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Form 8-K NII HOLDINGS INC For: May 10

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May 10, 2016 7:33 AM EDT



                                                                                                            

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________

FORM 8-K


CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): May 10, 2016
___________

NII HOLDINGS, INC.
(Exact name of registrant as specified in its charter)

Delaware
(State or other jurisdiction
of incorporation)
001-37488
(Commission File Number)
91-1671412 
(IRS Employer
Identification No.)
 
 
 
1875 Explorer Street, Suite 800
Reston, Virginia
 (Address of principal executive offices)

20190
(Zip Code)

Registrant's telephone number, including area code: (703) 390-5100

Not Applicable
(Former name or former address, if changed since last report)


Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨    Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨    Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨    Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨    Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
                                                                                                            





Item 2.02. Results of Operations and Financial Condition.    

First Quarter 2016 Results. On May 10, 2016, NII Holdings, Inc. issued a press release announcing certain financial and operating results for the quarter ended March 31, 2016. A copy of the press release is furnished as Exhibit 99.1 to this report and is incorporated by reference into this Item 2.02.

Item 9.01. Financial Statements and Exhibits.     
    
 (d) Exhibits.
Exhibit No.
 
Description
 
 
 
99.1
 
Press Release dated May 10, 2016
 






SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

                    
    
 
 
NII HOLDINGS, INC.
 
 
(Registrant)
 
 
 
 
 
 
Dated: May 10, 2016
 
By: /s/ SHANA C. SMITH                           
 
 
Shana C. Smith
 
 
Vice President, General Counsel and Secretary





EXHIBIT INDEX
Exhibit No.
 
Description
 
 
 
99.1
 
Press Release dated May 10, 2016





                                        
Exhibit 99.1

NII HOLDINGS ANNOUNCES 2016 FIRST QUARTER RESULTS

•
Consolidated operating revenues of $227 million for the first quarter

•
3G revenues increased 25% year-over-year in local currency

•
Consolidated adjusted operating loss before depreciation and amortization (adjusted OIBDA loss) of $8 million for the first quarter

•
First quarter results represent a $10 million year-over-year improvement
  
•
Year-end cash and short-term investments of $368 million and $227 million of cash held in escrow

•
First quarter net subscriber losses of 273,000 resulting from challenging economic conditions and a more competitive environment

•
First quarter 3G net subscriber losses of 78,000

RESTON, Va., May 10, 2016 - NII Holdings, Inc. [NASDAQ: NIHD] today announced its financial results for the first quarter of 2016. For the quarter, the Company generated consolidated operating revenues of $227 million, an adjusted OIBDA loss of $8 million and an operating loss of $54 million. The Company’s consolidated adjusted OIBDA excludes the impact of non-cash asset impairments, restructuring charges and other unusual items. Capital expenditures were $8 million for the quarter. The Company ended the quarter with $368 million in consolidated cash and short-term investments and $227 million of cash held in escrow. The Company reported net subscriber losses of 273,000 in the quarter, which were mostly the result of the more difficult competitive and economic environments in Brazil.

“Our financial results for the quarter reflect our continued efforts to improve our adjusted OIBDA by lowering our costs through operational improvements and expense savings,” said Steve Shindler, Chief Executive Officer. “Offsetting these financial results, we reported 3G net subscriber losses this quarter, resulting from the challenging economic conditions and more intense competitive environment. Given the current climate, we are applying a targeted approach to subscriber growth, focusing our efforts on customers that provide the most attractive revenue and churn characteristics to keep our quarterly adjusted OIBDA loss to a minimum.”

Nextel Brazil's average monthly service revenue per subscriber (ARPU) was $16 for the first quarter of 2016, down from $23 in the same quarter last year, due primarily to a 37% year-over-year decline in the average value of the Brazilian real. Nextel Brazil's average monthly churn rate for the quarter increased to 4.34 percent in the first quarter of 2016 from 3.15 percent in the same quarter last year due to increases in both 3G and iDEN churn. Nextel Brazil's cost per gross addition (CPGA) was $96 for the first quarter of 2016, a $68 decrease from the same quarter last year, primarily due to an increase in new 3G postpaid subscribers in Brazil who use their own handsets rather than purchasing a new one from the Company. Nextel Brazil's cash cost per user (CCPU) was $15 for the first quarter of 2016, a $5 decrease from the same quarter last year primarily resulting from a decline in local currency exchange rates.
 
