##### Table of Contents









SECURITIES AND EXCHANGE COMMISSION



FORM 10-Q

(Mark One)

|                                              |  |                                                                                          
|--------------------------------------------- |  | -----------------------------------------------------------------------------------------
|                                             
|                                             
|                                             
|                                             
|[X]                                           |  | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
	THE SECURITIES EXCHANGE ACT OF 1934 
|For the quarterly period ended March 31, 2001
|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 0-19656               

NEXTEL COMMUNICATIONS, INC.



|                                                                                   |  |                                               
|---------------------------------------------------------------------------------- |  | ----------------------------------------------
|                                                                                  
|                                                                                  
|                                                                                  
|                                                                                  
|Delaware(State or other jurisdiction of
	incorporation or organization)            |  | 36-3939651(I.R.S. Employer Identification No.)
|                                                                                  
|                                                                                  
|                                                                                  
|                                                                                  
|2001 Edmund Halley Drive, Reston, Virginia(Address of principal executive offices) |  | 20191(Zip Code)                               
|Registrants telephone number, including area code:
	(703) 433-4000               

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
[X]     No [  ]

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

|                                                 |  |                              |             | 
|------------------------------------------------ |  | ---------------------------- | ----------- | 
|                                                 |  | Number of Shares Outstanding
|Title of Class                                   |  | on April 30, 2001           
|                                                 |  |                             
|Class A Common Stock, $0.001 par value           |  |                              | 729,376,929 | 
|Class B Nonvoting Common Stock, $0.001 par value |  |                              | 35,660,000  | 



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TABLE OF CONTENTS



|                                               |                                                                                                |  |  |  |  |  |  | 
|---------------------------------------------- | ---------------------------------------------------------------------------------------------- |  |  |  |  |  |  | 
|PART I - FINANCIAL INFORMATION.               
|                                               | Item 1. Financial Statements -- Unaudited.                                                    
|                                               | Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations.
|                                               | Item 3. Quantitative and Qualitative Disclosures about Market Risk.                           
|PART II -- OTHER INFORMATION.                 
|                                               | Item 1. Legal Proceedings.                                                                    
|                                               | Item 6. Exhibits and Reports on Form 8-K.                                                     
|                                               | SIGNATURE                                                                                     
|                                               | EXHIBIT INDEX                                                                                 
|Amendment 3 to iDEN Subsciber Supply Agreement



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##### Table of Contents



NEXTEL COMMUNICATIONS, INC. AND SUBSIDIARIES

INDEX

| |          |  |  |                        |  |                                                                                                                             |  |  |    | 
| | -------- |  |  | ---------------------- |  | --------------------------------------------------------------------------------------------------------------------------- |  |  | -- | 
| |          |  |  |                        |  | Page                                                                                                                       
| |          |  |  |                        |  |                                                                                                                            
| | Part I   |  |  | Financial Information.
| |          |  |  | Item 1.                |  | Financial Statements  Unaudited.                                                                                           |  |  |    | 
| |          |  |  |                        |  | Condensed Consolidated Balance Sheets                                                                                       |  |  |    | 
|
|
|
|
| |          |  |  |                        |  | As of March 31, 2001 and December 31, 2000                                                                                  |  |  | 3  | 
|
|
|
|
| |          |  |  |                        |  | Condensed Consolidated Statements of Operations and
	Comprehensive Loss For the Three Months Ended March 31,
	2001 and 2000 |  |  | 4  | 
|
|
|
|
| |          |  |  |                        |  | Condensed Consolidated Statement of Changes in
	Stockholders Equity For the Three Months Ended
	March 31, 2001             |  |  | 5  | 
|
|
|
|
| |          |  |  |                        |  | Condensed Consolidated Statements of Cash Flows For the Three
	Months Ended March 31, 2001 and 2000                         |  |  | 6  | 
|
|
|
|
| |          |  |  |                        |  | Notes to Condensed Consolidated Financial Statements                                                                        |  |  | 7  | 
|
|
|
|
| |          |  |  | Item 2.                |  | Managements Discussion and Analysis of Financial Condition
	and Results of Operations                                      |  |  | 11 | 
|
|
|
|
| |          |  |  | Item 3.                |  | Quantitative and Qualitative Disclosures About Market Risk                                                                  |  |  | 22 | 
|
|
|
|
| | Part  II |  |  | Other Information.    
|
|
|
|
| |          |  |  | Item 1.                |  | Legal Proceedings                                                                                                           |  |  | 24 | 
|
|
|
|
| |          |  |  | Item 6.                |  | Exhibits and Reports on Form 8-K                                                                                            |  |  | 24 | 



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##### Table of Contents






PART I  FINANCIAL INFORMATION.




Item 1.  Financial Statements 
Unaudited.

NEXTEL COMMUNICATIONS, INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

As of March 31, 2001 and December 31, 2000


(in millions)


Unaudited


|                                                                                    |                                                                                       |                            |        |        |        |   |        |        |        | 
|----------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------- | -------------------------- | ------ | ------ | ------ | - | ------ | ------ | ------ | 
|                                                                                    |                                                                                       | 2001                       |        | 2000  
|                                                                                    |                                                                                       |                            |        |       
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|ASSETS                                                                             
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|Current assets                                                                      |                                                                                       |                            |        |        |        |   |        |       
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                    | Cash and cash equivalents, of which $215 and $474 is restricted                       |                            | $      | 3,382  |        |   | $      | 2,609  |       
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                    | Short-term investments                                                                |                            |        | 1,437  |        |   |        | 2,065  |       
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                    | Accounts and notes receivable, less allowance for doubtful
	accounts of $122 and $104 |                            |        | 864    |        |   |        | 864    |       
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                    | Handset and accessory inventory                                                       |                            |        | 200    |        |   |        | 183    |       
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                    | Prepaid expenses and other current assets                                             |                            |        | 527    |        |   |        | 737    |       
|                                                                                    |                                                                                       |                            |        |        |        |   |        |       
|                                                                                    |                                                                                       | Total current assets       |        |        | 6,410  |   |        |        | 6,458  | 
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|Property, plant and equipment,net of accumulated
	depreciation of $2,814 and $2,482 |                                                                                       |                            | 9,303  |        |        |   | 8,791  |       
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|Intangible assets,net of accumulated amortization of
	$1,156 and $1,101             |                                                                                       |                            | 6,024  |        |        |   | 5,982  |       
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|Investments and other assets                                                        |                                                                                       |                            | 1,525  |        |        |   | 1,455  |       
|                                                                                    |                                                                                       |                            |        |        |        |   |        |       
|                                                                                    |                                                                                       | $                          | 23,262 |        |        | $ | 22,686 |       
|                                                                                    |                                                                                       |                            |        |        |        |   |        |       
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|LIABILITIES AND STOCKHOLDERS EQUITY                                               
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|Current liabilities                                                                 |                                                                                       |                            |        |        |        |   |        |       
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                    | Accounts payable, accrued expenses and other                                          |                            | $      | 2,131  |        |   | $      | 2,197  |       
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                    | Due to related parties                                                                |                            |        | 350    |        |   |        | 423    |       
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                    | Current portion of long-term debt, capital lease and finance
	obligations             |                            |        | 106    |        |   |        | 102    |       
|                                                                                    |                                                                                       |                            |        |        |        |   |        |       
|                                                                                    |                                                                                       | Total current liabilities  |        |        | 2,587  |   |        |        | 2,722  | 
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|Long-term debt                                                                      |                                                                                       |                            | 15,121 |        |        |   | 13,763 |       
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|Capital lease and finance obligations                                               |                                                                                       |                            | 860    |        |        |   | 866    |       
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|Deferred income taxes and other                                                     |                                                                                       |                            | 1,376  |        |        |   | 1,426  |       
|                                                                                    |                                                                                       |                            |        |        |        |   |        |       
|                                                                                    |                                                                                       | Total liabilities          |        |        | 19,944 |   |        |        | 18,777 | 
|                                                                                    |                                                                                       |                            |        |        |        |   |        |       
|Contingencies (note 3)                                                              |                                                                                       |                            |        |        |        |   |        |       
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|Mandatorily redeemable preferred stock                                              |                                                                                       |                            | 1,937  |        |        |   | 1,881  |       
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|Stockholders equity                                                                |                                                                                       |                            |        |        |        |   |        |       
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                    | Convertible preferred stock, 8 shares issued and outstanding                          |                            |        | 283    |        |   |        | 283    |       
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                    | Common stock, class A, 729 and 727 shares issued and outstanding                      |                            |        | 1      |        |   |        | 1      |       
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                    | Common stock, class B, nonvoting convertible, 36 shares issued
	and outstanding       |                            |        |       |        |   |        |       |       
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                    | Paid-in capital                                                                       |                            |        | 8,333  |        |   |        | 8,370  |       
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                    | Accumulated deficit                                                                   |                            |        | (6,926 | )      |   |        | (6,554 | )     
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                    | Treasury stock, at cost                                                               |                            |        | (2     | )      |   |        | (2     | )     
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                    | Deferred compensation, net                                                            |                            |        | (28    | )      |   |        | (28    | )     
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                    | Accumulated other comprehensive loss                                                  |                            |        | (280   | )      |   |        | (42    | )     
|                                                                                    |                                                                                       |                            |        |        |        |   |        |       
|                                                                                    |                                                                                       | Total stockholders equity |        |        | 1,381  |   |        |        | 2,028  | 
|                                                                                    |                                                                                       |                            |        |        |        |   |        |       
|                                                                                    |                                                                                       | $                          | 23,262 |        |        | $ | 22,686 |       
|                                                                                    |                                                                                       |                            |        |        |        |   |        |       

The accompanying notes are an integral part of these condensed
consolidated financial statements.

3



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##### Table of Contents



NEXTEL COMMUNICATIONS, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Operations and
Comprehensive Loss

For the Three Months Ended March 31, 2001 and 2000


(in millions, except per share amounts)


Unaudited


|                                                                                |                                                                     |                                                                |       |       |      |   |       |       |    | 
|------------------------------------------------------------------------------- | ------------------------------------------------------------------- | -------------------------------------------------------------- | ----- | ----- | ---- | - | ----- | ----- | -- | 
|                                                                                |                                                                     | 2001                                                           |       | 2000 
|                                                                                |                                                                     |                                                                |       |      
|Operating revenues                                                              |                                                                     | $                                                              | 1,742 |       |      | $ | 1,175 |      
|                                                                                |                                                                     |                                                                |       |       |      |   |       |      
|Operating expenses                                                              |                                                                     |                                                                |       |       |      |   |       |      
|                                                                               
|                                                                               
|                                                                               
|                                                                               
|                                                                                | Cost of revenues                                                    |                                                                |       | 698   |      |   |       | 436   |   
|                                                                               
|                                                                               
|                                                                               
|                                                                               
|                                                                                | Selling, general and administrative                                 |                                                                |       | 726   |      |   |       | 511   |   
|                                                                               
|                                                                               
|                                                                               
|                                                                               
|                                                                                | Depreciation and amortization                                       |                                                                |       | 394   |      |   |       | 280   |   
|                                                                                |                                                                     |                                                                |       |       |      |   |       |      
|                                                                                |                                                                     |                                                                | 1,818 |       |      |   | 1,227 |      
|                                                                                |                                                                     |                                                                |       |       |      |   |       |      
|Operating loss                                                                  |                                                                     |                                                                | (76   | )     |      |   | (52   | )    
|                                                                                |                                                                     |                                                                |       |       |      |   |       |      
|Other income (expense)                                                          |                                                                     |                                                                |       |       |      |   |       |      
|                                                                               
|                                                                               
|                                                                               
|                                                                               
|                                                                                | Interest expense                                                    |                                                                |       | (358  | )    |   |       | (278  | ) 
|                                                                               
|                                                                               
|                                                                               
|                                                                               
|                                                                                | Interest income                                                     |                                                                |       | 79    |      |   |       | 83    |   
|                                                                               
|                                                                               
|                                                                               
|                                                                               
|                                                                                | Other, net                                                          |                                                                |       | (31   | )    |   |       | (40   | ) 
|                                                                                |                                                                     |                                                                |       |       |      |   |       |      
|                                                                                |                                                                     |                                                                | (310  | )     |      |   | (235  | )    
|                                                                                |                                                                     |                                                                |       |       |      |   |       |      
|Loss before income tax benefit and extraordinary item                           |                                                                     |                                                                | (386  | )     |      |   | (287  | )    
|                                                                               
|                                                                               
|                                                                               
|                                                                               
|Income tax benefit                                                              |                                                                     |                                                                | 14    |       |      |   | 8     |      
|                                                                                |                                                                     |                                                                |       |       |      |   |       |      
|Loss before extraordinary item                                                  |                                                                     |                                                                | (372  | )     |      |   | (279  | )    
|                                                                               
|                                                                               
|                                                                               
|                                                                               
|Extraordinary item  loss on early retirement of
	debt, net of income tax of $0 |                                                                     |                                                                |      |       |      |   | (104  | )    
|                                                                                |                                                                     |                                                                |       |       |      |   |       |      
|Net loss                                                                        |                                                                     |                                                                | (372  | )     |      |   | (383  | )    
|                                                                               
|                                                                               
|                                                                               
|                                                                               
|Mandatorily redeemable preferred stock dividends                                |                                                                     |                                                                | (56   | )     |      |   | (52   | )    
|                                                                                |                                                                     |                                                                |       |       |      |   |       |      
|Loss attributable to common stockholders                                        |                                                                     | $                                                              | (428  | )     |      | $ | (435  | )    
|                                                                                |                                                                     |                                                                |       |       |      |   |       |      
|Loss per share attributable to common stockholders, basic and
	diluted          |                                                                     |                                                                |       |       |      |   |       |      
|                                                                               
|                                                                               
|                                                                               
|                                                                               
|                                                                                | Loss before extraordinary item attributable to common
	stockholders |                                                                | $     | (0.56 | )    |   | $     | (0.45 | ) 
|                                                                               
|                                                                               
|                                                                               
|                                                                               
|                                                                                | Extraordinary item                                                  |                                                                |       |      |      |   |       | (0.14 | ) 
|                                                                                |                                                                     |                                                                |       |       |      |   |       |      
|                                                                                |                                                                     | $                                                              | (0.56 | )     |      | $ | (0.59 | )    
|                                                                                |                                                                     |                                                                |       |       |      |   |       |      
|Weighted average number of common shares outstanding                            |                                                                     |                                                                | 764   |       |      |   | 742   |      
|                                                                                |                                                                     |                                                                |       |       |      |   |       |      
|Comprehensive loss, net of income tax                                           |                                                                     |                                                                |       |       |      |   |       |      
|                                                                               
|                                                                               
|                                                                               
|                                                                               
|                                                                                | Unrealized (loss) gain on available-for-sale securities, net        |                                                                | $     | (162  | )    |   | $     | 37    |   
|                                                                               
|                                                                               
|                                                                               
|                                                                               
|                                                                                | Foreign currency translation adjustment                             |                                                                |       | (46   | )    |   |       | 19    |   
|                                                                               
|                                                                               
|                                                                               
|                                                                               
|                                                                                | Cash flow hedge:                                                    |                                                                |       |       |      |   |       |       |   
|                                                                               
|                                                                               
|                                                                               
|                                                                               
|                                                                                |                                                                     | Cumulative effect of accounting change                         |       |       | (20  | ) |       |       |   | 
|                                                                               
|                                                                               
|                                                                               
|                                                                               
|                                                                                |                                                                     | Reclassification of transition adjustment included in net loss |       |       | 2    |   |       |       |   | 
|                                                                               
|                                                                               
|                                                                               
|                                                                               
|                                                                                |                                                                     | Unrealized loss on cash flow hedge                             |       |       | (12  | ) |       |       |   | 
|                                                                                |                                                                     |                                                                |       |       |      |   |       |      
|                                                                                |                                                                     | Other comprehensive (loss) income                              |       |       | (238 | ) |       |       | 56 | 
|                                                                               
|                                                                               
|                                                                               
|                                                                               
|                                                                                | Net loss                                                            |                                                                |       | (372  | )    |   |       | (383  | ) 
|                                                                                |                                                                     |                                                                |       |       |      |   |       |      
|                                                                                |                                                                     | $                                                              | (610  | )     |      | $ | (327  | )    
|                                                                                |                                                                     |                                                                |       |       |      |   |       |      

The accompanying notes are an integral part of these condensed
consolidated financial statements.

