Subject: [NEXTEL-1] NII Holdings Announces Strong Third Quarter 2002 Results

From: Marcel <[email-masked]>
Date: Thu, 14 Nov 2002 12:44:10 -0500

http://www.businesswire.com/cgi-bin/f_headline.cgi?bw.111402/223182148

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BW2148 NOV 14,2002 5:48 PACIFIC 08:48 EASTERN

( BW)(FL-NII-HOLDINGS) NII Holdings Announces Strong Third Quarter
2002 Results

Business Editors/High Tech Writers

RESTON, Va.--(BUSINESS WIRE)--Nov. 14, 2002--NII Holdings:

--

Third quarter revenues of $191.1 million and $19.2 million in
operating income, and a record $40.5 million in quarterly
operating cash flow.

--

Successful completion of $2.3 billion corporate debt
restructuring.

--

Retirement of $100.7 million Nextel Argentina credit facility
and $56.7 million Motorola credit facility.

--

Proceeds of $140.0 million from completion of a senior note
and common stock rights offering and the receipt of $25.0
million for a spectrum sharing agreement.

NII Holdings, Inc. ("NII" or "the Company"), previously known as
Nextel International, today announced its consolidated financial
results for the third quarter of 2002 including consolidated operating
revenues of $191.1 million and consolidated operating income of $19.2
million for the third quarter of 2002 and $28.5 million year-to-date
as detailed in the attached table. The Company also reported $40.5
million in consolidated operating cash flow (income (loss) before
interest, taxes, depreciation and amortization, net foreign currency
transaction losses, and other charges determined to be non-recurring
in nature, such as reorganization items and impairment, restructuring
and other charges). In addition, NII Holdings ended the quarter with
approximately 1.24 million global proportionate subscribers.

NII's third quarter operating cash flow of $40.5 million
represents a $3.5 million increase over the record operating cash flow
of $37.0 million reported for the second quarter of 2002, and a $69.1
million increase over the operating cash flow loss of $28.6 million
for the same period in 2001. All of its operating companies in Latin
America reported significant increases in operating cash flow in the
third quarter over the same period in 2001. Nextel Mexico's quarterly
operating cash flow increased over 5 times the level reported last
year. Similarly, Nextel Peru's quarterly operating cash flow increased
over 3 times the level reported for the same period last year. Nextel
Brazil had positive third quarter 2002 quarterly operating cash flow
of $5.1 million versus an operating cash flow loss of $20.3 million in
the third quarter of 2001. Lastly, Nextel Argentina also reported
positive quarterly operating cash flow in the third quarter 2002 of
$3.4 million compared to $0.1 million in the third quarter of last
year.

Capital expenditures including capitalized interest were $35.1
million in the third quarter of 2002, a slight increase from the $34.8
million reported in the second quarter of 2002, and a decrease of 73
percent from the $130.5 million in the third quarter of 2001. For the
nine months ended September 30, 2002, the Company reported total
capital expenditures including capitalized interest of $139.1 million.
This represents a reduction of $385.0 million or 73 percent in capital
expenditures when compared to the first nine months of last year.

While the Company reported a net loss of $427.5 million for the
nine months ended September 30, 2002, the net loss was primarily
attributable to non-operating expenses. These non-operating expenses
included a $123.4 million non-cash write-off of unamortized discounts
and debt financing costs related to the Company's senior redeemable
notes, $160.7 million in foreign currency transaction losses,
primarily related to the Company's operations in Argentina, and the
accrual of interest on the Company's senior redeemable notes prior to
its Chapter 11 filing on May 24, 2002. For the third quarter 2002 the
Company reported a net loss of $36.2 million, of which $30.3 million
was related primarily to foreign currency transaction losses and $11.2
million was related to one time reorganization charges, which were
partially offset primarily by operating income of $19.2 million.

"NII's results during the quarter and for the first nine months of
this year represent a remarkable improvement over the same periods a
year ago. Our collective focus on profitability and free cash flow
generation has resulted in an improvement of $69.0 million in
operating cash flow for the third quarter of this year and of $198.8
million for the first nine months of this year compared to the same
periods in 2001," said Byron Siliezar, CFO of NII. "We have reported
six consecutive quarters of increasing operating cash flow,
significantly reduced our capital expenditures, successfully
recapitalized our balance sheet and operationally are on track for a
record year of financial results," added Siliezar.

On October 28, 2002 the U.S. Bankruptcy Court for the District of
Delaware confirmed the Company's plan of reorganization. As a result,
on November 12, 2002 the Company cancelled all shares of its preferred
stock, common stock and other equity interests outstanding as of May
24, 2002, exchanged $2.3 billion of its senior redeemable notes and
other unsecured non-trade claims that existed prior to its bankruptcy
filing plus any accrued interest owed for 3,920,000 shares of its new
common stock. In addition, the Company closed on the following series
of significant transactions:

-- A $140.0 million rights offering for $180.8 million principal

amount due at maturity of new NII 13% senior secured discount

notes and 15,680,000 additional shares of new common stock.

