NII II Holdings, In Inc. Q3 3 2018 2018 Earni nings ngs P - PowerPoint PPT Presentation

NII II Holdings, In Inc. Q3 3 2018 2018 Earni nings ngs P Presen entation November 8, 2018

Use of of Non on-GAAP f financial mea easu sures s This presentation includes certain financial information that is calculated and presented on the basis of methodologies that are not in accordance with U.S. Generally Accepted Accounting Principles, or GAAP. Management, as well as certain investors, use these non-GAAP financial measures to evaluate NII Holdings’ current and future financial performance. The non-GAAP financial measures included in this presentation do not replace the presentation of NII Holdings’ GAAP financial results. These measurements provide supplemental information to assist investors in analyzing NII Holdings’ financial position and results of operations. NII Holdings has chosen to provide this information to investors to enable them to perform meaningful comparisons of past, present and future operating results and as a means to emphasize the results of core on-going operations. Reconciliations of the non-GAAP financial measures provided in this presentation to the most directly comparable GAAP measures can be found in the appendix of this presentation and on NII Holdings’ Investor Relations link, at nii.com. 2

Safe h harbor or statement under privat ate sec ecur urities s litigatio ion reform act o of 1995 1995 This presentation includes “forward-looking statements” within the meaning of the securities laws. The statements regarding the business and economic outlook, future performance, and guidance, as well as other statements that are not historical facts, are forward-looking statements. Forward-looking statements are estimates and projections reflecting management's judgment based on currently available information and involve a number of risks and uncertainties that could cause actual results to differ materially from those suggested by the forward-looking statements. With respect to these forward-looking statements, management has made assumptions regarding, among other things, NII Holdings’ ability to fund the business and meet its business plan, customer growth and retention, pricing, network usage, operating costs, the timing of various events, Access Industries’ minority ownership in Nextel Brazil, the economic and regulatory environment and the foreign currency exchange rates that will prevail during the remainder of 2018. Future performance cannot be assured and actual results may differ materially from those in the forward-looking statements. Some factors that could cause actual results to differ include the risks and uncertainties relating to: the impact of liquidity constraints, including the inability to access escrowed funds when expected; the impact of more intense competitive conditions and changes in economic conditions in Brazil; the performance of NII Holdings’ network; NII Holdings’ ability to provide services that customers want or need; NII Holdings’ ability to execute its business plan; and the additional risks and uncertainties that are described in NII Holdings' Annual Report on Form 10-K for the year ended December 31, 2017, as well as in other reports filed from time to time by NII Holdings with the Securities and Exchange Commission. 3

Co Contents NII Ho Holdi dings R s Res esul ults O Over erview Nextel Brazil Results Overview Non-GAAP Reconciliations and Additional Information 4

Q3 201 Q3 2018 ea earni nings s overvie view • 3G/4G net subscriber additions of 86k and 3G/4G churn of 2.68% Ended Q3 2018 with 3.2 million 3G/4G subscribers, a 13% increase year-over-year o • Q3 2018 operating revenue of $142 million and operating income of $1 million $8 million adjusted operating income before depreciation and amortization • (adjusted OIBDA) Quarter-end unrestricted cash and short-term investments of $201 million and • $106 million of cash held in escrow • Year to date capex on track but accelerating some capex from Q1 2019 into 4Q 2018 which may cause our full year 2018 investments to be higher than planned • We are on track to meet or exceed our other updated 2018 guidance: Expect more than 300,000 3G/4G net subscriber additions for the full year o Expect churn of 2.75% or lower for the second half of 2018 o Expect consolidated adjusted OIBDA will be positive for the second half of the year o Expect cash burn for the second half of the year will not exceed $100 million o 5

Our p positive e subscriber ber gro rowth momentum co continued thi his qua s quarter er w with 244k h 244k 3G/4G n 4G net et adds ds y year t to date 3G/4G Gross Adds and Churn 3G/4G Net Adds and Total Subscriber Base 3G/4G Gross Adds (000’s) 3G/4G Net Adds (000’s) 93 86 66 340 325 27 320 312 303 -32 Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 3G/4G Churn (%) Total Subscriber Base (in millions) 3.3 3.2 3.3 3.2 3.1 4.0 - 0.2 - 0.4 0.3 3.5 2.7 2.7 2.4 3.2 3.1 3.0 2.9 2.8 Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 3G/4G iDEN 6

