Nextel Reports First Quarter 1998 Results
-Service Revenue Doubled and Operating Cash Flow Improved- -Record Digital
Subscriber Additions of 370,800- -New Market Launches Now Cover 79 of the
Top 100 U.S. Markets-
MCLEAN, Va., April 15 /PRNewswire/ -- Nextel Communications, Inc. (Nasdaq: NXTL - news) today reported its
financial results for the first quarter ended March 31, 1998, including continued strong revenue growth, improved
operating cash flow and record digital subscriber additions of approximately 370,800 during the quarter. With recent
launches in Charlotte, Charleston, S.C., Grand Rapids, Knoxville and Indianapolis, Nextel now provides digital
service in thousands of communities across the U.S. including 79 of the top 100 U.S. markets.
During the first quarter of 1998, total revenue grew approximately 196 percent to $327,134,000 as compared with
$110,676,000 for the first quarter of 1997. Service revenue increased approximately 209 percent to $320,271,000
over last year's first quarter service revenue of $103,685,000. First quarter 1998 domestic digital subscriber unit
additions were approximately 370,800, ending the first quarter with approximately 1,641,500 total digital subscriber
units in service in the U.S.
''With continued strong growth in subscriber additions, revenue trends and financial results, Nextel's position
continues to improve,'' said Dan Akerson, Nextel's chairman and chief executive officer. ''During the first quarter of
1998, the Nextel National Network carried more than 1.5 billion minutes of use and we continue to expect strong
growth in customer demand for our differentiated wireless business services. We look forward to continued progress
in 1998.''
Customer usage also remained strong during the first quarter with monthly average revenue per digital unit in service
of $66, an increase of approximately 12 percent over the first quarter of 1997. Nextel also experienced a 32 percent
reduction in bad debt expense during the first quarter of 1998 as compared with fourth quarter of 1997. The
improvement in bad debt expense follows the implementation of enhancements made in systems and processes to
address increased bad debt expense previously reported. As a part of the company's on-going efforts in cleaning up
its receivables, a significant number of older non-paying customer accounts were disconnected by the company
during this period, which contributed to an increase in the average monthly churn rate to approximately 1.7% for the
first quarter. Without this increase in involuntary disconnects due to non-payment, the Company believes that churn
would have been similar to fourth quarter levels. Ending analog units in service were 493,600 at March 31, 1998
with less than 10 percent of first quarter digital additions of 370,800 coming from the company's analog customer
base.
The consolidated operating cash flow loss (earnings before interest, taxes, depreciation and amortization) for the first
quarter of 1998 decreased to $105,033,000 as compared with $112,092,000 for the fourth quarter of 1997. First
quarter's consolidated operating cash flow loss includes approximately $94,843,000 of operating cash flow loss from
domestic operations down from fourth quarter's domestic operating cash flow loss of approximately $101,842,000.
The operating cash flow loss from international operating activities was $10,190,000 during the first quarter.
''Continued strong growth in domestic digital subscriber units fueled our first quarter results. Despite this strong
growth, we improved our consolidated operating cash flow position, our domestic operating cash flow loss and
posted reduced bad debt expense,'' said Steve Shindler, Nextel's chief financial officer. ''During the first quarter, we
also initiated efforts to tender approximately $627 million in bonds, raised approximately $1.75 billion in new
domestic securities, closed a $3 billion bank credit facility and completed a $400 million international bond offering.''
The consolidated net loss attributable to common stockholders for the first quarter of 1998 was $414,950,000 ($1.53
per share) and is based upon a weighted average number of shares outstanding of approximately 270,385,000. The
consolidated net loss includes approximately $28.1 million ($0.10 per share) for cumulative preferred dividends and
approximately $28.7 million ($0.11 per share) for international operations.
Consolidated capital expenditures excluding capitalized interest were $578,736,000 for the first quarter down from
fourth quarter levels. Domestic capital expenditures were $490,145,000 and international capital expenditures were
$88,591,000 consistent with Nextel International's buildout of digital mobile networks in Sao Paulo, Rio de Janeiro,
Buenos Aires, Mexico City, and Manila.
During the first quarter, Nextel International expanded its ownership interest in Nextel Argentina to 100% for $46
million, purchased a 21% stake in a Japanese wireless operator for $32 million, and acquired a 70% interest in a
Peruvian wireless operator for approximately $28 million.
Nextel Communications, Inc., based in McLean, Virginia, and Nextel International, Inc., based in Seattle,
Washington, now own licenses to provide wireless services in areas of the world where more than 633 million people
live or work. On a proportionate ownership basis, such licensed frequency coverage represents more than 431 million
people in 12 of the world's top 25 cities, including major metropolitan population centers in Argentina, Brazil,
Canada, Japan, Mexico, Shanghai, Philippines, Peru and the United States.
NEXTEL COMMUNICATIONS, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
(in thousands, except share and unit data)
Three Months Ended March 31,
1998 1997
Operating revenues $327,134 $110,676
Operating expenses
Cost of revenues 102,428 58,161
Selling, general and
administrative 329,739 132,376
Depreciation and
amortization 184,495 110,203
Operating loss (289,528) (190,064)
Other expense, net (130,974) (70,222)
Loss before income tax
benefit (420,502) (260,286)
Income tax benefit 33,640 39,436
Net loss (386,862) (220,850)
Redeemable preferred
stock dividends (28,088) --
Loss attributable to
common stockholders $(414,950) $(220,850)
Basic and diluted loss
per share attributable
to common stockholders $(1.53) $(0.93)
Weighted-average number
of common shares
outstanding 270,385,000 237,496,000
Selected Balance Sheet Data
March 31, December 31,
1998 1997
Cash, cash equivalents and
marketable securities,
including
restricted portion of
$468,616 and $288,350,
respectively $1,622,284 $433,005
Total current assets 2,083,050 839,597
Property, plant and
equipment, net 3,716,785 3,225,603
Intangible assets, net 4,733,507 4,699,746
Total assets 11,116,432 9,227,801
Long-term debt, excluding
current portion 6,396,799 5,038,250
Mandatorily redeemable
preferred stock 1,307,197 529,119
Total stockholders' equity 1,522,713 1,912,420
Other Selected Data
March 31,
1998 1997
Year-to-date capital
expenditures, including
international of
$88,591 and $6,193,
respectively, and net
of capitalized
interest of $12,388 and
$12,012, respectively $578,736 $205,919
Digital units in service 1,641,500 422,900
SOURCE: Nextel Communications, Inc. |