-- Reinstatement in full of $325.0 million in various credit

facilities with Motorola Credit Corporation, subject to some

structural modifications including deferrals of principal

repayments.

-- Retirement of a $100.7 million Argentina credit facility.

-- Repayment of a $56.7 million credit facility with Motorola.

-- A spectrum use and build-out agreement with Nextel

Communications for $50.0 million, of which $25.0 million has

been received by the Company.

"As a result of the successful completion of our restructuring,
NII Holdings emerges as a financially healthy company with tremendous
assets and a solid operational track record," said Steve Shindler, CEO
of NII Holdings. "We believe we have a fully funded business plan with
annual revenues in excess of $700 million, less than $500 million in
debt and 1.2 million wireless subscribers with the best ARPU in Latin
America. We have made a long trek from being a wholly owned subsidiary
of Nextel Communications to a fully independent company with strong
operating cash flow growth and a clear companywide focus on
profitability and free cash flow generation," concluded Shindler.

About NII Holdings, Inc.

NII Holdings, Inc., formerly known as Nextel International, is an
independent company with operations in Mexico, Brazil, Peru,
Argentina, Chile and the Philippines. NII 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. Visit the website at
http://www.nextelinternational.com .

Nextel, the Nextel logo, Nextel Online, Nextel Business Networks
and Nextel Direct Connect are trademarks and/or service marks of
Nextel Communications Inc.

"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 NII Holdings' actual
future experience involving any one or more of such matters and
subject areas. NII Holdings has attempted to identify, in context,
certain of the factors that they currently believe may cause actual
future experience and results to differ from NII Holdings' current
expectations regarding the relevant matter or subject area. Such risks
and uncertainties include the economic conditions in our targeted
markets, performance of our technologies, timely development and
delivery of new technologies, competitive conditions, market
acceptance of our services, access to sufficient capital to meet
operating and financing needs and those that are described from time
to time in NII Holdings' reports filed with the SEC, including NII
Holdings' annual report on Form 10-K for the year ended December 31,
2001 and their subsequent quarterly reports on Form 10-Q. This press
release speaks only as of its date, and NII Holdings disclaims any
duty to update the information herein.

NII HOLDINGS, INC. (DEBTOR-IN-POSSESSION) AND SUBSIDIARIES
(A Substantially Wholly Owned Subsidiary
of Nextel Communications, Inc.)

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
For the Nine and Three Months Ended September 30, 2002 and 2001
(in millions, except per share amounts)
Unaudited

Nine Months Three Months
Ended Ended
September 30, September 30,
----------------------------
2002 2001 2002 2001
----------------------------
Operating revenues $584 $486 $191 $186
----------------------------
Operating expenses
Cost of revenues 236 249 76 94
Selling, general and administrative 246 332 75 120
Impairment, restructuring and other
charges 16 147 1 147
Depreciation and amortization 58 174 20 60
----------------------------
556 902 172 421
----------------------------
Operating income (loss) 28 (416) 19 (235)

Interest expense (149) (221) (12) (74)
Interest income 4 11 1 3
Realized losses on investments -- (192) -- (188)
Foreign currency transaction losses, net (161) (71) (30) (16)
Reorganization items (136) -- (11) --
Other, net (6) (5) (5) (3)
----------------------------
Loss before income tax (provision) benefit (420) (894) (38) (513)
Income tax (provision) benefit (7) (39) 2 (39)
----------------------------
Net loss $(427) $(933) $(36) $(552)
============================
Net loss per common share, basic and
diluted $(1.58)$(3.44)$(0.13)$(2.04)
============================
Weighted average number of common shares
Outstanding 270 271 270 271
============================
Operating cash flow (1) 102 (95) 40 (28)
============================

(1) Operating cash flow represents income (loss) before interest,
taxes, depreciation and amortization, net foreign currency transaction
losses, and other charges determined to be non-recurring in nature,
such as reorganization items and impairment, restructuring and other
charges.

Nine Months Three Months
Ended Ended
September September
30, 30,
------------ -----------
2002 2001 2002 2001
------------ -----------

Net loss $(427)$(933) $(36)$(552)

Add back:
Income tax provision (benefit) 7 39 (2) 39
Other, net 6 5 5 3
Reorganization items 136 - 11 -
Foreign currency transaction
losses, net 161 71 30 16
Realized losses on investments - 192 - 188
Interest income (4) (11) (1) (3)
Interest expense 149 221 12 74
Depreciation and amortization 58 174 20 60
Impairment, restructuring and
other charges 16 147 1 147
------------ -----------

Operating cash flow $102 $(95) $40 $(28)
============ ===========

--30--EG/mi*

CONTACT: NII Holdings, Inc., Reston
Investor Relations:
Byron R. Siliezar, 703/390-5170
[email-masked]
or
Media Relations:
Claudia E. Restrepo, 786/251-7020
[email-masked]
http://www.nextelinternational.com

KEYWORD: VIRGINIA
INDUSTRY KEYWORD: TELECOMMUNICATIONS INTERNET ELECTRONIC
BANKING E-COMMERCE COMPUTERS/ELECTRONICS EARNINGS
SOURCE: NII Holdings, Inc.

©2002