NII Holdings Inc. Annual Report 2014

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FY2014 Annual Report · NII Holdings Inc.

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2014
or

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 0-32421
NII HOLDINGS, INC.
(Exact name of registrant as specified in its charter)

Delaware
(State or other jurisdiction of
incorporation or organization)
1875 Explorer Street, Suite 800
Reston, Virginia
(Address of principal executive offices)

91-1671412
(I.R.S. Employer Identification No.)

20190
(Zip Code)

Registrant’s telephone number, including area code: (703) 390-5100

Securities registered pursuant to Section 12(g) of the Act:
Common Stock, par value $0.001 per share

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the

Act. Yes

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities

Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and
(2) has been subject to such filing requirements for the past 90 days. Yes

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every

Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the
preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be

contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K.

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller
reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the
Exchange Act. (Check one):

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

(Do not check if a smaller
reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes

State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price

at which the common equity was last sold, or the average bid and asked price of such common equity, as of June 30, 2014: $94,798,954

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the

Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes

Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date.

Title of Class
Common Stock, $0.001 par value per share

Number of Shares Outstanding

on February 28, 2015
172,363,259

Page

101

Item

1.
Business
1A. Risk Factors
1B. Unresolved Staff Comments
2.

Properties

3.
Legal Proceedings
4. Mine Safety Disclosures

NII HOLDINGS, INC.

TABLE OF CONTENTS

Description
PART I

PART II

Selected Financial Data

5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
6.
7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
7A. Quantitative and Qualitative Disclosures About Market Risk
8.

Financial Statements and Supplementary Data

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

9.
9A. Controls and Procedures
9B. Other Information

PART III

10. Directors, Executive Officers of the Registrant and Corporate Governance
11. Executive Compensation
12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
13. Certain Relationships and Related Transactions, and Director Independence
14. Principal Accountant Fees and Services

15. Exhibits, Financial Statement Schedules

PART IV

Item 1.

Business

Corporate History

PART I

We were originally organized in 1995 as a holding company for the operations of Nextel Communications, Inc. in selected
international markets. The corporation that is currently known as NII Holdings, Inc. was incorporated in Delaware in 2000 as
Nextel International, Inc. In December 2001, we changed our name from Nextel International, Inc. to NII Holdings, Inc. Our
principal executive office is located at 1875 Explorer Street, Suite 800, Reston, Virginia 20190. Our telephone number at that
location is (703) 390-5100. Unless the context requires otherwise, “NII Holdings, Inc.,” “NII Holdings,” “we,” “our,” “us” and
“the Company” refer to the combined businesses of NII Holdings, Inc. and its consolidated subsidiaries. We refer to our operating
companies by the countries in which they operate, such as Nextel Brazil, Nextel Mexico and Nextel Argentina. For financial
information about our operating companies, see Note 15 to our consolidated financial statements included at the end of this annual
report on Form 10-K.

Except as otherwise indicated, all amounts are expressed in United States, or U.S., dollars and references to “dollars” and
“$” are to U.S. dollars. All historical financial statements contained in this report are prepared in accordance with accounting
principles generally accepted in the U.S.

Business Update

Chapter 11 Filing

On September 15, 2014, NII Holdings, Inc. and eight of its U.S. and Luxembourg-domiciled subsidiaries, including NII
Capital Corp. and Nextel International Telecom, S.C.A, or NIIT, filed voluntary petitions seeking relief under Chapter 11 of Title
11 of the United States Bankruptcy Code, which we refer to as Chapter 11, in the United States Bankruptcy Court for the Southern
District of New York, which we refer to as the Bankruptcy Court. Since September 15, 2014, five additional subsidiaries of NII
Holdings, Inc. have filed voluntary petitions seeking relief under Chapter 11 in the Bankruptcy Court, with four subsidiaries filing
on October 8, 2014 and one subsidiary filing on January 25, 2015. The entities that have filed petitions seeking relief under Chapter
11, which we refer to collectively as the debtors, continue to operate as "debtors-in-possession" under the jurisdiction of the
Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code and orders of the Bankruptcy Court.
Our operating subsidiaries in Brazil, Mexico and Argentina are not debtors in the Chapter 11 cases.

Under Chapter 11, we are permitted to continue to operate our business and manage our properties in the ordinary course of
business without prior approval from the Bankruptcy Court. Transactions outside the ordinary course of business proposed to be
undertaken by any of the debtors, including certain types of capital expenditures, as well as certain sales of assets, certain requests
for additional financings and certain other arrangements, including material changes to agreements and employee compensation
arrangements, require approval by the Bankruptcy Court. There can be no assurance that the Bankruptcy Court will grant any
requests for such approvals. On October 14, 2014, the Bankruptcy Court issued a final order permitting us to pay pre-petition
salaries, wages and benefits to all employees of our debtor entities and authorized the payment of certain other pre-petition claims,
in limited circumstances, to avoid undue disruption to our operations.

On November 24, 2014, certain of the holders of the senior notes issued by NII Capital Corp. and NIIT, certain other creditors
and the official committee of unsecured creditors appointed in the Chapter 11 cases, which we refer to as the Committee, reached
agreement regarding the terms of a plan of reorganization, which we refer to as the Original Plan, and the debtors, consenting
parties and the Committee entered into a plan support agreement, which we refer to as the Original PSA, that governed the respective
parties' obligations in connection with the formulation and filing of, and the solicitation of votes with respect to, the Original Plan.
The Original Plan and a related disclosure statement were filed with the Bankruptcy Court on December 22, 2014. As described
below, on January 26, 2015, NII Holdings, Inc. and certain of its subsidiaries entered into a purchase and sale agreement with an
indirect subsidiary of AT&T, Inc., or AT&T, for the sale of our Mexico operations, which we refer to as Nextel Mexico. The
agreement to sell Nextel Mexico is inconsistent with the terms of the Original PSA and the Original Plan, and as a result, NII
Holdings, Inc. exercised its right to terminate the Original PSA.

in connection with the formulation, filing and solicitation of votes with respect to the Revised PSA. The Revised Plan will provide
for, among other things, the distribution of a portion of the net proceeds of the sale of Nextel Mexico to holders of the senior notes
issued by NII Capital Corp. and NIIT and for the conversion of the remaining balance of these senior notes into equity interests
in the reorganized company. The Revised Plan will also include a settlement of certain estate claims and claims related to the
purported release of certain guarantees of our NII Capital Corp. senior notes due 2016 and 2019. The terms of the Revised PSA
do not provide for any return of value to equity holders. In addition, the Revised PSA requires, among other things, (i) the plan
proponents to file and solicit votes on the Revised Plan; (ii) the consenting parties to vote in favor of and otherwise support the
Revised Plan; and (iii) the parties thereto to use commercially reasonable efforts to obtain confirmation of the Revised Plan and
consummate the transactions contemplated under the plan term sheet that is part of the Revised PSA. The Revised PSA may be
terminated under various circumstances, including if the Revised Plan is not confirmed or is not confirmed by specified dates.

The Revised PSA also contemplates that certain of our creditors will provide up to $350.0 million in bridge loan financing
while our Chapter 11 case is pending that would remain outstanding in order to provide us with the additional liquidity necessary
to fund our business plan until the sale of Nextel Mexico is completed.

Proposed Sale of Mexico Operations

The purchase agreement provides that approximately $32.0 million of the purchase price will be deposited and held in escrow
to secure specified obligations of AT&T under the purchase agreement. The purchase agreement also provides that $187.5 million
of the purchase price will be held in escrow for two years in case of breaches by Nextel Mexico of representations, warranties and
covenants.

The sale transaction is being implemented pursuant to Section 363 of the Bankruptcy Code and is subject to higher or better
offers in accordance with bidding procedures approved by, and under the supervision of, the Bankruptcy Court. AT&T may
terminate the purchase agreement if the hearing before the Bankruptcy Court with respect to the sale does not occur by March 23,
2015. The successful bidder in the auction process contemplated by the bidding procedures will be required to complete the
transactions contemplated by the purchase agreement in accordance with its terms. In addition, if AT&T is not the successful
bidder, NII Holdings will be required to pay AT&T a termination fee equal to approximately $32.0 million, reimburse up to $10.0
million of AT&T's expenses and return the deposit.

Completion of the sale is subject to several conditions, including: (i) the Bankruptcy Court having entered all appropriate
orders; (ii) obtaining all required governmental approvals; (iii) the absence of a material adverse effect on Nextel Mexico; and
(iv) certain other customary conditions. Assuming the successful sale of Nextel Mexico, we plan to focus our financial and other
resources on our core operation in Brazil. We expect the sale transaction to be completed by mid-2015.

Argentina, Peru and Chile Operations

In an effort to focus our capital resources on our key markets, in August 2014, our wholly-owned subsidiaries, NII Mercosur
Telecom, S.L., NII Mercosur Moviles, S.L. and NII International Telecom S.C.A., completed the sale of all of the outstanding
equity interests of our wholly-owned subsidiary, Nextel Chile S.A., or Nextel Chile, to Fucata, S.A., or Fucata, for a de minimus
amount. In connection with the sale of Nextel Chile to Fucata, we have reported Nextel Chile as a discontinued operation in this
annual report on Form 10-K. Accordingly, we have reclassified Nextel Chile's results of operations for all periods presented to
reflect Nextel Chile as discontinued operations. Unless otherwise noted, amounts included in this annual report on Form 10-K
exclude amounts attributable to the discontinued operations of Nextel Chile and Nextel del Peru, S.A., or Nextel Peru, which we
sold to Empresa Nacional de Telecomunicaciones S.A. and one of its subsidiaries, Entel Inversiones, S.A., which we refer to
collectively as Entel, in August 2013. While we continue to support our operation in Argentina, in light of our results of operations
and this change in emphasis, we are actively pursuing strategic options such as partnerships, service arrangements and asset sales
in an effort to maximize Nextel Argentina's value.

Business Overview

We provide wireless communication services under the NextelTM brand. Historically, our services were targeted to meet the
needs of business customers and individuals who used our services to meet both professional and personal needs. With the
deployment of our wideband code division multiple access, or WCDMA, networks in our markets, our target market has expanded
to include both business subscribers and consumers who exhibit above average usage, revenue and loyalty characteristics and who
we believe will be attracted to the services and attractive pricing plans we offer, the quality of and data speeds provided by our
WCDMA networks and the quality of our customer service.

We provide our services through operating companies located in Brazil, Mexico and Argentina, with our principal operations
located in major business centers and related transportation corridors of these countries. We provide services in major urban and
suburban centers with high population densities where we believe there is a concentration of the country’s business users and
economic activity. We believe that the growing economic base, increase in the middle and upper class and lower wireline service
penetration encourage the use of the mobile wireless communications services that we offer and plan to offer in the future. Our
WCDMA networks in Brazil and Mexico serve these major business centers and, in some instances, a broader geographic area in
order to meet the requirements of our spectrum licenses. We also utilize roaming arrangements to expand the geographic coverage
of our WCDMA-based services in Brazil and Mexico.

Our original networks utilize integrated digital enhanced network, or iDEN, technology developed by Motorola, Inc. to
provide mobile services on our 800 megahertz, or MHz, spectrum holdings in all of our markets. Our next generation networks
utilize WCDMA technology, which is a standards-based technology that is being deployed by carriers throughout the world. We
also offer long-term evolution, or LTE, services in Rio de Janeiro in Brazil and in certain cities in Mexico. These technologies
allow us to use our spectrum efficiently and offer multiple wireless services integrated into a variety of handset and data devices.

The services we currently offer include:

•

mobile telephone voice service;

wireless data services, including text messaging services, mobile internet services and email services;

push-to-talk services, including Direct Connect®, Prip and International Direct Connect® services, which allow
subscribers to talk to each other instantly;

other value-added services, including location-based services, which include the use of Global Positioning System,
or GPS, technologies; digital media services; and a wide ranging set of applications available via our content
management system, as well as the AndroidTM open application market;

business solutions, such as security, work force management, logistics support and other applications that help our
business subscribers improve their productivity; and

voice and data roaming services outside of our coverage areas.

The deployment and expansion of our WCDMA networks in Brazil and Mexico enables us to offer a wider range of products
and services that are supported by that technology, including data services provided at substantially higher speeds than can be
delivered on our iDEN networks. These WCDMA networks also support our unique push-to-talk services that provide
differentiation from our competitors' offerings. In the third quarter of 2013, our WCDMA network reached geographic coverage
parity with our iDEN network in Mexico, and in Brazil we are currently offering services supported by our WCDMA network in
about 260 cities, including cities in and around Sao Paulo and Rio de Janeiro. In the second quarter of 2014, we launched LTE
services in Rio de Janeiro, and during the fourth quarter of 2014, we began offering similar LTE services in certain cities in Mexico.
We also offer service on our iDEN network in Argentina and continue to provide services on our iDEN networks in Brazil and
Mexico.

As a result of our transition to WCDMA and LTE-based networks, we are able to offer a substantially broader range of
services and devices that support our services, including our push-to-talk services, data services and, in some cases, both. For
example, our Prip service, which is currently available in Brazil and Mexico, expands the availability of our push-to-talk services
to a wider range of handsets.

Our transition to standards-based technologies also gives us more flexibility to offer customers the option of purchasing
services by acquiring the subscriber identity module, or SIM, cards from us separately, and by providing the customer with the
option to use the SIM cards in one or more devices that they acquire from us or from other sources.

As illustrated in the table below, as of December 31, 2014, our operating companies had about 9.2 million subscriber units
in commercial service, which represented a decrease of about 61 thousand, or 1%, from December 31, 2013. We refer to these
subscriber units in commercial service collectively as our subscriber base.

Country

Brazil (1)

Mexico (1)

Argentina

Total

Subscriber Units in
Commercial Service

As of December 31,

2014

2013

(in thousands)

4,341.5

2,888.5

1,954.4

9,184.4

3,958.2

3,264.5

2,023.1

9,245.8

_______________________________________
(1) Includes subscriber units on both our WCDMA and iDEN networks.

Operating Strategy

Our goal is to generate higher revenues and increase our subscriber base by providing differentiated wireless communications
services that are valued by our existing and potential customers while improving our profitability and cash flow over the long
term. Our strategy for achieving this goal is based on several core principles, including:

•

focusing on higher value customer segments in our core markets, such as segments that comprise the small, medium and
large business markets, as well as certain consumer market segments that value our differentiated wireless communications
services;

• expanding our service offerings to meet the needs of a broader range of potential customers, including by offering lower

cost prepaid service plans;

• offering a broad array of differentiated services and devices that build upon and complement our push-to-talk services,

which give our customers the ability to communicate with each other instantly;

• offering new services supported by high quality WCDMA networks;

• offering a superior customer experience; and

• building on the strength of the unique positioning of the Nextel brand.

To enhance our service offerings, we have deployed and are continuing to enhance our networks that utilize WCDMA and
LTE technologies. These networks enable us to offer a wider variety of applications and services, particularly applications and
services that are supported by high speed data and internet access; increase our network capacity; and ultimately reduce the costs
of supporting the services we offer when compared to our original iDEN networks. We plan to continue to focus on our current
high value subscriber base using the differentiated services available on both our networks and to expand our targeted subscriber
base using the handsets and devices, service offerings, applications and pricing plans made possible by our WCDMA networks.

Historically, we have focused on postpaid rate plans. With the expansion of our target customer base, we have been offering
more prepaid rate plans in Mexico and Argentina and hybrid rate plans that combine both postpaid and prepaid features. We expect
our sales of these types of service plans to continue to increase.

We are also utilizing domestic and international roaming agreements, including the roaming arrangements with Telefonica
in Brazil and Mexico, to cost effectively expand our service to areas in our markets that we do not currently serve or plan to serve
using our own networks and to provide our customers with services when they travel to other countries.

We believe that the wireless communications industry in the markets in which we operate has been and will continue to be
highly competitive on the basis of price, the types of services offered, the diversity of handsets and other devices offered, speed
of data access and quality of service. In each of our markets, we compete with at least two large, well-capitalized competitors with
substantial financial and other resources. Our competitors typically have more extensive distribution channels than ours or are
able to use their scale advantages to acquire subscribers at a lower cost than we can, and most of them have implemented network
technology upgrades that support high speed internet access and data services that are similar to the services supported by our
WCDMA networks, making it more difficult for us to compete effectively using our iDEN networks. Some of these competitors
also have the ability to offer bundled telecommunications services that include local, long distance, subscription television and
data services, and can offer a larger variety of handsets and other devices with a wide range of prices, brands and features. In
addition, the financial strength and operating scale of some of these competitors allows them to offer aggressive pricing plans,
including those targeted at attracting our existing subscribers.

We compete with other communications service providers, including other wireless communications companies and wireline
telephone companies, based primarily on our high quality customer service and differentiated wireless service offerings and
products, including our push-to-talk services that make it easier for our subscribers to communicate quickly and efficiently. We
continue to use this differentiated approach as we offer services on our WCDMA networks and pursue our plans to extend our
target market with an expanded message that focuses on the quality and speed of the data services supported by these networks.
In recent years, our largest competitors have increasingly focused their marketing efforts on attracting postpaid subscribers within
our target segments by, among other things, enhancing their network quality and their customer service and customer care functions,
which may minimize the value of our network quality and speed (for our WCDMA networks) and the quality of our customer
service as points of differentiation. Since our iDEN network does not support high speed data applications, we are experiencing
higher levels of migrations to lower price rate plans both within our iDEN network and from our iDEN network to our WCDMA
network.

We believe that the users who primarily make up our targeted subscriber base are likely to base their purchase decisions on
network quality and quality of customer support, as well as on the availability of differentiated features and services that make it
easier for them to communicate quickly, efficiently and economically. However, because pricing is one of a number of important
factors in potential customers' purchase decisions, increased price competition in the customer segments we target could require
us to decrease prices or increase service and product offerings, which would lower our revenues, increase our costs or both.

To address competitive pressures, we have, among other things:

•

realigned our distribution channels to make our services more widely accessible to a broader range of customers;

refreshed and tailored our marketing approach to this broader set of customers, especially consumers, to make them
aware of our new services and capabilities, our broader range of available handsets and devices, and the quality and
performance of our networks;

worked with device suppliers to develop new handset models and features supported by our WCDMA networks,
including devices and smartphones from suppliers like Samsung, LG, Sony, Alcatel, Huawei, Motorola Mobility and
Apple;

launched commercial campaigns offering handsets at a lower cost and offering service plans with prices and terms that
are more competitive, including prepaid and hybrid rate plans;

implemented customer retention programs that are focused on our high value customers that include lower priced plans
that better fit our customers' needs and/or provide them with new handsets or other devices at reduced prices in exchange
for their commitment to extend the term of their service contracts; and

developed and launched a high performance push-to-talk service, which we refer to as Prip, which operates on a wide
range of standard smartphones on our WCDMA networks.

We have made significant capital and other investments as we pursue our plans to deploy networks that utilize WCDMA
and LTE technologies in Brazil and Mexico. These investments have increased our costs and negatively impacted our profitability
and are expected to continue to have that impact as we incur the costs of the networks that utilize these new technologies while
building the subscriber base served by them. However, we believe that our investments in these networks have enhanced, and will
continue to enhance, the competitiveness of our service offerings while continuing to support the differentiated services and
superior customer service that have historically been significant factors supporting our business.

In addition, we have implemented and will continue to implement changes in our business to better align our organization
and costs with our operational and financial goals, as well as with the current trends in our business. These changes have included
significant reductions in our headquarters staff in connection with the reorganization of the roles and responsibilities of our
headquarters and market teams, as well as significant headcount reductions across all of our market operations designed to reduce
costs while maintaining the support necessary to meet our customers' needs. We are also taking steps to improve the performance
and efficiency of our supporting systems and functions, including implementing improvements to our information technology and
related supporting systems and processes, that are designed to improve the overall quality and efficiency of the service we provide
to our customers.

Our Products, Services and Solutions

We offer a wide range of wireless communications services and related subscriber equipment, as well as a variety of service
plans with different rate plan structures and bundles that are designed to meet the needs of our targeted customer groups. These
services and equipment have been designed to provide innovative features that meet those customers’ needs for fast and reliable
voice and data communications that allow them to conduct business quickly and efficiently. We offer the following services and
products that we believe reflect certain points of differentiation from those offered by our competitors:

1. Voice Services. We offer traditional mobile telephony services with calling features that include voicemail, call waiting,
call forwarding and three-way calling. Our voice services also include our push-to-talk services that give our customers the ability
to communicate with each other instantly. These push-to-talk services give our customers the ability to instantly set up a
conference — either privately (one-to-one) or with a group (one-to-many) — which allows them to initiate and complete
communications much more quickly than is possible using a traditional mobile telephone call. These push-to-talk services are
available on most of the handsets we offer.

Although a number of our competitors have introduced competitive push-to-talk products, and while we do not believe that
these services offer the same level of performance as our push-to-talk services in terms of latency, quality, reliability or ease of
use, our competitors could deploy new or upgraded technologies in their networks that could enable them to implement new
features and services that compete more effectively with our push-to-talk services.

2. Wireless Data Services. We offer a variety of wireless data services and solutions that are designed to help our customers
increase their productivity through the delivery of real-time information to mobile workers anytime and anywhere. Examples of
these services include:

•

Internet Access. We offer our customers always-on connectivity to the internet directly from their device through mobile
internet access, which combines the resources of the internet with convenient mobile content services. Our WCDMA and
LTE networks in Brazil and Mexico provide internet access at mobile broadband speeds supported by our WCDMA-and
LTE-enabled handsets, data air cards and other data access devices via our Internet Nextel® data service plans in Mexico
and other similar plans in Brazil;

• Messaging Services. We offer a range of messaging services, including short messaging services, or SMS, multimedia

messaging, or MMS services, and mobile email;

• Mobile Content and Applications. Our handsets can support a broad array of specialized and differentiated applications,
and many of our handsets incorporate the Android operating system, which provides an open environment for the
distribution and support of hundreds of thousands of business and consumer applications and digital media content to
meet the needs of a broad set of subscribers; and

• Business Solutions. Our data solutions, which are accessible via our wireless handsets, laptop computers and handheld
computing devices, facilitate quick responses among workers in the field by streamlining operations through faster
exchanges of information to support workforce mobility.

3. Roaming and International Calling Services. With the deployment and expansion of our WCDMA networks in Brazil
and Mexico, we have entered into domestic and international roaming arrangements with operators of compatible networks to
allow our customers using services supported by our new networks to roam in areas within our markets that we do not currently
serve and in countries around the world. For example, in December 2013, we signed agreements with Telefonica under which
Telefonica agreed to provide Nextel Brazil and Nextel Mexico with nationwide roaming voice and data coverage services on its
networks.

We have also entered into international roaming arrangements that allow us to offer a number of traditional, as well as
differentiated, international calling and roaming services. First, we complement our standard international voice calling services
with our International Direct Connect service, which allows our subscribers to communicate instantly across national borders to
other subscribers who use our push-to-talk services across our markets. We have also implemented network gateways designed
to enable our subscribers who use services supported by our networks to use our International Direct Connect service to communicate
with subscribers of Sprint Corporation's, or Sprint's, QChat service in the U.S. and for Sprint's subscribers to communicate to our
subscribers anywhere in Latin America. Our customers are also able to communicate using push-to-talk services with users of the
Prip service located throughout the world.

The availability of international voice and data roaming services is subject to reaching agreements with the operators of

those networks and the implementation of required back office systems that support those arrangements.

4. Wireless Devices. We offer our customers a broad array of wireless handsets, including smartphones and other feature
phones capable of supporting our push-to-talk services on both our WCDMA and iDEN networks. Our smartphone portfolio
includes a variety of devices that enable our subscribers to access the internet on their handsets. Additionally, we offer mobile
broadband devices, including data air cards and personal WiFi access devices, or MiFi, to our subscribers in Brazil and Mexico
on our WCDMA and LTE networks.

Our Networks and Wireless Technologies

We currently offer services supported by networks that utilize WCDMA technology in Brazil and Mexico. WCDMA is a
standards-based technology being deployed by wireless carriers throughout the world that provides service capabilities such as
high speed internet access, increased network capacity and reduced costs for voice and data services when compared to previous
technologies. In the second quarter of 2014, we launched LTE services in Rio de Janeiro. In addition, in October 2014, we began
offering similar LTE services in certain cities in Mexico.

The following chart details our significant spectrum holdings in each of our markets in spectrum bands that support both

the WCDMA and LTE technologies:

Country
Brazil

Spectrum Band
1.9 GHz/2.1 GHz

Mexico

1.7 GHz/2.1 GHz

Amount/Coverage
20 MHz in 11 of 13 regions (includes all major
metropolitan areas)
30 MHz nationwide

Additionally, we have significant spectrum holdings in the 800 MHz specialized mobile radio, or SMR, spectrum band that

support our iDEN networks. Our 800 MHz holdings in each of our markets are as follows:

Country
Brazil
Mexico
Argentina

Amount/Coverage (1) (2)
15 MHz nationwide weighted average
20 MHz nationwide weighted average
20 - 22 MHz nationwide weighted average

_______________________________________

(1) Weighted average coverage is a function of the population in each country, as well as the amount of spectrum. Spectrum

amounts vary greatly across regions and cities.

(2) This band was recently standardized and is available for use with LTE technology. The implementation of LTE technology
on our 800 MHz spectrum holdings requires support from and actions by the regulators in some of our markets in order
to be effective.

We also have additional spectrum holdings in some of our markets, including 20 MHz of spectrum in the 1.8 GHz spectrum
band in portions of Brazil, which we are using to support our LTE-based networks in Rio de Janeiro, and 10 MHz of spectrum in
the 1.9 GHz spectrum band in Monterrey and 50 MHz of spectrum in the 3.5 GHz spectrum band in Mexico.

As we transition from our iDEN networks to our WCDMA networks, we will evaluate ways in which we can use our 800
MHz spectrum to support existing or new services. In Brazil and Argentina, our current 800 MHz spectrum holdings are largely
contiguous, making it possible to use that spectrum to support future technologies, including LTE-based technologies, if certain
technical, operational and regulatory requirements are met, including, for example, the availability of compatible network and
subscriber equipment. The availability of that equipment will likely depend upon a number of factors, including the technology
decisions made by other wireless carriers and the willingness of infrastructure and device manufacturers to produce the required
equipment. In Mexico, our 800 MHz spectrum is either partially contiguous or non-contiguous. As a result, while it may be feasible
to use a portion of the spectrum to support future technologies, it will be necessary to reconfigure the spectrum band to increase
the amount of contiguous spectrum for it to be used to efficiently support those technologies.

In each of our markets, we also offer services supported by networks that utilize the iDEN technology developed and designed
by Motorola. The iDEN technology is a digital technology that is able to operate on non-contiguous spectrum frequencies, was
previously usable only for two-way radio calls and is a proprietary technology that relies solely on the efforts of Motorola and
any future licensees of this technology for product development and innovation. The iDEN technology is also based on an earlier
technology platform that is not capable of transmitting the volume of data at speeds that are supported by current technologies
like WCDMA. In addition, the more limited worldwide deployment of the iDEN technology makes services offered on the iDEN
network less attractive to subscribers who travel internationally because most of the iDEN handsets that we offer are not currently
designed to roam on non-iDEN wireless networks.

Motorola Solutions supplies a significant portion of our iDEN network equipment, and Motorola Mobility supplies a
significant portion of the iDEN handsets throughout our markets. We expect to continue to rely on Motorola Solutions and Motorola
Mobility for iDEN network equipment and handsets, particularly in Argentina where our services are supported exclusively by
the iDEN technology. The significant reduction in demand for iDEN network equipment and handsets may affect Motorola
Solutions' ability or willingness to continue to provide support for our iDEN networks and Motorola Mobility's ability or willingness

to provide support for the development of new iDEN handsets. The impact of this transition will be most significant in Argentina
where we do not currently hold spectrum that would support the deployment of a WCDMA network.

Because our next generation networks utilize WCDMA technology, which is a more widely utilized standards-based platform,
we are now able to purchase network equipment and subscriber handsets and other devices from a broader range of suppliers.
While we expect to capture cost benefits from our transition to a more widely-used technology, our plans to continue to offer
handsets that feature push-to-talk services, as well as our smaller size relative to our competitors, may result in the cost of our
handsets being higher, particularly those that are designed specifically to support push-to-talk services, because they will not be
produced in the same quantities as our competitors' more standardized WCDMA handsets. Our Prip service, which is an application-
based push-to-talk solution that can be implemented on standard smartphones, allows us to offer our customers the ability to
connect instantly with our customer base without using a specialized device.

Network Implementation, Design and Construction

Our deployment of WCDMA networks, which are not compatible with our iDEN-based networks, requires us to pursue a
network construction strategy that includes a substantially broader deployment of transmitter and receiver sites to support service
that meets the coverage needs of our customers than would be the case if we were deploying a compatible technology that would
allow more limited upgrades in specific markets. In addition, because we have deployed our WCDMA networks on spectrum that
is at a higher frequency than the spectrum used for our iDEN networks, the propagation characteristics of that spectrum made it
necessary for us to deploy significantly more sites to provide coverage that is comparable to our iDEN network coverage, particularly
with respect to coverage that supports in-building use of our services.

As we optimize our WCDMA networks, we seek to maximize our capital efficiencies by utilizing our iDEN transmitter and
receiver sites to support our WCDMA networks when feasible. We refer to our WCDMA and iDEN transmitter and receiver sites
as communication towers or towers, although in some instances these towers are located on rooftops and other structures. However,
our commercial strategies, the factors described above and the coverage requirements associated with the spectrum licenses being
utilized for those networks require us to construct more transmitter and receiver sites in a shorter period of time and to identify
and build sites that provide coverage that is competitive with the offerings of other carriers who have been building and expanding
their network coverage using compatible network platforms for several years. As a result, we have encountered and are likely to
continue to encounter, difficulties in acquiring necessary sites that can affect the quality of our services and the timing of our
launch of those services.

Our network construction efforts incorporate frequency planning and a system design process that is focused on developing
a network that will efficiently meet our coverage requirements and involves the selection of transmitter sites on the basis of their
proximity to targeted customers, the ability to acquire and build the sites, and frequency propagation characteristics. Site
procurement efforts include obtaining leases and permits and, in many cases, zoning approvals. See “Item 1A. — Risk Factors —
10c. Our operating companies are subject to local laws and government regulations in the countries in which they operate, and
we are subject to the U.S. Foreign Corrupt Practices Act, which could limit our growth and strategic plans and negatively impact
our financial results.” Any scheduled build-out or expansion may be delayed due to typical permitting, construction and other
delays. These delays can affect the quality or coverage of our services.

Sales and Distribution

Consistent with our historic approach, our target customers will continue to include high value customer segments such as
the small, medium and large business markets, as well as certain consumer market segments that value our differentiated wireless
communications, including our push-to-talk services, quality networks and our high level of customer service. Our WCDMA
networks also give us the opportunity to extend our target market to include additional corporate and business customers and
consumers who exhibit above average usage, revenue and loyalty characteristics and who we believe will be attracted to the
services supported by our WCDMA networks, the quality and speed of our data services and the quality of our customer service.

We use a variety of distribution channels that include direct sales representatives, indirect sales agents, retail stores and
kiosks and other subscriber-convenient sales channels such as online purchasing. Each of our operating companies is continuously
optimizing the mix of sales channels to take into consideration the methods that best meet local subscriber preferences, most cost
effectively sell and provide support to our different segments and facilitate our overall strategy of attracting and retaining subscribers
in our targeted segments.

We employ sales representatives who market our services directly to potential and existing customers. The focus of our
direct sales force is primarily on businesses that value our industry expertise and differentiated services, as well as our ability to
develop tailored custom communications capabilities that meet the specific needs of these customers. We also utilize indirect sales
agents, which mainly consist of local and national non-affiliated dealers that solicit customers for our service and are generally

paid through commissions. These dealers participate with our operating companies’ direct sales forces in varying degrees in
pursuing each of our targeted customer groups.

Our sales channels also include distribution through subscriber-convenient channels, including telesales and sales through
our Nextel retail stores, shopping center kiosks and other locations. With the expansion of services on our WCDMA networks,
we have realigned these sales channels and locations and have also expanded our marketing through regional and national retailers
with store kiosks and handset and prepaid card distribution offers. We utilize our websites as a marketing tool that allows subscribers
to compare our various rate plans and research the suite of our products and services, including handsets, accessories and special
promotions, and in some of our markets, we use online purchases as an additional sales channel to allow subscribers to purchase
our services directly.

Marketing

We are a full service provider of wireless services, offering our customers packages of services and features that combine
multiple communications services in one handset, including voice and data services and our differentiated push-to-talk services.

We offer a variety of pricing options and plans, including plans designed to combine features and services that meet the
needs of the customers we serve and target. In some instances, our services are sold on a postpaid basis pursuant to a service
contract, typically for periods of one to two years, with services billed on a monthly basis according to the applicable pricing plan.
In some markets, we also offer prepaid services as a means of attracting customers within our targeted base who may not meet
our customer credit requirements, who prefer the flexibility of paying for their service in advance, or who want to purchase certain
services, such as wireless data services, on a prepaid basis as an add-on service to their postpaid contract. We also offer hybrid
rate plans that incorporate a combination of postpaid services and prepaid characteristics. As we move forward with our goal to
expand our targeted customer base, we expect that we will continue to expand our prepaid and hybrid service offerings to meet
the needs of our existing and potential customers. As a result, we expect that the number of our subscribers who purchase services
under these prepaid or hybrid plans will increase. Based on our experience in offering prepaid services and the experience of other
carriers who have a substantially larger portion of their subscriber bases purchasing service under prepaid plans, including our
competitors, we expect that the average revenue per subscriber for subscribers using prepaid plans will be at a lower level than
we have experienced for subscribers under contract, and that the turnover for those subscribers will be higher. As a result, we are
focusing our efforts on designing those plans in a way that is competitive in the market while preserving overall profitability by
reducing the costs of acquiring and serving those subscribers.

Since 2002, we have offered services under the Nextel brand. In 2011, we launched a new brand identity in each of our
markets and at the corporate level, which we believe enhanced the recognition of our brand and unified our brand identity across
our markets. As a result of our efforts, the Nextel brand is recognized across our markets as standing for both quality of service
and the differentiated services and customer support we provide. More recently, with the launch of services supported by our
WCDMA networks, our marketing strategy has focused on the availability of the broader range of services and features of our
services that appeal to a wider range of consumers. This positioning of our brand continues to focus on customers who are attracted
to our differentiated services and our reputation for providing a high quality customer experience.

Competition

The Latin American mobile communications industry has undergone significant growth in recent years. We believe that the
wireless communications industry in our markets has been and will continue to be characterized by intense competition on the
basis of price, the types of services offered, variety, features and pricing of handsets and quality of service. In recent years, the
prices we have been able to charge for services have declined as a result of intensified price competition across our markets,
including the introduction by our competitors of aggressive pricing promotions, such as plans that allow shared minutes between
groups of callers. We expect that this trend will continue in the coming years. This increased competition may also affect our
ability to attract and retain subscribers.

In the countries in which we operate, there are principally two other multinational providers of mobile wireless voice

communications with whom we compete:

•

America Movil, which has the largest wireless market share in Mexico and has significant operations in Brazil and
Argentina; and

Telefonica, which has the largest wireless market share in Brazil, and has significant wireless operations in Mexico
and Argentina.

We also compete with regional or national providers of mobile wireless voice communications, such as Telemar’s Oi in
Brazil, Telecom Italia Mobile, or TIM, in Brazil and Personal in Argentina, which is in the process of being acquired by Fintech,
and Iusacell in Mexico, which was recently acquired by AT&T.

Many of our competitors have a larger spectrum position than ours, including more spectrum that can be used to support a
wide range of wireless technologies, and have greater coverage areas and/or name recognition than we do, making it easier for
them to expand into new markets and offer new products and services. Our competitors typically have more extensive distribution
channels than ours or are able to use their scale advantages to acquire subscribers at a lower cost than we can, and most of them
have implemented network technology upgrades, including both WCDMA and LTE, that support high speed data services. Although
we do not believe that the push-to-talk services launched by our competitors offer the same level of performance as our push-to-
talk services in terms of latency, quality, reliability or ease of use, our competitors' current networks and their future deployments
of new or upgraded technologies in their networks could enable them to implement new features and services that compete more
effectively with our push-to-talk services and other differentiated services that we offer. As we make the transition to WCDMA
and focus on a broader target base that includes consumers, we expect that our push-to-talk services may become less significant
as a differentiator. Finally, because a number of our competitors operate or are affiliated with entities that provide wireline-based
telecommunications services, they have the ability to offer a wider range of services, including bundles of wireline voice, high
speed internet and wireless services that may be more attractive to some subscribers.

We compete with other communications services providers, including other wireless communications companies and wireline
telephone companies, based primarily on our high quality customer service and differentiated wireless service offerings and
products, including our push-to-talk services, that make it easier for them to communicate quickly and efficiently and are particularly
attractive to certain business customers that we serve. We have continued to focus on this differentiated approach as we offer
iconic high-tier handsets and other devices and take advantage of the ample capacity on our WCDMA networks to offer attractive
rate plans consisting of both voice minutes and data usage while jointly offering our push-to-talk services on these high-tier devices.
In recent years, our largest competitors have increasingly focused their marketing efforts on attracting postpaid subscribers within
our target segments by, among other things, enhancing their network quality and their customer care functions, which may minimize
the value of our network quality and speed (for our WCDMA networks) and the quality of our customer service as points of
differentiation. In addition, as we have pursued our plans to extend our target market to include more high-value consumers, we
are increasingly competing more directly for subscribers that are also targeted by our largest competitors.

We believe that the users who primarily make up our targeted subscriber base are likely to base their purchase decisions on
network quality and the quality of customer support, as well as on the availability of differentiated features and services, like our
push-to-talk services, that make it easier for them to communicate quickly, efficiently and economically. However, because pricing
is one of a number of important factors in potential customers’ purchase decisions, increased price competition in the customer
segments we target has required us and could continue to require us to decrease prices or increase service and product offerings,
which has lowered our revenues and increased our costs.

Many of our competitors are owned by or affiliated with large multinational communications companies. As a result, these
competitors have substantially greater financial resources than we do, which allows them to spend substantially more than we do
in their advertising/brand awareness campaigns and may enable them to reduce prices in an effort to gain market share. These
competitors may also use those resources to deploy new services or technologies that could impact our ability to attract or retain
customers. While we expect to capture cost benefits from our transition to a more widely-used WCDMA technology, our plans to
continue to offer handsets that feature push-to-talk services, as well as our smaller size relative to our competitors, may result in
the cost of our handsets being higher, particularly those that are designed specifically to support push-to-talk services, because
they will not be produced in the same quantities as our competitors' more standardized WCDMA handsets. This will not be the
case for customers who utilize our Prip service that provides high performance push-to-talk capabilities on standard smartphones.
In addition, because the iDEN technology has been adopted by fewer carriers worldwide and does not benefit from the scale of
other more widely adopted technologies, the cost of our handsets is generally higher relative to the comparable handsets offered
by our competitors. As a result, we must absorb a comparatively larger part of the cost of offering iDEN handsets or WCDMA
handsets that are designed specifically to support our push-to-talk services to new and existing customers, which can place us at
a competitive disadvantage with respect to the pricing of our handsets and our ability to offer new handsets at discounted prices
as an incentive to retain our existing subscribers.

For a more detailed description of the competitive factors affecting each operating company, see the “Competition” discussion

for each of those operating companies under “— Operating Companies.”

Regulation

The licensing, construction, ownership and operation of wireless communications systems are regulated by governmental
entities in the markets in which our operating companies conduct business. The granting, maintenance, and renewal of applicable
licenses to use spectrum and radio frequency allocations are also subject to regulation. In addition, these matters and other aspects
of wireless communications system operations, including rates charged to subscribers, the rates charged by carriers to terminate
calls not originated on their networks and the resale of wireless communications services, may be subject to regulation in the
jurisdiction in which service is provided. Further, statutes and regulations in some of the markets in which our operating companies
conduct business impose limitations on the construction of transmitter and receiver sites by wireless carriers and on the ownership
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of telecommunications companies by foreign entities. Changes in the current regulatory environments, the interpretation or
application of current regulations, or future judicial intervention in those countries could impact our business. These changes may,
among other things:

• affect the terms of interconnection arrangements that allow our subscribers to complete calls to our competitors’

subscribers, including the charges imposed for the completion of those calls;

• establish restrictions that limit or otherwise affect the deployment of transmitter and receiver sites needed to support the

coverage and capacity of our networks;

• establish minimum network construction, coverage or quality of service obligations that can result in increased capital

investments or require other changes to our business;

• establish prices our operating companies are required to charge for their services or impose other terms of service that

can affect our revenues or costs; or

•

impose foreign ownership limitations on telecommunications providers that may affect our ability to own and operate
our business.

In some of our markets, there is an increasing focus on more significant regulation of transmitter and receiver sites and the
deployment of tower structures used to support wireless services, and local governments are adopting stringent rules and regulations
related to the placement and construction of wireless towers, or have placed embargoes on some of the transmitter and receiver
sites owned by our operating companies, which can significantly impede the planned expansion of our service coverage area,
eliminate existing towers, result in unplanned costs, negatively impact network performance and impose new and onerous taxes
and fees. There has also been an increased focus on service and quality standards in some of our markets as local governments
monitor telecommunications providers' voice quality, customer complaints, call failure rates, capacity to handle call traffic levels
in peak calling periods and failed interconnection of calls, which could potentially increase our operating costs and affect rates
charged to subscribers. For a more detailed description of the regulatory environment in each of the countries in which our operating
companies conduct business, see the “Regulatory and Legal Overview” discussion for each of those operating companies under
“— Operating Companies.”

Foreign Currency Controls and Dividends

In some of the countries in which we operate, the purchase and sale of foreign currency is subject to governmental control,
which may impose formal or informal limitations on our ability to transfer funds out of those countries. Additionally, local law in
some of these countries may limit the ability of our operating companies to declare and pay dividends. Local law may also impose
a withholding tax in connection with certain intercompany agreements and the payment of dividends, or otherwise limit our
operating companies' ability to make payments to upstream companies. Financing arrangements that we enter into at the local
level may also limit our ability to pay dividends or other upstream payments. For a more detailed description of the foreign currency
controls and dividend limitations and taxes in each of the countries in which our operating companies conduct business, see the
“Foreign Currency Controls, Dividends and Tax Regulation” discussion for each of those operating companies under “— Operating
Companies.”

Operating Companies

1. Brazil

Operating Company Overview. We refer to our wholly-owned Brazilian operating company, Nextel Telecomunicacoes
Ltda., as Nextel Brazil. Nextel Brazil’s operations are headquartered in Sao Paulo, with branch offices in Rio de Janeiro and various
other cities. As of December 31, 2014, Nextel Brazil had 4,363 employees.

Nextel Brazil provides wireless services in major business centers, including Rio de Janeiro, Sao Paulo, Belo Horizonte and
Brasilia, in areas in the northeast region of Brazil, including Salvador, Fortaleza and Recife, as well as in Vitoria, which is in the
southeast region of Brazil and along related transportation corridors and in a number of smaller markets. In the second half of
2013, Nextel Brazil commercially launched services on its WCDMA network in Sao Paulo, Rio de Janeiro and surrounding areas
and extended those services to other areas in Brazil in 2014 by expanding the coverage of its network and utilizing roaming services
and network sharing arrangements pursuant to agreements that it reached with affiliates of Telefonica. As of December 31, 2014,
Nextel Brazil provided service on both its WCDMA and iDEN networks to 4,341,500 handsets and other devices, which we
estimate to be about 1.5% of the total mobile handsets and other devices in commercial service in Brazil.

In late 2010, Nextel Brazil participated in a series of spectrum auctions and was the successful bidder for 20 MHz of spectrum
in 1.9/2.1 GHz spectrum bands in 11 of the 13 auction lots covering approximately 98% of the Brazilian population for $714.4
million based on foreign currency exchange rates at the time. Nextel Brazil also successfully bid on 20 MHz of spectrum in the
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1.8 GHz band in Rio de Janeiro, Minas Gerais and some states in the north and northeast regions of Brazil for a total bid price of
approximately $121.7 million. Nextel Brazil is utilizing this 1.9/2.1 GHz spectrum to support its WCDMA network and is utilizing
the 1.8 GHz spectrum to support the deployment of the LTE-based network in Rio de Janeiro. The licenses relating to the spectrum
won by Nextel Brazil in the auction were granted in June 2011 and have a term of 15 years. These licenses are renewable once
for an additional 15-year period and require Nextel Brazil to meet specified network coverage construction requirements within
specified timeframes.

Competition. Nextel Brazil competes with cellular and personal communications services, or PCS, providers. The largest
competitors are Vivo, which is owned by Spain's Telefonica and has the largest market share in the Sao Paulo metropolitan area
and Rio de Janeiro; Claro, which is controlled by Mexico's America Movil; Telecom Italia Mobile, or TIM, a subsidiary of Italy's
Telecom Italia; and TNL PCS S.A., a subsidiary of Telemar Norte Leste, Brazil’s largest wireline incumbent, that offers its services
under the brand name “Oi.” All of Nextel Brazil's largest competitors have launched and offer services supported by WCDMA-
based networks and some also launched LTE-based networks during 2013. Nextel Brazil also competes with other regional cellular
and wireless operators.

We believe that the most important factors upon which Nextel Brazil competes are the quality of its customer service and
network. With the launch of services on our WCDMA network in 2013, we expect to increasingly rely on the quality of our network,
the speed of our data services and the unique value proposition of our service plans as key points of differentiation from our
competitors' offerings. While its competition generally targets the prepaid market and competes on the basis of price, Nextel Brazil
primarily targets subscribers who utilize its services in their businesses and individuals that have medium to high usage patterns
who are more concerned with network quality and the quality of the customer care and service they receive. Nextel Brazil’s focus
on the quality of its network, and the quality of its customer service and care are important components of our strategy to attract
and retain subscribers within our targeted subscriber groups. Substantially all of our subscribers in Brazil purchase our services
on a postpaid basis pursuant to contracts that provide for recurring monthly payments for services over a specified term. Nextel
Brazil’s competitors compete aggressively, but with the launch of its WCDMA network, Nextel Brazil is able to not only continue
to offer its differentiated push-to-talk services, but is also able to offer a more competitive portfolio of devices and services,
including high speed data services, that are supported by its new network. We expect to continue to experience intense competitive
conditions in Brazil that have made it, and that are expected to continue to make it, more difficult and costly for Nextel Brazil to
attract new subscribers and retain its existing subscribers.

Regulatory and Legal Overview.

SMR Operation. Prior to 2000, the Brazilian telecommunications regulations imposed various restrictions that significantly
limited the ability of Nextel Brazil to provide mobile services to all potential subscriber groups. With the changes to the Brazilian
regulations enacted by Brazil’s telecommunications regulatory agency, Agencia Nacional de Telecomunicacoes, known as
ANATEL, in 2000 and in subsequent years, Brazil began opening its markets to wider competition in the mobile wireless
communications market where we operate. These regulations govern services provided on our iDEN network in Brazil.

Some of the key regulatory changes that have been adopted include changes to the rules that limit the amount of spectrum
in the 800 MHz band that Nextel Brazil is allowed to hold in a service area, the adoption of rules relating to the interconnection
of Nextel Brazil’s networks with those of other carriers and the calculation of calling party pays charges. Under the changes to
the rules adopted in November 2008, Nextel Brazil may own up to 25 MHz of 800 MHz spectrum, which allows Nextel Brazil to
increase the capacity of its networks more efficiently.

Under the rules adopted by ANATEL relating to interconnection charges, we have negotiated agreements for our SMR
operation with all significant fixed line and wireless operators in Brazil to reflect the additional payments between carriers as a
result of the calling party pays charges. The calling party pays charges, which are required to be paid to mobile operators in Brazil
for termination of calls on their networks, are based on rates, which we refer to as mobile termination rates, that are substantially
higher than those that apply in our other markets. Because Nextel Brazil's subscriber base is smaller than those of its competitors
and its subscribers tend to make a higher number of calls terminating on other carriers' networks, these higher mobile termination
rates result in substantial charges relating to the "off net" termination of calls by our subscribers. To partially address this, the
calling party pays structure adopted by ANATEL permits Nextel Brazil to compensate other mobile operators for calls terminated
on their network, including calls originated on our iDEN network, under a formula that reduces the amount paid to them by
allowing a percentage of these calls to be treated as “partial bill and keep.” Since their adoption, these regulations have resulted
in significant cost savings to Nextel Brazil when terminating calls originated on its iDEN network. Finally, in late 2011, ANATEL
announced a plan to reevaluate the current methodology used to determine mobile termination rates in the calling party pays
structure. ANATEL officially reduced the mobile termination rates in March 2012 and again in April 2013, both of which resulted
in substantial reductions in the charges paid by Nextel Brazil to terminate calls on other mobile carriers’ networks. In November
2012, ANATEL confirmed its plans to make the transition to a cost-based model for determining mobile termination rates beginning
in 2016 and announced further reductions in those rates through 2015 as part of the transition to cost-based rates. In July 2014,
ANATEL published a schedule to reach cost-based mobile termination rates in February 2019. These changes do not affect the

current partial bill and keep payment structure that applies to the settlement of mobile termination charges for calls originated on
our iDEN network and terminated on other wireless carriers' networks, but as described below, the recent decision by ANATEL
to apply the regulatory regime applicable to PCS operations to our iDEN business is expected to result in the continued application
of the partial bill and keep structure.

Nextel Brazil has, from time to time, been the target of complaints filed with the Brazilian regulatory authorities by one or
more of our competitors in which our competitors seek to challenge the manner in which we conduct business, and certain
competitors have also petitioned the Brazilian regulators seeking changes to the regulations applicable to our operations in an
effort to make it more difficult or costly for us to operate. In this regard, some of our competitors in Brazil, through Brazil’s
Associacao Nacional das Operadoras Celulares, or ACEL, filed a lawsuit against ANATEL to challenge the partial bill and keep
settlement process that allows us to retain a portion of the amounts we would otherwise be obligated to pay to other carriers for
calls originating on our iDEN-based network under the calling party pays structure in Brazil. Because the lawsuit against ANATEL
would interfere with the regulation as it relates to Nextel Brazil, Nextel Brazil was also summoned to join the lawsuit as a co-
defendant. Because the current settlement process results in a significant reduction in our overall interconnection charges, our
competitors have sought changes to these processes in order to increase our payments for call terminations. The court ruled against
ACEL, thereby preserving the bill and keep rule currently favoring SMR operators like Nextel Brazil, as regulated by ANATEL.
ACEL has appealed this decision, and the case will be reviewed by a higher court. We anticipate that our competitors may initiate
other proceedings challenging the partial bill and keep settlement process. If ANATEL eliminates this settlement process or modifies
it to increase the amounts we pay to terminate calls, those actions could have an adverse effect on the costs we incur to operate,
which could adversely affect the results of our SMR operations that utilize our iDEN network.

In February 2015, ANATEL adopted significant changes to its regulatory regime with respect to providers of wireless services
that have the effect of consolidating the regulation of SMR and PCS operations under a single regulatory structure, which we refer
to as regulatory convergence. In general, these changes will have the effect of extending the regulatory regime applicable to our
PCS operations to the SMR operations that are conducted using our iDEN network, including number portability requirements,
minimum service availability and quality requirements, and the partial bill-and-keep settlement structure that applies to mobile
termination charge settlements between PCS operators that hold significant market power and PCS operators like Nextel Brazil
that do not have significant market power.

To take advantage of these changes, an SMR operator must submit a request to ANATEL to amend its spectrum grants at
least 180 days before each SMR spectrum grant renewal date. The spectrum grant will be deemed adjusted when the SMR operator
executes a new spectrum grant allowing the use of the 806-821 MHz/851-866 MHz sub-bands within its current PCS license.
After execution of the new spectrum grant, the operator has 180 days to migrate its users to the PCS service. The new PCS spectrum
grants on the 806-821 MHz/851-866 MHz sub-bands will be provided for the remaining term of the original SMR spectrum grants.
The regulations applicable to PCS operations will apply immediately after new spectrum grants are executed, with the exception
of certain quality of service, consumer protection and numbering plan regulations, which will apply 180 days after the end of the
migration period. Convergence costs will be borne by the operator requesting the amendment of its SMR spectrum grants.

The transition of SMR operations to the PCS regulation as part of the regulatory convergence process is subject to the
payment of a spectrum amendment fee. The amendment fee is expected to be equal to a net present value or public price for
spectrum use formula, whichever is higher. Based on the terms that have been provided, Nextel Brazil currently expects to submit
requests to amend its SMR spectrum grants to enable the provision of PCS services using the related spectrum as part of the
regulatory convergence process.

PCS Operation. Nextel Brazil was the successful bidder for spectrum in the areas covered by 11 of the 13 auction lots offered
in the 1.9/2.1 GHz spectrum auction completed in late 2010. These areas include approximately 98% of the Brazilian population.
Nextel Brazil is currently offering services supported by its WCDMA network in about 260 cities, including cities in and around
Sao Paulo and Rio de Janeiro. The rules require that Nextel Brazil’s services comply with start-up terms and minimum service
availability and quality requirements detailed in the regulations, which are different from those that apply to services supported
by our iDEN networks and which are subject to the regulations relating to our SMR operation. The rules also require Nextel Brazil
to meet specified network coverage construction requirements within certain time frames. Failure to meet ANATEL’s requirements
may result in enforcement of the performance bonds related to the licenses, forfeiture of the channels and revocation of licenses.
We believe that Nextel Brazil is currently in compliance with the applicable operational requirements of its licenses in all material
respects.

Nextel Brazil has negotiated interconnection agreements with mobile and fixed line operators to support its PCS operation.
ANATEL has defined that Nextel Brazil is a new PCS entrant, and as a result, its mobile termination rate is 20% higher than PCS
operators with significant market power in Brazil. In November 2012, ANATEL approved a general plan of competition, which
establishes a number of rules that are aimed at promoting competition in the PCS market, including the transition to a cost-based
model for determining mobile termination rates beginning in 2016 and additional reductions in those rates that began in 2013 and
will continue through 2015 as part of the transition to cost-based rates. In July 2014, ANATEL published a schedule to reach cost-

based mobile termination rates in February 2019. A key component of ANATEL's plan includes the introduction of a partial bill
and keep settlement structure similar to the one that applies to our SMR operation for mobile termination charge settlements
between PCS operators that hold significant market power and PCS operators like Nextel Brazil that do not have significant market
power. This partial bill and keep structure, which effectively reduces the amount of mobile termination charges paid by Nextel
Brazil for calls originated on its WCDMA network, began in 2013 and will continue to be gradually phased out. In February 2015,
ANATEL amended and extended the bill and keep rule through 2019 so that the bill and keep rule will be phased out through 2019
rather than through 2015, as previously contemplated by the regulations. The application of this partial bill and keep settlement
structure to our PCS operation in Brazil and to our SMR operation as a result of the regulatory convergence, combined with the
scheduled mandatory reductions in mobile termination rates, will result in significant cost savings for Nextel Brazil. These cost
savings have also enabled us to develop and offer attractive pricing plans that reduce or eliminate the significant differentiation
in the cost of on net and off net calls that are common in Brazil due to the historically high mobile termination rates there, providing
opportunities for Nextel Brazil to offer unique service plans that will improve its ability to compete more effectively.

Foreign Currency Controls, Dividends and Tax Regulation. The purchase and sale of foreign currency in Brazil continues
to be subject to regulation by the Central Bank of Brazil despite regulatory changes enacted in 2005 that were designed to reduce
the level of government regulation of foreign currency transactions. Exchange rates are freely negotiated by the parties, but purchase
of currency for repatriation of capital invested in Brazil and for payment of dividends to foreign stockholders of Brazilian companies
may only be made if the original investment of foreign capital and capital increases were registered with the Brazilian Central
Bank. There are no significant restrictions on the repatriation of registered share capital and remittance of dividends. Nextel Brazil
has registered substantially all of its investments with the Brazilian Central Bank.

The Nextel Brazil subsidiaries through which any dividend is expected to flow have applied to the Brazilian Central Bank
for registration of their investments. We intend to structure future capital contributions to Brazilian subsidiaries to maximize the
amount of share capital and dividends that can be repatriated through the exchange market.

Brazilian law provides that the Brazilian government may, for a limited period of time, impose restrictions on the remittance
by Brazilian companies to foreign investors of the proceeds of investments in Brazil. These restrictions may be imposed whenever
there is a material imbalance or a serious risk of a material imbalance in Brazil’s balance of payments. The Brazilian government
may also impose restrictions on the conversion of Brazilian currency into foreign currency. These restrictions may hinder or prevent
us from purchasing equipment required to be paid for in any currency other than Brazilian reais. Under current Brazilian law, a
company may pay dividends from current or accumulated earnings. Dividend payments from current earnings are not subject to
withholding tax. Interest on foreign loans is generally subject to a 15% withholding tax. The entry of funds into Brazil as a foreign
loan is subject to a 6% foreign exchange transaction, or IOF, tax, except if the average repayment term of the loan is more than
180 days, in which case the IOF tax will be fully exempted. The first possible date of exercise for put or call provisions established
on the foreign loan will be considered the date of effective repayment of the loan. Interest and payments of principal on foreign
loans are currently exempted from the IOF tax.

2. Mexico

Operating Company Overview. We refer to our wholly-owned Mexican operating company, Comunicaciones Nextel de
Mexico, S.A. de C.V., as Nextel Mexico. Nextel Mexico is headquartered in Mexico City and has many regional offices throughout
Mexico. As of December 31, 2014, Nextel Mexico had 4,194 employees.

Nextel Mexico provides wireless services in major business centers, including Mexico City, Guadalajara, Puebla, Leon,
Monterrey, Toluca, Tijuana, Torreon, Ciudad Juarez and Cancun, as well as in smaller markets and along related transportation
corridors throughout Mexico. As of December 31, 2014, Nextel Mexico provided service on both its WCDMA and iDEN networks
to 2,888,500 handsets and other devices, including handsets supported by its WCDMA and iDEN networks, which we estimate
to be about 2.9% of the total mobile handsets and other mobile devices in commercial service in Mexico. Our WCDMA network
in Mexico uses the HSPA+ version of the WCDMA technology that supports significantly faster data delivery speeds than are
available on earlier versions of the technology, allowing Nextel Mexico to offer high speed broadband services to customers on
its new network. In the third quarter of 2013, Nextel Mexico's WCDMA network reached geographic parity with its iDEN network.
In addition, as of December 31, 2014, approximately 11% of Nextel Mexico's subscriber base was comprised of subscribers who
are utilizing prepaid service plans.

On January 26, 2015, NII Holdings, Inc. and certain of its subsidiaries entered into a purchase and sale agreement with an
indirect subsidiary of AT&T for the sale of Nextel Mexico. The purchase agreement provides for a purchase price of $1.875 billion
in cash, less Nextel Mexico's outstanding debt, net of its cash balances, on the closing date and subject to other specified adjustments.
Completion of the transaction is subject to a number of conditions, including the approval of the Bankruptcy Court and the receipt
of required regulatory approvals in Mexico. See "— Business Update" for more information.

Competition. Nextel Mexico competes with cellular and personal communications services system operators in all of its
market areas. Nextel Mexico competes on a nationwide basis with Telcel, which is the largest provider of wireless services in
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Mexico and is owned by America Movil; Movistar, which is owned by Telefonica; and with Iusacell, which was recently purchased
by AT&T.

We believe that the most important factors upon which Nextel Mexico competes are network quality, including the speed
of the data services supported by its WCDMA network, the quality of our customer service, the reputation of our brand and our
differentiated services, including our push-to-talk services. Nextel Mexico’s competitors compete aggressively, and all three of
its largest competitors offer services supported by WCDMA-based networks in a significant portion of their coverage areas.
Movistar and Telcel have also introduced services supported by an LTE-based network in certain cities in Mexico. In the fourth
quarter of 2014, Nextel Mexico launched LTE services commercially in Mexico City, Guadalajara and Monterrey.

Regulatory and Legal Overview. The Federal Institute of Telecommunications, or the IFT, regulates the telecommunications
industry in Mexico. The IFT was created in September 2013 as a constitutional autonomous body whose purpose is the efficient
development of the broadcasting and telecommunications industries. The IFT was created with the directive of regulating,
promoting and supervising the use of spectrum, networks, and broadcasting and telecommunications services. The IFT also
regulates economic competition in these sectors.

In March 2014, the IFT resolved that Telcel was a "Preponderant Economic Agent" in the telecommunications sector and
imposed asymmetric regulations to promote competition. These regulations included requirements for shared infrastructure,
asymmetric interconnection rates, wholesale national roaming, shared passive infrastructure (eg. towers, manholes, conduits, etc.),
local loop unbundling and on-net/off-net restrictions on retail rates.

In July 2014, the new Telecommunication and Broadcasting Law was enacted. This law included the elimination of long
distance charges, new subscriber rights, number portability within 24 hours, zero termination rates for the Preponderant Economic
Agent and early termination of service contracts. As a part of this new law, the IFT committed to establishing cost-based
interconnection rates. In December 2014, the IFT approved the new cost-based model to determine termination rates between
operators that have not reached an agreement. Termination rates for 2015 were announced by the IFT at the end of December
2014.

The rates paid by Nextel Mexico to terminate calls on other carriers’ networks are negotiated between the parties, subject
to the right of carriers to submit disputes to the IFT for resolution in instances where the carriers are unable to agree on the rates
or other terms. Nextel Mexico entered into agreements with Telcel and most of the fixed operators that provided for reduced mobile
termination rates for 2011 consistent with the Federal Telecommunications Commission, or COFETEL's, order, and agreements
calling for further mobile termination rate reductions in 2012 through 2014. Iusacell agreed to the reduced mobile termination
rates for 2011, but has not agreed to either extend the current mobile termination rates or to further reductions of mobile termination
rates in subsequent years. Telefonica has not agreed to any reductions in mobile termination rates, including reductions consistent
with COFETEL's order, and it has initiated an administrative appeal for review against COFETEL's decision, as well as other
proceedings challenging that decision. In July 2014, the IFT resolved interconnection rates for 2012 with Telefonica and Iusacell.
The proceedings for 2013 and 2014 are currently pending resolution by the IFT.

