T-mobile Us, Inc. · NASDAQ:TMUS
T-mobile Us — MetroPCS Communications — Merger or Acquisition (October 2012)
34 slides from T-mobile Us's merger presentation, Oct 3, 2012
Slide 1: Creating the Value Leader in Wireless
Creating the Value Leader in Wireless The Combination of T-Mobile USA and MetroPCS October 3, 2012 Life is for sharing.
Slide 2: Safe harbor statement
Safe harbor statement. ‘Additional Information and Where to Find t Inc. ("MetroPCS") ‘Deutsche Telekom’) i tic jle USA, Ino. ("T= it SEC’ ll documents, when filed, (wivw.sec.gov) ' cs This Paticipants in the Solicitation 012 ‘Cautionary Statement Regarding Forwardooking Statements 4 safe harbor” es
Slide 3: Speaker lineup
Speaker lineup. ™ René Obermann — Chief Executive Officer, Deutsche Telekom ™ Roger Linquist — Chairman and Chief Executive Officer, MetroPCS ® John Legere - President and Chief Executive Officer, T-Mobile USA ™ Braxton Carter — Chief Financial Officer & Vice Chairman, MetroPCS 3
Slide 4: Creating the Value Leader in Wireless
‘E - Mobile: - - Creating the Value Leader in Wireless Leading Value Carrier in U.S. Wireless Market Strengthened Spectrum Position to Rollout 4G LTE Projected $6 - $7Bn Cost Synergies from Enhanced Scale and Scope | Attractive Growth Profile with Projected 7% - 10% 5-year EBITDA CAGR 4
Slide 5: Transaction terms and structure
Transaction terms and structure. MetroPCS Shareholders ©<——— met =. One $1.5Bn Cash NewCo (T-Mobile & MetroPCS) = DT to nominate Board members + Reverse acquisition of T-Mobile by MetroPCS consistent with its ownership percentage * MetroPCS recapitalization with 1 Neneouonee mn Selected consent righ
Slide 6: Transformational combination enhances growth and profitability
Transformational combination enhances growth and profitability. « Capture growth in industry’s fast growing no-contract services Value Leadership = Greater customer value and choice « Greater spectrum position, network coverage and capacity Scale Benefits « Deeper LTE network deployment with path to
Slide 7: Strategic rationale for Deutsche Telekom
Strategic rationale for Deutsche Telekom. Strengthens DT’s = Enhances platform for credible challenger position in the U.S. wireless market Strategic Position in «= Leading player in fast growing no-contract services Attractive U.S. Market io le and positions N for growth and val Compelling = Total
Slide 8: Strategic rationale and financial benefits for MetroPCS
Strategic rationale and financial benefits for MetroPCS. — = Addresses need for spectrum by increasing average depth from 22 to 83 MHz in MetroPCS’s major metro areas Strengthens Strategic = Ability to expand MetroPCS model into new geographies providing new growth platform Position = Stronger value
Slide 9: NewCo: The Wireless Value Leader
NewCo: The Wireless Value Leader Life is for sharing.
