NII HOLDINGS, INC. (DEBTOR-IN-POSSESSION) AND SUBSIDIARIES

(A Substantially Wholly Owned Subsidiary of Nextel Communications, Inc.)

CONDENSED CONSOLIDATED BALANCE SHEETS

As of June 30, 2002 and December 31, 2001

(in thousands)

Unaudited

				2002			2001
ASSETS
Current assets
	Cash and cash equivalents			$	125,450		$	250,250
	Restricted cash				69,199			84,041
	Accounts receivable, less allowance for doubtful accounts of $14,547 and $24,277				97,646			116,819
	Handset and accessory inventory				14,379			24,486
	Prepaid expenses and other				76,487			75,506
			Total current assets		383,161			551,102
Property, plant and equipment, net of accumulated depreciation of $65,567 and $48,435					375,237			350,001
Intangible assets and other, net of accumulated amortization of $5,791 and $0 (note 1)					175,851			227,551
Other assets					65,532			115,766
				$	999,781		$	1,244,420
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Liabilities not subject to compromise
	Current liabilities
		Accounts payable		$	71,562		$	129,800
		Accrued expenses and other			167,833			172,057
		Deferred revenues			51,750			50,066
		Accrued interest			5,882			58,131
		Due to related parties			62,197			139,871
		Current portion of long-term debt (note 2)			100,769			2,665,144
			Total current liabilities		459,993			3,215,069
Deferred income taxes					14,543			15,134
Deferred revenues and other					34,357			36,367
			Total liabilities not subject to compromise		508,893			3,266,570
Liabilities subject to compromise (note 3)					2,856,411			—
Commitments and contingencies (note 7)
Stockholders’ deficit
	Series A exchangeable redeemable preferred stock, 11 shares issued and outstanding; accreted liquidation preference of $1,268,472 and $1,187,569				1,050,300			1,050,300
	Common stock, class B, 271,037 shares issued, 270,382 shares outstanding				271			271
	Paid-in capital				934,958			934,948
	Accumulated deficit				(4,165,663	)		(3,774,497	)
	Treasury stock, at cost, 655 shares				(3,275	)		(3,275	)
	Deferred compensation, net				(860	)		(903	)
	Accumulated other comprehensive loss				(181,254	)		(228,994	)
			Total stockholders’ deficit		(2,365,523	)		(2,022,150	)
				$	999,781		$	1,244,420

NII HOLDINGS, INC. (DEBTOR-IN-POSSESSION) AND SUBSIDIARIES

(A Substantially Wholly Owned Subsidiary of Nextel Communications, Inc.)

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

For the Six and Three Months Ended June 30, 2002 and 2001

(in thousands, except per share amounts)

Unaudited

		Six Months Ended						Three Months Ended
		June 30,						June 30,
		2002			2001			2002			2001
Operating revenues		$	393,011		$	299,817		$	193,930		$	160,661
Operating expenses
	Cost of revenues		160,387			155,132			79,716			84,369
	Selling, general and administrative		170,597			212,288			77,170			109,831
	Impairment, restructuring and other charges (note 4)		14,719			—			9,497			—
	Depreciation and amortization		37,986			113,493			20,630			57,840
			383,689			480,913			187,013			252,040
Operating income (loss)			9,322			(181,096	)		6,917			(91,379	)
Other income (expense)
	Interest expense (contractual interest of $166,185 and $86,455 in 2002)		(137,425	)		(146,662	)		(57,695	)		(74,132	)
	Interest income		2,634			7,678			1,057			2,953
	Realized losses on investments		—			(3,667	)		—			(3,667	)
	Foreign currency transaction losses, net		(130,461	)		(54,791	)		(58,982	)		(45,029	)
	Reorganization items (note 5)		(124,861	)		—			(124,861	)		—
	Other, net		(893	)		(2,599	)		1,032			(2,131	)
			(391,006	)		(200,041	)		(239,449	)		(122,006	)
Loss before income tax provision			(381,684	)		(381,137	)		(232,532	)		(213,385	)
Income tax provision			(9,482	)		(6	)		(4,085	)		(494	)
Net loss		$	(391,166	)	$	(381,143	)	$	(236,617	)	$	(213,879	)
Net loss per common share, basic and diluted		$	(1.45	)	$	(1.41	)	$	(0.88	)	$	(0.79	)
Weighted average number of common shares outstanding			270,382			271,025			270,382			271,025
Comprehensive loss, net of income tax
	Unrealized (loss) gain on available-for-sale securities, net of reclassification adjustment of $3,700 in 2001	$	—		$	(61,273	)	$	—		$	27,522
	Foreign currency translation adjustment		47,740			(58,388	)		21,608			(12,591	)
	Other comprehensive income (loss)		47,740			(119,661	)		21,608			14,931
	Net loss		(391,166	)		(381,143	)		(236,617	)		(213,879	)
		$	(343,426	)	$	(500,804	)	$	(215,009	)	$	(198,948	)