The agreed upon mobile interconnection rates with Telcel expired in December 2014. Currently, the termination rate
applicable to Telcel is zero, however Telcel is required to pay Nextel Mexico for the termination of the traffic originated by their
subscribers. Telcel is currently paying the agreed upon 2014 rate, however there is an interconnection dispute pending resolution
by the IFT regarding the corresponding 2015 rate. When the IFT resolves this dispute, the rate that Telcel is expected to pay to
Nextel Mexico for terminating its mobile traffic will be based on the IFT's announcement published in the Official Gazette on
December 29, 2014 regarding the interconnection rates it would order when it resolves disputes regarding rates for 2015.

As a result of the spectrum auctions that were completed in 2010, a subsidiary of Nextel Mexico, NII Digital, was awarded
a nationwide license for 30 MHz of spectrum in the 1.7 GHz and 2.1 GHz bands during the fourth quarter of 2010. In November
2012, Inversiones Nextel received authorization from the SCT to acquire a 100 MHz nationwide point-to-point 23 GHz link license
from Miditel, S.A. de C.V., or Mitidel, which may be used for its WCDMA network, as well as to provide services to third parties.
In January 2015, NII Digital received authorization from the IFT to acquire six point-to-multipoint 10.5 GHz link licenses from
Miditel, which may be used for its WCDMA network, as well as to provide services to third parties. Previously, in March 2014,
Miditel requested that the IFT extend these licenses in agreement with the Federal Telecommunications Act. This request is still
pending.

The IFT has announced that in 2015, it will auction some spectrum bands for mobile services, including spectrum in the
advanced wireless services, or AWS, band. The IFT expects to complete the auction and assign the spectrum by the end of 2015.

Foreign Currency Controls, Dividends and Tax Regulation. Because there are no foreign currency controls in place, Mexican
currency is convertible into U.S. dollars and other foreign currency without restrictions. Mexican companies may distribute
dividends and profits outside of Mexico if the Mexican company meets specified distribution and legal reserve requirements.
Under Mexican corporate law, approval of a majority of stockholders attending an ordinary stockholders’ meeting of a corporation

is required to pay dividends. Beginning in 2014, dividends out of the post-2013 earnings of Mexican companies are subject to a
10% dividend withholding tax or a reduced withholding tax rate if a tax treaty is applicable. Prior to 2014, dividends paid out of
Nextel Mexico's accumulated taxable income were not subject to withholding tax; a tax of up to 43% was imposed on Nextel
Mexico if it paid dividends in excess of the accumulated taxable income. This tax was creditable against Nextel Mexico’s future
tax liability. In addition, a 15% withholding tax applies to interest paid by Nextel Mexico to NII or its U.S. affiliates with respect
to intercompany loans made by NII Holdings or its U.S. subsidiaries to Nextel Mexico. Effective January 1, 2014, the corporate
tax rate was fixed at 30%, which repealed the scheduled reductions that were previously approved in December 2012.

3. Argentina

Operating Company Overview. We refer to our wholly-owned Argentine operating company, Nextel Communications
Argentina S.R.L., as Nextel Argentina. Nextel Argentina provides wireless services in major business centers including Buenos
Aires, Cordoba, Rosario and Mendoza, along related transportation corridors and in a number of smaller markets. As of
December 31, 2014, Nextel Argentina provided service to 1,954,400 handsets, which we estimate to be about 3.2% of the total
mobile handsets and other mobile devices in commercial service in Argentina. As of December 31, 2014, approximately 49% of
Nextel Argentina's subscriber base represented subscribers who are utilizing prepaid service plans.

Nextel Argentina is headquartered in Buenos Aires and has regional offices in Mar del Plata, Rosario, Mendoza and Cordoba,

and numerous branches in the Buenos Aires area. As of December 31, 2014, Nextel Argentina had 1,194 employees.

Competition. Nextel Argentina competes with Movistar, which is controlled by Telefonica, Claro, which is controlled by
America Movil, and Personal, which is controlled by Telecom Italia Mobile and is in the process of being acquired by Fintech.
Each of these companies provides a variety of services, including mobile voice and data communications throughout Argentina.
Nextel Argentina's competitors compete aggressively, and all three of the established mobile telephone service providers now offer
services supported by a WCDMA-based network in a significant portion of their coverage areas.

We believe that the most important factors upon which Nextel Argentina competes are the quality of our customer service
and network, brand recognition and our differentiated services, including our Direct Connect service. While its competition
generally targets the mass market, Nextel Argentina primarily targets subscribers who utilize its services in their businesses and
individuals that have medium to high usage patterns who are more concerned with the quality of customer care and service they
receive.

In October 2014, the Argentine government held an auction of PCS (3G) and SCMA (4G) cellular spectrum based on auction
rules that established minimum mandatory price and coverage requirements. The Argentine government has started the process
of awarding the licenses relating to these frequencies to the winning bidders in the auction. Nextel Argentina did not participate
in the auction, and as result, does not currently hold spectrum that would support the deployment of a WCDMA-based network
in Argentina. Thus, Nextel Argentina expects to continue to use its iDEN technology. While we are in the process of evaluating
spectrum options and strategic possibilities, it may become more difficult or costly for Nextel Argentina to acquire handsets that
operate using the iDEN technology.

Regulatory and Legal Overview. For the time being, the Comision Nacional de Comunicaciones, referred to as the CNC,
the Secretary of Communications, and the Ministry of Federal Planning, Public Investments and Services are the Argentine
telecommunications authorities responsible for the administration and regulation of the telecommunications industry. Licenses
and spectrum authorizations granted in Argentina may not be transferred or assigned without the regulators' authorization.

Under its licenses, Nextel Argentina is authorized to offer any and all types of telecommunications services and is free to
choose the geographic area, technology and network architecture it uses to provide those services. Nextel Argentina is deemed to
have registered SMR services, paging, data transmission and other value added services, as well as long distance telephony. Service
fees are not regulated and may be freely established by Nextel Argentina.

The use of the SMR spectrum used by Nextel Argentina in support of its services is subject to the prior granting of an
authorization to use that spectrum in a specified, limited geographical area. SMR authorizations granted through the year 2000
have an indefinite term, and those granted beginning in 2001 expire after a 10-year term. Nextel Argentina holds licenses to use
1,815 channels, including those covering the major business markets areas, with indefinite terms, and 1,760 channels with 10-
year terms, mostly in smaller markets. SMR authorizations are subject to service launch and subscriber loading requirements. We
believe that Nextel Argentina has met all material requirements of these authorizations.

In December 2014, the Argentine government passed a law establishing a new legal framework for telecommunication
services in Argentina. The new law provides that the development of information and communications technologies and their
associated resources are a public interest and creates a seven member board to oversee these resources. This law establishes that
telecommunications operators may provide audio visual and media services and provides mandatory interconnection and access
to associated and essential facilities. Particularities on these topics are uncertain since they are dependent on future regulations.

The new law also enables operators to set consumer pricing, but the regulatory authority is empowered to regulate for reasons of
public interest, and provides for the regulation of wholesale charges among telecommunications operators for the use of network
facilities and interconnection. Many of the provisions of the new law were already included in other laws currently in effect, and
the new regulatory framework is not expected to materially impact the current operations of Nextel Argentina.

Nextel Argentina provides services to its subscribers that allow calls to be completed on other carriers’ networks under
interconnection agreements with mobile operators, Telefonica de Argentina S.A. and Telecom Argentina S.A., as well as other
smaller local carriers. Nextel Argentina has also implemented a calling party pays program with the fixed line carriers with whom
it interconnects under which Nextel Argentina is compensated at agreed rates for calls made to its subscribers from fixed line
networks for those subscribers who purchase our services under calling party pays rate plans. Charges recovered by Nextel Argentina
for calling party pays calls originated on fixed lines depend on a reference price set periodically by the Minister of Federal Planning,
Public Investments and Services.

In recent years, growing government involvement in key sectors of the economy, including the telecommunications sector,
has resulted in new regulations that have set higher service standards, limited the right to freely establish service fees and increased
reporting requirements, which have affected and may continue to affect Nextel Argentina's operations.

Foreign Currency Controls, Dividends and Tax Regulation. Formal and informal restrictions on the transfer of the cash held
by Nextel Argentina effectively prevent the transfer of such funds outside of Argentina. On January 6, 2002, an Argentine emergency
law became effective, and the government formally declared a public emergency in economic, administrative, financial and
exchange control matters. The law empowered the Federal Executive Power to regulate those areas until December 10, 2003,
subject to overview by the National Congress. The Emergency Law amended several provisions of the 1991 Convertibility Law
No. 23,928, the most significant of which was to repeal the peg of the Argentine peso to the U.S. dollar. The effectiveness of the
Argentine Emergency Law has been extended through December 31, 2015 by the passing of a subsequent law on October 22,
2013.

The Argentine Central Bank has implemented certain formal and informal requirements related to the acquisition of foreign
currency by Argentine and non-Argentine residents and on the inflow and outflow of capital to and from Argentina, including
those for the purposes of repayment of principal and interest, dividend payments and repatriation of capital. In addition, there are
specific guidelines that must be complied with in order to make any repayment of principal or interest to foreign creditors. According
to these regulations, payments of profits and dividends abroad may be carried out as long as they correspond to financial statements
certified by external auditors. These formal and informal requirements have restricted the convertibility of currency and the ability
to repatriate capital from Nextel Argentina to its parent companies in 2014 and are expected to continue to restrict convertibility
and the ability to repatriate capital in 2015.

On June 9, 2005, the Federal Executive Power issued a decree that introduced certain requirements surrounding the transfer
of funds to and from Argentina and created a mandatory deposit of 30% of the funds transferred to Argentina. This decree provides
that, under certain circumstances, both Argentinean and non-Argentinean residents transferring funds from abroad to Argentina
are obligated to make a 365-day registered non-transferable non-interest bearing cash deposit equal to 30% of the funds transferred
by them to Argentina. Among others, foreign direct investment and subscription of primary issuances of debt or cash securities
with public offering in the capital or stock markets are exempt from such restricted deposit requirement.

Under applicable Argentine corporate law, a company may pay dividends only from liquid and realized profits as reported
in the company’s financial statements prepared in accordance with Argentine generally accepted accounting principles and duly
approved by the shareholders meeting. Of those profits, 5% must be set aside until a reserve of 20% of the company’s capital stock
has been established. Effective September 23, 2013, dividend payments are subject to a 10% withholding tax. In addition, when
the dividend payments are the result of profits paid out in excess of the accumulated profits computed for income tax purposes as
of the financial year preceding the date of the distribution of such dividends, a 35% withholding tax applies on the amount of the
surplus. A withholding tax of 35% applies to interest paid by Nextel Argentina to NII Holdings or any of its U.S. subsidiaries with
respect to intercompany loans made by NII Holdings or its U.S. subsidiaries to Nextel Argentina.

Employees

As of December 31, 2014, we had about 9,800 employees. Nextel Brazil is a party to a legally mandated collective bargaining
agreement that covers all of its employees and expires on September 30, 2015. Although Nextel Mexico is a party to certain
collective bargaining agreements, as of December 31, 2014, none of Nextel Mexico’s employees have chosen to participate under
these agreements. In addition, beginning in February 2014, Nextel Argentina is also a party to a collective bargaining agreement
that covers the majority of its employees. NII Holdings is not a party to any collective bargaining agreement. We believe that the
relationship between us and our employees, and between each of our operating companies and its employees, is good.

Access to Public Filings and Board Committee Charters

We maintain an internet website at www.nii.com. Information contained on our website is not part of this annual report on
Form 10-K. Stockholders of the Company and the public may access our annual reports on Form 10-K, quarterly reports on
Form 10-Q, current reports on Form 8-K and amendments to these reports filed with or furnished to the SEC under the Securities
Exchange Act of 1934, as amended, through the “investor relations” section of our website. This information is provided by a
third party link to the SEC’s online EDGAR database, is free of charge and may be reviewed, downloaded and printed from our
website at any time.

We also provide public access to our code of ethics, entitled the NII Holdings, Inc. Code of Conduct and Business Ethics,
and the charters of the following committees of our Board of Directors: the Audit Committee, the Compensation Committee, the
Corporate Governance and Nominating Committee and the Finance Committee. The committee charters may be viewed free of
charge on the Investor Relations link of our website at the following address: www.nii.com. You may obtain copies of the committee
charters and the Code of Conduct and Business Ethics free of charge by writing to: NII Holdings Investor Relations, 1875 Explorer
Street, Suite 800, Reston, Virginia 20190. If a provision of our Code of Conduct and Business Ethics required under the
Nasdaq Global Select Market corporate governance standards is materially modified, or if a waiver of our Code of Conduct and
Business Ethics is granted to a director or executive officer, we will post a notice of such action on the Investor Relations link of
our website at the following address: www.nii.com. Only the Board of Directors or the Audit Committee may consider a waiver
of the Code of Business Conduct and Ethics for an executive officer or director.

Item 1A.

Risk Factors

Investors should be aware that we and our business are subject to various risks, including the risks described below. Our
business, financial condition or results of operations could be materially adversely affected by any of these risks. The trading price
of our common stock could decline due to any of these risks, and investors may lose all or part of any investment. Our actual
results could differ materially from those anticipated in these forward-looking statements as a result of certain factors, including
the risks faced by us described below and included elsewhere. Please note that additional risks not presently known to us or that
we currently deem immaterial may also impair our business and operations.

The filing of a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code will subject the
Company to a number of risks and uncertainties and may have an adverse effect on the Company’s liquidity, results of
operations, brand or business prospects, and any plan of reorganization implemented in the bankruptcy proceeding is
expected to provide that holders of claims and interests with respect to our equity securities, or rights to acquire our equity
securities, would be entitled to no recovery and that those claims and interests would be canceled for little or no
consideration.

On September 15, 2014, NII Holdings, Inc. and certain of our subsidiaries filed voluntary petitions for relief under Chapter
11. As a result of this filing, our operations could be adversely affected, and there can be no assurances as to the length of the
bankruptcy proceeding or whether any plan of reorganization will be approved by our creditors and confirmed by the Bankruptcy
Court. While we expect to continue normal operations, upon commencement of the bankruptcy proceeding, transactions outside
the ordinary course of business require Bankruptcy Court approval, which may limit our ability to timely respond to certain events
or to take advantage of certain opportunities. The impact of the bankruptcy proceeding cannot be accurately predicted or quantified,
and during the bankruptcy proceedings, we will be subject to additional risks and uncertainties relating to our ability to:

• obtain Bankruptcy Court approval with respect to motions filed in the bankruptcy proceedings from time to time;

• obtain creditor and Bankruptcy Court approval for, and then to confirm, a plan of reorganization to emerge from

bankruptcy;

• attract and retain customers who may be unwilling to conduct business with us as a result of the bankruptcy proceedings;

• obtain and maintain acceptable terms with vendors and service providers and to maintain contracts that are critical to our

operations;

• attract, motivate and retain key employees;

• execute transactions outside of the normal course of business; and

• execute our business plan.

In addition, we currently expect that, under any plan of reorganization implemented in the bankruptcy proceedings, the
holders of claims and interests with respect to our equity securities, or rights to acquire our equity securities, will not be entitled
to any recovery and that those claims and interests will be canceled for no consideration.

2. The inability to complete the sale of Nextel Mexico may have an adverse effect on our ability to emerge from bankruptcy

and future liquidity.

The completion of the sale of Nextel Mexico is subject to several conditions, including: (i) the Bankruptcy Court having
entered all appropriate orders; (ii) obtaining all required governmental approvals; (iii) the absence of a material adverse effect on
Nextel Mexico; and (iv) certain other customary conditions. If these closing conditions are not satisfied or waived in accordance
with the Purchase Agreement or if the Purchase Agreement is terminated for any other reason other than as a result of our decision
to pursue a competing transaction, we may not be able to achieve certain milestone events included in the Revised PSA, including
the Bankruptcy Court’s approval and completion of the sale of Nextel Mexico, confirmation of the Revised PSA and the occurrence
of the effective date of the Revised Plan. If we fail to achieve any of these milestone events by the applicable date specified in the
Revised PSA, the Revised PSA may be terminated and there can be no assurances that we will be able to reach a new plan support
agreement or obtain creditor approval for a revised plan of reorganization to emerge from bankruptcy. Our failure to complete the
sale of Nextel Mexico would also have an adverse impact on our liquidity requiring us to secure other sources of financing to
support our business plan, which could also have an adverse impact on our ability to successfully develop and implement a plan
of reorganization to emerge from bankruptcy.

3. Our failure to maintain effective internal controls over financial reporting may adversely affect the accuracy and timing

of our financial reporting.

As described in Part II. Item 9A. Controls and Procedures included in this annual report on Form 10-K, we disclosed a
material weakness in internal control over financial reporting related to an aggregation of control deficiencies in Brazil resulting
from Nextel Brazil's failure to establish an effective control environment and monitoring activities, including an organizational
structure with sufficiently trained resources where supervisory roles, responsibilities and monitoring activities are aligned with
our financial reporting objectives. Further, Nextel Brazil did not maintain effective operation of process level controls, including
reconciliation and management review controls. Our efforts to remediate these deficiencies are ongoing and include reassessing
the organizational structure within Nextel Brazil, providing training on the Company's policies and procedures and the Company's
system of internal control over financial reporting, including individuals' responsibilities, improving the documentation and
operating effectiveness of internal controls over financial reporting and increasing the level of involvement and oversight from
the corporate office until the organizational structure and financial reporting processes in Brazil have matured.

Our inability to maintain effective internal control over financial reporting, as described above, combined with issues or
delays in implementing the improvements described herein, could result in a material misstatement to our financial statements or
other disclosures, which could have an adverse effect on our business, financial condition or results of operations.

4. Due to our Chapter 11 filing and recent results of operations, we may not be able to continue as a going concern.

Over the course of the last several years, our results of operations, including our operating revenues and operating cash flows,
have been negatively affected by a number of factors, including competitive pressure across all of our markets, the overall
depreciation of the value of local currencies relative to the U.S. dollar, the impact of previous delays in the deployment and launch
of services on our WCDMA networks, which combined with competitive conditions to slow the pace of subscriber growth and
revenues on those networks, and the increased costs to support both of our networks. These and other factors had a significant
negative impact on our results, and as a result, we ended 2014 with a significantly smaller subscriber and revenue base than was
necessary to reach the scale required to generate positive operating income.

These conditions, and their impact on our liquidity, raise substantial doubt about our ability to fund our debt obligations
when they become due, which in addition to our failure to satisfy certain financial covenants under our existing debt obligations,
raise substantial doubt about our ability to continue as a going concern. For this purpose, we assume that a business is generally
considered to be a going concern if there is neither the intention nor the need to liquidate or materially curtail the scope of its
business plans.

We may not be able to execute our business plan or meet our obligations.

Based on our current cash and investment balances and forecasted payment obligations, it will be necessary for us to raise
debtor-in-possession financing by the second quarter of 2015 to ensure we can continue to meet those obligations in the ordinary
course of business. We plan to secure $350.0 million in bridge loan financing contemplated by the Revised PSA that would remain

outstanding in order to provide us with the additional liquidity necessary to fund our business plan until the sale of Nextel Mexico
is completed. We expect to use a portion of the proceeds from the sale of Nextel Mexico to repay this debtor-in-possession loan
and support our business plan going forward.

Our current circumstances, together with the restrictions in our current financing arrangements and/or general conditions in
the financial and credit markets would be expected to make it difficult to obtain funding for our business either before or after we
emerge from Chapter 11 pursuant to a confirmed plan of reorganization. If available, the cost of any funding could be both
significant and higher than the cost of our existing financing arrangements. Moreover, the debtors' access to additional funding
will be subject to the approval of the Bankruptcy Court while our Chapter 11 cases are pending, and we believe that our ability
to secure significant additional funding, other than debtor-in-possession financing obtained while we are subject to the Chapter
11 proceedings, will not be available until we emerge from those proceedings. Our inability to obtain suitable financing when it
is required for these or other reasons could, among other things, negatively impact our results of operations and liquidity and result
in our inability to implement our current or future business plans.

Our current business plan assumes that customers will find our services attractive and that we will be able to continue to
expand our subscriber base on our WCDMA networks. Our business plan also assumes that we will increase our operating revenues
and ultimately generate positive operating cash flows. However, given the factors that have negatively affected our business, the
difficulties associated with predicting our ability to overcome these factors and the uncertainty regarding our ability to complete
the proposed sale of Nextel Mexico and confirm a plan of reorganization that would allow us to successfully restructure our debt
obligations and emerge from the Chapter 11 proceedings, there can be no assurance that we will be able to achieve these results.

As of December 31, 2014, we were in violation of one or more of the financial covenants under some of our financing
arrangements.

The negative impact of the factors discussed above on our results of operations also adversely affected our ability to comply
with certain financial covenants in our existing debt obligations. Specifically, as of the June 30, 2014 measurement date, we were
not in compliance with certain financial covenants in our equipment financing facilities in Brazil and Mexico. In December 2014,
Nextel Brazil and Nextel Mexico and the lender under the equipment financing facilities agreed to amendments to those facilities
that removed all financial covenants beginning with the December 31, 2014 measurement date and continuing through the June
30, 2017 measurement date. In addition, in February 2015, Nextel Brazil and the lenders providing the Brazil local bank loans
entered into standstill agreements under which the lenders agreed that they would not seek remedies under the provisions of the
agreements related to Nextel Brazil's failure to satisfy the financial covenants in the loan agreements in the period before September
15, 2015 and that further principal repayment obligations due between the signing date and September 15, 2015 would be suspended.
In addition, the standstill agreements formally commit the lenders to sign amendments once certain conditions are met. Among
others, these conditions include an effective date of our emergence from Chapter 11 on or prior to September 15, 2015. In the
event of a breach of one or more of the conditions listed above, the lenders have the right to terminate the standstill agreement
and exercise all remedies under the agreements in place, including but not limited to declaring an event of default for noncompliance
with the financial covenants and/or nonpayment of amounts due under the repayment schedule. Following the declaration of an
event of default, the lenders will have the right to accelerate the loans and proceed with claims against the collateral. See Note 9
to our consolidated financial statements for more information.

5. Our independent registered public accounting firm has indicated that our financial condition raises substantial doubt as

to our ability to continue as a going concern.

Based on our results of operations, including our operating revenues and operating cash flows, and the impact such results
have had on our liquidity, in combination with the uncertainty surrounding our Chapter 11 filing and other factors, our independent
registered public accounting firm has included a statement with respect to our ability to continue as a going concern in their report
on our consolidated financial statements for the year ended December 31, 2014. See “3. Due to our Chapter 11 filing and recent
results of operations we may not be able to continue as a going concern." and "— Business Update." However, our financial
statements have been prepared assuming we will continue to operate as a going concern, which contemplates the realization of
assets and the satisfaction of liabilities in the normal course of business. The reaction of investors and others to the inclusion of a
going concern statement by our auditors, our results of operations and questions regarding our potential inability to continue as a
going concern may cause others to choose not to deal with us due to concerns about our ability to meet our contractual obligations
and may materially adversely affect our share price and our ability to continue to execute our business plans, raise new capital
and/or make our scheduled debt payments on a timely basis or at all.

6. Because our cash flows from operating activities are negative, and are expected to continue to be negative through 2015,
we will likely need to meet our obligations and fund our working capital with cash on hand and proceeds from asset sales.

Our cash flows from operating activities were negative in 2014, and based on our current plans, we expect our cash flows
from operating activities to remain negative through 2015. Our current plans are based on a number of key assumptions relating
to, among other things, our ability to attract and retain customers and build our subscriber and revenue base without significantly
increasing our costs. If any of our assumptions are not borne out or are otherwise not correct, our cash flows from operations could
be significantly lower than expected. As a result, our cash flows from operating activities could continue to be negative or our
capital expenditures could exceed our cash flows from operations beyond 2015 and for an extended period of time. There can be
no assurance that we will succeed in executing on our plans or that we will generate positive cash flows from operations or cash
flows from operations sufficient to cover our capital expenditures in the future. See “3. Due to our Chapter 11 filing and recent
results of operations we may not be able to continue as a going concern.”

Our current business plan assumes that we will complete the proposed sale of Nextel Mexico, that customers will find our
services attractive and that we will be able to continue to expand our subscriber base on our WCDMA network in Brazil. We also
assume that we will be able to achieve a partial reversal of the subscriber loss trends we have experienced recently. However,
given the factors that have negatively affected our business, the difficulties associated with predicting our ability to overcome
these factors and the uncertainty regarding our ability to complete the Nextel Mexico sale and to confirm a plan of reorganization
that would allow us to successfully restructure our debt obligations and emerge from the Chapter 11 proceedings, there can be no
assurance that we will be able to achieve these results. In addition, we need to pay cash taxes and fund our working capital.

Due to the combined impact of the commencement of the Chapter 11 cases relating to NII Holdings, Inc. and certain of its
non-operating subsidiaries, our recent and projected results of operations and other factors, our access to the capital markets is
likely to be limited or nonexistent. The debtors' access to additional funding will also be subject to the approval of the Bankruptcy
Court while they remain in Chapter 11 proceedings, and we believe that our ability to secure significant additional funding, other
than any debtor-in-possession financing obtained while we are subject to the Chapter 11 proceedings that we would expect to
repay with proceeds from the proposed sale of Nextel Mexico, will be conditioned upon our emergence from those proceedings
pursuant to a confirmed plan of reorganization.

If we are not able to compete effectively in the highly competitive wireless communications industry, our future growth
and operating results will suffer.

Our business involves selling wireless communications services to subscribers, and as a result, our economic success is
based on our ability to attract new subscribers and retain current subscribers. Our success will depend on the ability of our operating
companies to compete effectively with other telecommunications services providers, including other wireless telecommunications
companies, internet and cable service providers and providers of fixed wireline services, in the markets in which they operate.
Our ability to compete successfully will depend on our ability to anticipate and respond to various competitive factors affecting
the telecommunications industry in our markets, including the availability of new services, features and technologies; changes in
consumer preferences, demographic trends and economic conditions; our ability to fund our operations; and our competitors'
pricing strategies.

The wireless industries in our markets are highly competitive, making it difficult for us to attract and retain customers. If
we are unable to attract and retain customers, our financial performance will be impaired.

Competition among telecommunications service providers in our markets is intense as multiple carriers seek to attract and
retain customers. Some of the factors contributing to this competitive environment include a higher relative penetration of wireless
services in our markets compared to historic levels, which drives more aggressive competition as competitors seek to attract and
retain customers that support the growth of their businesses in a more saturated market, the development and availability of new
products and services, including services supported by new technologies, and the entry of new competitors. We also expect the
current trend of alliances, cost-sharing arrangements and consolidation in the wireless and communications industries to continue
as companies respond to the need for cost reduction and additional spectrum. This trend may result in the creation of larger and
more efficient competitors with greater financial, technical, promotional and other resources to compete with our businesses. In
addition, as we continue to pursue our plans to expand our marketing and sales focus to include a larger segment of high value
consumers, we will be increasingly seeking to attract customers in segments that have historically been predominantly served by
our competitors, many of which are larger companies with more extensive networks, financial resources and benefits of scale that
allow them to spend more money on marketing and advertising than us and to exploit scale advantages that allow them to offer
products and services at a lower cost.

In order to obtain a competitive advantage, our competitors have, among other things:

•

provided increased handset subsidies;

offered higher commissions to distributors;

offered a broader range of handsets and, in some cases, offered those handsets through exclusivity periods;

provided discounted or free airtime or other services;

expanded their networks to provide more extensive network coverage;

developed and deployed networks that use new technologies and support new or improved services;

offered incentives to larger customers to switch service providers, including reimbursement of cancellation fees; and

offered bundled telecommunications services that include local, long distance and data services.

In addition, number portability requirements, which enable customers to switch wireless providers without changing their
wireless numbers, have been implemented in all of our markets, making it easier for wireless providers to effectively target and
attract their competitors' customers.

The competitive environment in our markets and competitive strategies of our competitors will put pressure on the prices
we can charge for our services and for handsets and other devices that we sell in connection with our service offerings. These
developments and actions by our competitors could continue to negatively impact our operating results and our ability to attract
and retain customers. These competitive conditions may also require that we incur increased costs such as higher sales commissions
or handset subsidies as we add new customers, which may reduce our profitability even while customer growth continues. If we
are unable to respond to competition and compensate for declining prices by adding new customers, increasing usage and offering
new services, our revenues and profitability could continue to decline.

b. Competition and technological changes in the market for wireless services, including competition driven by our competitors'
deployment of long-term evolution or other advanced technologies, could negatively affect our average revenue per
subscriber, customer turnover, operating costs and our ability to attract new subscribers, resulting in adverse effects on our
revenues, future cash flows, growth and profitability. If we do not keep pace with rapid technological changes or if we fail
to deploy our WCDMA networks and offer new services on these networks in a manner that delivers a quality customer
experience, we may not be able to attract and retain customers.

The wireless telecommunications industry is experiencing significant technological change. Spending by our competitors
on new wireless services and network improvements could enable them to obtain a competitive advantage with new technologies
or enhancements that we do not offer. Rapid change in technology may lead to the development of wireless communications
technologies that support products or services that consumers prefer over the products or services that we offer. If we are unable
to keep pace with future advances in competing technologies on a timely basis, or at an acceptable cost, we may not be able to
compete effectively and could lose subscribers to our competitors.

While we have deployed or are in the process of deploying our WCDMA networks in our markets other than Argentina, they
have yet to achieve wide acceptance, and competitors in each of our markets have launched new or upgraded networks that use
technology similar to the WCDMA networks that we have deployed or are in the process of deploying and are designed to support
services that use high speed data transmission capabilities, including internet access and video telephony, and some of those
competitors have expended significant resources and made substantial investments to deploy upgrades to the technology used in
their networks. Some of our competitors have also deployed or announced their plans to deploy new network technologies that
could provide further enhancements to data speed and capacity in our markets, including services utilizing LTE technologies.
These and other future technological advancements may enable competitors to offer features or services we cannot provide or
exceed the quality of services we offer, thereby making our services less competitive. In addition, we may not be able to accurately
predict technological trends or the success of new services in the market. If our services fail to gain acceptance in the marketplace
in the near term, or if costs associated with implementation and completion of the introduction of these services materially increase,
our ability to retain and attract customers could continue to be adversely affected. In particular, our push-to-talk services on our
new WCDMA networks may not meet the continually changing demands of our customers and may no longer serve to differentiate
our services in the future.

In Brazil and Argentina, our current 800 MHz spectrum holdings are largely contiguous, making it possible to use that
spectrum to support future technologies, if certain technical, operational and regulatory requirements are met, including, for
example, the availability of compatible network and subscriber equipment. In Mexico, our 800 MHz spectrum is either partially
contiguous or non-contiguous. As a result, while it may be feasible to use a portion of the spectrum to support future technologies,
it will be necessary to reconfigure the spectrum band to increase the amount of contiguous spectrum for it to be used to efficiently
support those technologies. In Argentina, we do not hold rights to use additional spectrum in bands that would facilitate a transition

to a new network technology, which could make it more difficult or impossible for us to deploy new and more competitive services
in Argentina.

Some of our competitors are financially stronger than we are, which may limit our ability to compete based on price.

Because of their size, scale and resources, some of our competitors may be able to offer services to subscribers at prices that
are below the prices that our operating companies can offer for comparable services. Many of our competitors are well-established
companies that have:

•

substantially greater financial and marketing resources;

larger customer bases;

larger spectrum positions;

higher profitability and positive free cash flow;

more access to funding, lower leverage and lower cost of financing; and

larger service coverage areas than those of our operating companies.

If we cannot compete effectively based on the price of our service offerings and related cost structure, our results of operations

may be adversely affected.

The network and subscriber equipment we currently use and expect to use is more expensive than the equipment used by our
competitors, which may limit our ability to compete.

Our iDEN-based networks utilize a proprietary technology developed and designed by Motorola Solutions, and Motorola
Mobility is the primary supplier for the network equipment and handsets we sell for use on our iDEN networks. In contrast, all
of our competitors use infrastructure and customer equipment that are based on standard technologies like the global system for
mobile communications standard, or GSM, and WCDMA, which are substantially more widely used technologies than iDEN, are
available from a significant number of suppliers and are produced in much larger quantities for a worldwide base of customers.
While we expect to capture cost benefits from our transition to WCDMA networks and services, our plans to continue to offer
handsets that feature push-to-talk services, as well as our smaller size relative to our competitors, may result in the cost of our
handsets being higher, particularly those that are designed specifically to support push-to-talk services, because they will not be
produced in the same quantities as our competitors' more standardized WCDMA handsets. As a result, our competitors benefit
from economies of scale and lower costs for handsets and infrastructure equipment than are available to us. The higher costs of
our handsets and other equipment may make it more difficult for us to attract or retain customers, and may require us to absorb a
comparatively larger cost of offering handsets to new and existing customers. The combination of these factors may place us at a
competitive disadvantage and may reduce our growth and profitability.

In addition, the spectrum band that we use to support our WCDMA networks and services in Mexico is not as widely used
throughout the world to support WCDMA networks as other spectrum bands that are being used by some of our competitors.
Utilizing this type of spectrum band may have an adverse impact on the availability of certain types of handsets that our customers
may desire and may increase the costs of the handsets we offer.

e. Our operating companies may face disadvantages when competing against government-owned and formerly government-

owned incumbent wireline operators or wireless operators affiliated with them.

In some markets, our operating companies compete against a government-owned telecommunications operator or a formerly
government-owned telecommunications operator, some of which enjoy a near monopoly position relating to the provision of
wireline telecommunications services and may have a wireless affiliate. For example, an affiliate of Telcel, which is our largest
competitor in Mexico, is the incumbent provider of wireline services in Mexico and was formerly a government-owned monopoly.
In Argentina, we expect to compete against ARSAT, which is a government-owned telecommunications operator. Our operating
companies may be at a competitive disadvantage in these markets because former government-owned incumbents or affiliated
competitors may have:

•

close ties with national regulatory authorities;

control over connections to local telephone lines; or

the ability to subsidize competitive services with revenues generated from services they provide on a monopoly or
near-monopoly basis.

For example, the services that we provide on our new WCDMA networks require significantly greater data capacity than is
the case on our iDEN networks, and this higher capacity demand have made it necessary for us to obtain wireline or other connecting

circuits between elements of our network such as switches and transmitter and receiver sites that are capable of transporting a
significantly higher volume of data traffic. In some instances, the availability of those higher capacity circuits is limited and in
many cases, our access to those circuits is controlled by entities that are affiliated with our competitors. As a result, we are dependent
on entities that are affiliated with our competitors to provide us with the data transport services needed to support our networks
and services. Our ability to offer services could be adversely affected if those entities were to choose to allocate limited transport
capacity to other customers including their wireless affiliates or otherwise make it more difficult for us to obtain the necessary
transport capacity to support our networks and services.

Our operating companies may also encounter obstacles and setbacks if local governments adopt policies favoring these
competitors or otherwise afford them preferential treatment. As a result, our operating companies may be at a competitive
disadvantage to incumbent providers, particularly as our operating companies seek to offer new telecommunications services.

Our coverage is not as extensive as those of other wireless service providers in our markets, which may limit our ability to
attract and retain subscribers.

In recent years, we have deployed and will continue to expand and enhance our WCDMA networks, but our current networks
do not offer nationwide coverage in the countries in which we operate nor will they provide the coverage available on some of
our competitors' networks. Although we have entered into roaming agreements relating to our WCDMA services in Brazil and
Mexico that allow our customers to use roaming services in a broader area in those markets, we are not able to supplement our
iDEN network coverage using roaming arrangements because the uniqueness of our iDEN technology limits our potential roaming
partners for subscribers solely on iDEN networks. In addition, the implementation of the roaming services that support our WCDMA
services are subject to the risks described below, and the costs of such services may be uneconomical, particularly if the competitive
environment continues to put pressure on the prices we are able to charge for services provided to our customers. As a result, we
will not be able to utilize roaming arrangements to extend the coverage of our iDEN networks and may not be able to economically
extend the coverage of our WCDMA networks using our existing or future roaming arrangements, making it difficult for us to
provide geographic coverage for our services that is sufficient to attract and retain certain subscribers and compete effectively
with competitors that operate mobile networks with more extensive service areas.

We have entered into roaming arrangements with respect to services supported by our WCDMA networks in Brazil and
Mexico that enable our customers in Brazil and Mexico to roam within those markets in areas where we do not offer network
coverage. There is no guarantee we will be able to effectively implement or maintain these agreements to provide roaming service
in areas where we do not have network coverage or that the terms of those agreements will allow us to utilize roaming services
to economically extend our coverage areas. In addition, we have entered into agreements with wireless carriers in a number of
countries that allow customers whose service is supported by our WCDMA networks to utilize roaming services in those countries.
Both in-market and international roaming requires our customers to rely on networks that are owned and operated by third parties
and, in the case of in-market roaming, by our competitors. We are unable to ensure the availability of services or data speeds on
these networks, and in most cases, push-to-talk service, one of our key differentiators, will not be available or will not have the
same level of performance when our subscribers are roaming, which could negatively affect the service experience of our customers
and ultimately make it more difficult to retain these subscribers.

If there is a substantial increase in our customer turnover rate, our business could be negatively affected.

In recent years, we have experienced a higher consolidated customer turnover rate compared to earlier periods, which resulted
primarily from the combined impact of weaker economic conditions, more competitive sales environments in the markets in which
we operate and our offering of prepaid and hybrid services to customers who are more likely to change service providers.

In addition, we have broadened our target market to include customers that have typically demonstrated a willingness to
change service providers more frequently and have increased our usage of prepaid and hybrid post and prepaid payment terms as
part of our service plans in order to attract more price sensitive customers, both of which had an adverse impact on our consolidated
customer turnover rate. These and other changes in our marketing strategies and the types of customers we target have recently
had a negative impact on our consolidated customer turnover rate and could continue to have that impact in the future. Subscriber
losses adversely affect our business and results of operations because these losses result in lost revenues and cash flow, drive
higher bad debt expenses and require us to attract replacement customers and incur the related sales commissions and other costs.
Although attracting new subscribers and retaining existing subscribers are both important to the financial viability of our business,
there is an added focus on retaining existing subscribers because the cost of acquiring a new subscriber is much higher. Accordingly,
increased levels of subscriber deactivations have had and could continue to have a negative impact on our results, even if we are
able to attract new subscribers at a rate sufficient to offset those deactivations. If we experience further increases in our customer
turnover rate, or if the higher customer turnover rates we are currently experiencing do not decline to levels that are closer to what
we have historically experienced, our results of operations could be adversely affected.

If our networks do not perform in a manner that meets subscriber expectations, we will be unable to attract and retain
customers.

Customer acceptance of the services we offer on our networks is and will continue to be affected by technology-based
differences and by the operational performance and reliability of these networks. We may have difficulty attracting and retaining
customers if: we are unable to satisfactorily address and resolve performance or other transmission quality issues as they arise;
these issues limit our ability to deploy or expand our network capacity as currently planned; or these issues place us at a competitive
disadvantage to other wireless providers in our markets. In Mexico, our subscriber base, operating revenues and operating cash
flows were negatively impacted by Sprint's decision to deactivate its iDEN network in the U.S. in mid-2013 and our failure to
effectively deploy and optimize our WCDMA network to meet the needs of customers who were seeking new services to replace
their iDEN services, particularly customers living in areas near the border of Mexico and the U.S. These factors contributed to
the negative market perception of our brand and services provided using our WCDMA network that developed in Mexico in late
2013, and our competitors in Mexico used this negative perception as an opportunity to aggressively target our existing and
potential subscribers, making it difficult for us to attract and retain subscribers and resulting in a significant decline in our subscriber
base from December 31, 2013 to December 31, 2014.

Customer concerns about our financial condition, ability to continue as a going concern and ability to implement our business
plan, including our network development and deployment efforts, may have an additional adverse effect on our ability to
attract and retain customers.

We believe that our customers may take our medium- to long-term operating and financial outlook, particularly to the extent
that it is perceived to impact our network deployment and development, into account when deciding whether to continue or begin
service with us. Recently, our results of operations, including our operating revenues and operating cash flows, have been negatively
affected by a number of factors. See “3. Due to our Chapter 11 filing and recent results of operations, we may not be able to
continue as a going concern.” If customers or potential customers who are aware of our recent results of operations, or of current
and future adjustments to our business plan in response to those results, become concerned that we will be unable to continue to
provide service to them at a quality level that meets their needs, customer deactivations could increase and new subscribers could
decrease relative to our business plans. Our current business plan assumes that customers will find our services attractive and that
we will be able to increase our subscriber base. However, given the factors that have negatively affected our business and the
difficulties associated with predicting our ability to overcome these factors, there can be no assurance that these assumptions will
prove to be correct. Increases in customer deactivations and decreases in new subscribers relative to our business plan would
adversely affect our revenues and our ability to generate the cash needed to fund our business and meet our other obligations.

8. If we are not able to manage our future growth, our operating results will suffer.

Our ability to achieve our long-range business goals and to grow profitably is dependent on our ability to manage changes
to our business model and cost structure that are necessary to allow us to pursue our plans to expand both our service offerings
and our targeted customer segments, including by implementing new and more efficient supporting business systems and processes.
Our inability to complete these efforts in a timely fashion, or to manage the related costs, could have an adverse impact on our
business.

a. We may be limited in our ability to grow unless we successfully expand network capacity and launch competitive services.

To continue to successfully retain our existing customers, increase our customer base and pursue our business plan, we must

economically:

•

expand the capacity and coverage of our WCDMA networks;

secure sufficient transmitter and receiver sites at appropriate locations to meet planned system coverage and capacity
targets;

obtain adequate quantities of base radios and other system infrastructure equipment; and

obtain an adequate volume and mix of handsets to meet customer demand.

In particular, the deployment and expansion of the coverage and capacity of our WCDMA networks will require us to deploy
a significant number of new transmitter and receiver sites in order to meet the expanded coverage and capacity requirements for
those networks resulting from differences in our commercial strategies, differences in the propagation characteristics of the spectrum
bands being used to support those networks and the coverage requirements associated with the spectrum licenses being utilized
for those networks. In some of our markets, individuals and governments are opposing new tower construction and supporting
laws restricting the construction of towers and other transmitter and receiver sites. Compliance with such laws could increase the
time and costs associated with our planned network deployments. The effort required to locate and build a significant number of

additional transmitter sites across our markets in coming years will be substantial, and our failure to meet this demand could delay
or impair the expansion of our WCDMA networks, which would adversely affect our business.

In addition, as we launch a broader array of services on our WCDMA networks, we must develop, test and deploy new
supporting technologies, software applications and systems intended to enhance our competitiveness both by supporting existing
and new services and features, and by reducing the costs associated with providing those services. Successful deployment and
implementation of new services and technology on our WCDMA networks depend, in part, on the willingness and ability of third
parties to develop new handsets and applications that are attractive to our customers and that are available in a timely manner. We
may not be able to successfully expand our WCDMA networks as needed or complete the development and deployment of
competitive services using our new networks. Failure to successfully expand those networks and services could also be expected
to result in subscriber dissatisfaction that could affect our ability to retain subscribers and could have an adverse effect on our
results of operations and growth prospects. If this occurs, we may be unable to recover the substantial investment we are making
in our new networks and the related costs we incur to offer these new services.

Failure to successfully implement core information technology and operating systems may adversely affect our business
operations.

Our business strategy envisions growing our business by successfully building and deploying our WCDMA networks,
expanding our product and service offerings and expanding our target customer base. Even if we do expand our business, if we
fail to manage our growth effectively, our financial results could be adversely affected. Separately, growth may place a strain on
our management systems and resources. We must continue to refine and expand our business development and sales capabilities,
our network operations and information technology infrastructure, and the hardware, software, systems, processes and people to
effectively support current and future sales, customer service and information requirements of our business in an efficient and
cost-effective manner. In addition, failure to prioritize technology initiatives and effectively allocate resources in order to achieve
our strategic goals could result in a failure to realize those goals, including the expected benefits of our growth, and could negatively
affect our financial results.

Changes to our networks and business strategies require us to implement new operating and supporting systems to improve
our ability to address the needs of our customers, as well as to create additional efficiencies and strengthen our internal controls
over financial reporting. We may not be able to successfully implement these new systems in an effective or timely manner or we
could fail to complete all necessary data reconciliation or other conversion controls when implementing the new systems. In
addition, we may incur significant increases in costs and encounter extensive delays in the implementation and rollout of these
new systems. Failure to effectively implement our new operating systems may adversely affect our results of operations, customer
perceptions and internal controls over financial reporting.

As we grow, we must continue to hire, train, supervise and manage new employees. We cannot assure you that we will be
able to allocate our human resources optimally or identify and hire qualified employees or retain valued employees. If we are
unable to manage our growth and operations, our results of operations could be adversely affected.

c. Costs, regulatory requirements and other problems we encounter as we deploy our WCDMA networks could adversely affect

our operations.

In some instances, the rights to use the spectrum that supports our WCDMA networks come with significant regulatory
requirements governing the coverage of these networks, the timing of deployment of these networks and the loading of new
customers on these networks. If we fail to meet these regulatory requirements, the applicable regulators could assess fines and, in
some instances, take action to revoke our spectrum rights.[In addition, our deployment of these new networks will require significant
capital expenditures and will result in incremental operating expenses prior to fully launching services. Costs could increase beyond
expected levels as a result of unforeseen delays, cost overruns, unanticipated expenses, regulatory changes, engineering design
changes, problems with network or systems compatibility, equipment unavailability and technological or other complications.

In addition, regulators could require us to provide competitors with the ability to interconnect with our push-to-talk services
and, accordingly, gain access to our push-to-talk customers in the future. This access could dilute the competitive advantage and
negatively affect the quality of this key differentiator, which could affect the willingness of current customers to remain on our
network and negatively impact the willingness of potential customers to choose our service.

Laws restricting the exchange of currencies or expatriating funds limit the ability of our subsidiaries to make funds
available to us.

Because almost all of our business operations and assets are conducted and held by our foreign subsidiaries, we depend on
those subsidiaries to provide us with cash to satisfy our obligations whether in the form of advances from our subsidiaries, the
repayment by our subsidiaries of intercompany loans or the payment of dividends and other distributions from the net earnings
and cash flow generated by these subsidiaries. Laws or regulations restricting the exchange of currencies or expatriation of funds
limit the ability of these subsidiaries to distribute cash or assets. For example, in Argentina, the Argentine Central Bank has

implemented certain formal and informal requirements related to the acquisition of foreign currency by Argentine and non-
Argentine residents and on the inflow and outflow of capital to and from Argentina, including those for the purposes of repayment
of principal and interest, dividend payments and repatriation of capital. From time to time, the Argentine Central Bank and other
authorities in Argentina have used these formal and informal requirements to limit the convertibility of currency and our ability
to repatriate capital from Nextel Argentina to its parent companies. Due to these restrictions, cash and investments held by Nextel
Argentina are not available to our holding company or our subsidiaries located outside of Argentina. Brazilian law provides that
the Brazilian government may, for a limited period of time, impose restrictions on the remittance by Brazilian companies to foreign
investors of the proceeds of investments in Brazil. These restrictions may be imposed whenever there is a material imbalance or
a serious risk of a material imbalance in Brazil's balance of payments. The inability to receive sufficient cash from our subsidiaries
to satisfy our obligations would require us to obtain additional debt or equity financing or sell assets to meet those obligations.
There can be no assurance that we would be able to obtain such financing or sell assets at acceptable terms or at all and, under
such circumstances, our failure to do so could prevent us from satisfying our obligations and from maintaining cash for dividends.

10. We operate exclusively in foreign markets, and our assets, subscribers and cash flows are concentrated in Latin America,
which presents risks to our operating plans. These risks will become more concentrated in Brazil if we complete the sale
of Nextel Mexico.

As a holding company with operations concentrated in Latin America, our growth and operating results are dependent on
the strength and stability of the economic, political and regulatory environments in which we operate. If we successfully complete
the proposed sale of Nextel Mexico, as discussed in "Item 1. Business — Business Update," the risks associated with operating
exclusively in foreign markets will relate primarily to the events and conditions in Brazil, and changes in the economic, political
and regulatory environment or foreign currency exchange rates in Brazil will have a more significant impact on our operating
results than has been the case historically with operations in multiple Latin American markets. As a result, our business and
operations may be subject to a higher degree of risk and volatility due to the impact of the risks described below.

A decline in foreign exchange rates for currencies in our markets may adversely affect our growth and our operating results.

Historically, in the countries in which we do business, the values of the local currencies in relation to the U.S. dollar have
been volatile. The unstable global economic environment and recent weakness in the economies of some of the countries where
we operate has led to increased volatility in these currencies. Nearly all of our revenues are earned in non-U.S. currencies, but we
report our results in U.S. dollars. As a result, fluctuations in foreign currency exchange rates have had and can have a significant
impact on our reported results that may not reflect the operating trends in our business. In addition, almost 50% of our outstanding
debt that has not been classified as subject to compromise is denominated in U.S. dollars. A decline in the values of the local
currencies in the markets in which we operate makes it more costly for us to service our U.S. dollar-denominated debt obligations
and affects our operating results because we generate nearly all of our revenues in foreign currencies, but we pay for some of our
operating expenses and capital expenditures in U.S. dollars. Further, because we report our results of operations in U.S. dollars,
declines in the value of local currencies in our markets relative to the U.S. dollar result in reductions in our reported revenues, as
well as a reduction in the carrying value of our assets, including the value of cash investments held in local currencies. Depreciation
of the local currencies also results in increased costs to us for imported equipment. We have entered into some limited hedging
arrangements to mitigate short-term volatility in foreign exchange rates, but have not hedged against long-term movements in
foreign exchange rates because the alternatives currently available for hedging against those movements are limited and costly.
As a result, if the values of local currencies in the countries in which our operating companies conduct business depreciate relative
to the U.S. dollar, we would expect our reported operating results in future periods, and the value of our assets held in local
currencies, to be adversely affected.

b. We face economic and political risks in our markets, which may limit our ability to implement our strategy and could
negatively impact our financial flexibility, including our ability to repatriate and redeploy profits, and may disrupt our
operations or hurt our performance.

Our operations depend on the economies of the markets in which our operating companies conduct business, all of which
are considered to be emerging markets. These markets are in countries with economies in various stages of development, some
of which are subject to volatile economic cycles and significant, rapid fluctuations in terms of commodity prices, local consumer
prices, employment levels, gross domestic product, interest rates and inflation rates, which have been generally higher, and at
times, significantly higher than the inflation rate in the U.S. If these economic fluctuations and higher inflation rates make it more
difficult for customers to pay for our products and services, we may experience lower demand for our products and services and
a decline in the growth of their customer base and in revenues. In addition, in recent years, the economies in some of the markets
in which we operate have also been negatively affected by volatile political conditions and, in some instances, by significant
intervention by the relevant government authorities relating to economic and currency exchange policies. For more information,
see "9. Laws restricting the exchange of currencies or expatriating funds limit the ability of our subsidiaries to make funds available

to us." Limitations on our ability to convert currency and repatriate and redeploy capital may prevent us from managing our
business and financial obligations in a cost effective manner, compete effectively, take advantage of new business opportunities
and grow our business.

We are unable to predict the impact that local or national elections and the associated transfer of power from incumbent
officials or political parties to newly elected officials or parties may have on the local economy or the growth and development
of the local telecommunications industry. Changes in leadership or in the ruling party in the countries in which we operate may
affect the economic programs developed under the prior administration, which in turn, may adversely affect the economies in the
countries in which we operate. Other risks associated with political instability could include the risk of expropriation or
nationalization of our assets by the governments in the markets where we operate. Although political, economic and social conditions
differ in each country in which we currently operate, political and economic developments in one country or in the U.S. may affect
our business as a whole, including our access to international capital markets to obtain funding needed for our business or to
refinance our existing indebtedness.

c. Our operating companies are subject to local laws and government regulations in the countries in which they operate, and
we are subject to the U.S. Foreign Corrupt Practices Act, which could limit our growth and strategic plans and negatively
impact our financial results.

Our operations are subject to local laws and regulations in the countries in which we operate, which may differ substantially
from those in the U.S., and we could become subject to legal penalties in foreign countries if we do not comply with those local
laws and regulations. In some foreign countries, particularly in those with developing economies, persons may engage in business
practices that are prohibited by U.S. regulations applicable to us such as the Foreign Corrupt Practices Act, or the FCPA. The
FCPA prohibits us from providing anything of value to foreign officials for the purpose of influencing official decisions or obtaining
or retaining business. Our employees and agents interact with government officials on our behalf, including interactions necessary
to obtain licenses and other regulatory approvals necessary to operate our business and through contracts to provide wireless
service to government entities, creating a risk that actions may occur that could violate the FCPA. Although we have implemented
policies and procedures designed to ensure compliance with local laws and regulations as well as U.S. laws and regulations,
including the FCPA, there can be no assurance that all of our employees, consultants, contractors and agents will abide by our
policies. The penalties for violating the FCPA can be severe. Any violations of law, even if prohibited by our policies, could have
a material adverse effect on our business.

In addition, in each market in which we operate, one or more regulatory entities regulate the licensing, construction,
acquisition, ownership and operation of our wireless communications systems. Adoption of new regulations, changes in the current
telecommunications laws or regulations or changes in the manner in which they are interpreted or applied could adversely affect
our operations by increasing our costs, reducing our revenues or making it more difficult for us to compete.

The regulatory schemes in the countries in which we operate allow third parties, including our competitors, to challenge our
actions or decisions of the regulators in our markets that potentially benefit us such as decisions regarding the allocation and
licensing of spectrum. If our competitors are successful in pursuing claims such as these, or if the regulators in our markets take
actions against us in response to actions initiated by our competitors, our ability to pursue our business plans and our results of
operations could be adversely affected.

Finally, rules and regulations affecting placement and construction of our transmitter and receiver sites affect our ability to
deploy and operate our networks in each of our markets, and therefore impact our business strategies. In some of our markets,
local governments have adopted very stringent rules and regulations related to the placement and construction of wireless towers,
or have placed embargoes on some of the cell sites owned by our operating companies, which can significantly impede the planned
expansion of our service coverage area or require us to remove or modify existing towers, which can result in unplanned costs,
negatively impact network performance and impose new and onerous taxes and fees. Compliance with such laws, rules and
regulations could increase the time and costs associated with our planned network deployments. The propagation characteristics
of the spectrum bands being used to support our WCDMA networks and the coverage requirements associated with the spectrum
licenses being utilized for those networks, particularly in Brazil, will require substantially more transmitter and receiver sites to
meet the minimum coverage requirements of those licenses and to provide coverage to the areas needed to provide competitive
services. In addition, our licenses to use spectrum in some of our markets require us to build our networks within proscribed time
periods, and rules and regulations affecting tower placement and construction could make it difficult to meet our build requirements
in a timely manner or at all, which could lead us to incur unplanned costs or result in the loss of spectrum licenses.

d. We pay significant import duties on our network equipment and handsets, and any increases could impact our financial

results.

Our operations are highly dependent upon the successful and cost-efficient importation of network equipment and handsets
and other devices from locations outside the countries in which we operate. Network equipment and handsets may be subject to

significant import duties and other taxes in the countries in which our operating companies conduct business. Any significant
increase in import duties in the future could significantly increase our costs. To the extent we cannot pass these costs on to our
customers, our financial results will be negatively impacted.

e. We are subject to foreign taxes in the countries in which we operate, which may reduce amounts we receive from our operating

companies or may increase our tax costs.

Many of the foreign countries in which we operate have increasingly turned to new taxes, as well as aggressive interpretations
of current tax law, as a method of increasing revenue. For example, our operating company in Brazil is required to pay two types
of income taxes, which include a corporate income tax and a social contribution tax and is subject to various types of non-income
related taxes, including value-added tax, excise tax, service tax, importation tax and property tax. In addition, the reduction in tax
revenues resulting from the economic downturn that has occurred in the last several years has led to proposals and new laws in
some of our markets that increase the taxes imposed on sales of handsets and on telecommunications services. The provisions of
new tax laws may attempt to prohibit us from passing these taxes on to our customers or our ability to do so may be limited by
competitive conditions. These taxes may reduce the amount of earnings that we can generate from our services or in some cases
may result in operating losses.

Distributions of earnings and other payments, including interest, received from our operating companies may be subject to
withholding taxes imposed by some countries in which these entities operate. Any of these taxes will reduce the amount of after-
tax cash we can receive from those operating companies.

In general, a U.S. corporation may claim a foreign tax credit against its federal income tax expense for foreign withholding
taxes and, under certain circumstances, for its share of foreign income taxes paid directly by foreign corporate entities in which
the company owns 10% or more of the voting stock. Our ability to claim foreign tax credits is, however, subject to numerous
limitations, and we may incur incremental tax costs as a result of these limitations or because we do not have U.S. Federal taxable
income.

We may also be required to include in our income for U.S. federal income tax purposes our proportionate share of specified
earnings of our foreign corporate subsidiaries that are classified as controlled foreign corporations, without regard to whether
distributions have been actually received from these subsidiaries.

f. We have entered into a number of agreements that are subject to enforcement in foreign countries, which may limit efficient

dispute resolution.

A number of the agreements that we and our operating companies enter into with third parties are governed by the laws of,
and are subject to dispute resolution in the courts of or through arbitration proceedings in, the countries or regions in which the
operations are located. We cannot accurately predict whether these forums will provide effective and efficient means of resolving
disputes that may arise. Even if we are able to obtain a satisfactory decision through arbitration or a court proceeding, we could
have difficulty enforcing any award or judgment on a timely basis. Our ability to obtain or enforce relief in the U.S. is also uncertain.

11. The costs we incur to connect our operating companies’ networks with those of other carriers are subject to local laws

in the countries in which they operate and may increase, which could adversely impact our financial results.

Our operating companies must connect their telecommunication networks with those of other carriers in order to provide
the services we offer. We incur costs relating to these interconnection arrangements and for local, long distance and data transport
services relating to the connection of our transmitter sites and other network equipment. These costs include interconnection
charges and fees, charges for terminating calls on the other carriers’ networks and transport costs, most of which are measured
based on the level of our use of the related services. We are able to recover a portion of these costs through revenues earned from
charges we are entitled to bill other carriers for terminating calls on our network, but because users of mobile telecommunications
services who purchase those services under contract generally, and business customers like ours in particular, tend to make more
calls that terminate on other carriers’ networks and because we have a smaller number of customers than most other carriers, we
incur more charges than we are entitled to receive under these arrangements. The terms of the interconnection and transport
arrangements, including the rates that we pay, are subject to varying degrees of local regulation in most of the countries in which
we operate, and often require us to negotiate agreements with the other carriers, most of whom are our competitors, in order to
provide our services. In some instances, other carriers offer their services to some of their subscribers at prices that are near or
lower than the rates that we pay to terminate calls on their networks, which may make it more difficult for us to compete profitably.
Our costs relating to these interconnection and transport arrangements are subject to fluctuation both as a result of changes in
regulations in the countries in which we operate and the negotiations with the other carriers. Changes in our customers’ calling
patterns that result in more of our customers’ calls terminating on our competitors’ networks and changes in the interconnection
arrangements either as a result of regulatory changes or negotiated terms that are less favorable to us could result in increased

costs for the related services that we may not be able to recover through increased revenues, which could adversely impact our
financial results.

12. Because we rely on one supplier for equipment used in our iDEN networks, any failure of that supplier to perform could

adversely affect our operations.

Some of the spectrum that our operating companies are licensed to use, other than the spectrum that supports our WCDMA
networks, is non-contiguous, and the iDEN technology is the only commercially available technology that operates on non-
contiguous spectrum. As a result, Motorola Solutions is the primary supplier for the network equipment and Motorola Mobility,
which is currently owned by Lenovo Group, is the primary supplier of the handsets we sell for use on our iDEN networks. If either
Motorola Solutions or Motorola Mobility fails to deliver system infrastructure equipment and handsets or enhancements to the
features and functionality of our iDEN-based networks and handsets on a timely, cost-effective basis, we may not be able to
adequately service our existing customers or attract new customers to services supported by our iDEN networks, particularly in
Argentina where we do not currently hold rights to use spectrum that would support the deployment of a WCDMA-based network.
Accordingly, if Motorola Solutions is unable to, or determines not to, continue supporting our iDEN-based infrastructure or if
Motorola Mobility is unable to, or determines not to, continue to manufacture iDEN-based handsets, our business in Argentina
will be materially adversely affected.

13. Our business could be negatively impacted by our reliance on indirect distribution channels for a significant portion of

our sales.

Our business depends heavily upon third party distribution channels for securing a substantial portion of the new customers
to our services, and with the expansion of our target market, we expect to rely more heavily on retailers and other sales channels
for a growing portion of our sales. In many instances, we rely on these third party dealers and retailers to serve as the primary
contact between us and the customer and to interact with other third parties on our behalf. As a result, there may be risks associated
with the actions taken by our distributors or the operators of our other retail channels, including potential risks associated with
the failure of our distributors or other retail channels to follow regulatory requirements. The volume of our new customer additions,
our ability to retain customers and our profitability could also be adversely affected if these third party dealers or retailers terminate
their relationship with us, if there are adverse changes in our relationships with them, if we alter our compensation arrangements
with these dealers or retailers or if the financial condition of these dealers or retailers deteriorates.

14. If our licenses to provide mobile services are not renewed, or are modified or revoked, our business may be restricted.

Wireless communications licenses and spectrum allocations are subject to ongoing review and, in some cases, to modification
or early termination for failure to comply with applicable regulations. If our operating companies fail to comply with the terms
of their licenses and other regulatory requirements, including installation deadlines and minimum loading or service availability
requirements, their licenses could be revoked. This is particularly true with respect to the grants of licenses for spectrum we use
to support our WCDMA networks, most of which impose strict deadlines for the construction of network infrastructure and
supporting systems as a condition of the license. Further, compliance with these requirements is a condition for eligibility for
license renewal. Most of our wireless communications licenses have fixed terms and are not renewed automatically. Because
governmental authorities have discretion to grant or renew licenses, our licenses may not be renewed or, if renewed, renewal may
not be on acceptable economic terms. In addition, the regulatory schemes in the countries in which we operate allow third parties,
including our competitors, to challenge the award and use of our licenses. If our competitors are successful in pursuing claims
such as these, or if regulators in our markets take actions modifying or revoking our licenses in response to these claims, our ability
to pursue our business plans, including our plans to deploy WCDMA networks, and our results of operations could be materially
adversely affected.

