<PAGE>
CONFORMED COPY
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-QSB
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1996
Commission file numbers: 333-4603; 333-4603-01
NEXTLINK Communications, L.L.C.
NEXTLINK Capital, Inc.
- --------------------------------------------------------------------------------
(Exact name of small business issuer as specified in its charter)
Washington 91-1678465
Washington 91-1716062
- --------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization Identification No.)
155 108th Avenue NE, 8th Floor, Bellevue, WA 98004
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(206) 519-8900
- --------------------------------------------------------------------------------
(Issuer's telephone number, including area code)
Check whether the issuer (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding
12 months (or for such shorter period that the issuer was required to file such
reports), and (2) has been subject to such filing requirements for the past 90
days. Yes X No
--- ---
NEXTLINK Capital, Inc. meets the conditions set forth in General Instruction
G(1) (a) and (b) of Form 10-QSB and is therefore filing this form with the
reduced disclosure format.
The number of shares of NEXTLINK Capital, Inc.'s common stock outstanding as of
November 1, 1996 was 1,000.
Page 1 of 15 pages.
Exhibit index at page 14.
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
NEXTLINK COMMUNICATIONS, L.L.C. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(DOLLARS IN THOUSANDS)
(UNAUDITED)
SEPTEMBER 30, DECEMBER 31,
1996 1995
------------- ------------
Current assets:
Cash and cash equivalents. . . . . . . . . $ 99,811 $ 1,350
Marketable securities. . . . . . . . . . . 55,600 --
Accounts receivable, net . . . . . . . . . 7,337 3,563
Other. . . . . . . . . . . . . . . . . . . 427 746
Pledged securities . . . . . . . . . . . . 39,901 --
---------- ---------
Total current assets. . . . . . . . . 203,076 5,659
Pledged securities . . . . . . . . . . . . . . 80,687 --
Property and equipment, net. . . . . . . . . . 72,897 29,664
Goodwill, net. . . . . . . . . . . . . . . . . 22,309 12,137
Other intangible assets, net . . . . . . . . . 4,075 5,751
Other assets, net. . . . . . . . . . . . . . . 12,512 250
---------- ---------
Total assets. . . . . . . . . . . . . $ 395,556 $ 53,461
---------- ---------
---------- ---------
Current liabilities:
Bank overdraft . . . . . . . . . . . . . . $ -- $ 1,373
Accounts payable . . . . . . . . . . . . . 3,695 4,315
Accrued expenses . . . . . . . . . . . . . 2,940 1,266
Accrued interest payable . . . . . . . . . 18,976 --
Payable to affiliates. . . . . . . . . . . 1,500 4,937
---------- ---------
Total current liabilities . . . . . . 27,111 11,891
Long-term liabilities:
Capital lease obligation . . . . . . . . . 4,587 --
Long-term debt . . . . . . . . . . . . . . 350,000 --
Other. . . . . . . . . . . . . . . . . . . 5,327 1,965
---------- ---------
Total liabilities . . . . . . . . . . 387,025 13,856
Minority interest. . . . . . . . . . . . . . . 419 2,886
Members' equity. . . . . . . . . . . . . . . . 8,112 36,719
---------- ---------
Total liabilities and members' equity $ 395,556 $ 53,461
---------- ---------
---------- ---------
See accompanying notes to unaudited consolidated interim financial statements.
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
NEXTLINK COMMUNICATIONS, L.L.C. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(DOLLARS IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
-----------------------------------------------
1996 1995 1996 1995
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Revenue. . . . . . . . . . . . . . . . . . $ 6,919 $ 2,825 $ 18,960 $ 4,224
Costs and expenses:
Operating. . . . . . . . . . . . . . . . 6,661 1,919 17,474 3,713
Selling, general and administrative. . . 12,811 2,578 25,302 4,798
Depreciation . . . . . . . . . . . . . . 2,555 219 4,942 534
Amortization of intangible assets. . . . 1,023 555 2,788 1,519
-------- --------- ---------- ---------
Total costs and expenses . . . . . . . 23,050 5,271 50,506 10,564
-------- --------- ---------- ---------
Loss from operations . . . . . . . . . . . (16,131) (2,446) (31,546) (6,340)
Interest income. . . . . . . . . . . . . . 4,113 -- 7,212 --
Interest expense . . . . . . . . . . . . . (11,582) (126) (20,220) (136)
-------- --------- ---------- ---------
Loss before minority interest. . . . . . . (23,600) (2,572) (44,554) (6,476)
Minority interest in loss of consolidated
subsidiaries. . . . . . . . . . . . . . . 98 31 219 120
-------- --------- ---------- ---------
Net loss . . . . . . . . . . . . . . . . . $ (23,502) $ (2,541) $ (44,335) $ (6,356)
-------- --------- ---------- ---------
-------- --------- ---------- ---------
</TABLE>
See accompanying notes to unaudited consolidated interim financial statements.
