Nextel Reports Record 2004 Results

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Nextel announced record 2004 financial results, including a 24% increase in 2004 revenue to $13.4 billion, a 22% increase in operating income before depreciation and amortization (OIBDA) to $5.1 billion and a 107% increase in income to $3.0 billion, as compared with 2003.
Nextel ended 2004 with approximately 16.2 million total subscribers, up 22% from the 13.3 million total subscribers at the end of 2003. At year-end, the subscriber base consisted of 15 million subscribers of Nextel branded service and 1.2 million subscribers of Boost Mobile branded prepaid service. During 2004, Nextel added 2.9 million total subscribers consisting of 2.2 million Nextel subscribers and 755,000 Boost Mobile subscribers. During the fourth quarter, Nextel added 955,000 total subscribers consisting of 595,000 Nextel subscribers and 360,000 Boost Mobile subscribers.
Total revenue for 2004 was $13.4 billion, up 24% over 2003. In the fourth-quarter 2004, total revenue was $3.6 billion, up 19% over the fourth-quarter 2003. Average revenue per user (ARPU) was $69 for the full year of 2004, consistent with 2003. In the fourth quarter, ARPU was $68. The monthly customer churn rate was 1.6% for the full year of 2004 and 1.5% for the fourth quarter, both unchanged from 2003.
Income available to common stockholders was $3.0 billion, or $2.69 per basic share in 2004, up 107% over 2003. In the fourth quarter, income available to common stockholders was $468 million, or $0.42 per basic share. OIBDA was $5.1 billion in 2004, up 22% over 2003. Fourth-quarter OIBDA was $1.33 billion, up 14% over the fourth quarter of 2003. Free cash flow was $1.5 billion in 2004, up 19% over 2003. Fourth-quarter free cash flow was $631 million, up 82% over the fourth quarter of 2003.
Capital expenditures were $574 million in the fourth quarter and $2.35 billion for the year. Total system minutes of use on the Nextel National Network increased 29% in 2004 to 130.2 billion. Fourth-quarter system minutes were 35.2 billion.
Nextel continued to strengthen its balance sheet with additional debt-for-debt exchanges and debt retirements during the fourth quarter. In a series of privately negotiated transactions, Nextel exchanged $255 million of its 9.375% notes and $414 million of its 9.5% notes for $154 million of its 6.875% notes and $592 million of its 5.95% notes. These exchanges will result in over $17 million of annualized cash interest savings. Additionally, Nextel retired a total of $577 million of long-term debt, including all of the remaining 9.375% notes on November 15, 2004 as previously announced. After giving effect to these de-leveraging activities, Nextel ended 2004 with $6.7 billion of net long-term debt, consisting of $8.5 billion of long-term debt and $1.8 billion of cash and short-term investments.
On January 28, 2005, Nextel entered into a new $2.2 billion secured term loan facility, the proceeds of which were used to refinance our then-existing $2.2 billion secured term loan E. The initial interest rate on the new term loan is set at LIBOR plus 75 basis points, reflecting a reduction of 150 basis points from the rate on the previous term loan E, and we expect this refinancing to generate about $30 million of interest savings in 2005. The existing $4 billion revolving credit facility remains in place unchanged and provides the $2.5 billion of capacity needed to obtain the letter of credit required by the FCC's 800 MHz Report and Order.