15. Any modification or termination of our trademark license with Nextel Communications could increase our costs.

Nextel Communications has licensed to us the right to use “Nextel” and other of its trademarks on a perpetual basis in Latin
America. However, Nextel Communications may terminate the license on 60 days notice if we commit one of several specified
defaults (namely, unauthorized use, failure to maintain agreed quality controls or a change in control of NII Holdings). If there is
a change in control of one of our subsidiaries, upon 90 days notice, Nextel Communications may terminate the sublicense granted
by us to the subsidiary with respect to the licensed marks. The loss of the use of the “Nextel” name and trademark could require
us to incur significant costs to establish a new brand in our markets, which could have a material adverse effect on our operations.

16. Our business could be negatively impacted by security threats and other material disruptions of our wireless networks.

Major equipment failures and the disruption of our wireless networks as a result of natural disasters, severe weather, terrorist
attacks, acts of war, cyber attacks or other breaches of network or information technology security, even for a limited period of
time, may result in significant expenses, result in a loss of subscribers or impair our ability to attract new subscribers, which in

turn could have a material adverse effect on our business, results of operations and financial condition. In the past, more stringent
network performance standards and reporting obligations have been adopted by the governments in some of our markets in order
to ensure quality of service during unforeseen disturbances. We could be required to make significant investments in our existing
networks in order to comply with these types of network performance standards. In addition, while we maintain information
security policies and procedures designed to comply with relevant privacy and security laws and restrictions, if we suffer a security
breach of customer or employee confidential data, we may be subject to significant legal and financial exposure, damage to our
reputation, and loss of confidence in the security of our products and services.

Item 1B.

Unresolved Staff Comments

None.

Item 2.

Properties

Our principal executive and administrative offices are located in Reston, Virginia, where we lease about 34,000 square feet
of office space, of which the lease of about 26,000 square feet expires in January 2020 and the lease of the remaining 8,000 square
feet expires in June 2015. In addition, each of our operating companies own and lease office space in each of the countries where
they conduct business.

Each operating company leases transmitter and receiver sites for the transmission of radio service in the countries in which
they operate under various individual site leases. As of December 31, 2014, our operating companies had constructed sites at
leased and owned locations for their business, including those constructed for our networks, as shown below:

Operating Company

Brazil

Mexico

Argentina

Total

Number
of Sites (1)

9,157

6,520

1,012

16,689

_______________________________________
(1) These amounts do not include 605 indoor sites in Brazil and Mexico and 388 GSM sites in Brazil.

Item 3.

Legal Proceedings

Securities Litigation. On March 4, 2014, a purported class action lawsuit was filed against the Company, NII Capital Corp.
and certain of the Company’s current and former directors and executive officers in the United States District Court for the Eastern
District of Virginia on behalf of a putative class of persons who purchased or otherwise acquired the securities of the Company
or NII Capital Corp. between February 25, 2010 and February 27, 2014. The lawsuit is captioned In re NII Holdings, Inc. Securities
Litigation, Case Number 14-CV-227. On July 18, 2014, the parties that have been designated as the lead plaintiffs in the lawsuit
filed a second amended complaint against only NII Holdings and three current and former officers, which generally alleges that
the defendants made false or misleading statements or concealed material adverse information about the Company’s financial
condition and operations in violation of Section 10(b), Rule 10b-5 and Section 20(a) of the Securities Exchange Act of 1934. The
complaint seeks class certification and unspecified damages, fees and injunctive relief. On September 22, 2014, the judge issued
an order staying all proceedings against the Company following the Company's filing of its petition for relief under Chapter 11.
On October 6, 2014, the Company's and the individual defendants' motion to dismiss was denied, and the case is currently continuing
as to the remaining individual defendants. On November 3, 2014, at the request of the parties, the court ordered that the case
against the three individual defendants be stayed indefinitely, and on January 7, 2015, the court extended the stay until the earlier
of May 22, 2015 or the effective date of a plan of reorganization. The Company and the named individuals will continue to
vigorously defend themselves in this matter.

jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code and orders of the
Bankruptcy Court. The Company’s other subsidiaries, including its operating subsidiaries in Brazil, Mexico and Argentina, are
not debtors in the Chapter 11 case. As a result of the bankruptcy proceedings, the pending litigation against the debtors is stayed.
Subject to certain exceptions and approval by the Bankruptcy Court, during the Chapter 11 proceedings, no party can take further
actions to recover pre-petition claims against the Company.

In addition, we are subject to other claims and legal actions that may arise in the ordinary course of business. We do not
believe that any of these pending claims or legal actions will have a material effect on our business, financial condition, results
of operations or cash flows. See Note 11 to our consolidated financial statements at the end of this annual report on Form 10-K
for more information.

Item 4.

Mine Safety Disclosures

Not applicable.

PART II

Item 5.

Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity
Securities

1. Market for Common Stock

Our common stock traded on the Nasdaq Global Select Market under the trading symbol “NIHD” through September 24,
2014. Based on our announcement that we filed for protection under Chapter 11 of the U.S. Bankruptcy Code and the associated
public interest concerns raised by the filing, as well as concerns regarding the residual equity interest of the existing listed securities
holders and about our ability to sustain compliance with all requirements for continued listing on the Nasdaq Market, including
in particular the listing rule that requires a minimum bid price of $1 per share, on September 25, 2014, trading of our common
stock was suspended at the opening of the Nasdaq Market. Since September 25, 2014, our common stock has traded on the Over-
the-Counter (OTC) Bulletin Board under the trading symbol “NIHDQ.” The following table sets forth on a per share basis the
reported high and low sales prices for our common stock, as reported on the market at the time, for the quarters indicated.

2013

First Quarter

Second Quarter

Third Quarter

Fourth Quarter

2014

First Quarter

Second Quarter

Third Quarter

Fourth Quarter

Price Range of
Common Stock

High

Low

$7.85

9.82

8.28

6.71

$3.51

1.27

0.84

0.10

$4.20

4.11

5.76

1.90

$0.83

0.43

0.05

0.02

2. Number of Stockholders of Record

As of February 28, 2015, there were approximately six holders of record of our common stock, including the Depository

Trust Corporation, which acts as a clearinghouse for multiple brokerage and custodial accounts.

3. Dividends

We have not paid any dividends on our common stock and do not plan to pay dividends on our common stock for the
foreseeable future. In addition, some of our financing documents contain and future financing agreements may contain restrictions
on the payment of dividends. We anticipate that for the foreseeable future any cash flow generated from our operations will be
used to develop and expand our business and operations and make contractual payments under our debt facilities in accordance
with our business plan.

Issuer Purchases of Equity Securities

We did not repurchase any of our equity securities during the fourth quarter of 2014.

Performance Graph

The following graph presents the cumulative total stockholder return on our common stock as listed on the Nasdaq Global
Select Market from December 31, 2009 through September 24, 2014 and on the Over-The-Counter Bulletin Board from September
25, 2014 through December 31, 2014. This graph also compares our common stock to the cumulative total stockholder return on
the Nasdaq 100 Index, the common stock of America Movil, S.A. de C.V. and Millicom International Cellular S.A. The graph
assumes an initial investment of $100 in our common stock as of December 31, 2009 and in each of the comparative indices or
peer issuers, and that all dividends were reinvested.

Index

NII Holdings

Nasdaq 100

America Movil

Millicom International

12/31/2009

12/31/2010

12/31/2011

12/31/2012

12/31/2013

12/31/2014

100.00

133.00

119.04

122.93

141.33

63.43

122.03

97.80

151.84

21.23

142.36

107.73

128.70

8.19

192.26

116.43

149.40

0.06

225.68

118.81

112.58

Item 6.

Selected Financial Data

The tables below set forth selected consolidated financial data for the periods or as of the dates indicated and should be read
in conjunction with the consolidated financial statements and notes thereto in Item 8 of this report and “Management’s Discussion
and Analysis of Financial Condition and Results of Operations” in Item 7 of this report. For more information regarding material
uncertainties in our business, see Note 2 and Note 11 to our consolidated financial statements.

Consolidated Statement of Operations Data:

Operating revenues

$ 3,688,720

$ 4,711,567

$ 5,693,235

$ 6,353,714

$ 5,271,603

Year Ended December 31,

2014

2013

2012

2011

2010

(in thousands, except per share data)

Impairment and restructuring charges

Foreign currency transaction (losses) gains, net

Net (loss) income from continuing operations

220,742

168,543

$
$
$
$ (130,499) $ (123,369) $
$(1,777,312) $(1,434,088) $

30,401
$
(63,330) $
(81,839) $

— $
(30,120) $
$
373,665

—

48,436

419,104

Net (loss) income from continuing operations per
common share, basic

Net (loss) income from continuing operations per
common share, diluted

(10.31) $

(8.34) $

(0.48) $

(10.31) $

(8.34) $

(0.48) $

2.18

2.16

2.49

2.43

December 31,

2014

2013

2012

2011

2010

(in thousands)

Consolidated Balance Sheet Data:

Total assets

$ 5,430,591

$ 8,679,954

$ 9,223,078

$ 9,822,136

$ 8,195,100

Long-term debt, including current portion

$ 1,512,392

$ 5,793,471

$ 4,709,545

$ 4,641,895

$ 3,127,597

Liabilities subject to compromise

$ 4,593,493

— $

—

Impairment and Restructuring Charges. During the year ended December 31, 2014, we recognized $220.7 million in
impairment and restructuring charges primarily related to the reduction of the carrying value of Nextel Argentina's asset group to
its estimated fair value, the discontinuation of certain projects related to the next generation of our push-to-talk services, restructuring
charges incurred in connection with the realignment of our organization and staffing structure, and other asset impairment charges
related to store closures and the shutdown or abandonment of transmitter and receiver sites in Brazil and Mexico. During the year
ended December 31, 2013, we recognized $168.5 million in impairment and restructuring charges primarily related to the
discontinuation of our use of software relating to customer relationship management, the restructuring of certain outsourcing
agreements to manage our network infrastructure and restructuring charges incurred in connection with the realignment of our
organization and staffing structure, including costs associated with staff reductions that occurred primarily at our corporate
headquarters and in Mexico. During the year ended December 31, 2012, we recognized $22.8 million in impairment charges
related to the write-off of certain information technology projects and $7.6 million in restructuring charges at the corporate level,
primarily related to the separation of employees in conjunction with certain actions taken to realign resources and roles between
our corporate headquarters and operating segments.

Foreign Currency Transaction (Losses) Gains, Net. Consolidated foreign currency transaction losses for the years ended
December 31, 2014, 2013, 2012 and 2011 primarily relate to the impact of the depreciation in the value of our local currencies
relative to the U.S. dollar on our operating companies' assets and liabilities. Consolidated foreign currency transaction gains of
$48.4 million for the year ended December 31, 2010 are primarily related to the impact of the appreciation in the value of the
Mexican peso relative to the U.S. dollar on peso-denominated receivables due to corporate from Nextel Mexico. See “Critical
Accounting Policies and Estimates — Foreign Currency.” for more information.

Net (Loss) Income From Continuing Operations. During the second half of 2013 and throughout most of 2014, we
experienced a significant decline in subscribers in Mexico and a reduction in operating revenues and operating cash flows generated
by Nextel Brazil and Nextel Mexico.

Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

INDEX TO MANAGEMENT’S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Forward Looking and Cautionary Statements

Introduction

A. Executive Overview

B. Results of Operations

1. Year Ended December 31, 2014 vs. Year Ended December 31, 2013

a. Consolidated

b. Nextel Brazil

c. Nextel Mexico

d. Nextel Argentina

e. Corporate

2. Year Ended December 31, 2013 vs. Year Ended December 31, 2012

a. Consolidated

b. Nextel Brazil

c. Nextel Mexico

d. Nextel Argentina

e. Corporate

C. Liquidity and Capital Resources

D. Future Capital Needs and Resources

E. Effect of Inflation and Foreign Currency Exchange

F. Effect of New Accounting Standards

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Forward-Looking and Cautionary Statements

This annual report on Form 10-K includes “forward-looking statements” within the meaning of the Private Securities
Litigation Reform Act of 1995. Statements regarding expectations, including forecasts regarding operating results, performance
assumptions and estimates relating to capital requirements, as well as other statements that are not historical facts, are forward-
looking statements. When used in this annual report on Form 10-K, these forward-looking statements are generally identified by
the words or phrases “would be,” “will allow,” “expects to,” “will continue,” “is anticipated,” “estimate,” “project” or similar
expressions.

While we provide forward-looking statements to assist in the understanding of our anticipated future financial performance,
we caution readers not to place undue reliance on any forward-looking statements, which speak only as of the date that we make
them. Forward-looking statements are based on current expectations and assumptions that are subject to significant risks and
uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Except as otherwise
required by law, we undertake no obligation to publicly release any updates to forward-looking statements to reflect events after
the date of this report, including unforeseen events.

We have included risk factors and uncertainties that might cause differences between anticipated and actual future results in
Part I, Item 1A. "Risk Factors” of this annual report on Form 10-K. We have attempted to identify, in context, some of the factors
that we currently believe may cause actual future experience and results to differ from our current expectations regarding the
relevant matter or subject area. The operations and results of our wireless communications business also may be subject to the
effects of other risks and uncertainties, including, but not limited to:

•

beliefs and assumptions regarding our ability to continue as a going concern, including our ability to successfully
confirm a plan of reorganization that would restructure certain of our debt obligations to address our liquidity issues
and allow the debtors to emerge from the Chapter 11 proceedings, or to execute one or more strategic transactions
either as part of such a plan of reorganization or otherwise;

our ability to attract and retain customers;

our ability to satisfy the requirements of our debt obligations;

our ability to access sufficient debt or equity capital to meet any future operating and financial needs;

our ability to meet the operating goals established by our business plan and generate cash flow;

general economic conditions in the U.S. or in Latin America, including specifically in the countries in which we operate
and in the market segments that we are targeting for our services, including the impact of uncertainties in global
economic conditions;

the political and social conditions in the countries in which we operate, including political instability, which may affect
the economies of our markets and the regulatory schemes in these countries;

the impact of foreign currency exchange rate volatility in our markets when compared to the U.S. dollar and related
currency depreciation in countries in which our operating companies conduct business;

reasonable access to and the successful performance of the technology being deployed in our service areas, and
improvements thereon, including technology deployed in connection with the introduction of digital two-way mobile
data or internet connectivity services in our markets;

the availability of adequate quantities of system infrastructure and subscriber equipment and components at reasonable
pricing to meet our service deployment and marketing plans and customer demand;

• Motorola Mobility’s ability and willingness to provide handsets and related equipment for use on our iDEN network,
including the availability of iDEN handsets, particularly in Argentina where we do not have the spectrum resources to
deploy a WCDMA network;

•

the risk of deploying WCDMA networks, including the potential need for additional funding to support that deployment,
delays in deployment, cost over-runs, the risk that new services supported by the new networks will not attract enough
subscribers to support the related costs of deploying or operating the new networks and the potential distraction of
management;

our ability to successfully scale our billing, collection, customer care and similar back-office operations to keep pace
with customer growth as necessary, increased system usage rates and growth or to successfully deploy new systems
that support those functions;

the success of efforts to change customer perceptions about the quality and performance of our network in Mexico and
any similar future issues in Mexico or our other markets;

•

future legislation or regulatory actions relating to our services, other wireless communications services or
telecommunications generally and the costs and/or potential customer impacts of compliance with regulatory mandates;

the ability to achieve and maintain market penetration and average subscriber revenue levels sufficient to provide
financial viability to our network business;

the quality and price of similar or comparable wireless communications services offered or to be offered by our
competitors, including providers of cellular services and personal communications services;

market acceptance of our new service offerings;

equipment failure, natural disasters, terrorist acts or other breaches of network or information technology security; and

other risks and uncertainties described in this annual report on Form 10-K, including in Part I, Item 1A. “Risk Factors,”
and, from time to time, in our reports filed with the SEC.

Introduction

The following is a discussion and analysis of:

•

our consolidated financial condition as of December 31, 2014 and 2013 and our consolidated results of operations for
the years ended December 31, 2014, 2013 and 2012; and

significant factors which we believe could affect our prospective financial condition and results of operations.

Historical results may not indicate future performance. See “Item 1A. — Risk Factors” for risks and uncertainties that may

impact our future performance.

We refer to our operating companies by the countries in which they operate, such as Nextel Brazil, Nextel Mexico and Nextel

Argentina.

Executive Overview

Business Update

Chapter 11 Filing. On September 15, 2014, NII Holdings, Inc. and eight of its U.S. and Luxembourg-domiciled subsidiaries,
including NII Capital Corp. and NIIT filed voluntary petitions seeking relief under Chapter 11 in the Bankruptcy Court. Since
September 15, 2014, five additional subsidiaries of NII Holdings, Inc. have filed voluntary petitions seeking relief under Chapter
11, with four subsidiaries filing on October 8, 2014 and one subsidiary filing on January 25, 2015. The debtor entities continue
to operate as "debtors-in-possession" under the jurisdiction of the Bankruptcy Court and in accordance with the applicable
provisions of the Bankruptcy Code and orders of the Bankruptcy Court. Our operating subsidiaries in Brazil, Mexico and Argentina
are not debtors in the Chapter 11 cases.

Proposed Sale of Mexico Operations. On January 26, 2015, NII Holdings, Inc. and certain of its subsidiaries entered into a
purchase and sale agreement with an indirect subsidiary of AT&T for the sale of Nextel Mexico. The purchase agreement provides
for a purchase price of $1.875 billion in cash, less Nextel Mexico's outstanding debt, net of its cash balances, on the closing date
and subject to other specified adjustments. Completion of the transaction is subject to a number of conditions, including the
approval of the Bankruptcy Court and the receipt of required regulatory approvals. Assuming the successful sale of Nextel Mexico,
we plan to focus our financial and other resources on our core operation in Brazil.

Business Overview

suburban centers with high population densities where we believe there is a concentration of the country’s business users and
economic activity. We believe that the growing economic base, increase in the middle and upper class and lower wireline service
penetration encourage the use of the mobile wireless communications services that we offer and plan to offer in the future. Our
WCDMA networks in Brazil and Mexico serve these major business centers and, in some instances, a broader geographic area in
order to meet the requirements of our spectrum licenses. We also utilize roaming arrangements to expand the geographic coverage
of our WCDMA-based services in Brazil and Mexico.

Our original networks utilize integrated digital enhanced network, or iDEN, technology developed by Motorola, Inc. to
provide mobile services on our 800 MHz spectrum holdings in all of our markets. Our next generation networks utilize WCDMA
technology, which is a standards-based technology that is being deployed by carriers throughout the world. We also offer long-
term evolution, or LTE, services in Rio de Janeiro in Brazil and in certain cities in Mexico. These technologies allow us to use
our spectrum efficiently and offer multiple wireless services integrated into a variety of handset and data devices.

The services we currently offer include:

•

mobile telephone voice service;

wireless data services, including text messaging services, mobile internet services and email services;

push-to-talk services, including Direct Connect®, Prip and International Direct Connect® services, which allow
subscribers to talk to each other instantly;

business solutions, such as security, work force management, logistics support and other applications that help our
business subscribers improve their productivity; and

voice and data roaming services outside of our coverage areas.

•

• expanding our service offerings to meet the needs of a broader range of potential customers, including by offering lower

cost prepaid service plans;

• offering a broad array of differentiated services and devices that build upon and complement our push-to-talk services,

which give our customers the ability to communicate with each other instantly;

• offering new services supported by high quality WCDMA networks;

• offering a superior customer experience; and

• building on the strength of the unique positioning of the Nextel brand.

To further support this goal, we plan to manage our costs in a manner designed to improve our operating results. While our
investments in our WCDMA networks and LTE upgrades have increased our costs and negatively impacted our profitability and
are expected to continue to have that impact as we incur the costs of our new networks while building the subscriber base served
by them, we believe that these investments in our new networks have begun and will continue to enhance the competitiveness of
our service offerings.

Consistent with this strategy, we have implemented and will continue to implement changes in our business to better align
our organization and costs with our operational and financial goals and the trends in our business. These changes have included
significant reductions in our headquarters staff in connection with the reorganization of the roles and responsibilities of our
headquarters and market teams and headcount reductions across all of our market operations designed to reduce costs while
maintaining the support necessary to meet our customers' needs. We are also taking steps to improve the performance and efficiency
of our supporting systems and functions, including implementing improvements to our information technology and related
supporting systems and processes, that are designed to improve the overall quality and efficiency of the service we provide our
customers.

As part of our efforts to reorganize our business and emerge from the Chapter 11 proceedings, we have recently agreed to
sell Nextel Mexico to AT&T. This transaction follows our sale of all of the outstanding equity interests of Nextel Chile to Fucata
in August 2014 and our sale of all of the outstanding equity interests of Nextel Peru to Entel in August 2013, which were implemented
as part of our strategy to focus on our largest markets. Assuming that the proposed sale of Nextel Mexico is completed as planned,
we expect that we will allocate most of our financial and other resources to our operation in Brazil. While we will continue to
support our operation in Argentina, our results of operations and this change in emphasis make it appropriate for us to consider
and explore a variety of strategic options for this market, such as partnerships, service arrangements and asset sales in an effort
to maximize Nextel Argentina's value.

Subscriber Units in Commercial Service

As we transition to our WCDMA networks, we are able to offer a substantially broader range of services and subscriber
units that support voice services, including our push-to-talk services, data services and, in many cases, both. In some instances,
we offer customers the option of purchasing services by acquiring the subscriber identity module, or SIM, cards from us separately,
providing the customer with the flexibility to use the SIM cards in one or more devices that they acquire from us or from other
sources. In addition, certain subscriber units that we offer support two SIM cards, enabling subscribers to seamlessly transition
between our iDEN and WCDMA networks on the same device. Because these handsets include two SIM cards and require two
contracts, they are reported as two subscribers for regulatory and external reporting purposes consistent with industry practice.
Accordingly, each of these dual SIM handsets that are provisioned with two separate SIM cards is included in the table below as
two "Subscriber Units in Commercial Service."

During the third quarter of 2014, Nextel Brazil automated its deactivation and collections processes, extended the deactivation
period for some of its subscriber units and aligned some of these policies with its competitors. These actions are expected to
improve collections in Brazil and provide additional time to retain certain subscribers. As a result of the extension of the deactivation
period, Nextel Brazil did not deactivate approximately 42 thousand subscribers during the second half of 2014 that would have
been deactivated under the original policy.

We use the term "subscriber unit," which we also refer to as a subscriber, to represent an active SIM card, which is the level
at which we have tracked and will continue to track subscribers. The table below provides an overview of our subscriber units in
commercial service on both our iDEN and WCDMA networks in the countries indicated as of December 31, 2013 and as of and
for the year ended December 31, 2014.

iDEN subscriber units

WCDMA subscriber units

Brazil

Mexico

Argentina

Total

(in thousands)

3,620.3

337.9

2,074.6

1,189.9

2,023.1

—

7,718.0

1,527.8

Total subscriber units in commercial service —

December 31, 2013

3,958.2

3,264.5

2,023.1

9,245.8

iDEN net subscriber losses

WCDMA net subscriber additions
Total net subscriber additions (losses)

(537.1)
920.4

383.3

(552.7)
176.7
(376.0)

(68.7)
—
(68.7)

(1,158.5)
1,097.1
(61.4)

Migrations from iDEN to WCDMA

414.0

632.5

—

1,046.5

iDEN subscriber units

WCDMA subscriber units

2,669.2

1,672.3

889.4

1,999.1

1,954.4

—

5,513.0

3,671.4

Total subscriber units in commercial service —

December 31, 2014

4,341.5

2,888.5

1,954.4

9,184.4

The following table shows our customer turnover rates for subscribers on both our iDEN and WCDMA networks in the countries

indicated for the year ended December 31, 2014.

Total customer turnover (1)

iDEN customer turnover

WCDMA customer turnover

_______________________________________

Brazil

Mexico

Argentina

Total

2.55%

2.72%

2.03%

3.93%

5.25%

2.90%

4.40%

—

3.40%

3.75%
2.57%

(1) Customer turnover is calculated by dividing subscriber deactivations for the period by the average number of subscriber

units during that period.

Critical Accounting Policies and Estimates

The preparation of our consolidated financial statements in conformity with accounting principles generally accepted in the
U.S. requires us to make estimates and judgments that affect the amounts reported in those financial statements and accompanying
notes. We consider the accounting policies and estimates addressed below to be the most important to our financial position and
results of operations, either because of the significance of the financial statement item or because they require the exercise of
significant judgment and/or use of significant estimates. Although we believe that the estimates we use are reasonable, due to the
inherent uncertainty involved in making those estimates, actual results reported in future periods could differ from those estimates.

Revenue Recognition. While our revenue recognition policy does not require the exercise of significant judgment or the

use of significant estimates, we believe that our policy is significant as revenue is a key component of our results of operations.

Operating revenues primarily consist of wireless service revenues and revenues generated from the sale of handsets and
accessories. We present our operating revenues net of value-added taxes, but we include certain revenue-based taxes that are our
primary obligation.

Service revenues primarily consist of fixed monthly access charges. Other components of service revenue include revenues
from calling party pays programs, where applicable, variable charges for airtime and two-way radio usage in excess of plan minutes
or data in excess of plan limits, long-distance charges, international roaming revenues derived from calls placed by our subscribers
on other carriers’ networks and revenues generated from broadband data services we provide on our WCDMA networks. We
recognize service revenue as service is provided, net of credits and adjustments for service discounts and value-added taxes. We
recognize excess usage, local, long distance and calling party pays revenue at contractual rates per minute as minutes are used.
We record cash received in excess of revenues earned as deferred revenues. We recognize handset revenue when title and risk of
loss passes to the customer.

We bill excess usage to certain of our subscribers in arrears. In order to recognize the revenues originating from excess
usage, we estimate the unbilled portion based on the usage that the subscriber had during the part of the month already billed, and
we use this actual usage to estimate the unbilled usage for the rest of the month taking into consideration working days and
seasonality. Our estimates are based on our experience in each market. We periodically evaluate our estimates by comparing them
to actual excess usage revenue billed the following month. While our estimates have been consistent with our actual results, actual
usage in future periods could differ from our estimates.

Other revenues primarily include amounts generated from our handset maintenance programs, roaming revenues generated
from other companies’ subscribers that roam on our networks and co-location rental revenues from third party tenants that rent
space on our transmitter and receiver sites, which we also refer to as communication towers or towers, although in some instances
these towers are located on rooftops and other structures. We recognize revenue generated from our handset maintenance programs
on a monthly basis at fixed amounts over the service period. We recognize roaming revenues at contractual rates per minute as
minutes are used. We recognize co-location revenues from third party tenants on a monthly basis based on the terms set by the
underlying agreements.

Allowance for Doubtful Accounts. We establish an allowance for doubtful accounts receivable sufficient to cover probable
and reasonably estimated losses. We estimate this allowance based on historical experience, aging of accounts receivable and
individual subscriber payment history. Actual write-offs in the future could be impacted by general economic and business
conditions, as well as fluctuations in subscriber deactivations, that are difficult to predict and therefore may differ from our
estimates. A 10% increase in our consolidated allowance for doubtful accounts as of December 31, 2014 would have resulted in
$5.5 million of additional bad debt expense for the year ended December 31, 2014.

Depreciation of Property, Plant and Equipment. We record at cost our network assets and other improvements that extend
the useful lives of the underlying assets and depreciate those assets over their estimated useful lives. We calculate depreciation

using the straight-line method based on estimated useful lives ranging from 3 to 30 years for mobile network equipment and
network software and 3 to 10 years for office equipment, furniture and fixtures, and other, which includes non-network internal
use software. We amortize leasehold improvements over the shorter of the lease terms or the useful lives of the improvements.
Our networks are highly complex and, due to constant innovation and enhancements, certain components of those networks may
lose their utility sooner than anticipated. We periodically reassess the economic life of these components and make adjustments
to their useful lives after considering historical experience and capacity requirements, consulting with the vendor and assessing
new product and market demands and other factors. When our assessment indicates that the economic life of a network component
is shorter than originally anticipated, we depreciate its remaining book value over its revised useful life. Further, the deployment
of any new technologies could adversely affect the estimated remaining useful lives of our network assets, which could significantly
impact future results of operations. During the fourth quarter of 2013, we reviewed the useful lives of our communication towers
and determined that the useful lives of some of these towers should be increased to 30 years compared to the 10- or 15-year useful
lives over which we were previously depreciating these sites.

Amortization of Intangible Assets. Intangible assets primarily consist of our telecommunications licenses. We calculate
amortization on our licenses using the straight-line method based on estimated useful lives of 3 to 20 years. While the terms of
our licenses, including renewals, range from 10 to 40 years, the political and regulatory environments in the markets we serve are
continuously changing and, as a result, the cost of renewing our licenses could be significant. Therefore, we do not view the
renewal of our licenses to be perfunctory. In addition, the wireless telecommunications industry is experiencing significant
technological change, and the commercial life of any particular technology is difficult to predict. Our licenses in Mexico give us
the right to use 800 MHz spectrum that is non-contiguous, and the iDEN technology is the only commercially available technology
that operates on non-contiguous spectrum. As a result, our ability to deploy new technologies using 800MHz spectrum in Mexico
may be limited. In light of these uncertainties we classify our licenses as definite lived intangible assets. Many of our licenses are
subject to renewal after the initial term, provided that we have complied with applicable rules and policies in each of our markets.
We intend to comply, and believe we have complied, with these rules and policies in all material respects as they relate to licenses
that are material to our business. However, because governmental authorities have discretion as to the renewal of licenses, our
licenses may not be renewed or we may be required to pay significant renewal fees, either of which could have a significant impact
on the estimated useful lives of our licenses, which could significantly impact future results of operations.

Valuation of Long-Lived Assets. We review long-lived assets for impairment whenever events or changes in circumstances
indicate that the carrying amount may not be recoverable. Long-lived asset groups were determined based on an assessment of
the lowest level for which identifiable cash flows are largely independent of the cash flows of other groups of assets and liabilities.
If the total of the expected undiscounted future cash flows is less than the carrying amount of our assets, we recognize a loss for
the difference between the estimated fair value and carrying value of the assets. As a result of the review of our long-lived assets
and our exploration of strategic options for Nextel Argentina, in December 2014, we determined that the carrying value of Nextel
Argentina's asset group, which includes all of the operating assets and liabilities held by our Argentine segment, was not recoverable.
Accordingly, we recorded a non-cash asset impairment charge of $84.7 million to reduce the carrying amount of Nextel Argentina's
asset group to its estimated fair value. In addition, during 2014, we tested long-lived assets in our Nextel Brazil and Nextel Mexico
segments for recoverability and, based on our estimates of undiscounted cash flows, determined the carrying values to be
recoverable. Our estimates of undiscounted cash flows for Nextel Brazil and Nextel Mexico exceeded the carrying value of the
respective asset groups. If we continue to have operational challenges, including obtaining and retaining subscribers, future cash
flows may not be sufficient to recover the carrying values of our asset groups, and we could record asset impairments that are
material to our consolidated results of operations and financial condition.

Asset Retirement Obligations. We record an asset retirement obligation, or ARO, and an associated asset retirement cost,
or ARC, when we have a legal obligation in connection with the retirement of tangible long-lived assets. Our obligations under
the FASB's authoritative guidance on asset retirement obligations arise from certain of our leases and relate primarily to the cost
of removing our network infrastructure and administrative assets from the leased space where these assets are located at the end
of the lease. Estimating these obligations requires us to make certain assumptions that are highly judgmental in nature. The
significant assumptions used in estimating our asset retirement obligations include the following: the expected settlement dates;
removal costs that are indicative of what third party vendors would charge us to remove the assets; expected inflation rates; and
credit-adjusted risk-free interest rates. We periodically review these assumptions to ensure that the estimates are reasonable. Any
change in the assumptions used could significantly affect the amounts recorded with respect to our asset retirement obligations.

Foreign Currency. We translate the results of operations for our non-U.S. subsidiaries from the designated functional
currency to the U.S. dollar using average exchange rates for the relevant period. We translate assets and liabilities using the
exchange rate in effect at the relevant reporting date. We report the resulting gains or losses from translating foreign currency
financial statements as other comprehensive income or loss. Because we translate the operations of our non-U.S. subsidiaries using
average exchange rates, our operating companies’ trends may be impacted by the translation.

We report the effect of changes in exchange rates on U.S. dollar-denominated assets and liabilities as foreign currency
transaction gains or losses. We report the effect of changes in exchange rates on intercompany transactions of a long-term investment

nature as part of the cumulative foreign currency translation adjustment in our consolidated financial statements. The intercompany
transactions that, in our view, are of a long-term investment nature include certain intercompany loans and advances from our
U.S. subsidiaries to Nextel Brazil and Nextel Chile. In contrast, we report the effect of exchange rates on U.S. dollar-denominated
intercompany loans and advances to our foreign subsidiaries that are due, or for which repayment is anticipated in the foreseeable
future, as foreign currency transaction gains or losses in our consolidated statements of comprehensive loss. As a result, our
determination of whether intercompany loans and advances are of a long-term investment nature can have a significant impact on
how we report foreign currency transaction gains and losses in our consolidated financial statements.

Loss Contingencies. We account for and disclose loss contingencies such as pending litigation and actual or possible claims
and assessments in accordance with the FASB’s authoritative guidance on accounting for contingencies. We accrue for loss
contingencies if it is probable that a loss will occur and if the loss can be reasonably estimated. We disclose, but do not accrue for,
material loss contingencies if it is reasonably possible that a loss will occur or if the loss cannot be reasonably estimated. We do
not accrue for or disclose loss contingencies if there is only a remote possibility that the loss will occur. The FASB’s authoritative
guidance requires us to make judgments regarding future events, including an assessment relating to the likelihood that a loss may
occur and an estimate of the amount of such loss. In assessing loss contingencies, we often seek the assistance of our legal counsel
and in some instances, of third party legal counsel. As a result of the significant judgment required in assessing and estimating
loss contingencies, actual losses realized in future periods could differ significantly from our estimates.

Income Taxes. We account for income taxes using the asset and liability method, under which we recognize deferred income
taxes for differences between the financial statement carrying amounts and the tax bases of existing assets and liabilities, as well
as for tax loss carryforwards and tax credit carryforwards. We measure deferred tax assets and liabilities using enacted tax rates
expected to apply to taxable income in the years in which those temporary differences are expected to be recoverable or settled.
We recognize the effect on deferred taxes of a change in tax rates in income in the period that includes the enactment date. We
provide a valuation allowance against deferred tax assets if, based upon the weight of available evidence, we do not believe it is
“more-likely-than-not” that some or all of the deferred tax assets will be realized.

The realization of deferred tax assets is dependent on the generation of future taxable income sufficient to realize our tax
loss carryforwards and other tax deductions. As of December 31, 2014, we recorded full valuation allowances on the deferred tax
assets of our foreign operating companies, our U.S. parent company and subsidiaries and our foreign holding companies due
to substantial negative evidence, including the recent history of cumulative losses and the projected losses for 2015 and subsequent
years. As a result, the valuation allowance on our deferred tax assets increased by $532.6 million during 2014. We do not anticipate
that we will recognize significant tax benefits with respect to our deferred tax assets.

We are subject to income taxes in both the U.S. and the non-U.S. jurisdictions in which we operate. Certain of our entities
are under examination by the relevant taxing authorities for various tax years. We regularly assess the potential outcome of current
and future examinations in each of the taxing jurisdictions when determining the adequacy of the provision for income taxes. We
have only recorded financial statement benefits for tax positions that we believe reflect the “more-likely-than-not” criteria of the
FASB’s authoritative guidance on accounting for uncertainty in income taxes, and we have established income tax reserves in
accordance with this guidance where necessary. Once a financial statement benefit for a tax position is recorded or a tax reserve
is established, we adjust it only when there is more information available or when an event occurs necessitating a change. While
we believe that the amount of the recorded financial statement benefits and tax reserves reflect the more-likely-than-not criteria,
it is possible that the ultimate outcome of current or future examinations may result in a reduction to the tax benefits previously
recorded on our consolidated financial statements or may exceed the current income tax reserves in amounts that could be material.

Results of Operations

Operating revenues primarily consist of wireless service revenues and revenues generated from the sale of handsets and
accessories. Service revenues primarily include fixed monthly access charges for mobile telephone service and two-way radio
and other services, including revenues from calling party pays programs and variable charges for airtime and two-way radio
usage, long-distance charges, international roaming revenues derived from calls placed by our subscribers and revenues generated
from broadband data services we provide on our WCDMA networks. Handset and accessory revenues represent revenues we
earn on the sale of handsets and accessories to our subscribers.

In addition, we also have other less significant sources of revenues. These revenues primarily include revenues generated
from our handset maintenance programs, roaming revenues generated from other companies' subscribers that roam on our networks
and co-location rental revenues from third-party tenants that rent space on our towers.

See "Revenue Recognition" above and Note 3 to our consolidated financial statements included at the end of this annual

report on Form 10-K for a description of our revenue recognition accounting policies.

Cost of revenues primarily includes the cost of providing wireless service and the cost of handsets and accessories. Cost

of providing service consists of:

•

costs of interconnection with local exchange carrier facilities;

costs relating to terminating calls originated on our network on other carriers' networks;

• direct switch, transmitter and receiver site costs, including property taxes;

•

expenses related to our handset maintenance programs; and

insurance costs, utility costs, maintenance costs, spectrum license fees and rent for the network switches and transmitter
sites used to operate our mobile networks.

Interconnection costs have fixed and variable components. The fixed component of interconnection costs consists of monthly
flat-rate fees for facilities leased from local exchange carriers, primarily for circuits required to connect our transmitter sites to
our network switches, to connect our switches and to connect our networks with those of other carriers. The variable component
of interconnection costs, which fluctuates in relation to the volume and duration of wireless calls, generally consists of per-minute
use fees charged by wireline and wireless carriers relating to wireless calls from our handsets that terminate on their networks.

Cost of handsets and accessories consists largely of the cost of the handset and accessories, order fulfillment and installation-

related expenses, as well as write-downs of handset and related accessory inventory for shrinkage or obsolescence.

Our service and other revenues and the variable component of our cost of service are primarily driven by the number of
subscriber units in commercial service and the rate plans applicable to, and the levels of usage of, those subscriber units. Our
handset and accessory revenues and cost of handsets and accessories are primarily driven by the number of new handsets placed
into service, as well as handset upgrades provided to existing subscribers.

Selling and marketing expenses include all of the expenses related to acquiring subscribers to our services, exclusive of

costs to subsidize our handsets.

General and administrative expenses include expenses related to revenue-based taxes, billing, customer care, collections,
provisions for doubtful accounts, maintenance of management information systems, corporate overhead and payroll, including
share-based payments for stock options and restricted stock.

Reorganization items include all income, expenses, gains or losses that are incurred or realized as a result of the
commencement of the Chapter 11 cases. These costs include unamortized discounts, premiums and financing costs related to
debt that is subject to compromise as a result of our Chapter 11 filing, as well as professional fees and related costs associated
with and incurred during the Chapter 11 cases.

In accordance with accounting principles generally accepted in the U.S., we translated the results of operations of our
operating segments using the average exchange rates for the years ended December 31, 2014, 2013 and 2012. The following table
presents the average exchange rates we used to translate the results of operations of our operating segments, as well as changes
from the average exchange rates utilized in prior periods.

Brazilian real

Mexican peso

Argentine peso

2014

2013

2012

2.35

13.30

8.13

2.16

12.77

5.48

1.95

13.17

4.55

2013 to 2014
Percent Change

2012 to 2013
Percent Change

(8.8)%

(4.2)%

(48.4)%

(10.8)%

3.0 %

(20.4)%

Late in 2012 and continuing throughout 2013 and 2014, foreign currency exchange rates in the countries where we operate
generally depreciated in value relative to the U.S. dollar. The following table presents the currency exchange rates in effect at the
end of 2012, as well as the end of each of the quarters in 2013 and 2014. If the values of these exchange rates remain at levels
similar to the end of 2014 or depreciate further relative to the U.S. dollar, our future operating results and the values of our assets
held in local currencies will be adversely affected.

2012

2013

2014

December

March

June

September

December

March

June

September

December

Brazilian real

Mexican peso
Argentine peso

2.04

13.01
4.92

2.01

12.35
5.12

2.22

13.19
5.39

2.23

13.01
5.79

2.34

13.08
6.52

2.26

13.08
8.00

2.20

13.03
8.13

2.45

13.45
8.43

2.66

14.72
8.55

To provide better insight into the results of some of our operating segments, we present the year-over-year percentage change
in each of the line items presented on a consolidated basis and for Nextel Brazil, Nextel Mexico and Nextel Argentina on a constant
currency basis in the "Constant Currency Change from Previous Year" columns in the tables below. The comparison of results

for these line items on a constant currency basis shows the impact of changes in foreign currency exchange rates (i) by adjusting
the relevant measures for the year ended December 31, 2013 to amounts that would have resulted if the average foreign currency
rates for the year ended December 31, 2013 were the same as the average foreign currency exchange rates that were in effect for
the year ended December 31, 2014; and (ii) by comparing the constant currency financial measures for the year ended December
31, 2013 to the actual financial measures for the year ended December 31, 2014. This constant currency comparison applies
consistent exchange rates to the operating revenues earned in foreign currencies and to the other components of segment earnings
for the year ended December 31, 2013, other than certain components of those measures consisting of U.S. dollar-based operating
expenses, which were not adjusted. The constant currency information reflected in the tables below is not a measurement under
accounting principles generally accepted in the U.S. and should be considered in addition to, but not as a substitute for, the
information contained in our results of operations.

Constant
Currency
Change
from
Previous
Year
Percent

(16)%

47 %

(13)%

4 %

20 %

10 %

(5)%

(6)%

31 %

5 %

186 %

(13)%

81 %

22 %

(43)%

66 %

(82)%

27 %

1 %

24 %

Year Ended December 31, 2014 vs. Year Ended December 31, 2013

Consolidated

Year Ended
December 31,
2014

% of
Consolidated
Operating
Revenues

Year Ended
December 31,
2013

% of
Consolidated
Operating
Revenues

Change from
Previous Year

Dollars

Percent

(dollars in thousands)

Operating revenues

Service and other revenues

$ 3,447,167

93 % $ 4,517,154

96 % $ (1,069,987)

Handset and accessory revenues

241,553

3,688,720

7 %

194,413

4 %

47,140

100 %

4,711,567

100 %

(1,022,847)

(24)%

24 %

(22)%

Cost of revenues

Cost of service (exclusive of
depreciation and amortization
included below)

Cost of handsets and accessories

Selling and marketing expenses

1,308,835

973,491

2,282,326

527,970

General and administrative expenses

1,171,088

220,742

(74,631)

672,705

(1,111,480)

(449,345)

66,425

(130,499)

(6,721)

Impairment and restructuring charges

Gain on sale of towers

Depreciation and amortization

Operating loss

Interest expense, net

Interest income
Foreign currency transaction losses,
net
Other expense, net

Loss from continuing operations
before reorganization items and
income tax provision

Reorganization items

Income tax provision

36 %

26 %

62 %

14 %

32 %

6 %

(2)%

18 %

(30)%

(12)%

2 %

1,392,140

884,789

2,276,929

573,884

1,367,889

168,543

—

692,927

(368,605)

(526,530)

43,327

(4)%

(123,369)

—

(12,859)

30 %

18 %

48 %

12 %

29 %

4 %

—

15 %

(8)%

(11)%

1 %

(3)%

—

(83,305)

88,702

5,397

(6)%

10 %

—

(45,914)

(8)%

(196,801)

(14)%

52,199

(74,631)

(20,222)

(742,875)

77,185

23,098

31 %

(3)%

202 %

(15)%

53 %

(7,130)

6 %

6,138

(48)%

(1,631,620)

(44)%

(988,036)

(21)%

(643,584)

(71,601)

(74,091)

(2)%

—

(446,052)

—

(9)%

(30)%

(71,601)

371,961

(343,224)

Net loss from continuing operations

(1,777,312)

(48)%

(1,434,088)

Loss from discontinued operations,
net of income taxes

(180,386)

(5)%

(215,511)

(5)%

35,125

Net loss

$ (1,957,698)

(53)% $ (1,649,599)

(35)% $

(308,099)

_______________________________________

NM-Not Meaningful

65 %

(83)%

24 %

(16)%

19 %

We continued to experience deteriorating financial and operational results in 2014 due to a number of factors, including the
economic and competitive environments in our markets, declining local currency values, the impact of previous delays in the
deployment and launch of services on our WCDMA networks and the increased costs to support these networks. The delays in
the deployment and launch of services on our WCDMA networks resulted in a significant decline in our subscriber base in Mexico
and substantially lower levels of average revenue per subscriber in Brazil. As a result of these and other factors, our consolidated
operating revenues decreased 22% on a reported basis, and 13% on a constant currency basis, from 2013 to 2014.

During 2014, we implemented a number of measures designed to reduce our costs, including significant headcount reductions
at the corporate level and in our markets. Despite some of these reductions in our cost structure, which reduced a number of
categories of costs compared to 2013, the overall combined impact of our lower consolidated operating revenues, weaker average
foreign currency exchange rates and higher cost of handsets and accessories led to increases in our consolidated cost of revenues,
selling and marketing expenses and general and administrative expenses as percentages of consolidated operating revenues in
2014 compared to 2013. Consolidated impairment and restructuring charges as a percentage of consolidated operating revenues
also increased from 2013 to 2014. As a result of these factors, our operating loss increased $742.9 million from 2013 to 2014.

In 2014, our investments in consolidated capital expenditures were $428.4 million, which represents a 51% decrease from
2013. We plan to continue to invest in the enhancement of our WCDMA network in Brazil in 2015 and will continue to make
these types of investments in Mexico pending the completion of the proposed sale of Nextel Mexico to AT&T. We also expect to
rely on our roaming agreements with Telefonica to provide expanded coverage in certain geographic areas on a cost effective basis
rather than investing additional capital expenditures to facilitate network expansion.

1. Operating revenues

Consolidated operating revenues decreased $1,022.8 million, or 22%, on a reported basis from 2013 to 2014 as a result of a
$1,070.0 million, or 24%, decrease in service and other revenues, partially offset by a $47.2 million, or 24%, increase in handset
and accessory revenues. On a constant currency basis, consolidated operating revenues decreased 13% from 2013 to 2014.

As discussed above, the decrease in consolidated service and other revenues was largely a result of the decline in our
consolidated subscriber base, most significantly in Mexico, and a decrease in consolidated average revenue per subscriber in local
currency, principally in Brazil, compounded by weaker foreign currency exchange rates across all markets for 2014 compared to
2013. See further discussion in "— Segment Results" below.

The increase in consolidated handset and accessory revenues was primarily caused by higher gross subscriber additions in

Brazil resulting from the launch of our WCDMA network there in late 2013.

2. Cost of revenues

Consolidated cost of revenues increased $5.4 million on a reported basis from 2013 to 2014 primarily as a result of:

• a $111.9 million, or 20%, increase in consolidated direct switch and transmitter and receiver site costs due to a 10%
increase in the number of sites in service from December 31, 2013 to December 31, 2014 in connection with the deployment
and expansion of our WCDMA networks and LTE upgrades in Brazil and Mexico; and

• an $88.7 million, or 10%, increase in the consolidated cost of handsets and accessories resulting from an 11% increase
in consolidated gross subscriber additions and a change in the mix of handsets toward higher cost smartphones and other
high-tier handsets.

These increases were partially offset by:

• a $136.0 million, or 25%, decrease in consolidated interconnect costs related to lower interconnect minutes of use,
primarily caused by the reduction in our consolidated subscriber base, and lower interconnect costs per minute in Brazil;

• a $45.4 million, or 33%, decrease in consolidated service and repair costs, mostly in Brazil and Argentina, resulting from

the utilization of more refurbished handsets and a lower overall number of repaired handsets; and

• weaker foreign currency exchange rates across all markets for 2014 compared to 2013.

On a constant currency basis, consolidated cost of revenues increased 10% for 2014 compared to 2013.

3. Selling and marketing expenses

The $45.9 million, or 8%, decrease in consolidated selling and marketing expenses on a reported basis, and 5% decrease on
a constant currency basis, in 2014 compared to 2013 was principally caused by a decrease in commissions earned by both sales
personnel and third party dealers, mostly in Mexico, partially offset by an increase in advertising costs, mostly in Brazil.

4. General and administrative expenses

The $196.8 million, or 14%, decrease in consolidated general and administrative expenses on a reported basis, and 6%
decrease on a constant currency basis, for 2014 compared to 2013 was primarily the result of lower payroll costs related to fewer
general and administrative personnel resulting from reductions in force, lower revenue-based taxes associated with the decline in
Nextel Brazil and Nextel Mexico's operating revenues, a decrease in customer care expenses, mostly in Mexico and Argentina,
and a decrease in information technology costs, mostly in Mexico and at the corporate level.

Impairment and restructuring charges

Consolidated impairment and restructuring charges recognized in 2014 primarily related to the following:

• an $84.7 million non-cash asset impairment charge to reduce the carrying amount of Nextel Argentina's asset group to

its estimated fair value;

• $48.4 million in severance and related costs incurred across all of our markets resulting from the separation of employees

in an effort to streamline our organizational structure and reduce general and administrative expenses;

• a $47.9 million non-cash asset impairment charge related to our decision to cease further development on one of the

strategic options for the next generation of our push-to-talk services; and

• $25.5 million in other non-cash asset impairment charges, the majority of which related to the shutdown or abandonment
of certain transmitter and receiver sites in Brazil and Mexico and certain retail store closures in Brazil related to the
realignment of our distribution channels.

Consolidated impairment and restructuring charges recognized in 2013 primarily related to the following.

• a non-cash asset impairment charge of $85.3 million related to the discontinuation of software previously developed to
support our customer relationship management systems, of which $76.3 million was recognized at the corporate level
and $9.0 million was recognized by Nextel Mexico;

• a $39.7 million non-cash charge in connection with the restructuring of our network outsourcing agreements reflecting
the write-off of a portion of the base contractual fees that we had classified as a prepayment and that were being recognized
over the life of the agreements prior to their restructuring;

• $30.1 million in restructuring charges, the majority of which was at the corporate level and in Mexico, related to the
separation of employees and other restructuring activities in conjunction with actions taken to realign staffing and other
resources;

• $6.8 million in contract termination costs incurred in connection with the sublease of certain excess space located in one

of our corporate office buildings; and

• $5.9 million in charges incurred at the corporate level related to the discontinuation of the development of certain network

features.

6. Gain on sale of towers

During the third quarter of 2014, Nextel Mexico completed the sale of 1,483 communication towers. After the finalization
of the price adjustments, Nextel Mexico began accounting for this transaction as a sale-leaseback and recognized a $75.4 million
gain related to the completion of the sale of these towers. Separately, during the fourth quarter of 2014, Nextel Brazil completed
the sale of 2,034 communication towers. After the finalization of the price adjustments, Nextel Brazil began accounting for this
transaction as a sale-leaseback and recognized an immaterial loss related to the completion of the sale of these towers.

7. Interest expense, net

In accordance with the U.S. Bankruptcy Code, subsequent to September 15, 2014, we have not accrued interest on any series
of our senior notes as we do not believe it is probable of being treated as an allowed claim in the Chapter 11 cases. As a result,
consolidated net interest expense decreased $77.2 million, or 15%, on a reported basis, and 13% on a constant currency basis,
from 2013 to 2014.

8. Reorganization items

Reorganization items of $71.6 million in 2014 were related to the write off of discounts, premiums and unamortized financing
costs associated with our NII Capital Corp. and NIIT senior notes, as well as professional fees and other costs incurred in connection
with our Chapter 11 filing.

Income tax provision

The $372.0 million, or 83%, decrease in the consolidated income tax provision from 2013 to 2014 is primarily due to the
valuation allowances that were recorded in 2013 in Brazil and Mexico. During 2013, the $446.1 million income tax provision was
primarily the result of establishing $572.8 million in valuation allowances with respect to certain of our Brazilian and Mexican
subsidiaries. During 2014, we established a $49.1 million valuation allowance with respect to our Argentine operating company.

Segment Results

We evaluate performance of our segments and provide resources to them based on operating income before depreciation
and amortization and impairment, restructuring and other charges, which we refer to as segment earnings. A discussion of our
segment results is provided below.

Nextel Brazil

Year Ended
December 31,
2014

% of
Nextel Brazil’s
Operating
Revenues

Year Ended
December 31,
2013

% of
Nextel Brazil’s
Operating
Revenues

(dollars in thousands)

Constant
Currency
Change
from
Previous
Year

Change from
Previous Year

Dollars

Percent

Operating revenues

Service and other revenues

$ 1,694,181

Handset and accessory revenues

Cost of revenues

Cost of service (exclusive of
depreciation and amortization)

Cost of handsets and accessories

Selling and marketing expenses

General and administrative
expenses

154,737

1,848,918

693,004

415,082

1,108,086

267,574

606,949

Segment (losses) earnings

(133,691)

92 % $ 2,109,363

8 %

98,671

96% $ (415,182)

56,066

100 %

2,208,034

100%

(359,116)

(20)%

57 %

(16)%

38 %

22 %

60 %

14 %

767,908

250,749

1,018,657

207,646

33 %

670,602

(7)% $

311,129

35%

11%

46%

(74,904)

(10)%

164,333

89,429

59,928

66 %

9 %

29 %

31%

(63,653)

(9)%

(1)%

14% $ (444,820)

(143)%

(147)%

(12)%

71 %

(9)%

(2)%

81 %

19 %

41 %

Nextel Brazil contributed 50% of our consolidated operating revenues for 2014 compared to 47% in 2013, and comprised
47% of our total subscriber base at the end of 2014 compared to 43% at the end of 2013. Over the last several years, Nextel Brazil
has operated in a highly competitive environment that reflected a significant increase in promotional activity, including price
reductions and other special offers, by its competitors. In addition, Nextel Brazil did not begin offering full voice and data services
on its WCDMA network until late in 2013, which reflected a delay from the service launch dates that we had originally planned.
Prior to that time, Nextel Brazil was competing using its iDEN network, which does not support data services that are competitive
with the higher speed data services offered by its competitors, and found it necessary to offer iDEN rate plans with lower average
revenue per subscriber in order to retain customers on its iDEN network. Consequently, many iDEN customers migrated to lower
rate service plans, and new customers on the iDEN network have been and are continuing to select lower rate service plans. In
addition, as of December 31, 2014, Nextel Brazil's subscriber base included approximately 246 thousand data-only subscribers,
which typically generate lower levels of average revenue per subscriber. As a result of these factors, Nextel Brazil's average revenue
per subscriber during 2014 was significantly lower than its average revenue per subscriber during 2013, which caused the $415.2
million, or 20%, decline in Nextel Brazil's service and other revenues from 2013 to 2014 despite a 10% increase in Nextel Brazil's
ending subscriber base from December 31, 2013 to December 31, 2014 that resulted from the launch of Nextel Brazil's WCDMA
network in late 2013. On a constant currency basis, Nextel Brazil's service and other revenues decreased 12%, and its average
revenue per subscriber decreased 26% in 2014 compared to 2013.

During 2014, Nextel Brazil experienced WCDMA subscriber growth, which was partially offset by deactivations by iDEN
subscribers, and increasing levels of WCDMA-based average revenue per subscriber for new subscriber additions. As of December
31, 2014, excluding average revenue per subscriber for data-only subscribers, Nextel Brazil's WCDMA-based average revenue
per subscriber for combined voice and data plans was higher than its iDEN-based average revenue per subscriber.

During 2014, Nextel Brazil continued to invest in the development of its WCDMA network and in its LTE upgrade in Rio
de Janeiro both for regulatory purposes and to improve the capacity of its network. As a result, Nextel Brazil incurred increased
operating expenses in connection with an increase in the number of transmitter and receiver sites on air from the end of 2013 to
the end of 2014. Nextel Brazil also incurred higher cost of handset sales and advertising costs to support an increase in gross
subscriber additions. These increased operating costs were partially offset by cost reductions in other areas, but led to an increase
in overall operating expenses. This increase combined with the decline in operating revenues discussed above resulted in a reduction
in Nextel Brazil's segment earnings margin from 14% in 2013 to a segment loss margin of 7% in 2014. Nextel Brazil's capital
expenditures were $218.9 million for 2014, which represented 51% of our consolidated capital expenditures, compared to 53%
of our consolidated capital expenditures for 2013.

The average value of the Brazilian real depreciated relative to the U.S. dollar during 2014 by 9% compared to the average
value that prevailed during 2013. As a result, the components of Nextel Brazil's results of operations for 2014, after translation
into U.S. dollars, reflect lower revenues and expenses in U.S. dollars than would have occurred if the Brazilian real had not

depreciated relative to the U.S. dollar. If the value of the Brazilian real remains at current levels or depreciates further relative to
the U.S. dollar, Nextel Brazil's future reported results of operations will be adversely affected.

Nextel Brazil’s segment earnings decreased $444.8 million, or 143%, on a reported basis, and 147% on a constant currency

basis, in 2014 compared to 2013, as a result of the following:

1. Operating revenues

The $415.2 million, or 20%, decrease in service and other revenues on a reported basis in 2014 compared to 2013 is primarily
the result of the decline in average revenue per subscriber described above and weaker foreign currency exchange rates. On a
constant currency basis, Nextel Brazil's service and other revenues decreased 12% in 2014 compared to 2013.

The $56.1 million, or 57%, increase in handset and accessory revenues on a reported basis in 2014 compared to 2013 is
primarily the result of a 24% increase in gross subscriber additions, the majority of which related to WCDMA handset sales, as
well as a change in the mix of handsets toward higher cost smartphones and other high-tier handsets. On a constant currency basis,
Nextel Brazil's handset and accessory revenues increased 71% in 2014 compared to 2013.

2. Cost of revenues

In 2012, Brazil's telecommunications regulatory agency approved the transition to a cost-based model for determining mobile
termination rates beginning in 2016 and additional reductions in those rates for 2013 through 2015 as part of the transition to the
cost-based rates. The transition rules also provide for a partial "bill and keep" settlement process that applies the settlement of
mobile termination charges between smaller operators like Nextel Brazil and its larger competitors, which further reduces mobile
termination charges for smaller operators. The benefit of this partial bill and keep settlement process, which previously only applied
to services provided on Nextel Brazil's WCDMA network but will soon apply to all of Nextel Brazil's services, including services
provided using its iDEN network as a result of recent regulatory changes in Brazil, declines as mobile termination rates in Brazil
transition to a cost-based model. The $74.9 million, or 10%, decrease in cost of service on a reported basis from 2013 to 2014 is
largely due to a $112.3 million, or 31%, decrease in interconnect costs related to the changes in the regulated interconnect cost
structure described above and a $23.0 million, or 36%, decrease in service and repair costs. These decreases were partially offset
by a $62.4 million, or 23%, increase in site and switch expenses, primarily due to an increase in direct switch and transmitter and
receiver site costs resulting from a 9% increase in the number of sites in service from December 31, 2013 to December 31, 2014
in connection with the deployment and expansion of Nextel Brazil's WCDMA network and LTE upgrade.

The $164.3 million, or 66%, increase in the cost of handsets and accessories on a reported basis from 2013 to 2014 is largely
related to the increase in gross subscriber additions on Nextel Brazil's WCDMA network discussed above, as well as a change in
the mix of handsets toward higher cost smartphones and other high-tier handsets.

3. Selling and marketing expenses

The $59.9 million, or 29%, increase in selling and marketing expenses on a reported basis, and 41% on a constant currency
basis, in 2014 compared to 2013 was largely due to higher advertising costs resulting from new marketing campaigns in connection
with our efforts to increase awareness of Nextel Brazil as a next generation service provider, as well as an increase in commissions
resulting from higher gross subscriber additions and an increase in average commission per gross subscriber addition related to a
change in the mix of commissions toward more costly indirect sales channels.

4. General and administrative expenses

The $63.7 million, or 9%, decrease in general and administrative expenses on a reported basis, and 1% on a constant currency
basis, in 2014 compared to 2013 is principally due to lower payroll costs related to fewer general and administrative personnel
resulting from a reduction in force, a decrease in revenue-based taxes associated with the decline in operating revenues described
above and a reduction in bad debt expense from 2013 to 2014 related to the delays in processing billing cycles that Nextel Brazil
experienced in 2013 that resulted in higher bad debt expense during that year.

Nextel Mexico

Year Ended
December 31,
2014

% of
Nextel
Mexico's
Operating
Revenues

Year Ended
December 31,
2013

% of
Nextel
Mexico’s
Operating
Revenues

(dollars in thousands)

Constant
Currency
Change
from
Previous
Year

Change from
Previous Year

Dollars

Percent

Operating revenues

Service and other revenues

$ 1,375,379

97 % $ 1,832,737

98% $ (457,358)

(25)%

Handset and accessory revenues

Cost of revenues

Cost of service (exclusive of
depreciation and amortization)

Cost of handsets and accessories

Selling and marketing expenses

General and administrative expenses

41,784

1,417,163

511,069

491,003

1,002,072

207,468

298,104

3 %

39,960

1,824

5 %

100 %

1,872,697

100% (455,534)

(24)%

36 %

35 %

71 %

14 %

21 %

484,367

547,123

1,031,490

292,800

368,511

26%

29%

55%

16%

19%

26,702

6 %

(56,120)

(10)%

(29,418)

(85,332)

(70,407)

(3)%

(29)%

(19)%

(22)%

9 %

(21)%

10 %

(7)%

1 %

(26)%

(16)%

Segment (losses) earnings

(90,481)

(6)% $

179,896

10% $ (270,377)

(150)%

(152)%

Nextel Mexico represented 38% of our consolidated operating revenues for 2014 compared to 40% for 2013, and comprised

32% of our total subscriber base at the end of 2014 compared to 35% at the end of 2013.

Nextel Mexico experienced significant disruption to its business plans, and a decline in its subscriber base, operating revenues
and operating cash flows, in connection with Sprint’s deactivation of its iDEN network in the U.S. in mid-2013, which was
compounded by the insufficient capacity of Nextel Mexico's WCDMA network to handle the number of subscribers that migrated
from service on our iDEN network to service on our WCDMA network, as well as the inability of our customer operations to
respond to problems encountered by those subscribers. The deactivation of Sprint's iDEN network also resulted in changes to the
connections previously available between our subscribers and their contacts in the U.S., as well as our customers’ ability to roam
in the U.S. These changes had an adverse impact on our customers' experience in using their services and created a negative
perception of our services and reputation as a provider of high quality services in Mexico, which has made it more difficult for us
to attract and retain subscribers in 2014. As a result of these factors and the competitive environment in Mexico, Nextel Mexico
experienced higher iDEN customer turnover and was not able to effectively offset the loss of iDEN subscribers with new WCDMA
subscribers, resulting in a 12% reduction in Nextel Mexico's ending subscriber base from December 31, 2013 to December 31,
2014.