“Our cash burn for the quarter was $64 million, which was generally consistent with our prior quarter results after taking into account the $29 million semi-annual debt service we paid this quarter on our equipment financing facility,” said Dan Freiman, Chief Financial Officer. “We will continue to take actions to protect our liquidity by staying focused on limiting our cash spending.”




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 March 31, 2016 that was filed with the Securities and Exchange Commission today. In 2015, the Company sold its operations in Mexico and Argentina, and as a result, all results presented in this press release reflect those markets as discontinued operations. 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 and forward-looking guidance, as well as other statements that are not historical facts, are forward-looking statements. Forward-looking statements are estimates and projections reflecting management's judgment based on currently available information and involve a number of risks and uncertainties that could cause actual results to differ materially from those suggested by the forward-looking statements. With respect to these forward-looking statements, management has made assumptions regarding, among other things, the Company’s ability to meet its business plans, 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 2016. 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, 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, 2015, 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 800
Reston, Virginia 20190
(703) 390-5100
www.nii.com

Investor and Media Relations: Dan Freiman
(703) 547-5209







NII HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 2016 (SUCCESSOR COMPANY) AND
THE THREE MONTHS ENDED ENDED MARCH 31, 2015 (PREDECESSOR COMPANY) (1) (2)
(in millions, except per share amounts)

 
Successor Company
 
 
Predecessor Company
 
Three Months Ended
March 31,
 
 
Three Months Ended
March 31,
 
2016
 
 
2015
 
(unaudited)
 
 
 
 
 
Operating revenues
  Service and other revenues
$
220.6

 
 
$
340.7

  Handset and accessory revenues
5.9

 
 
22.7

 
226.5

 
 
363.4

Operating expenses
  Cost of service (exclusive of depreciation and amortization included below)
90.0

 
 
130.1

  Cost of handsets and accessories
11.2

 
 
55.8

  Selling, general and administrative
133.4

 
 
195.8

  Impairment, restructuring and other charges
5.9

 
 
7.3

  Depreciation
30.1

 
 
66.1

  Amortization
10.0

 
 
14.1

 
280.6

 
 
469.2

Operating loss
(54.1
)
 
 
(105.8
)
Other (expense) income
  Interest expense, net
(25.2
)
 
 
(35.3
)
  Interest income
9.7

 
 
6.5

  Foreign currency transaction gains (losses), net
39.7

 
 
(78.5
)
  Other (expense) income, net
(2.5
)
 
 
9.2

 
21.7

 
 
(98.1
)
Loss from continuing operations before reorganization items and income tax provision
(32.4
)
 
 
(203.9
)
Reorganization items
(0.4
)
 
 
(13.6
)
Income tax provision
—

 
 
(0.9
)
Net loss from continuing operations
(32.8
)
 
 
(218.4
)
Loss from discontinued operations, net of income taxes
(3.8
)
 
 
(91.1
)
Net loss
$
(36.6
)
 
 
$
(309.5
)
 
 
 
 
 
Net loss from continuing operations per common share, basic and diluted
$
(0.33
)
 
 
$
(1.27
)
Net loss from discontinued operations per common share, basic and diluted
(0.04
)
 
 
(0.53
)
Net loss per common share, basic and diluted
$
(0.37
)
 
 
$
(1.80
)
 
 
 
 
 
Weighted average number of common shares outstanding, basic and diluted
100.0

 
 
172.4




















CONSOLIDATED BALANCE SHEETS (1) (2)
(in millions, except par values)
 
Successor Company
 
March 31,
2016
 
December 31, 2015 (3)
 
 
 
 
ASSETS
Current assets
 

 
 

Cash and cash equivalents
$
332.7

 
$
342.2

Short-term investments
35.0

 
84.3

Accounts receivable, net of allowance for doubtful accounts of $49.3 and $39.0
155.1

 
144.6

Handset and accessory inventory
18.5

 
24.4

Prepaid expenses and other
145.7

 
132.5

Total current assets
687.0

 
728.0

Property, plant and equipment, net
582.2

 
555.0

Intangible assets, net
962.9

 
892.6

Other assets
471.8

 
554.3

Total assets
$
2,703.9

 
$
2,729.9

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
 

 
 
