Syniverse Analyst Day
February 21, 2008 Today’s Agenda
• Tony Holcombe CEO Company Overview & Strategy
• Eugene Bergen EVP – EMEA EMEA Overview & Henegouwen BSG Integration Update
• Raymond Cheung EVP – AP Asia Pacific Overview
• Break
• Giorgio Miano VP – CALA CALA Overview
• Tony Holcombe CEO North America Overview
• Bud Basu VP – Prod. Mgmt. Key Products for 2008
• David Hitchcock CFO Financial Overview
• Tony Holcombe CEO 2008 Strategic Objectives
• Management Panel Q & A
2 Safe Harbor
Today’s presentations may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements about business outlook and strategy, and statements about historical results that may suggest trends for our business. These statements are based on estimates and information available to us at the time of this presentation and are not guarantees of future performance. Actual results could differ materially from our current expectations as a result of many factors, including: unpredictable quarterly fluctuations in our business; the effects of competition; the impact of international expansion efforts on our business; changes in our tax status; risks or uncertainties inherent in or related to the integration of BSG Wireless (including unanticipated operating costs and business disruptions); and other risks and uncertainties described in our quarterly and annual reports filed with the Securities and Exchange Commission. These and other risks and uncertainties associated with our business are described in our filings with the Securities Exchange Commission.
Today’s presentations contain preliminary and unaudited results for the year ended December 31, 2007.
Today’s presentations include non-GAAP financial measures that are different from financial measures calculated in accordance with GAAP and may be different from non-GAAP calculations made by other companies. A quantitative reconciliation of non-GAAP information to the most directly comparable GAAP financial measures is included on our website at www.syniverse.com and in this presentation.
3 Overview & Strategy
Tony Holcombe President & CEO February 21, 2008 Agenda
• Syniverse Overview
• Customer Growth
• Competitive Landscape
• Global Market Direction
5 Strategic Objectives and Operating Priorities
Syniverse Priority Comments
• Focus on high growth international markets Revenue Growth • Capitalize on data & messaging market opportunities • Further penetrate and cross-sell existing customer base
• BSG Wireless integration Integration and • Increase scale by expanding global footprint Execution • Reduce costs through outsourcing and platform consolidation
New Product • Develop innovative new products and services Development • Acquire products and services to enhance portfolio
6 Integration and Execution
Objective Rationale Actions
• Expand revenue base • BSG Wireless adds scale Increase • Reduce unit cost • Platform rationalization Operating Scale • Drive cash flows • Data center consolidation
• Global product management Streamline • Speed time to market • Offshoring initiatives Development • Reduce development cost • ITHL & BSG Wireless • Localize development Process acquisitions
• Organizational focus on • Six Sigma projects Continually efficiency & cost control • Regional customer service Improve Internal • Customer satisfaction • Focus on product Processes • New products management
7 Develop and Acquire Innovative New Products & Services
Rationale Examples Future Opportunities
• Leverage existing assets: • Uniroam OpenOpen ConnectivityConnectivity Internal – Relationships • MDR Development – IP • DataNet – Technology • CDMA / GSM Visibility IP/IMS/IPXIP/IMS/IPX InteroperabilityInteroperability
• Financial Clearing House (BSG Wireless) NextNext • Speed time to market GenerationGeneration Acquisitions • Mobile video (ITHL) MessagingMessaging • Expand technology base • Content charging (ITHL) • Fill product gaps • Number portability RoamingRoaming BPOBPO (ITHL & Softwright)
