NII Holdings Announces Second Quarter 2013 Results

              NII Holdings Announces Second Quarter 2013 Results

-- Net subscriber additions of 100,000

-- Consolidated operating revenues of $1.26 billion

-- Consolidated adjusted operating income before depreciation and amortization
(adjusted OIBDA) of $101 million

-- Nextel Peru accounted for as discontinued operations

PR Newswire

RESTON, Va., Aug. 1, 2013

RESTON, Va., Aug. 1, 2013 /PRNewswire/ --NII Holdings, Inc. [NASDAQ: NIHD]
today announced its consolidated financial results for the second quarter of
2013, which reflect the results of Nextel Peru as discontinued operations.
During the quarter, the Company added 100,000 net subscribers to its network,
bringing its ending subscriber base to over 9.9 million, a 2 percent increase
from June 30, 2012. Financial results for the quarter included consolidated
operating revenues of $1.26 billion, down 11 percent from the level reported
in the second quarter of 2012, and consolidated adjusted OIBDA, which excludes
the impact of non-cash asset impairment and restructuring charges, of $101
million, a 55 percent decline compared to the same period last year. The
decrease in consolidated adjusted OIBDA was driven by incremental investments
related to the Company's deployment of its planned next generation networks,
costs to migrate customers to the Company's next generation network in Mexico,
weaker average foreign currency exchange rates, and lower average revenue per
subscriber (ARPU) on a local currency basis. For the second quarter of 2013,
the Company generated a consolidated operating loss of $82 million and a
consolidated net loss of $396 million, or $2.30 per basic share. The net loss
includes $104 million of foreign currency transaction losses resulting from
weaker foreign currency exchange rates and $100 million of non-cash income tax
expense related to a deferred tax valuation allowance the Company recognized
during the period. Capital expenditures were $218 million for the quarter, of
which $113 million was paid in cash.

(Logo: http://photos.prnewswire.com/prnh/20110919/FL70458LOGO )

"We're making progress on a number of initiatives that are key to our goal of
improving the fundamentals of our business; however, we continue to experience
significant challenges, including the impact of Sprint's shutdown of its iDEN
network in the U.S. on our operations in Mexico," said Steve Shindler, NII
Holdings' chief executive officer. "While we expect the situation in Mexico
will continue to negatively impact our results in the second half of the year,
we are working to address these challenges by completing and expanding the
coverage of our next generation networks, as well as increasing our marketing
efforts to enhance consumer awareness of the new products and services they
support. The rigor and discipline that we have added to our next generation
network deployment process is enabling us to meet the timeline we set for
building our new networks, as evidenced by the recent launch of wireless
broadband services in our Sao Paulo market that will enhance our competitive
position in Brazil."

NII Holdings' consolidated ARPU was $36 for the second quarter of 2013, down
almost $5 compared to the same period last year. This decline resulted from
lower priced rate plans the Company offered as part of its customer retention
efforts and in response to more aggressive competition in recent quarters,
primarily in Brazil and Mexico, and from the year-over-year weakening in local
foreign currency exchange rates. The Company reported consolidated churn of
2.67 percent for the second quarter, up about 50 basis points from the level
reported for the same period last year. Consolidated cost per gross add
(CPGA) was $276 for the second quarter, a $25 decrease compared to the second
quarter of 2012.

The Company ended the quarter with $5.8 billion in total debt and $1.8 billion
in consolidated cash and investments, resulting in net debt of $4.0 billion.
During the second quarter, the Company issued $700 million in senior notes due
2019 and used proceeds of that financing to repay the entire outstanding
balance of its bank loan in Mexico and certain bank loans in Brazil, improving
its debt maturity schedule.

"We've made good progress executing against our financing objectives," said
Juan Figuereo, NII Holdings' executive vice president and chief financial
officer. "We raised $1.6 billion in the bond markets year to date, which we
used to enhance liquidity and improve our maturity profile. Additionally, with
the agreement to sell our operations in Peru, we took another important step
towards refocusing on our strategic markets, and expect to add approximately
$400 million to our liquidity at completion of this transaction. All of these
efforts will enable us to complete the deployment and expand the coverage and
capabilities of our next generation networks in Mexico and Brazil, the markets
which offer the best opportunity for us to return to profitable growth and
improve our cash flow profile."

