<PAGE> 1
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): February 22, 2000
-----------------------
NEXTEL COMMUNICATIONS, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 0-19656 36-3939651
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
2001 EDMUND HALLEY DRIVE, RESTON, VIRGINIA 20191
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (703) 433-4000
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(Former name or former address, if changed since last report)
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ITEM 5. OTHER EVENTS.
On February 22, 2000 Nextel issued a press release announcing its summary
financial results and other data for the quarter and year ended December 31,
1999, as well as a 2-for-1 stock split to be effective upon shareholder
consideration and approval of a proposed increase in the Company's authorized
equity capitalization at the annual shareholders meeting. A copy of the press
release is filed as Exhibit 99.1 hereto and is incorporated herein by reference.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(a) FINANCIAL STATEMENTS OF BUSINESS ACQUIRED.
NOT APPLICABLE
(b) PRO FORMA FINANCIAL INFORMATION.
NOT APPLICABLE
(c) EXHIBITS.
Exhibit No Exhibit Description
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99.1 Press Release
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SIGNATURE
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.
NEXTEL COMMUNICATIONS, INC.
Date: February 22, 2000 By: /s/ THOMAS J. SIDMAN
----------------------
Thomas J. Sidman
Senior Vice President and
General Counsel
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EXHIBIT INDEX
Exhibit No Exhibit Description
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99.1 Press Release
<PAGE> 1
NEWS RELEASE
[NEXTEL LOGO(R)]
For Immediate Release
NEXTEL COMMUNICATIONS, INC.
2001 Edmund Halley Drive
Reston, VA 20191
703 433-4000
CONTACTS:
INVESTORS: PAUL BLALOCK (703) 433-4300
MEDIA: BEN BANTA (703) 433-4700
NEXTEL REPORTS 1999 RESULTS
- ANNOUNCES 2-FOR-1 STOCK SPLIT -
- RECORD FOURTH QUARTER GLOBAL DIGITAL SUBSCRIBER ADDITIONS OF 549,100 -
- $698 MILLION IN 1999 DOMESTIC OPERATING CASH FLOW -
RESTON, Va. - February 22, 2000 - Nextel Communications, Inc., (NASDAQ: NXTL)
today reported its 1999 financial results and announced Board of Directors
approval for a 2-for-1 common stock split. Upon shareholder consideration and
approval of a proposed increase in the authorized equity capitalization at the
annual shareholders meeting scheduled for May 25, the new shares will be
distributed on June 6 to shareholders of record as of May 26, 2000.
1999 financial highlights include: $698 million in positive domestic operating
cash flow, the addition of 1,777,800 domestic digital subscribers, and a more
than doubling of proportionate subscribers at Nextel International. Nextel ended
1999 with more than 4.9 million global digital subscribers. Fourth-quarter 1999
highlights include: record global digital subscriber additions of 549,100,
consisting of a record 464,800 domestic subscriber additions, and a record
84,300 proportionate subscriber additions at Nextel International. Domestic
operations achieved the important milestone of positive operating income with $6
million recorded during the fourth quarter.
"1999 was an outstanding year," said Tim Donahue, Nextel's president and CEO.
"Nextel is harnessing the value of our growth initiatives while meeting the
challenges of impressive global demand for our innovative wireless
communications services. In 2000, Nextel will pursue several strategic
initiatives including aggressively growing our domestic and global wireless
operations, launching our Nextel Worldwidesm GSM/iDEN roaming services, and
introducing innovative wireless Internet products and services."
During 1999, domestic digital subscribers increased 62% to 4,515,700 ending
subscribers. Nextel International grew its proportionate subscribers in 1999 by
2.4 times, ending the year with 403,500 proportionate digital subscribers.
Consolidated revenue grew 80% over 1998's consolidated revenue of $1.847 billion
to $3.326 billion for 1999, and was $980 million in the fourth quarter of 1999.
Domestic revenue was $3.222 billion for the year and $945 million in the fourth
quarter. International revenue was $104 million for the year and $35 million in
the fourth quarter. Nextel's average monthly revenue per domestic subscriber
unit remained among the best in the wireless industry, increasing $4 during the
year to approximately $73 in 1999, as compared with approximately $69 in 1998.
Fourth-quarter average monthly revenue per domestic subscriber was also $73. The
domestic monthly churn rate for the fourth quarter remained at one of the best
levels in the wireless industry at approximately 2%.