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
NEXTLINK COMMUNICATIONS, L.L.C. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(DOLLARS IN THOUSANDS)
(UNAUDITED)
NINE MONTHS ENDED
SEPTEMBER 30,
------------------------
1996 1995
--------- --------
OPERATING ACTIVITIES:
Net loss . . . . . . . . . . . . . . . . . . $ (44,335) $ (6,356)
Adjustments to reconcile net loss to net
cash used in operating activities:
Noncash compensation expense . . . . . . 4,800 --
Equity in loss of affiliates . . . . . . 657 --
Depreciation and amortization. . . . . . 7,730 2,053
Noncash interest income. . . . . . . . . (2,900) --
Noncash interest expense . . . . . . . . 18,942 136
Minority interest in loss of
consolidated subsidiaries . . . . . . . (219) (120)
Changes in assets and liabilities, net of
effects from acquisitions:
Accounts receivable. . . . . . . . . . . (3,774) (1,911)
Other current assets . . . . . . . . . . 319 (1,005)
Other noncurrent assets. . . . . . . . . (338) (503)
Accounts payable . . . . . . . . . . . . (620) 3,796
Accrued expenses . . . . . . . . . . . . 844 314
--------- ---------
25,441 2,760
--------- ---------
Net cash used in operating activities. . . . (18,894) (3,596)
INVESTING ACTIVITIES:
Purchase of pledged securities . . . . . (117,688) --
Purchase of marketable securities, net . (55,600) --
Net assets acquired in business and
asset acquisitions. . . . . . . . . . . (10,503) (17,639)
Investments in affiliates. . . . . . . . (3,220) --
Purchase of property and equipment . . . (38,938) (10,842)
--------- ---------
Net cash used in investing activities. . . . (225,949) (28,481)
-- Continued --
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
NEXTLINK COMMUNICATIONS, L.L.C. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (CONT'D)
(DOLLARS IN THOUSANDS)
(UNAUDITED)
NINE MONTHS ENDED
SEPTEMBER 30,
------------------------
1996 1995
--------- --------
FINANCING ACTIVITIES:
Proceeds from issuance of senior notes . 350,000 --
Capital contributions. . . . . . . . . . 9,921 24,908
Proceeds from payable to affiliates. . . 28,766 7,398
Repayment of payables to affiliates. . . (33,703) --
Bank overdraft . . . . . . . . . . . . . (1,373) --
Costs incurred in connection with
financing . . . . . . . . . . . . . . . (9,700) --
Repayment of capital lease obligations . (607) --
--------- ---------
Net cash provided by financing activities. . 343,304 32,306
--------- ---------
Net increase in cash . . . . . . . . . . . . 98,461 229
Cash, beginning of period. . . . . . . . . . 1,350 25
--------- ---------
Cash, end of period. . . . . . . . . . . . . $ 99,811 $ 254
--------- ---------
--------- ---------
SUPPLEMENTAL CASH FLOW DISCLOSURES:
Cash paid for interest . . . . . . . . . $ 1,278 $ --
See accompanying notes to unaudited consolidated interim financial statements.
SUPPLEMENTAL CASH FLOW DISCLOSURES:
(Dollars in thousands)
Non-cash investing and financing activities:
In the three months ended March 31, 1996, the Company recognized additional
members' equity and goodwill of $5,574 and $2,907, respectively, and a reduction
in minority interests of $2,667 relating to a recapitalization and merger of
companies holding minority equity interests in certain subsidiaries of the
Company, who exchanged these interests for Class A membership units of the
Company.