Accounts payable
$
56.0

 
$
43.8

Accrued expenses and other
274.1

 
268.8

Deferred revenues
9.5

 
10.4

Current portion of long-term debt
581.4

 
582.4

Total current liabilities
921.0

 
905.4

Long-term debt
90.3

 
82.6

Other long-term liabilities
99.6

 
197.9

Total liabilities
1,110.9

 
1,185.9

Stockholders’ deficit
 
 
 
Undesignated preferred stock, par value $0.001, 10.0 shares authorized, no shares
  issued or outstanding
—

 
—

Common stock, par value $0.001, 140.0 shares authorized, 100.0 shares issued
  and outstanding
0.1

 
0.1

Paid-in capital
2,072.5

 
2,070.5

Accumulated deficit
(317.4
)
 
(280.9
)
Accumulated other comprehensive loss
(162.2
)
 
(245.7
)
Total stockholders’ equity
1,593.0

 
1,544.0

Total liabilities and stockholders’ equity
$
2,703.9

 
$
2,729.9




























CONSOLIDATED CASH FLOW DATA (1) (2)
(in millions)
 
Successor Company
 
 
Predecessor Company
 
Three Months Ended March 31,
 
 
Three Months Ended March 31,
 
2016
 
 
2015
 
 
 
 
 
Cash and cash equivalents, beginning of period
$
342.2

 
 
$
334.2

Net cash used in operating activities
(18.1
)
 
 
(170.9
)
Net cash provided by (used in) investing activities
33.7

 
 
(116.9
)
Net cash (used in) provided by financing activities
(24.7
)
 
 
335.9

Effect of exchange rate changes on cash and cash equivalents
(0.4
)
 
 
(5.0
)
Change in cash and cash equivalents related to discontinued
  operations
—

 
 
88.1

Cash and cash equivalents, end of period
$
332.7

 
 
$
465.4


(1) In accordance with the requirements of reorganization accounting, we adopted the provisions of fresh-start accounting as of June 30, 2015 and became a new entity for financial reporting purposes. References to the "Successor Company" relate to NII Holdings on or subsequent to June 30, 2015. References to the "Predecessor Company" relate to NII Holdings prior to June 30, 2015.

(2) On September 11, 2015, we entered into a binding agreement relating to the sale of all of the outstanding equity interests of Nextel Argentina. On January 27, 2016, the agreement was amended to permit Grupo Clarin or any of its affiliates to exercise the right to acquire the remaining 51% equity interest prior to receiving regulatory approval, and Grupo Clarin and its affiliate immediately acquired the remaining 51% of Nextel Argentina for no additional proceeds. On April 30, 2015, we completed the sale of our operations in Mexico to an indirect subsidiary of AT&T, Inc. In connection with these sales, we have reported the results for Nextel Mexico and Nextel Argentina as discontinued operations throughout this document.

(3) Our consolidated balance sheet as of December 31, 2015 reflects the impact of the correction of an error related to the failure to properly accrue expenses for services Nextel Brazil received under a management consulting services arrangement. 





NII HOLDINGS, INC. AND SUBSIDIARIES
OPERATING RESULTS AND METRICS
FOR THE THREE MONTHS ENDED MARCH 31, 2016 (SUCCESSOR COMPANY) AND THE
THREE MONTHS ENDED MARCH 31, 2015 (PREDECESSOR COMPANY)
(UNAUDITED)

Nextel Brazil
(dollars in millions, except ARPU and CPGA, and subscribers in thousands)
 
 
 
 
 
 
 
Successor Company
 
 
Predecessor Company
 
 
Three Months Ended
March 31,
 
 
2016
 
 
2015
 
Service and other revenues
$
220.5

 
 
$
340.6

 
 
 
 
 
 
 
Handset and accessory revenues
6.0

 
 
22.7

 
Cost of handsets and accessories
(11.2
)
 
 
(55.8
)
 
Handset and accessory net subsidy
(5.2
)
 
 
(33.1
)
 
Cost of service (exclusive of depreciation and amortization)
(90.0
)
 