Domestic operating cash flow (earnings before interest, taxes, depreciation and
amortization) was $698 million in 1999, compared with an operating cash flow
loss of $99 million in 1998. In the fourth quarter, domestic operations produced
$251 million in operating cash flow - approximately six times 1998's
fourth-quarter domestic cash flow of $42 million.
"Nextel exceeded projections in 1999 and in the fourth quarter," said Steve
Shindler, Nextel's CFO. "Our fourth-quarter domestic cash flow of $251 million
puts Nextel at an annualized run-rate of more than $1 billion in cash flow -
positioning Nextel as a powerful force in the emerging global wireless
marketplace. Nextel's
<PAGE> 2
1999 domestic conversion ratio of new revenue to cash flow was 56% and our
fourth-quarter domestic monthly cash flow per subscriber of just over $19 is
among the best in the wireless industry. Nextel ended 1999 in excellent
condition with approximately $5.8 billion in cash and marketable securities and
we will continue to use our resources to pursue high-growth strategies."
The consolidated net loss attributable to common stockholders decreased $271
million to $1.5 billion in 1999 as compared with a loss of $1.8 billion in 1998.
The net loss was $4.79 per share in 1999, down 26% from the $6.46 per share loss
in 1998. The consolidated fourth-quarter 1999 net loss per share before the
extraordinary charge was $0.85 per share and decreased 41% as compared with
$1.43 per share loss in the fourth quarter of 1998 and was approximately $0.15
cents better than consensus analyst expectations. In the fourth quarter of 1999,
the consolidated net loss attributable to common stockholders was $369 million,
or $1.04 per share and includes an extraordinary charge of $68 million, or $0.19
per share, for the early retirement of debt. The per share amounts mentioned
above for 1999 results do not reflect the effect of the proposed year 2000 stock
split.
During the fourth quarter, Nextel completed the largest primary offering of
equity (i.e., a non-IPO, non-secondary stock offering) in U.S. history,
successfully placing 33.8 million shares raising over $2.8 billion. In other
fourth-quarter financing activities, Nextel completed a $2 billion debt offering
to refinance approximately $1.7 billion in long-term debt, and we expanded our
Bank Facility to $5 billion. More recently, Nextel completed a convertible bond
issue during the first quarter of 2000 raising $1.15 billion.
Capital expenditures in 1999 for domestic operations were $1.9 billion and $173
million for international operations. In the fourth quarter, domestic capital
expenditures were $684 million and capital expenditures in international
operations were $50 million.
Total domestic system minutes of use on the Nextel National Network increased
94% to approximately 18 billion minutes of use during the year. Domestic digital
cell sites on air increased 44% in 1999 to approximately 8,800 sites. Nextel
ended 1999 with approximately 1.1 million data-capable handsets in service.
During the fourth quarter, approximately 8.2 million Internet text messages were
sent on the Nextel National Network, representing an increase of 273% over last
year's fourth-quarter Internet text messages of 2.2 million.
"Safe Harbor" Statement under the Private Securities Litigation Reform Act of
1995 A number of the matters and subject areas discussed in this press release
that are not historical or current facts deal with potential future
circumstances and developments. The discussion of such matters and subject areas
is qualified by the inherent risks and uncertainties surrounding future
expectations generally, and also may materially differ from Nextel and Nextel
International's actual future experience involving any one or more of such
matters and subject areas. Nextel and Nextel International have attempted to
identify, in context, certain of the factors that they currently believe may
cause actual future experience and results to differ from Nextel's and/or Nextel
International's current expectations regarding the relevant matter or subject
area. Such risks and uncertainties include those that are described from time to
time in Nextel's and Nextel International's reports filed with the SEC,
including Nextel's and Nextel International's Annual Report on Form 10-K for the
fiscal year ended December 31, 1998 and their respective Quarterly Report on
Form 10-Q for the quarters ended March 31, 1999, June 30, 1999 and September 30,
1999.