Effective January 1, 1996, the Company acquired certain assets of FoneNet, Inc.
and U.S. Network, Inc. through NEXTLINK Ohio, L.L.C. As part of the purchase
consideration for these assets, the Company assumed liabilities of $6,104 and
issued Class A membership units valued at $652.
See accompanying notes to unaudited consolidated interim financial statements.
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
NEXTLINK COMMUNICATIONS, L.L.C.
NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS)
(UNAUDITED)
1. BASIS OF PRESENTATION:
The condensed consolidated financial statements include the accounts of
NEXTLINK Communications, L.L.C., a Washington limited liability company,
and its majority-owned subsidiaries (collectively referred to as the
("Company"). The Company is a majority-owned subsidiary of Eagle River
Investments, L.L.C ("Eagle River").
The Company's financial statements include 100% of the assets, liabilities
and results of operations of subsidiaries (both limited liability companies
and a partnership) in which the Company has a controlling interest of
greater than 50%. The ownership interests of the other members or partners
is reflected as minority interests. The Company's investments in ventures
in which it has voting interests of at least 20% but not more than 50% are
accounted for on the equity method and investments in ventures in which it
has voting interests of not more than 20% are accounted for on the cost
method. All significant intercompany accounts and transactions have been
eliminated.
These financial statements have been prepared without audit, pursuant to
the rules and regulations of the Securities and Exchange Commission.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted pursuant to such rules and
regulations. These condensed consolidated financial statements should be
read in conjunction with the audited consolidated financial statements and
notes thereto included in the Company's Form S-4 as filed with the
Securities and Exchange Commission on May 28, 1996 as subsequently amended.
The financial information included herein reflects all adjustments
(consisting only of normal recurring adjustments) which are, in the opinion
of management, necessary to a fair presentation of the results for interim
periods. The results of operations for the three and nine month periods
ended September 30, 1996 are not necessarily indicative of the results to
be expected for the full year.
2. FINANCING
On April 25, 1996, the Company executed a purchase agreement pursuant to
which investors committed to purchase $350.0 million of 12.5% Senior Notes
due April 15, 2006 (the "Notes"), with interest due semi-annually. The
Company used $117.7 million of the proceeds to purchase U.S. government
securities, representing funds sufficient to provide for payment in full of
interest on the Notes through April 15, 1999 and $32.2 million to repay
advances and accrued interest from Eagle River. The Company will use the
remaining proceeds (net of transaction costs) to (i) expand existing
networks, (ii) acquire new networks or other complementary businesses,
(iii) build networks in new markets, and (iv) fund future negative
operating cash flow. The Company incurred costs of $9.7 million in
connection with the financing. Such costs are included in other long-term
assets and are amortized over the ten year term of the Notes.
3. RECLASSIFICATIONS
Certain reclassifications have been made to prior period amounts in order
to conform to the current presentation.
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
NEXTLINK CAPITAL, INC.
BALANCE SHEET
(UNAUDITED)
SEPTEMBER
30,
1996
--------------
ASSETS:
Cash in bank . . . . . . . . . . . . . . . . $ 100
---------
---------
SHAREHOLDER'S EQUITY
Common stock, no par value,
1,000 shares authorized, issued and
outstanding . . . . . . . . . . . . . . $ --
Additional paid-in capital . . . . . . . 100
---------
$ 100
---------
---------
NOTE TO BALANCE SHEET
1. Description of the Company
NEXTLINK Capital, Inc. (NEXTLINK Capital) is a Washington corporation and a
wholly-owned subsidiary of NEXTLINK Communications, L.L.C (NEXTLINK). NEXTLINK
Capital was formed for the sole purpose of obtaining financing from external
sources and is a joint obligor on the Senior Notes of NEXTLINK. NEXTLINK Capital
was initially funded with a $100 contribution from NEXTLINK and has had no
operations to date.
<PAGE>
PART I. FINANCIAL INFORMATION
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
OVERVIEW
Since its inception in 1994, the Company has executed a strategy of
constructing and acquiring fiber-optic networks, and acquiring related
telecommunications businesses. These activities have provided the Company with
the foundation to become a full service provider of local facilities-based
telecommunications services. Over this period, the Company has begun
construction of, or acquired and expanded, telecommunications networks in 10
metropolitan areas in five states. In addition, the Company became a 40% member
in a joint venture that currently provides competitive access services in Las
Vegas, Nevada. This venture also plans to become a full service provider of
local telecommunications services in 1997. Currently, service revenues
are being generated from the Company's networks in Tennessee (Memphis and
Nashville); Pennsylvania (Allentown, Harrisburg and Reading/Lancaster); Ohio
(Columbus) and Washington (Spokane). The Company is also generating revenues
from the provision of enhanced communications services. The Company
anticipates that its networks in Ohio (Akron and Cleveland) and Utah (Salt
Lake City), will begin generating revenues during the first quarter of 1997.
