Subject: [NEXTEL-1] NII Holdings Announces Strong Performance For the Fourth Quarter and Full Year 2003

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Date: Thu, 26 Feb 2004 07:52:37 -0500

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Press Release

Source:
NII Holdings, Inc.

NII Holdings Announces Strong Performance For the Fourth Quarter and Full Year 2003
Thursday February 26, 6:16 am ET

* Subscriber Additions of 76,700 for the Quarter and 215,500 for the Year 2003

* Consolidated Fourth Quarter Operating Revenues of $264 Million and $939 Million for the Full Year

* Consolidated Operating Income Before Depreciation and Amortization of $62 Million for the Quarter and $248 Million for the Year

* Consolidated Net Income of $84 Million or $3.70 Per Basic Share for the Quarter and $173 Million or $8.22 Per Basic Share for the Year, Including the Recognition of $68 Million in Non-Cash Tax Benefits

* Year-End Consolidated Cash Balance of $405 Million

The Company Announces a 3-for-1 Stock Split and Issues Full Year 2004 Guidance

RESTON, Va., Feb. 26 /PRNewswire-FirstCall/ -- NII Holdings, Inc.
(Nasdaq: NIHD - News) today announced its consolidated financial results for the
fourth quarter and full year for 2003. For the fourth quarter 2003, the
Company reported consolidated operating revenues of $264 million, a 27%
increase over the same period last year, consolidated operating income before
depreciation and amortization of $62 million and consolidated operating income
of $36 million. The Company also reported consolidated net income of $84
million, or $3.70 per basic share, which included $68 million in non-cash
gains related to the reversal of certain deferred tax asset valuation reserves
and other non-cash income tax adjustments.

ADVERTISEMENT

Results for the full year 2003 included consolidated operating revenues of
$939 million, up 20% as compared to the previous year. The Company reported
operating income before depreciation and amortization of $248 million for the
year, a 61% increase over last year, and consolidated operating income of
$161 million, an increase of 107% over the same period last year. 2003
consolidated net income was $173 million or $8.22 per basic share, including
$68 million related to the recognition of non-cash tax benefits previously
mentioned. The Company also added about 215,500 net subscribers for the year.
As of December 31, 2003, NII Holdings reported approximately 1.46 million
subscribers and consolidated cash balances of $405 million.
"Operationally and financially, our results for the year significantly
exceeded expectations as we continued to execute our profitable growth
strategy," said Steve Shindler, NII Holdings' Chairman and CEO. "We
accelerated subscriber growth in the fourth quarter while continuing our focus
on profitability and improving our balance sheet during the year. For the
year, we significantly exceeded our initial growth goals and expectations,
both in terms of top line growth and cash flow, executing successfully against
our strategy. As we head into 2004, I have never felt more confident in our
company and the opportunities to continue to build long term value."
The Company also announced that its Board of Directors approved a 3-for-1
split of the Company's common stock, effected in the form of a dividend of two
shares for each outstanding share. The dividend will be paid on March 22,
2004 to shareholders of record as of March 12, 2004.
NII Holdings' average monthly revenue per subscriber (ARPU) was
approximately $55 for the fourth quarter and approximately $53 for the full
year 2003, up from $50 last year. The Company also announced its eighth
consecutive quarter of churn reduction, reporting average consolidated churn
of 2.0% in the fourth quarter down from 2.4% in the third quarter of 2003.
"We continued to drive churn lower in all of our markets, leading to churn
of 2.0% in the fourth quarter," said Shindler. "In mid 2003, we further
intensified our efforts toward our global customer satisfaction goals. These
continued efforts on churn reduction programs and customer for life programs
are proving to be successful, highlighted by a significant drop in churn in
our Brazilian market to 2.7% in the fourth quarter."
During the year, NII executed several financial transactions to
significantly improve its capital structure and reduce its exposure to foreign
exchange risks. In the third quarter of 2003, the Company raised about $288
million in net proceeds through the sale of 2 million shares of common stock
and the issuance of $180 million principal amount of 3.5% convertible notes
due 2033. The Company used the proceeds to repay $203 million principal
amount of its long-term credit facilities plus $6 million of accrued interest
at a total discounted cost of $186 million. Since the end of 2003, the
Company raised about $292 million in net proceeds through a 2 7/8% convertible
notes offering. Proceeds from this transaction were used to partially pay
down $73 million in vendor debt and will be used to complete a tender offer
for NII Holdings (Cayman) Ltd.'s 13% senior note obligations. To date, more
than 99% of the outstanding notes have been tendered. As a result of these
transactions, the Company expects to eliminate approximately $176 million in
future interest expense and substantially improve its financial and
operational flexibility.
"Throughout 2003, we took several steps to strengthen our liquidity,
improve our capital structure, and reduce our cost of capital," said Byron
Siliezar, Vice President and CFO. "The transactions we executed in the third
quarter of 2003 were well received by the capital markets and were
significantly oversubscribed. The Company's net debt position at year end now
stands at $130 million, which equates to a net debt to our 2003 operating
income before depreciation and amortization of 0.5 times compared to a net
debt position of $201 million at year-end 2002."
For the full year 2003, the Company also closed on several communication
tower sale-leasebacks in Mexico and Brazil under its previously announced
agreement with American Tower Corporation, raising $106 million in local
currency-based financing. These transactions are classified as long-term debt
on the Company's balance sheet. The Company's total long-term debt as of
December 31, 2003 was $535 million, including $101 million in tower financing
obligations.
Consolidated cash capital expenditures, including capitalized interest,
were $42 million during the fourth quarter of 2003 and $197 million for the
full year.