Over the course of the last year, Nextel Mexico has experienced deteriorating financial and operational results due to these
and other factors, including the economic and competitive environments in Mexico. As a result, Nextel Mexico's operating revenues
decreased 24% on a reported basis, and its average revenue per subscriber decreased 6%, for 2014 compared to 2013. On a constant
currency basis, Nextel Mexico's operating revenues decreased 21%, and its average revenue per subscriber decreased 2%, in 2014
compared to 2013 primarily as a result of subscriber migrations to lower rate service plans, particularly for iDEN subscribers, as
well as a higher mix of prepaid subscribers with lower average revenues per subscriber. The percentage of Nextel Mexico's total
subscriber base that represented prepaid subscribers increased from 3% as of December 31, 2013 to 11% as of December 31, 2014.

Nextel Mexico has taken and continues to take actions designed to improve its WCDMA network performance and the
quality of service experienced by our customers, including improving its retail distribution channels, launching awareness
campaigns to inform subscribers of the improvements to its WCDMA network and offering new service plans. As a result of these
efforts, Nextel Mexico experienced some recovery in the second half of 2014, and its gross subscriber additions increased 13%
from 2013 to 2014.

The average value of the Mexican peso depreciated relative to the U.S. dollar by 4% during 2014 compared to the average
value that prevailed in 2013. As a result, the components of Nextel Mexico's results of operations for 2014, after translation into
U.S. dollars, reflect slightly lower revenues and expenses in U.S. dollars than would have occurred if the Mexican peso had not
depreciated relative to the U.S. dollar. If the value of the Mexican peso remains at current levels or depreciates further relative to
the U.S. dollar, Nextel Mexico's future reported results of operations will be adversely affected.

Nextel Mexico's segment earnings decreased $270.4 million, or 150%, on a reported basis, and 152% on a constant currency
basis, in 2014 compared to 2013. Nextel Mexico's segment earnings margin of 10% in 2013 declined to a segment loss margin of
6% in 2014 as a result of the following:

1. Operating revenues

The $457.4 million, or 25%, decrease in service and other revenues on a reported basis, and 22% on a constant currency
basis, in 2014 compared to 2013 is primarily due to a 12% reduction in Nextel Mexico's subscriber base from December 31, 2013
to December 31, 2014 and lower average revenue per subscriber.

2. Cost of revenues

The $26.7 million, or 6%, increase in cost of service on a reported basis from 2013 to 2014 is largely due to a $50.3 million,
or 20%, increase in direct switch and transmitter and receiver site costs resulting from a 13% increase in the number of sites in
service from December 31, 2013 to December 31, 2014 in connection with the deployment and expansion of Nextel Mexico's
WCDMA network, partially offset by a $27.2 million, or 99%, decrease in managed services expenses related to the insourcing
of certain activities and an $8.4 million, or 6%, decrease in interconnect costs related to lower interconnect minutes of use.

The decrease in cost of handsets and accessories on a reported basis from 2013 to 2014 was caused by a $175.9 million, or
72%, decrease in the cost of iDEN handsets, partially offset by a $119.7 million, or 40%, increase in the cost of WCDMA handsets.

3. Selling and marketing expenses

The $85.3 million, or 29%, decrease in selling and marketing expenses on a reported basis, and 26% on a constant currency
basis, in 2014 compared to 2013 is primarily the result of lower indirect commissions resulting from a 27% decrease in indirect
gross subscriber additions, a decrease in average commission per gross subscriber addition resulting from a change in Nextel
Mexico's commissions structure and lower advertising costs.

4. General and administrative expenses

The $70.4 million, or 19%, decrease in general and administrative expenses on a reported basis, and 16% on a constant
currency basis, in 2014 compared to 2013 is primarily the result of lower customer care expenses associated with Nextel Mexico's
smaller subscriber base, lower payroll costs related to fewer general and administrative personnel resulting from a reduction in
force and a decrease in information technology costs.

Nextel Argentina

Year Ended
December 31,
2014

% of
Nextel
Argentina's
Operating
Revenues

Year Ended
December 31,
2013

% of
Nextel
Argentina’s
Operating
Revenues

(dollars in thousands)

Constant
Currency
Change
from
Previous
Year

Change from
Previous Year

Dollars

Percent

Operating revenues

Service and other revenues

379,939

89% $

575,536

Handset and accessory revenues

Cost of revenues

Cost of service (exclusive of
depreciation and amortization)

Cost of handsets and accessories

Selling and marketing expenses

General and administrative expenses

Segment earnings

45,032

424,971

105,165

69,686

174,851

47,462

126,417

76,241

11%

100%

60,912

636,448

140,390

90,879

231,269

61,607

164,154

179,418

25%

16%

41%

11%

30%

18% $

90% $ (195,597)

10%

(15,880)

100% (211,477)

(34)%

(26)%

(33)%

22%

14%

36%

10%

26%

(35,225)

(21,193)

(56,418)

(14,145)

(37,737)

28% $ (103,177)

(25)%

(23)%

(24)%

(23)%

(58)%

(2)%

10 %

(1)%

11 %

14 %

12 %

14 %

(37)%

Nextel Argentina comprised 12% of our consolidated operating revenues for 2014 compared to 13% for 2013, and represented
21% of our total subscriber base at the end of 2014 compared to 22% at the end of 2013. Almost half of Nextel Argentina's
subscriber base as of December 31, 2014 represented subscribers who are utilizing prepaid service plans that generate lower
average monthly revenues per subscriber unit. Nextel Argentina generated a segment earnings margin of 18% in 2014 compared
to 28% in 2013. Over the last several years, the inflation rate in Argentina has risen significantly, and we expect that it may continue
to rise in future years. The higher inflation rate has affected costs that are incurred in Argentine pesos. If the higher inflation rates
in Argentina continue, Nextel Argentina's results of operations may be adversely affected. In addition, Nextel Argentina continues
to compete utilizing its iDEN network, which does not support data services that are competitive with the higher speed data services
offered by some of its competitors. As a result, Nextel Argentina experienced a higher customer turnover rate in 2014 compared
to 2013 as its customers were targeted by competitors’ aggressive offers.

The average value of the Argentine peso during 2014 depreciated relative to the U.S. dollar by 48% compared to the same
period in 2013. As a result, the components of Nextel Argentina's results of operations for 2014 after translation into U.S. dollars
reflect significantly lower U.S. dollar-denominated revenues and expenses than would have occurred if the Argentine peso had
not depreciated relative to the U.S. dollar. The average exchange rate used to translate Nextel Argentina's results of operations
may not be indicative of the economic reality in Argentina.

Nextel Argentina's segment earnings decreased $103.2 million, or 58%, on a reported basis in 2014 compared to 2013, and
its segment earnings margin decreased to 18% in 2014 compared to 28% in 2013, primarily as a result of the significant depreciation
in the value of the Argentine peso relative to the U.S. dollar. On a constant currency basis, Nextel Argentina's segment earnings
decreased 37% in 2014 compared to 2013, primarily as a result of lower operating revenues and higher overall costs resulting
from higher inflation rates.

Corporate

Year Ended
December 31,
2014

Year Ended
December 31,
2013

Change from
Previous Year

Dollars

Percent

(dollars in thousands)

351

309

5,544

144,932

11,831

(6,287)

169,813

(24,881)

(150,125) $

(181,602) $

31,477

(53)%

(15)%

(17)%

Operating revenues

Service and other revenues

Selling and marketing expenses

General and administrative expenses

Segment losses

_______________________________________

NM-Not Meaningful

Segment losses decreased $31.5 million, or 17%, in 2014 compared to 2013 primarily due to a $24.9 million, or 15%,
decrease in general and administrative expenses largely resulting from reduced payroll expenses related to fewer general and
administrative personnel following a reduction in personnel and lower information technology costs. General and administrative
expenses for 2014 also included $22.6 million in consulting costs and other professional fees incurred in connection with our
exploration of strategic and restructuring options and in preparation for our Chapter 11 filing.

Year Ended December 31, 2013 vs. Year Ended December 31, 2012

Consolidated

Year Ended
December 31,
2013

% of
Consolidated
Operating
Revenues

Year Ended
December 31,
2012

% of
Consolidated
Operating
Revenues

Change from
Previous Year

Dollars

Percent

(dollars in thousands)

Operating revenues

Service and other revenues

$ 4,517,154

96 % $ 5,424,766

95 % $ (907,612)

194,413

4,711,567

4 %

268,469

5 %

(74,056)

100 %

5,693,235

100 %

(981,668)

Handset and accessory revenues

Cost of revenues

Cost of service (exclusive of
depreciation and amortization
included below)

Cost of handsets and accessories

Selling and marketing expenses

1,392,140

884,789

2,276,929

573,884

General and administrative expenses

1,367,889

Impairment and restructuring charges

Depreciation and amortization

Operating (loss) income

Interest expense, net

Interest income

Foreign currency transaction losses,
net

Other expense, net

(Loss) income from continuing
operations before income tax
provision

Income tax provision

168,543

692,927

(368,605)

(526,530)

43,327

(123,369)

(12,859)

(988,036)

(446,052)

Net loss from continuing operations

(1,434,088)

(17)%

(28)%

(17)%

(8)%

12 %

(1)%

(14)%

15 %

46 %

28 %

95 %

(54)%

Constant
Currency
Change
from
Previous
Year
Percent

(12)%

(22)%

(12)%

(1)%

14 %

5 %

(13)%

(8)%

21 %

49 %

33 %

107 %

(54)%

200 %

(58)%

176 %

30 %

18 %

48 %

12 %

29 %

4 %

15 %

(8)%

(11)%

1 %

(3)%

—

(21)%

(9)%

(30)%

1,509,543

792,466

2,302,009

668,783

1,593,139

30,401

605,161

493,742

(359,795)

33,785

(63,330)

(28,097)

76,305

(158,144)

(81,839)

27 %

13 %

40 %

11 %

27 %

2 %

11 %

9 %

(7)%

1 %

(117,403)

92,323

(25,080)

(94,899)

(225,250)

138,142

87,766

(166,735)

9,542

(2)%

(60,039)

—

15,238

1 % (1,064,341)

(2)%

(287,908)

182 %

(1)% (1,352,249)

(862,347)

(175)%

(178)%

Loss from discontinued operations,
net of income taxes

(215,511)

(5)%

(683,410)

(12)%

467,899

Net loss

$ (1,649,599)

(35)% $

(765,249)

(13)% $ (884,350)

(68)%

116 %

_______________________________________

NM-Not Meaningful

1. Operating revenues

The $981.7 million, or 17%, decrease in consolidated service and other revenues on a reported basis, and the 12% decrease
on a constant currency basis, from 2012 to 2013 were primarily due to the decline in our consolidated subscriber base and a
decrease in consolidated average revenue per subscriber in local currency caused by an increase in the number of subscribers on
lower rate service plans in both Brazil and Mexico, adjustments to promotional offers in response to a more competitive environment
in Brazil and retention credits offered to certain customers in Mexico. The decrease in consolidated service and other revenues on
a reported basis also reflects weaker average foreign currency exchange rates in Brazil and Argentina, which were partially offset
by a slightly stronger average foreign currency exchange rate in Mexico.

2. Cost of revenues

Consolidated cost of revenues remained relatively stable on a reported basis from 2012 to 2013 despite the lower consolidated

operating revenue levels primarily as a result of:

• a $106.2 million, or 23%, increase in consolidated direct switch and transmitter and receiver site costs due to a 34%
increase in the number of sites in service from December 31, 2012 to December 31, 2013 in connection with the deployment
of our WCDMA networks in Brazil and Mexico; and

• a $92.3 million, or 12%, increase in cost of handsets and accessories resulting from a change in the mix of handsets in
Brazil and Mexico toward higher-tier handsets and losses related to inventory obsolescence that Nextel Brazil and Nextel
Mexico recognized in the second half of 2013.

These increases were partially offset by:

• a $169.2 million, or 24%, decrease in consolidated interconnect costs related to lower interconnect minutes of use in
Brazil and Mexico as a result of the reduction in our consolidated subscriber base and lower usage levels per subscriber,
as well as a decline in mobile termination rates in Brazil;

• a $66.8 million, or 32%, decrease in consolidated service and repair costs resulting from the utilization of more refurbished

handsets and a lower overall number of repaired handsets; and

• weaker average foreign currency exchange rates in Brazil and Argentina that were partially offset by slightly stronger

foreign currency exchange rates in Mexico.

On a constant currency basis, consolidated cost of revenues increased 5% for 2013 compared to 2012.

Consolidated cost of revenues as a percentage of consolidated operating revenues increased from 40% in 2012 to 48% in
2013 primarily as a result of an increase in direct switch and transmitter and receiver site costs, an increase in the cost of handsets
and accessories and the decline in operating revenues described above over the same period.

3. Selling and marketing expenses

Significant factors contributing to the $94.9 million, or 14%, decrease in consolidated selling and marketing expenses on a
reported basis in 2013 compared to 2012, and a 13% decrease on a constant currency basis, included a significant reduction in
commissions generated through direct and indirect channels, mostly in Brazil and Mexico, and a $27.6 million, or 14%, decrease
in consolidated advertising and other marketing expenses resulting from fewer advertising campaigns launched in 2013 compared
to 2012.

4. General and administrative expenses

The $225.3 million, or 14%, decrease in consolidated general and administrative expenses on a reported basis, and 8% on
a constant currency basis, in 2013 compared to 2012 was due to a decrease in consulting and information technology costs at the
corporate level, a decrease in revenue-based taxes in Brazil associated with a decline in Nextel Brazil's operating revenues as well
as a $103.0 million, or 48%, decrease in the consolidated provision for doubtful accounts in 2013 compared to 2012, which is
mostly attributable to changes made to Nextel Brazil's collection and retention policy and other processes in the fourth quarter of
2012 in connection with efforts to deactivate unprofitable customers. These changes resulted in an increase in the consolidated
provision for doubtful accounts in the fourth quarter of 2012 and improved customer credit quality in 2013, which led to a lower
consolidated provision for doubtful accounts in 2013.

Consolidated general and administrative expenses as a percentage of consolidated operating revenues increased from 27%

in 2012 to 29% in 2013 largely as a result of the decline in operating revenues over the same period.

Impairment and restructuring charges

Consolidated impairment and restructuring charges recognized in 2013 primarily related to the following:

• a non-cash asset impairment charge of $85.3 million related to the discontinuation of software previously developed for

use in multiple markets to support our customer relationship management systems;

• a $39.7 million non-cash charge in connection with the restructuring of certain outsourcing agreements reflecting the
write-off of a portion of the base contractual fees that we had classified as a prepayment and that were being recognized
over the life of the agreements prior to their restructuring;

• $6.8 million in contract termination costs incurred in connection with the sublease of certain excess space located in one

of our corporate office buildings; and

• $5.9 million in charges incurred at the corporate level related to the discontinuation of the development of certain network

features.

6. Depreciation and amortization

The $87.8 million, or 15%, increase in consolidated depreciation and amortization on a reported basis, and the 21% increase
on a constant currency basis, from 2012 to 2013 is principally the result of an increase in consolidated property, plant and equipment
in service resulting from continued investments in our WCDMA networks.

Interest expense, net

The $166.7 million, or 46%, increase in consolidated net interest expense on a reported basis, and the 49% increase on a
constant currency basis, from 2012 to 2013 is largely related to interest incurred in connection with the issuance of $900.0 million
in 11.375% senior notes in February and April 2013 and $700.0 million in 7.875% senior notes in May 2013, as well as lower
capitalized interest.

8. Foreign currency transaction losses, net

The $60.0 million, or 95%, increase in consolidated foreign currency losses from 2012 to 2013 is primarily the result of the
impact of the depreciation in the value of the Brazilian real relative to the U.S. dollar on Nextel Brazil's U.S. dollar-denominated
net liabilities, partially offset by the slight appreciation in the value of the Mexican peso relative to the U.S. dollar on Nextel
Mexico's U.S. dollar-denominated net liabilities.

Income tax provision

The $287.9 million, or 182%, increase in the consolidated income tax provision from 2012 to 2013 is primarily due to the
$572.8 million valuation allowance established with respect to the deferred tax assets of certain Brazilian and Mexican subsidiaries,
partially offset by a reduction in withholding taxes, tax benefits associated with various tax planning strategies in our foreign
markets and a reduction in the income from continuing operations before income taxes of our foreign markets.

Segment Results

Nextel Brazil

Year Ended
December 31,
2013

% of
Nextel Brazil’s
Operating
Revenues

Year Ended
December 31,
2012

% of
Nextel Brazil’s
Operating
Revenues

(dollars in thousands)

Constant
Currency
Change
from
Previous
Year

Change from
Previous Year

Dollars

Percent

Operating revenues

Service and other revenues

$ 2,109,363

Handset and accessory revenues

Cost of revenues

Cost of service (exclusive of
depreciation and amortization)

Cost of handsets and accessories

Selling and marketing expenses

General and administrative
expenses

Segment earnings

98,671

2,208,034

767,908

250,749

1,018,657

207,646

670,602

311,129

96% $ 2,756,167

146,183

95% $ (646,804)

(47,512)

100%

2,902,350

100%

(694,316)

(23)%

(33)%

(24)%

35%

11%

46%

31%

909,908

210,294

1,120,202

262,620

844,896

14% $

674,632

32%

39%

(142,000)

(16)%

40,455

(101,545)

19 %

(9)%

(54,974)

(21)%

29%

(174,294)

23% $ (363,503)

(21)%

(54)%

(15)%

(25)%

(16)%

(7)%

24 %

(1)%

(12)%

(46)%

The average value of the Brazilian real during 2013 depreciated relative to the U.S. dollar by 11% compared to the average
rate that prevailed during the same period in 2012. As a result, the components of Nextel Brazil's results of operations for 2013,
after translation into U.S. dollars, reflect lower revenues and expenses in U.S. dollars than would have occurred if the Brazilian
real had not depreciated relative to the U.S. dollar. If the value of the Brazilian real remains at levels similar to the end of 2013
or depreciates further relative to the U.S. dollar, Nextel Brazil's future results of operations may be adversely affected.

Nextel Brazil’s segment earnings decreased $363.5 million, or 54%, on a reported basis, and 46% on a constant currency

basis, in 2013 compared to 2012, as a result of the following:

1. Operating revenues

The $646.8 million, or 23%, decrease in service and other revenues on a reported basis in 2013 compared to 2012 is primarily
the result of lower average revenue per subscriber in local currency as described above and weaker foreign currency exchange
rates. On a constant currency basis, Nextel Brazil's service and other revenues decreased 15% in 2013 compared to 2012.

2. Cost of revenues

The $142.0 million, or 16%, decrease in cost of service on a reported basis from 2012 to 2013 is largely due to the $127.3
million, or 26%, decrease in interconnect costs related to a decrease in interconnect minutes of use and lower mobile termination
rates, as well as a decrease in Nextel Brazil's service and repair costs caused primarily by the utilization of more refurbished
handsets. The $40.5 million, or 19%, increase in cost of handsets and accessories on a reported basis from 2012 to 2013 is largely
related to a change in the mix of handsets toward higher-tier smartphones and other handsets, as well as losses related to inventory
obsolescence.

On a constant currency basis, Nextel Brazil's total cost of revenues decreased 1% in 2013 compared to 2012. Despite these
decreases, Nextel Brazil's cost of revenues increased as a percentage of operating revenues as a result of the more significant year-
over-year decline in operating revenues described above and an increase in costs associated with the deployment of Nextel Brazil's
WCDMA network.

In November 2012, Brazil's telecommunications regulatory agency approved the transition to a cost-based model for
determining mobile termination rates beginning in 2016 and additional reductions in those rates for 2013 through 2015 as part of
the transition to the cost-based rates. The transition rules also provide for a partial "bill and keep" settlement process that applies
the settlement of mobile termination charges between smaller operators like Nextel Brazil and its larger competitors, which has
the effect of further reducing the mobile termination charges of the smaller operators. The benefit of this partial bill and keep
settlement process, which only applies to services provided on our WCDMA network, declines as mobile termination rates in
Brazil transition to a cost-based model. We expect these changes will reduce the cost to provide wireless services to our customers
60

as we transition subscribers to our WCDMA network in Brazil and will allow us to offer unique pricing plans that we believe will
be attractive to our current and potential customers.

3. Selling and marketing expenses

The $55.0 million, or 21%, decrease in selling and marketing expenses on a reported basis, and 12% on a constant currency
basis, in 2013 compared to 2012 is largely due to significantly lower advertising costs resulting from fewer advertising campaigns,
as well as cost reduction initiatives in 2013 compared to 2012 and a decrease in direct and indirect commissions that resulted
mostly from acquiring subscribers with lower average revenues.

4. General and administrative expenses

The $174.3 million, or 21%, decrease in general and administrative expenses on a reported basis, and 12% on a constant
currency basis, in 2013 compared to 2012 is principally due to a $108.7 million, or 58%, decrease in provision for doubtful accounts
on a reported basis 2013 compared to 2012 as a result of the changes made to Nextel Brazil's collection and retention policy and
other processes during the fourth quarter of 2012 in connection with the deactivation of unprofitable customers. These changes
resulted in an increase in Nextel Brazil's provision for doubtful accounts in the fourth quarter of 2012 and improved customer
credit quality in 2013. Additionally, Nextel Brazil experienced a significant decrease in revenue-based taxes associated with the
decline in operating revenues described above and other cost reduction initiatives.

Nextel Mexico

Year Ended
December 31,
2013

% of
Nextel
Mexico's
Operating
Revenues

Year Ended
December 31,
2012

% of
Nextel
Mexico’s
Operating
Revenues

(dollars in thousands)

Constant
Currency
Change
from
Previous
Year

Change from
Previous Year

Dollars

Percent

Operating revenues

Service and other revenues

$ 1,832,737

98% $ 2,033,255

Handset and accessory revenues

Cost of revenues

Cost of service (exclusive of
depreciation and amortization)

Cost of handsets and accessories

Selling and marketing expenses

General and administrative expenses

39,960

1,872,697

484,367

547,123

1,031,490

292,800

368,511

76,318

96% $ (200,518)

(36,358)

100%

2,109,573

100% (236,876)

26%

29%

55%

16%

19%

413,457

504,962

918,419

299,022

331,073

20%

24%

44%

14%

15%

70,910

42,161

113,071

(6,222)

37,438

(10)%

(48)%

(11)%

17 %

8 %

12 %

(2)%

11 %

(13)%

(49)%

(14)%

15 %

5 %

9 %

(5)%

8 %

Segment earnings

179,896

10% $

561,059

27% $ (381,163)

(68)%

(69)%

The average value of the Mexican peso appreciated relative to the U.S. dollar by 3% during 2013 compared to the average
value that prevailed in 2012. As a result, the components of Nextel Mexico's results of operations for 2013, after translation into
U.S. dollars, reflect slightly higher revenues and expenses in U.S. dollars than would have occurred if the Mexican peso had not
appreciated relative to the U.S. dollar.

As a result of the increase in operating expenses in connection with the deployment of our WCDMA network, including
cost of service, general and administrative expenses and other factors described below, Nextel Mexico's segment earnings decreased
$381.2 million, or 68%, on a reported basis, and 69% on a constant currency basis, in 2013 compared to 2012. Nextel Mexico's
segment earnings margin declined from 27% in 2012 to 10% in 2013 as a result of the following:

1. Operating revenues

The $200.5 million, or 10%, decrease in service and other revenues on a reported basis, and 13% on a constant currency
basis, in 2013 compared to 2012 is primarily due to a decline in average revenue per subscriber on a local currency basis resulting
from the implementation of lower rate service plans in response to the competitive environment in Mexico, as well as the 16%
reduction in Nextel Mexico's subscriber base from December 31, 2012 to December 31, 2013.

2. Cost of revenues

The $70.9 million, or 17%, increase in cost of service on a reported basis, and 15% on a constant currency basis, in 2013
compared to 2012 is primarily the result of a $101.7 million, or 71%, increase in direct switch and transmitter and receiver site
costs resulting from a significant increase in transmitter and receiver sites in service from December 31, 2012 to December 31,
2013 related to the deployment and expansion of Nextel Mexico's WCDMA network. These amounts were partially offset by a
$26.4 million, or 16%, decrease in interconnect expenses related to a decline in interconnect minutes of use and a reduction in
mobile termination rates. The increase in Nextel Mexico's cost of revenues was also partially due to a $42.2 million, or 8%, increase
in cost of handsets and accessories resulting from a change in the mix of handsets toward higher tier smartphones and other handsets
and losses related to inventory obsolescence.

3. General and administrative expenses

The $37.4 million, or 11%, increase in general and administrative expenses on a reported basis, and 8% on a constant currency

basis, in 2013 compared to 2012 is primarily the result of higher information technology and customer care expenses.

Nextel Argentina

Year Ended
December 31,
2013

% of
Nextel
Argentina's
Operating
Revenues

Year Ended
December 31,
2012

% of
Nextel
Argentina’s
Operating
Revenues

(dollars in thousands)

Constant
Currency
Change
from
Previous
Year

Change from
Previous Year

Dollars

Percent

Operating revenues

Service and other revenues

575,536

90% $

636,807

93% $ (61,271)

(10)%

10%

100%

48,394

685,201

12,518

100%

(48,753)

26 %

(7)%

9 %

51 %

12 %

Handset and accessory revenues

Cost of revenues

Cost of service (exclusive of
depreciation and amortization)

Cost of handsets and accessories

Selling and marketing expenses

General and administrative expenses

60,912

636,448

140,390

90,879

231,269

61,607

164,154

22%

14%

36%

10%

26%

187,641

79,563

267,204

68,754

168,287

180,956

27%

12%

39%

10%

25%

(47,251)

(25)

(15)%

11,316

(35,935)

(7,147)

(4,133)

14 %

(13)%

(10)%

(2)%

(1)%

16 %

(5)%

8 %

17 %

43 %

Segment earnings

179,418

28% $

26% $

(1,538)

The average value of the Argentine peso during 2013 depreciated relative to the U.S. dollar by 20% compared to the same
period in 2012. As a result, the components of Nextel Argentina's results of operations for 2013 after translation into U.S. dollars
reflect lower U.S. dollar-denominated revenues and expenses than would have occurred if the Argentine peso had not depreciated
relative to the U.S. dollar.

Nextel Argentina's segment earnings decreased $1.5 million, or 1%, on a reported basis in 2013 compared to 2012 primarily
as the result of a $48.8 million, or 7%, decrease in operating revenues caused by the impact of the decrease in value of the Argentine
peso compared to the U.S. dollar during 2013, partially offset by a corresponding $47.2 million decrease in operating expenses
that was also driven primarily by the decrease in value of the Argentine peso. On a constant currency basis, Nextel Argentina's
segment earnings increased 43% in 2013 compared to 2012, primarily as a result of a 15% increase in Nextel Argentina's subscriber
base from 2012 to 2013.

Corporate

Year Ended
December 31,
2013

Year Ended
December 31,
2012

Change from
Previous Year

Dollars

Percent

(dollars in thousands)

— $

11,831

169,813

38,395

259,057

(26,564)

(89,244)

(181,602) $

(297,452) $ 115,850

(69)%

(34)%

(39)%

Operating revenues

Service and other revenues

Selling and marketing expenses

General and administrative expenses

Segment losses

Segment losses decreased $115.9 million, or 39%, in 2013 compared to 2012 primarily due to a $89.2 million, or 34%,
decrease in general and administrative expenses. This decrease in general and administrative expenses was largely the result of a
$32.4 million, or 24%, decrease in consulting and other outside service costs, a $35.3 million, or 55%, decrease in information
technology costs, a decrease in payroll expenses, and a decrease in stock-based compensation expense.

C. Liquidity and Capital Resources

We derive our liquidity and capital resources primarily from a combination of cash flows from our operations and cash we
raise in connection with external financings and asset sales. As of December 31, 2014, we had working capital, which is defined
as total current assets less total current liabilities, of $4.0 million, a $1,457.6 million decrease compared to working capital of
$1,461.6 million as of December 31, 2013. The decrease in our working capital was the result of cash used in our operations, as
well as the reclassification of the balances of our local bank loans and our equipment financing facility in Brazil as current liabilities
in our consolidated balance sheet. As of December 31, 2014, our working capital included $573.6 million in cash and cash
equivalents, of which $12.3 million was held by Nextel Brazil, $153.9 million was held by Nextel Mexico, $85.5 million was held
by Nextel Argentina and $175.2 million was held by NIIT. As of December 31, 2014, $223.2 million of our cash and cash equivalents
was held in currencies other than U.S. dollars, with 66% of that amount held in Mexican pesos and 28% of that amount held in
Argentine pesos. The majority of the cash and cash equivalents held in Argentina is denominated in Argentine pesos and remains
subject to Argentina’s foreign currency controls and to fluctuations in foreign currency exchange rates. Due to these restrictions,
cash and investments held by Nextel Argentina are not available to our holding company or our subsidiaries located outside of
Argentina. As of December 31, 2014, our working capital also included $153.6 million in short-term investments, the majority of
which was held in Brazilian reais. In addition, as of December 31, 2014, we pledged $119.7 million as collateral to secure certain
performance bonds relating to our obligations to deploy our spectrum in Brazil, which we recorded as long-term other assets in
our consolidated balance sheet.

A substantial portion of our cash and cash equivalents is held in money market funds, bank deposits and U.S. treasury
securities, and our cash, cash equivalents and short-term investments held in local currencies are typically maintained in a
combination of money market funds, highly liquid overnight securities and fixed income investments. The values of our cash,
cash equivalents and short-term investments that are held in the local currencies of the countries in which we do business will
fluctuate in U.S. dollars based on changes in the exchange rates of these local currencies relative to the U.S. dollar. Our current
sources of funding include our cash, cash equivalent and short-term investment balances. Pursuant to our Chapter 11 filing, our
uses of cash are subject to review and approval by the Bankruptcy Court.

Cash Flows

Cash and cash equivalents, beginning of year

Net cash (used in) provided by operating activities

Net cash used in investing activities

Net cash (used in) provided by financing activities

Effect of exchange rate changes on cash and cash
equivalents

Change in cash and cash equivalents related to
discontinued operations

Year Ended December 31,

2014

2013

2012

Change from
2013 to 2014

Change from
2012 to 2013

$ 1,730,335
(628,716)
(347,538)
(128,272)

$ 1,364,953
(192,451)
(177,612)
776,591

(in thousands)

$ 2,282,155

353,183
(1,055,160)
(238,295)

365,382
(436,265)
(169,926)
(904,863)

$ (917,202)
(545,634)
877,548

1,014,886

(55,657)

(56,236)

844

579

(57,080)

Cash and cash equivalents, end of year

573,600

$ 1,730,335

$ 1,364,953

3,448

15,090

22,226

(11,642)
$(1,156,735) $

(7,136)
365,382

The following is a discussion of the primary sources and uses of cash in our operating, investing and financing activities.

We used $628.7 million of cash in our operating activities during 2014, a $436.3 million increase from 2013, primarily due
to increased operating losses and a $125.5 million prepayment of certain costs associated with our roaming arrangements with
Telefonica in Brazil and Mexico. We used $192.5 million of cash in our operating activities during 2013, a $545.6 million, or
154%, change from the net cash provided by operating activities in 2012, primarily due to increased operating losses and higher
interest expense related to the senior notes we issued in 2013.

We used $347.5 million of cash in our investing activities during 2014, primarily due to $612.2 million in cash capital
expenditures and $119.7 million in deposits to secure certain performance bonds relating to our obligations to deploy our spectrum
in Brazil, partially offset by $454.5 million in net proceeds received from maturities of our short-term investments in Brazil and
at the corporate level. We used $177.6 million of cash in our investing activities during 2013, primarily due to $620.9 million in
cash capital expenditures, $417.6 million in net purchases of investments, $52.9 million in fees related to placing new transmitter
and receiver sites into service in Brazil and $39.4 million related to changes in restricted cash, partially offset by $721.4 million
in proceeds from the sale of towers and $355.5 million in proceeds from the sale of Nextel Peru. We used $1,055.2 million of cash
in our investing activities during 2012, primarily driven by $953.9 million in cash capital expenditures, partially offset by $134.9
million in net proceeds received from maturities of our short-term investments in Brazil and at the corporate level.

We used $128.3 million of cash in our financing activities during 2014, largely due to $142.2 million in repayments of bank
loans, capital leases and other borrowings, partially offset by $14.6 million in borrowings under our equipment financing facilities
and other borrowings. Our financing activities provided us with $776.6 million of cash during 2013, primarily due to $900.0
million in gross proceeds we received from the issuance of our 11.375% senior notes in February 2013 and April 2013 and $700.0
million in gross proceeds we received from the issuance of our 7.875% senior notes in May 2013, partially offset by $686.7 million
used to repay our bank loan in Mexico and one of our bank loans in Brazil and $37.4 million to repay our import financing loans
in Brazil. We used $238.3 million of cash in our financing activities during 2012, primarily due to the principal repayment of $97.4
million under our syndicated loan facility in Brazil, and the repayment of $212.8 million face amount of our 3.125% convertible
notes in the U.S., partially offset by $212.8 million in borrowings under a Brazilian real-denominated loan agreement.

D. Future Capital Needs and Resources

As of result of the factors described above, we are not currently able to maintain sufficient liquidity to support our business
plan and repay our debts when they come due. As a result, on September 15, 2014, NII Holdings, Inc. and eight of its U.S. and
Luxembourg-domiciled subsidiaries, including NII Capital Corp. and Nextel International Telecom, S.C.A, or NIIT, filed voluntary
petitions seeking relief under Chapter 11 of Title 11 of the United States Bankruptcy Code, which we refer to as Chapter 11, in
the United States Bankruptcy Court for the Southern District of New York, which we refer to as the Bankruptcy Court. Since

September 15, 2014, five additional subsidiaries of NII Holdings, Inc. have filed voluntary petitions seeking relief under Chapter
11 in the Bankruptcy Court, with four subsidiaries filing on October 8, 2014 and one subsidiary filing on January 25, 2015. The
entities that have filed petitions seeking relief under Chapter 11, which we refer to collectively as the debtors, continue to operate
as "debtors-in-possession" under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the
Bankruptcy Code and orders of the Bankruptcy Court. Our operating subsidiaries in Brazil, Mexico and Argentina are not debtors
in the Chapter 11 cases.

The circumstances leading to our decision to seek relief under Chapter 11, including those described above and their impact
on our business, including on our liquidity, and the uncertainties associated with the Chapter 11 process, in combination with the
potential impact of our failure to satisfy certain financial covenants under our existing debt obligations, raise substantial doubt
about our ability to continue as a going concern. See "— B. Results of Operations — Business Update" and "— Future Outlook
and Liquidity Plans" for further information.

Capital Resources. Our ongoing capital resources depend on a variety of factors, including our existing cash, cash
equivalents and investment balances, cash flows generated by our operating companies, external financial sources, the availability
of debtor-in-possession financing while our Chapter 11 cases are pending and other financing after we emerge from Chapter 11,
and the availability of cash proceeds from the sale of assets, including from the proposed sale of Nextel Mexico.

Our ability to generate sufficient net cash from our operating activities in the future is dependent upon, among other things:

•

the amount of revenue we are able to generate and collect from our subscribers, including our ability to increase the size
of our subscriber base;

the amount of operating expenses required to provide our services;

the cost of acquiring and retaining customers, including the subsidies we incur to provide handsets to both our new and
existing subscribers; and

• changes in foreign currency exchange rates.

Due to the combined impact of our filing for Chapter 11 protection, our recent and projected results of operations and other
factors, our access to the capital markets in the near term is expected to be limited to debtor-in-possession financing. We plan to
secure $350.0 million in bridge loan financing contemplated by the Revised PSA and to seek the Bankruptcy Court's approval of
that financing in order to fund our business plan while our Chapter 11 cases are pending. In addition, we plan to repay any amounts
borrowed with a portion of the proceeds expected to be received from the proposed sale of Nextel Mexico. Our access to debtor-
in-possession financing will be subject to the approval of the Bankruptcy Court. See "— Future Outlook and Liquidity Plans" for
more information.

Capital Needs, Contingencies and Contractual Obligations. We currently anticipate that our future capital needs will

principally consist of funds required for:

•

operating expenses and capital expenditures relating to our existing networks and the planned deployment of LTE
upgrades;

payments in connection with spectrum purchases, including ongoing spectrum license fees;

debt service requirements;

obligations relating to our tower financing arrangements and capital lease obligations;

cash taxes; and

other general corporate expenditures.

Brazilian Contingencies. Nextel Brazil has received various assessment notices from state and federal Brazilian authorities
asserting deficiencies in payments related primarily to value-added taxes, excise taxes on imported equipment and other non-
income based taxes. Nextel Brazil has filed various administrative and legal petitions disputing these assessments. In some cases,

Nextel Brazil has received favorable decisions, which are currently being appealed by the respective governmental authority. In
other cases, Nextel Brazil's petitions have been denied, and Nextel Brazil is currently appealing those decisions. Nextel Brazil
also had contingencies related to certain regulatory, civil and labor-related matters as of December 31, 2014 and 2013.

As of December 31, 2014 and 2013, Nextel Brazil had accrued liabilities of $69.7 million and $70.9 million, respectively,
related to contingencies, all of which were classified in accrued contingencies reported as a component of other long-term liabilities,
of which $8.0 million and $11.2 million related to unasserted claims, respectively. We currently estimate the reasonably possible
losses related to matters for which Nextel Brazil has not accrued liabilities, as they are not deemed probable, to be approximately
$430.0 million as of December 31, 2014. We continually evaluate the likelihood of probable and reasonably possible losses, if
any, related to all known contingencies. As a result, future increases or decreases to our accrued liabilities may be necessary and
will be recorded in the period when such amounts are determined to be probable and reasonably estimable.

Contractual Obligations. The following table sets forth the amounts and timing of contractual payments for our most
significant contractual obligations determined as of December 31, 2014. The amounts included in the table below exclude liabilities
subject to compromise. See Note 2 to our consolidated financial statements for more information. The information included in
the table below reflects future unconditional payments and is based upon, among other things, the current terms of the relevant
agreements and certain assumptions, such as future interest rates. Most of the amounts included in the table below will be settled
in local currencies. Future events could cause actual payments to differ significantly from these amounts. See “Forward-Looking
and Cautionary Statements.”

Contractual Obligations

Less than

1 Year

Payments due by Period

More than

1-3 Years

3-5 Years

5 Years

Total

(in thousands)

Purchase obligations (1)

$ 1,586,205

621,960

268,501

— $ 2,476,666

Capital leases and tower financing obligations (2)

Operating leases (3)

Spectrum fees (4)

Equipment financing (5)

Bank loans (6)

Other long-term obligations (7)

Total contractual commitments

_______________________________________

166,655

219,767

130,091

432,272

389,610

13,087

339,192

414,771

257,254

137,269

72,222

14,806

258,855

304,984

257,254

126,692

9,858

16,605

1,581,487

1,025,445

1,119,874

110,774

—

798,276

2,346,189

1,964,967

1,764,473

807,007

471,690

842,774

$ 2,937,687

$ 1,857,474

$ 1,242,749

$ 4,635,856

$ 10,673,766

(1) These amounts include maximum contractual purchase obligations under various agreements with our vendors.
(2) These amounts represent principal and interest payments due under our co-location agreements, our tower financing

arrangements and our sale of towers in Brazil and Mexico in 2013.

(3) These amounts principally include future lease costs related to our transmitter and receiver sites and switches and office

facilities.

(4) These amounts are subject to increases in the Mexican Consumer Pricing Index.
(5) These amounts include loan agreements with the China Development Bank in Brazil and Mexico to finance infrastructure
equipment and assist in the deployment of the WCDMA networks in these markets. These amounts include future interest
payments to which we are contractually obligated in the periods in which they are due. Because of certain cross-default
provisions included in Brazil's loan agreement, we classified the principal amount outstanding under this facility as due
in less than one year.

(6) These amounts represent principal and interest payments associated with our bank loans in Brazil and include future
interest payments to which we are contractually obligated in the periods in which they are due. Because of Nextel Brazil's
noncompliance with certain financial covenants at the December 31 measurement date, we classified the principal amounts
outstanding under these local bank loans as due in less than one year.

(7) These amounts include our current estimates of asset retirement obligations based on our expectations as to future
retirement costs, inflation rates and timing of retirements, as well as amounts related to our uncertain income tax positions.

Capital Expenditures. Our capital expenditures, including capitalized interest, were $428.4 million for 2014 and $872.1
million for 2013. In light of the liquidity issues we face, we have reduced our investments in capital expenditures, including making
substantial reductions to our network development and deployment efforts. We expect these efforts to conserve our cash resources
to continue.

Our capital spending and related expenses are expected to be driven by several factors, including:

•

the amount we spend to enhance our WCDMA networks and deploy our planned LTE upgrades;

the extent to which we expand the coverage of our networks in new or existing market areas;

the number of additional transmitter and receiver sites we build in order to increase system capacity, maintain
system quality and meet our regulatory requirements, as well as the costs associated with the installation of network
infrastructure and switching equipment; and

•

the costs we incur in connection with non-network related information technology projects.

Our future capital expenditures may also be affected by future technology improvements, technology choices and our

available capital.

Future Outlook and Liquidity Plans. Based on our current cash and investment balances and forecasted payment
obligations, it will be necessary for us to raise debtor-in-possession financing by the second quarter of 2015 to ensure we can
continue to meet those obligations in the ordinary course of business. We plan to secure $350.0 million in bridge loan financing
contemplated by the Revised PSA that would remain outstanding in order to provide us with the additional liquidity necessary to
fund our business plan until the sale of Nextel Mexico is completed. We expect to use a portion of the proceeds from the sale of
Nextel Mexico to repay this debtor-in-possession loan and support our business plan going forward.

In making the assessment of our funding needs under our current business plan and the adequacy of our current sources of

funding for 2015, we have considered:

•

cash and cash equivalents on hand and short-term investments available to fund our operations;

cash proceeds expected to be received from sales of assets, including from the proposed sale of Nextel Mexico;

expected cash flows from our operations;

the cost and timing of spectrum payments, including ongoing fees for spectrum use;

the anticipated level of capital expenditures required to meet both minimum build-out requirements and our business
plans for our deployment of WCDMA networks and our planned deployment of LTE upgrades in certain markets;

our scheduled debt service obligations relating to financing that is not expected to be restructured in the Chapter 11
proceedings and our current expectations regarding the treatment of certain of our debt obligations pursuant to a
plan of reorganization that may be confirmed in those proceedings;

our other contractual obligations;

the costs associated with the Chapter 11 proceedings; and

cash income and other taxes.

In addition to the factors described above, the anticipated cash needs of our business, as well as the conclusions presented

herein regarding our liquidity needs, could change significantly:

•

if we are unable to complete the proposed sale of Nextel Mexico or to confirm a plan of reorganization and emerge
from the Chapter 11 proceedings;

•

if our plans change;

if we are not able to satisfy the conditions of the amendments to our equipment financing facilities and other financing
agreements that have the effect of waiving certain financial covenants in the existing agreements (see "Maintenance
Covenants Under Financing Agreements" below);

if we decide to expand into new markets or expand our geographic coverage or network capacity in our existing
markets beyond our current plans, as a result of the construction of additional portions of our networks or the
acquisition of competitors or others;

if currency values in our markets depreciate or appreciate relative to the U.S. dollar in a manner that is more
significant than we currently expect and assume as part of our plans;

if economic conditions in any of our markets change;

if competitive practices in the mobile wireless telecommunications industry in our markets change materially from
those currently prevailing or from those now anticipated; or

if other presently unexpected circumstances arise that have a material effect on the cash flow or profitability of our
business.

Maintenance Covenants Under Financing Agreements. We are required to meet certain financial covenants in our
equipment financing facilities in Brazil and Mexico and in Brazil's local bank loans semiannually, calculated as of June 30 and
December 31 of each year.

As of the June 30, 2014 measurement date, we were not in compliance with certain financial covenants in our equipment
financing facilities in Brazil and Mexico. As of December 31, 2014, we had $689.9 million principal amount outstanding under
these equipment financing facilities. In December 2014, Nextel Brazil and Nextel Mexico and the lenders under the equipment
financing facilities agreed to amendments to those facilities that removed all financial covenants beginning with the December
31, 2014 measurement date and continuing through the June 30, 2017 measurement date. In exchange for covenant relief, Nextel
Brazil granted the lender of its equipment financing facility preferential rights to the amounts held in certain bank accounts, and
Nextel Mexico's parent company, Nextel International Uruguay, LLC, granted the lender of its equipment financing facility a
pledge on the shares it holds in Nextel Mexico. In addition, Nextel Brazil and Nextel Mexico have the option to defer principal
amortization payments in exchange for an upfront payment of 17% of the amounts outstanding under the equipment financing
facilities on August 31, 2014. As a result of the amendment of our equipment financing facility in Mexico, we classified the
principal amount outstanding under this facility as long-term debt in our consolidated balance sheet as of December 31, 2014.
Because of certain cross-default provisions included in our equipment financing facility in Brazil, we classified the principal
amount outstanding under this facility as a current liability in our consolidated balance sheet as of December 31, 2014. We do not
have the ability to borrow additional amounts under these equipment financing facilities.

As of December 31, 2014, we were not in compliance with the net debt financial covenants included in each of Nextel
Brazil's outstanding local bank loans. As of December 31, 2014, Nextel Brazil had a total of $343.9 million principal amount
outstanding under its bank loans. Because of our noncompliance at the December 31 measurement date, we classified the principal
amounts outstanding under these local bank loans as current liabilities in our consolidated balance sheet as of December 31, 2014.
In February 2015, Nextel Brazil and the lenders providing the local bank loans entered into standstill agreements under which the
lenders agreed that they would not seek remedies under the provisions of the agreements related to Nextel Brazil's failure to satisfy
the financial covenants in the loan agreements in the period before September 15, 2015 and that further principal repayment
obligations due between the signing date and September 15, 2015 would be suspended. In addition, the standstill agreements
formally commit the lenders to sign amendments, which we refer to as the second amendments, once certain conditions are met
that implement permanent amendments to the terms of the local bank loans, including with respect to the financial covenants and
principal repayment schedule for these loans. Among others, these conditions include:

• our emergence from the Chapter 11 proceedings on or prior to September 15, 2015;

•

the absence of an insolvency event involving Nextel Brazil;

the absence of events of default other than those waived or suspended in the standstill agreements; and

the execution of subordination agreements subordinating any amounts due under intercompany loans between NIIT and
Nextel Brazil.

repayment schedule. Following the declaration of an event of default, the lenders will have the right to accelerate the loans and
proceed with claims against the collateral.

Concurrent with the execution of the standstill agreements, Nextel Brazil and the lenders entered into amendments to the
agreements relating to the local bank loans, which we refer to as the first amendments, under which Nextel Brazil granted the
lenders a security interest over amounts held at any given time in certain collection accounts maintained with each lender. These
first amendments also adjust the interest rates on the loans.

Intercompany Transactions. In the past, we have entered into intercompany loans with some of our subsidiaries for cash
management purposes. As of December 31, 2014, these long-term intercompany loans included $2.7 billion principal amount,
plus accrued interest, owed by NII Holdings, Inc. to NII Capital Corp. and $644.0 million principal amount, plus accrued interest,
owed by NIIT to NII Capital Corp, both of which are considered subject to compromise. These intercompany loans also included
$1,123.3 million principal amount, plus accrued interest, owed by Nextel Brazil to NIIT, which is eliminated within the non-
guarantor subsidiaries column in the condensed consolidating balance sheets included in Note 17 to our consolidated financial
statements. In some instances, these intercompany obligations are subordinated to other third-party obligations of the borrower.
We also have intercompany agreements in place to transfer costs and expenses paid by one entity on behalf of others, including
intercompany management, royalty and equity recharge agreements. As of December 31, 2014, approximately $71.5 million in
intercompany payables were due from our operating companies to NII Holdings, Inc. and one of our corporate subsidiaries pursuant
to these agreements.

E. Effect of Inflation and Foreign Currency Exchange

Our net assets are subject to foreign currency exchange risks since they are primarily maintained in local currencies.
Additionally, a significant portion of our long-term debt, including some long-term debt incurred by our operating subsidiaries,
is denominated entirely in U.S. dollars, which exposes us to foreign currency exchange risks. We conduct business in countries
in which the rate of inflation has historically been significantly higher than that of the U.S. We seek to protect our earnings from
inflation and possible currency depreciation by periodically adjusting the local currency prices charged by each operating company
for sales of handsets and services to its subscribers. We routinely monitor our foreign currency exposure and the cost effectiveness
of hedging instruments.

Inflation is not currently a material factor affecting our business, although rates of inflation in some of the countries in which
we operate have been historically volatile. In the last several years, the inflation rate in Argentina has risen significantly, and we
expect that it may continue to rise, which will increase our costs and could reduce our profitability in Argentina. General operating
expenses such as salaries, employee benefits and lease costs are, however, subject to normal inflationary pressures. From time to
time, we may experience price changes in connection with the purchase of system infrastructure equipment and handsets, but we
do not currently believe that any of these price changes will be material to our business.

F. Effect of New Accounting Standards

On May 28, 2014, the Financial Accounting Standards Board, or the FASB, issued new authoritative guidance surrounding
revenue recognition, which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer
of promised goods or services to customers. This new authoritative guidance will replace most existing revenue recognition
guidance when it becomes effective. The new standard is effective on January 1, 2017, and early application is not permitted. The
standard permits the use of either the retrospective or cumulative effect transition method. We are evaluating the effect that the
new revenue recognition guidance will have on our consolidated financial statements and related disclosures. We have not yet
selected a transition method nor have we determined the effect of the standard on our ongoing financial reporting.

On April 10, 2014, the FASB issued new authoritative guidance surrounding discontinued operations and disclosures of
components of an entity, which updates the definition of discontinued operations. Going forward only those disposals of components
of an entity that represent a strategic shift that has or will have a major effect on an entity's operations and financial results will
be reported as discontinued operations in a company's financial statements. The new standard is effective for disposals of
components of an entity that occur within annual periods beginning on or after December 15, 2014, and early adoption is permitted.
We intend to adopt this standard in the first quarter of 2015. We do not expect the adoption of this standard to have a material
impact on our financial statements.

On August 27, 2014, the FASB issued new authoritative guidance surrounding the evaluation and disclosures of uncertainties
about an entity's ability to continue as a going concern. The new guidance requires management to perform an assessment of going
concern and, under certain circumstances, disclose information regarding this assessment in the footnotes to the financial statements.
The new standard is effective for periods beginning after December 15, 2016. We intend to adopt this standard in the first quarter
of 2017. We do not expect the adoption of this standard to have a material impact on our financial statements.

Item 7A.

Quantitative and Qualitative Disclosures About Market Risk

Our revenues are primarily denominated in foreign currencies, while a significant portion of our operations are financed in
U.S. dollars. As a result, fluctuations in exchange rates relative to the U.S. dollar expose us to foreign currency exchange risks.
These risks include the impact of translating our local currency reported earnings into U.S. dollars when the U.S. dollar strengthens
against the local currencies of our foreign operations. In addition, Nextel Brazil, Nextel Mexico and Nextel Argentina pay the
purchase price for some capital assets and a portion of handsets in U.S. dollars, but generate revenue from their operations in local
currency.

We occasionally enter into derivative transactions for hedging or risk management purposes. We have not and will not enter
into any derivative transactions for speculative or profit generating purposes. During 2014 and 2013, Nextel Brazil and Nextel
Mexico entered into hedge agreements to manage foreign currency risk on certain forecasted transactions. The fair values of these
instruments are not material.

Interest rate changes expose our fixed rate long-term borrowings to changes in fair value and expose our variable rate long-
term borrowings to changes in future cash flows. As of December 31, 2014, $479.1 million, or 32%, of our consolidated principal
amount of debt that was not classified as liabilities subject to compromise was fixed rate debt, and the remaining $1,033.3 million,
or 68%, of our total consolidated debt was variable rate debt.

The table below presents principal amounts, related interest rates by year of maturity and aggregate amounts as of
December 31, 2014 for both our fixed and variable rate debt obligations, including our equipment financing facilities in Brazil
and Mexico, our bank loans in Brazil and our tower financing obligations, all of which have been determined at their fair values.
Because we were unable to meet the financial covenants in our bank loans in Brazil as of the compliance date on December 31,
2014 and because of the associated cross-default provisions included in Brazil's equipment financing facility, we classified the
principal amounts outstanding under these facilities as current liabilities in our consolidated balance sheet as of December 31,
2014.

The changes in the fair values of our consolidated debt compared to their fair values as of December 31, 2013 reflect changes
in applicable market conditions and changes in other company-specific conditions during 2014. All of the information in the table
is presented in U.S. dollar equivalents, which is our reporting currency. The actual cash flows associated with our consolidated
long-term debt are denominated in U.S. dollars (US$), Mexican pesos (MP) and Brazilian reais (BR).

1 Year

2 Years

3 Years

4 Years

5 Years

Thereafter

Total

Fair Value

Total

Fair Value

Year of Maturity

2014

2013

(dollars in thousands)

Fixed Rate (US$)

— $

— $ 4,385,758

2,535,078

Average Interest Rate

—

Fixed Rate (MP)

$ 14,001

$ 16,703

$ 19,982

$ 14,548

$ 13,668

Average Interest Rate

18.1%

18.2%

19.6%

20.5%

Fixed Rate (BR)

$ 7,141

$ 8,531

$ 10,890

$ 6,726

$ 2,527

Average Interest Rate

22.9%

24.7%

25.0%

25.5%

26.0%

Variable Rate (US$)

$413,079

$ 46,142

Average Interest Rate

3.1%

—

185,228

17.1%

179,169

17.0%

92,283

3.1%

—

264,130

17.6%

214,984

18.3%

689,930

3.1%

Variable Rate (BR)

$343,348

— $

343,348

Average Interest Rate

13.3%

—

13.3%

264,130

214,984

620,125

273,832

9.0%

194,227

12.8%

126,693

19.0%

653,559

3.1%

443,951

11.3%

194,227

126,693

620,173

369,578

Item 8.

Financial Statements and Supplementary Data

We have listed the consolidated financial statements required under this Item in Part IV, Item 15(a)(1) of this annual report
on Form 10-K. We have also listed the financial statement schedules required under Regulation S-X in Part IV, Item 15(a)(2) of
this annual report on Form 10-K. The financial statements and schedules appear following the signature page of this annual report
on Form 10-K.

Item 9.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

Not applicable.

Item 9A.

Controls and Procedures

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed by us
in the reports that we file or submit under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized
and reported within the time periods required by the Securities and Exchange Commission, or the SEC, and that such information
is accumulated and communicated to the Company's management, including our chief executive officer and chief financial officer,
as appropriate to allow timely decisions regarding required disclosure.

As of December 31, 2014, an evaluation of the effectiveness of the design and operation of our disclosure controls and
procedures was carried out under the supervision and with the participation of our management teams in the United States and in
our operating companies, including our chief executive officer and chief financial officer. Based on and as of the date of such
evaluation, our chief executive officer and chief financial officer concluded that the design and operation of our disclosure controls
and procedures were not effective due to the material weakness in the Company's internal control over financial reporting in its
Brazil segment, as described below.

Management's Report on Internal Control over Financial Reporting

Management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined
in Rule 13a-15(f) and Rule 15d-15(f) under the Securities Exchange Act of 1934, as amended). Because of its inherent limitations,
internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness
to future periods are subject to the risk that controls may become inadequate because of changes in conditions or that the degree
of compliance with the policies or procedures may deteriorate.

In order to evaluate the effectiveness of internal control over financial reporting, management conducted an assessment using
the criteria established in Internal Control - Integrated Framework (1992), issued by the Committee of Sponsoring Organizations
of the Treadway Commission, or COSO. Based on this assessment, management concluded that as of December 31, 2014, our
internal control over financial reporting was not effective.

As part of its evaluation of internal control over financial reporting as described above, management concluded that Nextel
Brazil failed to establish an effective control environment and monitoring activities, including an organizational structure with
sufficiently trained resources where supervisory roles, responsibilities and monitoring activities are aligned with our financial
reporting objectives. Further, Nextel Brazil did not maintain effective operation of process level controls, including reconciliation
and management review controls.

The control deficiencies resulted in immaterial misstatements in Nextel Brazil's accounts. The control deficiencies create a
reasonable possibility that a material misstatement to the consolidated financial statements will not be prevented or detected on a
timely basis, and therefore we concluded that the deficiencies, in aggregate, represent a material weakness in Nextel Brazil's
internal control over financial reporting.

KPMG LLP, an independent registered public accounting firm who audited the consolidated financial statements included
in this annual report on Form 10-K, has issued an adverse report on the effectiveness of the Company's internal control over
financial reporting as of December 31, 2014. This attestation report appears on Page F-2 of this annual report on Form 10-K.

Plan for Remediation of Nextel Brazil's Material Weakness

In light of Nextel Brazil's material weakness, we performed additional procedures, including reviews and validations by
groups other than those performing the financial close procedures in Nextel Brazil, to ensure that our financial results are not
materially misstated.

In order to remediate Nextel Brazil's material weakness, the Company, led by our chief financial officer and our principal

accounting officer, are implementing and monitoring the following actions in Brazil:

•

reassessing the organizational structure within Nextel Brazil to properly align roles and responsibilities in order to ensure
that we have an adequate complement of properly trained personnel with appropriate skills and experience;

• providing training on the Company's policies and procedures and the Company's system of internal control over financial

reporting, including individuals' responsibilities;

•

improving the documentation and operating effectiveness of internal controls over financial reporting; and

•

increasing the level of involvement and oversight from the corporate office until the organizational structure and financial
reporting processes in Brazil have matured.

Changes in Internal Control over Financial Reporting

There have been no changes in the Company's internal control over financial reporting during the most recently completed
fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Company's internal control over
financial reporting.

Item 9B.

Other Information

None.

Item 10.

Directors, Executive Officers of the Registrant and Corporate Governance

PART III

Board of Directors

Summary of Qualifications. Below is a summary of the qualifications of the members of the Company's Board of Directors

(the "Board") that led the Board to conclude that each director is qualified to serve on the Board.

Beebe

Guthrie

Herington

Katz Knoepfelmacher

Parra

Rego Barros

Risner

Shindler

Senior executive
experience in large, complex
organizations

Telecommunications experience

Diverse experience in multiple
industries

Experience in our markets or
similar Latin American or
emerging markets

Service on the board of other
public companies

Managerial experience evaluating
risks

Experience in financial and capital
markets and strategic transactions

Director Biographies. Set forth below is biographical information of the members of the Board.

Kevin L. Beebe (Chairman, Independent)
President and Chief Executive Officer, 2BPartners, LLC
Director Since: 2010

Mr. Beebe, 55, has been president and chief executive officer of 2BPartners, LLC, a partnership that provides strategic,
financial and operational advice to private equity clients, investors and management since November 2007. Previously, he was
group president of operations at ALLTEL Corporation, a telecommunications services company, from 1998 to 2007. From 1996
to 1998, Mr. Beebe served as executive vice president of operations for 360° Communications Co., a wireless communications
company. Prior to that time, he has held a variety of executive and senior management positions at several divisions and affiliates
of Sprint Corporation. Mr. Beebe began his career at AT&T/Southwestern Bell as a Manager. Mr. Beebe also serves as a director
for Skyworks Solutions, Inc., a semiconductor and wireless handset chip supplier, and SBA Communications Corporation, a
provider of wireless and broadcast infrastructure communications. In addition, Mr. Beebe is a founding partner of Astra Capital,
a private equity company based in Washington, D.C.

Donald Guthrie (Independent)
Managing Director, Trilogy Equity Partners
Director Since: 2008

Mr. Guthrie, 59, has served as a managing director of Trilogy Equity Partners, a private investment firm since February 2006.
From 1995 to 2005, he served as vice chairman of the Western Wireless Corporation, a wireless communications company, where
he also served as chief financial officer from February 1997 to May 1999. From 1995 to 2002, Mr. Guthrie served as vice chairman
of VoiceStream Wireless, a wireless communications company, now T-Mobile USA, subsequent to its acquisition by Deutsche
Telekom AG. From 1986 to 1995, Mr. Guthrie served as senior vice president and treasurer of McCaw Cellular and, from 1990
to 1995, as senior vice president, finance for LIN Broadcasting.

Charles M. Herington (Independent)
Executive Vice Chair, Zumba Fitness LLC
Director Since: 2003

Mr. Herington, 55, serves as executive vice chair, Zumba Fitness LLC. Previously, Mr. Herington served as president and
executive vice president, emerging and developing markets of Avon Products, Inc., a global beauty company, from March 2010

to September 2012 and in other executive positions at Avon Products, Inc., from March 2006 to March 2010 with full business
responsibility for Latin America, Central and Eastern Europe, and Asia Pacific. From 1999 to February 2006, he was the president
and chief executive officer of AOL Latin America. From 1997 until 1999, he served as president of Revlon America Latina. From
1990 through 1997, he held a variety of executive positions with PepsiCo Restaurants International, and from 1981 through 1990
he lived in three different countries marketing P&G Brands. Mr. Herington currently serves as a director of Molson Coors Brewing
Company.

Carolyn F. Katz (Independent)
Executive Chair, Author & Company
Director Since: 2002

Ms. Katz, 53, has served as executive chair of Author & Company, a digital publisher, since 2012. Prior to her service as
executive chair of Author & Company, Ms. Katz served on the board of directors of multiple companies. She was also a principal
at Providence Equity Partners, a private equity firm specializing in media and telecommunications, from 2000 to 2001. From 1984
to 2000, Ms. Katz worked for Goldman Sachs, an investment bank, most recently as managing director. Ms. Katz currently is a
director of American Tower Corporation, a provider of wireless and broadcast communications infrastructure and Vonage
Corporation, a cloud-based communications provider.

Ricardo Knoepfelmacher (Independent)
Managing Partner, Angra Partners
Director Since: 2013

Mr. Knoepfelmacher, 48, co-founded Angra Partners, a financial advisory and private equity firm, in 2003 and is currently
a managing partner of the firm. Prior to his service as managing partner at Angra Partners, Mr. Knoepfelmacher served as chief
executive officer of Brasil Telecom from 2005 to 2009 and chief executive officer of Pegasus Telecom from 2000 to 2002. He
also worked for Citibank and McKinsey & Company before starting his first company, MGDK & Associados, a restructuring and
consulting firm later sold to Monitor Group. He also serves as director of Vicunha Textil, a Brazilian textile company.