NII HOLDINGS, INC. (DEBTOR-IN-POSSESSION) AND SUBSIDIARIES

(A Substantially Wholly Owned Subsidiary of Nextel Communications, Inc.)

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ DEFICIT

For the Six Months Ended June 30, 2002

(in thousands)

Unaudited

		Series A				Class B																	Accumulated
		Preferred Stock				Common Stock									Treasury Stock								Other
										Paid-in		Accumulated								Deferred			Comprehensive
		Shares		Amount		Shares		Amount		Capital		Deficit			Shares		Amount			Compensation			Loss			Total
Balance, January 1, 2002			11	$	1,050,300		270,382	$	271	$	934,948	$	(3,774,497	)		655	$	(3,275	)	$	(903	)	$	(228,994	)	$	(2,022,150	)
	Net loss		—		—		—		—		—		(391,166	)		—		—			—			—			(391,166	)
	Other comprehensive income		—		—		—		—		—		—			—		—			—			47,740			47,740
	Deferred compensation		—		—		—		—		10		—			—		—			43			—			53
Balance, June 30, 2002.			11	$	1,050,300		270,382	$	271	$	934,958	$	(4,165,663	)		655	$	(3,275	)	$	(860	)	$	(181,254	)	$	(2,365,523	)

NII HOLDINGS, INC. (DEBTOR-IN-POSSESSION) AND SUBSIDIARIES

(A Substantially Wholly Owned Subsidiary of Nextel Communications, Inc.)

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Six Months Ended June 30, 2002 and 2001

(in thousands)

Unaudited

				2002			2001
Cash flows from operating activities
	Net loss			$	(391,166	)	$	(381,143	)
	Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
		Amortization of debt financing costs and accretion of senior redeemable discount notes			67,475			90,579
		Depreciation and amortization			37,986			113,493
		Provision for losses on accounts receivable			15,158			17,303
		Foreign currency transaction losses, net			130,461			54,791
		Reorganization items			124,311			—
		Impairment, restructuring and other charges			7,968			—
		Realized losses on investments			—			3,667
		Deferred income tax benefit			(632	)		(944	)
		Other, net			3,452			3,576
		Change in assets and liabilities:
			Accounts receivable		10,865			(50,945	)
			Handset and accessory inventory		8,689			(6,049	)
			Prepaid expenses and other assets		13,177			(15,303	)
			Accounts payable, accrued expenses and other		(1,155	)		61,761
			Net cash provided by (used in) operating activities		26,589			(109,214	)
Cash flows from investing activities
	Capital expenditures				(130,827	)		(364,605	)
	Payments for acquisitions, purchases of licenses and other				(719	)		(27,878	)
			Net cash used in investing activities		(131,546	)		(392,483	)
Cash flows from financing activities
	Proceeds from issuance of series A exchangeable redeemable preferred stock to parent				—			250,000
	(Repayments to) Borrowings from parent, net				(12,130	)		17,992
	Repayments under long-term credit facilities and other				(8,044	)		(17,060	)
	Transfers to restricted cash				—			(11,381	)
			Net cash (used in) provided by financing activities		(20,174	)		239,551
Effect of exchange rate changes on cash and cash equivalents					331			503
Net decrease in cash and cash equivalents					(124,800	)		(261,643	)
Cash and cash equivalents, beginning of period					250,250			473,707
Cash and cash equivalents, end of period				$	125,450		$	212,064