4



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##### Table of Contents



NEXTEL COMMUNICATIONS, INC. AND SUBSIDIARIES

Condensed Consolidated Statement of Changes in
Stockholders Equity

For the Three Months Ended March 31, 2001


(in millions)


Unaudited


|                          |                                                  |                              |   |              |  |              |     |         |  |             |     |                |   |         |   |         |   |        |    |        |  |   |   |  |  |   |       |     |    |   |        |      |   |  |   |  |   |   |    |   |   | 
|------------------------- | ------------------------------------------------ | ---------------------------- | - | ------------ |  | ------------ | --- | ------- |  | ----------- | --- | -------------- | - | ------- | - | ------- | - | ------ | -- | ------ |  | - | - |  |  | - | ----- | --- | -- | - | ------ | ---- | - |  | - |  | - | - | -- | - | - | 
|                          |                                                  |                              |   |              |  |              |     |         |  |             |     |                |   |        
|                          |                                                  | Convertible                  |   | Class A      |  | Class B      |     |         |  |             |     |               
|                          |                                                  | Preferred Stock              |   | Common Stock |  | Common Stock |     |         |  |             |     | Treasury Stock
|                          |                                                  |                              |   |              |  |              |     | Paid-in |  | Accumulated |     |               
|                          |                                                  | Shares                       |   | Amount       |  | Shares       |     | Amount  |  | Shares      |     | Amount         |   | Capital |   | Deficit |   | Shares |    | Amount
|                          |                                                  |                              |   |              |  |              |     |         |  |             |     |                |   |         |   |         |   |        |    |       
|Balance, January  1, 2001 |                                                  |                              | 8 |              |  | $            | 283 |         |  |             | 727 |                |   | $       | 1 |         |   |        | 36 |        |  | $ |  |  |  | $ | 8,370 |     |    | $ | (6,554 | )    |   |  |  |  |   | $ | (2 | )
|                         
|                         
|                         
|                         
|                          | Net loss                                         |                              |   |              |  |              |     |         |  |             |     |                |   |         |   |         |   |        |    |        |  |   |   |  |  |   |       |     |    |   |        | (372 | ) |  |   |  |   |   |    |   |  
|                         
|                         
|                         
|                         
|                          | Other comprehensive loss                         |                              |   |              |  |              |     |         |  |             |     |                |   |         |   |         |   |        |    |        |  |   |   |  |  |   |       |     |    |   |        |      |   |  |   |  |   |   |    |   |  
|                         
|                         
|                         
|                         
|                          | Issuance of common stock:                        |                              |   |              |  |              |     |         |  |             |     |                |   |         |   |         |   |        |    |        |  |   |   |  |  |   |       |     |    |   |        |      |   |  |   |  |   |   |    |   |  
|                         
|                         
|                         
|                         
|                          |                                                  | Exercise of options          |   |              |  |              |     |         |  |             |     |                | 2 |         |   |         |  |        |    |        |  |   |   |  |  |   |       |     | 10 |   |        |      |   |  |   |  |   |   |    |   |   | 
|                         
|                         
|                         
|                         
|                          |                                                  | Employee stock purchase plan |   |              |  |              |     |         |  |             |     |                |   |         |   |         |   |        |    |        |  |   |   |  |  |   |       |     | 6  |   |        |      |   |  |   |  |  |   |    |   |  | 
|                         
|                         
|                         
|                         
|                          | Deferred compensation                            |                              |   |              |  |              |     |         |  |             |     |                |   |         |   |         |   |        |    |        |  |   |   |  |  |   |       | 3   |    |   |        |      |   |  |   |  |   |   |    |   |  
|                         
|                         
|                         
|                         
|                          | Mandatorily redeemable preferred stock dividends |                              |   |              |  |              |     |         |  |             |     |                |   |         |   |         |   |        |    |        |  |   |   |  |  |   |       | (56 | )  |   |        |      |   |  |   |  |   |   |    |   |  
|                          |                                                  |                              |   |              |  |              |     |         |  |             |     |                |   |         |   |         |   |        |    |        |  |   |   |  |  |   |       |     |    |   |        |      |   |  |   |  |   |   |    |  
|Balance, March 31, 2001   |                                                  |                              | 8 |              |  | $            | 283 |         |  |             | 729 |                |   | $       | 1 |         |   |        | 36 |        |  | $ |  |  |  | $ | 8,333 |     |    | $ | (6,926 | )    |   |  |  |  |   | $ | (2 | )
|                          |                                                  |                              |   |              |  |              |     |         |  |             |     |                |   |         |   |         |   |        |    |        |  |   |   |  |  |   |       |     |    |   |        |      |   |  |   |  |   |   |    |  

[Additional columns below]

[Continued from above table, first column(s) repeated]

|                          |                                                  |                              |     |               |  |       |      |      |   |   |       |      |    | 
|------------------------- | ------------------------------------------------ | ---------------------------- | --- | ------------- |  | ----- | ---- | ---- | - | - | ----- | ---- | -- | 
|                          |                                                  |                              |     | Accumulated   |  |      
|                          |                                                  |                              |     | Other         |  |      
|                          |                                                  | Deferred                     |     | Comprehensive |  |      
|                          |                                                  | Compensation                 |     | Loss          |  | Total
|                          |                                                  |                              |     |               |  |      
|Balance, January  1, 2001 |                                                  | $                            | (28 | )             |  | $     | (42  | )    |   | $ | 2,028 |     
|                         
|                         
|                         
|                         
|                          | Net loss                                         |                              |     |               |  |       |      |      |   |   |       | (372 | ) 
|                         
|                         
|                         
|                         
|                          | Other comprehensive loss                         |                              |     |               |  |       |      | (238 | ) |   |       | (238 | ) 
|                         
|                         
|                         
|                         
|                          | Issuance of common stock:                        |                              |     |               |  |       |      |      |   |   |       |      |   
|                         
|                         
|                         
|                         
|                          |                                                  | Exercise of options          |     |               |  |       |      |      |   |   |       |      | 10 | 
|                         
|                         
|                         
|                         
|                          |                                                  | Employee stock purchase plan |     |               |  |       |      |      |   |   |       |      | 6  | 
|                         
|                         
|                         
|                         
|                          | Deferred compensation                            |                              |     |              |  |       |      |      |   |   |       | 3    |   
|                         
|                         
|                         
|                         
|                          | Mandatorily redeemable preferred stock dividends |                              |     |               |  |       |      |      |   |   |       | (56  | ) 
|                          |                                                  |                              |     |               |  |       |      |      |   |   |       |     
|Balance, March 31, 2001   |                                                  | $                            | (28 | )             |  | $     | (280 | )    |   | $ | 1,381 |     
|                          |                                                  |                              |     |               |  |       |      |      |   |   |       |     

The accompanying notes are an integral part of these condensed
consolidated financial statements.

5



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##### Table of Contents



NEXTEL COMMUNICATIONS, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

For the Three Months Ended March 31, 2001 and 2000


(in millions)


Unaudited


|                                                              |                                                                                  |                                                                                                                               |                                              |                                           |     |     |       |        |     |     |       |  
|------------------------------------------------------------- | -------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------- | ----------------------------------------- | --- | --- | ----- | ------ | --- | --- | ----- | -
|                                                              |                                                                                  | 2001                                                                                                                          |                                              | 2000                                     
|                                                              |                                                                                  |                                                                                                                               |                                              |                                          
|Cash flows from operating activities                          |                                                                                  |                                                                                                                               |                                              |                                           |     |     |       |       
|                                                             
|                                                             
|                                                             
|                                                             
|                                                              | Net loss                                                                         |                                                                                                                               | $                                            | (372                                      | )   |     | $     | (383   | )  
|                                                             
|                                                             
|                                                             
|                                                             
|                                                              | Adjustments to reconcile net loss to net cash provided by
	operating activities: |                                                                                                                               |                                              |                                           |     |     |       |        |    
|                                                             
|                                                             
|                                                             
|                                                             
|                                                              |                                                                                  | Amortization of debt financing costs and accretion of senior
	redeemable discount notes, net of accreted interest capitalized |                                              |                                           | 126 |     |       |        | 100 |    
|                                                             
|                                                             
|                                                             
|                                                             
|                                                              |                                                                                  | Provision for losses on accounts receivable                                                                                   |                                              |                                           | 63  |     |       |        | 27  |    
|                                                             
|                                                             
|                                                             
|                                                             
|                                                              |                                                                                  | Stock-based compensation                                                                                                      |                                              |                                           | 4   |     |       |        | 2   |    
|                                                             
|                                                             
|                                                             
|                                                             
|                                                              |                                                                                  | Depreciation and amortization                                                                                                 |                                              |                                           | 394 |     |       |        | 280 |    
|                                                             
|                                                             
|                                                             
|                                                             
|                                                              |                                                                                  | Equity in losses of unconsolidated affiliates                                                                                 |                                              |                                           | 21  |     |       |        | 35  |    
|                                                             
|                                                             
|                                                             
|                                                             
|                                                              |                                                                                  | Foreign currency transaction losses (gains), net                                                                              |                                              |                                           | 10  |     |       |        | (12 | )  
|                                                             
|                                                             
|                                                             
|                                                             
|                                                              |                                                                                  | Income tax benefit                                                                                                            |                                              |                                           | (14 | )   |       |        | (8  | )  
|                                                             
|                                                             
|                                                             
|                                                             
|                                                              |                                                                                  | Extraordinary loss on early retirement of debt                                                                                |                                              |                                           |    |     |       |        | 104 |    
|                                                             
|                                                             
|                                                             
|                                                             
|                                                              |                                                                                  | Other, net                                                                                                                    |                                              |                                           | (10 | )   |       |        | 16  |    
|                                                             
|                                                             
|                                                             
|                                                             
|                                                              |                                                                                  | Change in assets and liabilities:                                                                                             |                                              |                                           |     |     |       |        |     |    
|                                                             
|                                                             
|                                                             
|                                                             
|                                                              |                                                                                  |                                                                                                                               | Accounts and notes receivable                |                                           |     | (60 | )     |        |     | (66 | )    
|                                                             
|                                                             
|                                                             
|                                                             
|                                                              |                                                                                  |                                                                                                                               | Handset and accessory inventory              |                                           |     | (20 | )     |        |     | 2   |      
|                                                             
|                                                             
|                                                             
|                                                             
|                                                              |                                                                                  |                                                                                                                               | Other assets                                 |                                           |     | 182 |       |        |     | (16 | )    
|                                                             
|                                                             
|                                                             
|                                                             
|                                                              |                                                                                  |                                                                                                                               | Accounts payable, accrued expenses and other |                                           |     | (15 | )     |        |     | 169 |      
|                                                              |                                                                                  |                                                                                                                               |                                              |                                           |     |     |       |       
|                                                              |                                                                                  |                                                                                                                               |                                              | Net cash provided by operating activities |     |     | 309   |        |     |     | 250   |  
|                                                              |                                                                                  |                                                                                                                               |                                              |                                           |     |     |       |       
|Cash flows from investing activities                          |                                                                                  |                                                                                                                               |                                              |                                           |     |     |       |       
|                                                             
|                                                             
|                                                             
|                                                             
|                                                              | Capital expenditures                                                             |                                                                                                                               |                                              | (1,005                                    | )   |     |       | (697   | )  
|                                                             
|                                                             
|                                                             
|                                                             
|                                                              | Proceeds from maturities and sales of short-term investments                     |                                                                                                                               |                                              | 1,815                                     |     |     |       | 894    |    
|                                                             
|                                                             
|                                                             
|                                                             
|                                                              | Purchases of short-term investments                                              |                                                                                                                               |                                              | (1,163                                    | )   |     |       | (919   | )  
|                                                             
|                                                             
|                                                             
|                                                             
|                                                              | Payments for other investments and licenses                                      |                                                                                                                               |                                              | (426                                      | )   |     |       | (56    | )  
|                                                              |                                                                                  |                                                                                                                               |                                              |                                           |     |     |       |       
|                                                              |                                                                                  |                                                                                                                               |                                              | Net cash used in investing activities     |     |     | (779  | )      |     |     | (778  | )
|                                                              |                                                                                  |                                                                                                                               |                                              |                                           |     |     |       |       
|Cash flows from financing activities                          |                                                                                  |                                                                                                                               |                                              |                                           |     |     |       |       
|                                                             
|                                                             
|                                                             
|                                                             
|                                                              | Issuance of debt securities                                                      |                                                                                                                               |                                              | 1,250                                     |     |     |       | 1,150  |    
|                                                             
|                                                             
|                                                             
|                                                             
|                                                              | Retirement of debt securities                                                    |                                                                                                                               |                                              |                                          |     |     |       | (1,208 | )  
|                                                             
|                                                             
|                                                             
|                                                             
|                                                              | Borrowings under long-term credit facilities                                     |                                                                                                                               |                                              |                                          |     |     |       | 1,060  |    
|                                                             
|                                                             
|                                                             
|                                                             
|                                                              | Repayments under long-term credit facilities                                     |                                                                                                                               |                                              | (25                                       | )   |     |       | (3     | )  
|                                                             
|                                                             
|                                                             
|                                                             
|                                                              | Proceeds from exercise of stock options                                          |                                                                                                                               |                                              | 10                                        |     |     |       | 46     |    
|                                                             
|                                                             
|                                                             
|                                                             
|                                                              | Proceeds from finance obligation                                                 |                                                                                                                               |                                              | 17                                        |     |     |       | 32     |    
|                                                             
|                                                             
|                                                             
|                                                             
|                                                              | Debt financing costs and other                                                   |                                                                                                                               |                                              | (10                                       | )   |     |       | (51    | )  
|                                                              |                                                                                  |                                                                                                                               |                                              |                                           |     |     |       |       
|                                                              |                                                                                  |                                                                                                                               |                                              | Net cash provided by financing activities |     |     | 1,242 |        |     |     | 1,026 |  
|                                                              |                                                                                  |                                                                                                                               |                                              |                                           |     |     |       |       
|Effect of exchange rate changes on cash and cash
	equivalents |                                                                                  |                                                                                                                               | 1                                            |                                           |     |     | 1     |       
|                                                              |                                                                                  |                                                                                                                               |                                              |                                           |     |     |       |       
|Net increase in cash and cash equivalents                     |                                                                                  |                                                                                                                               | 773                                          |                                           |     |     | 499   |       
|                                                             
|                                                             
|                                                             
|                                                             
|Cash and cash equivalents, beginning of period                |                                                                                  |                                                                                                                               | 2,609                                        |                                           |     |     | 4,701 |       
|                                                              |                                                                                  |                                                                                                                               |                                              |                                           |     |     |       |       
|Cash and cash equivalents, end of period                      |                                                                                  | $                                                                                                                             | 3,382                                        |                                           |     | $   | 5,200 |       
|                                                              |                                                                                  |                                                                                                                               |                                              |                                           |     |     |       |       

The accompanying notes are an integral part of these condensed
consolidated financial statements.