Slide 10: NewCo leadership in place
NewCo leadership in place. Brings Together Seasoned Executive Leadership with Significant Industry Exp John Legere President and Chief Executive Officer J. Braxton Carter Chief Financial Officer Jim Alling COO of T-Mobile Customer Unit Thomas C. Keys COO of MetroPCS Customer Unit 10
Slide 11: Simplicity, unlimited data, and No Surprises for both contract and no-contract customers
Simplicity, unlimited data, and “No Surprises” for both contract and no-contract customers Combined spectrum resources enabling at least 20x20 MHz LTE in major metro areas Growth platform delivering projected 7% - 10% EBITDA growth and 15% - 20% FCF") growth (5-year CAGR) Led by proven management te
Slide 12: Increasing our momentum
Increasing our momentum. \ \ AT&T Network spectrum \ modernization \ \ \ \ $4Bn LTE \_ investment ) NES a including site Foote upgrades and spectrum | re-farming / / Verizon spectrum swap \ More \ efficient network and deeper LTE rollout Tower MetroPCS \ Combinati \ Attractive \ \ financial structur
Slide 13: Enhanced spectrum position
Enhanced spectrum position. ee . Spectrum Transactions Significantly Improved T-Mobile's Spectrum Depth Total Spectrum in Top 100 Major Metro Areas MHz" 15 " rR 6) =a » (an 50 25 26 0 T-Mobile (Dec 2011) ‘AT&T Spectrum V2W Spectrum TMobile (Oct 2012) MetroPCS NewCo PCS Spectrum AWS Spectrum o8 eee e
Slide 14: NewCo: an enhanced competitor
NewCo: an enhanced competitor. Total Spectrum in Top 25 Major Metro Areas Subscribers MHz 20-2012, Millions a 76 48 425 6s wy 82 5) 06 50 24 5 13 iB 0 0 'E- Mobile- metro°Cs. NewCo. 'E- -Mobile- metro?Cs. NewCo. r Branded Contract" Branded No-Contract Wholeséile Total Revenue EBITDA $Bn, 2012E) $Bn,
Slide 15: Accelerates Challenger Strategy
Accelerates Challenger Strategy. Amazing 4G Services Value Leader Trusted Brand Multi-Segment Player Challenger Business hitiatives Underway Benefits with MetroPCS v $4Bn network modernization ¥ 20% coverage improvement v >200MM pops LTE in 2013 v Complementary spectrum position v Path to at least 2
Slide 16: $4Bn network modernization well underway
$4Bn network modernization well underway. = 37,000 sites upgraded over three years with: — Multimode radios — Tower-top electronics — New antennas with integrated radios = Enables technology enhancements: — HSPA+ introduction in PCS spectrum band in 2012 LTE >200MM POPs by end of year 2013 — Approxi
Slide 17: MetroPCS enables deeper LTE spectrum in top areas
Amazing 4G MetroPCS enables deeper LTE spectrum in top areas. Services Spectrum depth enhances LTE in key metro areas!) I = T-Mobile AWS Spectrum Il = Additional AWS spectrum rom transaction Key Areas Post-Transaction LTE Spectrum (MHz) Average LTE Spectrum in Key Areas (MHz) New York 60 Los Angeles
Slide 18: Delivers greater network scale
Delivers greater network scale. Cell Sites and DAS Nodes Thousands Subscribers per Cell Site* T-Mobile: metropcs” | NewCo* “Note: Includes DAS Nodes and Macro Sites F- ‘Mobile metroncs. | NewCo ‘Note: Includes M2M subscribers; ‘elses adjusted for DAS Nodes Amazing 4G Services Enhanced spectrum posit
Slide 19: T-Mobile network ready to accommodate MetroPCS subscribers
T-Mobile network ready to accommodate MetroPCS subscribers. Favorable Dynamics T-Mobile's 40-60 MHz HSPA+ / LTE will have capacity to allow MetroPCS customers to begin migration at time of close Rapid handset turnover (60% - 65% per year) facilitates MetroPCS customer migration Coverage and performa
Slide 20: Straightforward spectrum migration strategy
Straightforward spectrum migration strategy. GSM remains “universal” technology for roaming, M2M and legacy devices MetroPCS PCS spectrum migrated to HSPA+ T-Mobile AWS repurposed from HSPA+ to LTE over time Available MetroPCS AWS spectrum migrates to LTE AWS becoming primary LTE band across America
Slide 21: Creates the value leader in wireless
Creates the value leader in wireless. — See Best Value in the U.S. Market Contract Services No-contract Services « «Mobile: T - Mobile: metro?Cs. Partner Brands (MVNO) Brands 4 Customer = Consumer Se 0 Gab + Consumer egments on Primary Channel = National / Direct = National / Indirect atocel/jincire
Slide 22: Improves customer experience
Improves customer experience. Trusted EEE Benefits to NewCo Customers ‘F - «Mobile: metro?Cs. Y Better service and faster speeds driven by: ” Greatly expands on-net domestic Network ¥ Increased network density coverage Y Broader coverage area v International roaming options Y Additional capacity in
Slide 23: Leader in fast growing no-contract offerings
Leader in fast growing no-contract offerings. North America Industry Growth % Subscribers CAGR (2012-2017) Branded No-contract Subscribers") 02.2012, Millions Multi- Segment Player Branded No-contract Revenue 02-2012, $Bn Total 3% - 5% No-Contract 99% - 10% Contract 2% - 3% sprint > 15.4 TRACFONE 1.