Rosendo G. Parra (Independent)
Partner, Daylight Partners
Director Since: 2008

Mr. Parra, 55, is a retired executive of Dell Inc., an international information technology company, and a founder of Daylight
Partners, a technology-focused venture capital firm, where he has been a partner since December 2007. From 1993 until his
retirement in 2007, Mr. Parra held various executive and senior management positions at Dell Inc., including senior vice president
for the Home and Small Business Group from June 2006 to April 2007 and senior vice president and general manager, Dell
Americas from April 2002 until June 2006. Mr. Parra currently serves on the board of directors of Brinker International, Inc. and
PG&E Corporation.

John W. Risner (Independent)
Chairman, Accuride Corporation
Director Since: 2002

Mr. Risner, 55, is currently the non-executive chairman of the board of directors of Accuride Corporation, a manufacturer
of commercial vehicle components. Previously, Mr. Risner served as president of The Children’s Tumor Foundation, from 2002
until January 2014. From 1997 to 2002, he served as senior vice president - portfolio manager at AIG/SunAmerica Asset
Management, a money management firm. Prior to that, Mr. Risner was vice president-senior portfolio manager at Value Line Asset
Management, a money management firm where he worked from 2002 to 2007.

Paulino do Rego Barros, Jr. (Independent)
President, International, Equifax Inc.
Director Since: 2012

Mr. Rego Barros, 58, has served as president, international for Equifax Inc. since April 2010. Previously, Mr. Rego Barros
was president, PB&C Global Investments, LLC, an international consulting and investment firm, from October 2008 to April 2010
and served in multiple senior leadership positions at AT&T Inc. and BellSouth Corporation (acquired by AT&T in 2006), including
president, global operations from January 2007 to October 2008; chief product officer, U.S. Telecommunications Group from
January 2005 to January 2007; and president, Bellsouth International, Latin America Operations from January 2004 to January
2005. Mr. Rego Barros has also held senior leadership positions at Motorola, Inc.

Steven M. Shindler (Chief Executive Officer, Non-Independent)
Chief Executive Officer, NII Holdings, Inc.
Director Since: 1997

Mr. Shindler, 52, was appointed the chief executive officer of NII Holdings in May 2013 after serving as interim chief
executive officer from December 2012 to May 2013. Mr. Shindler has served as a director on the board of NII Holdings since
1997 and was NII Holdings' chairman of the board from 2002 to May 2013, including serving as executive chairman from February
2008 to July 2012. Prior to his most recent appointment as chief executive officer, Mr. Shindler served as chief executive officer
of NII Holdings from 2000 to February 2008. Mr. Shindler also served as executive vice president and chief financial officer of
Nextel Communications, Inc. from 1996 until 2000. From 1987 to 1996, Mr. Shindler was an officer with Toronto Dominion Bank,
a bank where he was a senior managing director in its communications finance group.

Executive Officers

The following people were serving as our executive officers as of February 28, 2015. These executive officers were elected
to serve until their successors are elected. There is no family relationship between any of our executive officers or between any
of these officers and any of our directors.

Steven M. Shindler, 52, see biography above under "Board of Directors - Director Biographies".

Gokul Hemmady, 54, is currently the chief operating officer of NII Holdings and president, Nextel Brazil. From June 2012
to June 2013, Mr. Hemmady was the interim president of Nextel Brazil and chief operations officer of NII Holdings. Prior to June
2012, Mr. Hemmady served as executive vice president and chief financial officer. He was also NII Holdings' chief transformation
officer from October 2011 through June 2012. From the time he joined NII Holdings in June 2007 to February 2011, Mr. Hemmady
served as vice president and chief financial officer. From June 1998 to June 2007, Mr. Hemmady served in various positions with
ADC Telecommunications, Inc., a provider of global network infrastructure products and services, including as vice president and
chief financial officer from August 2003 through June 2007, as vice president and treasurer from June 1998 through August 2003
and as controller from May 2002 through August 2003. Mr. Hemmady joined ADC as assistant treasurer in October 1997. Prior
to 1997, he was employed by U.S. West International, a communications service provider, where he served as director of
international finance.

Juan R. Figuereo, 59, is currently the executive vice president, chief financial officer of NII Holdings. Prior to October
2012, Mr. Figuereo served as executive vice president and chief financial officer of Newell Rubbermaid, Inc., a global marketer
of consumer and commercial products since 2009. Prior to joining Newell Rubbermaid, Mr. Figuereo served as chief financial
officer of Cott Corporation from 2007 to 2009, vice president of mergers and acquisitions for Wal-Mart International from 2003
to 2007 and various international, finance and general management positions at PepsiCo. from 1988 to 2003.

Gary D. Begeman, 56, is currently the executive vice president, general counsel of NII Holdings. Prior to February 2011,
Mr. Begeman served as vice president and general counsel since February 2007, having joined NII Holdings as vice president and
deputy general counsel in November 2006. From 2005 through 2006, he served as senior vice president and deputy general counsel
of Sprint Corporation, and was vice president and deputy general counsel of Nextel Communications, Inc. from 2003 until its
merger with Sprint in 2005. From 1999 through 2003, he was senior vice president and general counsel of XO Communications,
Inc. From 1997 to 1999, Mr. Begeman was vice president and deputy general counsel of Nextel Communications, Inc. From 1991
until he joined Nextel, Mr. Begeman was a partner with the law firm of Jones, Day, Reavis & Pogue.

Raul Ramirez, 59, is currently the executive vice president, chief technology officer of NII Holdings. From 2003 to 2013,
Mr. Ramirez served as the chief technology officer of Nextel Mexico. Prior to 2003, Mr. Ramirez was a technical director with
Nextel Mexico. Prior to joining Nextel Mexico in 1998, Mr. Ramirez was a technical director with Motorola for its Latin American
operations.

Salvador Alvarez, 49, is currently the president of Nextel Mexico. Prior to July 2014, Mr. Alvarez served as chief executive
officer of Maxcom, a fixed line telecommunications company in Mexico, from 2009 to 2013. He also served as chief executive
officer of Corporativo Corvi, a holding company for companies engaged in the distribution of groceries and merchandise in Mexico
from 2003 to 2008 and served in various leadership roles at ConAgra foods both in Mexico and internationally from 1997 to 2003.

David Truzinski, 56, is currently the executive vice president, chief information officer and chief digital officer of NII
Holdings. From January 2012 to December 2013, Mr. Truzinski served as NII Holdings' executive vice president, chief information
officer. Prior to January 2012, Mr. Truzinski served as senior vice president and chief information officer at Leap Wireless/Cricket
Communications beginning in 2005. Prior to joining Leap Wireless, he was the chief information officer for Cingular/AT&T
Wireless' International business. Mr. Truzinski also served as chief technology officer at ClickCollect, Inc. and as chief information
officer at Insurancenow.com. From 1989 to 1999, he served in a variety of leadership capacities at AT&T Wireless/Cellular One.

Board Committees

Committee Role and Responsibilities. The Board has the following standing committees: Audit Committee, Compensation
Committee, Finance Committee, Nominating and Corporate Governance Committee and Risk Committee. The specific roles and
responsibilities of the Board’s committees are delineated in written charters adopted by the Board for each committee. Each member
of the Audit Committee, Compensation Committee and Corporate Governance and Nominating Committee are independent in
accordance with the Company's Corporate Governance Guidelines, which applies the independence standards included in
NASDAQ Stock Market listing rules and the Securities Exchange Act of 1934, as amended.The Company's Corporate Governance
Guidelines and each of the charters of the Board's committees are available on the Investor Relations page of our website
at: www.nii.com. As provided in their charters, each committee is authorized to engage or consult from time to time, as appropriate,
at our expense, with outside independent legal counsel or other experts or advisors it deems necessary, appropriate or advisable
to discharge its duties.

Committee Membership. Membership on the Board and each standing committee as of February 28, 2015 and the number

of formal meetings and actions of the Board and each standing committee during 2014 was as follows:

Name

Steven M. Shindler

Kevin L. Beebe

Donald Guthrie

Charles M. Herington

Carolyn F. Katz

Ricardo Knoepflemacher

Rosendo G. Parra

Paulino do Rego Barros, Jr.

John W. Risner

TOTAL NUMBER OF MEETINGS IN 2014

Board

Audit

Compensation

Corporate
Governance and
Nominating

Finance

Risk

I,A

I: Independent A: Audit Committee Financial Expert C: Chair

M: Member

In addition, the Board regularly held informal meetings with management during 2014 to discuss the Company's business plan,
performance, potential need to restructure the Company's balance sheet, Chapter 11 Bankruptcy proceedings and any other
matters presented to the Board.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities Exchange Act of 1934 requires our directors and executive officers, and persons who own
more than 10% of a registered class of our equity securities, to file with the Securities and Exchange Commission initial reports
of beneficial ownership and reports of changes in beneficial ownership of our equity securities. Based solely upon a review of
Forms 3, 4 and 5 furnished to us under Rule 16a-3(e) during 2014, and written representations of our directors and executive
officers that no additional filings were required, we believe that all directors, executive officers and beneficial owners of more
than 10% of our common stock have filed with the Securities and Exchange Commission on a timely basis all reports required to
be filed under Section 16(a) of the Securities Exchange Act.

Code of Conduct and Business Ethics

The Board has approved a Code of Conduct and Business Ethics for our directors, officers and employees, including the
directors, officers and employees of each of our subsidiaries and controlled affiliates. The Code of Conduct and Business Ethics
addresses such topics as protection and proper use of our assets, compliance with applicable laws and regulations, accuracy and
preservation of records, accounting and financial reporting, conflicts of interest and insider trading. The Company requires that
all employees receive annual training relating to the Code of Conduct and Business Ethics and related policies in order to ensure
that employees are familiar with those standards of conduct. The Code of Conduct and Business Ethics is available on the Investor
Relations link of our website at www.nii.com.

Only the Board or the Audit Committee may consider a waiver of the Code of Conduct and Business Ethics for an executive
officer or director. If a provision of the Code of Conduct and Business Ethics is materially modified, or if a waiver of the Code of

Conduct and Business Ethics is granted to a director or executive officer, we will post a notice of such action on the Investor
Relations link of our website at www.nii.com. No such waivers were granted during 2014.

Item 11.

Executive Compensation

Compensation Committee Report

The Compensation Committee of the Board of Directors is responsible for the development, oversight and implementation of
our compensation program for executive officers and is committed to a philosophy that links a significant portion of each executive's
compensation to performance.

The Compensation Committee has reviewed the Compensation Discussion and Analysis included in this report and discussed
it with our management. Based on this review and discussion, the Compensation Committee recommended that the Compensation
Discussion and Analysis be included in this Form 10-K.

Compensation Committee
Charles M. Herington, Chairman
Kevin L. Beebe
Rosendo G. Parra

Compensation Discussion and Analysis

Introduction

This Compensation Discussion and Analysis provides the principles, objectives, structure, analysis and determinations of the

Compensation Committee with respect to the 2014 compensation of the following named executive officers:

•
Steven M. Shindler, Chief Executive Officer
Juan R. Figuereo, Executive Vice President, Chief Financial Officer
•
• Gokul Hemmady, Chief Operating Officer and President, Nextel Brazil
•
• Gary D. Begeman, Executive Vice President, General Counsel
•

Peter Foyo, Former Executive Vice President, Business Development(2)

Salvador Alvarez, President, Nextel Mexico(1)

(1) Mr. Alvarez was appointed President, Nextel Mexico effective July 14, 2014 and is employed by Comunicaciones Nextel de Mexico, S.A. de C.V.,
our wholly owned subsidiary, which we refer to as Nextel Mexico. In 2014, Mr. Alvarez’s salary and annual bonus were paid in Mexican pesos. The
compensation amounts provided in this Compensation Discussion and Analysis are based on the exchange rate of 13.00 Mexican Pesos to 1.00 U.S.
Dollar that was used in Mr. Alvarez's employment agreement. The amounts disclosed in the Summary Compensation Table are based on the average
exchange rate during 2014, which was 13.30 Mexican Pesos to 1.00 U.S. Dollar.

(2) Mr. Foyo resigned as the Company's Executive Vice President, Business Development effective February 28, 2014. For more information related
to Mr. Foyo’s separation from the Company, please see “2014 Management Changes – Former Executive Vice President, Business Development.”

Compensation Objectives and Philosophy. Our executive compensation program is designed to provide competitive, flexible,
and market-based compensation that is substantially linked to our performance and aligned with long-term stockholder interests. The
Compensation Committee’s primary objective in designing our compensation program is to recruit and retain the high caliber executive
officers and employees necessary to deliver strong and consistent performance to our stockholders, customers and communities in
which we operate. Within this framework, the Compensation Committee has developed a compensation program that incorporates
salary and benefits that allow us to retain and motivate our executive officers, short-term incentives that challenge our executive
officers to achieve our financial and operational goals, and long-term incentives that link our executives’ risks and rewards with those
of our stakeholders.

2014 Total Direct Compensation. In 2014, the Compensation Committee approved the following elements of our executive

compensation program:

• Base Salary. Base salary provides a fixed source of income and allows the Company to attract and retain experienced

executives.

•

Short-Term Incentives. Short-term incentives provide variable cash compensation that allows the Company to motivate
executives to achieve the Company's operating and financial objectives.

Long-Term Incentives. Long-term incentives provide variable equity awards, in the form of stock options, restricted stock
and performance share units, that build executive stock ownership, encourage retention, drive strategic and operating
performance and align our executives' interests with those of our stockholders.

In 2014, the Compensation Committee based their executive compensation decisions on the analysis of various factors that it
deemed relevant to those decisions when they were made. Most of those decisions were made in April 2014, and while management
and the Board had begun to analyze the necessity of restructuring the Company's balance sheet prior to the Compensation Committee
making those decisions, the Compensation Committee did not take into account the impact of such a restructuring or the possibility
that it would be implemented in a Chapter 11 bankruptcy proceeding on equity compensation or on our actual performance for the
full year in those decisions. The Compensation Committee reviews our compensation policies and practices throughout the year, and
based on recent financial and operational results, the Compensation Committee generally set the target ranges for our named executive
officers’ total direct compensation opportunities below the lower quartile for comparable positions within our Peer Group (as defined
below) in 2014 due primarily to the significant decline in the value of the 2014 long-term incentives as described below. In addition,
as a result of our Chapter 11 filing and the proposals for reorganization, which do not contemplate any recoveries with respect to
equity interests in the Company, the named executive officers will not realize any value or receive any recovery from the long-term
incentives granted during 2014 or in prior years.

The Compensation Committee approved the following composition of our executive compensation program in April 2014.
Please see "2014 Management Changes" for information related to the compensation provided to Messrs. Alavarez and Foyo, who
were not employed by the Company at that time.

Name

Steven Shindler(4)

Juan R. Figuereo

Gokul V. Hemmady

Gary D. Begeman(5)

Base Salary ($)

Target Bonus at
100% Payout

Value of 2014 Long-
Term Incentives(1)($)

2014 Target Total Direct
Compensation(2)

Percent Change
From 2013(3)

945,996

550,000

647,500

463,380

1,844,692

1,019,513

825,000

971,250

556,056

186,358

260,235

115,918

3,810,201

1,561,358

1,878,985

1,135,354

N/A

(37.5)%

(42.2)%

(33.4)%

(1) The fair market value of the stock options, restricted stock and performance share units granted to the executives in the current year
determined using the closing price of our common stock on April 8, 2014 of $1.15, a date prior to the April 2014 Compensation Committee
meeting in accordance with FASB ASC Topic 718.
(2) Target total direct compensation is calculated as the sum of (a) base salary, (b) the target annual bonus amount for the year assuming a
payout of 100% and (c) value of the 2014 stock options, restricted stock and performance share units granted to named executive officers.
(3) Target total direct compensation for 2013 has been computed using the same formulas, but incorporating the grant date fair values for the
restricted stock and option grants made in 2013.
(4) As disclosed in the Company’s proxy statement for the 2012 annual meeting of stockholders, Mr. Shindler was granted 685,912 nonqualified
stock options and 377,937 shares of restricted stock on December 18, 2012 in connection with his appointment as interim Chief Executive Officer.
In April 2013, Mr. Shindler only received a grant of performance share units in connection with his appointment as Chief Executive Officer,
therefore Mr. Shindler does not have comparable 2013 Target Total Direct Compensation.
(5) Mr. Begeman's base salary and target bonus were set in April 2014. In June 2014, due to his enhanced role and expanded duties his base
salary was increased to $550,000 and his target bonus was increased to 150%.

2014 Base Salary. Base salary is the only fixed element of our named executive officers’ target total direct compensation and
is based primarily on historic base salary levels and internal pay equity and base salaries paid to executives in comparable positions
at the Peer Group companies. In April 2014, the Compensation Committee determined to not increase the base salaries of the named
executive officers . Our named executive officers’ annual base salaries in 2014 (effective from April 1, 2014 through March 31, 2015)
and the percentage of target total direct compensation represented by the base salaries are as follows:

Name

Steven Shindler

Juan R. Figuereo

Gokul V. Hemmady

Gary D. Begeman(1)

2014 Base Salary ($)

Percent Change From 2013

Percent of Target Total
Direct Compensation

945,996

550,000

647,500

463,380

24.8%

35.2%

34.5%

40.8%

(1) Subsequent to the approval of his 2014 base salary, Mr. Begeman's base salary was increased to $550,000 due to his enhanced role and
expanded duties in June 2014.

2014 Bonus. Our 2014 Bonus Plan rewards executive officers for performance relative to key financial and operating measures
that are designed to enhance the value of the Company. The target bonus percentage of base salary for each executive is determined
based on historic target levels and internal equity, and the comparison of annual incentive compensation targets for executives in
comparable positions at the Peer Group. For 2014, the bonus payout percentage is determined after the conclusion of each fiscal
quarter by evaluating the Company’s performance relative to pre-determined performance goals and performance “intervals” for that
quarter. Performance intervals are the upper and lower boundaries of performance in which actual bonus payouts are awarded. The
bonus payout percentage is designed to provide payments in a range from 200% of the target bonus, if performance greatly exceeds
the Company’s targets, to 0% of the target bonus, if performance fails to reach minimum threshold levels. The use of these intervals
is intended to provide a greater performance incentive to participating employees by providing a more significant increase in the
bonus award in instances where there is over performance in relation to our performance targets and a more significant decrease in
the bonus award where there is under performance in relation to those targets. The Company was required to seek Bankruptcy Court
approval for all targets and payouts under the 2014 Bonus Plan after filing a petition for relief under Chapter 11 on September 15,
2014, and the Bankruptcy Court approved the 2014 Bonus Plan and payouts as described below that occurred after that date.

2014 Target Bonus. The Compensation Committee sets our executive officers’ target bonus percentages at a level that balances
fixed and at-risk short-term compensation. In 2014, the Compensation Committee increased our named executive officers’ target
bonus percentages in order to partially offset the significant reduction in the value of the long-term equity incentives that were granted
in 2014. The 2014 target bonus percentage as determined by the Compensation Committee, the potential cash payout under the 2014
Bonus Plan at 100% of target and the percentage of each named executive officer’s target total direct compensation represented by
the target bonus at 100% payout were as follows:

Target Bonus Percentage of Base Salary

2014 Target Bonus at
100% Payout ($)

Percent of Target Total
Direct Compensation

Steven Shindler

Juan R. Figuereo

Gokul V. Hemmady

Gary D. Begeman(1)

2014

195%

150%

120%

2013

130%

100%

80%

1,844,692

825,000

971,250

556,056

48.4%

52.8%

51.7%

49%

(1) Subsequent to the approval of his 2014 target bonus percentage, Mr. Begeman's target bonus percentage was increased to 150% due to his
enhanced role and expanded duties in June 2014.

2014 Performance Goals. In 2014, the Compensation Committee reviewed the 2014 Bonus Plan and determined that in order
to set appropriate performance measures and weightings throughout the year, the Compensation Committee should set performance
measures and weightings on a quarterly basis to allow the Compensation Committee to respond to changes in the Company's business
plan. In addition, the Compensation Committee determined that quarterly payouts of earned bonus awards provided the strongest
performance incentives to the Company's named executive officers and to other employees participating in the 2014 Bonus Plan.
Each of the following performance measures and weightings were selected in order to provide balanced incentives as any unsound
actions to improve one performance measure would be expected to have a corresponding negative impact on the other performance
measure, and the plans for the third and fourth quarters were developed with the input of the Company's stakeholders. The quarterly
criteria and weightings under the 2014 Bonus Plan for named executive officers were as follows:

Performance Measures

Consolidated Revenues

Consolidated Operating Cashflow(1)

First Quarter Weight

Second Quarter Weight Third Quarter Weight Fourth Quarter Weight

60%

40%

60%

40%

60%

40%

60%

(1) Operating income before depreciation and amortization ("OIBDA") - Capital Expenditures

2014 Targets and Calculation of Bonus Payout. To determine bonus amounts earned by our executive officers during the 2014
Plan year, the Compensation Committee met following each fiscal quarter-end to review our financial and operating performance as
compared to the applicable performance measures for that quarter and to discuss performance factors and other criteria related to the
bonus awards. At each quarterly meeting, the applicable targets set for each performance measure were compared to the results for
the quarter in order to determine the appropriate bonus payout percentage, which may range from 0% to 200% depending on the
Company’s performance relative to the performance targets. Performance at levels below a minimum threshold for a particular
performance measure result in no payout under the 2014 Bonus Plan, and performance at levels above the target threshold will result
in a combined payout limited to 200% under the 2014 Bonus Plan. In addition, in order to balance growth and profitability under the
2014 Bonus Plan, the Compensation Committee determined that an additional performance bonus would be rewarded if the performance

targets were achieved in conjunction with predefined levels of net subscriber additions and average monthly revenue per subscriber
unit (ARPU) for new subscribers in Mexico and Brazil.

The Compensation Committee approved the 2014 quarterly performance targets and intervals for each of the performance
measures based upon the Company's business plan. The performance targets and corresponding intervals are designed to drive Company
performance against challenging performance standards, but are not goals that would cause our executives to take inappropriate
business risks. In 2014, our quarterly performance targets and minimum threshholds for each of the performance measures were as
follows:

First Quarter

Second Quarter

Third Quarter

Fourth Quarter

Revenues(1) (in millions)

Operating Cashflow(1) (in millions)

Min.

868

(331)

Target

964

(276)

Min.

860

(300)

Target

955

(250)

Min.

837

(233)

Target

930

(194)

Min.

756

(231)

Target

840

(193)

(1) As adjusted and approved by the Compensation Committee

In some instances, the Compensation Committee, upon the recommendation of management, makes adjustments to the bonus
payments or, if appropriate, the methodology used to calculate the bonus target or our performance relative to the target to take into
account, among other things, changes in our Company’s goals and plans and changes in business conditions in the relevant bonus
period if it concludes that such adjustments are appropriate and are consistent with our overall goals and strategy. The Compensation
Committee adjusted the 2014 bonus targets and payments for the named executive officers to reflect: the sale of Nextel Chile; deviations
in timing of certain capital expenditures; the reallocation of certain costs between market and headquarter operations; one-time, non-
operational items and strategic operational decisions made after the targets were set; and foreign currency translations.

2014 Financial Results and Bonus Payouts. The Company’s 2014 results were as follows:

Revenues(3) (in millions)

964

914

66%

955

893

30%

930

844

840

808

96%

First Quarter

Second Quarter

Third Quarter

Fourth Quarter

Target Results Payout(1) Target Results Payout Target Results Payout Target Results Payout(2)

(276)

Operating Cash Flow(3) (in millions)
Weighted Average Payout (as
percentage of target)
(1) Bonus kicker (140%) applied to Revenue payout in accordance with net subscriber additions and ARPU achievement in Mexico and Brazil.
(2) Bonus kicker (170%) applied to Revenue payout in accordance with net subscriber additions and ARPU achievement in Mexico.
(3) As adjusted and approved by the Compensation Committee.

152% (193)

103%

128%

(250)

(212)

(199)

(194)

(244)

90%

84%

94%

95%

62%

(94)

Based on the foregoing, the bonuses awarded to the named executive officers with respect to our performance in 2014 were as

follows:

Name

Steven Shindler

Juan R. Figuereo

Gokul V. Hemmady

Gary D. Begeman(1)

Bonus Payout Percentage
(% of Target)

2014 Actual Bonus Payout
($)

Percent Change From 2013
Actual

78%

1,437,323

642,813

756,766

602,023

484%

712%

(1) Mr. Begeman's 2014 Actual Bonus Payout reflects his base salary at the time the bonus award was earned and paid.

2014 Long-Term Equity Incentives. In 2014, due to the Company's stock price and available equity grant pool, the
Compensation Committee determined that the grants made to the named executive officers would reflect the same number of shares
as was granted in April 2013. Due to the decline in the Company's stock price, value of the target long-term equity incentives reflected
a significant year over year decline and was below the lower quartile of the Peer Group. In 2014, the Compensation Committee
awarded approximately one-third of the target value of each named executive officer’s long-term equity award in the form of
performance share units, one-third of the target value of each named executive officer’s long-term equity award in the form of stock
options and the remaining one-third of such value in the form of restricted stock with the exception of the chief executive officer who
received long-term equity compensation in the proportion as was granted when he was appointed chief executive officer.

As a result of our Chapter 11 filing and the proposals for reorganization, which do not contemplate any recoveries with respect
to equity interests in the Company, the named executive officers will not realize any value or receive any recovery from the long-
term incentives granted during 2014 or in prior years.

Performance Share Units. In 2014, one-third of the target value for our named executive officers' long-term incentive award
was granted in the form of performance share units that are earned at the end of a one-year period linked to the Company’s performance
compared to a pre-determined OIBDA target for that period and vest on a pro-rata basis on the second and third anniversary of the
grant date. The OIBDA target for the performance share units granted in 2014 was not met and therefore as of December 31, 2014
the performance share units have been forfeited.

Stock Options. In 2014, one-third of the target total value for our named executive officers’ long-term incentive equity awards
was granted in the form of nonqualified stock options that vest ratably over a three-year period and expire after 10 years. The exercise
price of each option is the closing price of our common stock on the date of grant. The number of options granted is determined by
dividing the target value for each executive of the portion of the incentive equity grant to be paid in stock options by the value of each
option, which is computed using the Black-Scholes option-pricing model using the closing price of our common stock on the date of
grant, and using the same assumptions that we use in calculating the compensation expense attributable to such grants under FASB
ASC Topic 718.

Restricted Stock. In 2014, one-third of the target value for our named executive officer’s long-term incentive award was granted
in the form of restricted stock that vests ratably over a three year period. The number of shares of restricted stock awarded to each
executive is determined by dividing the target value for each executive of the portion of the incentive equity grant to be paid in
restricted stock by the closing price of our common stock on the grant date, which is the fair value computed in accordance with FASB
ASC Topic 718.

The grant date value of the annual long-term equity grants provided to each of our named executive officers in 2014, the percent
change of the grant date fair value of the equity grant for 2014 compared to the grant date fair value of the equity grant for 2013 and
the percentage of target total direct compensation the 2014 long-term equity grants represented based on values reviewed by the
Compensation Committee in April 2014 were as follows:

Name

Steven Shindler(2)

Juan R. Figuereo

Gokul V. Hemmady

Gary D. Begeman

Value of 2014
Performance Share
Units at Target ($)

Value of 2014 Stock
Option Grants ($)

Value of 2014
Restricted Stock
Grant ($)

Percent Change
From 2013(1)

Percent of Target
Total Direct
Compensation

132,183

61,686

86,140

38,370

452,702

62,986

87,955

39,178

434,628

61,686

86,140

38,370

(86.69)%

26.8%

11.9%

13.9%

10.2%

(1) The value of long-term equity for 2013 was computed using the same formulas and methodology as 2014, but with a stock price based on April
18, 2013, which was the valuation date used by the Compensation Committee to approve the 2013 compensation.
(2) As disclosed in the Company’s 2012 Proxy Statement, Mr. Shindler was granted 685,912 nonqualified stock options and 377,937 shares of
restricted stock on December 18, 2012 in connection with his appointment as interim Chief Executive Officer. The stock options and restricted stock
vest over a three-year period with one-third vesting each year. In April 2013, Mr. Shindler was appointed Chief Executive Officer and was granted
performance share units in connection with the appointment.

2014 Management Changes

President, Nextel Mexico. Salvador Alvarez was appointed president Nextel Mexico effective July 18, 2014. As is customary
in Mexico, Mr. Alvarez entered into an employment agreement with Nextel Mexico. In accordance with his employment agreement,
Mr. Alvarez was granted a base salary of $675,000, a 2014 target bonus payout under the 2014 Bonus Plan of 150% (on a prorated
basis) and $800,000 in restricted stock awards (in connection with our bankruptcy proceedings Mr. Alvarez will not realize any value
from the restricted stock award) . In addition, Mr. Alvarez was awarded a sign-on bonus of $200,000 which would be paid if he was
still employed by the Company on December 31, 2014. In 2014, Mr. Alvarez received both the sign-on bonus and a pro rated bonus
payout of $494,006, which represents a bonus payout percentage of 109% based on the performance of our Mexico operations.

Former Executive Vice President, Business Development. On February 25, 2014, the Company announced that Peter Foyo
would no longer serve as the Company’s executive vice president, business development effective February 28, 2014. In accordance
with an offer letter between Mr. Foyo and the Company, Mr. Foyo received a payment of $1,100,000 and was not eligible for any
further severance payments or benefits. Mr. Foyo did not receive any accelerated vesting for his unvested equity awards in connection
with his severance.

Compensation Framework

Roles and Responsibilities. The following tables summarize the roles and responsibilities of the Compensation Committee,
Management and the Independent Compensation Consultant retained by the Compensation Committee in connection with the
development and implementation of our compensation program for our executive officers.

Compensation Committee (3
Independent Directors)

Quarterly reviews and approves corporate goals and objectives with respect to our executive officers’
compensation.

Annually reviews and approves the evaluation process and compensation structures with respect to our executive
officers’ compensation.

Evaluates our performance in light of the Committee’s established goals and objectives

Approves the annual compensation for our executive officers, considering the recommendations made by the chief
executive officer (for compensation other than his own) and the independent compensation consultant.

Evaluates the performance of the chief executive officer relative to the performance goals determined by the Board.

Management

Recommends the compensation structure for the Company’s executive officers.

Chief executive officer recommends the level of annual compensation for the Company’s executive officers (other
than the chief executive officer).

Chief executive officer evaluates each executive officer’s performance of their respective business or function and
their retention considerations (other than for the chief executive officer).

Provides input to the Compensation Committee on the strategy, design and funding of our incentive compensation
plans.

Makes plan design recommendations for broad-based benefit programs in which our executive officers participate.

Independent Compensation Consultant Conducts annual review of our executive compensation program, advising on the external competitiveness of our

executive compensation packages and practices.

Provides data relating to total compensation levels and relative amounts of cash and equity compensation earned by
executives in comparable positions within the Peer Group.

Provides a comparison of our performance with that of our Peer Group over one and three year periods with respect
to various performance measures.

Provides no services to our company other than those provided directly to or on behalf of the Compensation
Committee.

Performs other work at the direction and under the supervision of the Committee.

Reviews and reports on Compensation Committee materials, participates in Compensation Committee meetings
and communicates with the chair of the Compensation Committee between meetings.

Compensation Committee Consultant and Independence. The Compensation Committee considers the advice of its independent
compensation consultant, together with information and analysis from management and its own judgment and experience, when
evaluating the Company’s executive compensation program. In 2014, the Compensation Committee was advised by Pearl Meyer &
Partners.

Use of Comparative Industry Data. In order to design our compensation programs, the Compensation Committee reviews the
executive salaries, compensation structures and the financial performance of comparable corporations in a designated Peer Group
established by the Compensation Committee. As part of its annual compensation process, with assistance from Pearl Meyer & Partners,
the Compensation Committee evaluated the Company’s historical peer group in order to ensure that the most appropriate industry
data was utilized in the evaluation of the Company’s compensation programs. The Committee focused on ensuring that our Peer Group
companies operated in the telecommunication, technology or consumer industries and recognized revenues within 50% to 200% of
the Company. The Committee also sought to ensure that our Peer Group companies were engaged primarily in service and/or technology
based businesses and maintained a significant international presence with headquarters in the United States. Based on these criteria
and the advice and recommendations provided by Pearl Meyer & Partners, the Compensation Committee approved the following
Peer Group for 2014:

CA, Inc.

Cablevisions Systems Corporation

CyberLink, Inc.

Charter Communications, Inc.

Frontier Communications Corporation

Harris Corporation

Juniper Networks, Inc.

Leap Wireless International, Inc.

Level 3 Communications, Inc.

Motorola Solutions, Inc.

MetroPCS Communications, Inc. (now T-Mobile US, Inc.)

NetApp, Inc.

Sandisk Corporation

Symantec Corporation

Telephone and Data Systems, Inc.

United States Cellular Corporation

Windstream Communications

To assess the competitiveness of our executive compensation programs, we analyze Peer Group compensation data included in
proxy statements or other public filings as well as compensation and benefits survey data developed by global compensation consulting
firms. As part of this process, we measure pay levels within each of our three primary elements of compensation (base salary, target
bonus and equity incentive grants) and in the aggregate. We also review the mix of our compensation attributable to these elements
with respect to their characteristics including fixed versus variable, short-term versus long-term, and cash versus equity-based pay.
The Compensation Committee generally compares the compensation of each named executive officer in relation to various percentiles
reflected in the Peer Group data for similar positions based on proxy ranking and job title and responsibilities.

Additional Compensation and Compensation Plans

Benefits. In the United States, the named executive officers participate in the same benefit plans as the general employee
population of the Company. International plans vary, and incremental amounts paid to executives who work outside the United States
pursuant to foreign government required programs, including mandatory vacation allowances and retirement benefits, or to compensate
them for the additional costs and other obligations relating to those assignments, such as amounts paid for security services, housing
costs, travel costs and certain related tax obligations, are not taken into consideration in determining base salary and are not used in
calculating the annual target bonus amounts or in determining those executives’ target total direct compensation. In general, benefits
are designed to provide a safety net of protection against the financial catastrophes that can result from illness, disability or death,
and to provide a reasonable level of retirement income based on years of service with the Company. Benefits help keep employees
focused on serving the Company and not distracted by matters related to paying for health care, saving for retirement or similar issues.

Retirement, Deferred Compensation and Pension Plans. Our executive officers who are eligible may participate at their election
in our 401(k) retirement savings plan that provides employees with an opportunity to contribute a portion of their cash compensation
to the plan on a tax-deferred basis to be invested in specified investment options and distributed upon their retirement. Consistent
with the 401(k) plan, we match 100% of each employee’s contributions to the 401(k) plan up to a maximum of 4% of the employee’s
eligible annual compensation. Our matching contribution for 2014 for named executive officers was $35,102 in the aggregate.

We do not have any pension plans that entitle our named executive officers to additional benefits. In addition, we have not
adopted a supplemental executive retirement plan or other “excess plan” that pays benefits to highly compensated executives whose
salaries exceed the Internal Revenue Service’s maximum allowable salary for qualified plans. In December 2008, the Compensation
Committee approved the adoption of an Executive Deferral Plan, which became effective January 1, 2009. Under the Executive
Deferral Plan, executives may defer a portion of their compensation with the amount deferred by a participating executive attributed
to a hypothetical account and treated as if it is invested in deferred stock units with the value of those units linked to the value of our
common stock. No compensation was deferred by executive officers under this plan in 2014 and the Executive Deferral Plan is not
available to executive officers during 2015. We do not have any other nonqualified deferred compensation plans.

Severance Plans. We previously adopted two severance plans that provide for the payment of severance benefits to our U.S.-
based employees, including our U.S. based executive officers, if their employment is terminated in specified circumstances. One plan
provides for the payment of severance benefits if the executive officer’s employment is terminated without cause for certain reasons
and the other plan provides for the payment of severance benefits if the executive officer’s employment is terminated without cause,
or if the executive officer of the Company terminates his or her employment with good reason, in connection with or following a
change of control. The two severance plans are mutually exclusive meaning that an executive may be eligible to receive payments
under one or the other of the plans depending on the circumstances surrounding the termination of the executive’s employment, but
it is not possible for an executive to receive payments under both plans. While the Compensation Committee generally does not take
into account the potential payments to executives under our severance plans, including termination and change of control arrangements,
in performing its annual evaluation of the target total direct compensation that may be realized by our executive officers, the
Compensation Committee believes that the terms of these arrangements are generally consistent with those offered by similarly situated
companies including those in the Peer Group. As part of the Chapter 11 proceedings, the Bankruptcy Court must approve the terms
of the Severance Plan and the Change of Control Severance Plan before any payments can be provided to eligible employees. The
Bankruptcy Court has reviewed and approved the terms of our Severance Plan, but has not reviewed our Change of Control Severance
Plan. A description of the terms of our severance plans, the specific circumstances that trigger payment of benefits, an estimate of
benefits payable upon the occurrence of those triggering events and other information relating to such plans can be found below under
the caption “Executive Compensation - Potential Payments under Severance Plans.”

Executive Compensation Governance Practices

We believe that our compensation programs should ensure that our executives remain accountable for business results and take
responsibility for the assets of the business and its employees. Consistent with these objectives, our Board has incorporated the
following governance features into our compensation governance programs.

Compensation Risk Mitigation. The Company’s executive compensation program includes features designed to discourage

executives from taking unnecessary risks that could harm the financial health and viability of the Company, including:

•

Balanced Performance Measures. The Compensation Committee believes that the performance criteria used in our 2014
Bonus Plan strike an appropriate balance between growth and profitability and mitigate risk to the Company because actions
taken to improve our performance with respect to one of the criteria would normally be expected to have a corresponding
negative impact on other criteria. For example, if management were to implement promotional programs designed to
aggressively pursue growth in revenue, those actions would be expected to increase expenses, resulting in a potential
deterioration in operational free cash flow.

• Emphasis on Long-Term Stockholder Value. Long-term incentive awards focus executives on creating long-term stockholder

value and delivering exceptional long-term operating results.

•

Stock Ownership Requirements. Executive officers are subject to stock ownership requirements as described below, which
focus executives on long-term stockholder value and aligns the interests of our executive officers with those of our
stockholders.

The Compensation Committee reviewed the risk profile of our compensation policies and practices and determined that our

compensation programs are not reasonably likely to have a material adverse effect on the Company.

Tax Deductibility Under Section 162(m). Section 162(m) of the Internal Revenue Code imposes a limitation on the deductibility
of non-performance-based compensation in excess of $1 million paid to certain named executive officers of public companies. The
Compensation Committee has implemented a compensation program that links a substantial portion of each executive’s compensation
to performance and requires each executive officer to attain designated stock ownership levels, and therefore maintain a vested interest
in our equity performance, but has not implemented a policy that limits the amount of compensation based on the limitations of
Section 162(m). We intend to qualify executive compensation for deductibility under Section 162(m) if doing so is consistent with
our best interests and the interests of our stockholders.

Stock Ownership Guidelines. The Board has adopted stock ownership guidelines that require our executive officers to retain a
vested interest in our equity performance by maintaining certain designated stock ownership levels until retirement. Executive officers
may not sell stock in the Company until their stock ownership levels reach specified values based on pre-determined multiples of
their base salary. Further, except for sales of shares to cover taxes due at vesting of equity awards, executive officers may not sell
shares after those stock ownership levels have been met if, following the potential sale, the value of the equity interests they own
would be below the levels specified in the guidelines. Individuals subject to our stock ownership guidelines have a five-year period,
which commences upon the appointment of the individual as an executive officer, to achieve their designated ownership requirement
in accordance with a pre-determined schedule. Executive officers will be deemed to be in compliance with the guidelines and will
not be required to purchase additional shares to meet the ownership requirement if they met their target ownership level in compliance
with the guidelines following any sale of shares.

The following are the ownership requirements for our named executive officers:

Position

CEO

Other NEOs

Requirement

5x Base Salary

3x Base Salary

The types of stock ownership that are applied to satisfy the ownership requirements under our guidelines include the value of
stock directly owned by the executives, the value of unexercised but vested options to the extent that the fair market value of our
common stock exceeds the option exercise price and the value of deferred stock units granted pursuant to our executive deferral plan.

Each of our executive officers subject to an ownership target under the executive stock ownership guidelines at December 31,
2014 was in compliance with the guidelines. In 2014, there were no sales of stock by the named executive officers and as a result of
the bankruptcy proceedings the named executives officers will not receive any value for their stock.

Trading and Derivatives Policy. The Board has adopted a policy prohibiting our directors, officers and members of their
immediate families from entering into any transactions in our securities without first obtaining pre-clearance of the transaction from
our general counsel. In addition, we prohibit directors and employees from engaging in any transaction involving our common stock
that may be viewed as speculative, including buying or selling puts, calls or options, short sales, hedging transactions or purchases
of our common stock on margin.

Employment Agreements. Generally, we do not enter into employment contracts with our employees unless otherwise required
or customary based on local law or practice. As is customary for executives in Mexico, the Company has entered into an employment
Agreement with Mr. Alvarez in connection with his service as president of Nextel Mexico. The terms of Mr. Alvarez's employment
agreement are summarized under "2014 Management Changes - President, Nextel Mexico." We do not have employment contracts
with any of our other named executive officers.

Timing of Long-Term Incentive Awards. We have historically granted our annual long-term incentive awards to our employees,
executive officers and directors in late April of each year. These grants are timed to coincide with our regularly scheduled April Board
and committee meetings. In 2014, our annual equity grants were made to our employees, executive officers and directors on April 30,
2014. The number of options and shares of restricted stock and restricted stock units awarded were based on the closing market price
on the date of grant and the exercise price of the stock options granted was the closing market price on the date of the grant.

We follow a practice of disclosing our financial results for the first quarter of the fiscal year following the April Board meeting
at which we make equity grants. The 2014 first quarter earnings release was made publicly available on May 12, 2014. It is the policy
of the Compensation Committee not to use information relating to first quarter results when determining the amount, timing or other
characteristics of our annual equity grants to employees, executive officers and directors. We have consistently granted our annual
long-term incentive awards in April, regardless of the content or timing of the issuance of the first quarter earnings release. Although
our quarterly financial results may have an impact on the market price of our common stock, and therefore the number of options and
shares of restricted stock and restricted stock units awarded as well as the exercise price of the option awarded, we believe that the
April board meeting is the appropriate time during the year to grant our annual long-term incentive awards and that a consistent
application of our granting practices from year to year is appropriate. The equity grants by the Compensation Committee are designed
to create incentives for the creation of long-term stockholder value and contain delayed vesting provisions that prevent any advantages
from short-term fluctuations in the market price of our common stock.

We have not planned in the past, nor do we plan in the future, to time the release of material non-public information for the
purpose of affecting the value of executive compensation. We do not have a practice of setting the exercise price of options based on
the stock price on any date other than the grant date, nor do we use a formula or any other method to select an exercise price of options
based on a period before, after or surrounding the grant date. Nonqualified stock options are always granted at the closing price of
our common stock on the date of grant.

No Repricing Options. The 2012 Incentive Compensation Plan (the "2012 Plan") approved by our stockholders at the 2012

Annual Meeting prohibits the repricing of stock options governed by the 2012 Plan.

Compensation Recoupment Policy. The Compensation Committee believes that the Company’s compensation programs should
provide for the reduction or recovery of certain incentive payments made to our executives in the event our financial statements were
to be restated in the future in a manner that would have negatively impacted the size or payment of the award at the time of payment.
Although the Compensation Committee has not adopted a formal policy in addition to remedies available under applicable law, the
Compensation Committee intends to adopt a policy to recover payments in compliance with the rules issued by the Securities and
Exchange Commission pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act when such rules are finalized.
As described above, long-term equity incentives comprise a significant portion of our executives’ target direct compensation and
when combined with our ownership guidelines, subject our executives to substantial financial risk should there be a material negative
restatement of our financial results.

Summary Compensation Table

As previously disclosed, the Company and several of its subsidiaries filed for relief under Chapter 11 in September 2014 and
any plan of reorganization implemented in the bankruptcy proceeding is expected to cancel our equity securities for no consideration.
The long-term equity incentives disclosed in the following tables reflect the grant date or current fair value of our outstanding equity
awards and does not reflect the expected cancellation of all outstanding equity awards granted to our named executive officers as a
result of the Chapter 11 proceedings.

Name and Principal Position

Year

Salary ($)

Bonus($)

Stock
Awards(1)
($)

Option
Awards(2)
($)

Non-Equity
Incentive Plan
Compensation
(3) ($)

All Other
Compensation
(4) ($)

Steven M. Shindler

Chief Executive Officer

Juan R. Figuereo

Executive Vice President,

Chief Financial Officer

Gokul V. Hemmady

Chief Operating Officer and

President, Nextel Brazil
Salvador Alvarez(5)

President, Nextel Mexico

Gary D. Begeman

Executive Vice President,

General Counsel

Peter Foyo

Executive Vice President,

Business Development

2014

2013

2012

2014

2013

2012

2014

2013

2012

2014

2013

2012

2014

2013

2012

945,996

243,025

550,000

114,583

647,500

605,079

301,212

503,081

463,380

456,310

133,957

535,829

529,450

195,489

423,876

999,995

466,420

1,437,323

245,959

2,582,914

1,884,271

92,261

933,340

156,200

128,835

64,895

466,673

131,423

90,620

1,303,330

651,666

981,369

800,000

749,020

57,388

580,551

727,949

533,274

721,333

40,365

290,275

555,600

266,636

550,548

642,813

110,000

756,765

129,500

194,250

494,006

602,023

74,141

111,211

112,524

9,483

23,792

5,580

13,032

31,394

76,006

785,053

329,293

11,855

115,388

10,400

10,200

11,029

1,105,642

578,683

691,242

Total ($)

3,283,098

2,215,742

4,715,790

1,363,001

2,091,407

478,212

2,408,773

3,061,289

2,541,573

1,906,095

1,213,257

1,418,547

1,862,099

1,239,599

1,914,422

2,605,097

(1)The amounts in this column reflect the grant date fair value of restricted stock awards and performance share units computed in accordance with
stock-based compensation accounting rules (FASB ASC Topic 718), but disregarding estimated forfeitures related to service-based vesting conditions.
We value restricted common stock awards and performance share units at the date of grant based on the number of shares subject to the grant
multiplied by the closing price of our common stock on the date of grant.

For all performance share units the amounts included under Stock Awards reflect the grant date fair value based upon the estimated performance
during the performance period. Based on the grant date fair value, the maximum values of the 2014 Stock Awards are as follows:

Name

Steven M. Shindler

Juan R. Figuereo

Gokul V. Hemmady

Salvador Alvarez

Gary D. Begeman

Peter Foyo

2014 Stock Awards Maximum Value ($)

423,876

92,261

128,835

800,000

57,388

Additional information regarding the awards of restricted common stock and performance share units to the named executive officers in 2014 is
included in the Grants of Plan-Based Awards table below.

(2) The amounts in this column reflect the grant date fair value of awards computed in accordance with stock-based compensation accounting rules
(FASB ASC Topic 718) of options to purchase common stock, but disregarding estimated forfeitures related to service-based vesting conditions. The
valuation assumptions used in determining these amounts are described in Note 14 to our consolidated financial statements. Additional information
regarding the awards of options to purchase common stock to the named executive officers in 2014 is included in the Grants of Plan-Based Awards
table below.

(3) The amounts in this column represent the bonus that we paid under the Bonus Plans in effect in 2012, 2013 and 2014. The bonus is determined
based on a target bonus amount, which is a predetermined percentage of base salary, and is adjusted based on achievement of operating unit and/
or consolidated performance goals as well as personal performance.

(4) Consists of: (a) amounts contributed by us under our 401(k) plan, (b) in the case of Mr. Hemmady, amounts contributed by Nextel Brazil to the
Fundo de Garantia de Tempo de Servico, or FGTS, and a private savings plan, and in the case of Mr. Alvarez, amounts contributed by Nextel Mexico
to government mandated retirement and savings plans or other government mandated payments, (c) perquisites and other personal benefits described
in more detail below, (d) severance payments and (e) tax gross-up payments made in connection with the foregoing:

Company
Contributions
to 401(k) Plan
($)

Company
Contributions
to
Government
Plans
($)

-
-
5,576
10,400
9,167
-
8,944
10,200
9,800
-

10,400
10,200
9,800
5,358
10,200
9,800

N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
60,691

N/A
N/A
N/A
N/A
14,487
14,556

Company
Contributions
to
Private
Savings Plan
($)(a)
N/A
N/A
N/A
N/A
N/A
N/A
46,817
N/A
N/A
N/A

N/A
N/A
N/A
N/A
N/A
N/A

Perquisites
and
Other
Personal
Benefits
($)(b)
9,483
22,046
-
1,977
14,952
51,193
524,147
304,606
-
54,697

-
-
-
277
457,820
583,950

Tax
Gross-Up
Payments
($)(c)
-
1,745
4
654
7,276
24,813
205,145
14,487
2,055
-

Severance
Payments
($)

N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A

-
-
1,229
7
96,176
82,936

N/A
N/A
N/A
1,100,000
N/A
N/A

Mr. Shindler

Mr. Figuereo

Mr. Hemmady

Mr. Alvarez

Mr. Begeman

Mr. Foyo

Year

2014
2013
2012
2014
2013
2012
2014
2013
2012
2014

2014
2013
2012
2014
2013
2012

(a) Represents the contribution by Nextel Brazil to a private savings program designed to complement Brazilian social security
in which Nextel Brazil matches employee contributions up to 8% of an employee’s annual salary. The employer contribution
vests based on length of service.

(b) The dollar value of perquisites and other personal benefits received by Messrs. Hemmady and Alvarez each exceeded $10,000

in 2014.

Pursuant to an international assignment agreement with Mr. Hemmady, who is a U.S. citizen, we agreed to provide certain
benefits and expatriation/repatriation assistance for the period of his assignment in Brazil that are reflected as perquisites
and other personal benefits. Some of these benefits are paid to Mr. Hemmady or to third parties on Mr. Hemmady's behalf in
Brazilian Reais, the amounts of which are reflected in Benefits column of the table above and the All Other Compensation
column of the Summary Compensation Table in U.S. dollars based on the average exchange rate of 2.35 Brazilian Reais to
1.00 U.S. Dollar for 2014. Perquisites and other personal benefits received by Mr. Hemmady in 2014 consist of $244,761 for
housing and utilities; $194,250 representing Mr. Hemmady’s foreign services differential; $79,009 for expenses relating to a
car and driver; $6,128 for language training. We also provide Mr. Hemmady with tax counseling and make tax equalization
payments on his behalf so that Mr. Hemmady pays the same taxes as he would as a U.S. citizen working in the U.S.

The perquisites and benefits paid to Mr. Alvarez in 2014 consist of an annual allowance for a Company supplied automobile,
including related maintenance and fuel, which is a customary element of compensation for senior executives in Mexico and
which had an incremental cost to Nextel Mexico of $13,192, $39,568 in security costs and $1,937 for wireless handsets and
service for Mr. Alvarez's family.

(c) Tax gross up payments in 2014 reflect amounts paid for Mr. Figuereo for travel by family members on our corporate aircraft
to business events and Mr. Hemmady for tax equalization, housing allowance, language courses and travel by family members
on our corporate aircraft to business events.

(5) In 2014, Mr. Alvarez’s salary, bonus and benefits, other than his equity grants, were paid in Mexican Pesos. As a result, the
amount of compensation provided to Mr. Alvarez as reflected in U.S. dollars in the Salary, Bonus, Non-Equity Incentive Plan
Compensation and All Other Compensation columns varies based on the applicable exchange rate of the Mexican Peso
relative to the U.S. dollar. Mr. Alvarez’s compensation as reported in U.S. dollars can vary significantly with no actual change
to the compensation paid to Mr. Alvarez in Mexican currency if the exchange rates are volatile. The amounts for Mr. Alvarez
reflected in the Salary, Bonus, Non-Equity Incentive Plan Compensation and All Other Compensation columns in the table
above are based on the average exchange rate of 13.30 Mexican Pesos to 1.00 U.S. Dollar for 2014.

Grants of Plan-Based Awards Table

In the table below and discussion that follows, we summarize the grants of stock options and stock awards to each of the

named executive officers during 2014. Our 2014 Bonus Plan does not provide for payouts in fiscal years after 2014.

Estimated Future Payouts Under
Non-Equity Incentive Plan
Awards (1)

Estimated Future Payouts
Under
Equity Incentive Plan Awards (2)

Name

Grant
Date

Threshold
($)

Target
($)

Maximum
($)

Threshold
($)

Target
($)

Maximum
($)

All
Other
Stock
Awards:
Number
of
Shares
of
Stock or
Units
(#)

All Other
Option
Awards:
Number
of
Securities
Underlying
Options
(#)

Exercise
or
Base
Price
of Option
Awards
($/sh)

Grant
Date Fair
Value of
Stock
and
Option
Awards(3)
($)

—
N/A
N/A
N/A

N/A
N/A
N/A
—

—
N/A
N/A
N/A

N/A
N/A
N/A
—

—
N/A
N/A
N/A

N/A
N/A
N/A
—

N/A
N/A
0.86
N/A

N/A
53,640
N/A
N/A

N/A
N/A
95,434
N/A

N/A
N/A
N/A
98,850

N/A
N/A
N/A
46,130

4/30/2014
4/30/2014
4/30/2014

N/A
325,025
466,420
N/A

N/A
N/A
685,912
N/A

825,000
N/A
N/A
N/A

N/A
377,937
N/A
N/A

3,689,384
N/A
N/A
N/A

1,650,000
N/A
N/A
N/A

1,844,692
N/A
N/A
N/A

Steven M. Shindler
Annual Bonus
Restricted Stock
Stock Options
Performance Shares
Juan R. Figuereo
Annual Bonus
Restricted Stock
Stock Options
Performance Shares
Gokul V. Hemmady
Annual Bonus
Restricted Stock
Stock Options
Performance Shares
Salvador Alvarez
Annual Bonus(4)
Restricted Stock
Gary D. Begeman
Annual Bonus
Restricted Stock
Stock Options
Performance Shares
Peter Foyo
Annual Bonus
Restricted Stock
Stock Options
Performance Shares
(1) The amounts reflect the potential range of payouts pursuant to the 2014 Bonus Plan. The actual amounts of the payments made under this plan
to the named executive officers are reflected in the Non-Equity Incentive Plan Compensation column of the Summary Compensation Table.

1,942,500
N/A
N/A
N/A

1,112,112
N/A
N/A
N/A

556,056
N/A
N/A
N/A

971,250
N/A
N/A
N/A

N/A
N/A
133,265
N/A

—
N/A
N/A
—
N/A
N/A
N/A

4/30/2014
4/30/2014
4/30/2014

N/A
28,694
40,365
N/A

N/A
N/A
N/A
28,694

N/A
64,417
90,620
N/A

N/A
N/A
59,361
N/A

N/A
46,130
64,895
N/A

N/A
N/A
N/A
64,417

N/A
33,365
N/A
N/A

N/A
74,904
N/A
N/A

N/A
N/A
0.86
N/A

N/A
N/A
N/A
—

N/A
800,000

903,637
N/A

N/A
975,610

451,819
N/A

—
—
—
—

7/14/2014

N/A
N/A

(2) The amounts reflect the potential range of payouts pursuant to the performance share units granted in 2014. There were no payments made

pursuant to the performance share units as the OIBDA target for December 31, 2014 was not achieved.

(3) The amounts in this column reflect the grant date fair value of the restricted stock and option awards on the date of grant computed in accordance
with stock-based compensation accounting rules (FASB ASC Topic 718), with respect to awards of shares of restricted common stock and awards
of options to purchase shares of common stock held by each of the named executives, but disregarding estimated forfeitures related to service-
based vesting conditions. We value restricted stock awards at the date of grant based on the number of shares subject to the grant multiplied
by the closing price of our common stock on the date of grant. We determined the fair market value of option awards based on the Black-Scholes
option pricing model. The valuation assumptions used in determining these amounts are described in footnote 14 to our consolidated financial
statements.The long-term equity incentives disclosed in this table do not reflect the expected cancellation of all outstanding equity awards
granted to our named executive officers as a result of the Chapter 11 proceedings.

(4) Mr. Alvarez was eligible to participate in the 2014 Bonus Plan on a pro rata basis beginning July 14, 2014. The target and maximum annual

bonus amounts for Mr. Alvarez have been adjusted to reflect his start date of July 14, 2014.

Outstanding Equity Awards at Fiscal Year-End 2014 Table

Option Awards

Stock Awards

Number of
Securities
Underlying
Unexercised
Options
Exercisable
(#)

Number of
Securities
Underlying
Unexercised
Options
Unexercisable
(#)

150,000

130,000

135,000

(3)

Option
Exercise
Price
($)

Option
Expiration
Date

26.20

4/27/2015

60.77

4/26/2016

78.30

4/25/2017

Number
of
Shares
or Units
of
Stock
That
Have
Not
Vested
(#)

2,033

457,274

(5)

228,638

(5)

6.53

12/17/2022

125,979

26,667

31,811

50,000

85,000

83,333

59,000

42,254

62,970

44,422

40,000

70,000

93,333

31,900

31,362

46,709

19,787

(11)

(13)

(3)

(15)

(16)

(13)

(3)

(15)

(16)

(13)

685,912

13,333

63,623

95,434

(8)

(11)

(13)

(8)

0.86

4/30/2024

377,937

7.81

10/17/2022

20,000

8.70

0.86

4/30/2023

35,757

4/30/2024

53,640

78.87

5/21/2017

40.62

4/23/2018

14.33

4/22/2019

40.40

4/23/2020

40.28

4/20/2021

(16)

(13)

(8)

31,484

88,843

133,265

18.85

4/24/2022

17,354

8.70

0.86

4/30/2023

49,936

4/30/2024

74,904

957,610

65.17

11/27/2016

78.30

4/25/2017

40.62

4/23/2018

14.33

4/22/2019

40.40

4/23/2020

40.28

4/20/2021

(16)

(13)

(8)

23,354

39,574

59,361

18.85

4/24/2022

12,873

8.70

0.86

4/30/2023

22,243

4/30/2024

33,365

Market
Value
of Shares
or
Units of
Stock
That
Have Not
Vested (1)
($)

Number
of
Unearned
Shares,
Units or
Other
Rights
That
Have Not
Vested

Market
or Payout
Value of
Unearned
Shares,
Units or
Other
Rights
That
Have Not
Vested(1)
($)

2,520

114,942

7,559

114,942

400

715

53,640

1,073

53,640

(7)

(10)

(7)

(10)

2,298

2,299

1,073

347

999

1,498

19,512

257

445

667

74,904

(7)

(10)

1,498

33,365

(7)

(10)

667

(4)

(6)

(9)

(12)

(14)

(9)

(4)

(14)

(9)

(17)

(4)

(14)

(9)

Name
Steven M. Shindler (2)

Grant Date

4/27/2005

4/26/2006

4/25/2007

4/22/2009

4/23/2010

4/20/2011

4/24/2012

12/17/2012

4/30/2013

4/30/2014

Juan R. Figuereo

10/17/2012

4/30/2013

4/30/2014

Gokul V. Hemmady

5/21/2007

4/23/2008

4/22/2009

4/23/2010

4/20/2011

4/24/2012

4/30/2013

4/30/2014

Salvador Alvarez

7/14/2014

Gary D. Begeman

11/27/2006

4/25/2007

4/23/2008

4/22/2009

4/23/2010

4/20/2011

4/24/2012

4/30/2013

4/30/2014

Peter A. Foyo(17)

(1) The market value of the restricted stock and performance share units are based on the reported $0.02 closing price of a share of our common
stock on the over the counter market, on December 31, 2014. The long-term equity incentives disclosed in this table reflect the current fair
value of our outstanding equity awards and do not reflect the expected cancellation of all outstanding equity awards granted to our named
executive officers as a result of the Chapter 11 proceedings.

(2) Mr. Shindler was not granted any awards in 2008. Mr. Shindler was only granted restricted stock awards in April of 2009, 2010 and 2011 in
his capacity as a member of our Board. Mr. Shindler was granted restricted stock awards in April 2012 in his capacity as a member of our
Board and was granted restricted stock awards and stock option in December 2012 upon his appointment as interim, chief executive officer.
Mr. Shindler was not granted stock options or restricted stock awards in April of 2013.

(3) Stock options vested 25% on the four anniversary dates following the date of grant.

(4) Restricted stock vests/vested 33 1/3% on each of April 24, 2013, April 24, 2014 and April 24, 2015.

(5) Stock option award vests/vested 33 1/3% on each of December 17, 2013, December 17, 2014 and December 17, 2015.

(6) Restricted stock vests/vested 33 1/3% on each of December 17, 2013, December 17, 2014 and December 17, 2015.
(7) Performance share units vest on the third anniversary following the date of grant in an amount based on the Company’s performance during

the performance period.

(8) Stock option award vests 33 1/3% on each of April 30, 2015, April 30, 2016 and April 30, 2017.

(9) Restricted stock vests 33 1/3% on each of April 30, 2015, April 30, 2016 and April 30, 2017.
(10) Performance share units vest on the second and third anniversary following the date of grant in an amount based on the Company’s performance

during the performance period.

(11) Stock option vests/vested 33 1/3% on each of October 17, 2013, October 17, 2014 and October 17, 2015.

(12) Restricted stock vests on the third anniversary following the date of grant.

(13) Stock option award vests/vested 33 1/3% on each of April 30, 2014, April 30, 2015 and April 30, 2016.

(14) Restricted stock vests/vested 33 1/3% on each of April 30, 2014, April 30, 2015 and April 30, 2016.

(15) Stock options vested 33 1/3% on the three anniversary dates following the date of grant.

(16) Stock options vests/vested 33 1/3% on each of April 24, 2013, April 24, 2014 and April 24, 2015.
(17) Restricted stock vests/vested 33 1/3% on each of July 14, 2015, July 14, 2016 and July 14, 2017.

Option Exercises and Stock Vested Table

In the table below, we list information on the exercise of options and the vesting of restricted stock during the year ended

December 31, 2014.