6



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##### Table of Contents



NEXTEL COMMUNICATIONS, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

Unaudited


Note 1.  Basis of Presentation

Our unaudited condensed consolidated financial statements have
been prepared under the rules and regulations of the Securities
and Exchange Commission and reflect all adjustments that are
necessary for a fair presentation of the results for interim
periods. All adjustments made were normal recurring accruals.

You should read the condensed consolidated financial statements
in conjunction with the consolidated financial statements and
notes contained in our annual report on Form 10-K for the
year ended December 31, 2000. You should also read Nextel
International, Inc.s annual report on Form 10-K for
the year ended December 31, 2000 for matters related to the
operations of Nextel International, our indirect, substantially
wholly owned subsidiary. You should not expect the results of
operations of interim periods to be an indication of the results
for a full year.

Restricted Cash and Cash Equivalents. Nextel
International and its subsidiaries held cash and cash
equivalents of $215 million at March 31, 2001 and
$474 million at December 31, 2000 that were not
available to fund any of the cash needs of our domestic
operations due to restrictions contained in their financing
agreements.

Accumulated Other
Comprehensive Loss.

|                                                             |  |               |      |              |  |   |      |  
|------------------------------------------------------------ |  | ------------- | ---- | ------------ |  | - | ---- | -
|                                                             |  | March 31,     |      | December 31,
|                                                             |  | 2001          |      | 2000        
|                                                             |  |               |      |             
|                                                             |  |              
|                                                             |  | (in millions)
|                                                            
|                                                            
|                                                            
|                                                            
|Unrealized (loss) gain on available-for-sale securities, net |  | $             | (70  | )            |  | $ | 92   |  
|                                                            
|                                                            
|                                                            
|                                                            
|Cumulative foreign currency translation adjustment           |  |               | (180 | )            |  |   | (134 | )
|                                                            
|                                                            
|                                                            
|                                                            
|Cumulative effect of accounting change                       |  |               | (18  | )            |  |   |     |  
|                                                            
|                                                            
|                                                            
|                                                            
|Unrealized loss on cash flow hedge                           |  |               | (12  | )            |  |   |     |  
|                                                             |  |               |      |              |  |   |      |  
|                                                             |  | $             | (280 | )            |  | $ | (42  | )
|                                                             |  |               |      |              |  |   |      |  

Supplemental Cash Flow Information.

|                                                  |                                                                     |               |     |       |   |   |     |     | 
|------------------------------------------------- | ------------------------------------------------------------------- | ------------- | --- | ----- | - | - | --- | --- | 
|                                                  |                                                                     |              
|                                                  |                                                                     | Three Months 
|                                                  |                                                                     | Ended        
|                                                  |                                                                     | March 31,    
|                                                  |                                                                     |              
|                                                  |                                                                     | 2001          |     | 2000 
|                                                  |                                                                     |               |     |      
|                                                  |                                                                     |              
|                                                  |                                                                     | (in millions)
|                                                 
|                                                 
|                                                 
|                                                 
|Capital expenditures                              |                                                                     |               |     |       |   |   |     |    
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Cash paid for capital expenditures, including interest
	capitalized |               | $   | 1,005 |   |   | $   | 697 | 
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Noncash items, including accreted interest capitalized              |               |     | (125  | ) |   |     | 95  | 
|                                                  |                                                                     |               |     |       |   |   |     |    
|                                                  |                                                                     | $             | 880 |       |   | $ | 792 |    
|                                                  |                                                                     |               |     |       |   |   |     |    
|Cash paid for interest,net of amounts capitalized |                                                                     | $             | 189 |       |   | $ | 152 |    
|                                                  |                                                                     |               |     |       |   |   |     |    

Accounting Change and New Accounting Pronouncements.Effective January 1, 2001, we adopted Statement of
Financial Accounting Standards, or SFAS, No. 133,
Accounting for Derivative Instruments and Hedging
Activities, which, as amended by SFAS No. 138,
establishes accounting and reporting standards for derivative
instruments, including some derivative instruments embedded in
other contracts, and for hedging activities. Upon adoption of
SFAS No. 133, we recorded a $20 million transition
adjustment in other comprehensive loss as a cumulative effect of
a change in accounting principle. We will reclassify this

7



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##### Table of Contents



NEXTEL COMMUNICATIONS, INC. AND SUBSIDIARIES


Notes to Condensed Consolidated Financial
Statements  (Continued)

amount into interest expense over the lives of the respective
interest rate swaps, including $8 million during the twelve
months ending December 31, 2001.

We hedge the cash flows on some of our long-term debt using
interest rate swaps. We enter into these derivative contracts to
manage our exposure to interest rate movements by achieving a
desired proportion of fixed rate versus variable rate debt. In
an interest rate swap, we agree to exchange the difference
between a variable interest rate and either a fixed or another
variable interest rate, multiplied by a notional principal
amount.

As of March 31, 2001, we have recognized all derivatives at
their fair values of $84 million in other current and other
noncurrent liabilities on our balance sheet. For our interest
rate swap that qualifies for cash flow hedge accounting, an
unrealized loss of $12 million, representing the effective
portion of the change in its fair value, is reported in other
comprehensive loss and will be reclassified into interest
expense in the same period during which the hedged item affects
interest expense. We will reclassify $10 million of this
amount into interest expense during the twelve months ending
March 31, 2002. The ineffective portion of the change in
fair value of our cash flow hedge and changes in the fair values
of our derivative instruments not qualifying for hedge
accounting are recognized in our statement of operations in the
period of the change. For the three months ended March 31,
2001, interest expense includes an unrealized loss of
$4 million representing changes in the fair values of our
derivative instruments not qualifying as hedges and $0 relating
to the ineffective portion of the change in fair value of our
cash flow hedge.

In May 2000, the Emerging Issues Task Force, or EITF,
reached a consensus on EITF Issue No. 00-14,
Accounting for Certain Sales Incentives, which
addresses the recognition, measurement and statement of
operations classification for sales incentives offered
voluntarily by vendors, without cost to consumers, as a result
of a single exchange transaction. The adoption of EITF Issue
No. 00-14 on April 1, 2001 did not have a material
impact on our financial position or results of operations.

Reclassifications and Other. We have reclassified
some prior period amounts to conform to our current year
presentation.

As a result of our adoption of Staff Accounting Bulletin
No. 101, Revenue Recognition in Financial
Statements, we recognized revenues from digital handset
sales of $73 million during the first quarter of 2001 and
$81 million during the first quarter of 2000 and equal
amounts of cost of revenues for both periods, attributable to
handset sales previously reported in periods prior to 2000.

Note 2.  Long-Term Debt, Capital Lease and Finance
Obligations

|                                                                                                                                         |  |                       |       |              |  |   |       | 
|---------------------------------------------------------------------------------------------------------------------------------------- |  | --------------------- | ----- | ------------ |  | - | ----- | 
|                                                                                                                                         |  | March 31,             |       | December 31,
|                                                                                                                                         |  | 2001                  |       | 2000        
|                                                                                                                                         |  |                       |       |             
|                                                                                                                                         |  |                      
|                                                                                                                                         |  | (dollars in millions)
|                                                                                                                                        
|                                                                                                                                        
|                                                                                                                                        
|                                                                                                                                        
|13% senior redeemable discount notes due 2007, issued by
	Nextel International, net of unamortized discount of $129 and
	$156            |  | $                     | 822   |              |  | $ | 795   | 
|                                                                                                                                        
|                                                                                                                                        
|                                                                                                                                        
|                                                                                                                                        
|10.65% senior redeemable discount notes due 2007, net of
	unamortized discount of $118 and $136                                          |  |                       | 722   |              |  |   | 704   | 
|                                                                                                                                        
|                                                                                                                                        
|                                                                                                                                        
|                                                                                                                                        
|9.75% senior serial redeemable discount notes due 2007,net of unamortized discount of $157 and $180                                      |  |                       | 972   |              |  |   | 949   | 
|                                                                                                                                        
|                                                                                                                                        
|                                                                                                                                        
|                                                                                                                                        
|4.75% convertible senior notes due 2007                                                                                                  |  |                       | 354   |              |  |   | 354   | 
|                                                                                                                                        
|                                                                                                                                        
|                                                                                                                                        
|                                                                                                                                        
|9.95% senior serial redeemable discount notes due 2008,
	net of unamortized discount of $270 and $303                                    |  |                       | 1,357 |              |  |   | 1,324 | 
|                                                                                                                                        
|                                                                                                                                        
|                                                                                                                                        
|                                                                                                                                        
|12.125% senior serial redeemable discount notes due 2008,
	issued by Nextel International, net of unamortized discount of
	$156 and $172 |  |                       | 574   |              |  |   | 558   | 

8



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##### Table of Contents



NEXTEL COMMUNICATIONS, INC. AND SUBSIDIARIES


Notes to Condensed Consolidated Financial
Statements  (Continued)

|                                                                                                                          |                                             |                       |        |              |     |   |        |        |     |  
|------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------- | --------------------- | ------ | ------------ | --- | - | ------ | ------ | --- | -
|                                                                                                                          |                                             | March 31,             |        | December 31,
|                                                                                                                          |                                             | 2001                  |        | 2000        
|                                                                                                                          |                                             |                       |        |             
|                                                                                                                          |                                             |                      
|                                                                                                                          |                                             | (dollars in millions)
|                                                                                                                         
|                                                                                                                         
|                                                                                                                         
|                                                                                                                         
|12% senior serial redeemable notes due 2008, net of
	unamortized discount of $4 and $4                                    |                                             |                       | 296    |              |     |   | 296    |       
|                                                                                                                         
|                                                                                                                         
|                                                                                                                         
|                                                                                                                         
|9.375% senior serial redeemable notes due 2009                                                                            |                                             |                       | 2,000  |              |     |   | 2,000  |       
|                                                                                                                         
|                                                                                                                         
|                                                                                                                         
|                                                                                                                         
|5.25% convertible senior notes due 2010                                                                                   |                                             |                       | 1,150  |              |     |   | 1,150  |       
|                                                                                                                         
|                                                                                                                         
|                                                                                                                         
|                                                                                                                         
|12.75% senior serial redeemable notes due 2010, issued by
	Nextel International, net of unamortized discount of $9 and $9 |                                             |                       | 641    |              |     |   | 641    |       
|                                                                                                                         
|                                                                                                                         
|                                                                                                                         
|                                                                                                                         
|9.5% senior serial redeemable notes due 2011                                                                              |                                             |                       | 1,250  |              |     |   |       |       
|                                                                                                                         
|                                                                                                                         
|                                                                                                                         
|                                                                                                                         
|Bank credit facility                                                                                                      |                                             |                       | 4,500  |              |     |   | 4,500  |       
|                                                                                                                         
|                                                                                                                         
|                                                                                                                         
|                                                                                                                         
|Nextel International credit facilities                                                                                    |                                             |                       | 515    |              |     |   | 524    |       
|                                                                                                                         
|                                                                                                                         
|                                                                                                                         
|                                                                                                                         
|Other long-term debt                                                                                                      |                                             |                       | 2      |              |     |   | 2      |       
|                                                                                                                          |                                             |                       |        |              |     |   |        |       
|                                                                                                                          | Total long-term debt                        |                       |        | 15,155       |     |   |        | 13,797 |    
|                                                                                                                         
|                                                                                                                         
|                                                                                                                         
|                                                                                                                         
|                                                                                                                          |                                             | Less current portion  |        |              | (34 | ) |        |        | (34 | )
|                                                                                                                          |                                             |                       |        |              |     |   |        |       
|                                                                                                                          |                                             | $                     | 15,121 |              |     | $ | 13,763 |       
|                                                                                                                          |                                             |                       |        |              |     |   |        |       
|                                                                                                                         
|Capital lease obligation                                                                                                  |                                             | $                     | 253    |              |     | $ | 260    |       
|                                                                                                                         
|                                                                                                                         
|                                                                                                                         
|                                                                                                                         
|Finance obligation                                                                                                        |                                             |                       | 679    |              |     |   | 674    |       
|                                                                                                                          |                                             |                       |        |              |     |   |        |       
|                                                                                                                          | Total capital lease and finance obligations |                       |        | 932          |     |   |        | 934    |    
|                                                                                                                         
|                                                                                                                         
|                                                                                                                         
|                                                                                                                         
|                                                                                                                          |                                             | Less current portion  |        |              | (72 | ) |        |        | (68 | )
|                                                                                                                          |                                             |                       |        |              |     |   |        |       
|                                                                                                                          |                                             | $                     | 860    |              |     | $ | 866    |       
|                                                                                                                          |                                             |                       |        |              |     |   |        |       

9.5% Senior Serial Redeemable Notes.In
January 2001, we completed the issuance and sale in a
private placement of $1.25 billion in principal amount of
9.5% senior serial redeemable notes due 2011, generating
$1.245 billion in net cash proceeds. Cash interest is
payable semiannually beginning August 1, 2001 at a rate of
9.5% per year. We may choose to redeem some or all of these
notes starting February 1, 2006 at an initial redemption
price of 104.75% of the aggregate principal amount of these
notes, plus accrued and unpaid interest. On or before
February 1, 2004, we may choose to redeem up to 35% of the
original principal amount of the notes using the proceeds of one
or more sales of qualified equity securities at 109.5% of their
principal amount, plus accrued and unpaid interest to the date
of redemption. These notes are senior unsecured indebtedness of
ours and rank equal in right of payment with all our other
unsubordinated, unsecured indebtedness. We have agreed to
specific registration rights with respect to these notes. If an
exchange offer of new notes, without restrictive transfer
legends, for these notes is not consummated by August 1,
2001, the interest rate on the notes will increase by 0.5% per
year until this exchange offer is completed or until other
specified conditions are met.