2004 Guidance
The Company also announced the following guidance for 2004.

* Net subscriber additions of 285,000 -- a 32% increase over 2003 net
additions
* Revenue of $1.2 billion -- a 28% increase over revenues in 2003
* Operating income before depreciation and amortization of
$320 million -- a 29% increase over 2003
* Cash capex of $225 million

This guidance is predicated on reasonably stable foreign exchange rates
and subscriber growth assumptions. Additionally, this guidance is forward
looking and is based upon management's current beliefs, as well as a number of
assumptions concerning future events, and as such, should be taken in the
context of the risks and uncertainties outlined in the SEC filings of NII
Holdings, Inc., including NII's annual report on Form 10-K for the year ended
December 31, 2002 and it's subsequent 2003 quarterly reports on Form 10-Q.
In addition to the results prepared in accordance with accounting
principles generally accepted in the United States (GAAP) provided throughout
this press release, NII has presented consolidated operating income before
depreciation and amortization, ARPU, net debt and cost per gross add (CPGA),
which are non-GAAP financial measures and should be considered in addition to,
but not as substitutes 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 table. To view these and
other reconciliations of non-GAAP financial measures that the Company uses and
information about how to access the conference call discussing NII's fourth
quarter results, visit the investor relations link at http://www.nii.com .
About NII Holdings, Inc.
NII Holdings, Inc., a publicly held company based in Reston, Va., is a
leading provider of mobile communications for business customers in Latin
America. NII Holdings, Inc. has operations in Argentina, Brazil, Mexico and
Peru, offering a fully integrated wireless communications tool with digital
cellular service, text/numeric paging, wireless Internet access and Nextel
Direct Connect®, a digital two-way radio feature. NII Holdings, Inc. trades
on the NASDAQ market under the symbol NIHD. Visit the Company's website at
http://www.nii.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 it currently believes 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' Annual Report on Form 10-K for the fiscal year ended December
31, 2002 and other reports filed from time to time with the Securities and
Exchange Commission. This press release speaks only as of its date, and NII
Holdings disclaims any duty to update the information herein.