OPTION EXERCISES AND STOCK VESTED FISCAL YEAR 2014

Name
Steven M. Shindler
Juan R. Figuereo
Gokul V. Hemmady
Salvador Alvarez
Gary D. Begeman
Peter Foyo

Option Awards

Stock Awards

Number of
Shares Acquired
on Exercise(#)
-
-
-
-
-
-

Value
Realized on
Exercise($)
-
-
-
-
-
-

Number of
Shares Acquired
on Vesting(#)
128,964
17,880
51,406
-
30,737
-

Value
Realized on
Vesting(1)($)
6,644
15,377
46,860
-
28,401
-

(1) The value realized on vesting is calculated as the number of shares vested multiplied by the closing price of the shares on the date of vesting,
unless vesting occurs on a Saturday or Sunday, in which case the shares vested are multiplied by the closing price on the Friday preceding the
vesting date. In accordance with our stock ownership guidelines the executive officers retained all of the shares acquired at vesting and will
not realize any value or receive any recovery for the vested shares in connection with the Chapter 11 bankruptcy proceedings.

Pension Benefits and Nonqualified Deferred Compensation

None of our executive officers are entitled to pension benefits from us. None of our executive officers participated in our

Executive Deferral Plan in 2014.

Potential Payments under Severance Plans

We have arrangements with each of our U.S.-based named executive officers under our Change of Control Severance Plan that
provide for payments and benefits if an executive officer’s employment is terminated in connection with the occurrence of certain
events involving a change in control. In addition, we have an obligation to make payments and provide certain benefits to our U.S.-
based named executive officers under our Severance Plan and the 2012 Plan resulting from termination of employment upon the
occurrence of certain events. The following is a summary of the payments that we or our successor may make under each of these
arrangements.

Payments upon Termination of Employment. Each of our U.S.-based named executive officers is covered by our Change of
Control Severance Plan and our Severance Plan. As part of the Chapter 11 proceedings, the Bankruptcy Court must approve the terms
of each compensatory plan and any payments provided for under each plan. The Bankruptcy Court has reviewed and approved the
terms of our Severance Plan, but has not reviewed our Change of Control Severance Plan. Absent such approval, no payments can
be made pursuant to the Change of Control Severance Plan. The Change of Control Severance Plan provides for the payment of certain
benefits if an executive officer’s employment is terminated by the company without cause or by the executive officer for good reason
in connection with a change of control. No benefits are required to be paid unless the executive officer’s employment is terminated.
The named executive officers are also entitled to severance benefits if their employment is terminated by the Company in specified
circumstances under the Severance Plan. Although the benefits under the Severance Plan apply without regard to whether any change
of control has occurred or is pending, the Change of Control Severance Plan provides that employees entitled to receive amounts paid
under the Change in Control Severance Plan will not be entitled to cash severance under any other severance plan, including the
Severance Plan. Each of the named executive officers has also received awards of stock options, restricted stock and performance
share units under the 2012 Plan, which contains provisions that may accelerate the vesting of awards made to a named executive
officer if we terminate the executive officer’s employment with us or if the executive officer terminates his or her employment with
us for good reason in connection with a change of control. As a result of our Chapter 11 filing and the proposals for reorganization,
which do not contemplate any recoveries with respect to equity interests in the Company, the named executive officers will not realize
any value or receive any recovery from any awards that receive accelerated vesting based on a change of control.

Except as noted below, we otherwise have not entered into any employment agreements or other arrangements that provide for

benefits in connection with a termination of employment of our named executive officers.

The following table shows the estimated amount of the payments to be made to each of the named executive officers upon
termination of their employment in connection with their involuntary termination under the Severance Plan, which has been approved
by the Bankruptcy Court, or upon their termination in connection with their death or disability. For purposes of calculating the value
of the benefits, we have assumed that the triggering event for payment occurred under each of the arrangements as of December 31,
2014. The footnotes to the table contain an explanation of the assumptions made by us to calculate the payments, and the discussion
that follows the table provides additional details on these arrangements. The Company cannot currently issue payments under the
Change of Control Severance Plan because the Change of Control Severance Plan has not been approved by the Bankruptcy Court.

POTENTIAL PAYMENTS UPON TERMINATION OF EMPLOYMENT

Termination Event(1)
Severance Plan - Involuntary Termination (7)(8)

Steven M. Shindler

Juan R. Figuereo

Gokul V. Hemmady

Gary D. Begeman

Death, Disability or Retirement

Steven M. Shindler

Juan R. Figuereo

Gokul V. Hemmady

Gary D. Begeman

Base
Salary (2)
($)

945,996

550,000

647,500

550,000

Bonus(3)
($)

1,437,323

642,813

756,766

602,023

Other
Payments (4)
($)

Equity
Awards (5)
($)

11,652

2,903

3,842

1,815

Total(6)
($)

2,383,319

1,192,813

1,404,266

1,152,023

11,652

2,903

3,842

1,815

(1) No payments are required to be made to any named executive officer under the Severance Plan if the executive is terminated for cause or if the

executive voluntarily terminates his employment.

(2) Amounts included in this column with respect to the Severance Plan reflect the portion of the severance payment attributable to base salary.
Amounts attributable to the target bonus are included in the “Bonus” column (see note 3 below). The severance payment under the Severance
Plan for the named executive officers is 12 months of the named executive officer’s annualized base salary at the time of termination.

(3) Amounts included in this column with respect to the Severance Plan reflect the portion of the severance payment attributable to the target
bonus. The portion of the severance payment attributable to base salary is included in the “Base Salary” column (see note 2 above). The
Severance Plan provides for the payment of an amount equal to a prorated portion of the actual annual bonus payment for the period ending
on the termination event for each named executive officer, payable when bonuses are paid for the applicable plan year.

(4) Other Payments include repatriation relocation benefits for Mr. Hemmady.
(5) Amounts included in the Equity Awards column reflect the value (calculated in the case of options as the difference between the exercise
price of the options and the market value of the related shares on December 31, 2014 and in the case of restricted shares and performance
share units as the value of shares on that date) of any awards granted under the 2012 Plan whose vesting or payment are accelerated upon the
triggering event. The 2012 Plan and the grant agreements made under that plan also provide that outstanding and unvested options and
restricted stock and a pro rata portion of the outstanding and unvested performance share units will vest upon an employee’s death or disability,

and for options if the employee retires at or after age 65 or at an earlier age with the consent of the Compensation Committee, with vested
options remaining exercisable for a period of one year after the date the employee ceases to be an employee of the Company. The 2012 Plan
and the grant agreements also provide for continued exercisability of vested options for a period of 90 days from the employee’s date of
termination in all other situations.

(6) In addition to the amounts specified in this column, upon termination in each of the circumstances noted the executive officer is entitled to
receive base salary and cash or non-cash benefits earned prior to the date of the named executive officer’s termination, including payments
with respect to accrued and unused vacation time and any reimbursements for the reasonable and necessary business expenses incurred by the
named executive officer prior to termination.

(7) Severance Plan - Involuntary Termination describes the benefits payable to a named executive officer if the named executive officer’s employment
is terminated by us other than in connection with a change of control under the circumstances described below under “Severance Plan.”

(8) Section 503(c)(2) of the Bankruptcy Code prohibits the payment of any severance to an "insider" (as defined under the Bankruptcy Code)
unless: (a) the payment is part of a program that is generally applicable to all full-time employees; and (b) the amount of the payment is no
more than 10 times the amount of the mean severance pay given to non-management employees during the calendar year in which the payment
is made. Pursuant to Section 503(c)(2), any severance payment provided to our named executive officers in 2014 would have been limited to
$840,750.

Change of Control Severance Plan. Any payments under our Change of Control Severance Plan are contingent on approval
from the Bankruptcy Court. At this time, the Company has not presented the Change of Control Severance Plan for approval and the
Bankruptcy Court has not reviewed or approved the terms or potential payments under our Change of Control Severance Plan. The
Change of Control Severance Plan provides that each named executive officer will receive a payment if a change of control, as defined
below, occurs and he either is terminated without cause or resigns for good reason. Each named executive officer will be entitled to
receive 250% of their annual base salary and target bonus at the date of his termination upon such an event as provided in the Change
of Control Severance Plan. Each named executive officer will be entitled to receive their payment under the Change of Control
Severance Plan in a lump sum within thirty days following his termination of employment.

We or the surviving entity will also pay the full premium cost of continued health care coverage for each named executive officer
under the federal “COBRA” law in such a termination. We will make the COBRA payments up to the lesser of 18 months or the time
at which the named executive officer is reemployed and is eligible to receive group health coverage benefits under another employer-
provided plan. The payments may also cease for any of the reasons provided in the COBRA law.

In addition, in the event that any of the named executive officers incur any legal, accounting or other fees and expenses in a
good faith effort to obtain benefits under the Change of Control Severance Plan, we or the surviving entity will reimburse the named
executive officer for such reasonable expenses. The named executive officer will be entitled to receive a tax gross-up payment in the
event that any payment made under the Change of Control Severance Plan is subject to the excise tax imposed by Section 4999 of
the Internal Revenue Code. Such reimbursement and gross-up payments will be subject to Section 409A of the Internal Revenue Code
and will be paid within the timeframe prescribed by the regulations thereunder.

A change of control will be deemed to occur under the Change of Control Severance Plan when:

• we are merged, consolidated or reorganized into or with another company, or we sell or otherwise transfer all or substantially
all of our assets to another company, and, as a result of either transaction, less than a majority of the combined voting power
of the then outstanding securities of the resulting company immediately after the transaction is held by the holders of our
voting securities immediately prior to the transaction;

•

the directors on our board as of the effective date of the Change of Control Severance Plan or directors elected subsequent
to that date and whose nomination or election was approved by a vote of at least two-thirds of the directors on the board as
of effective date of the Change of Control Severance Plan cease to be a majority of our board;

• our stockholders approve our complete liquidation or dissolution;

• an individual, entity or group acquires beneficial ownership of 50% or more of our then outstanding shares or 50% of our

then outstanding voting power to vote in an election of our directors, excluding any acquisition directly from us; or

• our board approves a resolution stating that a change of control has occurred.

A named executive officer will receive compensation under the Change of Control Severance Plan if:

•

the named executive officer is terminated without cause, as defined in the 2012 Plan, within 18 months from a change of
control or prior to the change of control if the named executive officer reasonably demonstrates that the termination was at
the request of a third party attempting to effect a change of control or otherwise in connection with a change of control; or

•

the named executive officer voluntarily terminates his employment for good reason during the 18 months following a change
of control, defined as when, after the change of control:

there was a material and adverse change in or reduction of the named executive officer's duties, responsibilities and authority
that the named executive officer held preceding the change of control;

the named executive officer's principal work location was moved to a location more than 40 miles away from his prior work
location;

the named executive officer was required to travel on business to a substantially greater extent than prior to the change of
control, which results in a material adverse change in his employment conditions;

the named executive officer's salary, bonus or bonus potential were materially reduced or any other significant adverse
financial consequences occurred;

•

the benefits provided to the named executive officer were materially reduced in the aggregate; or

• we or any successor fail to assume or comply with any material provisions of the Change of Control Severance Plan.

Severance Plan. The Severance Plan provides payments to our named executive officers in the event of an involuntary termination
of employment, which includes termination due to job elimination, work force reductions, lack of work, a determination by us that
the executive officer’s contributions no longer meet the needs of the business and any other reason determined by us. Under the
Severance Plan, each of the named executive officers will be entitled to a payment equal to 12 months of his annualized base salary,
not including any bonus, incentive payments or commission payments. Each eligible named executive officer will also receive a pro
rata payment of his bonus based on the portion of the year that the named executive officer was employed by us. We will pay the
bonus to the named executive officer when we pay bonuses to employees at the same position level for the bonus plan year in the
following year, and such bonus will be based on the achievement level of the named executive officer’s business unit for the applicable
year.

We expect to make a lump sum payment of the amount due under the Severance Plan although we reserve the right to make the
payments periodically for a period not to exceed 24 months. In order to receive payments under the Severance Plan, each named
executive officer must return all of our property and execute a release agreement:

• acknowledging that the payments to be received represent the full amount that the named executive officer is entitled to

under the Severance Plan;

•

releasing any claims that the named executive officer has or may have against us; and

•

in our discretion, agreeing not to compete with us for a certain period.

The release agreement will also require the named executive officer to comply with specified confidentiality, non-disparagement
and non-solicitation obligations. Our obligation to make or continue severance payments to the executive officer will cease if the
executive officer does not comply with those obligations. The terms of the Severance Plan have been reviewed and approved by the
Bankruptcy Court.

2012 Incentive Compensation Plan. The 2012 Plan currently covers the grant of certain incentives and awards, including stock
options, restricted stock, restricted stock units and cash-based incentives, to our employees, including the named executive officers.
Under the 2012 Plan, if a change of control occurs and the incentives and awards granted under the 2012 Plan are not assumed by the
surviving entity, or the employee is terminated within a certain period following a change of control, each outstanding award is treated
as explained below. A change of control under the 2012 Plan is defined the same as in the Change of Control Severance Plan and the
same events that trigger payments to the named executive officer under the Change of Control Severance Plan trigger payments under
the 2012 Plan.

• Options. If the surviving entity assumes, replaces or converts the options and the named executive officer is terminated within
24 months under circumstances that would trigger payment, the options will become fully exercisable, vested or earned. If
the options are not assumed, replaced or converted, each option shall be fully exercisable upon a change of control.

• Restricted Stock and Restricted Stock Units. If the surviving entity assumes, replaces or converts the stock award and the
named executive officer is terminated within 24 months under circumstances that would trigger payment, the stock awards
shall be vested. If the restricted stock and restricted stock unit awards are not assumed, replaced or converted, the restricted
stock or restricted stock units shall be vested upon a change of control.

• Performance Share Units. If the surviving entity assumes, replaces or converts the performance share units and the named
executive officer is terminated within 24 months under circumstances that would trigger payment, the performance share
units shall vest at the target level of performance. If the performance share units are not assumed, replaced or converted, the
performance share units shall vest at the target level of performance upon a change of control.

• Cash-based Incentives. If the surviving entity assumes, replaces or converts cash-based incentives and the named executive
officer is terminated within 24 months under circumstances that would trigger payment, each outstanding cash-based incentive
award shall be deemed earned pro-rata based on the fraction of the performance period that has elapsed from the beginning
of the performance period until termination. If the cash-based incentives are not assumed, replaced or converted, the cash-
based incentives shall be deemed earned upon a change of control.

The 2012 Plan provides that the Compensation Committee, as administrator of the plan, shall determine what amounts will be
payable to the named executive officer upon death, disability or retirement in the agreement under which awards are made under the
2012 Plan.

Offer Letter with Mr. Foyo. Mr. Foyo resigned as the Company’s executive vice president, business development effective
February 28, 2014 and under the terms of his Offer Letter dated December 16, 2013, Mr. Foyo received a payment of $1,100,000.
Mr. Foyo did not receive any accelerated vesting for his outstanding and unvested equity awards.

Retention Agreement with Mr. Alvarez. In connection with the proposed sale of Nextel Mexico, Nextel Mexico has entered
into a retention agreement with Mr. Alvarez that provides for a payment of $510,923 on the earlier of 30 days after closing of the sale
transaction, September 30, 2015 or the date Mr. Alvarez is involuntarily terminated without cause. In the event that Mr. Alvarez is
terminated without cause prior to the closing date or the sale transaction is not completed by September 30, 2015, the retention payment
will be provided by Nextel Mexico, otherwise the purchaser will be responsible for the retention payment.

Director Compensation

Fees Payable to Non-Employee Directors. Each of our non-employee directors receives an annual retainer and equity grant for
serving on the Board. In addition our non-employee directors receive additional fees for their service on committees. Our director
compensation for 2014 consisted of the following components:

Board:
Annual Retainer
Annual Equity Grant
Lead Independent Director
Non-Executive Chairman

Committees:
Committee Chairs
Audit Committee
Compensation Committee
Corporate Governance and Nominating Committee
Finance Committee
Risk Committee

$
$
$
$

$
$
$
$
$
$

70,000
10,378 (1)
20,000
45,000

5,000
25,000
20,000
15,000
15,000
15,000

(1) On April 30, 2014, each non-employee director then serving received 12,068 restricted shares that vest 33 1/3 % annually over a three year
period. The number of restricted shares granted was determined consistent with the philosophy applied to the long-term equity grants provided
to the named executive officers and equals the number of restricted shares received in 2013.

We pay all retainers in arrears in quarterly installments. We also reimburse directors for travel expenses incurred in connection
with attending Board, committee and stockholder meetings and for other related expenses. We do not provide any additional
compensation to employees who serve as a director or a committee member in periods in which they are also employees. Non-
employee directors are also permitted to defer all or a portion of their annual retainer pursuant to the NII Holdings, Inc. Outside
Directors Deferral Plan described below.

Director Compensation Table

In the table and discussion below, we summarize the compensation paid to our directors during 2014 who were not our employees

as of December 31, 2014.

DIRECTOR COMPENSATION FISCAL YEAR 2014

Name
Kevin L. Beebe
Donald Guthrie
Charles M. Herington (3)
Carolyn F. Katz
Ricardo Knoepfelmacher
Rosendo G. Parra
Paulino do Rego Barros, Jr.
John W. Risner

Fees
Earned or
Paid in
Cash ($)
155,000
115,000
110,000
130,000
70,000
110,000
85,000
110,000

Stock
Awards(1)
($)
10,378
10,378
10,378
10,378
10,378
10,378
10,378
10,378

Option
Awards(2)
($)
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A

Non-Equity
Incentive Plan
Compensation
($)
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A

Change in
Pension Value and
Nonqualified
Deferred
Compensation
Earnings
-
-
-
-
-
-
-
-

All Other
Compensation
($)
-
-
-
-
-
-
-
-

Total
($)
165,378
125,378
120,378
140,378
80,378
120,378
95,378
120,378

(1) The amounts in this column reflect the grant date fair value of awards computed in accordance with stock-based compensation accounting
rules (FASB ASC Topic 718), but disregarding estimated forfeitures related to service-based vesting conditions. We value restricted stock awards
at the date of grant based on the number of shares subject to the grant multiplied by the closing price of our common stock on the date of grant.
On April 30, 2014, we provided each non-employee director then serving with a grant of 12,068 shares of restricted stock that vest 33 1/3 %
on each of April 30, 2015, April 30, 2016 and April 30, 2017. The grant date fair value was $0.86 per share. The dollar value of the shares
subject to those grants, based on the $0.02 closing price of a share of our common stock as reported on the over the counter market on
December 31, 2014, was $241.

The aggregate number of shares of unvested restricted stock held by each of our non-employee directors on December 31, 2014, and the dollar
value of the shares based on the closing price on that date, were as follows: Ms. Katz and Messrs. Beebe, Guthrie, Herington, Parra, and Risner
-22,147, $443; Mr. Rego Barros -21,638, $432; and Mr. Knoepfelmacher -20,264, $405.

(2) In 2009, we discontinued our prior practice of making annual grants of options to purchase our common stock to our directors. Consistent
with that change, no awards of options to purchase common stock were made to our directors in 2014. The aggregate number of shares of our
common stock underlying options held by each of the non-employee directors on December 31, 2014 were as follows: Messrs. Beebe,
Knoepfelmacher and Rego Barros - 0; Mr. Guthrie - 19,700; Ms. Katz and Messrs. Herington and Risner - 63,500; and Mr. Parra - 17,100.

(3) As of December 31, 2014, Mr. Herington held approximately 22,676 deferred share units under that plan that were granted in lieu of director

fees earned in 2008, 2009, 2010, 2011, 2012 and 2013.

Outside Directors Deferral Plan. The Company maintains the NII Holdings, Inc. Outside Directors Deferral Plan, which we
refer to as the Director Deferral Plan. The Director Deferral Plan allows our non-employee directors to elect to defer 0%, 50% or
100% of his or her annual retainer and committee fees with the amount deferred by a participant attributed to a hypothetical account
and treated as if it is invested in deferred stock units with the value of those units linked to the value of our common stock. Payments
out of the participating director’s hypothetical account are made in shares of the Company’s common stock, except that any fractional
share is paid in cash. The Company may also elect to make the payment in a lump sum in cash in an amount equal to the value of the
deferred stock units credited to the participating director’s hypothetical account. Shares are issued under and governed in accordance
with the 2012 Plan. A participating director’s account is payable to the participating director on the first day of the month following
his termination of service on the Board. None of our non-employee directors currently participate in our Director Deferral Plan and
the Director Deferral Plan is not available for 2015.

Stock Ownership Guidelines

We have adopted director stock ownership guidelines that require our non-employee directors to attain certain stock ownership
levels and therefore maintain a vested interest in our equity performance. Over a five-year period from the date a director joins the
Board, non-employee directors are expected to reach an ownership level of five times their cash base retainer and to retain that
ownership. Our current base retainer is $70,000, thus our non-employee directors currently have a share ownership target of $350,000.

Under our policy, an increase in the base retainer of non-employee directors will result in an increase in the ownership requirement.
The types of stock ownership that qualify toward the ownership requirement under our policy include direct stock ownership and the
value of unexercised but vested options to the extent that the fair market value of our common stock exceeds the option exercise price.

Non-employee directors must hold all equity received until their target is met. Directors will be deemed to be in compliance with the
guidelines and will not be required to purchase additional shares to meet the ownership requirement if they met their target ownership
level in compliance with the guidelines following any sale of shares.

On December 5, 2014, the Company granted a waiver under the stock ownership guidelines for the sale of common stock by a
non-employee director who had previously attained his required stock ownership level. There were no other dispositions of Company
common stock during 2014 and as of December 31, 2014, each of the non-employee directors were in compliance with the guidelines.
Mr. Shindler is covered by the employee stock ownership guidelines, and as chief executive officer, he is expected to hold equity
equivalent to five times his base salary.

Compensation Committee Interlocks and Insider Participation

No member of the Compensation Committee is a current or former officer of us or any of our subsidiaries. In addition, there

are no compensation committee interlocks with other entities with respect to any such member.

Item 12.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Equity Compensation Plan Information

The following table sets forth information as of December 31, 2014, with respect to the 2012 Plan, the equity compensation

plan under which shares of our common stock are authorized for issuance.

Plan category

Equity compensation plans approved by security holders

Total

Number of securities to be
issued upon exercise of
outstanding options,
warrants and rights

Weighted-average
exercise price of
outstanding options,
warrants and rights

Number of securities
remaining available for
future issuance under
equity compensation plans(1)

6,034,151

26.57

23,824,039 (2)

23,824,039

(1) Amounts exclude any securities to be issued upon exercise of outstanding options, warrants and rights, and shares subject to an outstanding
but unvested restricted stock or restricted stock unit award.
(2) The 2012 Plan permits the grant of one or more of the following awards: options, restricted stock, restricted stock units and cash-based
incentives. The number of shares authorized to be issued under the 2012 Plan will be reduced by one share of common stock for each share of
common stock issued pursuant to a stock option and by one and one-half shares of common stock for each share of common stock issued pursuant
to all other equity-based awards. As of December 31, 2014, common stock reserved for future issuance does not include 2,386,673 restricted
stock units that were issued in 2012, 2013 and 2014 that, if settled in shares of common stock, would reduce the shares available for grant under
our 2012 Plan by 3,580,009 shares.

Securities Ownership of Directors and Management

In the table and the related footnotes below, we list the amount and percentage of shares of our common stock that are deemed

under the rules of the Securities and Exchange Commission to be beneficially owned on February 28, 2015 by:

•

each person who served as one of our directors as of that date;

each of the named executive officers; and

all directors and executive officers as a group.

Name of Beneficial Owner
Salvador Alvarez
Kevin L. Beebe
Gary D. Begeman
Juan R. Figuereo
Donald Guthrie
Gokul V. Hemmady
Charles M. Herington(5)
Carolyn F. Katz
Ricardo Knoepfelmacher
Rosendo G. Parra
Paulino do Rego Barros, Jr.
John W. Risner
Steven M. Shindler
All directors and executive officers as a group
(15 persons)

Shares Owned and
Vested Options (1)
-
38,543
489,420
70,439
64,522
581,467
93,322
124,322
4,113
41,922
7,073
74,573
1,209,855

2,982,527

Shares Covered by

Options to
Vest (2)
-
-
-
-
-
-
-
-
-
-
-
-
-

Restricted Stock
to Vest (3)
-
-
-
-
-
-
-
-
-
-
-
-
-

Percent of
Class (4)
*
*
*
*
*
*
*
*
*
*
*
*
*

1.73%

Indicates ownership of less than 1%.

*
(1) Includes common stock currently owned, deferred share units and exercisable options, including those options with an exercise price that
is greater than the trading price of our common stock on February 28, 2015. This column does not include shares covered by options and
restricted stock that vest within 60 days of February 28, 2015, which are reflected in the second and third columns in the table. Unless
otherwise indicated by footnote, the named individuals have sole voting and investment power with respect to beneficially owned shares of
stock. A person is also deemed to be a beneficial owner of any securities if that person has the right to acquire beneficial ownership within
60 days of the relevant date. Shares beneficially owned as a result of the right to acquire beneficial ownership within 60 days are reflected
in the second and third columns of the table.

(2) Indicates shares that may be acquired upon the exercise of stock options exercisable on or within 60 days of February 28, 2015.
(3) Indicates shares of restricted common stock that are scheduled to vest on or within 60 days of February 28, 2015.
(4) Based on the total amount of shares reflected in columns one through three and 172,363,259 shares of common stock issued and outstanding

on February 28, 2015.

(5) Includes 22,677 deferred share units granted in lieu of cash compensation pursuant to the Company’s Outside Director Deferral Plan.

Securities Ownership of Principal Stockholders

There is no person or group, as that term is used in Section 13(d)(3) of the Securities Exchange Act of 1934, known by us

to be the beneficial owner of more than 5% of our outstanding common stock as of February 28, 2015.

Item 13.

Certain Relationships and Related Transactions, and Director Independence

Director Independence

In accordance with our Corporate Governance Guidelines, a majority of our Board must be independent as defined by the
NASDAQ listing rules and the Securities Exchange Act of 1934, as amended. On February 11, 2015, the Board determined that
the following eight of its nine current members (89%) are independent: Kevin L. Beebe, Donald Guthrie, Charles M. Herington,
Carolyn F. Katz, Ricardo Knoepfelmacher, Rosendo G. Parra, Paulino do Rego Barros, Jr. and John W. Risner. In making that
determination, the Board considered the relationships described below in “Certain Relationships and Related Transactions.” The
Audit Committee, Compensation Committee, and Corporate Governance and Nominating Committee are comprised entirely of
independent directors.

Certain Relationships and Related Transactions

Our Corporate Governance Guidelines require that the Audit Committee review and approve or ratify transactions involving
the Company and related persons (such as the Company’s officers, directors, family members of the officers and directors and
other related parties). In determining whether to approve or ratify a related party transaction, the Audit Committee evaluates
whether the transaction is in the best interests of the Company taking into consideration all relevant factors, including as applicable
the Company’s business rationale for entering into the transaction and the fairness of the transaction to the Company. The Audit
Committee generally seeks to consider and approve these transactions in advance where practicable, but may also ratify them after
the transactions are entered into, particularly in instances where the transactions are entered into in the ordinary course of business
or if the transaction is on terms that are consistent with a policy previously approved by the Audit Committee or the Board. In

instances where the transaction is subject to renewal or if the Company has the right to terminate the relationship, the Audit
Committee expects to periodically monitor the transaction to ensure that there are no changed circumstances that would render it
advisable for the Company to amend or terminate the transaction.

Currently, the only related person transaction is the transaction described below.

Transaction
Equifax, Inc.

Description of Relationship; Audit Committee Determination
In accordance with our Corporate Governance Guidelines, the Audit Committee has
continued to monitor the Company’s relationship with Equifax, Inc., which provided
customer credit evaluation services to the Company during 2014.

As of December, 31, 2014, Paulino do Rego Barros, Jr., a member of the Board, serves as
president, international of Equifax.

The Audit Committee has continued to monitor the Company’s relationship with Equifax and
its affiliates to ensure there were no changed circumstances that would render it advisable for
the Company to amend or terminate the transaction. The Company made payments of
approximately $2,000,000 to Equifax and its affiliates for the services provided in 2014,
excluding any payments made by Nextel Chile, which was sold in August 2014. In February
2015, the Board determined, upon review, that the transaction continued to be in the best
interest of the Company and ratified the transaction.

Item 14.

Principal Accountant Fees and Services

Fees Paid to Independent Registered Public Accounting Firms

KPMG LLP audited our consolidated financial statements for the fiscal year ended December 31, 2014 and
PricewaterhouseCoopers LLP audited our consolidated financial statements for the fiscal year ended December 31, 2013. The
following table sets forth the fees accrued or paid to the Company’s independent registered public accounting firm for the years
ended December 31, 2014 and December 31, 2013.

Audit Fees(1)

Audit-Related Fees(2)

Tax Fees(3)

All Other Fees(4)

TOTAL

KPMG

2014

PwC

2013

9,609,173 $

— $

39,890 $

— $

9,766,035

31,304

202,373

210,102

9,649,063 $

10,209,814

(1) Audit fees consist of those fees rendered for the audit of our annual consolidated financial statements, audit of the effectiveness of internal
controls over financial reporting, review of financial statements included in our quarterly reports and for services normally provided in connection
with statutory and regulatory filings or engagements, such as comfort letters or attest services.
(2) Audit-related fees consist of those fees for assurance and related services that are reasonably related to the review of our financial statements.
(3) Tax fees consist of those fees billed for professional services for tax compliance, tax advice, tax planning, transfer pricing and expatriate tax
services.
(4) Fees incurred for services other than those described above for consulting, assessment of information technology systems, salary and human
resources projects, research and disclosure tools and expenses.

Audit Committee Pre-Approval Policies and Procedures

It is the policy of the Audit Committee that our independent registered public accounting firm may provide only those services
that have been pre-approved by the Audit Committee. Unless a type of service to be provided by the independent registered public
accounting firm has received general pre-approval, it requires specific pre-approval by the Audit Committee or, in specified
circumstances, the Audit Committee chair pursuant to authority delegated by the Audit Committee. The term of any general pre-
approval is eighteen months from the date of pre-approval, unless the Audit Committee or a related engagement letter specifically
provides for a different period. The Audit Committee annually reviews and pre-approves the services that may be provided by the
independent registered public accounting firm without obtaining specific pre-approval. The Audit Committee has delegated its
pre-approval authority to Carolyn Katz, the chair of the Audit Committee.

Requests or applications to provide services that require specific approval by the Audit Committee must be submitted to the
Audit Committee by both the independent registered public accounting firm and our controller, and must include a joint statement
as to whether, in their view, the request or application is consistent with the Securities and Exchange Commission’s rules on auditor
independence. For the years ended December 31, 2014 and December 31, 2013, all services provided by our independent registered
public accounting firms were pre-approved in accordance with the Audit Committee policy described above.

100

Item 15.

Exhibits, Financial Statement Schedules.

PART IV

(a)(1) Financial Statements. Consolidated financial statements and reports of independent registered public accounting

firms filed as part of this report are listed below:

Report of Independent Registered Public Accounting Firm

Consolidated Balance Sheets — As of December 31, 2014 and 2013

Consolidated Statements of Comprehensive Loss — For the Years Ended December 31, 2014, 2013 and 2012

Consolidated Statements of Changes in Stockholders’ (Deficit) Equity — For the Years Ended December 31, 2014, 2013
and 2012

Consolidated Statements of Cash Flows — For the Years Ended December 31, 2014, 2013 and 2012

Notes to Consolidated Financial Statements

Page

F-2

F-3

F-4

F-5

F-6

F-7

F-8

F-9

(2) Financial Statement Schedules. The following financial statement schedules are filed as part of this report.

Schedules other than the schedules listed below are omitted because they are either not required or not applicable.

Schedule I — Condensed Financial Information of Registrant

Schedule II — Valuation and Qualifying Accounts

Page

F-51

F-55

(3) List of Exhibits. The exhibits filed as part of this report are listed in the Exhibit Index, which is incorporated in this

item by reference.

101

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused

this report to be signed on its behalf by the undersigned, thereunto duly authorized.

SIGNATURES

NII HOLDINGS, INC.

By:

/s/ ESTEBAN NARANJO
Esteban Naranjo
Vice President, Corporate Controller
(on behalf of the registrant and as
Principal Accounting Officer)

March 10, 2015

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following

persons on behalf of the registrant and in the capacities indicated on March 10, 2015.

Signature

Title

/s/ Steven M. Shindler
Steven M. Shindler

/s/ Juan R. Figuereo
Juan R. Figuereo

/s/ Kevin L. Beebe
Kevin L. Beebe

/s/ Donald Guthrie
Donald Guthrie

/s/ Charles M. Herington
Charles M. Herington

/s/ Carolyn Katz
Carolyn Katz

Ricardo Knoepfelmacher

/s/ Rosendo G. Parra
Rosendo G. Parra

/s/ Paulino do Rego Barros
Paulino do Rego Barros

/s/ John W. Risner
John W. Risner

Chief Executive Officer

Executive Vice President, Chief Financial Officer (Principal Financial
Officer)

Chairman of the Board of Directors

Director

102

NII HOLDINGS, INC. AND SUBSIDIARIES

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
AND FINANCIAL STATEMENT SCHEDULES

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

CONSOLIDATED FINANCIAL STATEMENTS

Consolidated Balance Sheets — As of December 31, 2014 and 2013

Consolidated Statements of Comprehensive Loss — For the Years Ended December 31, 2014, 2013 and 2012

Consolidated Statements of Changes in Stockholders’ (Deficit) Equity — For the Years Ended December 31,
2014, 2013 and 2012

Consolidated Statements of Cash Flows — For the Years Ended December 31, 2014, 2013 and 2012

Notes to Consolidated Financial Statements

FINANCIAL STATEMENT SCHEDULES

Schedule I — Condensed Financial Information of Registrant

Schedule II — Valuation and Qualifying Accounts

F-2

F-3

F-4

F-5

F-6

F-7

F-8

F-9

F-51

F-55

F-1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Stockholders
NII Holdings, Inc. (Debtor-In-Possession):

We have audited the accompanying consolidated balance sheet of NII Holdings, Inc. (Debtor-In-Possession) and subsidiaries (the
Company) as of December 31, 2014, and the related consolidated statements of comprehensive loss, changes in
stockholders’ (deficit) equity, and cash flows for the year then ended. In connection with our audit of the consolidated financial
statements, we also have audited the financial statement schedules as listed in the accompanying index. These consolidated financial
statements and financial statement schedules are the responsibility of the Company’s management. Our responsibility is to express
an opinion on these consolidated financial statements and financial statement schedules based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States).
Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable
basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position
of NII Holdings, Inc. (Debtor-In-Possession) and subsidiaries as of December 31, 2014, and the results of their operations and
their cash flows for the year then ended, in conformity with U.S. generally accepted accounting principles. Also in our opinion,
the related financial statement schedules, when considered in relation to the basic consolidated financial statements taken as a
whole, present fairly, in all material respects, the information set forth therein.

The accompanying consolidated financial statements and financial statement schedules have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 2 to the consolidated financial statements, the Company has
suffered recurring losses from operations, has a net capital deficiency, and filed a voluntary petition for relief under Chapter 11
of Title 11 of the United States Bankruptcy Code, which raise substantial doubt about its ability to continue as a going concern.
Management’s plans in regard to these matters are also described in Note 2. The consolidated financial statements and financial
statement schedules do not include any adjustments that might result from the outcome of this uncertainty.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), NII
Holdings, Inc.’s (Debtor-In-Possession) internal control over financial reporting as of December 31, 2014, based on criteria
established in Internal Control - Integrated Framework (1992) issued by the Committee of Sponsoring Organizations of the
Treadway Commission (COSO), and our report dated March 10, 2015 expressed an adverse opinion on the effectiveness of the
Company’s internal control over financial reporting.

/s/ KPMG LLP
McLean, Virginia
March 10, 2015

F-2

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Stockholders
NII Holdings, Inc. (Debtor-in-Possession):

We have audited NII Holdings, Inc.’s (Debtor-in-Possession) internal control over financial reporting as of December 31, 2014,
based on criteria established in Internal Control - Integrated Framework (1992) issued by the Committee of Sponsoring
Organizations of the Treadway Commission (COSO). NII Holdings, Inc.’s management is responsible for maintaining effective
internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting,
included in the accompanying Management Report on Internal Control over Financial Reporting (Item 9A). Our responsibility
is to express an opinion on the Company’s internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States).
Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control
over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control
over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating
effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we
considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability
of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted
accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain
to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets
of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial
statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are
being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable
assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that
could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also,
projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because
of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there
is a reasonable possibility that a material misstatement of the company’s annual or interim financial statements will not be prevented
or detected on a timely basis. A material weakness was identified at the Company’s reportable segment in Brazil (Nextel Brazil)
related to the failure to establish an effective control environment and monitoring activities, including an organizational structure
with sufficiently trained resources where supervisory roles, responsibilities, and monitoring activities are aligned with the
Company’s financial reporting objectives. Further, Nextel Brazil did not maintain effective operation of process level controls,
including reconciliation and management review controls. We also have audited, in accordance with the standards of the Public
Company Accounting Oversight Board (United States), the consolidated balance sheet of NII Holdings, Inc. (Debtor-in-Possession)
and subsidiaries as of December 31, 2014 and the related consolidated statements of comprehensive loss, changes in
stockholders’ (deficit) equity, and cash flows for the year then ended. This material weakness was considered in determining the
nature, timing, and extent of audit tests applied in our audit of the 2014 consolidated financial statements, and this report does not
affect our report dated March 10, 2015, which expressed an unqualified opinion on those consolidated financial statements.

In our opinion, because of the effect of the aforementioned material weakness on the achievement of the objectives of the control
criteria, NII Holdings, Inc. (Debtor-in-Possession) has not maintained effective internal control over financial reporting as of
December 31, 2014, based on criteria established in Internal Control - Integrated Framework (1992) issued by the Committee of
Sponsoring Organizations of the Treadway Commission (COSO)..

/s/ KPMG LLP
McLean, Virginia
March 10, 2015

F-3

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of NII Holdings, Inc.:

In our opinion, the consolidated balance sheet as of December 31, 2013 and the related consolidated statements of
comprehensive loss, changes in stockholders’ (deficit) equity and cash flows for each of two years in the period ended December
31, 2013 present fairly, in all material respects, the financial position of NII Holdings, Inc. (Debtor-in-Possession) and its subsidiaries
at December 31, 2013, and the results of their operations and their cash flows for each of the two years in the period ended December
31, 2013, in conformity with accounting principles generally accepted in the United States of America. In addition, in our opinion,
the financial statement schedules for each of the two years in the period ended December 31, 2013 present fairly, in all material
respects, the information set forth therein when read in conjunction with the related consolidated financial statements. These
financial statements and financial statement schedules are the responsibility of the Company's management. Our responsibility is
to express an opinion on these financial statements and financial statement schedules based on our audits. We conducted our audits
of these statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those
standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating
the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a
going concern. As more fully discussed in Note 1 to the consolidated financial statements appearing under Item 15 of the Company's
2013 annual report on Form 10-K (not presented herein), the Company projected that it was likely that it would not be able to
comply with certain debt covenants throughout 2014. This condition and its impact on the Company’s liquidity raise substantial
doubt about the Company’s ability to continue as a going concern. Management’s plans in regard to this matter are also described
in Note 1 to the consolidated financial statements appearing under Item 15 of the Company's 2013 annual report on Form 10-K
(not presented herein). The consolidated financial statements do not include any adjustments that might result from the outcome
of this uncertainty.

/s/ PricewaterhouseCoopers LLP
McLean, Virginia
February 28, 2014, except for the effects of discontinued operations discussed in Note 5 to the consolidated financial statements,
as to which the date is March 10, 2015

F-4

NII HOLDINGS, INC. (DEBTOR-IN-POSSESSION) AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except par values)

December 31,
2014

December 31,
2013

ASSETS

Current assets

Cash and cash equivalents
Short-term investments
Accounts receivable, net of allowance for doubtful accounts of $55,015 and $54,531
Handset and accessory inventory
Deferred income taxes, net
Prepaid expenses and other
Assets related to discontinued operations

Total current assets

Property, plant and equipment, net

Intangible assets, net

Deferred income taxes, net

Other assets
Assets related to discontinued operations

Total assets

LIABILITIES AND STOCKHOLDERS’ (DEFICIT) EQUITY

Liabilities not subject to compromise
Current liabilities
Accounts payable
Accrued expenses and other
Deferred revenues
Current portion of long-term debt
Deposits related to 2013 sale of towers
Liabilities related to discontinued operations

Total current liabilities

Long-term debt
Deferred income tax liabilities
Other long-term liabilities
Liabilities related to discontinued operations
Total liabilities not subject to compromise

Liabilities subject to compromise (Note 2)
Commitments and contingencies (Note 11)

Stockholders’ (deficit) equity

573,600
153,612
398,678
207,633
50,692
329,197
—
1,713,412
2,432,933

822,124

5,767

456,355
—
5,430,591

279,804
562,988
89,019
777,569
—
—
1,709,380
734,823
58,088
299,571
—
2,801,862
4,593,493

1,730,335
585,760
511,406
336,620
127,395
397,574
59,096
3,748,186
3,337,545

980,369

26,713

477,306
109,835
8,679,954

346,128
959,059
127,782
96,839
720,013
36,769
2,286,590
5,696,632
108,991
227,028
5,326
8,324,567
—

Undesignated preferred stock, par value $0.001, 10,000 shares authorized — 2014 and
2013, no shares issued or outstanding — 2014 and 2013
Common stock, par value $0.001, 600,000 shares authorized — 2014 and 2013, 172,363
shares issued and outstanding — 2014, 172,105 shares issued and outstanding — 2013
Paid-in capital
Accumulated deficit
Accumulated other comprehensive loss
Total stockholders’ (deficit) equity

Total liabilities and stockholders’ (deficit) equity

—

172
1,517,081
(2,150,664)
(1,331,353)
(1,964,764)
5,430,591

172
1,504,258
(192,966)
(956,077)
355,387
8,679,954

The accompanying notes are an integral part of these consolidated financial statements.

F-5

NII HOLDINGS, INC. (DEBTOR-IN-POSSESSION) AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(in thousands, except per share amounts)

Operating revenues

Service and other revenues
Handset and accessory revenues

Operating expenses

Cost of service (exclusive of depreciation and amortization included
below)
Cost of handsets and accessories
Selling, general and administrative
Impairment and restructuring charges
Gain on sale of towers, net (Note 9)
Depreciation
Amortization

Operating (loss) income
Other (expense) income
Interest expense, net
Interest income
Foreign currency transaction losses, net
Other expense, net

(Loss) income from continuing operations before reorganization items
and income tax provision
Reorganization items (Note 2)
Income tax provision (Note 13)
Net loss from continuing operations
Loss from discontinued operations, net of income taxes (Note 5)
Net loss

Net loss from continuing operations per common share, basic and
diluted
Net loss from discontinued operations per common share,
basic and diluted
Net loss per common share, basic and diluted

Weighted average number of common shares outstanding, basic and
diluted

Comprehensive loss, net of income taxes
Foreign currency translation adjustment
Reclassification adjustment for sale of Nextel Chile (Note 5)
Other
Other comprehensive loss
Net loss
Total comprehensive loss

Year Ended December 31,

2014

2013

2012

3,447,167
241,553
3,688,720

4,517,154
194,413
4,711,567

5,424,766
268,469
5,693,235

1,308,835
973,491
1,699,058
220,742
(74,631)
592,056
80,649
4,800,200
(1,111,480)

(449,345)
66,425
(130,499)
(6,721)
(520,140)

1,392,140
884,789
1,941,773
168,543
—
629,606
63,321
5,080,172
(368,605)

(526,530)
43,327
(123,369)
(12,859)
(619,431)

(1,631,620)
(71,601)
(74,091)
(1,777,312)
(180,386)
(1,957,698) $

(988,036)
—
(446,052)
(1,434,088)
(215,511)
(1,649,599) $

1,509,543
792,466
2,261,922
30,401
—
558,224
46,937
5,199,493
493,742

(359,795)
33,785
(63,330)
(28,097)
(417,437)

76,305
—
(158,144)
(81,839)
(683,410)
(765,249)

(10.31) $

(8.34) $

(0.48)

(1.05)
(11.36) $

(1.26)
(9.60) $

(3.98)
(4.46)

172,283

171,912

171,499

(340,847) $
(33,885)
(544)
(375,276)
(1,957,698)
(2,332,974) $

(334,893) $

—
2,257
(332,636)
(1,649,599)
(1,982,235) $

(97,589)
—
(1,802)
(99,391)
(765,249)
(864,640)

The accompanying notes are an integral part of these consolidated financial statements.

F-6

NII HOLDINGS, INC. (DEBTOR-IN-POSSESSION) AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN
STOCKHOLDERS’ (DEFICIT) EQUITY
(in thousands)

Common Stock

Amount

Paid-in Capital

(Accumulated
Deficit)
Retained
Earnings

Accumulated
Other
Comprehensive
Loss

Total
Stockholders’
(Deficit) Equity

Balance, January 1, 2012

171,177

171

$ 1,440,079

$ 2,221,882

(524,050) $

3,138,082

Net loss

Other comprehensive loss

Purchase of convertible notes

Share-based compensation activity

—

476

—

(526)

43,533

(765,249)

—

(99,391)

—

(765,249)

(99,391)

(526)

43,533

Balance, December 31, 2012

171,653

171

1,483,086

1,456,633

(623,441)

2,316,449

Net loss

Other comprehensive loss

Share-based compensation activity

—

452

—

21,172

(1,649,599)

—

(1,649,599)

—

(332,636)

—

21,173

355,387

Balance, December 31, 2013

172,105

172

1,504,258

(192,966)

(956,077)

Net loss

Other comprehensive loss

Share-based compensation activity

—

258

—

12,823

(1,957,698)

—

(1,957,698)

—

(375,276)

—

(375,276)

12,823

Balance, December 31, 2014

172,363

172

$ 1,517,081

$ (2,150,664) $ (1,331,353) $

(1,964,764)

The accompanying notes are an integral part of these consolidated financial statements.

F-7

NII HOLDINGS, INC. (DEBTOR-IN-POSSESSION) AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)

Cash flows from operating activities:
Net loss
Adjustments to reconcile net loss to net cash (used in) provided by
operating activities:
Loss from discontinued operations
Reorganization items
Amortization of debt discount and financing costs
Depreciation and amortization
Provision for doubtful accounts
Provision for inventory obsolescence
Foreign currency transaction losses, net
Impairment charges, restructuring charges and losses on disposal of fixed
assets
Gain on sale of towers
Deferred income tax provision (benefit)
Share-based compensation expense
Other, net
Changes in assets and liabilities:

Accounts receivable
Handset and accessory inventory
Prepaid expenses and other
Other long-term assets
Accounts payable, accrued expenses and other

Total operating cash (used in) provided by continuing operations
Total operating cash used in discontinued operations
Net cash (used in) provided by operating activities

Cash flows from investing activities:

Capital expenditures
Purchase of investments
Proceeds from sales of investments
(Payments) proceeds related to 2013 sale of towers, net
Change in restricted cash and escrow accounts
Proceeds from sale of corporate aircraft
Purchase of licenses and other

Total investing cash used in continuing operations
Total investing cash (used in) provided by discontinued operations
Net cash used in investing activities

Cash flows from financing activities:
Borrowings under equipment financing facilities and other
Proceeds from issuance of senior notes
Repayments and purchases of convertible notes
Repayments under bank loans, capital leases and other borrowings
Other, net

Total financing cash (used in) provided by continuing operations
Total financing cash used in discontinued operations
Net cash (used in) provided by financing activities
Effect of exchange rate changes on cash and cash equivalents
Change in cash and cash equivalents related to discontinued
operations
Net (decrease) increase in cash and cash equivalents
Cash and cash equivalents, beginning of year
Cash and cash equivalents, end of year

Year Ended December 31,

2014

2013

2012

(1,957,698) $

(1,649,599) $

(765,249)

180,386
54,851
16,816
672,705
114,784
40,768
130,499

176,577
(74,631)
48,453
13,845
(5,002)

(52,706)
57,465
(66,218)
(166,366)
249,339
(566,133)
(62,583)
(628,716)

(612,161)
(1,637,913)
2,092,459
(39,618)
(137,827)
32,390
(30,870)
(333,540)
(13,998)
(347,538)

14,590
—
—
(142,230)
(632)
(128,272)
—
(128,272)
(55,657)

215,511
—
31,283
692,927
111,460
56,077
123,369

149,227
—
382,070
27,255
(11,537)

(29,458)
(112,919)
(24,495)
(52,875)
63,386
(28,318)
(164,133)
(192,451)

(620,895)
(2,360,529)
1,942,886
721,404
(39,436)
—
(52,859)
(409,429)
231,817
(177,612)

145,122
1,600,000
—
(787,572)
(27,994)
929,556
(152,965)
776,591
(56,236)

683,410
—
21,598
605,161
214,454
1,470
63,330

38,535
—
(17,877)
40,430
30,981

(83,946)
(48,705)
(239,876)
(99,862)
119,865
563,719
(210,536)
353,183

(953,882)
(1,678,918)
1,813,783
—
(4,087)
—
(99,167)
(922,271)
(132,889)
(1,055,160)

446,546
—
(212,782)
(352,048)
(46,001)
(164,285)
(74,010)
(238,295)
844

3,448
(1,156,735)
1,730,335
573,600

15,090
365,382
1,364,953
1,730,335

22,226
(917,202)
2,282,155
1,364,953

The accompanying notes are an integral part of these consolidated financial statements.

F-8

NII HOLDINGS, INC. (DEBTOR-IN-POSSESSION) AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Summary of Operations

The services we currently offer include:

•

mobile telephone voice service;

wireless data services, including text messaging services, mobile internet services and email services;

push-to-talk services, including Direct Connect®, Prip and International Direct Connect® services, which allow
subscribers to talk to each other instantly;

business solutions, such as security, work force management, logistics support and other applications that help our
business subscribers improve their productivity; and

voice and data roaming services outside of our coverage areas.

F-9

NII HOLDINGS, INC. (DEBTOR-IN-POSSESSION) AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Chapter 11 Filing

Overview.

On March 5, 2015, certain of the debtors, holders of approximately $1.93 billion, or 70%, of the senior notes issued by NII
Capital Corp. and approximately $1.15 billion, or 72%, of the senior notes issued by NIIT, which we refer to collectively as the
Consenting Creditors, and the Committee reached agreement regarding the terms of a revised plan of reorganization, which we
refer to as the Revised Plan, that takes into account the impact of, and is contingent upon, the sale of Nextel Mexico. Certain
debtors, the Consenting Creditors and the Committee entered into a Revised PSA that governs the respective parties' obligations
in connection with the formulation, filing and solicitation of votes with respect to the Revised PSA. The Revised Plan will provide
for, among other things, the distribution of a portion of the net proceeds of the sale of Nextel Mexico to holders of the senior notes
issued by NII Capital Corp. and NIIT and for the conversion of the remaining balance of these senior notes into equity interests
in the reorganized company. The Revised Plan will also include a settlement of certain estate claims and claims related to the
purported release of certain guarantees of our NII Capital Corp. senior notes due 2016 and 2019. The terms of the Revised PSA
do not provide for any return of value to equity holders. In addition, the Revised PSA requires, among other things, (i) the plan
proponents to file and solicit votes on the Revised Plan; (ii) the consenting parties to vote in favor of and otherwise support the
Revised Plan; and (iii) the parties thereto to use commercially reasonable efforts to obtain confirmation of the Revised Plan and
consummate the transactions contemplated under the plan term sheet that is part of the Revised PSA. The Revised PSA may be
terminated under various circumstances, including if the Revised Plan is not confirmed or is not confirmed by specified dates.

The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the
realization of assets and the satisfaction of liabilities in the normal course of business. The circumstances leading to our decision

F-10

NII HOLDINGS, INC. (DEBTOR-IN-POSSESSION) AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

to seek relief under Chapter 11 and their impact on our business, including on our liquidity and the uncertainties associated with
the Chapter 11 process, in combination with the potential impact of our failure to satisfy certain financial covenants under our
existing debt obligations, raise substantial doubt about our ability to continue as a going concern. See Note 9 for more information
on financial covenants. These consolidated financial statements do not include any adjustments that might result from the outcome
of any of the uncertainties described herein.

Liabilities Subject to Compromise.

We have segregated liabilities and obligations whose treatment and satisfaction are dependent on the outcome of our
reorganization in the Chapter 11 proceedings and have classified these items as liabilities subject to compromise. Generally, all
actions to enforce or otherwise effect repayment of pre-petition liabilities of the debtors, as well as all pending litigation against
the debtors, are stayed while we are subject to the Chapter 11 proceedings. The ultimate amount of and settlement terms for these
types of liabilities will be subject to the claims resolution processes in the Chapter 11 cases and the terms of any plan of reorganization
confirmed by the Bankruptcy Court in the Chapter 11 cases. Only those liabilities that are obligations of the debtors (and not the
obligations of our operating subsidiaries that are not debtors in the Chapter 11 cases) are included in liabilities subject to compromise.
These liabilities subject to compromise may vary significantly from the stated amounts of claims filed with the Bankruptcy Court.
Obligations classified as liabilities subject to compromise may be subject to future adjustments depending on the decisions of the
Bankruptcy Court in the Chapter 11 cases, further developments with respect to potential disputed claims and/or determination
as to the value of any collateral securing claims or other events. Further, additional claims may arise subsequent to the Chapter
11 filing date resulting from the rejection of executory contracts and from a determination by the Bankruptcy Court, or agreed to
by parties in interest, of allowed claims for contingencies and other disputed amounts.

We report interest expense incurred subsequent to our Chapter 11 filing date only to the extent that it will be paid during the
cases or that it is probable that it will be an allowed claim. Principal and interest payments may not be made on pre-petition debt
subject to compromise without approval from the Bankruptcy Court or until a plan of reorganization defining the repayment terms,
if any, has been confirmed. Further, the Bankruptcy Code generally disallows the payment of post-petition interest that accrues
with respect to unsecured or undersecured claims. As a result, we have not accrued interest that we believe is not probable of being
treated as an allowed claim in the Chapter 11 cases. As a result, during the year ended December 31, 2014, we did not accrue
interest aggregating $119.6 million on our NII Capital Corp. and NIIT senior notes subsequent to our Chapter 11 filing date.

As of December 31, 2014, we classified the entire principal balance of our NII Capital Corp. and NIIT senior notes, as well
as interest that was accrued and due but unpaid prior to our Chapter 11 filing date, as liabilities subject to compromise in accordance
with the requirements of reorganization accounting since these notes are obligations of the debtors. The components of our liabilities
subject to compromise are as follows (in thousands):

7.625% Capital Corp. senior notes due 2021
8.875% Capital Corp. senior notes due 2019
10.0% Capital Corp. senior notes due 2016
7.875% NII International Telecom S.C.A. senior notes due 2019

11.375% NII International Telecom S.C.A. senior notes due 2019
Total debt subject to compromise

Accrued interest on debt subject to compromise

Accounts payable

Accrued expenses and other
Total liabilities subject to compromise

December 31,
2014

1,450,000
500,000
800,000
700,000

900,000

4,350,000

203,010

3,644

36,839

4,593,493

F-11

NII HOLDINGS, INC. (DEBTOR-IN-POSSESSION) AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Reorganization Items.

We classify all income, expenses, gains or losses that are incurred or realized as a result of the commencement of the Chapter
11 cases as reorganization items in our consolidated statements of comprehensive loss. In addition, we report professional fees
and related costs associated with and incurred during the Chapter 11 cases as reorganization items. We also reclassify interest
income earned by the debtors that would not have been earned but for our Chapter 11 filing as reorganization items. During 2014,
we wrote off $8.6 million in net unamortized discounts and premiums, as well as $48.2 million in unamortized financing costs
related to all series of our NII Capital Corp. and NIIT senior notes, both of which are included as reorganization items in our
consolidated statements of comprehensive loss. We also recognized $14.8 million in professional fees and other costs related to
our Chapter 11 filing as reorganization items in our consolidated statements of comprehensive loss for the year ended December
31, 2014.

In accordance with the requirements of reorganization accounting, the following are condensed combined financial statements

of the debtor entities:

NII HOLDINGS, INC. AND CERTAIN SUBSIDIARIES (DEBTORS-IN-POSSESSION) (1)
CONDENSED COMBINED BALANCE SHEET
(in thousands)

ASSETS

Current assets

Cash and cash equivalents
Short-term intercompany receivables
Accounts receivable, prepaid expenses and other

Total current assets

Property, plant and equipment, net
Intangible assets, net
Investments in and advances to non-debtor subsidiaries
Long-term intercompany receivables
Other assets

Total assets

LIABILITIES AND STOCKHOLDERS’ DEFICIT

Liabilities not subject to compromise

Current liabilities

Accounts payable
Accrued expenses and other
Total current liabilities

Other long-term liabilities

Total liabilities not subject to compromise

Liabilities subject to compromise
Intercompany liabilities subject to compromise

Total liabilities
Total stockholders’ deficit

Total liabilities and stockholders’ deficit

December 31,
2014

321,690
127,215
16,584
465,489
48,167
18,000
423,163
1,712,199
1,339
2,668,357

1,996
20,257
22,253
4,805
27,058
4,593,493
12,570
4,633,121
(1,964,764)
2,668,357

_______________________________________
(1) The condensed combined balance sheet above includes those subsidiaries of NII Holdings, Inc. that had filed voluntary petitions
seeking protection under Chapter 11 of the U.S. Bankruptcy Code as of December 31, 2014. These debtor subsidiaries consisted
of: Nextel International Services, Ltd.; NII Capital Corp.; NII Aviation, Inc.; NII Funding Corp.; NII Global Holdings, Inc.;
NII International Telecom S.C.A.; NII International Holdings S.à r.l.; NII International Services S.à r.l.; Airfone Holdings,
LLC; Nextel International (Uruguay), LLC; McCaw International (Brazil), LLC; and NII Mercosur, LLC.

F-12

NII HOLDINGS, INC. (DEBTOR-IN-POSSESSION) AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NII HOLDINGS, INC. AND CERTAIN SUBSIDIARIES (DEBTORS-IN-POSSESSION) (1)
CONDENSED COMBINED STATEMENT OF COMPREHENSIVE LOSS
(in thousands)

Operating revenues
Operating expenses

Selling, general and administrative
Impairment and restructuring charges
Management fee and other
Depreciation and amortization

Operating loss
Other expense

Interest expense, net
Intercompany interest expense
Interest income
Intercompany interest income
Equity in losses of non-debtor subsidiaries
Other income, net

Loss before reorganization items and income tax provision
Reorganization items
Income tax provision
Net loss

Year Ended
December 31,

2014

351

148,538
63,393
(49,010)
19,309
182,230
(181,879)

(287,630)
(50)
900
34,507
(1,460,247)
8,302
(1,704,218)
(1,886,097)
(71,601)
—
(1,957,698)

Comprehensive loss, net of income taxes
Foreign currency translation adjustment
Reclassification adjustment for sale of Nextel Chile
Other
Other comprehensive loss
Net loss
Total comprehensive loss
_______________________________________
(1) The condensed combined statement of comprehensive loss above includes those subsidiaries of NII Holdings, Inc. that had
filed voluntary petitions seeking protection under Chapter 11 of the U.S. Bankruptcy Code as of December 31, 2014. These
debtor subsidiaries consisted of: Nextel International Services, Ltd.; NII Capital Corp.; NII Aviation, Inc.; NII Funding Corp.;
NII Global Holdings, Inc.; NII International Telecom S.C.A.; NII International Holdings S.à r.l.; NII International Services
S.à r.l.; Airfone Holdings, LLC; Nextel International (Uruguay), LLC; McCaw International (Brazil), LLC; and NII Mercosur,
LLC.

(340,847)
(33,885)
(544)
(375,276)
(1,957,698)
(2,332,974)

F-13

NII HOLDINGS, INC. (DEBTOR-IN-POSSESSION) AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NII HOLDINGS, INC. AND CERTAIN SUBSIDIARIES (DEBTORS-IN-POSSESSION) (1)
CONDENSED COMBINED STATEMENT OF CASH FLOWS
(in thousands)

Cash flows from operating activities:
Net loss
Adjustments to reconcile net loss to net cash used in operating activities

Net cash used in operating activities

Cash flows from investing activities:

Capital expenditures
Proceeds from sales of fixed assets
Proceeds from sales of investments
Intercompany long-term loans
Investments in and advances to non-debtor subsidiaries
Changes in restricted cash

Net cash used in investing activities

Cash flows from financing activities:

Repayments under capital lease and other
Other, net

Net cash used in financing activities
Net decrease in cash and cash equivalents
Cash and cash equivalents, beginning of year
Cash and cash equivalents, end of year

Year Ended
December 31,

2014

(1,957,698)
1,606,769
(350,929)

(7,012)
32,390
198,007
(542,000)
(124,532)
25,300
(417,847)

(42,414)
(396)
(42,810)
(811,586)
1,133,276
321,690

_______________________________________
(1) The condensed combined statement of cash flows above includes those subsidiaries of NII Holdings, Inc. that had filed
voluntary petitions seeking protection under Chapter 11 of the U.S. Bankruptcy Code as of December 31, 2014. These debtor
subsidiaries consisted of: Nextel International Services, Ltd.; NII Capital Corp.; NII Aviation, Inc.; NII Funding Corp.; NII
Global Holdings, Inc.; NII International Telecom S.C.A.; NII International Holdings S.à r.l.; NII International Services S.à
r.l.; Airfone Holdings, LLC; Nextel International (Uruguay), LLC; McCaw International (Brazil), LLC; and NII Mercosur,
LLC.

F-14

NII HOLDINGS, INC. (DEBTOR-IN-POSSESSION) AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Summary of Significant Accounting Policies

Use of Estimates. The preparation of financial statements in conformity with accounting principles generally accepted in
the United States, or the U.S., requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities
and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Due to the inherent uncertainty involved in making estimates, actual results to be reported
in future periods could differ from our estimates.

Principles of Consolidation. The consolidated financial statements include the accounts of NII Holdings and our
subsidiaries. Our decision to consolidate an entity is based on our control of the entity through direct and indirect majority interest
in the entity. We eliminate all significant intercompany transactions, including intercompany profits and losses, in consolidation.

We refer to our subsidiaries by the countries in which they operate, such as Nextel Brazil, Nextel Mexico and Nextel Argentina.