Note 3.  Contingencies

Beginning in the second quarter of 2000, allegations of
employment discrimination and harassment were leveled against us
in the press and some related complaints subsequently were filed
with the Equal Employment Opportunity Commission. Those
complaints have since been withdrawn. Together with the law firm
that represents our current and former employees who have
asserted these allegations, we have structured mutually
acceptable arrangements for processing and resolving these
claims. Substantially all of the claimants have agreed to have
their claims addressed exclusively under these arrangements.
Based on the specific claim details and our related
investigative results to date, we do not believe that the claims
that have come to our attention are likely to result in a
material liability to us.

See Part II, Item 1. Legal Proceedings for a
discussion of other legal matters.

9



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##### Table of Contents



NEXTEL COMMUNICATIONS, INC. AND SUBSIDIARIES


Notes to Condensed Consolidated Financial
Statements  (Continued)

Note 4.  Mandatorily Redeemable Preferred Stock

|                                                                                                                                                                                                                                                                                                                            |  |                       |       |              |  |   |       | 
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | --------------------- | ----- | ------------ |  | - | ----- | 
|                                                                                                                                                                                                                                                                                                                            |  | March 31,             |       | December 31,
|                                                                                                                                                                                                                                                                                                                            |  | 2001                  |       | 2000        
|                                                                                                                                                                                                                                                                                                                            |  |                       |       |             
|                                                                                                                                                                                                                                                                                                                            |  |                      
|                                                                                                                                                                                                                                                                                                                            |  | (dollars in millions)
|                                                                                                                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                                                                                                           
|Series D exchangeable preferred stock mandatorily
        redeemable 2009, 13% cumulative annual dividend; 780,772 and
        756,185 shares issued; 780,761 and 756,174 shares outstanding;
        stated at liquidation value                                                                                           |  | $                     | 802   |              |  | $ | 777   | 
|                                                                                                                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                                                                                                           
|Series E exchangeable preferred stock mandatorily
        redeemable 2010, 11.125% cumulative annual dividend;
        1,043,652 and 1,015,397 shares issued; 1,043,638 and 1,015,383
        shares outstanding; stated at liquidation value                                                                               |  |                       | 1,058 |              |  |   | 1,029 | 
|                                                                                                                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                                                                                                           
|Zero coupon convertible preferred stock mandatorily
        redeemable 2013, no dividend; convertible into 4,779,386
        shares of class A common stock; 245,245 shares issued and
        outstanding; stated at fair value when issued plus accretion of
        liquidation preference at 9.25% compounded quarterly |  |                       | 77    |              |  |   | 75    | 
|                                                                                                                                                                                                                                                                                                                            |  |                       |       |              |  |   |       | 
|                                                                                                                                                                                                                                                                                                                            |  | $                     | 1,937 |              |  | $ | 1,881 | 
|                                                                                                                                                                                                                                                                                                                            |  |                       |       |              |  |   |       | 

Note 5.  Segment Reporting

We operate in two business segments, domestic and international.
These reportable segments are strategic business units in
different phases of development that we manage and finance
separately based on the fundamental differences in their
operations. We evaluate performance based on earnings
(losses) before interest, taxes, depreciation and
amortization and other nonoperating charges, referred to as
segment earnings (losses).

|                                                      |  |                                           |       |               |  |              |      |              |  |   |    |   |  |   |       |  
|----------------------------------------------------- |  | ----------------------------------------- | ----- | ------------- |  | ------------ | ---- | ------------ |  | - | -- | - |  | - | ----- | -
|                                                      |  |                                          
|                                                      |  | For the Three Months Ended March 31, 2001
|                                                      |  |                                          
|                                                      |  |                                           |       | Intercompany  |  |             
|                                                      |  | Domestic                                  |       | International |  | Eliminations |      | Consolidated
|                                                      |  |                                           |       |               |  |              |      |             
|                                                      |  |                                          
|                                                      |  | (in millions)                            
|                                                     
|                                                     
|                                                     
|                                                     
|Operating revenues                                    |  | $                                         | 1,603 |               |  | $            | 139  |              |  | $ |   |   |  | $ | 1,742 |  
|                                                      |  |                                           |       |               |  |              |      |              |  |   |    |   |  |   |       |  
|Segment earnings (losses)                             |  | $                                         | 353   |               |  | $            | (34  | )            |  | $ | (1 | ) |  | $ | 318   |  
|                                                     
|                                                     
|                                                     
|                                                     
|Depreciation and amortization                         |  |                                           | (338  | )             |  |              | (56  | )            |  |   |   |   |  |   | (394  | )
|                                                     
|                                                     
|                                                     
|                                                     
|Interest expense                                      |  |                                           | (286  | )             |  |              | (72  | )            |  |   |   |   |  |   | (358  | )
|                                                     
|                                                     
|                                                     
|                                                     
|Interest income                                       |  |                                           | 74    |               |  |              | 5    |              |  |   |   |   |  |   | 79    |  
|                                                     
|                                                     
|                                                     
|                                                     
|Other (expense) income, net                           |  |                                           | (21   | )             |  |              | (10  | )            |  |   |   |   |  |   | (31   | )
|                                                      |  |                                           |       |               |  |              |      |              |  |   |    |   |  |   |       |  
|Loss before income tax benefit and extraordinary item |  | $                                         | (218  | )             |  | $            | (167 | )            |  | $ | (1 | ) |  | $ | (386  | )
|                                                      |  |                                           |       |               |  |              |      |              |  |   |    |   |  |   |       |  
|Capital expenditures                                  |  | $                                         | 660   |               |  | $            | 220  |              |  | $ |   |   |  | $ | 880   |  
|                                                      |  |                                           |       |               |  |              |      |              |  |   |    |   |  |   |       |  

[Additional columns below]

[Continued from above table, first column(s) repeated]

|                                                      |  |                                           |       |               |  |              |      |              |  |   |   |  |  |   |       |  
|----------------------------------------------------- |  | ----------------------------------------- | ----- | ------------- |  | ------------ | ---- | ------------ |  | - | - |  |  | - | ----- | -
|                                                      |  |                                          
|                                                      |  | For the Three Months Ended March 31, 2000
|                                                      |  |                                          
|                                                      |  |                                           |       | Intercompany  |  |             
|                                                      |  | Domestic                                  |       | International |  | Eliminations |      | Consolidated
|                                                      |  |                                           |       |               |  |              |      |             
|                                                      |  |                                          
|                                                      |  | (in millions)                            
|                                                     
|                                                     
|                                                     
|                                                     
|Operating revenues                                    |  | $                                         | 1,123 |               |  | $            | 52   |              |  | $ |  |  |  | $ | 1,175 |  
|                                                      |  |                                           |       |               |  |              |      |              |  |   |   |  |  |   |       |  
|Segment earnings (losses)                             |  | $                                         | 262   |               |  | $            | (34  | )            |  | $ |  |  |  | $ | 228   |  
|                                                     
|                                                     
|                                                     
|                                                     
|Depreciation and amortization                         |  |                                           | (247  | )             |  |              | (33  | )            |  |   |  |  |  |   | (280  | )
|                                                     
|                                                     
|                                                     
|                                                     
|Interest expense                                      |  |                                           | (226  | )             |  |              | (52  | )            |  |   |  |  |  |   | (278  | )
|                                                     
|                                                     
|                                                     
|                                                     
|Interest income                                       |  |                                           | 83    |               |  |              |     |              |  |   |  |  |  |   | 83    |  
|                                                     
|                                                     
|                                                     
|                                                     
|Other (expense) income, net                           |  |                                           | (48   | )             |  |              | 8    |              |  |   |  |  |  |   | (40   | )
|                                                      |  |                                           |       |               |  |              |      |              |  |   |   |  |  |   |       |  
|Loss before income tax benefit and extraordinary item |  | $                                         | (176  | )             |  | $            | (111 | )            |  | $ |  |  |  | $ | (287  | )
|                                                      |  |                                           |       |               |  |              |      |              |  |   |   |  |  |   |       |  
|Capital expenditures                                  |  | $                                         | 675   |               |  | $            | 117  |              |  | $ |  |  |  | $ | 792   |  
|                                                      |  |                                           |       |               |  |              |      |              |  |   |   |  |  |   |       |  

|                                   |  |                      |        |                         |  |   |       |  |  |   |    |  |  |   |        |  |  |   |        |  |  |   |       |  |  |   |      |  
|---------------------------------- |  | -------------------- | ------ | ----------------------- |  | - | ----- |  |  | - | -- |  |  | - | ------ |  |  | - | ------ |  |  | - | ----- |  |  | - | ---- | -
|                                   |  |                      |        |                         |  |   |       | 
|                                   |  | As of March 31, 2001 |        |                         |  |   |       | 
|                                   |  |                      |        |                         |  |   |       | 
|                                   |  |                      |        |                        
|                                   |  |                      |        | As of December 31, 2000
|                                   |  |                      |        |                        
|Property, plant and equipment, net |  | $                    | 8,080  |                         |  | $ | 1,223 |  |  | $ |   |  |  | $ | 9,303  |  |  | $ | 7,721  |  |  | $ | 1,070 |  |  | $ |     |  
|                                   |  |                      |        |                         |  |   |       |  |  |   |    |  |  |   |        |  |  |   |        |  |  |   |       |  |  |   |      |  
|Identifiable assets                |  | $                    | 20,258 |                         |  | $ | 2,993 |  |  | $ | 11 |  |  | $ | 23,262 |  |  | $ | 19,687 |  |  | $ | 3,193 |  |  | $ | (194 | )
|                                   |  |                      |        |                         |  |   |       |  |  |   |    |  |  |   |        |  |  |   |        |  |  |   |       |  |  |   |      |  

[Additional columns below]

[Continued from above table, first column(s) repeated]

|                                   |  |          |        | 
|---------------------------------- |  | -------- | ------ | 
|                                   |  |         
|                                   |  | As of   
|                                   |  | December
|                                   |  | 31, 2000
|                                   |  |         
|Property, plant and equipment, net |  | $        | 8,791  | 
|                                   |  |          |        | 
|Identifiable assets                |  | $        | 22,686 | 
|                                   |  |          |        | 

Note 6.  Subsequent Event

In early May 2001, we purchased 800 MHz and 900 MHz
specialized mobile radio licenses and related assets from Mobex
Communications, Inc. for a cash purchase price of
$102 million.

10



---



##### Table of Contents






Item 2.  Managements Discussion and
Analysis of Financial Condition and Results of Operations.

Overview

The following is a discussion and analysis of:



| |   |                                                                                                                                
| | - | -------------------------------------------------------------------------------------------------------------------------------
| |  | our consolidated financial condition and results of operations
	for the three-month periods ended March 31, 2001 and 2000;
	and
|
| |  | significant factors that could affect our prospective financial
	condition and results of operations.                          

You should read this discussion in conjunction with our 2000
annual report on Form 10-K. Historical results may not
indicate future performance. See Forward Looking
Statements.

Our consolidated financial statements include the accounts of
Nextel International, Inc. and its consolidated subsidiaries.
However, additional more detailed and focused information
relating to Nextel International may be found in the periodic
and other reports filed by Nextel International with the
Securities and Exchange Commission pursuant to the rules under
the Securities Exchange Act of 1934.

We provide a wide array of digital wireless communications
services throughout the United States. We offer a
differentiated, integrated package of digital wireless
communications services under the Nextel brand name, primarily
to business users. Our digital mobile network constitutes one of
the largest integrated wireless communications systems utilizing
a single transmission technology in the United States. This
digital technology, developed by Motorola, Inc., is referred to
as integrated Digital Enhanced Network, or iDEN®,
technology.

A customer using our digital mobile network is able to access:



| |   |                                                                                                                                            
| | - | -------------------------------------------------------------------------------------------------------------------------------------------
| |  | digital mobile telephone service;                                                                                                          
|
| |  | digital two-way radio dispatch service, which is marketed as
	Nextel Direct Connect® service;                                            
|
| |  | the Internet, mobile messaging services, e-mail and advanced
	business applications, which are marketed as Nextel
	Wireless Web services;
|
| |  | advanced calling features, such as three-way calling, voicemail,
	call forwarding and additional line service;                             
|
| |  | international roaming capabilities, which are marketed as
	Nextel WorldwideSM; and                                                       
|
| |  | text and numeric paging.                                                                                                                   

In addition to our domestic operations, we have ownership
interests in international wireless companies through our
substantially wholly owned subsidiary, Nextel International.
Nextel International, through its subsidiaries, provides
wireless communications services in and around various major
metropolitan market areas in Latin America and the Philippines,
referred to as its managed markets. Additionally, Nextel
International has investments in wireless communications
providers in Canada and Japan and owns analog specialized mobile
radio companies in Chile.

As of March 31, 2001:



| |   |                                                                                                                                                                                                                                                                    
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | we provided service to about 7,198,500 digital handsets in the
	United States;                                                                                                                                                                                     
|
| |  | our digital mobile network or the compatible digital mobile
	network of Nextel Partners, Inc., our affiliate providing
	service in small and medium sized markets, was operational in
	184 of the top 200 metropolitan statistical areas in the United
	States; and
|
| |  | Nextel International provided service to about 934,800 digital
	handsets in its managed markets.                                                                                                                                                                   

In January 2001, we opened our fifth customer care center
in Temple, Texas and expect to open a sixth center near
Bremerton, Washington in the second half of 2001. With the
addition of these new customer care centers, we expect to be
well positioned to handle the core needs of our growing customer
base as we expand our product and service offerings.

11



---



##### Table of Contents



In January 2001, we agreed to purchase specified 900 MHz
specialized mobile radio licenses from Arch Wireless, Inc. for
an aggregate cash purchase price of $175 million and an
investment of $75 million in a new Arch Wireless equity
issue of redeemable cumulative preferred stock. In
February 2001, we advanced to Arch Wireless the
$175 million purchase price and the $75 million
investment in the form of two loans which accrue interest until
the necessary regulatory approvals to permit transfer of the 900
MHz licenses to us are obtained. Upon transfer of the licenses
to us, Arch Wireless obligation to repay the $175 million
loan will be satisfied, and the $75 million loan will be
converted into the new series of preferred stock of Arch
Wireless. Arch Wireless will pay accrued interest on the two
loans by issuing us shares of its common stock at closing. The
closing of this purchase is subject to customary conditions.

In February 2001, William E. Conway, Jr. was appointed
Chairman of our board of directors, replacing Daniel F.
Akerson, who remains on our board. Mr. Conway has served as
one of our directors since February 1997. In
April 2001, we announced that James F. Mooney had been
named our Executive Vice President and Chief Operating Officer,
replacing Steven P. Dussek.