Contacts:
Investor Relations: Tim Perrott
(703) 390-5113
[email-masked]

Media Relations: Claudia E. Restrepo
(786) 251-7020
[email-masked]

NII HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEARS AND THREE MONTHS ENDED DECEMBER 31, 2003 AND 2002 (1)
(in millions, except per share amounts)

Year Ended Three Months Ended
December 31, December 31,
2003 2002(2) 2003 2002(2)
Operating revenues
Service and other revenues $896 $748 $252 $199
Digital handset and accessory
revenues 43 32 12 8
939 780 264 207
Operating expenses
Cost of service (exclusive of
depreciation shown separately below) 240 195 70 44
Cost of digital handset and
accessory sales 134 107 43 29
Selling, general and administrative 317 309 89 69
Impairment, restructuring
and other charges -- 16 -- --
Depreciation 48 60 16 10
Amortization 39 15 10 7
778 702 228 159
Operating income 161 78 36 48
Other income (expense)
Interest expense (65) (162) (16) (13)
Interest income 11 6 4 3
Foreign currency transaction
gains (losses), net 7 (182) (4) (22)
Gain on extinguishment of debt, net 22 102 -- 102
Reorganization items, net -- 2,180 -- 2,316
Other expense, net (12) (11) (4) (2)
(37) 1,933 (20) 2,384
Income from continuing operations
before income tax benefit (provision) 124 2,011 16 2,432
Income tax benefit (provision) 49 (31) 68 (23)
Net income from continuing operations 173 1,980 84 2,409
Discontinued operations
Income from operations of Nextel
Philippines, net -- 18 -- 17
Income tax provision -- -- -- --
Income from discontinued operations -- 18 -- 17
Net income $173 $1,998 $84 $2,426
Net income from continuing operations
per common share, basic $8.22 N/A $3.70 N/A
Net income from discontinued
operations per common share, basic -- N/A -- N/A
Net income per common share, basic $8.22 N/A $3.70 N/A
Net income from continuing operations
per common share, diluted $7.63 N/A $3.49 N/A
Net income from discontinued
operations per common share, diluted -- N/A -- N/A
Net income per common share, diluted $7.63 N/A $3.49 N/A
Weighted average number of common
shares outstanding, basic 21,043 N/A 22,704 N/A
Weighted average number of common
shares outstanding, diluted 22,662 N/A 24,130 N/A

(1) As a result of the application of fresh-start accounting rules under
SOP 90-7 in 2002 and other events related to the Company's
reorganization, the Successor Company's financial statements for the
year ended December 31, 2003 are not fully comparable to the combined
Successor Company and Predecessor Company's financial statements for
the year ended December 31, 2002.

(2) The financial statements for the year and three months ended December
31, 2002 include the Predecessor Company's financial statements for
the ten months ended October 31, 2002 and one month ended October 31,
2002, respectively. See "Non-GAAP Reconciliations for the Years and
Three Months Ended December 31, 2003 and 2002" included in this
release.

CONSOLIDATED BALANCE SHEET DATA

December 31, December 31,
2003 2002

Cash and cash equivalents $405 $231
Accounts receivable, less allowance for
doubtful accounts of $9 and $7 121 101
Property, plant and equipment, net 369 230
Intangible assets, net 194 200
Total assets 1,234 849
Long-term debt, including current portion 537 432
Total liabilities 905 758
Stockholders' equity 329 91

NII HOLDINGS, INC. AND SUBSIDIARIES
OPERATING RESULTS AND METRICS
FOR THE YEARS AND THREE MONTHS ENDED DECEMBER 31, 2003 AND 2002 (1)

NII Holdings, Inc.
(subscribers in thousands)

Year Ended Three Months Ended
December 31, December 31,
2003 2002 (2) 2003 2002 (2)
Total digital subscribers (as of
December 31) 1,464 1,248 1,464 1,248
Net subscriber additions 216 86 77 29
Churn (%) 2.4 % 3.1 % 2.0 % 2.7 %

Average monthly revenue per
handset/unit in service (ARPU) $53 $50 $55 $52

Cost per gross add (CPGA) $338 $353 $349 $321

Nextel Mexico
(dollars in millions and subscribers in thousands)

Year Ended Three Months Ended
December 31, December 31,
2003 2002 (2) 2003 2002 (2)
Operating revenues
Service and other revenues $559 $432 $155 $129
Digital handset and accessory
revenues 19 15 6 5
578 447 161 134
Operating expenses
Cost of service 115 88 32 23
Cost of digital handset and
accessory sales 78 64 26 19
Selling, general and administrative 169 152 49 38
Depreciation and amortization 73 54 21 15
435 358 128 95
Operating income $143 $89 $33 $39

