Nextel Reports Record First Quarter 2003 Results
Income of $208 million, or $0.21 per share EBITDA of $906 million and Margin of 41% Subscriber Additions of 480,000; 11.1 million Total Subscribers Debt and Preferred Retirements of $568 million; $3.8 billion since Q2 2002
RESTON, Va., Apr 23, 2003 (BUSINESS WIRE) -- Nextel Communications, Inc. (NASDAQ: NXTL), today announced record financial and operating results for the first quarter of 2003. Income was $208 million, or $0.21 per share, a considerable improvement over the loss of $654 million, or ($0.82) per share, for the same period last year. Revenue was $2.4 billion, a 21% increase over last year's first quarter. Operating income before depreciation and amortization (EBITDA) was $906 million, increasing by 64% over the $551 million for the first quarter of 2002. Nextel retired approximately $568 million in debt and preferred stock during the first quarter, bringing total debt and preferred stock retirements to $3.8 billion over the last year. Nextel added approximately 480,000 subscribers during the first quarter, finishing the quarter with approximately 11.1 million subscribers.
"Strong customer demand for Nextel's differentiated wireless services coupled with our focused growth strategies led to improved subscriber quality and our fourth consecutive quarter of positive earnings," said Tim Donahue, Nextel's president and CEO. "During the first quarter, Nextel posted 21 cents in earnings per share and $201 million in free cash flow, putting Nextel solidly on track to meet or exceed our financial and operating goals for 2003. We are very excited about the rollout of Nationwide Direct Connect(R), which is already underway, and new handsets with increased battery life, incorporating the new 6-to-1 voice coder, a software solution that will enable Nextel to nearly double the cellular calling capacity of our wireless network."
Nextel's average monthly revenue per subscriber for the first quarter was $67, significantly higher than other national wireless carriers and down $1 from the $68 reported in the first quarter of 2002. Customer churn was approximately 1.9% during the first quarter, a significant improvement over recent quarters and the lowest level in the last four years.
"First quarter subscriber growth of 480,000 pushes Nextel to more than 11 million high-value subscribers and continues Nextel's momentum in the wireless marketplace," said Tom Kelly, Nextel's executive vice president and COO. "Nextel once again expanded market share and improved subscriber quality while making improvement in our industry leading EBITDA margin, which grew to 41% in the first quarter, up from last year's first quarter margin of 30%. Nextel is focused on serving our traditional business customers and is successfully expanding into other high-value segments, and that focus is evident in our results. Consistent with the seasonal trends of our core customer segments we expect even stronger results in the coming quarters."
Nextel's consolidated income available to common stockholders during the first quarter was $208 million, or $0.21 per basic share. Net cash provided by operating activities was $813 million. Free cash flow generated during the first quarter was $201 million.
"Nextel delivered on our financial targets during the first quarter, and we are confident that our strategies will continue to drive Nextel's earnings higher," said Paul Saleh, Nextel's executive vice president and CFO. "Nextel has once again set the bar even higher for subscriber quality, underscored by a reduction in subscriber churn to the lowest level in the last four years and an improvement in bad debt expense as a percentage of operating revenues to the lowest level in the last three years. The solid first quarter financial performance also enabled a further retirement of debt and preferred obligations and Nextel ended the quarter with an excellent liquidity position of approximately $3.6 billion."
For the quarter ended March 31, 2003, Nextel retired $568 million in principal amount of its outstanding debt and mandatorily redeemable preferred stock in exchange for approximately $570 million in cash. Over the last year, Nextel has retired approximately $3.8 billion in principal amount of debt and mandatorily redeemable preferred stock, which will allow Nextel to avoid approximately $6.3 billion in future principal, interest and dividend payments over the life of these securities. Nextel may from time to time, as it deems appropriate, enter into similar transactions that in the aggregate may be material.
Domestic capital expenditures were $305 million in the first quarter of 2003. Total domestic system minutes of use on the Nextel National Network increased 35% during the quarter when compared with the same period in 2002 to approximately 21.1 billion total system minutes of use.
In addition to the results prepared in accordance with Generally Accepted Accounting Principles (GAAP) provided throughout this press release, Nextel has presented non-GAAP financial measures, such as EBITDA, free cash flow and ARPU. The non-GAAP financial measures should be considered in addition to, but not as a substitute 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 and information about how to access the conference call discussing Nextel's first quarter results visit the 'Investor Relations' link under the 'About Nextel' tab at www.nextel.com.
corporate-ir.net |