In February 2001, we introduced the
i2000plus handset, our first global handset
with Internet capabilities. The i2000plus, like the
i2000, is a dual-mode handset manufactured by
Motorola that operates on both iDEN technology and the Global
System for Mobile Communications, or GSM, digital wireless
technology that is the current digital cellular communications
standard in Europe and elsewhere. As of March 31, 2001, a
customer using the i2000 or i2000plus could roam in more than 80
countries worldwide with the convenience of one phone, one
number and one bill.

In April 2001, we introduced the i85s and
the i50sx handsets, which are part of a new
platform of handsets with embedded Java technology. These
new handsets, developed and manufactured by Motorola, combine
the qualities of our Internet capable handsets with additional
features and functionality such as the ability to download
Java-based applications, wireless synchronization capabilities
and voice activated dialing and recorder features. As more
Java-based applications are developed, we expect our customers
to be able to download the associated new software onto their
handsets from our website.

In May 2001, we purchased a substantial portion of the
operations, assets and rights associated with about 200 retail
stores from Lets Talk Cellular & Wireless, Inc., a
specialty cellular and wireless retailer, for a cash purchase
price of about $32 million subject to adjustments. The
stores are being rebranded as Nextel stores and will serve as
additional points of contact for existing and new customers.

In May 2001, we announced a domestic restructuring,
including a 5% workforce reduction, designed to reduce operating
costs and improve operating efficiencies. We will record a
restructuring charge related to these actions in the second
quarter of 2001.

12



---



##### Table of Contents



Results of Operations

Operating revenues.

|              |                    |                       |       |              |  |           |    |              |   |               |       |         |  |  |    |     |   |   |     |     |  |  |     |    |  
|------------- | ------------------ | --------------------- | ----- | ------------ |  | --------- | -- | ------------ | - | ------------- | ----- | ------- |  |  | -- | --- | - | - | --- | --- |  |  | --- | -- | -
|              |                    |                       |       |              |  |           |    |              |   |              
|              |                    |                       |       | % of         |  |           |    | % of         |   | Change from  
|              |                    |                       |       | Consolidated |  |           |    | Consolidated |   | Previous Year
|              |                    | March 31,             |       | Operating    |  | March 31, |    | Operating    |   |              
|              |                    | 2001                  |       | Revenues     |  | 2000      |    | Revenues     |   | Dollars       |       | Percent
|              |                    |                       |       |              |  |           |    |              |   |               |       |        
|              |                    |                      
|              |                    | (dollars in millions)
|             
|             
|             
|             
|Domestic      |                    | $                     | 1,603 |              |  |           | 92 | %            |   | $             | 1,123 |         |  |  | 96 | %   |   | $ | 480 |     |  |  | 43  | % 
|             
|             
|             
|             
|International |                    |                       | 139   |              |  |           | 8  | %            |   |               | 52    |         |  |  | 4  | %   |   |   | 87  |     |  |  | 167 | % 
|              |                    |                       |       |              |  |           |    |              |   |               |       |         |  |  |    |     |   |   |     |     |  |  |     |   
|              | Operating revenues |                       | $     | 1,742        |  |           |    | 100          | % |               | $     | 1,175   |  |  |    | 100 | % |   | $   | 567 |  |  |     | 48 | %
|              |                    |                       |       |              |  |           |    |              |   |               |       |         |  |  |    |     |   |   |     |     |  |  |     |   

|                                             |  |  |       |  |  |  |   |  |  |          |       |         |  |  |   |  |  |  |       |  |  |  |     |  
|-------------------------------------------- |  |  | ----- |  |  |  | - |  |  | -------- | ----- | ------- |  |  | - |  |  |  | ----- |  |  |  | --- | -
|Digital handsets in service at end of period |  |  |       |  |  |  |   |  |  |          |       |        
|for consolidated subsidiaries (in            |  |  |       |  |  |  |   |  |  |          |       |        
|thousands)                                   |  |  |       |  |  |  |   |  |  |          |       |        
|                                             |  |  |       |  |  |  |   |  |  | Handsets |       | Percent
|                                             |  |  |       |  |  |  |   |  |  |          |       |        
|Domestic                                     |  |  | 7,199 |  |  |  |  |  |  |          | 5,056 |         |  |  |  |  |  |  | 2,143 |  |  |  | 42  | %
|                                            
|                                            
|                                            
|                                            
|International                                |  |  | 935   |  |  |  |  |  |  |          | 359   |         |  |  |  |  |  |  | 576   |  |  |  | 160 | %

The increase in domestic operating revenues from the first
quarter of 2000 to the first quarter of 2001 consists of a 45%
increase in wireless service and other revenues of
$463 million to $1.5 billion and a 19% increase in
revenues from digital handset and accessory sales of
$17 million to $108 million. We continue to sell handsets
at prices below our cost to attract new customers and as handset
upgrade and retention inducements for existing customers.
Additionally, as competition has intensified, the prices at
which we sell handsets to our new and existing customers have
declined. Accordingly, revenues from domestic digital handset
and accessory sales have not increased in proportion to the
increase in number of handsets sold. However, for the remainder
of 2001, this effect may be mitigated as we raise prices on
existing handsets and introduce more feature rich and higher
priced handsets, which we believe may allow us to limit the
level of subsidy required to attract and retain customers in our
targeted segments.

Domestic service and other revenues increased principally as a
result of a 42% increase in domestic handsets in service.
Average monthly revenue per domestic handset decreased slightly
from about $72 during the first quarter of 2000 to about $71
during the first quarter of 2001. Additionally, as compared to
the first quarter of 2000, average monthly minutes of use per
subscriber increased 16% in the first quarter of 2001 to about
510 minutes, which we attribute to increased phone usage
primarily driven by the introduction of pricing plans designed
to provide additional value to our customers. These new pricing
plans, developed in part to meet competitive demands, generally
provide lower per-minute rates made available in conjunction
with fixed-rate service plans. These plans typically include a
fixed amount of interconnect minutes combined with unlimited
digital two-way radio service, unlimited Nextel Wireless Web
services, free incoming calls or free long distance service, all
for a stated package price. The growth in handsets in service is
the result of a number of factors, principally:



| |   |                                                                                                                                                                                                                                     
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | lower priced handsets reflecting more aggressive promotions
	during the fourth quarter of 2000 and the first quarter of 2001;                                                                                                       
|
| |  | the introduction of more competitive service pricing plans
	targeted at meeting more of our customers needs, including
	a variety of fixed-rate plans offering bundled monthly minutes
	and other integrated services and features;
|
| |  | differentiated products and services, including Nextel Direct
	Connect;                                                                                                                                                             
|
| |  | increased brand name recognition through our indirect
	distribution channels;                                                                                                                                                       
|
| |  | increased advertising and marketing campaigns;                                                                                                                                                                                      
|
| |  | increased sales force and marketing staff; and                                                                                                                                                                                      
|
| |  | improved quality of service.                                                                                                                                                                                                        

13



---



##### Table of Contents



Our average monthly revenue per domestic handset may decrease in
the future if our customers migrate to lower priced service
offering packages or if competitive pressures require us to:



| |   |                                                                                                                                                                                                                                                    
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | further restructure our service offering packages to offer more
	value;                                                                                                                                                                            
|
| |  | reduce our service offering prices; or                                                                                                                                                                                                             
|
| |  | respond to particular short-term, market specific situations,
	such as special introductory pricing or packages that may be
	offered by providers launching their service, or particular new
	product or service offerings, in a particular market.

Operating revenues for our international operations increased
from the first quarter of 2000 to the first quarter of 2001
primarily as a result of a 160% increase in the number of
digital handsets in service in Nextel Internationals
managed markets, particularly in its Brazilian and Mexican
markets. Additionally, the introduction of higher priced service
plans primarily in Brazil and Mexico and the launch of new
services, such as calling party pays in Peru, also contributed
to the increase.

Cost of revenues.

|              |                  |                       |     |              |  |           |     |              |  |               |     |         |  |  |     |     |  |   |     |     |  |  |      |     | 
|------------- | ---------------- | --------------------- | --- | ------------ |  | --------- | --- | ------------ |  | ------------- | --- | ------- |  |  | --- | --- |  | - | --- | --- |  |  | ---- | --- | 
|              |                  |                       |     |              |  |           |     |              |  |              
|              |                  |                       |     | % of         |  |           |     | % of         |  | Change from  
|              |                  |                       |     | Consolidated |  |           |     | Consolidated |  | Previous Year
|              |                  | March 31,             |     | Operating    |  | March 31, |     | Operating    |  |              
|              |                  | 2001                  |     | Revenues     |  | 2000      |     | Revenues     |  | Dollars       |     | Percent
|              |                  |                       |     |              |  |           |     |              |  |               |     |        
|              |                  |                      
|              |                  | (dollars in millions)
|             
|             
|             
|             
|Domestic      |                  | $                     | 627 |              |  |           | 36% |              |  | $             | 405 |         |  |  | 34% |     |  | $ | 222 |     |  |  | 55%  |    
|             
|             
|             
|             
|International |                  |                       | 71  |              |  |           | 4%  |              |  |               | 31  |         |  |  | 3%  |     |  |   | 40  |     |  |  | 129% |    
|              |                  |                       |     |              |  |           |     |              |  |               |     |         |  |  |     |     |  |   |     |     |  |  |      |    
|              | Cost of revenues |                       | $   | 698          |  |           |     | 40%          |  |               | $   | 436     |  |  |     | 37% |  |   | $   | 262 |  |  |      | 60% | 
|              |                  |                       |     |              |  |           |     |              |  |               |     |         |  |  |     |     |  |   |     |     |  |  |      |    

The increase in cost of revenues from the first quarter of 2000
to the first quarter of 2001 for our domestic operations
consists of a 49% increase in cost of providing wireless
services of $97 million to $297 million and a 61%
increase in cost of digital handset and accessory sales of
$125 million to $330 million. Cost of digital handset and
accessory sales increased due to the increase in the number of
handsets sold to new and existing customers, partially offset by
a decrease in the average cost we paid for the handsets sold.

Domestic cost of service revenues increased primarily as a
result of variable costs related to interconnect fees on higher
minutes of use and increased fixed costs related to direct
switch and transmitter and receiver site costs including rent,
utility and interconnection fees that we incurred. Total system
minutes of use grew 68% from the first quarter of 2000 to the
first quarter of 2001, principally due to the larger number of
handsets in service as well as the 16% increase in average
monthly minutes of use per subscriber in the first quarter of
2001 compared to the same period in 2000. The fixed transmitter
and receiver site and switch costs increased due to a 42%
increase in transmitter and receiver sites and related equipment
and a 42% increase in the number of switches we placed in
service from March 31, 2000 to March 31, 2001.

The increase in international cost of revenues consists of an
increase in cost of providing wireless services of
$21 million or 150%, and an increase in cost of digital
handset and accessory sales of $19 million or 110%. The
increase in the cost of providing international wireless
services is primarily attributable to:



| |   |                                                                                                                                                                                                                                                       
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | an increase in variable costs related to interconnect fees on
	significantly higher minutes of use; and                                                                                                                                               
|
| |  | an increase in site ground lease and utility expenses incurred
	due to an 85% increase in the number of transmitter and receiver
	sites placed in service by Nextel Internationals
	consolidated subsidiaries from March 31, 2000 to
	March 31, 2001.

The increase in international cost of digital handset and
accessory sales is primarily due to the increase in the number
of digital handsets sold, partially offset by a decrease in the
average cost Nextel International paid for the handsets sold.

14



---



##### Table of Contents



We expect the amount of cost of revenues to increase as we place
more sites and switches into service to add capacity and
coverage to our networks, as customer usage of the digital
mobile networks increases and as we sell more handsets and
accessories to new customers and provide handset upgrade and
retention inducements to existing customers.

Selling, general and administrative expenses.

|                                    |                            |                       |     |              |  |           |     |              |  |               |     |         |  |  |     |     |  |   |     |     |  |  |      |     | 
|----------------------------------- | -------------------------- | --------------------- | --- | ------------ |  | --------- | --- | ------------ |  | ------------- | --- | ------- |  |  | --- | --- |  | - | --- | --- |  |  | ---- | --- | 
|                                    |                            |                       |     |              |  |           |     |              |  |              
|                                    |                            |                       |     | % of         |  |           |     | % of         |  | Change from  
|                                    |                            |                       |     | Consolidated |  |           |     | Consolidated |  | Previous Year
|                                    |                            | March 31,             |     | Operating    |  | March 31, |     | Operating    |  |              
|                                    |                            | 2001                  |     | Revenues     |  | 2000      |     | Revenues     |  | Dollars       |     | Percent
|                                    |                            |                       |     |              |  |           |     |              |  |               |     |        
|                                    |                            |                      
|                                    |                            | (dollars in millions)
|                                   
|                                   
|                                   
|                                   
|Selling, general and administrative |                            | $                     | 726 |              |  |           | 42% |              |  | $             | 511 |         |  |  | 43% |     |  | $ | 215 |     |  |  | 42%  |    
|                                    |                            |                       |     |              |  |           |     |              |  |               |     |         |  |  |     |     |  |   |     |     |  |  |      |    
|Domestic                            |                            | $                     | 327 |              |  |           | 19% |              |  | $             | 249 |         |  |  | 21% |     |  | $ | 78  |     |  |  | 31%  |    
|                                   
|                                   
|                                   
|                                   
|International                       |                            |                       | 47  |              |  |           | 3%  |              |  |               | 28  |         |  |  | 2%  |     |  |   | 19  |     |  |  | 68%  |    
|                                    |                            |                       |     |              |  |           |     |              |  |               |     |         |  |  |     |     |  |   |     |     |  |  |      |    
|                                    | Selling and marketing      |                       | $   | 374          |  |           |     | 22%          |  |               | $   | 277     |  |  |     | 23% |  |   | $   | 97  |  |  |      | 35% | 
|                                    |                            |                       |     |              |  |           |     |              |  |               |     |         |  |  |     |     |  |   |     |     |  |  |      |    
|Domestic                            |                            | $                     | 296 |              |  |           | 17% |              |  | $             | 207 |         |  |  | 18% |     |  | $ | 89  |     |  |  | 43%  |    
|                                   
|                                   
|                                   
|                                   
|International                       |                            |                       | 55  |              |  |           | 3%  |              |  |               | 27  |         |  |  | 2%  |     |  |   | 28  |     |  |  | 104% |    
|                                   
|                                   
|                                   
|                                   
|Intercompany eliminations           |                            |                       | 1   |              |  |           |    |              |  |               |    |         |  |  |    |     |  |   | 1   |     |  |  | NM   |    
|                                    |                            |                       |     |              |  |           |     |              |  |               |     |         |  |  |     |     |  |   |     |     |  |  |      |    
|                                    | General and administrative |                       | $   | 352          |  |           |     | 20%          |  |               | $   | 234     |  |  |     | 20% |  |   | $   | 118 |  |  |      | 50% | 
|                                    |                            |                       |     |              |  |           |     |              |  |               |     |         |  |  |     |     |  |   |     |     |  |  |      |    



---

NMNot Meaningful


The increase in domestic selling and marketing expenses from the
first quarter of 2000 to the first quarter of 2001 primarily
reflects increased costs incurred in connection with higher
sales of handsets including:



| |   |                                                                                                                                                                                                
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | $39 million, or a 36% increase in commissions and residuals
	earned by indirect dealers and distributors as a result of
	increased handset sales through these channels;                       
|
| |  | $21 million, or a 39% increase in advertising expenses, due
	to aggressive marketing campaigns directed at growing our
	customer base and promoting our services, such as Nextel
	Wireless Web;
|
| |  | $11 million, or a 15% increase in sales and marketing
	payroll and related expenses including increased commissions
	attributable to a larger direct sales force; and                          
|
| |  | $7 million, or a 54% increase in other general marketing
	expenses.                                                                                                                            

The increase in international selling and marketing expenses is
primarily due to increased direct sales labor costs attributable
to a larger direct sales force and increased commissions from
higher levels of digital handset sales.