Total digital subscribers
(as of December 31) 658 517 658 517
Net subscriber additions 141 117 42 31
Churn (%) 2.1 % 2.6 % 1.9 % 2.2 %

ARPU $78 $78 $77 $84

CPGA $440 $464 $447 $426

Nextel Brazil
(dollars in millions and subscribers in thousands)

Year Ended Three Months Ended
December 31, December 31,
2003 2002 (2) 2003 2002 (2)
Operating revenues
Service and other revenues $138 $163 $39 $34
Digital handset and
accessory revenues 11 12 3 2
149 175 42 36
Operating expenses
Cost of service 57 65 18 11
Cost of digital handset and
accessory sales 28 23 9 5
Selling, general and administrative 50 69 12 12
Impairment, restructuring
and other charges -- 1 -- --
Depreciation and amortization 5 10 2 1
140 168 41 29
Operating income $9 $7 $1 $7

Total digital subscribers
(as of December 31) 384 394 384 394
Net subscriber (deactivations)
additions (10) (53) 13 (18)
Churn (%) 3.6 % 3.6 % 2.7 % 3.9 %

ARPU $29 $31 $33 $26

CPGA $234 $223 $250 $177

Nextel Argentina
(dollars in millions and subscribers in thousands)

Year Ended Three Months Ended
December 31, December 31,
2003 2002 (2) 2003 2002 (2)
Operating revenues
Service and other revenues $107 $71 $33 $15
Digital handset and accessory
revenues 11 4 3 1
118 75 36 16
Operating expenses
Cost of service 33 16 11 3
Cost of digital handset and
accessory sales 16 8 4 2
Selling, general and administrative 37 35 11 6
Impairment, restructuring
and other charges -- 9 -- 1
Depreciation and amortization 4 3 1 1
90 71 27 13
Operating income $28 $4 $9 $3

Total digital subscribers
(as of December 31) 275 207 275 207
Net subscriber additions 68 2 18 12
Churn (%) 1.2 % 3.5 % 1.1 % 1.9 %

ARPU $34 $29 $36 $23

CPGA $156 $177 $170 $139

Nextel Peru
(dollars in millions and subscribers in thousands)

Year Ended Three Months Ended
December 31, December 31,
2003 2002 (2) 2003 2002 (2)
Operating revenues
Service and other revenues $90 $81 $23 $21
Digital handset and
accessory revenues 2 2 -- 1
92 83 23 22
Operating expenses
Cost of service 34 25 9 7
Cost of digital handset and
accessory sales 11 12 3 3
Selling, general and administrative 26 25 7 7
Depreciation and amortization 4 5 1 --
75 67 20 17
Operating income $17 $16 $3 $5

Total digital subscribers
(as of December 31) 147 130 147 130
Net subscriber additions 17 20 4 3
Churn (%) 2.3 % 2.4 % 2.2 % 2.4 %

ARPU $51 $54 $49 $53

CPGA $333 $342 $336 $362

(1) For information regarding ARPU and CPGA, see "Non-GAAP Reconciliations
for the Years and Three Months Ended December 31, 2003 and 2002"
included in this release.

(2) The financial information for the year and three months ended December
31, 2002 include the Predecessor Company's financial information for
the ten months ended October 31, 2002 and one month ended October 31,
2002, respectively. See "Non-GAAP Reconciliations for the Years and
Three Months Ended December 31, 2003 and 2002" included in this
release.

NON-GAAP RECONCILIATIONS
FOR THE YEARS AND THREE MONTHS ENDED DECEMBER 31, 2003 AND 2002

Operating Income Before Depreciation and Amortization
Consolidated operating income before depreciation and amortization, or
OIBDA, represents operating income before depreciation and amortization
expense. Consolidated OIBDA is not a measurement under accounting principles
generally accepted in the United States, may not be similar to consolidated
OIBDA measures of other companies and should be considered in addition to, but
not as a substitute for, the information contained in our statements of
operations. We believe that consolidated OIBDA provides useful information to
investors because it is an indicator of operating performance, especially in a
capital intensive industry such as ours, since it excludes items that are not
directly attributable to ongoing business operations. Our consolidated OIBDA
calculations are commonly used as some of the bases for investors, analysts
and credit rating agencies to evaluate and compare the periodic and future
operating performance and value of companies within the wireless
telecommunications industry. Consolidated OIBDA can be reconciled to our
consolidated statements of operations as follows (in millions):

NII Holdings, Inc.