A presentation highlighting NII Holdings' second quarter 2013 results is
available on the Investor Relations page of the Company's web site.
Additional information relating to NII Holdings' second quarter 2013 results
will be provided on the Company's earnings call on Thursday, August 1, 2013
from 8:30 AM to 9:15 AM EDT. The call will be available via webcast, online
www.nii.com on the Investor Relations page or by phone at the numbers provided
below.

Phone:
Domestic
1.800.591.6942 pass-code: NII HOLDINGS
International
1.617.614.4909 pass-code: NII HOLDINGS
Please click herefor additional Global Access Numbers

All participants are asked to dial in 10-15 minutes prior to the start of the
conference call. If you are unable to participate, a rebroadcast of the
conference call will be available for two weeks following the call.

For a replay of this call, please use the following:

Conference Call Replay:
Domestic
1.888.286.8010 pass-code: 98266541
International
1.617.801.6888 pass-code: 98266541

The financial results provided throughout this press release are prepared in
accordance with accounting principles generally accepted in the United States,
or GAAP. NII has presented consolidated adjusted OIBDA, ARPU, CPGA and net
debt. These measures are non-GAAP financial measures and should be considered
in addition to, but not as substitutes for, the information prepared in
accordance with GAAP. Reconciliations from GAAP results to these non-GAAP
financial measures are provided in the notes to the attached financial tables.
To view these and other reconciliations of non-GAAP financial measures that
the Company uses and information about how to access the conference call
discussing NII's second quarter 2013 results, visit the investor relations
link at www.nii.com.

About NII Holdings, Inc.
NII Holdings, Inc., a publicly held company based in Reston, Va., is a
provider of differentiated mobile communication services for businesses and
high value consumers in Latin America. NII, operating under the Nextel brand
in Brazil, Mexico, Argentina, Peru and Chile, offers fully integrated wireless
communications tools with digital cellular voice services, data services,
wireless Internet access and Nextel Direct Connect^® and International Direct
Connect^SM, a digital two-way radio. NII is a Fortune 500 and Barron's 500
company, and has also been named one of the best places to work among
multinationals in Latin America by the Great Place to Work^® Institute. The
company trades on the NASDAQ market under the symbol NIHD. Visit the company's
website at www.nii.com.

Nextel, the Nextel logo and Nextel Direct Connect and International Direct
Connect are trademarks and/or service marks of Nextel Communications, Inc.,
and are used by NII's subsidiaries under license in Latin America.

Visit NII's news room for news and to access our markets' news centers:
www.nii.com/newsroom.

Safe Harbor Statement

"Safe Harbor" Statement under the Private Securities Litigation Reform Act of
1995. This news release includes "forward-looking statements" within the
meaning of the securities laws. The statements in this news release regarding
the business outlook, future performance and forward-looking guidance, as well
as other statements that are not historical facts, are forward-looking
statements. Forward-looking statements are estimates and projections
reflecting management's judgment based on currently available information and
involve a number of risks and uncertainties that could cause actual results to
differ materially from those suggested by the forward-looking statements.
With respect to these forward-looking statements, management has made
assumptions regarding, among other things, network usage, customer growth and
retention, pricing, operating costs, the timing of various events, the
economic and regulatory environment and the foreign exchange rates that will
prevail during 2013. 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
in NII Holdings' Annual Report on Form 10-K for the fiscal year ended December
31, 2012, as well as in other reports filed from time to time by NII Holdings
with the Securities and Exchange Commission. This press release speaks only as
of its date, and NII Holdings disclaims any duty to update the information
herein.