Domestic general and administrative expenses increased from the
first quarter of 2000 to the first quarter of 2001 primarily as
a result of activities to support a larger customer base,
specifically:



| |   |                                                                                                                                                                                                                                                                                                 
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | $32 million, or a 139% increase in bad debt expense, which
	continued to represent about 3% of domestic operating revenues,
	consistent with the level of bad debt expense for the years
	ended December 31, 2000 and 1999, but a percentage increase
	as compared to the first quarter of 2000;
|
| |  | $31 million, or a 40% increase in expenses related to
	billing, collection, customer retention and customer care
	activities, including the costs associated with our fifth
	customer care center which commenced operations in
	January 2001; and                                              
|
| |  | $26 million, or a 24% increase in personnel, facilities
	costs and general corporate expenses.                                                                                                                                                                                                  

International general and administrative expenses increased due
to a $28 million increase in general corporate expenses,
including payroll, related expenses for collection and customer
care activities and facilities and information technology
related costs to support a growing customer base.

15



---



##### Table of Contents



The aggregate amount of selling, general and administrative
expenses is expected to increase both domestically and
internationally as a result of a number of factors, including
but not limited to:



| |   |                                                                                                                                                                                                                                                                                               
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | increasing commission and residual payments owed to indirect
	dealers and distributors as we sell more handsets through these
	channels, partially offset by efforts to lower domestic
	commissions and to generate more domestic handset sales through
	our lower cost distribution channels;
|
| |  | increasing costs as a result of opening and operating additional
	customer care centers, including our sixth domestic customer
	care center expected to open in the second half of 2001;                                                                                                      
|
| |  | costs associated with operating recently acquired domestic
	retail stores;                                                                                                                                                                                                                    
|
| |  | increasing costs associated with the implementation of our new
	billing system for domestic operations;                                                                                                                                                                                       
|
| |  | continuing aggressive marketing and advertising campaigns in
	response to increasing competition for wireless subscribers; and                                                                                                                                                                
|
| |  | increasing costs associated with customer retention and handset
	upgrade activities.                                                                                                                                                                                                          

Segment earnings (losses).

|                          |                  |                       |     |              |  |           |    |              |   |               |     |         |  |  |    |    |   |   |    |    |  |  |     |     | 
|------------------------- | ---------------- | --------------------- | --- | ------------ |  | --------- | -- | ------------ | - | ------------- | --- | ------- |  |  | -- | -- | - | - | -- | -- |  |  | --- | --- | 
|                          |                  |                       |     |              |  |           |    |              |   |              
|                          |                  |                       |     | % of         |  |           |    | % of         |   | Change from  
|                          |                  |                       |     | Consolidated |  |           |    | Consolidated |   | Previous Year
|                          |                  | March 31,             |     | Operating    |  | March 31, |    | Operating    |   |              
|                          |                  | 2001                  |     | Revenues     |  | 2000      |    | Revenues     |   | Dollars       |     | Percent
|                          |                  |                       |     |              |  |           |    |              |   |               |     |        
|                          |                  |                      
|                          |                  | (dollars in millions)
|                         
|                         
|                         
|                         
|Domestic earnings         |                  | $                     | 353 |              |  |           | 20 | %            |   | $             | 262 |         |  |  | 22 | %  |   | $ | 91 |    |  |  | 35% |    
|                         
|                         
|                         
|                         
|International losses      |                  |                       | (34 | )            |  |           | (2 | )%           |   |               | (34 | )       |  |  | (3 | )% |   |   |   |    |  |  |    |    
|                         
|                         
|                         
|                         
|Intercompany eliminations |                  |                       | (1  | )            |  |           |   |              |   |               |    |         |  |  |   |    |   |   | (1 | )  |  |  | NM  |    
|                          |                  |                       |     |              |  |           |    |              |   |               |     |         |  |  |    |    |   |   |    |    |  |  |     |    
|                          | Segment earnings |                       | $   | 318          |  |           |    | 18           | % |               | $   | 228     |  |  |    | 19 | % |   | $  | 90 |  |  |     | 39% | 
|                          |                  |                       |     |              |  |           |    |              |   |               |     |         |  |  |    |    |   |   |    |    |  |  |     |    





---

NMNot Meaningful


We define segment earnings as earnings before interest, taxes,
depreciation and amortization and other nonoperating charges.
Based on the current stage of development of each of our
reportable segments, most of our operating revenues and
identifiable assets, as well as all of our segment earnings
pertain to our domestic operations. In 2001, domestic segment
earnings improved but decreased slightly as a percentage of
consolidated operating revenues as we began to feel the impact
of a slowing economy. Domestic operating revenues increased 43%
from the first quarter of 2000 to the first quarter of 2001 as
our customer base increased while domestic operating expenses
increased 45% primarily due to customer acquisition, retention
and handset upgrade activities. As described in Future
Capital Needs and Resources, beginning in the second
quarter of 2001, we began taking various actions designed to
reduce costs and increase domestic segment earnings. However, we
cannot be sure that our actions will be successful in decreasing
our overall operating costs or increasing domestic segment
earnings. See Forward Looking Statements.

International segment losses were unchanged due to increasing
operating revenues from growth in digital handset sales offset
by increased costs attributable to:



| |   |                                                                                                                          
| | - | -------------------------------------------------------------------------------------------------------------------------
| |  | the build-out of our digital mobile networks and higher customer
	usage;                                                 
|
| |  | increased aggregate amounts of digital handset costs and related
	commissions resulting from increased handset sales; and
|
| |  | general corporate expenses to support the larger customer base.                                                          

We expect international segment losses to continue while we are
building out our digital mobile networks and expanding our
presence in international markets.

16



---



##### Table of Contents



Depreciation and amortization.

|             |                               |                       |     |              |  |           |    |              |   |               |     |         |  |  |    |    |   |   |     |     |  |  |    |    |  
|------------ | ----------------------------- | --------------------- | --- | ------------ |  | --------- | -- | ------------ | - | ------------- | --- | ------- |  |  | -- | -- | - | - | --- | --- |  |  | -- | -- | -
|             |                               |                       |     |              |  |           |    |              |   |              
|             |                               |                       |     | % of         |  |           |    | % of         |   | Change from  
|             |                               |                       |     | Consolidated |  |           |    | Consolidated |   | Previous Year
|             |                               | March 31,             |     | Operating    |  | March 31, |    | Operating    |   |              
|             |                               | 2001                  |     | Revenues     |  | 2000      |    | Revenues     |   | Dollars       |     | Percent
|             |                               |                       |     |              |  |           |    |              |   |               |     |        
|             |                               |                      
|             |                               | (dollars in millions)
|            
|            
|            
|            
|Depreciation |                               | $                     | 335 |              |  |           | 19 | %            |   | $             | 233 |         |  |  | 20 | %  |   | $ | 102 |     |  |  | 44 | % 
|            
|            
|            
|            
|Amortization |                               |                       | 59  |              |  |           | 3  | %            |   |               | 47  |         |  |  | 4  | %  |   |   | 12  |     |  |  | 26 | % 
|             |                               |                       |     |              |  |           |    |              |   |               |     |         |  |  |    |    |   |   |     |     |  |  |    |   
|             | Depreciation and amortization |                       | $   | 394          |  |           |    | 22           | % |               | $   | 280     |  |  |    | 24 | % |   | $   | 114 |  |  |    | 41 | %
|             |                               |                       |     |              |  |           |    |              |   |               |     |         |  |  |    |    |   |   |     |     |  |  |    |   

Depreciation increased from the first quarter of 2000 to the
first quarter of 2001 primarily as a result of placing into
service, as well as modifying, additional switches and
transmitter and receiver sites in existing domestic and
international markets primarily to enhance the coverage and
capacity of our digital mobile networks. We expect the amount of
depreciation to continue to increase as we place additional
switches and transmitter and receiver sites into service.

The increase in amortization is primarily attributable to
international acquisition activities completed during the second
half of 2000. We expect the amount of amortization to increase
as we acquire, place into service and continue to amortize
intangible assets such as licenses and customer lists.

Interest expense, interest income and other.

|                                         |                                                  |                       |      |              |   |           |     |              |    |               |      |         |   |  |     |    |    |   |     |     |   |  |     |      |   
|---------------------------------------- | ------------------------------------------------ | --------------------- | ---- | ------------ | - | --------- | --- | ------------ | -- | ------------- | ---- | ------- | - |  | --- | -- | -- | - | --- | --- | - |  | --- | ---- | --
|                                         |                                                  |                       |      |              |   |           |     |              |    |              
|                                         |                                                  |                       |      | % of         |   |           |     | % of         |    | Change from  
|                                         |                                                  |                       |      | Consolidated |   |           |     | Consolidated |    | Previous Year
|                                         |                                                  | March 31,             |      | Operating    |   | March 31, |     | Operating    |    |              
|                                         |                                                  | 2001                  |      | Revenues     |   | 2000      |     | Revenues     |    | Dollars       |      | Percent
|                                         |                                                  |                       |      |              |   |           |     |              |    |               |      |        
|                                         |                                                  |                      
|                                         |                                                  | (dollars in millions)
|                                        
|                                        
|                                        
|                                        
|Interest expense                         |                                                  | $                     | (358 | )            |   |           | (21 | )%           |    | $             | (278 | )       |   |  | (24 | )% |    | $ | (80 | )   |   |  | (29 | )%  
|                                        
|                                        
|                                        
|                                        
|Interest income                          |                                                  |                       | 79   |              |   |           | 5   | %            |    |               | 83   |         |   |  | 7   | %  |    |   | (4  | )   |   |  | (5  | )%  
|                                        
|                                        
|                                        
|                                        
|Other, net:                              |                                                  |                       |      |              |   |           |     |              |    |               |      |         |   |  |     |    |    |   |     |     |   |  |     |     
|                                        
|                                        
|                                        
|                                        
|                                         | Equity in losses of unconsolidated affiliates    |                       |      | (21          | ) |           |     | (1           | )% |               |      | (35     | ) |  |     | (3 | )% |   |     | 14  |   |  |     | 40   | % 
|                                        
|                                        
|                                        
|                                        
|                                         | Foreign currency transaction (losses) gains, net |                       |      | (10          | ) |           |     | (1           | )% |               |      | 12      |   |  |     | 1  | %  |   |     | (22 | ) |  |     | (183 | )%
|                                        
|                                        
|                                        
|                                        
|                                         | Other expense, net                               |                       |      |             |   |           |     |             |    |               |      | (17     | ) |  |     | (1 | )% |   |     | 17  |   |  |     | 100  | % 
|                                        
|                                        
|                                        
|                                        
|Income tax benefit                       |                                                  |                       | 14   |              |   |           | 1   | %            |    |               | 8    |         |   |  | 1   | %  |    |   | 6   |     |   |  | 75  | %   
|                                        
|                                        
|                                        
|                                        
|Extraordinary loss                       |                                                  |                       |     |              |   |           |    |              |    |               | (104 | )       |   |  | (9  | )% |    |   | 104 |     |   |  | 100 | %   
|                                        
|                                        
|                                        
|                                        
|Loss attributable to common stockholders |                                                  |                       | (428 | )            |   |           | (25 | )%           |    |               | (435 | )       |   |  | (37 | )% |    |   | 7   |     |   |  | 2   | %   

The increase in interest expense from the first quarter of 2000
to the first quarter of 2001 resulted primarily from the
issuance of our senior notes in January 2001 and Nextel
Internationals senior notes in August 2000, as well
as a higher average level of outstanding borrowings under our
credit facilities.

The decrease in equity in losses of unconsolidated affiliates
from the first quarter of 2000 to the first quarter of 2001 is
due to $7 million of decreased losses attributable to our
equity method investment in Nextel Partners, Inc. The remaining
decrease is attributable to our Philippine affiliate, which we
began consolidating in the third quarter of 2000, and to our
Japanese investment, which was written off in the fourth quarter
of 2000.

The foreign currency transaction loss in 2001 is due primarily
to the weakening of the Brazilian real as a result of the
current economic environment in both Brazil and Argentina. The
foreign currency transaction gain in 2000 is primarily
attributable to the strengthening of the Brazilian real.

The extraordinary loss in 2000 relates to the early retirement
of some of our senior notes during the first quarter of 2000.

17



---



##### Table of Contents



Liquidity and Capital Resources

We had losses attributable to common stockholders of
$428 million for the three months ended March 31, 2001
and $435 million for the three months ended March 31,
2000. The operating expenses and capital expenditures associated
with developing, enhancing and operating our digital mobile
network have more than offset operating revenues. Our operating
expenses, debt service obligations and anticipated capital
expenditures are expected to continue to more than offset
operating revenues for the next several years. We have
consistently used external sources of funds, primarily from debt
incurrences and equity issuances, to fund operations, capital
expenditures, acquisitions and other nonoperating needs.

Cash Flows. Net cash provided by operating
activities of $309 million during the three months ended
March 31, 2001 improved by $59 million compared to net
cash provided by operating activities of $250 million
during the three months ended March 31, 2000. This
improvement in net cash provided by operating activities is
primarily attributable to domestic operations, reflecting
improved domestic performance resulting from the growth in our
customer base, offset slightly by increasing interest payments
on outstanding debt.

Capital expenditures to fund the continued expansion and
enhancement of our digital mobile network continue to represent
the largest use of our funds for investing activities. Net cash
used in investing activities of $779 million during the three
months ended March 31, 2001 remained virtually the same as
compared to $778 million during the three months ended
March 31, 2000 primarily due to a $677 million
increase in net proceeds from short-term investing activities,
offset by a $370 million increase in cash paid for other
investments and licenses and a $308 million increase in
cash paid for capital expenditures. Cash payments for capital
expenditures totaled $1,005 million during the three months
ended March 31, 2001 and $697 million during the three
months ended March 31, 2000, including $157 million
during 2001 and $71 million during 2000 for international
operations. Cash paid for capital expenditures during the three
months ended March 31, 2001 increased primarily due to an
increase in the number of switches and transmitter and receiver
sites and related equipment placed in service during the fourth
quarter of 2000 and the first quarter of 2001. The increase in
cash paid for other investments and licenses is primarily due to
$250 million advanced to Arch Wireless for the acquisition
of 900 MHz licenses and preferred stock, which is expected to
close during 2001, and $32 million applied towards the
purchase of retail stores from Lets Talk Cellular and
Wireless. We also purchased more domestic licenses in the first
quarter of 2001 than in the first quarter of 2000.