Year Ended Three Months Ended
December 31, December 31,
2003 2002 2003 2002

Consolidated operating income $161 $78 $36 $48
Consolidated depreciation 48 60 16 10
Consolidated amortization 39 15 10 7
Consolidated operating income
before depreciation
and amortization $248 $153 $62 $65

NII Holdings, Inc.
Guidance
Estimate
For the Year Ended
December 31,
2004
Consolidated operating income $207
Consolidated depreciation 71
Consolidated amortization 42
Consolidated operating income before
depreciation and amortization $320

Average Monthly Revenue Per Handset/Unit in Service (ARPU)
Average monthly revenue per handset/unit in service, or ARPU, is an
industry term that measures service revenues, which we refer to as subscriber
revenues, per period from our customers divided by the weighted average number
of handsets in commercial service during that period. ARPU is not a
measurement under accounting principles generally accepted in the United
States, may not be similar to ARPU measures of other companies and should be
considered in addition, but not as a substitute for, the information contained
in our statements of operations. We believe that ARPU provides useful
information concerning the appeal of our rate plans and service offerings and
our performance in attracting and retaining high value customers. Other
revenue includes revenues for such services as roaming, service and repair,
cancellation fees, analog and other. ARPU can be calculated and reconciled to
our consolidated statement of operations as follows (in millions, except
ARPU):

NII Holdings, Inc.

Year Ended Three Months Ended
December 31, December 31,
2003 2002 2003 2002

Service and other revenues $896 $748 $252 $199
Less: analog revenues (9) (11) (3) (2)
Less: other revenues (44) (23) (19) (7)
Total subscriber revenues $843 $714 $230 $190

ARPU calculated with subscriber
revenues $53 $50 $55 $52

ARPU calculated with service and
other revenues $57 $53 $60 $54

Nextel Mexico

Year Ended Three Months Ended
December 31, December 31,
2003 2002 2003 2002

Service and other revenues $559 $432 $155 $129
Less: analog revenues (5) (5) (2) (1)
Less: other revenues (21) (12) (10) (4)
Total subscriber revenues $533 $415 $143 $124

ARPU calculated with subscriber
revenues $78 $78 $77 $84

ARPU calculated with service and
other revenues $82 $81 $83 $88

Nextel Brazil

Year Ended Three Months Ended
December 31, December 31,
2003 2002 2003 2002

Service and other revenues $138 $163 $39 $34
Less: analog revenues (2) (3) -- (1)
Less: other revenues (5) (4) (2) (1)
Total subscriber revenues $131 $156 $37 $32

ARPU calculated with subscriber
revenues $29 $31 $33 $26

ARPU calculated with service and
other revenues $31 $32 $35 $27

Nextel Argentina

Year Ended Three Months Ended
December 31, December 31,
2003 2002 2003 2002

Service and other revenues $107 $71 $33 $15
Less: analog revenues -- -- -- --
Less: other revenues (12) (5) (5) (1)
Total subscriber revenues $95 $66 $28 $14

ARPU calculated with subscriber
revenues $34 $29 $36 $23

ARPU calculated with service and
other revenues $38 $31 $43 $25

Nextel Peru

Year Ended Three Months Ended
December 31, December 31,
2003 2002 2003 2002

Service and other revenues $90 $81 $23 $21
Less: analog revenues -- -- -- --
Less: other revenues (5) (4) (2) (1)
Total subscriber revenues $85 $77 $21 $20

ARPU calculated with subscriber
revenues $51 $54 $49 $53

ARPU calculated with service and
other revenues $55 $56 $53 $56

Cost per Gross Add (CPGA)
Cost per gross add, or CPGA, is an industry term that is calculated by
dividing our selling, marketing and handset and accessory subsidy costs,
excluding costs unrelated to initial customer acquisition, by our new
subscribers during the period, or gross adds. CPGA is not a measurement under
accounting principles generally accepted in the United States, may not be
similar to CPGA measures of other companies and should be considered in
addition, but not as a substitute for, the information contained in our
statements of operations. We believe CPGA is a measure of the relative cost
of customer acquisition. CPGA can be calculated and reconciled to our
consolidated statements of operations as follows (in millions, except CPGA):

NII Holdings, Inc.