Media Contacts:

NII Holdings, Inc.
1875 Explorer Street, Suite 1000
Reston, VA. 20190
(703) 390-5100
www.nii.com

Investor Relations: Tim Perrott
(703) 390-5113
tim.perrott@nii.com

Media Relations: Claudia Restrepo
(786) 251-7020
claudia.restrepo@nii.com





NII HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2013 AND 2012
(in millions, except per share amounts)
                                Three Months Ended      Six Months Ended

                                June 30,                 June 30,
                                2013        2012        2013        2012
                                (unaudited)
Operating revenues
                                $ 1,214.2   $ 1,342.9   $ 2,497.3   $ 2,805.4
 Service and other revenues
Handset and accessory revenues  45.4        66.5        93.1        148.4
                                1,259.6     1,409.4     2,590.4     2,953.8
Operating expenses

 Cost of service (exclusive of 393.0       391.9       792.1       806.8
depreciation and amortization

 included below)
Cost of handset and accessory   233.9       214.1       440.2       424.8
sales
Selling, general and            497.7       535.4       978.7       1,061.5
administrative
 Provision for doubtful        34.1        42.1        50.6        86.9
accounts
 Impairment and restructuring  1.3         9.3         125.9       9.3
charges
Depreciation                    166.1       144.3       333.5       286.4
Amortization                    15.5        8.6         30.9        17.6
                                1,341.6     1,345.7     2,751.9     2,693.3
Operating (loss) income         (82.0)      63.7        (161.5)     260.5
Other income (expense)
                                (150.2)     (80.7)      (259.9)     (163.4)
 Interest expense
Interest income                 9.0         5.9         15.5        12.1
 Foreign currency transaction  (104.5)     (38.8)      (81.3)      (53.3)
losses, net
Other expense, net              (8.4)       (5.7)       (13.1)      (14.9)
                                (254.1)     (119.3)     (338.8)     (219.5)
(Loss) income from continuing
operations before income tax    (336.1)     (55.6)      (500.3)     41.0

 provision
Income tax provision            (48.8)      (29.7)      (70.4)      (100.4)
Net loss from continuing        (384.9)     (85.3)      (570.7)     (59.4)
operations
Loss from discontinued          (11.5)      (18.2)      (33.2)      (30.5)
operations, net of income taxes
Net loss                        $ (396.4)   $ (103.5)   $ (603.9)   $ (89.9)
Net loss from continuing
operations, per common share,   $ (2.23)    $ (0.50)    $ (3.32)    $ (0.34)
basic
Net loss from discontinued
operations, per common share,   (0.07)      (0.10)      (0.19)      (0.18)
basic
Net loss per common share,      $ (2.30)    $ (0.60)    $ (3.51)    $ (0.52)
basic
Net loss from continuing
operations, per common share,   $ (2.23)    $ (0.50)    $ (3.32)    $ (0.34)
diluted
Net loss from discontinued
operations, per common share,   (0.07)      (0.10)      (0.19)      (0.18)
diluted
Net loss per common share,      $ (2.30)    $ (0.60)    $ (3.51)    $ (0.52)
diluted
Weighted average number of
common shares outstanding,      172.2       171.5       172.0       171.4

 basic
Weighted average number of
common shares outstanding,      172.2       171.5       172.0       171.4

 diluted







CONDENSED CONSOLIDATED BALANCE SHEETS
(in millions, except par values)
                                                      June 30,    December 31,
                                                      2013        2012
                                                      (unaudited)
ASSETS
Current assets
Cash and cash equivalents                             $ 1,463.3   $  1,371.2
Short-term investments                                318.4       204.8
Accounts receivable, less allowance for doubtful      644.9       674.5
accounts of $75.8 and $108.7
Handset and accessory inventory                       304.4       323.3
Deferred income taxes, net                            134.0       175.7
Assets held for sale                                  491.4       97.4
Prepaid expenses and other                            435.1       488.1
Total current assets                                  3,791.5     3,335.0
Property, plant and equipment, net                    3,308.9     3,531.3
Intangible assets, net                                1,049.0     1,125.4
Deferred income taxes, net                            363.7       367.2
Assets held for sale                                  —           400.3
Other assets                                          468.7       463.9
Total assets                                          $ 8,981.8   $  9,223.1
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable                                      $ 297.4     $  424.2
Accrued expenses and other                            812.3       969.8
Deferred revenues                                     131.8       144.1
Current portion of long-term debt                     81.4        94.0
Liabilities held for sale                             94.3        127.9
Total current liabilities                             1,417.2     1,760.0
Long-term debt                                        5,653.1     4,765.5
Deferred revenues                                     12.5        14.0
Deferred tax liabilities                              69.1        58.2
Liabilities held for sale                             —           12.7
Other long-term liabilities                           306.0       296.2
Total liabilities                                     7,457.9     6,906.6
Commitments and contingencies
Stockholders' equity
Undesignated preferred stock, par value $0.001,
10.0shares authorized— 2013 and
                                                      —           —
 2012, no shares issued or outstanding— 2013 and
2012
Common stock, par value $0.001, 600.0shares
authorized— 2013 and 2012, 172.4
                                                      0.2         0.2
 shares issued and outstanding— 2013, 171.7 shares
issued and outstanding— 2012
Paid-in capital                                       1,494.9     1,481.7
Retained earnings                                     854.2       1,458.0
Accumulated other comprehensive loss                  (825.4)     (623.4)
Total stockholders' equity                            1,523.9     2,316.5
Total liabilities and stockholders' equity            $ 8,981.8   $  9,223.1