Net cash provided by financing activities of $1.24 billion
during 2001 consisted primarily of $1.245 billion in net
proceeds from the private placement of our 9.5% senior serial
redeemable notes due 2011. Net cash provided by financing
activities of $1.03 billion during the first quarter of
2000 was primarily attributable to $1.13 billion in net
proceeds from the sale of debt securities and $1.0 billion
in proceeds from borrowings under our domestic bank credit
facility, offset by $1.21 billion used for the retirement
of debt securities.

Future Capital Needs and Resources

We anticipate that, for the foreseeable future, significant
amounts of available cash flows will be utilized both
domestically and internationally for:



| |   |                                                                                                                                                  
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------
| |  | capital expenditures for the expansion and enhancement of our
	digital mobile networks;                                                          
|
| |  | operating expenses relating to our digital mobile networks;                                                                                      
|
| |  | potential acquisitions, including any negotiated acquisitions,
	of spectrum from third parties and any future governmental
	auctions of spectrum;
|
| |  | debt service requirements; and                                                                                                                   
|
| |  | other general corporate expenditures.                                                                                                            

We anticipate that our cash utilization for capital expenditures
and other investing activities will continue to exceed our
positive cash flows from domestic operating activities
throughout 2001, as we build out, expand and enhance our digital
mobile networks. See Forward Looking Statements.

18



---



##### Table of Contents



During the first quarter of 2001, our domestic operations began
to feel the impact of a slowing economy. We incurred higher
operating costs in our business primarily attributable to
customer acquisition, handset upgrade and retention activities.
As a result, we experienced lower segment earnings from our
domestic business in the first quarter of 2001 as compared to
the fourth quarter of 2000. To offset this trend during the
remainder of 2001, we are taking various actions designed to
reduce costs and increase domestic segment earnings, including:



| |   |                                                                                                                                                                                                                                                                                                     
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | reducing the average subsidy on handsets sold by increasing the
	selling prices of existing handsets and introducing new feature
	rich and higher priced handsets;                                                                                                                                  
|
| |  | implementing strategies designed to lower commission costs on
	domestic handset sales;                                                                                                                                                                                                              
|
| |  | focusing our customer acquisition activities on lower cost
	distribution channels such as company owned retail stores,
	acquired in May 2001, Internet sales through our website
	and telemarketing sales; and                                                                                      
|
| |  | reducing payroll and other operating costs by restructuring and
	streamlining our domestic organization to improve operating
	efficiencies by implementing a 5% workforce reduction in the
	second quarter of 2001, while continuing to invest in our
	customer care centers and direct sales force.

However, we cannot be sure that our actions will be successful
in decreasing our overall operating costs or increasing domestic
segment earnings. See Forward Looking Statements.

As of March 31, 2001, our domestic bank credit facility
provided for total secured financing capacity of up to
$6.0 billion, subject to the satisfaction or waiver of
applicable borrowing conditions. This facility consists of a
$1.5 billion revolving loan and $4.5 billion in term
loans that mature over a period from December 31, 2007 to
March 31, 2009. At March 31, 2001, the entire
$4.5 billion of term loans available under our bank credit
facility was outstanding. Amounts outstanding under this bank
credit facility are secured by liens on assets of substantially
all our domestic subsidiaries and bear interest payable
quarterly at an adjustable rate calculated based either on the
U.S. prime rate or the London Interbank Offered Rate, or LIBOR.
The maturity dates of the loans can accelerate if our credit
ratings are below specified levels and if the aggregate amount
of specified debt obligations that mature before June 30,
2009, including the redemption price of redeemable stock that is
mandatorily redeemable before June 30, 2009, exceed
specified amounts. The availability of financing under this bank
credit facility is subject to requirements under the indentures
governing our public notes and the terms applicable to some of
our preferred stock. As of March 31, 2001, under our bank
credit agreement, as then in effect, we were able to access
substantially all of the $6.0 billion available in
compliance with our financial ratio tests, the debt incurrence
covenants contained in our indentures and the relevant terms of
applicable issues of preferred stock.

As part of our cost containment initiatives, we expect to reduce
our level of domestic capital expenditures during the remainder
of 2001 as compared to our domestic capital expenditures for
2000. Our capital spending for the remainder of 2001 is expected
to be driven by several factors, including:



| |   |                                                                                                                                                                                                                                               
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | the contemplated construction of additional transmitter and
	receiver sites to increase system capacity and maintain system
	quality and the installation of related switching equipment in
	the existing domestic core market coverage areas;
|
| |  | the contemplated enhancement of our digital mobile network
	coverage around most major domestic market areas; and                                                                                                                             
|
| |  | to a lesser extent, the potential enhancement of our digital
	mobile network by employing contemplated third
	generation or 3G technology.                                                                                                

Nextel International will require a significant amount of
capital to fund its operations and any planned network build-out
for at least the next several years. In March 2001, due to
adverse market conditions, Nextel International announced its
decision to discontinue its initial public offering at that time
and withdrew its registration statement on file with the
Securities and Exchange Commission. We have historically
provided Nextel International with significant financial
support. In April 2001, through a wholly owned subsidiary,
we contributed $250 million to Nextel International in
exchange for 2,500 shares of its series A exchangeable

19



---



##### Table of Contents





If Nextel International is unable to raise additional funds or
obtain funds from other sources on acceptable terms and in a
timely manner, Nextel International may be required to conserve
its available cash for use in funding its existing business
activities, by slowing enhancement and expansion of its digital
mobile networks and minimizing or eliminating certain
expenditures. Although we have no legal obligation to make any
investments in, or otherwise advance funds to, Nextel
International, to the extent Nextel International is unable to
obtain necessary funding from other sources, we may supply
Nextel International with additional funds, including the
commitments outlined above. Any funding that we elect to provide
to Nextel International will reduce the amount of funding
available for our domestic operations.

Based on available cash resources and the anticipated cash needs
of our domestic and international operations for capital
expenditures and acquisitions and the combined anticipated
operating cash flow of our domestic and international wireless
businesses, we believe that we will be able to fully fund both
our domestic and international operations through calendar year
2001. See Forward Looking Statements. In making this
assessment, we have considered:



| |   |                                                                                                                                                                    
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | consolidated cash, cash equivalents and short-term investments
	on hand as of March 31, 2001 of $4.82 billion;                                                     
|
| |  | the expected availability of $1.5 billion of incremental
	funding over the amounts outstanding under our domestic bank
	credit facility;                           
|
| |  | the anticipated level of domestic capital expenditures during
	2001;                                                                                               
|
| |  | presently scheduled domestic and international debt service
	requirements during 2001; and                                                                         
|
| |  | our participation in supplying a substantial portion of the
	funding expected to be required for Nextel Internationals
	operations during 2001, as outlined above.

If our or Nextel Internationals business plans change, or
if economic conditions in any of our combined markets generally
or competitive practices in the mobile wireless
telecommunications industry change materially from those
currently prevailing or from those now anticipated in 2001, or
if other presently unexpected circumstances are encountered that
have a material effect on the cash flow or profitability of the
domestic or international mobile wireless businesses conducted
by us or Nextel International, the anticipated cash needs of
those businesses, and the conclusions as to the adequacy of the
available sources, each also could change significantly.
Finally, our conclusion that we will be able to fully fund both
our domestic and international operations through 2001 does not
take into account the impact of our participation in any
auctions for the purchase of licenses other than those already
concluded or any significant acquisition transactions or the
pursuit of any significant new business opportunities other than
those currently being pursued by us or Nextel International. Any
acquisition or new business opportunity could involve
significant additional funding needs in excess of the identified
currently available sources, and could require us or Nextel
International to raise additional equity and debt funding to
meet those needs.

The availability of borrowings under our domestic bank credit
facility is subject to certain conditions and limitations, and
we cannot be sure that those conditions will be met. The
instruments relating to our financing arrangements and preferred
stock contain provisions that operate to limit the amount of
borrowings that we may incur. The terms of the domestic bank
credit facility and Nextel Internationals financing
agreements also require us and our subsidiaries at specified
times to maintain compliance with specified operating and
financial covenants or ratios, including specified covenants and
ratios related to leverage, which become more stringent over
time. In March 2001, we amended our $6.0 billion
domestic bank credit facility to modify certain financial
covenants to better reflect our anticipated financial
performance and to permit ongoing compliance

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In addition, our capital needs, and our ability to adequately
address those needs through debt or equity funding sources, are
subject to a variety of factors that we cannot presently predict
with certainty, for example:



| |   |                                                                                   
| | - | ----------------------------------------------------------------------------------
| |  | the commercial success of our domestic and international digital
	mobile networks;
|
| |  | the amount and timing of our capital expenditures and operating
	income or losses;
|
| |  | the volatility and demand of the equity and debt markets; and                     
|
| |  | the market price of our common stock.                                             

We have had and may in the future have discussions with third
parties regarding potential equity investments and debt
financing arrangements to satisfy actual or anticipated
financing needs. At present, other than the existing equity or
debt financing arrangements that have been consummated or are
described in this quarterly report, we have no legally binding
commitments or understandings with any third parties to obtain
any material amount of equity or debt financing. Under the terms
of the agreements between us and Motorola pursuant to which we
acquired substantially all of Motorolas domestic 800 MHz
specialized mobile radio licenses in 1995, we have agreed, under
specified circumstances, not to grant superior governance rights
to any third-party investor without Motorolas consent,
which may make securing certain strategic equity investments
more difficult. Our ability to incur additional indebtedness,
including, in certain circumstances, indebtedness incurred under
our domestic bank credit agreement, is and will be limited by
the terms of our financing agreements and the terms of some
series of our outstanding preferred stock.

Forward Looking Statements

Safe Harbor Statement under the Private
Securities Litigation Reform Act of 1995.A number of
statements made in the foregoing Managements
Discussion and Analysis of Financial Condition and Results of
Operations are not historical or current facts, but deal
with potential future circumstances and developments. They can
be identified by the use of forward looking words such as
believes, expects, plans,
may, will, would,
could, should or anticipates
or other comparable words, or by discussions of strategy that
may involve risks and uncertainties. We caution you that these
forward looking statements are only predictions, which are
subject to risks and uncertainties including financial
variations, changes in the regulatory environment, industry
growth and trend predictions. 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
operation and results of our wireless communications business
also may be subject to the effect of other risks and
uncertainties in addition to the relevant qualifying factors
identified in the foregoing Managements Discussion
and Analysis of Financial Condition and Results of
Operations including, but not limited to:



| |   |                                                                                                                                                                                                     
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | general economic conditions in the geographic areas and
	occupational market segments that we are targeting for our
	digital mobile network service;                                                
|
| |  | the availability of adequate quantities of system infrastructure
	and subscriber equipment and components to meet service
	deployment and marketing plans and customer demand;                      
|
| |  | the availability and cost of acquiring additional spectrum;                                                                                                                                         
|
| |  | the timely development and availability of new handsets with
	expanded applications and features;                                                                                                   
|
| |  | the success of efforts to improve, and satisfactorily address
	any issues relating to, our digital mobile network performance;                                                                      
|
| |  | the continued successful performance of the technology being
	deployed in our various market areas and the success of the
	technology deployed in connection with our Nextel Wireless Web
	services;
|
| |  | market acceptance of our new service offerings, including our
	Nextel Wireless Web services and Nextel Worldwide;                                                                                   

21



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##### Table of Contents





| |   |                                                                                                                                                                                                                                                                                                                                       
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | the successful implementation of new technologies deployed in
	connection with any future third generation or
	3G services we may offer;                                                                                                                                                                                          
|
| |  | the ability to achieve market penetration and average subscriber
	revenue levels sufficient to provide financial viability to our
	digital mobile network business;                                                                                                                                                                   
|
| |  | our ability to timely and successfully accomplish required
	scale-up of our billing, collection, customer care and similar
	back-office operations to keep pace with customer growth,
	increased system usage rates and growth in levels of accounts
	receivables being generated by the digital mobile network
	customer base;       
|
| |  | access to sufficient debt or equity capital to meet operating
	and financing needs;                                                                                                                                                                                                                                                   
|
| |  | the quality and price of similar or comparable wireless
	communications services offered or to be offered by our
	competitors, including providers of cellular and personal
	communication services;                                                                                                                                  
|
| |  | future legislation or regulatory actions relating to specialized
	mobile radio services, other wireless communications services or
	telecommunications generally; and                                                                                                                                                                 
|
| |  | other risks and uncertainties described from time to time in our
	reports and, with specific reference to risk factors relating to
	international operations, in Nextel Internationals
	reports, filed with the Securities and Exchange Commission,
	including our annual reports on Form 10-K for the year
	ended December 31, 2000.




Item 3.  Quantitative and Qualitative
Disclosures about Market Risk.

We primarily use senior notes, bank and vendor credit facilities
and mandatorily redeemable preferred stock to finance our
obligations. These financial instruments, to the extent they
provide for variable rates of interest, expose us to interest
rate risk. Our primary interest rate risk exposure results from
changes in LIBOR, the U.S. prime rate, Eurodollar Rate and
Adjusted Base Rate, which are used to determine the interest
rates that are applicable to borrowings under our bank and
vendor credit agreements. We use interest rate swap agreements
to partially hedge interest rate exposure associated with our
long-term debt. All of our derivative financial instrument
transactions are entered into for non-trading purposes.

Nextel Internationals revenues are denominated in foreign
currencies while a significant portion of its operations are
financed through senior notes and bank and vendor credit
facilities, which are denominated in U.S. dollars. As a result,
fluctuations in exchange rates relative to the U.S. dollar,
primarily those related to the Brazilian real, Mexican peso and
Philippine peso, expose us to foreign currency exchange risks.

As of March 31, 2001, we held $1.44 billion of debt
securities in the form of commercial paper and corporate bonds
as short-term investments. As the weighted average maturity from
the date of purchase was less than five months, these short-term
investments do not expose us to a significant amount of interest
rate risk.

As of March 31, 2001, we had investments in the common
stock of publicly traded companies, which had an aggregate fair
value of $327 million. These investments are reported at
their market value in our financial statements. Negative
fluctuations in the stock prices of these companies expose us to
equity price risks. A 10% decline in their stock price would
result in a $33 million decrease in the fair value of our
investments in these public companies.