In July 1996, the Company commenced the offering of local switched
telecommunications services in six of its markets, and expects to provide these
services in its four remaining markets and the joint venture by early 1997. The
Company also plans to acquire and build networks in new areas, expand its
current networks, and also explore the acquisition of additional enhanced
communications services providers. These efforts should allow the Company to
increase its presence in the marketplace, and facilitate providing a single
source solution for the telecommunications needs of its customers.
On September 30, 1996, the Company executed a definitive agreement to
acquire substantially all of the assets of Los Angeles-based competitive
telecommunications provider Linkatel Pacific L.P. Linkatel operates an 80
mile fiber-optic telecommunications network covering several cities in the
Orange and Los Angeles county areas. Construction is progressing on an
additional 200 miles of right-of-way. The Company anticipates assuming
management of the operation in the fourth quarter of 1996. The parties
anticipate closing after receiving appropriate regulatory approvals. The
Company has also reached agreements in principle which will grant it
right-of-ways which should enable expansion into Philadelphia and Scranton,
Pennsylvania and Provo/Orem, Utah. With the anticipated completion of all
of the above agreements, the Company will have a total of 20 markets in which
it currently offers or plans to offer its services.
September 30, June 30, March 31,
1996 1996 1996
----------------------------------------
EBITDA (1) . . . . . . . . . . . . . . $(7,753,000) $(6,421,000) $(4,842,000)
Statistical Data (2)
Markets in operation . . . . . . . . . 8 8 7
Markets under development . . . . . . 3 3 3
Route miles (3). . . . . . . . . . . . 900 801 496
Buildings connected. . . . . . . . . . 299 277 206
Switches . . . . . . . . . . . . . . . 6 6 6
Employees. . . . . . . . . . . . . . . 456 387 255
- ----------
(1) EBITDA consists of quarterly earnings (loss) before interest
expense, interest income, minority interests, depreciation, amortization and
non-cash compensation expense. EBITDA is commonly used in the
telecommunications industry to analyze companies on the basis of operating
performance, leverage and liquidity. EBITDA should not be construed as a
substitute for operating income or a better measure of liquidity than cash
flow from operating activities, which are determined in accordance with
generally accepted accounting principles.
<PAGE>
PART I. FINANCIAL INFORMATION
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
(2) Statistical data as of September 30 and June 30, 1996 includes information
for the Company's 40% joint venture interest in the Las Vegas, Nevada service
area.
(3) Route miles refers to the number of miles of telecommunications path in
which the Company owned or leased fiber optic cables are installed.
RESULTS OF OPERATIONS
The revenue increase for the third quarter of 1996 compared to the prior
year reflects a substantial increase in enhanced services revenues and, to a
lesser extent, growth in competitive access and local exchange resale service
revenues. Of the third quarter 1996 revenues, $4.3 million were derived from
enhanced services, $1.4 million from competitive access and dedicated line
services and $1.1 million from local exchange resale services. The Company began
offering local switched services in six of its service areas in July, 1996.
Revenues from the provision of switched services, while not material in the
third quarter of 1996, are expected to represent an increasing component of
total revenues in future periods. Revenues for the third quarter of 1996
increased 4% from second quarter 1996 revenues, reflecting growth in
local exchange resale and switched services.
Operating expenses continued to increase during the third quarter as the
Company continued to add people and other related costs in order to expand
the Company's local switched service businesses in its existing and planned
service areas. In addition, the Company experienced increased network costs
related to the provision of local and long distance services.
Selling, general and administrative expenses ("SG&A") continued to
increase during the third quarter of 1996 as the Company continued to add
people and other related costs in order to expand the Company's local
switched service businesses in its existing and planned service areas. SG&A
expenses for the third quarter of 1996 also included a $4.8 million noncash
compensation charge resulting from a revaluation of the Company's equity
option plan units as well as additional vesting of such units.