CONDENSED CONSOLIDATED CASH FLOW DATA
(in millions)
                                                     Six Months Ended June 30,
                                                     2013           2012
                                                     (unaudited)
Cash and cash equivalents, beginning of period       $  1,371.2     $ 2,310.7
Net cash (used in) provided by operating activities  (40.3)         193.3
Net cash used in investing activities                (647.8)        (362.5)
Net cash provided by (used in) financing activities  821.5          (325.2)
Effect of exchange rate changes on cash and cash     (18.2)         0.7
equivalents
Change in cash and cash equivalents held for sale    (23.1)         (24.4)
Cash and cash equivalents, end of period             $  1,463.3     $ 1,792.6





NII HOLDINGS, INC. AND SUBSIDIARIES
OPERATING RESULTS AND METRICS
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2013 and 2012
(UNAUDITED)



NII Holdings, Inc. (1)
(subscribers in thousands)
                                               Three Months Ended

                                               June 30,
                                               2013       2012
Total subscribers (2) (as of June 30)          9,914.3    9,763.7
Net subscriber additions                       100.5      241.0
Churn (%)                                      2.67    %  2.16    %
Average monthly revenue per subscriber unit in
                                               $  36      $  41
 service (ARPU) (1)
Cost per gross add (CPGA) (1)                  $  276     $  301



    All operating results and metrics presented herein have been adjusted to
(1) exclude the results of Nextel Peru, which has been accounted for as
    discontinued operations.
    Each subscriber, which we also refer to as a subscriber unit, represents
(2) an active subscriber identity module, or SIM, which isthe level at which
    we have tracked and will continue to track subscribers.



Nextel Brazil
(dollars in millions, except ARPU and CPGA, and subscribers in thousands)
                                  Three Months Ended    Six Months Ended

                                  June 30,              June 30,
                                  2013       2012       2013        2012
                                  (unaudited)
Operating revenues
                                  $ 559.2    $ 678.6    $ 1,175.8   $ 1,455.5
 Service and other revenues
Handset and accessory revenues    19.4       33.9       38.7        81.3
                                  578.6      712.5      1,214.5     1,536.8
Operating expenses

 Cost of service (exclusive of
depreciation and amortization     205.0      225.8      422.4       476.5
included

 below)
Cost of handset and accessory     40.2       55.1       90.7        114.0
sales
Selling, general and              200.5      213.0      403.1       452.7
administrative
Provision for doubtful accounts   25.6       35.1       33.3        72.1
Segment earnings                  107.3      183.5      265.0       421.5
 Impairment and restructuring    —          0.3        23.8        0.3
charges
Management fee and other          13.4       14.0       26.3        27.5
Depreciation and amortization     95.2       73.0       192.8       151.9
Operating (loss) income           $ (1.3)    $ 96.2     $ 22.1      $ 241.8
Total subscribers (as of June 30) 3,879.6    4,230.0
 Net subscriber (deactivations)  (5.2)      3.2
additions
Churn (%)                         2.70    %  2.30    %
ARPU (1)                          $ 43       $ 47
CPGA (1)                          $ 207      $ 256