History of innovative development and successful acquisitions
8 Agenda
• Syniverse Overview
• Customer Growth
• Competitive Landscape
• Global Market Direction
9 Syniverse Customer Growth
588
439 388
2006 2007 Today
10 Strong Position Globally
588 global operators
127 countries
Reaching 1.7 billion global subscribers
Sources: Syniverse, Informa, CTIA and Merrill Lynch 11 Agenda
• Syniverse Overview
• Customer Growth
• Competitive Landscape
• Global Market Direction
12 Competitive Strengths
HIGH
StrongStrong ScaleScale andand CustomerCustomer GlobalGlobal ReachReach RelationshipsRelationships
Aicent VeriSign TNS
Teleglobe VSNL Sybase/365 HIGH LOW HIGH Fair Isaac SNET MACH Telcordia Neustar
BroadBroad GlobalGlobal TalentTalent ServiceService andand OfferingsOfferings ExperienceExperience
HIGH
13 Agenda
• Syniverse Overview
• Customer Growth
• Competitive Landscape
• Global Market Direction
14 Global Data Trends Forecast
SMS Traffic (B) SMS Revenue ($B)
3,464 $66 7% 16% $47 CAGR 1,663 CAGR
2006 2011 2006 2011
MMS Traffic (B) MMS Revenue ($B)
118
34% $33 CAGR 17% 27 $15 CAGR
2006 2011 2006 2011
Source: Portio Research 15 Global Data Trends Forecast
Mobile IM Subscribers (B) Roaming Revenues ($B)
36.13 Mobile Data Roaming Voice Roaming $51 $38 33% 14% CAGR CAGR 8.68 5% CAGR
2006 2011 2006 2011
Mobile Data Users (% of subs) Mobile Data Revenue by Type ($B)
Games TV $34 74.5% Music Adult 61.5% Video Gambling 4% CAGR 19% CAGR $14
2006 2011 2006 2011
Source: Portio Research, Informa 16 World’s Leading Mobile Countries
531 By Mobile Subscribers* (M)
248 206 165 114 104 93 90 87 72 70 65
China U.S. India Russia Brazil Japan Germany Indonesia Italy UK Pakistan Mexico
146.7 By Mobile Revenue* ($B)
63.7 61.6 37.9 32.7 32.3 29.3 26.8 22 21.9 21.6 19.6
U.S. Japan China UK Italy France Germany Spain Korea Brazil India Russia
Source: *Wall Street estimates - data as of Q3 2007
17 Key Growth Markets
Brazil China India Wireless Penetration (%) Wireless Penetration (%) Wireless Penetration (%)
89.7%
64.1% 12% CAGR 55.0% 41.0% 10% 45.0% CAGR 30% 20.4% CAGR
2007 2010 2007 2010 2007 2010
Total Sub Growth (M) Total Sub Growth (M) Total Sub Growth (M)
738 11% 540 CAGR 527
32% 230 CAGR 14% 181 122 CAGR
2007 2010 2007 2010 2007 2010
Sources: CTIA, Merrill Lynch Global Wireless Matrix 18 Syniverse Analyst Day
February 21, 2008 EMEA Region & BSG Integration
Eugene Bergen Henegouwen Executive Vice President February 21, 2008 Agenda - EMEA
• Key Milestones
• Revenue Growth
• Regional Market Trends
• Recent Successes
• 2008 Initiatives
• BSG Wireless Acquisition
2 Key Milestones - EMEA Region
Established Signed Saudi Signed VimpelCom office in EMEA Telecom Group Worldwide Established Signed SFR, 2nd Signed TeliaSonera Dubai office largest roaming Group operator in BSG Europe Integration
19992001 20032005 2007 2008
Signed Acquired Board decision Signed first Vodafone BSG to expand into customer Group Wireless EMEA Vox Mobile Worldwide
3 EMEA Revenue Growth
Revenue: 2003 - 2007 ($K)
$15,121
159.2% CAGR
$335
2003 2007
4 Regional Market Trends – EMEA
• Continuous increasing volumes due to regional regulatory measures on voice calls
• Further regulatory changes – Regulation on both voice and data services, strengthening Syniverse revenue
• Operator consolidation – Vodafone continues to acquire operators in fast growing geographical areas
5 Recent Successes
• GSM Clearing Take-aways –Avea(Turkey) – Base (KPN, Belgium) – Cable & Wireless Group –Casema – O2 Slovakia –Telfort(KPN) – VimpelCom Group – Vodacom • Renewals • NRTRDE DataNet – Hutchison Group –Avea –KPN –KPN – O2 Ireland –One –One –Saudi Telecom – Sercom – VimpelCom Group – SFR – Vodafone Group –Turkcell – Vodafone Group 4 year contract
6 2008 Initiatives - EMEA
• Accelerate position in Eastern Europe by leveraging recent successes and expanding commercial organization