Concentrations of Risk. All of our revenues are generated from our operations located in Brazil, Mexico and Argentina.
Regulatory entities in each country regulate the licensing, construction, acquisition, ownership and operation of our networks, and
certain other aspects of our business, including some of the rates we charge our subscribers. Changes in the current
telecommunications statutes or regulations in any of these countries could adversely affect our business. In addition, as of
December 31, 2014 and 2013, $4.7 billion and $6.4 billion, respectively, of our assets were owned by Nextel Brazil and Nextel
Mexico. Political, financial and economic developments in Brazil and Mexico could impact the recoverability of our assets.

Motorola Solutions is the primary supplier for iDEN network equipment, and Motorola Mobility is the primary supplier of
iDEN handsets. We expect to continue to rely on Motorola Solutions and Motorola Mobility for iDEN network equipment and
handsets. The recent significant reduction in demand for iDEN network equipment and handsets may make it uneconomical for
Motorola Solutions to continue to provide the same level of ongoing support for our iDEN networks and could also affect Motorola
Mobility's ability or willingness to provide iDEN handsets. As a result, we may not be able to adequately service our existing
iDEN subscribers or attract new iDEN subscribers. The impact of this transition is particularly significant in Argentina where we
do not currently hold spectrum that supports the deployment of a WCDMA or LTE network.

Financial instruments that potentially subject us to significant amounts of credit risk consist of cash, cash equivalents, short-
term investments and accounts receivable. Our cash and cash equivalents are deposited with high-quality financial institutions. At
times, we maintain cash balances in excess of Federal Deposit Insurance Corporation (or the foreign country equivalent institution)
limits. Our short-term investments are composed of investments in U.S. treasury securities, investments in corporate bonds and
certain investments made by Nextel Brazil and Nextel Argentina. See Note 10 for further information. Our accounts receivable
are generally unsecured. In some cases, for certain higher risk subscribers, we require a subscriber deposit. We routinely assess
the credit worthiness of our subscribers and maintain allowances for probable losses, where necessary.

Foreign Currency. We translate the results of operations for our non-U.S. subsidiaries and affiliates from the designated
functional currency to the U.S. dollar using average exchange rates during the relevant period, while we translate assets and
liabilities at the exchange rate in effect at the reporting date. We translate equity balances at historical rates. We report the resulting
gains or losses from translating foreign currency financial statements as other comprehensive income or loss.

In general, monetary assets and liabilities held by our operating subsidiaries that are denominated in U.S. dollars give rise
to realized and unrealized foreign currency transaction gains and losses, which we record in the consolidated statement of
comprehensive loss as foreign currency transaction losses, net. We report the effects of changes in exchange rates associated with
certain U.S. dollar-denominated intercompany loans and advances to our foreign subsidiaries that are of a long-term investment
nature as other comprehensive income or loss in our consolidated financial statements. We have determined that certain U.S. dollar-
denominated intercompany loans and advances to Nextel Brazil are of a long-term investment nature.

The authorities in some of our markets have, from time to time, used formal and informal restrictions to limit the convertibility
of currency and our ability to repatriate capital from our market operations to their parent companies. For example, the Argentine
government continues to impose formal and informal limitations on our ability to repatriate funds and repay intercompany
contractual obligations.

Cash and Cash Equivalents. We consider all highly liquid investments with an original maturity of three months or less
at the time of purchase to be cash equivalents. Cash equivalents primarily consist of money market funds and other similarly
structured funds. As of December 31, 2014 and 2013, we had $200.3 million and $738.9 million, respectively, in time deposits.

Short-Term Investments. We classify investments in debt securities as available-for-sale as of the balance sheet date and
report them at fair value. We record unrealized gains and losses, net of income tax, as other comprehensive income or loss. We

F-15

NII HOLDINGS, INC. (DEBTOR-IN-POSSESSION) AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

report realized gains or losses, as determined on a specific identification basis, and other-than-temporary declines in value, if any,
in net other expense in our consolidated statement of comprehensive loss. We assess declines in the value of individual investments
to determine whether the decline is other-than-temporary and thus the investment is impaired. We make these assessments by
considering available evidence, including changes in general market conditions, specific industry and individual company data,
the length of time and the extent to which the market value has been less than cost, the financial condition and near-term prospects
of the individual company and our intent and ability to hold the investment. See Note 10 for additional information.

Handset and Accessory Inventory. We record handsets and accessories at the lower of cost or market. We determine cost
by the weighted average costing method. We expense handset costs at the time of sale and classify such costs in cost of handsets
and accessories. Inventory cost includes amounts associated with non-income based taxes.

We analyze the net realizable value and replacement cost of handset and accessory inventory on a periodic basis. This analysis
includes an assessment of the obsolescence of individual devices, our sales forecasts and other factors. For the years ended
December 31, 2014, 2013 and 2012, we recorded losses related to inventory obsolescence of $40.8 million, $70.2 million and $1.5
million, respectively, which included $14.1 million in 2013 related to expected losses on firm purchase commitments.

Property, Plant and Equipment. We record property, plant and equipment, including improvements that extend useful
lives or enhance functionality, at cost, while we charge maintenance and repairs to operations as incurred. We capitalize internal
and external costs incurred to develop internal-use software, which consist primarily of costs related to configuration, interfaces,
installation and testing. We also capitalize internal and external costs incurred to develop specified upgrades and enhancements if
they result in significant additional functionalities for our existing software. We expense all costs related to evaluation of software
needs, data conversion, training, maintenance and other post-implementation operating activities.

We calculate depreciation using the straight-line method based on estimated useful lives ranging from 3 to 30 years for
network equipment, communication towers and software and 3 to 10 years for office equipment, furniture and fixtures, and other,
which includes non-network internal use software. We include depreciation expense on our capital leases in accumulated
depreciation. We amortize leasehold improvements over the shorter of the lease terms or the useful lives of the improvements.

Construction in progress includes internal and external labor, materials, transmission and related equipment, engineering,
site development, interest and other costs relating to the construction and development of our digital wireless networks. We do not
depreciate assets under construction until they are ready for their intended use. We capitalize interest and other costs, including
labor and software upgrades, which are applicable to the construction of, and significant improvements that enhance functionality
to, our network equipment.

We periodically review the depreciation method, useful lives and estimated salvage value of our property, plant and equipment

and revise those estimates if current estimates are significantly different from previous estimates.

During the fourth quarter of 2013, we reviewed the useful lives of our communication towers and determined that the useful
lives of some of these towers should be increased to 30 years compared to the 10- or 15-year useful lives over which we were
previously depreciating these sites. As a result of this change in useful lives, our depreciation expense decreased by approximately
$80.0 million in 2014.

Asset Retirement Obligations. We record an asset retirement obligation and an associated asset retirement cost when we
have a legal obligation in connection with the retirement of tangible long-lived assets. Our obligations arise from certain of our
leases and relate primarily to the cost of removing our communication towers and network equipment from leased sites. We
recognize an asset retirement obligation, and the associated asset retirement cost, in the period in which it is incurred at fair value
computed using discounted cash flow techniques. The liability is then accreted over time until the obligation is settled and the
asset retirement cost is depreciated over the useful life of the related assets.

We make adjustments for changes to either the timing or amount of the estimated future settlement obligation in the period
incurred. We recognize increases in the present value of the asset retirement obligations as an additional liability and add this
amount to the carrying amount of the associated asset retirement cost. We record decreases as a reduction in both the recorded
liability and the carrying amount of the associated asset retirement cost. To the extent that the decrease in the recorded liability
exceeds the carrying amount of the associated asset retirement cost, we record the excess as a component of operating income.
For the year ended December 31, 2013, we recorded a $75.9 million reduction to our asset retirement obligations as the result of
a change in the timing and amount of estimated future settlements, of which $48.3 million represented the amount of the liability
that was in excess of the carrying amount of the associated asset retirement cost.

As of December 31, 2014 and 2013, our asset retirement obligations were as follows (in thousands):

F-16

NII HOLDINGS, INC. (DEBTOR-IN-POSSESSION) AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Balance, January 1

New asset retirement obligations

Change in assumptions

Accretion

Settlement of asset retirement obligations

Foreign currency translation and other

Balance, December 31

2014

2013

49,879

102,465

8,718
(2,096)
6,531
(9,844)
(9,650)
43,538

18,292
(75,900)
17,171

323
(12,472)
49,879

Derivative Financial Instruments. We enter into derivative transactions for risk management purposes only. We have not
and will not enter into any derivative transactions for speculative or profit generating purposes. As of December 31, 2014 and
2013, the values of our derivative instruments were not material.

Valuation of Long-Lived Assets. We review long-lived assets such as property, plant and equipment and identifiable
intangible assets with definite useful lives, which include our licenses, for impairment whenever events or changes in circumstances
indicate that the carrying amount may not be recoverable. If the total of the expected undiscounted future cash flows of the asset
or asset group is less than the carrying amount of the asset, we recognize a loss, if any, for the difference between the fair value
and carrying value of the asset.

Intangible Assets. Substantially all of our intangible assets are wireless telecommunications licenses. We amortize our
intangible assets using the straight-line method over the estimated period benefited. We amortize licenses acquired after our
emergence from reorganization in 2002 over their estimated useful lives of 3 to 20 years. In the countries in which we operate,
licenses are customarily issued conditionally for specified periods of time ranging from 10 to 40 years, including renewals. The
licenses are generally renewable provided the licensee has complied with applicable rules and policies. We believe we have
complied with these standards in all material respects. However, the political and regulatory environments in the markets we serve
are continuously changing and, in many cases, the renewal fees could be significant. Therefore, we do not view the renewal of our
licenses to be perfunctory. In addition, the wireless telecommunications industry is experiencing significant technological change,
and the commercial life of any particular technology is difficult to predict. Our licenses in Mexico give us the right to use 800 MHz
spectrum that is non-contiguous, and the iDEN technology is the only commercially available technology that operates on non-
contiguous spectrum. As a result, our ability to deploy new technologies using 800 MHz spectrum in Mexico may be limited. In
light of these uncertainties, we classify our licenses as definite lived intangible assets.

Revenue Recognition. Operating revenues primarily consist of wireless service revenues and revenues generated from the
sale of handsets and accessories. We present our operating revenues net of value-added taxes, but we include certain revenue-
based taxes that are our primary obligation.

Service revenues primarily consist of fixed monthly access charges. Other components of service revenue include revenues
from calling party pays programs, where applicable, variable charges for airtime usage in excess of plan minutes, long-distance
charges, international roaming revenues derived from calls placed by our subscribers on other carriers’ networks and revenues
generated from broadband data services we provide on our WCDMA networks, net of credits and adjustments for service discounts
and value-added taxes. We recognize excess usage, local, long distance and calling party pays revenue at contractual rates per
minute as minutes are used. We record cash received in excess of revenues earned as deferred revenues. We recognize service
revenue as service is provided. We recognize handset revenue when title and risk of loss passes to the customer.

We bill excess usage to certain of our subscribers in arrears. In order to recognize the revenues originating from excess usage
subsequent to subscriber invoicing, we estimate the unbilled portion based on the usage that the handset had during the part of the
month already billed, and we use this actual usage to estimate the unbilled usage for the rest of the month taking into consideration
working days and seasonality. Our estimates are based on our experience in each market. We periodically evaluate our estimates
by comparing them to actual excess usage revenue billed the following month. While our estimates have been consistent with our
actual results, actual usage in future periods could differ from our estimates.

Other revenues primarily include amounts generated from our handset maintenance programs, roaming revenues generated
from other companies’ subscribers that roam on our networks and co-location rental revenues from third party tenants that rent
space on our towers. We recognize revenue generated from our handset maintenance programs on a monthly basis at fixed amounts
over the service period. We recognize roaming revenues at contractual rates per minute as minutes are used. We recognize co-
location revenues from third party tenants on a monthly basis based on the terms set by the underlying agreements.

F-17

NII HOLDINGS, INC. (DEBTOR-IN-POSSESSION) AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Revenue-Based Taxes. We record revenue-based taxes and other excise taxes on a gross basis as a component of both
service and other revenues and selling, general and administrative expenses in our consolidated financial statements. For the years
ended December 31, 2014, 2013 and 2012, we had $120.6 million, $166.0 million and $211.5 million, respectively, in revenue-
based taxes and other excise taxes.

Accounts Receivable. Accounts receivable represents amounts due from subscribers, net of an allowance for doubtful
accounts, and includes amounts that have been billed to customers and amounts that have not yet been billed. Trade accounts
receivable consists of fixed monthly charges, as well as charges for excess and roaming minutes used in arrears.

Subscriber Related Direct Costs. We recognize all costs of handset sales when title and risk of loss passes upon delivery

of the handset to the subscriber.

Advertising Costs. We expense costs related to advertising and other promotional expenditures as incurred. Advertising
costs totaled $146.9 million, $142.5 million and $159.8 million during the years ended December 31, 2014, 2013 and 2012,
respectively.

Stock-Based Compensation. We measure and recognize compensation expense for all stock-based compensation awards
based on estimated fair values. We account for share-based awards exchanged for employee services in accordance with the
authoritative guidance for stock compensation. Under the guidance, stock compensation expense is measured at the grant date,
based on the estimated fair value of the award when settled in shares, and is recognized, net of estimated forfeitures, over the
employee's requisite service period. Compensation expense is amortized on a straight-line basis over the requisite service period
for the entire award, which is generally the maximum vesting period of the award. Our stock options and restricted shares generally
vest thirty-three percent per year over a three-year period. See Note 14 for more information.

Net Loss Per Common Share, Basic and Diluted. Basic net loss per common share is computed by dividing adjusted net
loss attributable to common shares by the weighted average number of common shares outstanding for the period. Diluted net loss
per common share reflects the potential dilution of securities that could participate in our earnings, but not securities that are
antidilutive, including stock options with an exercise price greater than the average market price of our common stock.

Our unvested restricted stock awards, or RSAs, contain non-forfeitable rights to dividends, whether paid or unpaid. As a
result, our RSAs are considered participating securities because their holders have the right to participate in earnings with common
stockholders. We use the two-class method to allocate net income between common shares and other participating securities.

As presented for the years ended December 31, 2014, 2013 and 2012, our calculation of diluted net loss per common share
is based on the weighted average number of common shares outstanding during the period and does not include other potential
common shares, including shares issuable upon the potential exercise of stock options under our stock-based employee
compensation plans or restricted common shares issued under those plans. In addition, for the years ended December 31, 2014,
2013 and 2012, we did not include 5.4 million, 10.8 million or 16.8 million stock options, respectively, and 0.9 million, 2.8 million
or 2.0 million in restricted stock, respectively, in our calculation of diluted net loss per common share because their effect would
have been antidilutive to our net loss per common share for those periods.

Income Taxes. We account for income taxes using the asset and liability method, under which we recognize deferred income
taxes for the tax consequences attributable to differences between the financial statement carrying amounts and the tax bases of
existing assets and liabilities, as well as for tax loss carryforwards and tax credit carryforwards. We measure deferred tax assets
and liabilities using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are
expected to be recoverable or settled. We recognize the effect on deferred taxes of a change in tax rates in income in the period
that includes the enactment date. We provide a valuation allowance against deferred tax assets if, based upon the weight of available
evidence, we do not believe it is “more-likely-than-not” that some or all of the deferred tax assets will be realized.

Reclassifications. We have reclassified some prior period amounts in our consolidated financial statements to conform to

our current year presentation.

New Accounting Pronouncements. On May 28, 2014, the Financial Accounting Standards Board, or the FASB, issued
new authoritative guidance surrounding revenue recognition, which requires an entity to recognize the amount of revenue to which
it expects to be entitled for the transfer of promised goods or services to customers. This new authoritative guidance will replace

F-18

NII HOLDINGS, INC. (DEBTOR-IN-POSSESSION) AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

most existing revenue recognition guidance when it becomes effective. The new standard is effective on January 1, 2017, and early
application is not permitted. The standard permits the use of either the retrospective or cumulative effect transition method. We
are evaluating the effect that the new revenue recognition guidance will have on our consolidated financial statements and related
disclosures. We have not yet selected a transition method nor have we determined the effect of the standard on our ongoing financial
reporting.

Impairment and Restructuring Charges

Asset Impairments.

In accordance with the FASB's authoritative guidance on the impairment and disposal of long-lived assets, we review our
long-lived assets for impairment whenever events and circumstances indicate that the carrying amount of the asset or asset group
may not be recoverable. The recoverability of an asset or asset group held and used is measured by a comparison of the carrying
amount of the asset or asset group to the estimated and undiscounted future cash flows expected to be generated by the asset or
asset group.

Although we plan to continue to support our operations in Argentina, we are also exploring various strategic options for this
market, such as partnerships, service arrangements and asset sales, to maximize the value of Nextel Argentina and generate
additional liquidity. As a result of the review of our long-lived assets and our exploration of strategic options for Nextel Argentina
in 2014, we determined that the carrying value of Nextel Argentina's asset group, which includes all of the operating assets and
liabilities held by our Argentine segment, was not recoverable. Accordingly, we recorded a non-cash asset impairment charge of
$84.7 million to reduce the carrying amount of the asset group to its estimated fair value. We estimated the fair value of Nextel
Argentina's asset group using assumed proceeds from a potential disposition, which is a Level 3 input within the fair value hierarchy
under the FASB's authoritative guidance on fair value measurements. During 2014, we also tested the long-lived assets in our
Nextel Brazil and Nextel Mexico segments for recoverability and, based on our estimates of undiscounted cash flows, determined
the carrying values to be recoverable. Our estimates of undiscounted cash flows for each asset group exceeded the carrying value
of the respective asset groups.

In 2014, we evaluated strategic options for the next generation of our push-to-talk services and determined that, for one of
these options, further development was no longer probable. As a result, we recognized a $47.9 million asset impairment charge,
$5.1 million of which was recognized by Nextel Mexico and the remainder of which was recognized at the corporate level.

We recognized a $6.4 million asset impairment charge at the corporate level related to the sale of our corporate aircraft in

2014.

During 2014, we also recognized $25.5 million in asset impairment charges, the majority of which related to the shutdown
or abandonment of approximately 300 transmitter and receiver sites in Brazil and Mexico and about 50 retail store closures in
Brazil related to the realignment of our distribution channels.

In 2013, we discontinued the use of software previously developed to support our customer relationship management systems.
As a result of this evaluation, in the first quarter of 2013, we recognized an asset impairment charge of $85.3 million related to
the discontinuation of this software, of which $76.3 million was recognized at the corporate level and $9.0 million was recognized
by Nextel Mexico.

F-19

NII HOLDINGS, INC. (DEBTOR-IN-POSSESSION) AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

We recognized a $5.9 million asset impairment at the corporate level in 2013 related to the discontinuation of the development

of certain network features.

During 2012, we recognized $22.8 million in asset impairment charges, the majority of which related to the write-off of

certain information technology projects at the corporate level.

Restructuring Charges.

During 2014, we recognized $48.4 million in severance and related costs as a result of the termination of employees at the

corporate level and in our markets. These actions included the separation of:

• approximately 85 employees at the corporate level, all of whom were severed in the second quarter of 2014;

• approximately 800 employees in Brazil, all of whom were severed in the third quarter of 2014;

• approximately 1,170 employees in Mexico, 800 of whom were severed in the second quarter of 2014 and the remainder

of whom were severed in the third quarter of 2014; and

• about 20 employees in Argentina, all of whom were severed in the second half of 2014.

We terminated these employees in an effort to streamline our organizational structure and reduce general and administrative

expenses.

In 2009, we outsourced our network operations to a third party. During 2013, we restructured and amended this agreement,
reduced the scope of the services provided, added terms to facilitate the transition of those services to us and established the terms
on which further transitions of services and the termination of the arrangements could be implemented in each of our markets.
Under the outsourcing agreements in effect prior to this restructuring, we classified a portion of the base contractual fees as a
prepayment and were recognizing this prepayment over the life of the previous agreement. As a result of this restructuring, we
recognized a non-cash charge of $38.2 million relating to the write-off of the remainder of the prepayment during 2013. In 2014,
we settled certain refund claims related to this outsourcing agreement, which resulted in a restructuring benefit of $3.2 million.

During 2014, we recognized a $4.5 million charge related to the cessation of our utilization of certain network services in

Brazil.

In 2013, we recognized $30.1 million in restructuring charges, the majority of which was related to the separation of
approximately 800 employees at the corporate level and in Mexico, in connection with an organizational realignment plan that we
designed to simplify the roles and responsibilities of both our headquarters and market organizations and to reduce general and
administrative expenses.

During 2013, we recognized $6.8 million in contract termination costs incurred in connection with the sublease of certain

excess space located in one of our corporate office buildings.

During 2012, we recognized $7.6 million in restructuring charges at the corporate level, primarily related to the separation
of approximately 50 employees in conjunction with certain actions taken to realign resources and roles between our corporate
headquarters and operating segments.

Total impairment and restructuring charges for the years ended December 31, 2014, 2013 and 2012 were as follows (in

thousands):

F-20

NII HOLDINGS, INC. (DEBTOR-IN-POSSESSION) AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Brazil

Mexico

Argentina

Corporate

December 31,

2014

2013

2012

41,492

24,515

2,437

26,256

89,601

63,393

39,057

7,908

97,063

439

27,452

30,401

Total impairment and restructuring charges

220,742

168,543

As of December 31, 2014, the total of our accrued restructuring charges that we expect to pay in 2015 were as follows (in

thousands):

Balance, January 1, 2014

Restructuring charges

Cash payments
Balance, December 31, 2014

15,410

56,260
(63,420)
8,250

Discontinued Operations

Impairment and Sale of Nextel Chile. In the second quarter of 2014, we determined that the carrying value of Nextel Chile's
assets was not recoverable. As a result, we recognized a non-cash impairment charge of $127.5 million to impair the carrying
amount of Nextel Chile's assets. We estimated the fair value of Nextel Chile's assets using short-term projections of cash flows,
as well as assumed proceeds from a potential disposition of some or all of the assets. The impairment charge we recognized in the
second quarter of 2014 reduced the carrying value of Nextel Chile's net assets to a nominal amount and is included as a component
of operating expenses for the year ended December 31, 2014 in the table below.

In August 2014, our wholly-owned subsidiaries NII Mercosur Telecom, S.L., NII Mercosur Moviles, S.L. and NII International
Telecom S.C.A. completed the sale of all of the outstanding equity interests of our wholly-owned subsidiary, Nextel Chile S.A.,
or Nextel Chile, to Fucata, S.A. for a de minimus amount. During the third quarter of 2014, we recognized a $32.7 million gain
on the disposal of Nextel Chile, which included the reclassification of accumulated other comprehensive income related to Nextel
Chile's cumulative translation adjustment to loss from discontinued operations in connection with this sale.

Sale of Nextel Peru. In August 2013, we, together with our wholly-owned subsidiaries NII Mercosur Telecom, S.L. and NII
Mercosur Moviles, S.L., completed the sale of all of the outstanding equity interests of our wholly-owned subsidiary, Nextel del
Peru, S.A., or Nextel Peru, to Empresa Nacional de Telecomunicaciones S.A. and one of its subsidiaries, Entel Inversiones, S.A.,
which we refer to collectively as Entel, for $405.5 million in cash, which includes $50.0 million that was deposited in escrow on
our behalf to satisfy potential indemnification claims. In 2013, we recognized a $2.8 million loss on the disposal of Nextel Peru
in connection with this sale. In April 2014, we released $7.5 million of the amounts held in escrow to Entel as a result of the
settlement of certain indemnification claims, and in February 2015, we released an additional $2.0 million as a result of the
settlement of certain tax indemnification claims. The remaining funds held in escrow continue to be available to satisfy potential
future indemnification claims.

In connection with the sale of Nextel Chile and Nextel Peru, we have reported the results of these operating companies as
discontinued operations in our consolidated financial statements. Accordingly, we reclassified Nextel Chile's and Nextel Peru's
results of operations for all periods presented to reflect Nextel Chile and Nextel Peru as discontinued operations. Unless otherwise
noted, amounts included in these notes to our consolidated financial statements exclude amounts attributable to discontinued
operations. The major components of loss from discontinued operations related to Nextel Chile and Nextel Peru were as follows
(in thousands):

F-21

NII HOLDINGS, INC. (DEBTOR-IN-POSSESSION) AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Operating revenues
Operating expenses
Other expense, net
Loss before income tax provision
Income tax provision

Gain (loss) on disposal of Nextel Chile and
Nextel Peru

Loss from discontinued operations, net of
income taxes

Year Ended December 31,

2014

2013

38,596
(228,578)
(19,989)
(209,971)
—
(209,971)

265,979
(443,166)
(34,576)
(211,763)
(900)
(212,663)

2012

393,227
(1,010,229)
(2,443)
(619,445)
(63,965)
(683,410)

29,585

(2,848)

—

(180,386) $

(215,511) $

(683,410)

The components of assets and liabilities related to discontinued operations as of December 31, 2013, all of which related

to Nextel Chile, consisted of the following (in thousands):

ASSETS

Cash and cash equivalents

Accounts receivable, net of allowance for doubtful accounts of
$6,762

Handset and accessory inventory

Prepaid expenses and other

Property, plant and equipment, net

Intangible assets, net

Other assets
Total assets

Accounts payable

Accrued expenses and other

Other long-term liabilities
Total liabilities

LIABILITIES

December 31, 2013

3,448

11,157

5,965

38,526

50,515

13,300

46,020

168,931

22,928

13,841

5,326

42,095

F-22

NII HOLDINGS, INC. (DEBTOR-IN-POSSESSION) AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Property, Plant and Equipment

The components of our property, plant and equipment are as follows:

Land

Building and leasehold improvements

Network equipment, communication towers and network software

Software, office equipment, furniture and fixtures and other

Corporate aircraft

Less: Accumulated depreciation and amortization

Construction in progress

Intangible Assets

Our intangible assets include the following:

December 31,

2014

2013

(in thousands)

6,777

137,235

4,074,786

678,300

—
(2,669,566)
2,227,532

7,663

190,258

4,735,361

753,665

42,747
(2,907,939)
2,821,755

205,401

515,790

2,432,933

3,337,545

December 31, 2014

December 31, 2013

Gross Carrying
Value

Accumulated
Amortization

Net Carrying
Value

Gross Carrying
Value

Accumulated
Amortization

Net Carrying
Value

(in thousands)

Amortizable intangible assets:
Licenses

$ 1,091,405
Total amortizable intangible assets $ 1,091,405

$ (287,281) $
$ (287,281) $

804,124
804,124

$ 1,205,450
$ 1,205,450

$ (243,081) $
$ (243,081) $

962,369
962,369

Based on the carrying amount of intangible assets as of December 31, 2014 and current exchange rates, we estimate

amortization expense for each of the next five years to be as follows (in thousands):

Years
2015

2016

2017

2018

2019

Estimated
Amortization
Expense

75,922

Actual amortization expense to be reported in future periods could differ from these estimates as a result of additional
acquisitions of intangibles, as well as changes in exchange rates and other relevant factors. As of both December 31, 2014 and
December 31, 2013, the balance of our indefinite lived intangible assets was $18.0 million. In addition, the weighted average
useful life of the intangible assets we acquired during the year ended December 31, 2014 was 15 years.

F-23

NII HOLDINGS, INC. (DEBTOR-IN-POSSESSION) AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Supplemental Balance Sheet and Cash Flow Information

Prepaid Expenses and Other.

The components are as follows:

Value-added taxes

Income taxes

Other prepaid assets

Other current assets

Restricted Cash.

December 31,

2014

2013

(in thousands)

137,699

207,951

19,632

97,573

74,293

59,054

90,108

40,461

329,197

397,574

As of December 31, 2014, we had $107.8 million in restricted cash, the majority of which was included in other long-term
assets and was comprised of cash held in escrow in connection with the sale of Nextel Peru, judicial deposits in Nextel Brazil and
a debt service reserve account related to Nextel Mexico's equipment financing facility.

As of December 31, 2013, we had $120.5 million in restricted cash, the majority of which was included in other long-term
assets and was comprised of cash held in escrow in connection with the sale of Nextel Peru, a debt service reserve account related
to Nextel Mexico's equipment financing facility, judicial deposits in Nextel Brazil, purchase commitments for handsets and cash
collateral supporting the lease of our corporate headquarters.

Accrued Expenses and Other.

The components are as follows:

Capital expenditures

Non-income based taxes

Payroll related items and commissions

Network system and information technology

Accrued interest

Other

December 31,

2014

2013

(in thousands)

106,295

87,127

66,598

62,229

10,574

230,165

562,988

290,036

114,360

89,435

92,109

128,509

244,610

959,059

Accumulated Other Comprehensive Loss. As of December 31, 2014 and 2013, the tax impact on our accumulated other
comprehensive loss was not material. The components of our accumulated other comprehensive loss, net of taxes, are as follows:

Cumulative foreign currency translation adjustment
Other

December 31, 2014

December 31, 2013

(in thousands)

(1,326,003) $
(5,350)
(1,331,353) $

(951,271)
(4,806)
(956,077)

As of December 31, 2014, our consolidated cumulative foreign currency translation adjustment included $672.4 million in
Brazil, $400.3 million in Mexico and $262.8 million in Argentina. During the third quarter of 2014, we reclassified $33.9 million
of accumulated other comprehensive income to loss from discontinued operations in connection with the sale of Nextel Chile. See
Note 5 for more information.

F-24

NII HOLDINGS, INC. (DEBTOR-IN-POSSESSION) AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Supplemental Cash Flow Information.

Capital expenditures

Cash paid for capital expenditures, including capitalized interest

Change in capital expenditures accrued and unpaid or financed, including
accreted interest capitalized

Interest costs

Interest expense, net

Interest capitalized

Acquisitions of assets and business combinations

Fair value of licenses and other assets acquired

Less: liabilities assumed and deferred tax liabilities incurred

Less: cash acquired

Cash paid for interest, net of amounts capitalized

Cash paid for income taxes

Year Ended December 31,

2014

2013

2012

(in thousands)

612,161

620,895

953,882

(183,741)
428,420

449,345

32,541

481,886

31,861

—

31,861

310,230

24,544

251,199

872,094

526,530

78,254

604,784

53,066

—

53,066

389,064

39,292

351,814

1,305,696

359,795

127,189

486,984

100,185

—

100,185

290,131

269,597

For the year ended December 31, 2014, we had $319.6 million in non-cash financing, primarily related to capital lease
obligations recognized in Brazil and Mexico in connection with the leaseback of communication towers and borrowings under
our equipment financing facility in Mexico. For the year ended December 31, 2013 and 2012, we had $213.5 million and $194.5
million, respectively, in non-cash financing, primarily related to borrowings under our equipment financing facilities in Mexico,
the short-term financing of imported handsets and infrastructure in Brazil and co-location capital lease obligations on our
communication towers in Brazil and Mexico.

Debt

Chapter 11 Filing. On September 15, 2014, NII Holdings, Inc. and eight of its U.S. and Luxembourg-domiciled subsidiaries,
including NII Capital Corp. and NIIT, filed voluntary petitions seeking relief under Chapter 11 in the Bankruptcy Court. Since
September 15, 2014, five additional subsidiaries of NII Holdings, Inc. have filed voluntary petitions seeking relief under Chapter
11 in the Bankruptcy Court, with four subsidiaries filing on October 8, 2014 and one subsidiary filing on January 25, 2015. These
Chapter 11 filings constituted an event of default under the NII Capital Corp. and NIIT senior notes; however, the holders of these
senior notes are currently precluded from taking any action with respect to such events of default under the Bankruptcy Code. As
a result of the commencement of the Chapter 11 cases, the obligations evidenced by the NII Capital Corp. and NIIT senior notes
are included in liabilities subject to compromise on our consolidated balance sheet as of December 31, 2014. See Note 2 for more
information. The financings included in the table below are considered not subject to compromise.

F-25

NII HOLDINGS, INC. (DEBTOR-IN-POSSESSION) AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NII Capital Corp. senior notes, net

NII International Telecom, S.C.A. senior notes, net

Bank loans

Brazil equipment financing

Mexico equipment financing

Mexico capital lease and tower financing obligations

Brazil capital lease and tower financing obligations

Corporate aircraft capital lease

Other

Total debt

Less: current portion

Bank Loans.

December 31,

2014

2013

(in thousands)

— $

2,729,321

—

1,609,962

343,915

366,937

322,993

264,130

213,163

—

1,254

444,268

352,725

300,832

194,227

122,499

35,736

3,901

1,512,392
(777,569)
734,823

5,793,471
(96,839)
5,696,632

In December 2011, Nextel Brazil borrowed funds from two Brazilian banks and utilized the proceeds of those borrowings
to repay the remaining unpaid purchase price relating to the spectrum it acquired in June 2011. Both of the loans from the Brazilian
banks were denominated in Brazilian reais. In the first of the two local bank financings, we borrowed the equivalent of $351.8
million that was required to be repaid semi-annually over a five-year period with principal payable beginning in May 2014. In the
second quarter of 2013, we repaid all amounts outstanding under this local bank financing utilizing a portion of the proceeds from
the issuance of our 7.875% senior notes. In the second transaction, we borrowed the equivalent of $341.2 million that is required
to be repaid quarterly over a seven-year period beginning March 2014. The loan accrues interest at a floating interest rate of 115%
of the Brazilian local borrowing rate (13.40% and 11.39% as of December 31, 2014 and 2013, respectively). Because this loan is
denominated in Brazilian reais, the payments for principal and interest will fluctuate in U.S. dollars based on changes in the
exchange rate of the Brazilian real relative to the U.S. dollar.

In October 2012, Nextel Brazil entered into a Brazilian real-denominated bank loan agreement, under which Nextel Brazil
borrowed the equivalent of approximately $196.9 million. This loan agreement has a floating interest rate equal to 113.9% of the
local Brazilian borrowing rate (13.27% and 11.28% as of December 31, 2014 and 2013, respectively). Borrowings under this loan
agreement have a three-year borrowing period, a two-year repayment term beginning in 2015 and a final maturity of October 2017.

As of December 31, 2014, we were not in compliance with the net debt financial covenants included in each of Nextel
Brazil's outstanding local bank loans. Because of our noncompliance at the December 31 measurement date, we classified the
principal amounts outstanding under these local bank loans as current liabilities in our consolidated balance sheet as of December
31, 2014. In February 2015, Nextel Brazil and the lenders providing the local bank loans entered into standstill agreements under
which the lenders agreed that they would not seek remedies under the provisions of the agreements related to Nextel Brazil's failure
to satisfy the financial covenants in the loan agreements in the period before September 15, 2015 and that further principal repayment
obligations due between the signing date and September 15, 2015 would be suspended. In addition, the standstill agreements
formally commit the lenders to sign amendments, which we refer to as the second amendments, once certain conditions are met
that implement permanent amendments to the terms of the local bank loans, including with respect to the financial covenants and
principal repayment schedule for these loans. Among others, these conditions include:

• our emergence from the Chapter 11 proceedings on or prior to September 15, 2015;

•

the absence of an insolvency event involving Nextel Brazil;

the absence of events of default other than those waived or suspended in the standstill agreements; and

the execution of subordination agreements subordinating any amounts due under intercompany loans between NIIT and
Nextel Brazil.

F-26

NII HOLDINGS, INC. (DEBTOR-IN-POSSESSION) AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In the event of a breach of one or more of the conditions listed above, the lenders providing the local bank loans have the
right to terminate the standstill agreement and exercise all remedies under the agreements in place, including but not limited to
declaring an event of default for noncompliance with the financial covenants and/or nonpayment of amounts due under the
repayment schedule. Following the declaration of an event of default, the lenders will have the right to accelerate the loans and
proceed with claims against the collateral.

Equipment Financing Facilities.

In April 2012, Nextel Brazil entered into a U.S. dollar-denominated loan agreement with the China Development Bank,
under which Nextel Brazil is able to borrow up to $500.0 million to finance infrastructure equipment and certain other costs related
to the deployment of its WCDMA network. This financing has a floating interest rate based on LIBOR plus 2.90% (3.16% and
3.15% as of December 31, 2014 and 2013, respectively) and may limit our ability to pay dividends and other upstream payments.
Loans under this agreement have a three-year borrowing period, a seven-year repayment term beginning in 2015 and a final
maturity of June 2022. Assets purchased using the amounts borrowed under Nextel Brazil's equipment financing facility are pledged
as collateral.

In July 2011, Nextel Mexico entered into a U.S. dollar-denominated loan agreement with the China Development Bank,
under which Nextel Mexico is entitled to borrow up to $375.0 million to finance infrastructure equipment and certain other costs
related to the deployment of its WCDMA network in Mexico. This vendor financing has a floating interest rate based on LIBOR
plus 2.80% (3.06% and 3.05% as of December 31, 2014 and 2013, respectively) and may limit our ability to pay dividends and
other upstream payments. Loans under this agreement have a final maturity of ten years, with a three-year borrowing period and
a seven-year repayment term commencing in 2014. Assets purchased using the amounts borrowed under Nextel Mexico's equipment
financing facility are pledged as collateral.

As of the June 30, 2014 measurement date, we were not in compliance with certain financial covenants in our equipment
financing facilities in Brazil and Mexico. In December 2014, Nextel Brazil and Nextel Mexico and the lender under the equipment
financing facilities agreed to amendments to those facilities that removed all financial covenants beginning with the December
31, 2014 measurement date and continuing through the June 30, 2017 measurement date. In exchange for covenant relief, Nextel
Brazil granted the lender of its equipment financing facility preferential rights to the amounts held in certain bank accounts, and
Nextel Mexico's parent company, Nextel International Uruguay, LLC, granted the lender of its equipment financing facility a
pledge on the shares it holds in Nextel Mexico. In addition, Nextel Brazil and Nextel Mexico have the option to defer principal
amortization payments in exchange for an upfront payment of 17% of the amounts outstanding under the equipment financing
facilities on August 31, 2014. As a result of the amendment of our equipment financing facility in Mexico, we classified the
principal amount outstanding under this facility as long-term debt in our consolidated balance sheet as of December 31, 2014.
Because of certain cross-default provisions included in our equipment financing facility in Brazil, we classified the principal
amount outstanding under this facility as a current liability in our consolidated balance sheet as of December 31, 2014. We do not
have the ability to borrow additional amounts under these equipment financing facilities.

Capital Leases and Tower Financing Obligations.

2013 Tower Transactions. In November 2013, Nextel Mexico sold 1,483 communication towers to American Tower for
proceeds based on foreign currency exchange rates at the time of $374.3 million, subject to purchase price adjustments. During
the adjustment period, Nextel Mexico accounted for this transaction under the deposit method and recorded the proceeds as a
deposit liability. During the third quarter of 2014, the price adjustments were finalized, and we began accounting for the transaction
as a sale-leaseback. As result, we recognized $75.4 million of the gain on the sale of the towers as a component of operating income
in the third quarter of 2014 and deferred the remaining $179.6 million of the gain, which we will recognize into income over the
term of the leaseback of the towers. Nextel Mexico also recognized a capital lease liability of $112.4 million related to the leaseback
of a portion of each of these towers.

F-27

NII HOLDINGS, INC. (DEBTOR-IN-POSSESSION) AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In December 2013, Nextel Brazil sold 1,940 communication towers to American Tower for proceeds based on foreign currency
exchange rates at the time of $348.0 million, subject to purchase price adjustments. Nextel Brazil also sold 103 towers for proceeds
of $18.6 million in June 2014, subject to purchase price adjustments. In October 2014, upon the finalization of the price adjustments,
Nextel Brazil completed the sale of all of these towers and began accounting for this transaction as a sale-leaseback. As a result,
Nextel Brazil recognized an immaterial loss on the sale of the towers as a component of operating income in the fourth quarter of
2014 and deferred a gain of $155.5 million, which we will recognize into income over the term of the leaseback of the towers.
Nextel Brazil also recognized a capital lease liability of $186.5 million related to the leaseback of a portion of each of these towers.

Site-Related Capital Lease Obligations. We have entered into various agreements under which we are entitled to lease space

on towers or other structures owned by third parties and to install our transmitter and receiver equipment in that space.

Tower Financing Obligations. From 2002 to 2008, we sold and subsequently leased back space on certain transmitter and
receiver sites in Brazil and Mexico. Due to our continuing involvement with these properties, we account for these transactions
as financing arrangements. As a result, we did not recognize any gains from the sales of these towers under these arrangements,
and we maintain the tower assets on our consolidated balance sheets. In addition, we recognized the proceeds received as financing
obligations. We recognize ground rent payments as operating expenses in cost of service and tower base rent payments as interest
expense and a reduction in the financing obligation using the effective interest method. In addition, we recognize co-location rent
payments made by the third party lessees to the owner of the site as other operating revenues because of our continuing involvement
with the tower assets. During the years ended December 31, 2014, 2013 and 2012, we recognized $38.5 million, $39.4 million
and $56.8 million , respectively, in other operating revenues related to these co-location lease arrangements.

Corporate Aircraft Lease. In 2009, we entered into an agreement to lease a corporate aircraft, which we accounted for as
a capital lease. In June 2014, we entered into an agreement to sell this corporate aircraft for $32.5 million. In addition, in conjunction
with the sale, we exercised our pre-existing option to purchase this aircraft from the lessor and immediately terminated the lease.
In connection with the sale of the corporate aircraft and the termination of the associated lease, we recognized a $6.4 million asset
impairment charge in the second quarter of 2014.

Debt Maturities.

Because we were unable to meet the financial covenants in our bank loans in Brazil as of the compliance date on December
31, 2014 and because of the associated cross-default provisions included in Nextel Brazil's equipment financing facility, we
classified the principal amounts outstanding under these facilities as due in 2015 for purposes of the table below. For the years
subsequent to December 31, 2014, scheduled annual maturities of all debt outstanding, excluding the obligations evidenced by
the NII Capital Corp. and NIIT senior notes, which are included in liabilities subject to compromise on our consolidated balance
sheet as of December 31, 2014, are as follows (in thousands):

Year

2015
2016

2017

2018

2019

Thereafter

Total

Principal
Repayments

777,569
71,376

77,014

67,416

62,337

456,680

1,512,392

10.

Fair Value Measurements

We estimate the fair value of our long-term debt instruments, our available-for-sale securities, our held-to-maturity

investments and other financial instruments as described below.

The FASB’s authoritative guidance on fair value measurements defines fair value as an exit price, representing the amount
that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such,
fair value is a market-based measurement that is determined based on assumptions that market participants would use in pricing
an asset or liability. Valuation techniques discussed under the FASB’s authoritative guidance for fair value measurements include

F-28

NII HOLDINGS, INC. (DEBTOR-IN-POSSESSION) AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

the market approach (comparable market prices), the income approach (present value of future income or cash flow based on
current market expectations) and the cost approach (cost to replace the service capacity of an asset or replacement cost). As a basis
for considering these assumptions, the guidance utilizes a three-tier fair value hierarchy, which prioritizes the inputs to the valuation
techniques used to measure fair value. The following is a brief description of the three levels in the fair value hierarchy:

Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2: Inputs other than quoted prices in active markets that are observable for the asset or liability, either directly or

indirectly.

Level 3: Unobservable inputs that reflect the reporting entity’s own assumptions.

To the extent that the valuation is based on models or inputs that are less observable or unobservable in the market, the
determination of fair value requires more judgment. Accordingly, the degree of judgment exercised in determining fair value is
greatest for instruments categorized in Level 3. In certain cases, the inputs used to measure fair value may fall into different levels
of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value
measurement falls is determined based on the lowest level input that is significant to the fair value measurement in its entirety.

For assets and liabilities measured at fair value on a non-recurring basis, fair value is determined by using various valuation
approaches. The same hierarchy as described above, which maximizes the use of observable inputs and minimizes the use of
unobservable inputs, by generally requiring that the observable inputs be used when available, is used in measuring fair value for
these items. Fair value may be derived using pricing models. Pricing models take into account the contract terms (including
maturity) as well as multiple inputs, including, where applicable, interest rate yield curves, credit curves, correlation, credit-
worthiness of the counterparty, option volatility and currency rates. In accordance with the FASB’s authoritative guidance for fair
value measurements, the impact of our own credit spreads is also considered when measuring the fair value of liabilities. Where
appropriate, valuation adjustments are made to account for various factors such as credit quality and model uncertainty. These
adjustments are subject to judgment, are applied on a consistent basis and are based upon observable inputs where available. We
generally subject all valuations and models to a review process initially and on a periodic basis thereafter. As fair value is a market-
based measure considered from the perspective of a market participant rather than an entity-specific measure, even when market
assumptions are not readily available, our own assumptions are set to reflect those that we believe market participants would use
when pricing the asset or liability at the measurement date.

Considerable judgment is required in interpreting market data to develop the estimates of fair value. Accordingly, the estimates
presented below are not necessarily indicative of the amounts that we could realize in a current market exchange. The use of
different market assumptions and valuation techniques may have a material effect on the estimated fair value amounts. The
following is a description of the major categories of assets and liabilities measured at fair value on a recurring basis and the
valuation techniques applied to them.

Available-for-Sale Securities.

As of December 31, 2014 and 2013, available-for-sale securities included $110.1 million and $418.6 million, respectively,
in short-term investments made by Nextel Brazil in two investment funds and certificates of deposit with a Brazilian bank. These
funds invest primarily in Brazilian government bonds, long-term, low-risk bank certificates of deposit and Brazilian corporate
debentures. As of December 31, 2014, available-for-sale securities also included $43.5 million in short-term investments made
by Nextel Argentina in local money market funds. All of these securities are either government or corporate rated bonds with
underlying performance linked to the U.S. dollar. During the years ended December 31, 2014, 2013 and 2012, we did not have
any material unrealized gains or losses associated with these investments.

As a result of favorable market conditions during 2013, we sold $150.0 million certificates of deposit for an immaterial gain.
Prior to the third quarter of 2013, we classified these investments as held-to-maturity and recorded them at amortized cost. As a
result of this sale, we transferred the remaining $167.2 million in short-term investments and $31.4 million in long-term investments
held at one of our Spanish subsidiaries from held-to-maturity to available-for-sale and recognized an immaterial unrealized gain,
which we recorded as other comprehensive income in 2013.

We account for our available-for-sale securities at fair value in accordance with the FASB’s authoritative guidance
surrounding the accounting for investments in debt and equity securities. The fair value of the Brazilian and Argentine securities
is based on the net asset value of the funds. In our judgment, these types of securities trade with sufficient daily observable market
activity to support a Level 1 classification within the fair value hierarchy.

F-29

NII HOLDINGS, INC. (DEBTOR-IN-POSSESSION) AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Debt Instruments.

The carrying amounts and estimated fair values of our debt instruments are as follows:

December 31,

2014

2013

Carrying
Amount

Estimated
Fair Value

Carrying
Amount

Estimated
Fair Value

(in thousands)

NII Capital Corp. senior notes, net (1)

2,750,000

648,500

2,729,321

1,227,950

NII International Telecom, S.C.A. senior notes, net (1)

1,600,000

1,166,500

1,609,962

1,271,370

Equipment financing

Bank loans and other

689,930

345,169

620,125

275,653

653,557

448,169

620,173

373,796

5,385,099

2,710,778

5,441,009

3,493,289

__________________________
(1) As of December 31, 2014, both our senior notes held by NII Capital Corp. and our senior notes held by NII International Telecom S.C.A.

are classified as liabilities subject to compromise in our consolidated balance sheet.

We estimated the fair values of our senior notes using quoted market prices. Because our fair value measurement is based

on market prices in an active market, we consider this Level 1 in the fair value hierarchy.

Bank loans and other consists primarily of loans with certain banks in Brazil and Mexico. We estimated the fair value of
these bank loans, as well as the fair value of our equipment financing facilities, utilizing inputs such as U.S. Treasury security
yield curves, prices of comparable bonds, LIBOR and zero-coupon yield curves, U.S. Treasury bond rates and credit spreads on
comparable publicly traded bonds and consider these measurements to be Level 2 in the fair value hierarchy.

Other Financial Instruments.

The carrying values of cash and cash equivalents, accounts receivable and accounts payable contained in our consolidated
balance sheets approximate their fair values due to the short-term nature of these instruments. The fair values of our derivative
instruments are not material.

11.

Commitments and Contingencies

Capital and Operating Lease Commitments.

We have co-location capital lease obligations on some of our transmitter and receiver sites in Mexico and Brazil. See Note 9

for further information regarding these agreements.

We lease various cell sites, office facilities and other assets under operating leases. Some of these leases provide for annual
increases in our rent payments based on changes in locally-based consumer price indices. The remaining terms of our cell site
leases range from one to fifteen years and are generally renewable for additional terms. The remaining terms of our office leases
range from less than one to ten years. During the years ended December 31, 2014, 2013 and 2012, total rent expense under operating
leases was $302.4 million, $300.9 million and $270.6 million, respectively.

For years subsequent to December 31, 2014, future minimum payments for all capital and operating lease obligations that

have initial noncancelable lease terms exceeding one year, net of rental income, are as follows (in thousands):

F-30

NII HOLDINGS, INC. (DEBTOR-IN-POSSESSION) AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

2015

2016

2017

2018

2019

Thereafter

Total minimum lease payments

Less: imputed interest

Total

Capital
Leases

Operating
Leases

166,655

219,767

168,602

170,590

139,081

119,774

1,581,487

2,346,189
(1,868,897)
477,292

225,041

189,730

163,151

141,833

1,025,445

1,964,967

—

1,964,967

Total

386,422

393,643

360,320

302,232

261,607

2,606,932

4,311,156
(1,868,897)
2,442,259

Handset, Equipment and Other Commitments.

We are a party to purchase agreements with various suppliers, under which we have committed to purchase handsets,
equipment and network services that will be used or sold in the ordinary course of business. As of December 31, 2014, we are
committed to purchase $2.5 billion under these arrangements, $1.6 billion of which we expect to pay in 2015, $622.0 million of
which we expect to pay in 2016 and 2017, and the remaining $268.5 million of which we expect to pay in 2018. These amounts
do not represent our entire anticipated purchases in the future, but represent only those items that are the subject of contractual
obligations. Our commitments are generally determined based on noncancelable quantities or termination amounts. As of December
31, 2014, we were required to pay a total of $1.8 billion in spectrum fees in Mexico, $130.1 million of which we expect to pay in
2015, $257.3 million of which we expect to pay in 2016 and 2017, $257.3 million of which we expect to pay in 2018 and 2019
and the remaining $1.2 billion of which we expect to pay in years subsequent to 2019. These fees are subject to increases in the
Mexican Consumer Pricing Index. We also purchase products and services as needed with no firm commitment. Amounts actually
paid under some of these agreements will likely be higher due to variable components of these agreements. The more significant
variable components that determine the ultimate obligation owed include such items as hours contracted, subscribers and other
factors. In addition, we are a party to various arrangements that are conditional in nature and obligate us to make payments only
upon the occurrence of certain events, such as the delivery of functioning software or a product.

Brazilian Contingencies.

Nextel Brazil has received various assessment notices from state and federal Brazilian authorities asserting deficiencies in
payments related primarily to value-added taxes, excise taxes on imported equipment and other non-income based taxes. Nextel
Brazil has filed various administrative and legal petitions disputing these assessments. In some cases, Nextel Brazil has received
favorable decisions, which are currently being appealed by the respective governmental authority. In other cases, Nextel Brazil's
petitions have been denied, and Nextel Brazil is currently appealing those decisions. Nextel Brazil also had contingencies related
to certain regulatory, civil and labor-related matters as of December 31, 2014 and 2013.

As of December 31, 2014 and 2013, Nextel Brazil had accrued liabilities of $69.7 million and $70.9 million, respectively,
related to contingencies, all of which were classified in accrued contingencies reported as a component of other long-term liabilities,
of which $8.0 million and $11.2 million related to unasserted claims, respectively. We currently estimate the reasonably possible
losses related to matters for which Nextel Brazil has not accrued liabilities, as they are not deemed probable, to be approximately
$430.0 million as of December 31, 2014. We are continuing to evaluate the likelihood of probable and reasonably possible losses,
if any, related to all known contingencies. As a result, future increases or decreases to our accrued liabilities may be necessary
and will be recorded in the period when such amounts are determined to be probable and reasonably estimable.

Legal Proceedings.

F-31

NII HOLDINGS, INC. (DEBTOR-IN-POSSESSION) AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

the defendants made false or misleading statements or concealed material adverse information about the Company’s financial
condition and operations in violation of Section 10(b), Rule 10b-5 and Section 20(a) of the Securities Exchange Act of 1934. The
complaint seeks class certification and unspecified damages, fees and injunctive relief. On September 22, 2014, the judge issued
an order staying all proceedings against the Company following the Company's filing of its petition for relief under Chapter 11.
On October 6, 2014, the Company's and the individual defendants' motion to dismiss was denied, and the case is currently continuing
as to the remaining individual defendants. On November 3, 2014, at the request of the parties, the court ordered that the case
against the three individual defendants be stayed indefinitely, and on January 7, 2015, the court extended the stay until the earlier
of May 22, 2015 or the effective date of a plan of reorganization. The Company and the named individuals will continue to
vigorously defend themselves in this matter.

Chapter 11 Proceedings. On September 15, 2014, NII Holdings, Inc. and eight of its U.S. and Luxembourg-domiciled
subsidiaries filed voluntary petitions seeking relief under Chapter 11 in the Bankruptcy Court (Case No. 14-12611). On October
8, 2014, four additional subsidiaries of NII Holdings filed voluntary petitions seeking relief under Chapter 11, and a fifth additional
subsidiary filed a voluntary petition seeking relief under Chapter 11 on January 25, 2015. The entities that have filed petitions
seeking relief under Chapter 11, which we refer to collectively as the debtors, include Nextel International (Services), Ltd.; NII
Capital Corp.; NII Aviation, Inc.; NII Funding Corp.; NII Global Holdings, Inc.; NII International Telecom S.C.A.; NII International
Holdings S.à r.l.; NII International Services S.à r.l.; Airfone Holdings, LLC; Nextel International (Uruguay), LLC; McCaw
International (Brazil), LLC; NII Mercosur, LLC; and NIU Holdings LLC. The debtors continue to operate as "debtors-in-
possession" under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy
Code and orders of the Bankruptcy Court. The Company’s other subsidiaries, including its operating subsidiaries in Brazil, Mexico
and Argentina, are not debtors in the Chapter 11 case. As a result of the bankruptcy proceedings, the pending litigation against the
debtors is stayed. Subject to certain exceptions and approval by the Bankruptcy Court, during the Chapter 11 proceedings, no
party can take further actions to recover pre-petition claims against the Company.

12.

Capital Stock

We currently have 600,000,000 shares of authorized common stock, par value $0.001 per share, and 10,000,000 shares of

authorized undesignated preferred stock, par value $0.001 per share.

During the years ended December 31, 2014, 2013 and 2012, we issued shares of common stock in connection with the

exercise of stock options by employees and the vesting of employee restricted share awards.

Common Stock. Holders of our common stock are entitled to one vote per share on all matters submitted for action by the
stockholders and share equally, share for share, if dividends are declared on the common stock. If our Company is partially or
completely liquidated, dissolved or wound up, whether voluntarily or involuntarily, the holders of the common stock are entitled
to share ratably in the net assets remaining after payment of all liquidation preferences, if any, applicable to any outstanding
preferred stock. There are no redemption or sinking fund provisions applicable to the common stock.

Undesignated Preferred Stock. Our board of directors has the authority to issue undesignated preferred stock of one or
more series and in connection with the creation of such series, to fix by resolution the designation, voting powers, preferences and
relative, participating, optional and other special rights of such series, and the qualifications, limitations and restrictions thereof.
As of December 31, 2014, we had not issued any shares of undesignated preferred stock.

Common Stock Reserved for Issuance. Under our 2012 Incentive Compensation Plan, we had 23,824,039 shares of our
common stock reserved for future issuance as of December 31, 2014, assuming our restricted stock units outstanding as of December
31, 2014 are settled in cash. As of December 31, 2014, common stock reserved for future issuance does not include 2,386,673
restricted stock units that were issued in 2014 that, if settled in shares of common stock, would reduce the shares available under
our 2012 Incentive Compensation Plan by 3,580,009 shares. We had 22,089,643 shares of our common stock reserved for future
issuance as of December 31, 2013, assuming our restricted stock units outstanding as of December 31, 2013 were settled in cash.
As of December 31, 2013, common stock reserved for future issuance did not include 3,341,132 restricted stock units that were
issued in 2013 that, if settled in shares of common stock, would have reduced the shares available under our 2012 Incentive
Compensation Plan by 5,011,698 shares.

F-32

NII HOLDINGS, INC. (DEBTOR-IN-POSSESSION) AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

13.

Income Taxes

The components of (loss) income from continuing operations before income taxes and the related income tax provision are

as follows (in thousands):

U.S.

Non-U.S.

Total

Current:

Federal

State, net of Federal tax benefit

Foreign

Total current income tax provision

Deferred:

Federal

State, net of Federal tax benefit

Foreign

Total deferred income tax (provision) benefit

Total income tax provision

Year Ended December 31,

2014
(368,667) $

(1,334,554)
(1,703,221) $

2013
(377,502) $
(610,534)
(988,036) $

2012
(311,575)
387,880

76,305

Year Ended December 31,

2014

2013

2012

— $

727

—
(25,638)
(25,638)

—
(63,982)
(63,982)

(1,846)
(205)
(46,402)
(48,453)
(74,091) $

(1,310)
(146)
(380,614)
(382,070)
(446,052) $

—
(176,748)
(176,021)

895

100

16,882

17,877
(158,144)

A reconciliation of the U.S. statutory Federal income tax rate to our effective tax rate as a percentage of (loss) income from

continuing operations before reorganization items and income tax provision is as follows:

Year Ended
December 31,

2013

35%

(3)

(81)

(3)

—

(2)

—

(1)
(45)%

2012

35%

160

(42)

(17)

(3)

—

(1)
207%

2014

35%

(3)

(36)

(1)

—

(1)

1
(4)%

Statutory Federal tax rate

Effect of foreign operations

Change in deferred tax asset valuation allowance

Intercompany transactions

Tax on subpart F income

Withholding tax

Deductible dividends

Inflation adjustments

Income tax credits

Local statutory investment loss

Other nondeductible expenses

Other
Effective tax rate

F-33

NII HOLDINGS, INC. (DEBTOR-IN-POSSESSION) AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The components of our deferred tax assets and liabilities consist of the following:

Deferred tax assets:

Net operating losses and capital loss carryforwards

4,354,474

3,922,944

December 31,

2014

2013

(in thousands)

Allowance for doubtful accounts

Accrued expenses

Accrual for contingent liabilities

Property, plant and equipment

Capital lease obligations

Deferred revenue

Equity compensation

Inventory reserve
Debt discount

Other

Valuation allowance

Total deferred tax asset

Deferred tax liabilities:

Intangible assets

Unremitted foreign earnings

Deferred revenue

Property, plant and equipment

Capital lease obligation

Other

Total deferred tax liability

Net deferred tax (liability) asset

41,724

193,251

21,944

153,036

175,498

37,730

69,172

25,642
16,511

52,016

34,587

151,131

22,117

36,784

300,141

35,179

71,171

22,548
—

41,116

5,140,998
(4,868,504)
272,494

4,637,718
(4,335,913)
301,805

42,036

54,386

39,492

33,915

107,491

2,773

280,093

(7,599) $

48,162

54,386

44,126

96,613

—

15,123

258,410

43,395

We have not recorded a deferred tax liability on Nextel Brazil’s unrealized foreign currency gain on the intercompany loan
from NII Holdings as it is our intention to not subject that unrealized gain to Brazilian tax. If this gain is subject to tax, it could
result in an additional income tax liability. As of December 31, 2014 and 2013, the cumulative amount of additional tax liability
would have been approximately $35.8 million and $41.4 million, respectively.

As of December 31, 2014, we included $54.4 million in deferred tax liabilities for U.S. federal, state and foreign taxes with
respect to future remittances of certain undistributed earnings (other than income that has been previously taxed in the U.S. under
the subpart F rules) of certain of our foreign subsidiaries. Except for the earnings associated with this accrual and income that has
been previously taxed in the U.S. under the subpart F rules and can be remitted to the U.S. without incurring additional income
taxes, we currently have no intention to remit any additional undistributed earnings of our foreign subsidiaries in a taxable manner.
Should additional amounts of our foreign subsidiaries’ undistributed earnings be remitted to the U.S. as taxable dividends, we
may be subject to additional U.S. income taxes (net of allowable foreign tax credits) and foreign withholding taxes. It is not
practicable to estimate the amount of any additional taxes that may be payable on the remaining undistributed earnings.

As of December 31, 2014, we had $1.3 billion of net operating loss carryforwards for U.S. Federal and state income tax
purposes, which expire in various amounts beginning in 2019 through 2034. The timing and manner in which we will utilize the
net operating loss carryforwards in any year, or in total, may be limited in the future under the provisions of Internal Revenue
Code Section 382 relating to changes in our ownership. We excluded $210.3 million of U.S. net operating loss carryforwards from
the calculation of the deferred tax asset presented above because it represents excess stock option deductions that did not reduce

F-34

NII HOLDINGS, INC. (DEBTOR-IN-POSSESSION) AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

taxes payable in the U.S. The tax effect of these unrealized excess stock option deductions, if realized in the future, will result in
an increase to paid-in capital.

As of December 31, 2014, we had $764.0 million of net operating loss carryforwards in our Mexican subsidiaries. These
carryforwards expire in various amounts and at various periods from 2015 to 2024. Our Brazilian subsidiaries had $816.4 million
of net operating loss carryforwards that can be carried forward indefinitely, but the amount that we can utilize annually is limited
to 30% of Brazilian taxable income before the net operating loss deduction. Our foreign subsidiaries' ability to utilize the foreign
tax net operating losses in any single year ultimately depends upon their ability to generate sufficient taxable income.

As of December 31, 2014, we had $10.8 billion of net operating loss carryforwards in our holding companies in Luxembourg
that can be carried forward indefinitely. Our holding companies in Spain had $844.0 million of net operating loss carryforwards
that can be carried forward 18 years, and our holding company in the Netherlands had $0.3 million of net operating loss
carryforwards that can be carried forward nine years. Given the nature of activities that are considered taxable in these jurisdictions
and the activities engaged in by the holding companies, these net operating loss carryforwards will never be utilized by our holding
companies and add no value to the company.

The deferred tax asset valuation allowances that our subsidiaries and holding companies had as of December 31, 2014 and

2013 are as follows:

Argentina

Brazil

U.S.

