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NEWS RELEASE
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[NEXTEL LOGO] 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 RECORD THIRD QUARTER 2000 RESULTS
- RECORD GLOBAL PROPORTIONATE SUBSCRIBER ADDITIONS OF 681,400 -
- RECORD MONTHLY AVERAGE REVENUE PER DOMESTIC SUBSCRIBER OF $75 -
- POSITIVE CONSOLIDATED OPERATING INCOME -
- EPS LOSS NARROWS 44% -
RESTON, Va. - October 26, 2000 - Nextel Communications, Inc., (NASDAQ: NXTL)
today announced third quarter results including record global proportionate
subscriber additions of 681,400, a 59% increase in third quarter revenue to $1.4
billion and a 105% increase in operating cash flow to $359 million during the
third quarter 2000 as compared to third quarter 1999. Highlights of the third
quarter include the achievement of a new financial milestone of $44 million in
positive consolidated operating income, record domestic operating cash flow of
$392 million and continued strong growth in the operations of Nextel
International.
"Nextel continues to attract and retain the best wireless customers in the
increasingly competitive wireless industry," said Tim Donahue, Nextel's
president and CEO. "Nextel's monthly cash flow per domestic subscriber is
approximately $22 - among the highest in the industry - and we intend to
continue to set the pace in subscriber quality and profitability. Nextel remains
focused on serving the best customers in the wireless industry."
Record global proportionate subscriber additions of approximately 681,400 during
the third quarter consists of 540,400 domestic subscriber additions and a record
141,000 proportionate subscriber additions from Nextel International. Nextel
ended the third quarter with about 6,897,400 global proportionate subscribers
consisting of approximately 6,157,000 domestic subscribers and approximately
740,400 proportionate international subscribers. Nextel Partners announced
subscriber additions of 51,400 for the third quarter 2000 and Nextel's
proportionate share of these net additions is not reflected in this report.
Consolidated revenue grew 59% over last year's third quarter to $1.4 billion and
consists of $1.33 billion from domestic operations and $86 million from
international operations. Domestic monthly average revenue per subscriber unit
increased to about $75 which is the highest in the industry among the national
carriers, while customer churn of about 2% per month remained among the lowest
in the industry.
Consolidated operating cash flow (earnings before interest, taxes, depreciation
and amortization) grew 105% to $359 million during the quarter as compared with
$175 million during the third quarter 1999. Domestic cash flow grew 87% to $392
million during the third quarter as compared with $210 million in the third
quarter 1999. The operating cash flow loss from Nextel International operations
of $33 million was unchanged from second quarter.
The consolidated net loss attributable to common stockholders improved 35% to
$236 million during the third quarter 2000 as compared with $361 million in the
third quarter 1999. The net loss per share during the third quarter 2000 was
$0.31 and improved 44% over third quarter 1999 net loss per share of $0.55. The
third quarter consolidated net loss includes gains of approximately $21 million
(or $0.03 per share) from the previously announced sales of assets to Nextel
Partners and dissolution arrangements relating to the GSM system joint venture
in Shanghai, China.
<PAGE> 2
"Nextel International posted its best quarter ever," said Steve Shindler, Nextel
International's CEO. "Outstanding subscriber growth of 141,000 net additions
during the third quarter is up 100% over last year while revenue of $86 million
is up over 200% from last year. We will continue to drive Nextel International
with the same business focus that has made Nextel's domestic operations a
success."
Consolidated capital expenditures were $806 million during the third quarter
2000 and include $666 million for domestic operations and $140 million for
international operations. Total domestic system minutes of use grew to 8.5
billion during the third quarter 2000, up 73% over third quarter 1999 domestic
minutes of use of 4.9 billion.
"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, 1999 and in the 10-Q's for the first and second
quarters of 2000 filed by Nextel and Nextel International.
Nextel Communications, Inc., based in Reston, VA, is the leading provider of
fully integrated wireless communications services 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 174 of the top 200 U.S. markets. Through recent market launches,
Nextel and Nextel Partners' service is available today in areas of the U.S.