• Build business in Africa with dedicated people assigned
• Cross sell Syniverse and BSG services in combined customer base
• Leverage the ITHL product roadmap
7 BSG Wireless Acquisition
• Syniverse completes regional strategy – In region development: Frankfurt and London – In region support: Frankfurt and London
• Adds Financial Clearing to portfolio
• Adds 148 customers globally
• Provides cost leverage of $12M annually
8 BSG Wireless Acquisition
• Acquisition completed 19th of December 2007
• No surprises
• Cultures blend very well
9 BSG Wireless Acquisition
• Preparation phase for platform migration: USA and EMEA plans being finalized by end of February 2008 – Two platforms (NA and Europe) – Two front-ends (Syniverse and BSG) – Customer impact very limited
• Consolidate commercial organization – Cost savings achieved on schedule
• First customer migrations planned for 3Q 2008
10 Syniverse Analyst Day
February 21, 2008 Asia Pacific Region
Raymond Cheung Executive Vice President February 21, 2008 Agenda – Asia Pacific
• Key Milestones
• Revenue Growth
• Regional Market Trends
• Recent Successes
• 2008 Initiatives
2 Key Milestones - Asia Pacific Region
Signed Tata and Expanded Provide Roaming Established Reliance in India China Solutions for Beijing & operations Operators at Hong Kong Signed China Acquired Sydney Olympics offices Mobile ITHL Won Singapore Number Portability
19992001 20032005 2007 2008
Established Offered SCCP Established Roaming service & India office Solutions Signed expanded Launched Provider to China into GSM Data Roaming Asian Operators Unicom operators in region
3 Revenue Growth – Asia Pacific
Revenue: 2003 - 2007 ($M)
$42
75.5% CAGR
$4
2003 2007
4 Regional Market Trends – Asia Pacific
• Growth Trends – 2006 telecom VAS market estimated at $20B – Information services represent $12B or 61% of the VAS market with a growth rate of 41% over 2005 – Internet services represent $6B with a growth of 25% – Value-added service accounts for 20% of overall telecommunications revenue
• More AP operators are expected to migrate to an all IP core in 2008
• 2008 is set to be a big year for IP-surveillance
5 Recent Successes
• GSM Growth • Number Portability – China Mobile – Singapore Centralized NP License • Technology Product – SingTel Operator Side Solution Contract – M1 Operator Side Solution Contract – SmarTone-Vodafone - Fixed Mobile Substitution prepaid platform – U-Mobile Operator Side Solution Contract – Telkomsel - USSD service platform – China Mobile - People Phone new prepaid platform – Hanoi Telecom - customized RingBack Tone platform Orangehk.com • GSM Clearing Take-aways – Smartone-Vodafone • CDMA Growth – China Unicom - CRX/MDR – Tata Teleservices - CRX/MDR – KDDI - Uniroam
1 2008 Initiatives – Asia Pacific
• Market Dynamics – Wireless subscribers continue to grow – Anticipate additional roaming traffic – Beijing Olympics 2008 provides opportunity – HSPA networks deployment speed up – New applications, Internet on Mobile (IOM) & Mobile TV – Wireless operators continue to invest to increase ARPU – Possible telecommunications reform in China
• Opportunity – Identify more Number Portability opportunities – Develop data applications – Prepare for new 3G license in China
7 2008 Initiatives – Asia Pacific
• China and India Focus in 2008 – Set up AP POP to capitalize the growth in business – China • Continue to expand Syniverse workforce • 3G Video and Multi-media platform • Mobile Broadband Solution • GSM Roaming Clearing –India • Imminent Number Portability opportunity • LNP operator side solution • CRX/MDR for CDMA operators • GSM Roaming Clearing • Financial Clearing • CDMA Domestic Roaming
8 Syniverse Analyst Day
February 21, 2008 -Regional Financial Summary (annual revenue trend) CALA REGION
Giorgio Miano Vice President February 21, 2008 Agenda - CALA
• Key Milestones
• Revenue Growth
• Regional Market Trends