The information below summarizes our market risks associated
with fluctuations in interest rates as of March 31, 2001 in
U.S. dollars. To the extent that our financial instruments
expose us to interest rate and foreign currency exchange risk,
these instruments are presented within each market risk category
in the table below. The table presents principal cash flows and
related interest rates by year of maturity for our senior notes,
bank and vendor credit facilities, capital lease and finance
obligations and mandatorily redeemable preferred stock in effect
at March 31, 2001. In the case of the mandatorily
redeemable preferred stock and senior notes, the table excludes
the potential exercise of the relevant redemption or conversion
features. This table also assumes that we will repay our senior
notes to levels necessary to avoid an earlier repayment

22



---



##### Table of Contents







| |   |                                                                                                                                
| | - | -------------------------------------------------------------------------------------------------------------------------------
| |  | quoted market prices for senior notes and mandatorily redeemable
	preferred stock;                                             
|
| |  | carrying value for the bank and vendor credit facilities at
	March 31, 2001 as interest rates are reset periodically;          
|
| |  | estimates for the capital lease and finance obligations based on
	interest rates for current term loans with similar terms; and
|
| |  | estimates obtained from dealers to settle interest rate swap
	agreements.                                                      

Descriptions of our senior notes, bank and vendor credit
facilities, capital lease and finance obligations, interest rate
risk management agreements and mandatorily redeemable preferred
stock are contained in notes 4, 6, 7 and 10 to the consolidated
financial statements included in our 2000 annual report on
Form 10-K and should be read in conjunction with the
following table.

|                                                                                                  |                       |                            |   |      |   |      |   |      |   |      |   |            |   |       |   |            |   |  |   |     |   |  |   |        |   |  |   |        |   |  |   |        |  
|------------------------------------------------------------------------------------------------- | --------------------- | -------------------------- | - | ---- | - | ---- | - | ---- | - | ---- | - | ---------- | - | ----- | - | ---------- | - |  | - | --- | - |  | - | ------ | - |  | - | ------ | - |  | - | ------ | -
|                                                                                                  |                       |                            |   |      |   |     
|                                                                                                  |                       | Year of Maturity           |   |      |   |     
|                                                                                                  |                       |                            |   |      |   |     
|                                                                                                  |                       | 2001                       |   | 2002 |   | 2003 |   | 2004 |   | 2005 |   | Thereafter |   | Total |   | Fair Value
|                                                                                                  |                       |                            |   |      |   |      |   |      |   |      |   |            |   |       |   |           
|                                                                                                  |                       |                           
|                                                                                                  |                       | (U.S. dollars in millions)
|                                                                                                 
|                                                                                                 
|                                                                                                 
|                                                                                                 
|I. Interest Rate Sensitivity                                                                      |                       |                            |   |      |   |      |   |      |   |      |   |            |   |       |   |            |   |  |   |     |   |  |   |        |   |  |   |        |   |  |   |       
|Long-Term Debt, Capital Lease and Finance Obligations and
	Mandatorily Redeemable Preferred Stock |                       |                            |   |      |   |      |   |      |   |      |   |            |   |       |   |            |   |  |   |     |   |  |   |        |   |  |   |        |   |  |   |       
|                                                                                                 
|                                                                                                 
|                                                                                                 
|                                                                                                 
|                                                                                                  | Fixed Rate            |                            | $ | 54   |   |      | $ | 79   |   |      | $ | 87         |   |       | $ | 87         |   |  | $ | 76  |   |  | $ | 14,023 |   |  | $ | 14,406 |   |  | $ | 10,379 |  
|                                                                                                 
|                                                                                                 
|                                                                                                 
|                                                                                                 
|                                                                                                  | Average Interest Rate |                            |   | 9    | % |      |   | 9    | % |      |   | 9          | % |       |   | 9          | % |  |   | 9   | % |  |   | 9      | % |  |   | 9      | % |  |   |        |  
|                                                                                                 
|                                                                                                 
|                                                                                                 
|                                                                                                 
|                                                                                                  | Variable Rate         |                            | $ | 25   |   |      | $ | 121  |   |      | $ | 417        |   |       | $ | 419        |   |  | $ | 507 |   |  | $ | 3,526  |   |  | $ | 5,015  |   |  | $ | 5,015  |  
|                                                                                                 
|                                                                                                 
|                                                                                                 
|                                                                                                 
|                                                                                                  | Average Interest Rate |                            |   | 10   | % |      |   | 9    | % |      |   | 9          | % |       |   | 9          | % |  |   | 8   | % |  |   | 9      | % |  |   | 9      | % |  |   |        |  
|Interest Rate Swaps                                                                               |                       |                            |   |      |   |      |   |      |   |      |   |            |   |       |   |            |   |  |   |     |   |  |   |        |   |  |   |        |   |  |   |       
|                                                                                                 
|                                                                                                 
|                                                                                                 
|                                                                                                 
|                                                                                                  | Variable to Fixed (1) |                            | $ |     |   |      | $ |     |   |      | $ |           |   |       | $ |           |   |  | $ |    |   |  | $ | 570    |   |  | $ | 570    |   |  | $ | (74    | )
|                                                                                                 
|                                                                                                 
|                                                                                                 
|                                                                                                 
|                                                                                                  | Average Pay Rate      |                            |   |     |   |      |   |     |   |      |   |           |   |       |   |           |   |  |   |    |   |  |   | 8      | % |  |   | 8      | % |  |   |        |  
|                                                                                                 
|                                                                                                 
|                                                                                                 
|                                                                                                 
|                                                                                                  | Average Receive Rate  |                            |   |     |   |      |   |     |   |      |   |           |   |       |   |           |   |  |   |    |   |  |   | 6      | % |  |   | 6      | % |  |   |        |  
|                                                                                                 
|                                                                                                 
|                                                                                                 
|                                                                                                 
|                                                                                                  | Variable to Variable  |                            | $ | 100  |   |      | $ |     |   |      | $ | 400        |   |       | $ |           |   |  | $ |    |   |  | $ |       |   |  | $ | 500    |   |  | $ | (10    | )
|                                                                                                 
|                                                                                                 
|                                                                                                 
|                                                                                                 
|                                                                                                  | Average Pay Rate      |                            |   | 6    | % |      |   |     |   |      |   | 6          | % |       |   |           |   |  |   |    |   |  |   |       |   |  |   | 6      | % |  |   |        |  
|                                                                                                 
|                                                                                                 
|                                                                                                 
|                                                                                                 
|                                                                                                  | Average Receive Rate  |                            |   | 5    | % |      |   |     |   |      |   | 5          | % |       |   |           |   |  |   |    |   |  |   |       |   |  |   | 5      | % |  |   |        |  
|                                                                                                 
|                                                                                                 
|                                                                                                 
|                                                                                                 
|II. Foreign Exchange Rate Sensitivity                                                             |                       |                            |   |      |   |      |   |      |   |      |   |            |   |       |   |            |   |  |   |     |   |  |   |        |   |  |   |        |   |  |   |       
|Long-Term Debt                                                                                    |                       |                            |   |      |   |      |   |      |   |      |   |            |   |       |   |            |   |  |   |     |   |  |   |        |   |  |   |        |   |  |   |       
|                                                                                                 
|                                                                                                 
|                                                                                                 
|                                                                                                 
|                                                                                                  | Fixed Rate            |                            | $ | 1    |   |      | $ |     |   |      | $ |           |   |       | $ |           |   |  | $ |    |   |  | $ | 2,332  |   |  | $ | 2,333  |   |  | $ | 1,387  |  
|                                                                                                 
|                                                                                                 
|                                                                                                 
|                                                                                                 
|                                                                                                  | Average Interest Rate |                            |   | 14   | % |      |   |     |   |      |   |           |   |       |   |           |   |  |   |    |   |  |   | 13     | % |  |   | 13     | % |  |   |        |  
|                                                                                                 
|                                                                                                 
|                                                                                                 
|                                                                                                 
|                                                                                                  | Variable Rate         |                            | $ | 25   |   |      | $ | 74   |   |      | $ | 219        |   |       | $ | 94         |   |  | $ | 75  |   |  | $ | 28     |   |  | $ | 515    |   |  | $ | 515    |  
|                                                                                                 
|                                                                                                 
|                                                                                                 
|                                                                                                 
|                                                                                                  | Average Interest Rate |                            |   | 10   | % |      |   | 11   | % |      |   | 11         | % |       |   | 11         | % |  |   | 11  | % |  |   | 11     | % |  |   | 11     | % |  |   |        |  




|    |                                                                     
|--- | --------------------------------------------------------------------
|(1) | This interest rate swap requires a cash settlement in
	October 2003.

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##### Table of Contents






PART II  OTHER INFORMATION.




Item 1.  Legal Proceedings.

Nextel is involved in certain legal proceedings that are
described in our 2000 annual report on Form 10-K. During
the three months ended March 31, 2001, there were no
material changes in the status of or developments regarding
those legal proceedings that have not been previously disclosed
in our 2000 annual report on Form 10-K.

On April 19, 2001, a purported class action lawsuit was
filed in the Circuit Court in Baltimore, Maryland by the Law
Offices of Peter Angelos, and subsequently in other state courts
in Pennsylvania and New York, alleging that wireless telephones
pose a health risk to users of those telephones and that the
defendants failed to disclose these risks. We, along with
numerous other companies, are defendants in these cases.
Mr. Angelos firm has also participated in the filing
of an amended complaint in a similar suit pending in federal
court in Louisiana, in which we are also named. These suits seek
to require the defendants to provide headsets, or reimburse the
cost of headsets, for use with wireless telephones, as well as
attorneys fees and punitive damages. While we cannot
predict the outcome of this litigation, we believe that the
claims against us are without merit and intend to vigorously
defend against them.




Item 6.  Exhibits and Reports on
Form 8-K.

(a)  List of Exhibits.

|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|Number  |  | Exhibit Description                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|4.1     |  | Indenture, dated January 26, 2001, between Nextel
	Communications, Inc. and BNY Midwest Trust Company, as
	Trustee, relating to Nextels 9.5% Senior Serial Redeemable
	Notes due 2011 (filed as Exhibit 4.1 to our current report
	on Form 8-K dated and filed as of January 29, 2001 and
	incorporated herein by reference)                                                                                                                                                                             
|4.2     |  | Registration Rights Agreement, dated January 26, 2001,
	between Nextel Communications, Inc. and Goldman
	Sachs & Co. relating to Nextels 9.5% Senior
	Serial Redeemable Notes due 2011 (filed as Exhibit 4.2 to
	our Current Report on Form 8-K dated and filed as of
	January 29, 2001 and incorporated herein by reference)                                                                                                                                                                            
|4.3     |  | Amendment no. 2 dated March 29, 2001 to the Amended
	and Restated Credit Agreement dated November 9, 1999, as
	amended, among Nextel, Nextel Finance Company, the other
	Restricted Companies party thereto, the Lenders party thereto,
	Toronto Dominion (Texas), as Administrative Agent, and The Chase
	Manhattan Bank, as Collateral Agent (filed April 2, 2001 as
	exhibit 4.13.4 to Nextels annual report on
	Form 10-K for the year ended December 31, 2000 and
	incorporated herein by reference)
|10.1*   |  | Amendment 003 dated March 29, 2001 to iDEN Subscriber
	Supply Agreement dated November 4, 1991 between Nextel and
	Motorola                                                                                                                                                                                                                                                                                                                                                                               




|  |                                                                                                                                        
|- | ---------------------------------------------------------------------------------------------------------------------------------------
|* | Portions of this exhibit have been omitted and filed separately
	with the Commission pursuant to a request for confidential
	treatment.

(b)  Reports on Form 8-K filed with the Securities and
Exchange Commission.



| |      |                                                                                                                                                                                                       
| | ---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (i)  | Current report on Form 8-K dated and filed on
	January 22, 2001 reporting under Item 5 the
	announcement of a private placement of $1.25 billion of our
	9.5% senior serial redeemable notes due 2011.
|
| | (ii) | Current report on Form 8-K dated and filed on
	January 29, 2001 reporting under Item 5 the completion
	of a private placement of $1.25 billion of our 9.5% senior
	serial redeemable notes due 2011.  

24



---



##### Table of Contents





| |       |                                                                                                                                                                                                      
| | ----- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (iii) | Current report on Form 8-K dated and filed on
	February 16, 2001 reporting under Item 5 the
	announcement of our financial results and other data for the
	quarter and year ended December  31, 2000.



| |      |                                                                                                                                                                                    
| | ---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (iv) | Current report on Form 8-K dated and filed on
	March 14, 2001 reporting under Item 5 the announcement
	of certain preliminary financial information for the first
	quarter of 2001.

25



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##### Table of Contents






SIGNATURE

Pursuant to the requirements 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.



| |                            
| | ---------------------------
| | NEXTEL COMMUNICATIONS, INC.



| |     |                      
| | --- | ---------------------
| | By: | /s/ WILLIAM G. ARENDT



| |  |                                                                                     
| |  | ------------------------------------------------------------------------------------
| |  | William G. Arendt 
	 Vice President and Controller 
	 (Principal Accounting Officer)

26



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##### Table of Contents






EXHIBIT INDEX

|        |      |                     |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|------- | ---- | ------------------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |      |                    
|Number  |      | Exhibit Description
|        |      |                    
|        | 4.1  |                     |  | Indenture, dated January 26, 2001, between Nextel
	Communications, Inc. and BNY Midwest Trust Company, as Trustee,
	relating to Nextels 9.5% Senior Serial Redeemable Notes
	due 2011 (filed as Exhibit 4.1 to our current report on
	Form 8-K dated and filed as of January 29, 2001 and
	incorporated herein by reference).                                                                                                                                                                             
|        | 4.2  |                     |  | Registration Rights Agreement, dated January 26, 2001,
	between Nextel Communications, Inc. and Goldman Sachs & Co.
	relating to Nextels 9.5% Senior Serial Redeemable Notes
	due 2011 (filed as Exhibit 4.2 to our Current Report on
	Form  8-K dated and filed as of January 29, 2001 and
	incorporated herein by reference).                                                                                                                                                                           
|        | 4.3  |                     |  | Amendment no. 2 dated March 29, 2001 to the Amended and
	Restated Credit Agreement dated November 9, 1999, as
	amended, among Nextel, Nextel Finance Company, the other
	Restricted Companies party thereto, the Lenders party thereto,
	Toronto Dominion (Texas), as Administrative Agent, and The Chase
	Manhattan Bank, as Collateral Agent (filed April 2, 2001 as
	exhibit 4.13.4 to Nextels annual report on Form 10-K
	for the year ended December 31, 2000 and incorporated
	herein by reference).
|        | 10.1 | *                   |  | Amendment 003 dated March 29, 2001 to iDEN Subscriber
	Supply Agreement dated November 4, 1991 between Nextel and
	Motorola.                                                                                                                                                                                                                                                                                                                                                                               






|  |                                                                                                                                        
|- | ---------------------------------------------------------------------------------------------------------------------------------------
|* | Portions of this exhibit have been omitted and filed separately
	with the Commission pursuant to a request for confidential
	treatment.

27