 
(130.1
)
 
Selling, general and administrative
(121.5
)
 
 
(173.9
)
 
Segment earnings
$
3.8

 
 
$
3.5

 
 
 
 
 
 
 
Subscriber units
 
 
 
 
 
iDEN
1,315.1

 
 
2,414.5

 
WCDMA
2,708.7

 
 
1,970.4

 
   Total subscriber units in commercial service (as of March 31)
4,023.8

 
 
4,384.9

 
 
 
 
 
 
 
iDEN net subscriber losses
(195.2
)
 
 
(194.7
)
 
WCDMA net subscriber (losses) additions
(77.7
)
 
 
239.9

 
   Total net subscriber (losses) additions (2)
(272.9
)
 
 
45.2

 
 
 
 
 
 
 
Migrations from iDEN to WCDMA
41.7

 
 
58.3

 
 
 
 
 
 
 
iDEN customer churn
4.80
%
 
 
3.25
%
 
WCDMA customer churn
4.10
%
 
 
2.99
%
 
   Churn (%) (2)
4.34
%
 
 
3.15
%
 
 
 
 
 
 
 
ARPU (1) (2)
$
16

 
 
$
23

 
 
 
 
 
 
 
CPGA (1)
$
96

 
 
$
164

 
 
 
 
 
 
 
CCPU (1) (2)
$
15

 
 
$
20

 

(1) For information regarding ARPU, CPGA and CCPU, see “Non-GAAP Reconciliations for the Three Months Ended March 31, 2016 (Successor Company) and Three Months Ended March 31, 2015 (Predecessor Company)” included in this release.

(2) Net subscriber losses (additions), customer churn, ARPU, and CCPU for each prior quarter presented include adjustments to reduce Nextel Brazil's subscriber base for about 45,400 subscribers that were not properly deactivated in prior periods.















NON-GAAP RECONCILIATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 2016 (SUCCESSOR COMPANY) AND
THREE MONTHS ENDED MARCH 31, 2015 (PREDECESSOR COMPANY)
(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.
 
 
Successor Company
 
 
Predecessor Company
 
Three Months Ended
March 31,
 
2016
 
 
2015
Consolidated operating loss
$
(54.1
)
 
 
$
(105.8
)
Consolidated depreciation
30.1

 
 
66.1

Consolidated amortization
10.0

 
 
14.1

Consolidated operating loss before
   depreciation and amortization
(14.0
)
 
 
(25.6
)
Asset impairment charges
1.0

 
 
5.8

Restructuring charges
4.9

 
 
1.5

Consolidated adjusted operating loss
  before depreciation and amortization
$
(8.1
)
 
 
$
(18.3
)
 
 
 
 
 

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
 
 
 
 
 
 
 
Successor Company
 
 
Predecessor Company
 
 
Three Months Ended
March 31,
 
 
2016
 
 
2015
 
 
 
 
 
 
 
Service and other revenues
$
220.5

 
 
$
340.6

 
Less: other revenues
(23.5
)
 
 
(38.5
)
 
Total subscriber revenues
$
197.0

 
 
$
302.1

 
 
 
 
 
 
 
 
 
 
 
 
 
ARPU calculated with subscriber revenues
$
16

 
 
$
23

 
 
 
 
 
 
 
ARPU calculated with service and other revenues
$
18

 
 
$
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 as follows (in millions, except CPGA):
Nextel Brazil
 
 
 
 
 
 
 
Successor Company
 
 
Predecessor Company
 
 
Three Months Ended
March 31,
 
 
2016
 
 
2015
 
 
 
 
 
 
 
Consolidated handset and accessory revenues
$
6.0

 
 
$
22.7

 
Less: consolidated uninsured handset replacement revenues
(0.1
)
 
 
(0.4
)
 
Consolidated handset and accessory revenues, net
5.9

 
 
22.3

 
Less: consolidated cost of handsets and accessories
11.2

 
 
55.8

 
    Consolidated handset subsidy costs
5.3

 
 
33.5

 
Consolidated selling and marketing
22.1

 
 
48.9

 
Costs per statement of operations
27.4

 
 
82.4

 
Less: consolidated costs unrelated to initial customer acquisition
(1.6
)
 