Nextel Mexico
(dollars in millions, except ARPU and CPGA, and subscribers in thousands)
                                  Three Months Ended     Six Months Ended

                                  June 30,               June 30,
                                  2013        2012       2013       2012
                                  (unaudited)
Operating revenues
                                  $ 492.7     $ 501.7    $ 993.7    $ 1,024.2
 Service and other revenues
Handset and accessory revenues    10.0        19.4       23.0       41.4
                                  502.7       521.1      1,016.7    1,065.6
Operating expenses

 Cost of service (exclusive of
depreciation and amortization     124.6       103.6      247.7      206.8
included

 below)
Cost of handset and accessory     162.5       132.3      291.1      261.0
sales
Selling, general and              171.5       152.4      328.5      292.6
administrative
Provision for doubtful accounts   4.7         4.1        8.8        7.8
Segment earnings                  39.4        128.7      140.6      297.4
 Impairment and restructuring    1.4         0.3        21.1       0.3
charges
Management fee and other          18.0        33.5       36.2       65.3
Depreciation and amortization     68.7        48.5       131.3      95.2
Operating (loss) income           $ (48.7)    $ 46.4     $ (48.0)   $ 136.6
Total subscribers (as of June 30) 3,939.1     3,819.0
Net subscriber additions          21.5        60.1
Churn (%)                         2.15     %  2.02    %
ARPU (1)                          $ 37        $ 39
CPGA (1)                          $ 505       $ 431





Nextel Argentina
(dollars in millions, except ARPU and CPGA, and subscribers in thousands)
                                      Three Months Ended    Six Months Ended

                                      June 30,              June 30,
                                      2013       2012       2013      2012
                                      (unaudited)
Operating revenues
                                      $ 149.1    $ 153.5    $ 302.2   $ 309.8
 Service and other revenues
Handset and accessory revenues        14.9       11.6       28.8      23.8
                                      164.0      165.1      331.0     333.6
Operating expenses

 Cost of service (exclusive of
depreciation and amortization         41.4       48.6       81.4      98.0
included

 below)
Cost of handset and accessory sales   21.9       20.0       43.1      40.4
Selling, general and administrative   56.3       58.4       106.6     106.9
Provision for doubtful accounts       2.6        2.8        5.7       6.3
Segment earnings                      41.8       35.3       94.2      82.0
 Impairment and restructuring        —          0.1        3.8       0.1
charges
Management fee and other              4.4        8.1        11.8      13.1
Depreciation and amortization         10.9       11.6       22.2      22.5
Operating income                      $ 26.5     $ 15.5     $ 56.4    $ 46.3
Total subscribers (as of June 30)     1,887.5    1,597.6
Net subscriber additions              68.3       150.4
Churn (%)                             3.46    %  2.01    %
ARPU (1)                              $ 24       $ 29
CPGA (1)                              $ 82       $ 112



    For information regarding ARPU and CPGA, see "Non-GAAP Reconciliations for
(1) the Three and Six Months Ended June 30, 2013 and 2012" included in this
    release.



NON-GAAP RECONCILIATIONS
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2013 AND 2012
(UNAUDITED)

Consolidated OIBDA and Consolidated Adjusted OIBDA

Consolidated operating income before depreciation and amortization, or OIBDA,
represents operating income before depreciation and amortization expense.
Consolidated adjusted operating income before depreciation and amortization,
or adjusted OIBDA, represents consolidated operating income before
depreciation expense, amortization expense, material non-cash asset
impairments, severance costs associated with publicly announced restructuring
plans and other material non-recurring charges. During the fourth quarter of
2012, we converted our consolidated OIBDA metric to a consolidated adjusted
OIBDA metric to better align this metric with our business objectives.
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   Six Months Ended

                                     June 30,             June 30,
                                     2013       2012      2013        2012
Consolidated operating (loss) income $ (82.0)   $ 63.7    $ (161.5)   $ 260.5
Consolidated depreciation            166.1      144.3     333.5       286.4
Consolidated amortization            15.5       8.6       30.9        17.6
Consolidated operating income before
                                     99.6       216.6     202.9       564.5
 depreciation and amortization
Non-cash asset impairment charges    —          9.3       85.3        9.3
Restructuring charges                1.3        —         40.6        —
Consolidated adjusted operating
income
                                     $ 100.9    $ 225.9   $ 328.8     $ 573.8
 before depreciation and
amortization