where approximately 200 million people live or work. The Nextel National Network
offers a fully integrated wireless communications tool with digital cellular,
text/numeric paging, wireless Internet access and Nextel Direct Connect(R) - 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, Chile and Japan. 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 per share data)
Unaudited
<TABLE>
<CAPTION>
NINE MONTHS ENDED THREE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
---------------------- ----------------------
2000 1999 2000 1999
--------- --------- -------- ---------
<S> <C> <C> <C> <C>
OPERATING REVENUES $ 3,755 $ 2,346 $ 1,416 $ 889
--------- --------- -------- ---------
OPERATING EXPENSES
Cost of revenues 760 504 286 175
Selling, general and administrative 2,118 1,523 771 539
--------- --------- -------- ---------
EBITDA 877 319 359 175
Depreciation and amortization 898 732 315 261
--------- --------- -------- ---------
OPERATING (LOSS) INCOME (21) (413) 44 (86)
Interest expense (912) (627) (333) (220)
Interest income 298 28 111 16
Debt conversion expense (23) -- -- --
Equity in losses of unconsolidated affiliates (106) (49) (35) (18)
Foreign currency transaction gains (losses), net 9 (61) 3 (15)
Other income, net 27 78 18 3
--------- --------- -------- ---------
LOSS BEFORE INCOME TAX BENEFIT (728) (1,044) (192) (320)
Income tax benefit 24 25 8 8
--------- --------- -------- ---------
LOSS BEFORE EXTRAORDINARY ITEM (704) (1,019) (184) (312)
Extraordinary loss from extinguishment of debt (104) -- -- --
Mandatorily redeemable preferred stock dividends (155) (142) (52) (49)
--------- --------- -------- ---------
LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS $ (963) $ (1,161) $ (236) $ (361)
========= ========= ======== =========
LOSS PER SHARE ATTRIBUTABLE TO COMMON STOCKHOLDERS,
BASIC AND DILUTED:
Loss before extraordinary item attributable to
common stockholders $ (1.14) $ (1.89) $ (0.31) $ (0.55)
Extraordinary item (0.14) -- -- --
-------- --------- -------- ---------
$ (1.28) $ (1.89) $ (0.31) $ (0.55)
======== ========= ======== ========
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING 754 615 761 655
========= ========= ======== =========
</TABLE>
SELECTED BALANCE SHEET AND OTHER DATA
(in millions, except unit data)
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
2000 1999
------------- -------------
(Unaudited)
<S> <C> <C>
CASH, CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS $ 6,364 $ 5,808
PROPERTY, PLANT AND EQUIPMENT, NET 7,925 6,152
INTANGIBLE ASSETS, NET 4,851 4,551
TOTAL ASSETS 21,846 18,410
LONG-TERM DEBT, including current portion of $107 and $1,165 13,920 10,925
MANDATORILY REDEEMABLE PREFERRED STOCK 1,827 1,770
TOTAL STOCKHOLDERS' EQUITY 2,439 2,574
DIGITAL UNITS IN SERVICE:
Domestic 6,157,000 4,515,700
========= =========
Global - proportionate (1) 6,897,400 4,919,200
========= =========
</TABLE>
(1) The subscriber unit count at December 31, 1999 includes units attributable
to Nextel's investment in our affiliate in Shanghai, China. These
subscriber units are excluded from the total subscriber count as of
September 30, 2000.
<TABLE>
<CAPTION>
THREE MONTHS ENDED
----------------------------
SEPTEMBER 30, JUNE 30,
2000 2000
------------- --------
<S> <C> <C>
CONSOLIDATED CAPITAL EXPENDITURES $ 806 $ 823
======= ======
</TABLE>
<PAGE> 4
NEXTEL INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in millions)
Unaudited
<TABLE>
<CAPTION>
NINE MONTHS ENDED THREE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
---------------------- ----------------------
2000 1999 2000 1999
--------- --------- -------- ---------
<S> <C> <C> <C> <C>
OPERATING REVENUES $ 197 $ 69 $ 86 $ 27
--------- --------- -------- ---------
OPERATING EXPENSES
Cost of revenues 52 30 23 12
Selling, general and administrative 245 167 96 50
--------- --------- -------- ---------
EBITDA (100) (128) (33) (35)
Depreciation and amortization 103 81 38 29
--------- --------- -------- ---------
OPERATING LOSS (203) (209) (71) (64)
Interest expense (177) (128) (70) (46)
Interest income 15 5 10 2
Equity in losses of unconsolidated affiliates (31) (21) (14) (10)
Foreign currency transaction gains (losses), net 9 (61) 3 (15)
Other income, net 7 16 3 3
--------- --------- -------- ---------
LOSS BEFORE INCOME TAX BENEFIT (380) (398) (139) (130)
Income tax benefit 1 -- 1 --
--------- --------- -------- ---------
NET LOSS $ (379) $ (398) $ (138) $ (130)
========= ========= ======== =========
</TABLE>
SELECTED BALANCE SHEET AND OTHER DATA
(in millions, except unit data)
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
2000 1999
--------- ---------
(Unaudited)
<S> <C> <C>
CASH, CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS $ 602 $ 100
PROPERTY, PLANT AND EQUIPMENT, NET 928 539
INTANGIBLE ASSETS, NET 769 455
TOTAL ASSETS 2,975 1,682
LONG-TERM DEBT, including current portion of $79 and $33 2,448 1,548
TOTAL STOCKHOLDERS' DEFICIT (32) (180)
INTERNATIONAL DIGITAL UNITS IN SERVICE (1):
Total 1,418,900 1,245,600
========== =========
Proportionate 740,400 403,500
========== =========
</TABLE>
(1) The subscriber unit count at December 31, 1999 includes units attributable
to Nextel's investment in our affiliate in Shanghai, China. These
subscriber units are excluded from the total subscriber count as of
September 30, 2000.
<TABLE>
<CAPTION>
THREE MONTHS ENDED
---------------------------
SEPTEMBER 30, JUNE 30,
2000 2000
------------ ---------
<S> <C> <C>
INTERNATIONAL CAPITAL EXPENDITURES $ 140 $ 137
======== ======
</TABLE>
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