costs 25.9 10.2
Consolidated selling and marketing 75.0 97.9
---- ----
Costs per statement of operations 100.9 108.1
Less: consolidated costs unrelated to initial customer (7.4) (6.1)
acquisition
Customer acquisition costs $93.5 $102.0
===== ======
Cost per Gross Add $331 $349
==== ====
Cash Cost per Handset/User
Cash cost per handset/unit, or CCPU, represents the sum of cost of service, general and administrative expenses and customer retention and other costs divided by average handsets in service during the period and divided by the number of months in the period. CCPU is not a measurement under accounting principles generally accepted in the United States, may not be similar to CCPU measures of other companies and should not be considered in addition to, but not as a substitute for, the information contained in our statements of operations. We believe CCPU is a measure of the recurring costs we incur on a monthly basis to provide service to our subscribers. The CCPU calculation excludes material asset impairments, severance costs associated with publicly announced restructuring plans and other material non-recurring or unusual charges and is calculated as follows (in thousands, except CCPU):
Nextel Brazil
Three Months Ended June 30,
2017 2016
---- ----
US$
Total selling, general and
administrative expenses $121.1 $126.1
Less: selling and marketing
expenses (23.4) (28.0)
----- -----
General and administrative
expenses 97.7 98.1
Cost of service 87.9 90.0
Customer retention costs
and other 2.3 1.7
Total $187.9 $189.8
====== ======
Cash Cost per User $18 $16
=== ===
Nextel Brazil
Three Months Ended June 30,
2017 2016
---- ----
BRL R$
Total selling, general and
administrative expenses $388.7 $442.3
Less: selling and marketing
expenses (75.0) (97.9)
----- -----
General and administrative
expenses 313.7 344.4
Cost of service 281.5 316.2
Customer retention costs
and other 7.4 6.1
Total $602.6 $666.7
====== ======
Cash Cost per User $57 $56
=== ===
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 six months ended June 30, 2016 compared to the same period in 2017 by (i) adjusting the relevant measures for the three and six months ended June 30, 2016 to levels that would have resulted if the average foreign currency exchange rates for the three and six months ended June 30, 2016 were the same as the average foreign currency exchange rates that were in effect for the three and six months ended June 30, 2017; and (ii) comparing the actual and adjusted financial measures for the three and six months ended June 30, 2016 to the similar financial measures for the three and six months ended June 30, 2017 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 six months ended June 30, 2017 and 2016. The average foreign currency exchange rates for each of the relevant currencies during each of the three and six months ended June 30, 2017 and 2016 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 six months ended June 30, 2017 compared to the same period in 2016 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 June 30,
2Q 2016 2Q 2016 2Q 2016 2Q 2017 2Q 2016 2Q 2016
Actual Adjustment Normalized Actual
(1) (1) to 2Q 2017 to 2Q 2017
Actual B(W) Normalized
Growth (2)
B(W) Growth (3)
Consolidated:
Operating revenues $249,213 $23,287 $272,500 $225,134 (10)% (17)%
Adjusted operating income (loss) 14,387 2,254 16,641 (5,361) (137)% (132)%
before depreciation and
amortization
Nextel Brazil:
Operating revenues $249,168 $23,287 $272,455 $225,105 (10)% (17)%
Adjusted OIBDA 24,123 2,254 26,377 3,080 (87)% (88)%
-------------- ------ ----- ------ ----- ---- ----
NII Holdings, Inc
-----------------
(dollars in thousands)
Six Months Ended June 30,
YTD 2016 YTD 2016 YTD 2016 YTD 2017 YTD 2016 YTD 2016
Actual Adjustment Normalized Actual
(1) (1) to YTD 2017 to YTD 2017
B(W) Growth (2) Normalized
B(W) Growth (3)
--- ---------------
Consolidated:
Operating revenues $475,770 $81,029 $556,799 $476,089 - (14)%
Adjusted operating income (loss) 6,343 4,750 11,093 (246) (104)% (102)%
before depreciation and
amortization
Nextel Brazil:
Operating revenues $475,671 $81,029 $556,700 $476,030 - (14)%
Adjusted OIBDA 27,883 4,750 32,633 15,453 (45)% (53)%
-------------- ------ ----- ------ ------ ---- ----
(1) The "2Q 2016 Normalized" and "YTD 2016 Normalized" amounts reflect the impact of applying the average
foreign currency exchange rates for the three and six months ended June 30, 2017 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 six months ended June 30, 2016, 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 "2Q 2016 Normalized" and "YTD 2016 Normalized" reflect the amount determined by adding the "2Q
2016 Adjustment" and "YTD 2016 Adjustment" amounts calculated as described in the preceding sentence to
the "2Q 2016 Actual" and "YTD 2016 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 six months ended
June 30, 2017. The average foreign currency exchange rates for each of the relevant currencies during the three
and six months ended June 30, 2017 and 2016 for purposes of these calculations were as follows:
Three Months Ended June 30, Six Months Ended June 30,
2017 2016 2017 2016
---- ---- ---- ----
Brazilian real 3.21 3.51 3.17 3.71
(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 "2Q 2017 Actual" and "YTD 2017 Actual" columns with those in
the "2Q 2016 Actual" and "YTD 2016 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 "2Q 2017 Actual" and "YTD 2017 Actual" columns with those in the
"2Q 2016 Normalized" and "YTD 2016 Normalized" columns.
Operational Free Cash Burn
Operational free cash burn is an industry term that represents all of the Company's cash spending, with the exception of payments related to debt principal and interest, cash returned from escrow in connection with the sale of Nextel Mexico and cash recovered from certain performance bonds relating to the Company's obligations to deploy its WCDMA spectrum in Brazil. Operational free cash burn is not derived from or based on any measurement under accounting principles generally accepted in the United States but is instead calculated through the Company's cash forecasting process. For this reason, we believe that it would require unreasonable efforts to provide a quantitative reconciliation of this term.
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SOURCE NII Holdings, Inc.