Average Monthly Revenue Per Handset/Unit in Service (ARPU)

Average monthly revenue per subscriber unit in service, or ARPU, is an
industry term that measures service revenues, which we refer to as subscriber
revenues, per period from our customers divided by the weighted average number
of subscriber units in commercial service during that period. ARPU is not a
measurement under accounting principles generally accepted in the United
States, may not be similar to ARPU measures of other companies and should be
considered in addition, but not as a substitute for, the information contained
in our statements of operations. We believe that ARPU provides useful
information concerning the appeal of our rate plans and service offerings and
our performance in attracting and retaining high value customers. Other
revenue includes revenues for such services as roaming, handset maintenance,
cancellation fees, analog and other. ARPU can be calculated and reconciled to
our consolidated statement of operations as follows (in millions, except
ARPU):

NII Holdings, Inc.
                                                Three Months Ended

                                                June 30,
                                                2013        2012
                                                (unaudited)
Consolidated service and other revenues         $ 1,214.2   $ 1,342.9
Less: consolidated other revenues               (140.3)     (155.5)
Total consolidated subscriber revenues          $ 1,073.9   $ 1,187.4
ARPU calculated with subscriber revenues        $ 36        $ 41
ARPU calculated with service and other revenues $ 41        $ 46





Nextel Brazil
                                                Three Months Ended

                                                June 30,
                                                2013      2012
                                                (unaudited)
Service and other revenues                      $ 559.2   $ 678.6
Less: other revenues                            (64.7)    (80.0)
Total subscriber revenues                       $ 494.5   $ 598.6
ARPU calculated with subscriber revenues        $ 43      $ 47
ARPU calculated with service and other revenues $ 48      $ 53





Nextel Mexico
                                                Three Months Ended

                                                June 30,
                                                2013      2012
                                                (unaudited)
Service and other revenues                      $ 492.7   $ 501.7
Less: other revenues                            (56.5)    (54.9)
Total subscriber revenues                       $ 436.2   $ 446.8
ARPU calculated with subscriber revenues        $ 37      $ 39
ARPU calculated with service and other revenues $ 42      $ 44





Nextel Argentina
                                                Three Months Ended

                                                June 30,
                                                2013      2012
                                                (unaudited)
Service and other revenues                      $ 149.1   $ 153.5
Less: other revenues                            (18.0)    (19.8)
Total subscriber revenues                       $ 131.1   $ 133.7
ARPU calculated with subscriber revenues        $ 24      $ 29
ARPU calculated with service and other revenues $ 27      $ 34



Cost per Gross Add (CPGA)

Cost per gross add, or CPGA, is an industry term that is calculated by
dividing our selling, marketing and handset and accessory subsidy costs,
excluding costs unrelated to initial customer acquisition, by our new
subscribers during the period, or gross adds. CPGA is not a measurement under
accounting principles generally accepted in the United States, may not be
similar to CPGA measures of other companies and should be considered in
addition, but not as a substitute for, the information contained in our
statements of operations. We believe CPGA is a measure of the relative cost
of customer acquisition. CPGA can be calculated and reconciled to our
consolidated statements of operations as follows (in millions, except CPGA):

NII Holdings, Inc.
                                                            Three Months Ended

                                                            June 30,
                                                            2013      2012
                                                            (unaudited)
Consolidated handset and accessory revenues                 $ 45.4    $ 66.5
Less: consolidated uninsured replacement revenues           (3.9)     (4.8)
Consolidated handset and accessory revenues, net            41.5      61.7
Less: consolidated cost of handset and accessory sales      233.9     214.1
Consolidated handset subsidy costs                          192.4     152.4
Consolidated selling and marketing                          160.3     183.3
Costs per statement of operations                           352.7     335.7
Less: consolidated costs unrelated to initial customer      (106.8)   (75.4)
acquisition
Customer acquisition costs                                  $ 245.9   $ 260.3
Cost per Gross Add                                          $ 276     $ 301