Year Ended Three Months Ended
December 31, December 31,
2003 2002 2003 2002
Digital handset and accessory
revenues $43 $32 $12 $8
Less: cost of handset and
accessory sales 134 107 43 29
Handset subsidy costs 91 75 31 21
Selling and marketing 129 127 39 30
Costs per statement of operations 220 202 70 51
Less: costs unrelated to initial
customer acquisition (22) (14) (9) (4)
Customer acquisition costs $198 $188 $61 $47

Cost per Gross Add $338 $353 $349 $321

Nextel Mexico

Year Ended Three Months Ended
December 31, December 31,
2003 2002 2003 2002
Digital handset and accessory
revenues $19 $15 $6 $5
Less: cost of handset and
accessory sales 78 64 26 19
Handset subsidy costs 59 49 20 14
Selling and marketing 81 79 25 20
Costs per statement of operations 140 128 45 34
Less: costs unrelated to initial
customer acquisition (15) (8) (6) (3)
Customer acquisition costs $125 $120 $39 $31

Cost per Gross Add $440 $464 $447 $426

Nextel Brazil

Year Ended Three Months Ended
December 31, December 31,
2003 2002 2003 2002
Digital handset and accessory
revenues $11 $12 $3 $2
Less: cost of handset and
accessory sales 28 23 9 5
Handset subsidy costs 17 11 6 3
Selling and marketing 22 23 7 4
Costs per statement of operations 39 34 13 7
Less: costs unrelated to initial
customer acquisition (5) (4) (2) --
Customer acquisition costs $34 $30 $11 $7

Cost per Gross Add $234 $223 $250 $177

Nextel Argentina

Year Ended Three Months Ended
December 31, December 31,
2003 2002 2003 2002
Digital handset and accessory
revenues $11 $4 $3 $1
Less: cost of handset and accessory
sales 16 8 4 2
Handset subsidy costs 5 4 1 1
Selling and marketing 11 11 4 2
Costs per statement of operations 16 15 5 3
Less: costs unrelated to initial
customer acquisition -- -- -- --
Customer acquisition costs $16 $15 $5 $3

Cost per Gross Add $156 $177 $170 $139

Nextel Peru
Year Ended Three Months Ended
December 31, December 31,
2003 2002 2003 2002
Digital handset and accessory
revenues $2 $2 $1 $1
Less: cost of handset and
accessory sales 11 12 3 3
Handset subsidy costs 9 10 2 2
Selling and marketing 11 10 3 2
Costs per statement of operations 20 20 5 4
Less: costs unrelated to initial
customer acquisition (1) (1) (1) --
Customer acquisition costs $19 $19 $4 $4

Cost per Gross Add $333 $342 $336 $362

Net Debt
Net debt represents total long-term debt less cash and cash equivalents.
Net debt to consolidated operating income before depreciation and amortization
represents net debt divided by consolidated operating income before
depreciation and amortization. Net debt is not a measurement under accounting
principles generally accepted in the United States, may not be similar to net
debt measures of other companies and should be considered in addition to, but
not as a substitute for, the information contained in our balance sheets. We
believe that net debt and net debt to consolidated operating income before
depreciation and amortization provide useful information concerning our
liquidity and leverage. Net debt as of December 31, 2003 and 2002 can be
calculated as follows (in millions):

NII Holdings, Inc.
December 31,
2003 2002

Total long-term debt $535 $432
Less: cash and cash equivalents (405) (231)
Net debt $130 $201

Net debt to 2003 consolidated operating income before depreciation and
amortization and net debt to 2003 consolidated operating income are as
follows:

NII Holdings, Inc.