Luxembourg

Mexico

Spain

Total

2014

2013

(in millions)

49.1

584.1

480.3

3,169.2

318.2

267.6

—

419.1

363.8

3,131.4

190.7

230.9

4,868.5

4,335.9

Of the $4.9 billion valuation allowance as of December 31, 2014, $281.5 million was classified as current and $4.6 billion

was classified as non-current in our consolidated financial statements.

The realization of deferred tax assets is dependent on the generation of future taxable income sufficient to realize our tax
loss carryforwards and other tax deductions. Valuation allowances are required to be recognized on deferred tax assets unless it
is determined that it is “more-likely-than-not” that the asset will be realized. As of December 31, 2014, we recorded full valuation
allowances on the deferred tax assets of our foreign operating companies, our U.S. parent company and subsidiaries and our foreign
holding companies due to substantial negative evidence, including the recent history of cumulative losses and the projected losses
for 2015 and subsequent years. As a result, the valuation allowance on our deferred tax assets increased by $532.6 million during
2014. We do not anticipate that we will recognize significant tax benefits with respect to our deferred tax assets.

We are subject to income taxes in both the U.S. and the non-U.S. jurisdictions in which we operate. Certain of our entities
are under examination by the relevant taxing authorities for various tax years. The earliest years that remain subject to examination
by jurisdiction are: U.S. - 1999; Argentina and Mexico - 2006; Brazil, Luxembourg, Netherlands and Spain - 2009. We regularly
assess the potential outcome of current and future examinations in each of the taxing jurisdictions when determining the adequacy
of our provision for income taxes. We have only recorded financial statement benefits for tax positions which we believe reflect
the “more-likely-than-not” criteria incorporated in the FASB’s authoritative guidance on accounting for uncertainty in income
taxes, and we have established income tax reserves in accordance with this authoritative guidance where necessary. Once a financial
statement benefit for a tax position is recorded or a tax reserve is established, we adjust it only when there is more information
available or when an event occurs necessitating a change. While we believe that the amounts of the recorded financial statement
benefits and tax reserves reflect the more-likely-than-not criteria, it is possible that the ultimate outcome of current or future
examinations may result in a reduction to the tax benefits previously recorded on the financial statements or may exceed the current
income tax reserves in amounts that could be material.

Unrecognized tax benefits are classified as non-current liabilities. The following table shows a reconciliation of our

beginning and ending unrecognized tax benefits for 2014, 2013 and 2012 (in thousands):

F-35

NII HOLDINGS, INC. (DEBTOR-IN-POSSESSION) AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Year Ended December 31,

2014

2013

2012

Unrecognized tax benefits at January 1

Additions for current year tax positions

Reductions for current year tax positions

Reductions for prior year tax positions

Foreign currency translation adjustment

8,686

35,639

—

—
(350)
8,336

—

—
(26,519)
(434)
8,686

35,572

3,118
(551)
(2,197)
(303)
35,639

Unrecognized tax benefits at December 31

As of December 31, 2014, 2013 and 2012, the unrecognized tax benefits that could potentially reduce our future effective
tax rate, if recognized, were $1.8 million , $2.1 million and $4.8 million, respectively. In addition, unrecognized tax benefits will
decrease by approximately $4.8 million over the next twelve months due to the expiration of certain statutes of limitations.

We record interest and penalties associated with uncertain tax positions as a component of our income tax provision. During
the years ended December 31, 2014, 2013 and 2012, we recognized $0.2 million, $0.2 million and $0.3 million, respectively, of
interest and penalties in our current income tax provision. Unrecognized tax benefits (including penalties and interest) were reduced
by $26.5 million in 2013 due to the effective resolution of a tax position with the Internal Revenue Service and $2.7 million in
2012 due to a change in estimates. As of December 31, 2014 and 2013, we had accrued $2.4 million and $2.3 million, respectively
for the payment of interest and penalties.

Effective January 1, 2014, the Mexican government passed legislation to keep the corporate income tax rate fixed at 30%,

which repealed the scheduled tax rate reduction previously approved in December 2012.

14.

Employee Stock and Benefit Plans

In May 2012, our stockholders adopted the 2012 Incentive Compensation Plan, which replaced our prior incentive
compensation plans. The 2012 Incentive Compensation Plan provides us with the ability to award stock options, restricted stock,
restricted stock units, and cash-based incentives to our employees, directors and consultants. The 2012 Incentive Compensation
Plan incorporated the outstanding equity grants and remaining shares available for grant under our prior plans. Our stockholders
previously authorized the Company to grant equity and equity-related incentives up to a maximum of 64,933,332 shares of common
stock, subject to adjustments. At the time of adoption of the 2012 Incentive Compensation Plan, there were 9,731,179 shares
authorized, unissued and available for grant under the 2012 Incentive Compensation Plan. All grants or awards made under the
2012 Incentive Compensation Plan are governed by written agreements between us and the participants and have a maximum term
of ten years.

Historically, our Board of Directors has granted equity-related incentives consisting of stock options, restricted stock awards
and restricted stock units to employees on an annual basis near the end of April. On April 30, 2014, our Board of Directors granted
1,752,921 stock options, 2,271,555 restricted stock awards and 358,373 restricted stock units to certain of our employees and
directors in connection with this annual grant of equity-related incentives. Stock options, restricted stock awards, and restricted
stock units are also granted to certain new employees on the later of their date of hire or the date that the grant is approved. In
addition, under the provisions outlined in the 2012 Incentive Compensation Plan, our chief executive officer may grant, under
authority delegated to him by the Compensation Committee of our Board of Directors, a limited number of stock options (not to
exceed 1,000,000 shares in the aggregate for the plan year) and restricted stock/restricted stock unit awards (not to exceed 500,000
shares in the aggregate for the plan year) to employees who are not executive officers.

Prior to April 2014, upon the exercise of a stock option award or vesting of a restricted stock award or restricted stock units,
we issued shares of our common stock from an available pool of shares that were authorized but not yet issued. Beginning in April
2014, our practice is to settle awards in cash upon vesting. As a result of this change, we changed the classification of outstanding
awards from equity-classified to liability-classified and recorded an immaterial liability in our consolidated balance sheet as of
December 31, 2014. There was no incremental compensation cost that resulted from this change in practice.

For the years ended December 31, 2014, 2013 and 2012, we recognized $4.0 million, $9.0 million and $20.3 million,
respectively, in share-based compensation expense related to stock options. For the years ended December 31, 2014, 2013 and
2012, we recognized $10.4 million, $20.0 million and $22.2 million, respectively, in share-based compensation expense related
to restricted stock and restricted stock units. Amounts recognized in the income statement for tax benefits related to share-based

F-36

NII HOLDINGS, INC. (DEBTOR-IN-POSSESSION) AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

payment arrangements in 2014, 2013 and 2012 were not material. We include substantially all share-based compensation expense,
including restricted stock expense, as a component of selling, general and administrative expenses based on classification of the
compensation expense for the applicable grantee. We classify tax benefits resulting from tax deductions in excess of the
compensation cost recognized for share-based awards as financing cash flows. As of December 31, 2014, there was approximately
$5.2 million in unrecognized compensation cost related to non-vested employee stock option awards. We expect this cost to be
recognized over a weighted average period of 1.27 years. Cash paid for exercises under all share-based payment arrangements
was $0.1 million for 2014, $1.0 million for 2013 and $2.0 million for 2012.

Stock Option Awards

The following table summarizes stock option activity for the year ended December 31, 2014:

Number of
Options

Weighted Average
Exercise Price
per Option

Weighted Average
Remaining Life

Aggregate
Intrinsic
Value

Outstanding, December 31, 2013

11,259,868

Granted

Exercised
Forfeited

Outstanding, December 31, 2014

Exercisable, December 31, 2014

1,752,921

—
(6,978,638)
6,034,151

3,996,673

36.20

0.86

—
35.63

26.57

38.55

5.71

4.04

—

There were no options exercised during the year ended December 31, 2014. The total fair value of vested options was $16.4
million, $39.1 million and $54.3 million for the years ended December 31, 2014, 2013 and 2012, respectively. Generally, our stock
options are non-transferable, except by will or laws of descent or distribution, and the actual value of the stock options that a
recipient may realize, if any, will depend on the excess of the market price on the date of exercise over the exercise price. As a
result of our Chapter 11 filing and the proposals for reorganization, which do not contemplate any recoveries with respect to equity
interests, the holders of these stock option awards will not realize any value or receive any recovery from the long-term incentives
granted during 2014 or in prior years.

The weighted average fair value of the stock option awards on their grant dates using the Black-Scholes-Merton option-
pricing model was less than $0.01 for each option granted during the year ended December 31, 2014, $4.64 for each option granted
during the year ended December 31, 2013 and $7.31 for each option granted during the year ended December 31, 2012 based on
the following assumptions:

Risk free interest rate

Expected stock price volatility
Expected term in years

Expected dividend yield

2014

2013

2012

1.60% - 1.63%

0.63% - 1.49%

0.62% - 0.95%

69.53% - 96.99% 56.56% - 69.53% 50.00% - 56.56%
4.78 - 4.81

4.65 - 4.78

4.78 - 4.81

—

The expected term of stock option awards granted represents the period that we expect our stock option awards will be
outstanding and was determined based on (1) historical data on employee exercise and post-vesting employment termination
behavior, (2) the contractual terms of the stock option awards, (3) vesting schedules and (4) expectations of future employee
behavior. The risk-free interest rate for periods consistent with the contractual life of the stock option award is based on the yield
curve of U.S. Treasury strip securities in effect at the time of the grant. Expected volatility takes into consideration historical
volatility and the implied volatility from traded options on our stock.

Restricted Stock and Restricted Stock Unit Awards

Restricted stock includes both non-vested restricted stock awards and restricted stock units. Following is a summary of

our restricted stock:

F-37

NII HOLDINGS, INC. (DEBTOR-IN-POSSESSION) AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Restricted stock awards as of December 31, 2013

Granted

Vested

Forfeited

Restricted stock awards as of December 31, 2014

Number of
Shares

Weighted Average
Grant Date
Fair Value
Per Share

3,919,485

$12.99

3,605,538
(1,140,667)
(2,294,608)
4,089,748

0.85

16.80

7.69

3.75

If a participant terminates employment prior to the vesting dates, the unvested shares are forfeited and available for reissuance
under the terms of the 2012 Incentive Compensation Plan. The fair value of our restricted stock is determined based on the quoted
price of our common stock at the grant date. As of December 31, 2014, there was approximately $7.8 million in unrecognized
compensation cost related to restricted stock. We expect this cost to be recognized over a weighted average period of 1.52 years.
The total fair value of restricted stock awards vested was $1.2 million during 2014 and $7.7 million during 2013. During 2014,
we paid an immaterial amount to settle vested restricted stock awards. The weighted average grant date fair value of restricted
stock awards granted during 2014 was $0.85 per unit compared to $8.69 per unit for 2013 and $16.97 per unit for 2012. As a result
of our Chapter 11 filing and the proposals for reorganization, which do not contemplate any recoveries with respect to equity
interests, the holders of these restricted stock awards will not realize any value or receive any recovery from the long-term incentives
granted during 2014 or in prior years.

15.

Segment Information

We have determined our reportable segments based on our method of internal reporting, which disaggregates our business
by geographic location. We evaluate performance of these segments and provide resources to them based on operating income
before depreciation, amortization and impairment and restructuring charges, which we refer to as segment earnings. Our reportable
segments are: (1) Brazil, (2) Mexico and (3) Argentina.

F-38

NII HOLDINGS, INC. (DEBTOR-IN-POSSESSION) AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Year Ended December 31, 2014
Operating revenues

Segment (losses) earnings
Less:
Impairment and restructuring charges
Gain on sale of towers
Depreciation and amortization
Foreign currency transaction losses, net
Interest expense and other, net

Loss from continuing operations before reorganization
items and income tax provision
Capital expenditures
Year Ended December 31, 2013
Operating revenues
Segment earnings (losses)
Less:
Impairment and restructuring charges
Depreciation and amortization
Foreign currency transaction losses, net
Interest expense and other, net

Loss from continuing operations before income tax
provision
Capital expenditures
Year Ended December 31, 2012
Operating revenues
Segment earnings (losses)
Less:
Impairment and restructuring charges
Depreciation and amortization
Foreign currency transaction losses, net
Interest expense and other, net

Income from continuing operations before income tax
provision
Capital expenditures
December 31, 2014
Identifiable assets
December 31, 2013
Identifiable assets

$
$

Brazil

Mexico

Argentina

Corporate and
Eliminations

Consolidated

(in thousands)

1,848,918

1,417,163

424,972

(133,691) $

(90,481) $

76,241

(2,333)

(144,733)

3,688,720

(292,664)

(220,742)
74,631
(672,705)
(130,499)
(389,641)

14,507

$ (1,631,620)
428,420
$

(5,612)
(177,578)

$
$

4,711,567
492,865

(168,543)
(692,927)
(123,369)
(496,062)

(988,036)
872,094

5,693,235
1,129,304

(30,401)
(605,161)
(63,330)
(354,107)

76,305
1,305,696

5,430,591

$
$

13,931

(3,889)
(287,343)

92,520

437,208

1,828,180 (1) $

8,679,954

218,855

2,208,034
311,129

461,458

2,902,350
674,632

632,796

2,991,959

3,705,642

$
$

168,750

1,872,697
179,896

375,522

2,109,573
561,059

523,555

1,721,710

2,695,091

$
$

26,308

636,448
179,418

21,183

685,201
180,956

56,825

279,714

451,041

$
$

__________________________
(1) As of December 31, 2013, identifiable assets in the "Corporate and Eliminations" column include $168.9 million of total assets related
to discontinued operations as a result of the sale of Nextel Chile. See Note 5 for more information.

F-39

NII HOLDINGS, INC. (DEBTOR-IN-POSSESSION) AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

16.

Quarterly Financial Data (Unaudited)

2014

Operating revenues

Operating loss

Net loss from continuing operations

Net (loss) income from discontinued operations

Net loss from continuing operations, per common share,
basic and diluted

Net (loss) income from discontinued operations, per
common share, basic and diluted

2013

Operating revenues

Operating loss

Net loss from continuing operations

Net loss from discontinued operations

Net loss from continuing operations, per common share,
basic and diluted

Net loss from discontinued operations, per common
share, basic and diluted

First

Second

Third

Fourth

(in thousands, except per share amounts)

955,781
(212,290)
(338,270)
(37,808)

951,981
(350,553)
(474,983)
(148,329)

926,727
(212,900)
(456,753)
13,306

854,231
(335,737)
(507,306)
(7,555)

(1.97) $

(2.76) $

(2.65) $

(2.95)

(0.22) $

(0.86) $

0.08

(0.04)

First

Second

Third

Fourth

(in thousands, except per share amounts)

1,316,716
(44,397)
(153,103)
(54,400)

1,245,451
(40,653)
(316,018)
(80,334)

1,085,633
(127,889)
(259,507)
(40,434)

1,063,767
(155,666)
(705,460)
(40,343)

(0.89) $

(1.83) $

(1.51) $

(4.10)

(0.32) $

(0.47) $

(0.23) $

(0.23)

The sum of the per share amounts do not equal the annual amounts due to changes in the number of weighted average

common shares outstanding during the year.

In August 2014, we completed the sale of all of the outstanding equity interests of our wholly-owned subsidiary, Nextel
Chile, to Fucata. As a result of the sale of Nextel Chile, the quarterly amounts included above differ from the amounts originally
included in our quarterly reports on Form 10-Q for each of the quarterly periods in 2013, as well as in the quarterly reports on
Form 10-Q for the three months ended March 31, 2014 and June 30, 2014.

F-40

NII HOLDINGS, INC. (DEBTOR-IN-POSSESSION) AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

17.

Condensed Consolidating Financial Statements

In 2011, we issued $1.45 billion in aggregate principal amount of our 7.625% senior notes due in 2021. In addition, during
2009, we issued senior notes totaling $1.3 billion in aggregate principal amount comprised of our 10.0% senior notes due 2016
and our 8.875% senior notes due 2019. We refer to the senior notes issued in 2011 and 2009 collectively as the "notes." All of
these notes are senior unsecured obligations of NII Capital Corp., our wholly-owned domestic subsidiary, and are guaranteed on
a senior unsecured basis by NII Holdings and all of its current and future first tier and domestic restricted subsidiaries, other than
NII Capital Corp. No foreign subsidiaries will guarantee the notes unless they are first tier subsidiaries of NII Holdings. These
guarantees are full and unconditional, as well as joint and several.

In connection with the issuance of the notes and the guarantees thereof, we are required to provide certain condensed
consolidating financial information. Included in the tables below are condensed consolidating balance sheets as of December 31,
2014 and 2013, as well as condensed consolidating statements of comprehensive (loss) income for the years ended December 31,
2014, 2013 and 2012 and condensed consolidating statements of cash flows for the years ended December 31, 2014, 2013 and
2012, of: (a) the parent company, NII Holdings, Inc.; (b) the subsidiary issuer, NII Capital Corp.; (c) the guarantor subsidiaries
on a combined basis; (d) the non-guarantor subsidiaries on a combined basis; (e) consolidating adjustments; and (f) NII Holdings,
Inc. and subsidiaries on a consolidated basis.

F-41

NII HOLDINGS, INC. (DEBTOR-IN-POSSESSION) AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

CONDENSED CONSOLIDATING BALANCE SHEET
As of December 31, 2014

NII Holdings,
Inc. (Parent
and
Guarantor)

NII Capital
Corp. (Issuer)
(1)

Guarantor
Subsidiaries
(2)

Non-
Guarantor
Subsidiaries

Consolidating
Adjustments

Consolidated

(in thousands)

ASSETS

Current assets

Cash and cash equivalents

106,747

25,170

14,505

427,178

— $

573,600

Short-term investments

Accounts receivable, net

—

Short-term intercompany receivables

27,803

65,130

Handset and accessory inventory

Deferred income taxes, net

Prepaid expenses and other

Total current assets

Property, plant and equipment,
net
Intangible assets, net

Deferred income taxes, net

—

7,942

142,492

—

18,000

—

13,561

—

290

99,459

—

857

8,352

153,612

398,388

7,030

207,633

49,835

312,903

—

(199,422)

—

153,612

398,678

—

207,633

50,692

329,197

48,168

2,384,765

—

804,124

5,772

1,354

—

2,432,933

822,124

(13,566)

(5,225,630)

5,767

—

90,300

123,463

1,556,579

(199,422)

1,713,412

Long-term intercompany receivables

1,393,109

3,488,284

342,883

Other assets

Total assets

947

—

392

455,016

—

456,355

$ 1,554,548

$ 3,592,145

514,906

$ 5,207,610

(5,438,618) $ 5,430,591

LIABILITIES AND STOCKHOLDERS’ (DEFICIT) EQUITY

Liabilities not subject to compromise
Current liabilities
Accounts payable

Short-term intercompany payables

Accrued expenses and other

Deferred revenues

Current portion of long-term debt

Total current liabilities

Long-term debt

Deferred income tax liabilities

Long-term intercompany payables

Other long-term liabilities

Total liabilities not subject to
compromise

Liabilities subject to compromise

Intercompany liabilities subject to
compromise

Total liabilities subject to
compromise

— $

1,995

277,809

— $

279,804

—

1,529

—

100

1,629

30,584

9,764

—

4,958

18,993

—

182,239

544,528

89,019

777,569

(196,961)

(533)

—

562,988

89,019

777,569

9,764

25,946

1,871,164

(197,494)

1,709,380

—

9,764

2,858,128

—

14,524

—

2,217

42,687

9,899

734,823

55,601

139,206

297,254

3,098,048

1,694,882

—

(13,566)

(139,206)

734,823

58,088

—

299,571

(350,266)

—

2,801,862

4,593,493

3,487,099

115,458

1,492,946

709,392

(5,804,895)

—

3,517,683

2,973,586

1,502,845

2,404,274

(5,804,895)

4,593,493

Total stockholders’ (deficit) equity

(1,964,764)

608,795

(1,030,626)

(294,712)

716,543

(1,964,764)

Total liabilities and
stockholders’ (deficit) equity

$ 1,554,548

$ 3,592,145

514,906

$ 5,207,610

(5,438,618) $ 5,430,591

_______________________________________
(1) NII Capital Corp. is the issuer of our 7.625% senior notes due 2021, our 10.0% senior notes due 2016 and our 8.875% senior notes due

2019.

(2) Represents our subsidiaries that have provided guarantees of the obligations of NII Capital Corp. under our 7.625% senior notes due 2021,

our 10.0% senior notes due 2016 and our 8.875% notes due 2019.

F-42

NII HOLDINGS, INC. (DEBTOR-IN-POSSESSION) AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

CONDENSED CONSOLIDATING BALANCE SHEET
As of December 31, 2013

Current assets

Cash and cash equivalents
Short-term investments
Accounts receivable, net
Short-term intercompany receivables
Handset and accessory inventory
Deferred income taxes, net
Prepaid expenses and other
Assets related to discontinued
operations
Total current assets

Property, plant and equipment, net

Investments in and advances to
affiliates
Intangible assets, net
Deferred income taxes, net
Long-term intercompany receivables
Other assets
Assets related to discontinued
operations

Total assets

Current liabilities
Accounts payable
Short-term intercompany payables
Accrued expenses and other
Deferred revenues
Current portion of long-term debt
Deposits related to 2013 sale of towers

Liabilities related to discontinued
operations
Total current liabilities

Long-term debt
Deferred income tax liabilities
Long-term intercompany payables
Other long-term liabilities

Liabilities related to discontinued
operations

Total liabilities
Total stockholders’ equity

Total liabilities and stockholders’
equity

NII Capital
Corp. (Issuer)

Guarantor
Subsidiaries

Non-
Guarantor
Subsidiaries

Consolidating
Adjustments

Consolidated

NII Holdings,
Inc. (Parent
and
Guarantor)

356,314
—
—
31,803
—
—
6,832

—
394,949
—

1,867,753
18,000
16,025
1,474,658
29,381

ASSETS

— $
—
—
129,810
—
—
—

—
129,810
—

1,503,202
—
—
3,714,760
32,556

5,586
—
627
72,595
—
1,145
7,914

$ 1,368,435
585,760
510,779
4,779
336,620
126,250
382,828

—
87,867
130,729

1,562,080
—
—
701,680
15,383

59,096
3,374,547
3,207,103

—
962,369
26,716
1,354
399,986

—
$ 3,800,766

—
$ 5,380,328

—
$ 2,497,739

109,835
$ 8,081,910

LIABILITIES AND STOCKHOLDERS’ EQUITY

— $

464,798
—
—
—
—

—
464,798
23
3
2,950,226
30,329

—
3,445,379
355,387

132,007
59,490
—
—
—

—
191,497
2,729,321
2,950
—
—

—
2,923,768
2,456,560

727
1,485,835
26,089
—
1,871
—

—
1,514,522
33,864
15,384
10,390
10,248

—
1,584,408
913,331

345,401
159,322
873,702
127,782
94,968
720,013

36,769
2,357,957
2,933,424
106,682
929,990
186,451

5,326
6,519,830
1,562,080

— $ 1,730,335
585,760
—
511,406
—
—
(238,987)
336,620
—
127,395
—
397,574
—

—
(238,987)
(287)

59,096
3,748,186
3,337,545

(4,933,035)
—
(16,028)
(5,892,452)
—

—
980,369
26,713
—
477,306

—

109,835
(11,080,789) $ 8,679,954

— $

(2,241,962)
(222)
—
—
—

—
(2,242,184)
—
(16,028)
(3,890,606)
—

—
(6,148,818)
(4,931,971)

346,128
—
959,059
127,782
96,839
720,013

36,769
2,286,590
5,696,632
108,991
—
227,028

5,326
8,324,567
355,387

$ 3,800,766

$ 5,380,328

$ 2,497,739

$ 8,081,910

(11,080,789) $ 8,679,954

F-43

NII HOLDINGS, INC. (DEBTOR-IN-POSSESSION) AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE LOSS
For the Year Ended December 31, 2014

NII Holdings,
Inc. (Parent
and
Guarantor)

NII Capital
Corp. (Issuer)

Guarantor
Subsidiaries

Non-
Guarantor
Subsidiaries

Consolidating
Adjustments

Consolidated

(in thousands)

— $

2,143

$ 3,688,369

(1,792) $ 3,688,720

—

2,145

—

2,567

— 2,282,326

140,119

1,561,410

(7,183)

1,699,058

—

2,145

(2,145)

(570)

280

411

—

(1,805,438)

8,212

(1,962,429)

—

63,393

—
(48,852)
19,309

157,349
(74,631)
51,672

653,396

2,567
(2,567)

173,969
(171,826)

4,631,522
(943,153)

(171,646)
—

200,467

(543)
(50)
9

1,317

—
(1,593,607)
—
(1,564,785)

—
(1,589,367)
(2)
(1,588,636)

(478,784)
165,374

66,135

(130,499)
—
(7,706)
(385,477)

—

—
(2,820)
—
(10,003)
8,211

220,742
(74,631)
—

672,705

4,800,200
(1,111,480)

202,198

—

—
(202,198)

—

4,988,412
(7,225)
4,981,187

(449,345)
—

66,425

—

(130,499)
—
(6,721)
(520,140)

(1,964,574)
(291)
7,167

(1,567,352)
(45,652)
6,747

(1,760,462)
(13,932)
(18,678)

(1,328,630)
(11,726)
(69,327)

4,989,398
—
—

(1,631,620)
(71,601)
(74,091)

(1,957,698)

(1,606,257)

(1,793,072)

(1,409,683)

4,989,398

(1,777,312)

Intercompany interest expense

(165,324)

Operating revenues

Operating expenses

Cost of revenues (exclusive of
depreciation and amortization
included below)
Selling, general and administrative
Impairment and restructuring
charges
Gain on sale of towers

Management fee and other

Depreciation and amortization

Operating loss

Other (expense) income

Interest expense, net

Interest income

Intercompany interest income
Foreign currency transaction
losses, net
Equity in loss of affiliates

Other income (expense), net

Loss from continuing operations
before reorganization items and
income tax benefit (provision)
Reorganization items
Income tax benefit (provision)
Net loss from continuing
operations
Loss from discontinued
operations, net of income taxes

Comprehensive loss, net of
income taxes

Foreign currency translation
adjustment

Reclassification adjustment for
sale of Nextel Chile

Other

Other comprehensive loss

Net loss

$(1,957,698) $(1,606,257) $(1,793,072) $(1,589,369) $

—

(179,686)

(700)
4,988,698

(180,386)
$(1,957,698)

$ (340,847) $ (342,432) $ (342,432) $ (342,432) $

1,027,296

$ (340,847)

(33,885)

(544)

(375,276)

(1,957,698)

(33,885)
(544)
(376,861)
(1,606,257)

(33,885)
(544)
(376,861)
(1,793,072)

(33,885)
(544)
(376,861)
(1,589,369)

101,655

1,632

1,130,583

4,988,698

(33,885)
(544)
(375,276)
(1,957,698)
$(2,332,974)

Total comprehensive loss

$(2,332,974) $(1,983,118) $(2,169,933) $(1,966,230) $

6,119,281

F-44

NII HOLDINGS, INC. (DEBTOR-IN-POSSESSION) AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE LOSS
For the Year Ended December 31, 2013

NII Holdings,
Inc. (Parent
and
Guarantor)

NII Capital
Corp. (Issuer)

Guarantor
Subsidiaries

Non-
Guarantor
Subsidiaries

Consolidating
Adjustments

Consolidated

(in thousands)

— $

3,114

$ 4,711,525

(3,072) $ 4,711,567

Operating revenues

Operating expenses

Cost of revenues (exclusive of
depreciation and amortization
included below)

Selling, general and administrative

Impairments and restructuring
charges

Management fee and other

Depreciation and amortization

Operating loss

Other (expense) income

Interest expense, net

Interest income

Intercompany interest income

Foreign currency transaction
losses, net

Equity in loss of affiliates

Other income (expense), net

Loss from continuing operations
before income tax benefit
(provision)
Income tax benefit (provision)
Net loss from continuing
operations
Loss from discontinued
operations, net of income taxes

Intercompany interest expense

(234,799)

—

3,136

—

3,136

(3,136)

(562)

913

1,340

—

(1,473,856)

36,017

(1,670,947)

—

— 2,276,929

167,180

1,779,719

(8,262)

1,941,773

97,063
(75,116)
28,055

71,480

106,264

664,872

217,182
(214,068)

4,899,264
(187,739)

—
(31,148)
—
(39,410)
36,338

168,543

—

692,927

5,080,172
(368,605)

(240,132)
—

—

284,709

(1,379)
(59)
9

549

—
(1,274,274)
—
(1,229,697)

—
(1,269,438)
612
(1,269,706)

(284,457)
(51,740)
42,405

—

(123,369)
—
(13,150)
(430,311)

—

286,598

—
(286,598)

—

4,017,568
(36,338)
3,981,230

(526,530)
—

43,327

—

(123,369)
—
(12,859)
(619,431)

(1,674,083)

24,484

(1,229,697)
(16,548)

(1,483,774)
(18,111)

(618,050)
(435,877)

4,017,568

—

(988,036)
(446,052)

(1,649,599)

(1,246,245)

(1,501,885)

(1,053,927)

4,017,568

(1,434,088)

—

(215,511)

—

Net loss

$(1,649,599) $(1,246,245) $(1,501,885) $(1,269,438) $

4,017,568

Comprehensive loss, net of
income taxes

Foreign currency translation
adjustment

Other

Other comprehensive loss

Net loss

$ (334,893) $ (335,183) $ (335,183) $ (335,183) $

2,257

(332,636)

(1,649,599)

2,257
(332,926)
(1,246,245)

2,257
(332,926)
(1,501,885)

2,257
(332,926)
(1,269,438)

1,005,549
(6,771)
998,778

4,017,568

Total comprehensive loss

$(1,982,235) $(1,579,171) $(1,834,811) $(1,602,364) $

5,016,346

F-45

(215,511)
$(1,649,599)

$ (334,893)
2,257
(332,636)
(1,649,599)
$(1,982,235)

NII HOLDINGS, INC. (DEBTOR-IN-POSSESSION) AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE (LOSS) INCOME
For the Year Ended December 31, 2012

NII Holdings,
Inc. (Parent
and
Guarantor)

NII Capital
Corp. (Issuer)

Guarantor
Subsidiaries

Non-
Guarantor
Subsidiaries

Consolidating
Adjustments

Consolidated

(in thousands)

— $

3,071

$ 5,694,718

(4,554) $ 5,693,235

73
309,680

2,303,419
1,962,033

(1,483)
(12,973)

2,302,009
2,261,922

—
3,180

—
—
—
3,180
(3,180)

(23,646)
(215,501)
15,292
1

—
(639,902)
86,324
(777,432)

—
2

—
—
—
2
(2)

(229,652)
—
24,181
261,352

—
(443,294)
—
(387,413)

—
(126,971)
36,079
218,861
(215,790)

30,401
225,202
569,082
5,090,137
604,581

(2,072)
—
801
186

—
(434,443)
101
(435,427)

(104,425)
(84,202)
(6,489)
38,164

(63,330)
—
(6,389)
(226,671)

—
(98,231)
—
(112,687)
108,133

—
299,703
—
(299,703)

—
1,517,639
(108,133)
1,409,506

(780,612)

15,363

(387,415)
(19,731)

(651,217)
(24,833)

377,910
(128,943)

1,517,639

—

(765,249)

(407,146)

(676,050)

248,967

1,517,639

(81,839)

Operating revenues

Operating expenses

Cost of revenues (exclusive of
depreciation and amortization
included below)
Selling, general and administrative
Impairment and restructuring
charges
Management fee and other
Depreciation and amortization

Operating (loss) income
Other (expense) income
Interest expense, net
Intercompany interest expense
Interest income
Intercompany interest income
Foreign currency transaction
losses
Equity in loss of affiliates
Other income (expense), net

(Loss) income before income tax
benefit (provision)

Income tax benefit (provision)
Net (loss) income from continuing
operations
Loss from discontinued
operations, net of income taxes

—

(683,410)

—

Net loss

$ (765,249) $ (407,146) $ (676,050) $ (434,443) $

1,517,639

Comprehensive loss, net of
income taxes

Foreign currency translation
adjustment

Other

Other comprehensive loss

Net loss

(97,589) $

(1,802)

(99,391)

(765,249)

(96,593) $
(1,802)
(98,395)
(407,146)

(96,593) $
(1,802)
(98,395)
(676,050)

(96,593) $
(1,802)
(98,395)
(434,443)

289,779

5,406

295,185

1,517,639

Total comprehensive loss

$ (864,640) $ (505,541) $ (774,445) $ (532,838) $

1,812,824

F-46

30,401
—
605,161
5,199,493
493,742

(359,795)
—
33,785
—

(63,330)
—
(28,097)
(417,437)

76,305
(158,144)

(683,410)
$ (765,249)

(97,589)
(1,802)
(99,391)
(765,249)
$ (864,640)

NII HOLDINGS, INC. (DEBTOR-IN-POSSESSION) AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
For the Year Ended December 31, 2014

NII Holdings,
Inc. (Parent
and
Guarantor)

NII Capital
Corp. (Issuer)

Guarantor
Subsidiaries

Non-
Guarantor
Subsidiaries

Consolidating
Adjustments

Consolidated

(in thousands)

Cash flows from operating activities:

Net loss

$ (1,957,698) $ (1,606,257) $ (1,793,072) $ (1,589,369) $

4,988,698

$ (1,957,698)

Adjustments to reconcile net loss to net
cash (used in) provided by operating
activities

Total operating cash (used in) provided
by continuing operations

Total operating cash used in
discontinued operations

Net cash (used in) provided by
operating activities

Cash flows from investing activities:

Capital expenditures

Purchases of investments

Proceeds from sales of investments

Changes in restricted cash and escrow
accounts

Investment in subsidiaries

Other, net

Total investing cash (used in) provided

by continuing operations

Total investing cash used in
discontinued operations

Net cash (used in) provided by

investing activities

Cash flows from financing activities:

Borrowings under equipment financing
and other

Repayments under capital leases

Repayments under equipment financing
and other borrowings

Payment of line of credit

Capital contributions

Other, net

Net cash (used in) provided by
financing activities

Effect of exchange rate changes on
cash and cash equivalents

Change in cash and cash equivalents
related to discontinued operations

Net (decrease) increase in cash and

cash equivalents

Cash and cash equivalents, beginning

of year

1,861,773

1,631,873

1,640,357

1,246,260

(4,988,698)

1,391,565

(95,925)

25,616

(152,715)

(343,109)

—

(62,583)

(95,925)

25,616

(152,715)

(405,692)

—

25,300

(180,712)

1,856

—

(446)

—

(7,012)

(605,149)

—

(1,637,913)

2,092,459

(163,127)

—

32,390

(70,488)

—

181,158

(1,856)

(566,133)

(62,583)

(628,716)

(612,161)

(1,637,913)

2,092,459

(137,827)

—

(38,098)

(153,556)

(446)

25,378

(384,218)

179,302

(333,540)

—

(13,998)

—

(13,998)

(153,556)

(446)

25,378

(398,216)

179,302

(347,538)

—

(42,414)

—

180,525

(1,855)

14,590

(6,506)

(39,243)

(54,067)

613

(527)

—

(181,158)

1,856

14,590

(48,920)

(39,243)

(54,067)

—

(632)

136,256

(85,140)

(179,302)

(128,272)

—

(86)

—

(20)

—

(55,657)

3,448

(249,567)

25,170

8,919

(941,257)

356,314

—

5,586

1,368,435

—

(55,657)

3,448

(1,156,735)

1,730,335

Cash and cash equivalents, end of year $

106,747

25,170

14,505

427,178

— $

573,600

F-47

NII HOLDINGS, INC. (DEBTOR-IN-POSSESSION) AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
For the Year Ended December 31, 2013

NII Holdings,
Inc. (Parent
and
Guarantor)

NII Capital
Corp. (Issuer)

Guarantor
Subsidiaries

Non-
Guarantor
Subsidiaries

Consolidating
Adjustments

Consolidated

(in thousands)

Cash flows from operating activities:

Net loss

(1,649,599) $

(1,246,245) $

(1,501,885) $

(1,269,438) $

4,017,568

(1,649,599)

1,477,932

1,298,129

1,340,701

1,571,997

(4,067,478)

1,621,281

(171,667)

51,884

(161,184)

302,559

(49,910)

(28,318)

Adjustments to reconcile net loss to net cash (used

in) provided by operating activities

Total operating cash (used in) provided by

continuing operations

Total operating cash provided by (used in)

discontinued operations

—

Net cash (used in) provided by operating activities

(171,667)

Cash flows from investing activities:

Capital expenditures

Purchases of licenses

Purchases of investments

Proceeds from sales of investments

Proceeds from 2013 sale of towers, net

Transfers to restricted cash

Transfers from restricted cash

Investment in subsidiaries

Other, net

—

(15,050)

—

(191,526)

545

Total investing cash used in continuing operations

(206,031)

—

(206,031)

—

(1,010)

Total investing cash provided by discontinued

operations

Net cash used in investing activities

Cash flows from financing activities:

Gross proceeds from issuance of senior notes

Borrowings under equipment financing and other

Repayments under syndicated loan facilities

Repayments of import financing

Repayments under tower financing and other

borrowings

Payment of line of credit

Intercompany dividends

Capital contributions

Other, net

Total financing cash (used in) provided by

continuing operations

Total financing cash used in discontinued

operations

Net cash (used in) provided by financing activities

Effect of exchange rate changes
on cash and cash equivalents

Change in cash and cash equivalents related to

discontinued operations

Net (decrease) increase in cash and cash

equivalents

Cash and cash equivalents, beginning of year

—

51,884

1,440

(159,744)

(165,573)

136,986

—

(49,910)

(164,133)

(192,451)

—

(1,974)

—

(1,974)

—

(1,974)

—

(49,910)

(20)

(14,232)

—

(1,260)

—

(606,663)

(53,066)

(2,360,529)

1,942,886

721,404

(26,659)

2,273

—

191

(15,492)

(380,163)

—

(15,492)

231,817

(148,346)

—

(16,608)

—

191,506

(545)

1,600,000

145,077

(323,919)

(37,422)

(46,887)

(362,735)

—

3,234

(26,904)

—

194,760

(529)

194,231

—

194,231

—

49,910

(194,760)

(620,895)

(53,066)

(2,360,529)

1,942,886

721,404

(41,709)

2,273

—

207

(409,429)

231,817

(177,612)

1,600,000

145,077

(323,919)

(37,422)

(63,495)

(362,735)

—

529

(27,950)

(1,010)

(49,910)

174,353

950,444

(144,321)

929,556

—

(1,010)

—

(378,708)

735,022

—

(49,910)

174,353

—

(883)

6,469

(152,965)

797,479

(56,236)

15,090

744,973

623,462

—

(144,321)

—

(152,965)

776,591

(56,236)

15,090

365,382

1,364,953

Cash and cash equivalents, end of year

356,314

— $

5,586

1,368,435

— $

1,730,335

F-48

NII HOLDINGS, INC. (DEBTOR-IN-POSSESSION) AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
For the Year Ended December 31, 2012

NII Holdings,
Inc. (Parent
and
Guarantor)

NII Capital
Corp. (Issuer)

Guarantor
Subsidiaries

Non-
Guarantor
Subsidiaries

Consolidating
Adjustments

Consolidated

(in thousands)

Cash flows from operating activities:

Net loss

(765,249) $

(407,146) $

(676,050) $

(434,443) $

1,517,639

(765,249)

Proceeds from sales of investments

224,330

Adjustments to reconcile net loss to net cash
provided by (used in) operating activities

Total operating cash provided by (used in)

continuing operations

Total operating cash provided by (used in)

discontinued operations

Net cash provided by (used in) operating

activities

Cash flows from investing activities:

Capital expenditures

Purchases of licenses

Purchases of investments

Transfers to restricted cash

Transfers from restricted cash

Intercompany borrowings

Investment in subsidiaries

Other, net

Total investing cash used in continuing

operations

Total investing cash used in discontinued

operations

Net cash used in investing activities

Cash flows from financing activities:

Borrowings under line of credit

Borrowings under equipment financing

Repayments under syndicated loan facilities

Repayments of import financing

Capital contributions

Proceeds from intercompany long-term loan

Purchases of convertible notes

Intercompany dividends

Other, net

Total financing cash (used in) provided by

continuing operations

Total financing cash used in discontinued

operations

Net cash (used in) provided by financing

activities

Effect of exchange rate changes on cash

and cash equivalents

Change in cash and cash equivalents
related to discontinued operations

768,542

567,599

564,974

1,296,998

(1,869,145)

1,328,968

3,293

160,453

(111,076)

862,555

(351,506)

563,719

—

2,142

(212,678)

—

(210,536)

3,293

160,453

(108,934)

649,877

(351,506)

353,183

—

(92,574)

—

(861,308)

(100,185)

(1,678,918)

1,589,453

(11,969)

7,882

(300)

—

1,018

—

300

328,394

—

(953,882)

(100,185)

(1,678,918)

1,813,783

(11,969)

7,882

—

1,018

(318,949)

—

(9,445)

—

(94,619)

(9,445)

(92,574)

(1,054,327)

328,694

(922,271)

—

(94,619)

—

(9,445)

—

(132,889)

—

(132,889)

(92,574)

(1,187,216)

328,694

(1,055,160)

—

(212,782)

—

(3,228)

—

(151,186)

(778)

—

318,949

300

—

(100,320)

(19,368)

212,770

233,776

(97,403)

(175,923)

9,445

—

(100,000)

(101,349)

—

(328,394)

(300)

—

351,506

212,770

233,776

(97,403)

(175,923)

—

(212,782)

—

(124,723)

(216,010)

(151,964)

199,561

(18,684)

22,812

(164,285)

—

(74,010)

—

(74,010)

(216,010)

(151,964)

199,561

(92,694)

22,812

(238,295)

—

(956)

956

—

844

22,226

(1,947)

(606,963)

8,416

1,230,425

—

844

22,226

(917,202)

2,282,155

—

Net decrease in cash and cash equivalents

(307,336)

Cash and cash equivalents, beginning of

year

1,042,358

Cash and cash equivalents, end of year

735,022

— $

6,469

623,462

— $

1,364,953

F-49

NII HOLDINGS, INC. (DEBTOR-IN-POSSESSION) AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

18.

Subsequent Event

The sale transaction is being implemented pursuant to Section 363 of the Bankruptcy Code and is subject to higher or better
offers in accordance with bidding procedures approved by, and under the supervision of, the Bankruptcy Court. AT&T may terminate
the purchase agreement if the hearing before the Bankruptcy Court with respect to the sale does not occur by March 23, 2015. The
successful bidder in the auction process contemplated by the bidding procedures will be required to complete the transactions
contemplated by the purchase agreement in accordance with its terms. In addition, if AT&T is not the successful bidder, NII
Holdings will be required to pay AT&T a termination fee equal to approximately $32.0 million, reimburse up to $10.0 million of
AT&T's expenses and return the deposit.

Completion of the sale is subject to several conditions, including: (i) the Bankruptcy Court having entered all appropriate
orders; (ii) obtaining all required governmental approvals; (iii) the absence of a material adverse effect on Nextel Mexico; and (iv)
certain other customary conditions. Assuming the successful sale of Nextel Mexico, we plan to focus our financial and other
resources on our core operation in Brazil. We expect the sale transaction to be completed by mid-2015.

Pending completion of the transactions contemplated by the purchase agreement, Nextel Mexico has agreed to (i) conduct
its business in the ordinary course consistent with past practice; and (ii) use commercially reasonable efforts to maintain and
preserve intact its business organization and preserve intact certain business relationships and relationships with applicable
regulatory authorities.

F-50

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

SCHEDULE I — CONDENSED FINANCIAL INFORMATION OF THE REGISTRANT

NII HOLDINGS, INC.
CONDENSED BALANCE SHEETS (PARENT COMPANY ONLY)
(in thousands)

December 31,
2014

December 31,
2013

ASSETS

Current assets

Cash and cash equivalents

Short-term intercompany receivables

Prepaid expenses and other

Total current assets

Investments in and advances to affiliates
Intangible assets, net
Deferred income taxes, net
Long-term intercompany receivables
Other assets

Total assets

106,747

27,803

7,942

142,492
—
18,000
—
1,393,109
947
1,554,548

LIABILITIES AND STOCKHOLDERS’ (DEFICIT) EQUITY

Liabilities not subject to compromise
Current liabilities

Short-term intercompany payables

Total current liabilities

Long-term intercompany payables
Other long-term liabilities

Total liabilities not subject to compromise

Liabilities subject to compromise

Intercompany liabilities subject to compromise

Total liabilities subject to compromise

Total stockholders’ (deficit) equity

Total liabilities and stockholders’ (deficit) equity

— $

—
—
1,629
1,629

30,584

3,487,099

3,517,683
(1,964,764)
1,554,548

356,314

31,803

6,832

394,949
1,867,753
18,000
16,025
1,474,658
29,381
3,800,766

464,798

464,798
2,950,226
30,355
3,445,379

—

355,387

3,800,766

F-51

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

SCHEDULE I — CONDENSED FINANCIAL INFORMATION OF THE REGISTRANT

NII HOLDINGS, INC.
CONDENSED STATEMENTS OF COMPREHENSIVE LOSS (PARENT COMPANY ONLY)
(in thousands)

Operating revenues
Operating expenses

Selling, general and administrative

Operating loss

Other (expense) income

Interest expense, net

Intercompany interest expense

Interest income

Intercompany interest income

Equity in loss of affiliates

Other income, net

Loss before reorganization items and income tax benefit
Reorganization items
Income tax benefit

Net loss

Comprehensive loss, net of income taxes

Foreign currency translation adjustment

Reclassification adjustment for sale of Nextel Chile

Other

Other comprehensive loss

Net loss
Total comprehensive loss

Year Ended December 31,

2014

2013

2012

— $

—

2,145

2,145
(2,145)

3,136

3,136
(3,136)

(570)
(165,324)
280

411
(1,805,438)
8,212
(1,962,429)
(1,964,574)
(291)
7,167
(1,957,698) $

(340,847) $
(33,885)
(544)
(375,276)
(1,957,698)
(2,332,974) $

(562)
(234,799)
913

1,340
(1,473,856)
36,017
(1,670,947)
(1,674,083)
—
24,484
(1,649,599) $

(334,893) $

—

2,257
(332,636)
(1,649,599)
(1,982,235) $

3,180

3,180
(3,180)

(23,646)
(215,501)
15,292

1
(639,902)
86,324
(777,432)
(780,612)
—
15,363
(765,249)

(97,589)
—
(1,802)
(99,391)
(765,249)
(864,640)

F-52

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

SCHEDULE I — CONDENSED FINANCIAL INFORMATION OF THE REGISTRANT

NII HOLDINGS, INC.
CONDENSED STATEMENTS OF CASH FLOWS (PARENT COMPANY ONLY)
(in thousands)

Year Ended December 31,

2014

2013

2012

(1,957,698) $

(1,649,599) $

(765,249)

1,861,773
(95,925)

1,477,932
(171,667)

768,542

3,293

—

25,300
(180,712)
1,856
(153,556)

—
(86)
(86)
(249,567)
356,314
106,747

—
(15,050)
(191,526)
545
(206,031)

—
(1,010)
(1,010)
(378,708)
735,022
356,314

224,330

—
(318,949)
—
(94,619)

(212,782)
(3,228)
(216,010)
(307,336)
1,042,358
735,022

Cash flows from operating activities:

Net loss

Adjustments to reconcile net loss to net cash (used in)
provided by operating activities

Net cash (used in) provided by operating activities

Cash flows from investing activities:

Proceeds from sales of long-term and short-term
investments

Changes in restricted cash and escrow accounts

Investments in subsidiaries

Other, net

Net cash used in investing activities
Cash flows from financing activities:

Purchases of convertible notes

Other, net

Net cash used in financing activities

Net decrease in cash and cash equivalents
Cash and cash equivalents, beginning of year
Cash and cash equivalents, end of year

F-53

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

SCHEDULE I — NOTES TO CONDENSED FINANCIAL INFORMATION OF THE REGISTRANT

Basis of Presentation

NII Holdings, Inc., or NII Holdings, our parent company, is a holding company that conducts substantially all of its business
operations through its operating subsidiaries. See Note 1 to our consolidated financial statements for more information. As specified
in the indenture surrounding our NIIT senior notes and in certain of our operating companies' local financing agreements, there
are restrictions on the parent company's ability to obtain funds from certain of its subsidiaries through dividends, loans or advances.
Substantially all of the consolidated net assets of NII Holdings and its subsidiaries are restricted. See Note 9 to our consolidated
financial statements for more information. These condensed financial statements have been presented on a "parent company only"
basis. In accordance with this parent company only presentation, we have presented our parent company's investments in
consolidated subsidiaries under the equity method. These condensed parent company only financial statements should be read in
conjunction with our consolidated financial statements included elsewhere herein.

Dividends From Subsidiaries

NII Holdings' consolidated subsidiaries did not declare any dividends to the parent company during the year ended December
31, 2014. For the years ended December 31, 2013 and 2012, NII Holdings' consolidated subsidiaries declared and paid $49.9
million and $151.2 million, respectively, in cash dividends to the parent company.

F-54

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

SCHEDULE II — VALUATION AND QUALIFYING ACCOUNTS
(in thousands)

Year Ended December 31, 2014

Allowance for doubtful accounts

Valuation allowance for deferred tax assets

Year Ended December 31, 2013

Allowance for doubtful accounts

Valuation allowance for deferred tax assets

Year Ended December 31, 2012

Allowance for doubtful accounts

Valuation allowance for deferred tax assets

Balance at
Beginning of
Period

Charged to
Costs and
Expenses

Deductions
and Other
Adjustments (1)

Balance at
End of
Period

54,531

4,335,913

104,897

330,739

62,030

180,545

114,784

610,467

111,460

4,052,410

214,454

151,286

(114,300) $
(77,876) $

55,015

4,868,504

(161,826) $
(47,236) $

54,531

4,335,913

(171,587) $
(1,092) $

104,897

330,739

_______________________________________
(1) Includes the impact of foreign currency translation adjustments.

F-55

For periods before December 21, 2001, references to NII Holdings refer to Nextel International, Inc. the former name of
NII Holdings. All documents referenced below were filed pursuant to the Securities Exchange Act of 1934 by NII Holdings, file
number 0-32421, unless otherwise indicated.

EXHIBIT INDEX

Exhibit
Number
3.1

3.2

4.1

4.2

4.3

4.4

4.5

4.6

4.7

4.8

4.9

4.10

10.1

10.2

10.3

Exhibit Description

Amended and Restated Certificate of Incorporation of NII
Holdings

Fourth Amended and Restated Bylaws of NII Holdings

Indenture governing our 10% senior notes due 2016, dated as of
August 18, 2009, by and between NII Holdings and Wilmington
Trust Company, as Indenture Trustee

Indenture governing our 8.875% senior notes due 2019, dated as of
December 15, 2009, by and between NII Holdings and Wilmington
Trust Company, as Indenture Trustee

Indenture governing our 7.625% senior notes due 2021, dated as of
March 29, 2011, by and between NII Holdings and Wilmington
Trust Company, as Indenture Trustee

First Supplemental Indenture to the Indenture governing our
7.625% senior notes due 2021, dated as of December 8, 2011, by
and between NII Holdings and Wilmington Trust Company, as
Indenture Trustee

Indenture governing our 11.375% senior notes due 2019, dated as
of February 19, 2013, by and between NII International Telecom
S.C.A., NII Holdings, Inc. and Wilmington Trust National
Association, as Indenture Trustee

Registration Rights Agreement related to our 11.375% senior notes
due 2019, dated as of February 19, 2013, among NII International
Telecom S.C.A., NII Holdings, Inc. and the initial purchasers

First Supplemental Indenture governing our 11.375% senior notes
due 2019, dated April 15, 2013, among NII International Telecom,
S.C.A., NII Holdings, Inc. and Wilmington Trust National
Association, as Indenture Trustee

Registration Rights Agreement related to our 11.375% senior notes
due 2019, dated April 15, 2013, among NII International Telecom,
S.C.A., NII Holdings, Inc. and J.P. Morgan Securities LLC

Indenture governing our 7.875% senior notes due 2019, dated May
23, 2013, among NII International Telecom, S.C.A., NII Holdings,
Inc. and Wilmington Trust National Association, as Indenture
Trustee
Registration Rights Agreement related to our 7.875% senior notes
due 2019, dated May 23, 2013, among NII International Telecom
S.C.A., NII Holdings, Inc. and the initial purchasers named therein

Subscriber Unit Purchase Agreement, dated as of January 1, 2005,
by and between NII Holdings and Motorola, Inc. (portions of this
exhibit have been omitted pursuant to a request for confidential
treatment)

Amendment Number Three to the Subscriber Unit Purchase
Agreement, dated September 28, 2006, by and between NII
Holdings and Motorola, Inc. (portions of this exhibit have been
omitted pursuant to a request for confidential treatment)

Form of iDEN Infrastructure Installation Services Agreement,
effective June 30, 2000, by and between NII Holdings, Motorola,
Inc. and each of Nextel, Telecomunicações Ltda., Nextel Argentina
S.R.L., Nextel de Mexico, S.A. de C.V., Nextel del Peru, S.A. and
Nextel Communications Philippines, Inc.

F-56

Incorporated
by
Reference
Filing Date
05/23/13

Exhibit
3.1

Filed
Herewith

3.2

4.1

05/23/13

08/18/09

Form
8-K

8-K

4.1

12/15/09

8-K

4.1

03/29/11

8-K

4.2

12/08/11

8-K

4.1

02/19/13

8-K

4.2

02/19/13

8-K

4.2

04/15/13

8-K

4.3

04/15/13

8-K

4.1

05/23/13

8-K

4.2

05/23/13

10-K

10.1

03/22/06

10-Q

10.1

11/06/06

8-K

10.1

12/22/00

10.4

10.5

10.6

10.7

10.8

10.9

Form of iDEN Infrastructure Equipment Supply Agreement,
effective June 30, 2000, by and between NII Holdings, Motorola,
Inc. and each of Nextel Telecomunicações Ltda., Nextel Argentina
S.R.L., Nextel de Mexico, S.A. de C.V., Nextel del Peru, S.A. and
Nextel Communications Philippines, Inc.

Amendment 003 to iDEN Infrastructure Equipment Supply
Agreement, dated December 7, 2001, between NII Holdings,
Motorola, Inc., Nextel Communications Argentina, S.A., Nextel
Telecomunicações Ltda., Comunicaciones Nextel de Mexico, S.A.
de C.V., Nextel del Peru S.A. and Nextel Communications
Philippines, Inc.

Form of Amendment 007A to the iDEN Infrastructure Equipment
Supply Agreement, dated September 28, 2006, between NII
Holdings, Motorola, Inc. and each of Nextel Communications
Argentina, S.A., Nextel Telecomunicações Ltda., Centennial
Cayman Corp. Chile, S.A., Comunicaciones Nextel de Mexico,
S.A. de C.V. and Nextel del Peru, S.A. (portions of this exhibit
have been omitted pursuant to a request for confidential treatment)

Fourth Amended and Restated Trademark License Agreement,
dated July 27, 2011, between Nextel Communications, Inc. and NII
Holdings

Spectrum Use and Build Out Agreement, dated as of November 12,
2002

Stock Purchase Agreement by and among Entel Inversiones, S.A.,
Empresa Nacional de Telecomunicaciones S.A., NII Mercosur
Telecom, S.L., NII Mercosur Moviles, S.L. and NII Holdings, Inc.,
dated as of April 4, 2013

10.10(+)

Form of NII Holdings Change of Control Severance Plan

10.11(+)

2012 Incentive Compensation Plan

10.12(+)

Form of Executive Officer Restricted Stock Award Agreement

10.13(+)

Form of Executive Officer Nonqualified Stock Option Agreement

10.14(+)

Form of Executive Officer Performance Share Unit Agreement

10.15(+)

10.16(+)

Form of Non-Employee Director Restricted Stock Award
Agreement

Form of Non-Employee Director Nonqualified Stock Option
Agreement

10.17(+)

Severance Plan

10.18(+) Offer Letter for Steven M. Shindler, dated April 30, 2013

10.19(+) Offer Letter for Peter A. Foyo, dated December 16, 2013

10.20(+)

10.21

10.22(+)

International Assignment Agreement between NII Holdings, Inc.
and Gokul Hemmady
Form of Director and Executive Officer Indemnification
Agreement

Employment Agreement between Comunicaciones Nextel de
Mexico, S.A. de C.V. and Salvador Alvarez Valdes, dated as of July
3, 2014.

10.23(+) Amendment No. 1 to the Employment Agreement, dated February

23, 2015, between Comunicaciones Nextel de Mexico, S.A. de
C.V. and Salvador Alvarez Valdes.

10.24

Purchase and Sale Agreement, dated as of January 26, 2015,
between New Cingular Wireless Services, Inc., NIHD Telecom
Holdings, B.V., NIU Holdings LLC, Nextel International
(Uruguay) LLC, NII International Telecom S.C.A., NII
International Holdings S.à r.l., NII Global Holdings, Inc., NII
Capital Corp. and NII Holdings, Inc.

8-K

10.2

12/22/00

10-K

10.48

03/29/02

10-Q

10.2

11/06/06

10-Q

10.1

11/08/11

10-K

10.2

03/27/03

8-K

10.1

04/04/13

10-K

Def 14A

10-K

8-K

10-K

10.9

10.11

10.12

10.2

10.13

02/28/13

03/30/12

02/28/13

05/02/13

02/28/13

8-K

10.4

05/02/06

10-K

10.16

8-K

10.1

02/28/13

05/02/13

12/19/13

07/12/13

10-K

10.2

02/28/14

8-K

2.1

01/26/15

F-57

10.25

12.1

16.1

21.1

23.1

23.2

31.1

31.2

32.1

32.2

99.1

99.2

99.3

99.4

99.5

99.6

99.7

99.8

99.9

99.10

8-K

10.1

03/06/15

Plan Support Agreement, dated March 5, 2015, by and among NII
Holdings, Inc., NII Capital Corp., NII Funding Corp., NII Aviation,
Inc., Nextel International (Services), Ltd., NII Global Holdings,
Inc., NII International Holdings S.a.r.l., NII International Telecom
S.C.A., NII Mercosur, LLC, McCaw International (Brazil), LLC,
Airfone Holdings, LLC, and NIU Holdings LLC, entities managed
by Aurelius Capital Management, LP, entities managed by Capital
Research and Management Company, members of the Ad Hoc
Committee of Luxco Holders, and the Official Committee of
Unsecured Creditors of NII Holdings, Inc., et al.

Computation of Ratio of Earnings to Fixed Charges

PricewaterhouseCoopers LLP Letter of Concurrence, dated March
4, 2014

8-K

16.1

03/05/14

Subsidiaries of NII Holdings

Consent of KPMG LLP

Consent of PricewaterhouseCoopers LLP

Statement of Chief Executive Officer Pursuant to Rule 13a-14(a)

Statement of Chief Financial Officer Pursuant to Rule 13a-14(a)

Statement of Chief Executive Officer Pursuant to 18 U.S.C.
Section 1350

Statement of Chief Financial Officer Pursuant to 18 U.S.C.
Section 1350

Credit Agreement, dated July 12, 2011, among Comunicaciones
Nextel de Mexico, S.A. de C.V., the Guarantors and China
Development Bank Corporation, as Lender, Administrative Agent
and Arranger (Non-Sinosure)

Credit Agreement, dated April 20, 2012, among Nextel
Telecomunicações Ltda., the Guarantors and China Development
Bank Corporation, as Lender, Administrative Agent and Arranger
(Non-Sinosure)

Credit Agreement, dated April 20, 2012, among Nextel
Telecomunicações Ltda., the Guarantors and China Development
Bank Corporation, as Lender, Administrative Agent and Arranger
(Sinosure)

Bank Credit Certificate, dated November 8, 2011, between Nextel
Telecomunicações Ltda., and Caixa Econômica Federal

Bank Credit Certificate, dated October 31, 2012, between Nextel
Telecomunicações Ltda., and Banco do Brasil, S.A.

Amendment No. 1 to the Credit Agreement, dated September 25,
2013, among Comunicaciones Nextel de Mexico, S.A. de C.V., the
Guarantors and China Development Bank Corporation, as Lender,
Administrative Agent and Arranger (Non-Sinosure)

Amendment No. 1 to the Credit Agreement, dated September 25,
2013, among Nextel Telecomunicações Ltda., the Guarantors and
China Development Bank Corporation, as Lender, Administrative
Agent and Arranger (Non-Sinosure)

F-58

10-K

99.1

02/28/14

10-K

99.2

02/28/14

10-K

99.3

02/28/14

10-K

99.4

02/28/14

10-K

99.5

02/28/14

10-K

99.6

02/28/14

10-K/A

99.7

02/28/14

10-K/A

99.8

02/28/14

10-K/A

99.9

02/28/14

10-K/A

99.10

02/28/14

99.11

99.12

99.13

99.14

99.15

99.16

99.17

101

Amendment No. 2 to the Credit Agreement, dated December 5,
2014, among Comunicaciones Nextel de Mexico, S.A. de C.V., the
Guarantors and China Development Bank Corporation, as Lender,
Administrative Agent and Arranger (Non-Sinosure)

Amendment No. 2 to the Credit Agreement, dated December 5,
2014, among Nextel Telecomunicações Ltda., the Guarantors and
China Development Bank Corporation, as Lender, Administrative
Agent and Arranger (Non-Sinosure)

Amendment No. 1 to Bank Credit Certificate, dated February 13,
2015, between Nextel Telecomunicações Ltda. and Caixa
Econômica Federal

Amendment No. 1 to Bank Credit Certificate, dated February 13,
2015, between Nextel Telecomunicações Ltda. and Banco do
Brasil, S.A.

Mutual Standstill Agreement, dated February 13, 2015, between
Nextel Telecomunicações Ltda., Nextel Telecomunicações S.A.,
Caixa Econômica Federal and Banco do Brasil, S.A.
The following materials from the NII Holdings, Inc. Annual Report
on Form 10-K for the year ended December 31, 2014 formatted in
eXtensible Business Reporting Language (XBRL):
(i) Consolidated Balance Sheets, (ii) Consolidated Statements of
Comprehensive Loss, (iii) Consolidated Statements of Changes in
Stockholders’ (Deficit) Equity, (iv) Consolidated Statements of
Cash Flows and (v) Notes to Consolidated Financial Statements

_______________________________________

Indicates Management Compensatory Plan, Contract or Arrangement.

F-59