Nextel Unit Sees $35 Mln Charge to Cover Brazilian Devaluation
Bloomberg News
February 22, 1999, 1:54 p.m. ET
Nextel Unit Sees $35 Mln Charge to Cover Brazilian Devaluation
Washington, Feb. 22 (Bloomberg) -- The international unit of
Nextel Communications Inc. expects to take a pretax charge of
about $35 million in response to Brazil's currency devaluation.
Seattle-based Nextel International Inc. also will write down
certain Brazilian assets by $130 million to reflect their lower
value in dollars, according to a Form 8-K filed with the U.S.
Securities and Exchange Commission.
The $35 million charge will lower the parent company's
earnings for the quarter ending March 31, but the $130 million
write-down will only affect shareholders' equity on the company's
balance sheet.
''There is really no change in the economic earning power of
the assets,'' said Nextel Communications spokesman Paul Blalock.
Nextel, based in McLean, Virginia, operates a wireless telephone
network.
Nextel must make these adjustments when consolidating the
results of its foreign operations into U.S. financial statements
prepared according to generally accepted accounting principles.
Blalock cautioned that amounts cited in the SEC filing are
preliminary estimates. Final figures will be based on the foreign
exchange rate at the end of the first quarter, the filing said.
The $35 million estimated charge is for what is known as a
foreign currency transaction loss. The figure is based in part on
the outstanding amount of dollar-denominated debt of Nextel's
Brazilian subsidiaries.
Nextel shares rose 1 1/4 in recent trading to 31 13/16.
Company shares have risen 35 percent so far this year.
--Miles Weiss in Washington (202) 624-1879/bd
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