Slide 24: MetroPCS expands footprint
Multi- MetroPCS expands footprint. Segment Player NewCo’s Spectrum and Network Broadens MetroPCS’s Potential Rea: HH MetroPCS Network [TMobile Network Addressable POPs coverage increases from 105MM to more than 280MM 24
Slide 25: Transaction accelerates momentum in contract offerings
Multi- Transaction accelerates momentum in contract offerings. Segment Player v Powerful signal to customers that NewCo is here to compete in contract offerings v Network improvements contribute to improving churn metrics v Improves 4G LTE depth in major metro areas VY Additional spectrum supports U
Slide 26: Poised for growth
Poised for growth. Expected 5-year Growth % CAGR Revenue 3% - 5% EBITDA 7% - 10% Free Cash 15% - 20% Flow (!) Target Profitability % of service revenue EBITDA Margin 34% - 36% Challenger Business Model Capture Scale Benefits ™ Achievable projected cost synergy realization with run-rate of $1.2 - $1.
Slide 27: Synergies turbocharge the Challenger business model
Challenger Synergies turbocharge the Challenger business model. Business Model = T-Mobile’s network capacity accelerates MetroPCS customer transition Rapid Transition to * Highly complementary spectrum allows for greater LTE bandwidth a Single Network Projected $5 - $6Bn NPV") « Rapid handset turnov
Slide 28: Cost synergies yield projected $6 - $7 billion NPV
Cost synergies yield projected $6 - $7 billion NPV"), a sexe ($0-$50) ($700-$800) ($800-$900) “ Network ($MM) Challen: Bu: isiness Model + Reduction in operating expenses related to tower, backhaul and roaming = Savings in capacity and expansion capex * Site upgrades and decommissioning $0-$50 (80-$
Slide 29: NewCo's strong financial profile
NewCo’s strong financial profile. Total Revenue Challenger Business Model EBITDA $Bn, 20126") $Bn, 20126") : 63 30 51 248 te 5 19.7 6 49 = 2 | | 3 10 0 0 5 E--Mobile- metro?Cs.” NewCo E-Mobile metroPCs. NewCo me Maren Service 28.2% 30.3% 28.6% Revenue) Capital Expenditure Free Cash Flow (4) $Bn, 201
Slide 30: NewCo's attractive and flexible capital structure
NewCo’s attractive and flexible capital structure. alleiices NewCo Financial Strategy ™ NewCo will have significant financial resources, stability and access to capital — Strong credit profile will reduce cost of capital — Target credit rating of Ba2/BB to Ba3/BB- ™ Deutsche Telekom will be the larg
Slide 31: NewCo's detailed capital structure
NewCo’s detailed capital structure. (0) Deutsche Telekom Financin $15Bn of rollover notes — Average tenor of 8.5 years - Projected weighted average yield of 8% $0.5Bn Revolving Credit Facility $5.5Bn backstop (existing MetroPCS debt and new third party debt) isting MetroPCS Debt $2.5Bn bank debt (su
Slide 32: Creating the Value Leader in Wireless
‘E - Mobile: - - Creating the Value Leader in Wireless Leading Value Carrier in U.S. Wireless Market Strengthened Spectrum Position to Rollout 4G LTE Projected $6 - $7Bn Cost Synergies from Enhanced Scale and Scope | | | | Attractive Growth Profile with Projected 7% - 10% 5-year EBITDA CAGR 32
Slide 33: Life is for sharing.
Life is for sharing.
Slide 34: Estimated Deutsche Telekom group impact from MetroPCS transaction
Estimated Deutsche Telekom group impact from MetroPCS transaction. ) €0.02 or ial Key Performs Indicators (KPIs) 2013 : >= a a — a Tal ] i} | €4.2Bn | €1.1Bn | 0.4 p.p. | €-0.3Bn | Other Effects ™ One time effect 2012: estimated negative net income effect of € 7 - 8 Bn due to goodwill and asset impa
MetroPCS Communications — Merger or Acquisition (October 2012) on 6ix