 
(7.3
)
 
    Customer acquisition costs
$
25.8

 
 
$
75.1

 
 
 
 
 
 
 
Cost per Gross Add
$
96

 
 
$
164

 
 
 
 
 
 
 

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
 
 
 
 
 
 
 
Successor Company
 
 
Predecessor Company
 
 
Three Months Ended
March 31,
 
 
2016
 
 
2015
 
 
 
 
 
 
 
Total selling, general and administrative expenses
$
121.6

 
 
$
173.9

 
Less: selling and marketing expenses
(22.1
)
 
 
(48.9
)
 
General and administrative expenses
99.5

 
 
125.0

 
Cost of service
90.0

 
 
130.1

 
Customer retention costs and other
1.6

 
 
7.3

 
Total
191.1

 
 
262.4

 
 
 
 
 
 
 
Cash Cost per User
$
15

 
 
$
20

 
 
 
 
 
 
 

Impact of Foreign Currency Fluctuations
The following table shows the impact of changes in foreign currency exchange rates on certain financial measures for the three months ended March 31, 2015 compared to the same period in 2016 by (i) adjusting the relevant measures for the three months ended March 31, 2015 to levels that would have resulted if the average foreign currency exchange rates for the three months ended March 31, 2015 were the same as the average foreign currency exchange rates that were in effect for the three months ended March 31, 2016; and (ii) comparing the actual and adjusted financial measures for the three months ended March 31, 2015 to the similar financial measures for the three months ended March 31, 2016 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 months ended March 31, 2016 and 2015. The average foreign currency exchange rates for each of the relevant currencies during each of the three months ended March 31, 2016 and 2015 are included in the notes to the table below. The information reflected in the following table is not a measurement under accounting principles generally accepted in the United States and should be considered in addition to, but not as a substitute for, the information contained in our statements of operations. We believe that these calculations provide useful information concerning our relative performance for the three months ended March 31, 2016 compared to the same period in 2015 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)
 
 
 
 
 
 
 
 
 
 
Predecessor Company
 
 
Successor Company
 
 
 
Three Months Ended March 31,
 
 
 
1Q 2015 Actual

1Q 2015 Adjustment (1)

1Q 2015 Normalized (1)
 
 
1Q 2016 Actual
1Q 2015
to 1Q 2016
Actual Growth
Rate (2)
1Q 2015
to 1Q 2016
Normalized
Growth Rate (3)
 
 
 
 
 
 
 
 
 
Consolidated:
 
 
 
 
 
 
 
 
  Operating revenues
$
363,408

$
(97,576
)
$
265,832

 
 
$
226,557

(38)%
(15)%
  Adjusted operating loss before
    depreciation and amortization
(18,346
)
(946
)
(19,292
)
 
 
(8,044
)
(56)%
(58)%
Nextel Brazil:
 
 
 
 
 
 
 
 
  Operating revenues
$
363,356

$
(97,576
)
$
265,780

 
 
$
226,503

(38)%
(15)%
  Segment earnings
3,523

(946
)
2,577

 
 
3,760

7%
46%








(1)
The "1Q 2015 Normalized" amounts reflect the impact of applying the average foreign currency exchange rates for the three months ended March 31, 2016 to the operating revenues earned in foreign currencies and to the other components of each of the actual financial measures shown above for the three months ended March 31, 2015. The amounts included under the column "1Q 2015 Normalized" reflect the amount determined by subtracting the "1Q 2015 Adjustment" amounts calculated as described in the preceding sentence from the "1Q 2015 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 months ended March 31, 2016. The average foreign currency exchange rates for each of the relevant currencies during the three months ended March 31, 2016 and 2015 for purposes of these calculations were as follows:
 
Successor Company
 
Predecessor Company
 
Three Months Ended March 31,
 
2016
 
2015
Brazilian real
3.91
 
2.86

(2)
The percentage amounts in these columns reflect the growth rates for each of the financial measures comparing the amounts in the "1Q 2016 Actual" columns with those in the "1Q 2015 Actual" columns.

(3)
The percentage amounts in these columns reflect the growth rates for each of the financial measures comparing the amounts in the "1Q 2016 Actual" columns with those in the "1Q 2015 Normalized" columns.



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