Nextel Brazil
                                                      Three Months Ended

                                                      June 30,
                                                      2013       2012
                                                      (unaudited)
Handset and accessory revenues                        $  19.4    $ 33.9
Less: uninsured replacement revenues                  (1.9)      (1.7)
Handset and accessory revenues, net                   17.5       32.2
Less: cost of handset and accessory sales             40.2       55.1
Handset subsidy costs                                 22.7       22.9
Selling and marketing                                 50.6       59.1
Costs per statement of operations                     73.3       82.0
Less: costs unrelated to initial customer acquisition (9.4)      (6.7)
Customer acquisition costs                            $  63.9    $ 75.3
Cost per Gross Add                                    $  207     $ 256







Nextel Mexico
                                                      Three Months Ended

                                                      June 30,
                                                      2013      2012
                                                      (unaudited)
Handset and accessory revenues                        $ 10.0    $ 19.4
Less: uninsured replacement revenues                  (2.0)     (3.1)
Handset and accessory revenues, net                   8.0       16.3
Less: cost of handset and accessory sales             162.5     132.3
Handset subsidy costs                                 154.5     116.0
Selling and marketing                                 80.8      76.3
Costs per statement of operations                     235.3     192.3
Less: costs unrelated to initial customer acquisition (96.4)    (67.5)
Customer acquisition costs                            $ 138.9   $ 124.8
Cost per Gross Add                                    $ 505     $ 431





Nextel Argentina
                                                      Three Months Ended

                                                      June 30,
                                                      2013       2012
                                                      (unaudited)
Handset and accessory revenues, net                   $  14.9    $ 11.6
Less: cost of handset and accessory sales             21.9       20.0
Handset subsidy costs                                 7.0        8.4
Selling and marketing                                 15.2       19.9
Costs per statement of operations                     22.2       28.3
Less: costs unrelated to initial customer acquisition (0.9)      (1.2)
Customer acquisition costs                            $  21.3    $ 27.1
Cost per Gross Add                                    $  82      $ 112



Net Debt

Net debt represents total debt less cash, cash equivalents, short-term and
long-term investments. Net debt is not a measurement under accounting
principles generally accepted in the United States, may not be similar to net
debt measures of other companies and should be considered in addition to, but
not as a substitute for, the information contained in our balance sheets. We
believe that net debt provides useful information concerning our liquidity
and leverage. Net debt as of June 30, 2013 can be calculated as follows (in
millions):

NII Holdings, Inc
Total debt                      $ 5,734.5
Add: debt discounts             22.7
Less: cash and cash equivalents 1,463.3
Less: short-term investments    318.4
Net debt                        $ 3,975.5



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, 2012 compared to the same period in 2013 by (i) adjusting the relevant
measures for the three and six months ended June 30, 2012 to levels that would
have resulted if the average foreign currency exchange rates for the three and
six months ended June 30, 2012 were the same as the average foreign currency
exchange rates that were in effect for the three and six months ended June 30,
2013; and (ii) comparing the actual and adjusted financial measures for the
three and six months ended June 30, 2012 to the similar financial measures for
the three and six months ended June 30, 2013 to show the percentage change in
those measures before and after taking those adjustments into account. The
amounts reflected in the following table for operating income before
depreciation and amortization on a consolidated basis and segment earnings for
Nextel Brazil, Nextel Mexico and Nextel Argentina, before the adjustments for
changes in foreign currency exchange rates, are based on the calculations
contained elsewhere in these non-GAAP reconciliations for the three and six
months ended June 30, 2013 and 2012. The average foreign currency exchange
rates for each of the relevant currencies during each of the three and six
months ended June 30, 2013 and 2012 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, 2013 compared to the same period in 2012 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
                                                                 2012   2Q 2012
                                      