Depreciation expense increased primarily due to placement in service of
additional telecommunications network assets, including switches, fiber-optic
equipment and network electronics. Amortization of intangible assets
increased as a result of acquisitions completed during 1995 and 1996.
Interest expense (net of $0.5 million capitalized) primarily reflects the
interest expense associated with the Notes. Pursuant to Statement of
Financial Accounting Standards No. 34, the Company capitalizes a portion of
its interest costs as part of the construction cost of its communications
networks. Interest income results from the pledged securities and investment
of excess cash.
The Company is a Washington limited liability company, which is treated as
a partnership for federal and state income tax purposes. Accordingly, the
Company does not maintain a provision for income taxes in its consolidated
financial statements.
<PAGE>
PART I. FINANCIAL INFORMATION
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
The competitive local telecommunications service business is a capital
intensive business. The Company's existing operations have required and will
continue to require substantial capital investment for (i) the installation of
fiber and electronics for switched services in the Company's networks, and (ii)
the funding of operating losses during the start-up phase of each market. In
addition, the Company's strategic plan calls for expansion into additional
market areas. Such expansion will require significant additional capital for
potential acquisitions of businesses or assets; design, development and
construction of new networks; and the funding of operating losses during the
start-up phase of each market. During the nine months ended September 30, 1996,
the Company used $18.9 million in cash for operating activities, compared to
$3.6 million in the same period in 1995. The increase was due to a substantial
increase in the Company's activities associated with the development and
initiation of competitive local exchange services. During the nine months ended
September 30, 1996, the Company also invested an additional $52.7 million in
property and equipment, acquisitions of telecommunications assets and equity
investments in telecommunications businesses. During the same period in 1995,
the Company invested $28.5 million in capital equipment and acquisitions of
telecommunications assets and businesses.
Through April 1996, the Company funded approximately $55.0 million of its
expenditures through cash equity investments from two entities that are
controlled by Mr. Craig O. McCaw. In addition, the Company issued $10.5 million
of member units for the acquisition of certain assets as well as the issuance of
member units in a recapitalization of the Company and four of the Company's
operating subsidiaries, as a result of which each of these subsidiaries is owned
99% by the Company and 1% by a corporation that is wholly owned by Mr. McCaw,
and assumed or incurred approximately $12.7 million of debt obligations. Mr.
McCaw, through Eagle River, made advances totaling $32.2 million to the Company
primarily to fund the Company's capital expenditures (excluding acquisitions)
and operating losses between January 1996 and April 1996. Such advances were
repaid with a portion of the proceeds from the sale of the Notes.
On April 25, 1996, the Company raised net proceeds of approximately $190
million through the issuance of $350 million in senior notes. The Company used
$117.7 million of the gross proceeds to purchase U.S. government securities,
representing funds sufficient to provide for payment in full of interest on the
senior notes through April 15, 1999 and used an additional $32.2 million to
repay the advances and accrued interest from Eagle River. In addition, the
Company incurred costs of $9.7 million in connection with the financing. The
Notes bear interest at 12.5% annually, with interest payments due semi-annually.
The Company expects to use the remaining proceeds in connection with (i)
further construction and expansion of the Company's existing networks,
including the installation of additional switches and switch peripherals,
(ii) design, construction and development of networks in adjacent or new
geographic areas, (iii) connection of additional buildings and customers to
the Company's networks, (iv) further development of the Company's enhanced
communications services and (v) acquisitions and the development of acquired
businesses. On September 30, 1996, the Company announced that it had reached
a definitive agreement to acquire Los Angeles-based competitive
telecommunications service provider Linkatel Pacific L.P. The total purchase
price consists of a cash payment of $42.5 million less certain assumed
liabilities (including the assumption of long-term debt of approximately $5.5
million). The Company expects to fund the cash payment using its existing
working capital. Closing is anticipated for the first quarter of 1997.