Nextel Communications, Inc., based in Reston, VA, is the leading provider of
fully integrated wireless communications and has built the largest guaranteed
all-digital wireless network in the United States covering thousands of
communities across the United States. Nextel and Nextel Partners, Inc.,
currently serve 94 of the top 100 U.S. markets. Through recent market launches,
Nextel and Nextel Partners' service is available today in areas of the U.S.
where approximately 190 million people live or work. The Nextel National Network
offers a fully integrated wireless communications tool with digital cellular,
text/numeric paging and Nextel Direct Connectsm - a digital two-way radio
feature. In addition, through Nextel International, Inc., Nextel has wireless
operations and investments in Canada, Mexico, Argentina, Brazil, the
Philippines, Peru, Japan and Shanghai, China. Please visit our website at
http://www.nextel.com.
- more -
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NEXTEL COMMUNICATIONS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in millions, except share and per share data)
<TABLE>
<CAPTION>
YEARS ENDED THREE MONTHS ENDED
DECEMBER 31, DECEMBER 31,
---------------------- ------------------------
1999 1998 1999 1998
-------- -------- --------- ----------
<S> <C> <C> <C> <C>
OPERATING REVENUES $ 3,326 $ 1,847 $ 980 $ 592
OPERATING EXPENSES:
Cost of revenues 697 516 193 145
Selling, general and administrative 2,094 1,551 571 450
--------- --------- --------- --------
EBITDA 535 (220) 216 (3)
Depreciation and amortization 1,004 832 272 249
--------- --------- --------- --------
OPERATING LOSS (469) (1,052) (56) (252)
Interest expense (878) (656) (251) (188)
Other income (expense), net 49 (3) 53 5
--------- --------- --------- --------
LOSS BEFORE INCOME TAX BENEFIT (1,298) (1,711) (254) (435)
Income tax benefit 28 192 3 64
--------- --------- --------- --------
LOSS BEFORE EXTRAORDINARY ITEM (1,270) (1,519) (251) (371)
Extraordinary loss from extinguishment of debt (68) (133) (68) --
Mandatorily redeemable preferred stock dividends (192) (149) (50) (42)
--------- --------- --------- --------
LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS $ (1,530) $ (1,801) $ (369) $ (413)
========= ========= ========= ========
LOSS PER SHARE ATTRIBUTABLE TO COMMON STOCKHOLDERS,
BASIC AND DILUTED:
Loss before extraordinary item attributable to
common stockholders $ (4.58) $ (5.98) $ (0.85) $ (1.43)
Extraordinary item (0.21) (0.48) (0.19) --
--------- --------- --------- --------
$ (4.79) $ (6.46) $ (1.04) $ (1.43)
========= ========= ========= ========
WEIGHTED AVERAGE NUMBER OF COMMON SHARES
OUTSTANDING (IN THOUSANDS) 319,302 278,643 354,917 287,820
========= ========= ========= ========
</TABLE>
SELECTED BALANCE SHEET AND OTHER DATA
<TABLE>
<CAPTION>
AS OF DECEMBER 31,
1999 1998
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<S> <C> <C>
CASH, CASH EQUIVALENTS AND MARKETABLE SECURITIES, including
restricted portion of $1,365 and $121, respectively $ 5,808 $ 321
PROPERTY, PLANT AND EQUIPMENT, NET 6,152 4,915
INTANGIBLE ASSETS, NET 4,551 4,937
TOTAL ASSETS 18,410 11,573
LONG-TERM DEBT, excluding current portion 9,760 7,710
REDEEMABLE PREFERRED STOCK 1,770 1,578
TOTAL STOCKHOLDERS' EQUITY 2,574 230
DIGITAL UNITS IN SERVICE:
Domestic 4,515,700 2,789,900
========== ==========
International - total 1,245,600 618,800
========== ==========
International - proportionate 403,500 166,500
========== ==========
Global - proportionate 4,919,200 2,956,400
========== ==========
</TABLE>
<TABLE>
<CAPTION>
YEARS ENDED THREE MONTHS ENDED
DECEMBER 31, -----------------------------
------------------- DECEMBER 31, SEPTEMBER 30,
1999 1998 1999 1999
------- ------ ------------ -------------
CAPITAL EXPENDITURES:
<S> <C> <C> <C> <C>
Domestic $ 1,908 $ 1,905 $ 684 $ 453
International 173 376 50 31
--------- -------- --------- --------
Total capital expenditures, net of capitalized interest of $46
and $55 year to date; $17 and $10 quarterly, respectively $ 2,081 $ 2,281 $ 734 $ 484
========= ======== ========= ========
</TABLE>
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