Net debt to 2003 consolidated operating income before
depreciation and amortization 0.5
Net debt to 2003 consolidated operating income 0.8

Results of Operations for the Combined Year and Three Months Ended
December 31, 2002
The results of operations for the year and three months ended December 31,
2002 represents a combination of the Predecessor Company's results of
operations for the ten months and one month ended October 31, 2002,
respectively, and the Successor Company's results of operations for the two
months ended December 31, 2002. The results of operations for the combined
year and three months ended December 31, 2002 are not measurements under
accounting principles generally accepted in the United States, may not be
similar to these measures of other companies and should be considered in
addition to, but not as a substitute for, the information contained in our
statements of operations. We believe the results of operations for the year
and three months ended December 31, 2002 provides useful information to
investors because it allows for the best comparison to the results of
operations of full-year prior periods. The results of operations for the year
and three months ended December 31, 2002 can be calculated and reconciled to
our consolidated statements of operations as follows (in millions):

NII Holdings, Inc.

Successor Predecessor
Company Company
Two Months Ten Months Combined
Ended Ended Year Ended
December 31, October 31, December 31,
2002 2002 2002
Operating revenues
Service and other revenues $138 $610 $748
Digital handset and
accessory revenues 5 27 32
143 637 780
Operating expenses
Cost of service (exclusive of
depreciation shown separately
below) 30 165 195
Cost of digital handset
and accessory sales 19 88 107
Selling, general and
administrative 47 262 309
Impairment, restructuring
and other charges -- 16 16
Depreciation 5 55 60
Amortization 6 9 15
107 595 702
Operating income 36 42 78
Other income (expense)
Interest expense (10) (152) (162)
Interest income 2 4 6
Foreign currency transaction
gains (losses), net 1 (183) (182)
Gain on extinguishment of
debt, net -- 102 102
Reorganization items, net -- 2,180 2,180
Other expense, net (1) (10) (11)
(8) 1,941 1,933
Income from continuing
operations before income tax
provision 28 1,983 2,011
Income tax provision (5) (26) (31)
Net income from continuing
operations 23 1,957 1,980
Discontinued operations
Income (loss) from operations of
Nextel Philippines, net 20 (2) 18
Income tax provision -- -- --
Income (loss) from
discontinued operations 20 (2) 18
Net income $43 $1,955 $1,998

Successor Predecessor
Company Company Combined
Two Months One Month Three Months
Ended Ended Ended
December 31, October 31, December 31,
2002 2002 2002
Operating revenues
Service and other revenues $138 $61 $199
Digital handset and
accessory revenues 5 3 8
143 64 207
Operating expenses
Cost of service (exclusive of
depreciation shown separately 30 14 44
below)
Cost of digital handset
and accessory sales 19 10 29
Selling, general and
administrative 47 22 69
Impairment, restructuring
and other charges -- -- --
Depreciation 5 5 10
Amortization 6 1 7
107 52 159
Operating income 36 12 48
Other income (expense)
Interest expense (10) (3) (13)
Interest income 2 1 3
Foreign currency
transaction gains
(losses), net 1 (23) (22)
Gain on extinguishment of
debt, net -- 102 102
Reorganization items, net -- 2,316 2,316
Other expense, net (1) (1) (2)
(8) 2,392 2,384
Income from continuing
operations before
income tax provision 28 2,404 2,432
Income tax provision (5) (18) (23)
Net income from continuing
operations 23 2,386 2,409
Discontinued operations
Income (loss) from
operations of Nextel
Philippines, net 20 (3) 17
Income tax provision -- -- --
Income (loss) from
discontinued operations 20 (3) 17
Net income $43 $2,383 $2,426

Nextel Mexico

Successor Predecessor
Company Company
Two Months Ten Months Combined
Ended Ended Year Ended
December 31, October 31, December 31,
2002 2002 2002
Operating revenues
Service and other revenues $92 $340 $432
Digital handset and
accessory revenues 3 12 15
95 352 447
Operating expenses
Cost of service (exclusive of
depreciation shown separately
below) 16 72 88
Cost of digital handset
and accessory sales 13 51 64
Selling, general and
administrative 25 127 152
Depreciation and amortization 10 44 54
64 294 358
Operating income $31 $58 $89