<PAGE>
PART I. FINANCIAL INFORMATION
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The Company's planned growth will require substantial additional capital to
fund capital expenditures, acquisition opportunities, working capital and any
future operating losses. The Company will continue to evaluate additional
revenue opportunities in each of its metropolitan areas and, as and when
attractive additional opportunities develop, the Company plans to make
additional capital investments in its networks that might be required to pursue
such opportunities. The Company expects to meet its additional capital needs
with the proceeds from credit facilities and other borrowings, sales of
additional debt securities, sales or issuance of equity securities and through
joint ventures. There can be no assurance, however, that the Company will be
successful in raising sufficient additional capital on terms that it will
consider acceptable or that the Company's operations will produce positive
consolidated cash flow in sufficient amounts to service the Notes. Failure to
raise and generate sufficient funds may require the Company to delay or abandon
some of its planned future expansion or expenditures, which could have a
material adverse effect on the Company's growth and its ability to compete in
the telecommunications services industry.
In addition, the Company's operating flexibility with respect to certain
business matters is, and will continue to be, limited by covenants associated
with the Senior Notes. Among other things, these covenants limit the ability of
the Company and its subsidiaries to incur additional indebtedness, create liens
upon assets, apply the proceeds from the disposal of assets, make dividend
payments and other distributions on capital stock and redeem capital stock.
There can be no assurance that such covenants will not adversely affect the
Company's ability to finance its future operations or capital needs or to engage
in other business activities that may be in the interest of the Company. The
Company was in compliance with all covenants associated with the Notes as
of September 30, 1996.
INFORMATION REGARDING FORWARD-LOOKING STATEMENTS
The statements contained in this report and in associated prior filings
by the Company with the Securities and Exchange Commission which are not
historical facts are "forward-looking statements" (as such term is defined in
the Private Securities Litigation Reform Act of 1995), which can be identified
by the use of forward-looking terminology such as "believes," "expects,"
"may," "will," "should," or "anticipates" or the negative thereof or other
variations thereon or comparable terminology, or by discussions of strategy
that involve risks and uncertainties. Management wishes to caution the reader
that these forward-looking statements, such as the Company's plans to build
and acquire networks in new areas, its anticipation of revenues from
designated markets during 1997, and statements regarding the development of
the Company's businesses, the markets for the Company's services and products,
the Company's anticipated capital expenditures, regulatory reform and other
statements contained herein regarding matters that are not historical facts,
are only predictions. No assurance can be given that the future results will
be achieved; actual events or results may differ materially as a result of
risks facing the Company. Such risks include, but are not limited to, the
Company's ability to successfully market its services to current and new
customers, access markets, identify, finance and complete suitable
acquisitions, design and construct fiber optic networks, install cable and
facilities, including switching electronics, and obtain rights-of-way,
building access rights and any required governmental authorizations,
franchises and permits, all in a timely manner, at reasonable costs and on
satisfactory terms and conditions, as well as regulatory, legislative and
judicial developments that could cause actual results to vary materially
from the future results indicated, expressed or implied, in such
forward-looking statements.
<PAGE>
PART II. OTHER INFORMATION
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
27 Financial Data Schedule
(b) Reports on Form 8-K
None.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrants have duly caused this report to be signed on their behalf by the
undersigned thereunto duly authorized.
NEXTLINK Communications, L.L.C.
Date: November 14, 1996 By: /s/ Kathleen H. Iskra
----------------------------------------
Kathleen H. Iskra
Vice President, Chief Financial Officer and
Treasurer
(Principal financial and accounting officer)
NEXTLINK Capital, Inc.
Date: November 14, 1996 By: /s/ Kathleen H. Iskra
----------------------------------------
Kathleen H. Iskra
Vice President, Chief Financial Officer and
Treasurer
(Principal financial and accounting officer)
<PAGE>
NEXTLINK COMMUNICATIONS, L.L.C.
EXHIBIT INDEX
Exhibit No. Description
- ----------- -----------
27 Financial Data Schedule
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> SEP-30-1996
<CASH> 99,811
<SECURITIES> 176,188
<RECEIVABLES> 7,337
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 203,076
<PP&E> 78,973
<DEPRECIATION> 6,076
<TOTAL-ASSETS> 395,556
<CURRENT-LIABILITIES> 27,111
<BONDS> 354,587
0
0
<COMMON> 0
<OTHER-SE> 8,112
<TOTAL-LIABILITY-AND-EQUITY> 395,556
<SALES> 18,960
<TOTAL-REVENUES> 18,960
<CGS> 0
<TOTAL-COSTS> 17,474
<OTHER-EXPENSES> 33,032
<LOSS-PROVISION> 0
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