                                                                 to 2Q  to 2Q 2013
              2Q 2012      2Q 2012     2Q 2012      2Q 2013      2013
              Actual                                Actual              Normalized
                           Adjustment  Normalized                Actual
                           (1)         (1)                       Growth Growth
                                                                        Rate (3)
                                                                 Rate
                                                                 (2)
Consolidated:
Operating     $ 1,409,424  $ (19,466)  $ 1,389,958  $ 1,259,560  (11)%  (9)%
revenues
 Adjusted
operating
income before
              225,988      (14,462)    211,526      100,890      (55)%  (52)%

depreciation
and
amortization
Nextel
Brazil:
Operating     $ 712,521    $ (37,782)  $ 674,739    $ 578,644    (19)%  (14)%
revenues
Segment       183,497      (12,683)    170,814      107,347      (41)%  (37)%
earnings
Nextel
Mexico:
Operating     $ 521,103    $ 42,973    $ 564,076    $ 502,697    (4)%   (11)%
revenues
Segment       128,627      12,827      141,454      39,394       (69)%  (72)%
earnings
Nextel
Argentina:
Operating     $ 165,131    $ (24,978)  $ 140,153    $ 163,961    (1)%   17%
revenues
Segment       35,248       (12,768)    22,480       41,842       19%    86%
earnings







NII Holdings, Inc.
(dollars in thousands)
              Six Months Ended June 30,
                                                                  YTD
                                                                  2012   YTD 2012
                                       
                                                                  to YTD to YTD
              YTD 2012     YTD 2012     YTD 2012     YTD 2013     2013   2013
              Actual
                           Adjustment   Normalized   Actual       Actual Normalized
                           (1)          (1)                       Growth
                                                                         Growth
                                                                  Rate   Rate (3)
                                                                  (2)
Consolidated:
Operating     $ 2,953,784  $ (121,955)  $ 2,831,829  $ 2,590,399  (12)%  (9)%
revenues
 Adjusted
operating
income before
              573,857      (58,767)     515,090      328,803      (43)%  (36)%

depreciation
and
amortization
Nextel
Brazil:
Operating     $ 1,536,821  $ (132,856)  $ 1,403,965  $ 1,214,516  (21)%  (13)%
revenues
Segment       421,492      (47,526)     373,966      264,990      (37)%  (29)%
earnings
Nextel
Mexico:
Operating     $ 1,065,565  $ 57,990     $ 1,123,555  $ 1,016,711  (5)%   (10)%
revenues
Segment       297,337      19,032       316,369      140,623      (53)%  (56)%
earnings
Nextel
Argentina:
Operating     $ 333,648    $ (47,724)   $ 285,924    $ 330,985    (1)%   16%
revenues
Segment       81,997       (26,139)     55,858       94,183       15%    69%
earnings



    The "2Q 2012 Normalized" and "YTD 2012 Normalized" amounts reflect the
    impact of applying the average foreign currency exchange rates for the
    three and six months ended June 30, 2013 to the operating revenues earned
    in foreign currencies and to the other components of each of the actual
    financial measures shown above for the six and three months ended June 30,
    2012, 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 2012 Adjustment" and "YTD 2012 Adjustment"
(1) reflect the amount determined by subtracting the "2Q 2012 Normalized" and
    "YTD 2011 Normalized" amounts calculated as described in the preceding
    sentence from the "2Q 2012 Actual" and "YTD 2012 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, 2013. The average foreign currency exchange
    rates for each of the relevant currencies during the three and six months
    ended June 30, 2013 and 2012 for purposes of these calculations were as
    follows:



               Three Months Ended June 30,  Six Months Ended June 30,
               2013             2012        2013            2012
Brazilian real 2.07             1.96        2.03            1.86
Mexican peso   12.46            13.51       12.56           13.27
Argentine peso 5.24             4.45        5.13            4.40



    The percentage amounts in these columns reflect the growth rates for each
(2) of the financial measures comparing the amounts in the "2Q 2013 Actual"
    and "YTD 2013 Actual" columns with those in the "2Q 2012 Actual" and "YTD
    2012 Actual" columns.
    The percentage amounts in these columns reflect the growth rates for each
(3) of the financial measures comparing the amounts in the "2Q 2013 Actual"
    and "YTD 2013 Actual" columns with those in the "2Q 2012 Normalized" and
    "YTD 2012 Normalized" columns.



SOURCE NII Holdings, Inc.

Website: http://www.nii.com
 
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