Successor Predecessor
Company Company Combined
Two Months One Month Three Months
Ended Ended Ended
December 31, October 31, December 31,
2002 2002 2002
Operating revenues
Service and other revenues $92 $37 $129
Digital handset and
accessory revenues 3 2 5
95 39 134
Operating expenses
Cost of service (exclusive of
depreciation shown separately
below) 16 7 23
Cost of digital handset
and accessory sales 13 6 19
Selling, general and
administrative 25 13 38
Depreciation and amortization 10 5 15
64 31 95
Operating income $31 $8 $39

Nextel Brazil

Successor Predecessor
Company Company
Two Months Ten Months Combined
Ended Ended Year Ended
December 31, October 31, December 31,
2002 2002 2002
Operating revenues
Service and other revenues $21 $142 $163
Digital handset and
accessory revenues 1 11 12
22 153 175
Operating expenses
Cost of service
(exclusive of depreciation
shown separately below) 7 58 65
Cost of digital handset
and accessory sales 3 20 23
Selling, general and
administrative 8 61 69
Impairment, restructuring
and other charges -- 1 1
Depreciation and amortization -- 10 10
18 150 168
Operating income $4 $3 $7

Successor Predecessor
Company Company Combined
Two Months One Month Three Months
Ended Ended Ended
December 31, October 31, December 31,
2002 2002 2002
Operating revenues
Service and other revenues $21 $13 $34
Digital handset and
accessory revenues 1 1 2
22 14 36

Operating expenses
Cost of service
(exclusive of depreciation
shown separately below) 7 4 11
Cost of digital handset
and accessory sales 3 2 5
Selling, general and
administrative 8 4 12
Impairment, restructuring
and other charges -- -- --
Depreciation and amortization -- 1 1
18 11 29
Operating income 4 3 7

Nextel Argentina

Successor Predecessor
Company Company
Two Months Ten Months Combined
Ended Ended Year Ended
December 31, October 31, December 31,
2002 2002 2002
Operating revenues
Service and other revenues $ 10 $61 $71
Digital handset and
accessory revenues 1 3 4
11 64 75
Operating expenses
Cost of service
(exclusive of depreciation
shown separately below) 2 14 16
Cost of digital handset
and accessory sales 2 6 8
Selling, general and
administrative 4 31 35
Impairment, restructuring
and other charges -- 9 9
Depreciation and amortization 1 2 3
9 62 71
Operating income $ 2 $2 $4

Successor Predecessor
Company Company Combined
Two Months One Month Three Months
Ended Ended Ended
December 31, October 31, December 31,
2002 2002 2002
Operating revenues
Service and other revenues $10 $5 $15
Digital handset and
accessory revenues 1 -- 1
11 5 16
Operating expenses
Cost of service
(exclusive of depreciation
shown separately below) 2 1 3
Cost of digital handset
and accessory sales 2 -- 2
Selling, general and
administrative 4 2 6
Impairment, restructuring
and other charges -- 1 1
Depreciation and amortization 1 -- 1
9 4 13
Operating income $2 $1 $3

Nextel Peru

Successor Predecessor
Company Company
Two Months Ten Months Combined
Ended Ended Year Ended
December 31, October 31, December 31,
2002 2002 2002
Operating revenues
Service and other revenues $ 14 $67 $81
Digital handset and
accessory revenues 1 1 2
15 68 83
Operating expenses
Cost of service
(exclusive of depreciation
shown separately below) 5 20 25
Cost of digital handset
and accessory sales 2 10 12
Selling, general and
administrative 5 20 25
Depreciation and amortization -- 5 5
12 55 67
Operating income $ 3 $13 $16

Successor Predecessor
Company Company Combined
Two Months One Month Three Months
Ended Ended Ended
December 31, October 31, December 31,
2002 2002 2002
Operating revenues
Service and other revenues $14 $7 $21
Digital handset and
accessory revenues 1 -- 1
15 7 22
Operating expenses
Cost of service
(exclusive of depreciation
shown separately below) 5 2 7
Cost of digital handset
and accessory sales 2 1 3
Selling, general and
administrative 5 2 7
Depreciation and amortization -- -- --
12 5 17
Operating income $3 $2 $5

Source:
NII Holdings, Inc.

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