Our t topline r revenue a and A ARP RPU in U.S. dollar t terms h has been i been impa pacted b by wea eaker f forei eign c cur urren ency… 3G/4G Service ARPU – in USD Total Operating Revenue – in millions USD 205 189 181 32 25 19 12 156 18 18 142 4 15 14 173 169 164 152 142 Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 3G/4G iDEN 7

…whi hile o operationa nal i improvem emen ents a s and c cost containm nmen ent efforts a s allowed ed us us to achi hieve po positive a e adj djusted ed O OIBDA Expenses – in USD Adjusted OIBDA – in millions USD Expenses – in millions USD 239 206 184 8 157 100 134 98 28 93 -3 81 -1 65 30 21 15 19 111 77 70 61 50 -16 Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 G&A Selling & Mktg Cost of Service CCPU and CPGA 20 17 16 120 14 20 100 12 102 -34 100 15 80 60 77 10 40 55 48 5 20 0 0 Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 CPGA CCPU 8

The p positive t e trend i d in our resul ults c s continued t nued this q quarter… % Change Q3'18 % Change (in millions USD) Q3'18 Q2'18 Q3'17 B/(W) % Rev B/(W) Operating revenue 142 156 (9%) 100% 205 (31%) Cost of revenue 65 81 20% 46% 100 35% General and administrative expenses 50 61 18% 35% 111 55% Selling and marketing expenses 19 15 (22%) 13% 28 33% Consolidated Adjusted OIBDA (Loss) 8 (1) 763% 6% (34) 124% Service ARPU 14 15 (6%) nm 19 (24%) Total ARPU 15 16 (6%) nm 20 (27%) CCPU 12 14 17% nm 20 42% CPGA 55 48 (14%) nm 100 45% Average FX Rate (Real) 4.0 3.6 (10%) nm 3.2 (25%) 9

…and w nd we signi nificantly l lowered o ed our cash b h burn. (in millio lions U USD) 8M (21M) 8M (2M) (8M) (15M) Adjusted Cash CAPEX Value Added Taxes Cash Deposits Working Capital & Operational OIBDA Other Free Cash Flow 110M (2M) (13M) 0M 201M 121M (15M) Q3'18 Beginning Operational Convertible Debt Net Interest FX Translation Q3'18 Ending Cash & Free Cash Flow Notes - Net Repayments Expense Cash & Investments* Investments* * Cash balances exclude $106 million related to the Nextel Mexico escrow 10

Co Contents NII Holdings Results Overview Nextel B l Brazil R l Result lts O Overvie view Non-GAAP Reconciliations and Additional Information 11

Nextel el B Brazil g generated p ed positive a adjus usted O ed OIBDA, signi nificantly b bet etter t than t n the same q e quarter er l last y year % Change Q3'18 % Change (in millions R$) Q3'18 Q2'18 Q3'17 B/(W) % Rev B/(W) Operating revenue 561 560 0% 100% 650 (14%) Cost of revenue 257 290 11% 46% 316 19% General and administrative expenses 178 204 13% 32% 330 46% Selling and marketing expenses 74 55 (35%) 13% 89 17% Adjusted OIBDA (Loss) 51 11 351% 9% (86) 160% Service ARPU 56 54 3% nm 59 (5%) Total ARPU 58 56 3% nm 63 (9%) CCPU 45 49 9% nm 62 28% CPGA 217 171 (27%) nm 316 31% 12

Nextel B Brazil’s l s local c cur urren ency o oper perating rev evenue s nue stabi bilized ed thi his qua s quarter er w whi hile i e its AR ARPU U inc ncrease sed. (in loca cal c currency) 3G / 4G Topline Trends * 565 72 560 61 Operating Revenue and Service ARPU 58 58 561 555 55 (Operating Revenue in millions R$) 56 550 549 1000 80 545 548 546 540 900 535 70 530 532 59 800 57 56 525 56 54 60 520 700 30 515 50 Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 650 600 614 Operating Revenue Service ARPU 588 560 561 500 40 400 30 iDEN Topline Trends * 300 20 48 47 120 55 200 39 45 100 10 102 100 27 35 80 83 0 0 60 25 Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 40 15 Operating Revenue Service ARPU 38 - 20 5 14 - -5 0 Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 Operating Revenue Service ARPU * During the first quarter of 2018, we recorded R$15 million in 3G/4G operating revenues that were not technology specific and had been reported as iDEN operating revenues in prior quarters 13