• Recent Successes
• 2008 Initiatives
2 Key Milestones – CALA Region
Caribbean expansion Telefónica Colombia, expand GSM roaming Claro Puerto Rico, and messaging Movilnet Venezuela for solutions GSM Clearing
Established Signed Regional HQ in Established Telefónica Argentina and sales office in México office in Brazil Mexico
19992001 20032005 2007 2008
SMS Interworking
First GSM Mobile Data Customers Roaming and Signed first GSM Signed GRX Visibility Customers in Mexico
3 CALA Revenue Growth
Revenue: 2003 - 2007 ($M)
$24
14.5% $14 CAGR
2003 2007
4 Regional Market Trends - CALA
• Mobile subs in 2007 reached approximately 360M (~80% GSM); penetration rate over 60% • Two main groups serving over 65% of the total mobile subscribers • Voice services still largely predominant, messaging and data services are growing steadily • 3G networks launches • Number Portability – Several NP implementations during 2009-2011
5 Market Traction
• 60 customers in the CALA region – America Móvil – C&W – Digicel – Iusacell – Movilnet Venezuela – Orange Caraibe & Dominicana – Telefonica • Opened 3 new regional offices – Buenos Aires – Regional Headquarters –Mexico City –Sao Paulo • Very strong customer relationships and high renewal rate
6 Recent Successes
• CDMA Operators launching • DCH GSM Roaming (DCH, SS7 – Ancel Uruguay Transport, GRX, NRTRDE) – Telefonica Colombia –Claro Dominicana – Telefonica Venezuela – Claro Puerto Rico – Trilogy Dominicana (Centennial) –TSTT – Movilnet Venezuela –VIVO • GSM Visibility –TelcelMX –Telefonica MX –TSTT • Datanet – CCT – Orange Dominicana – Telefonica Argentina – Telefonica Colombia
7 2008 Initiatives: Brazil
• Today Syniverse provides Data Clearing for major players
• High potential areas include messaging, signaling, and value added roaming services
• Newly awarded 3G licenses are a tremendous opportunity for investment and growth
• Next steps – Establish key partnership to strengthen competitive position – Evaluate M&A opportunities
8 Syniverse Analyst Day
February 21, 2008 North America Region
Tony Holcombe President & CEO February 21, 2008 Agenda - North America
• Key Milestones
• Revenue Growth
• Regional Market Trends
• Recent Successes
• 2008 Initiatives
2 Key Milestones – North America Region
Bell Mobility Broadband Number Solutions Portability Converged GSM Suite of U.S. Number Services Visibility Services Portability
19992001 20032005 2007 2008
UniRoam Acquired MDR IOS Canadian Number Portability 26 Contracts DataNet NRTRDE
3 Revenue Growth – North America
Revenue: 2003 - 2007 ($M)
$291 $223 6.9% CAGR
2003 2007
4 Key Market Trends – North America
• Data is driving regional growth
• Operator consolidation net neutral
• Carrier focus moving to the subscriber service experience – GSM Visibility – Verizon usage reporting – Subscriber Bandwidth Management
• Converged services finally here
5 Recent Successes
• Key Multi-Year Renewals – Cellular One NE Arizona – Clearing – Cincinnati Bell Wireless – Network – MTS Communications – Network, Clearing – Rogers Wireless – Network – Sprint – Network, Clearing, Mobile Data, Visibility
• Growth/New Contracts – 30 New Customers Representing 70 New Services
• Key Existing Customers/New • Service Renewals 2007 Services – Due: 400; Renewed: 313 – Nationwide Wireless Carrier – SMS – Loss to Acquisition/In-house – AT&T – DataNet Solution/Product Sunset: 85 – Cellular South - Uniroam – Loss to Competition: 2 –Sprint –Network
6 2008 Initiatives - North America
DataNet
45 DataNet Prospects • As of today 26 signed customers in North America including key operators (AT&T Wireless) • Estimated 5-10 more to sign 26 Signed • Huge success in a market due to Customers 19 Prospects Syniverse key advantages: – Involvement in GSMA mandate – 60+ signed customers worldwide – 24x7 NRTRDE Operation Center – Multiple Value Added Services – Customer satisfaction dedication
7 2008 Initiatives - North America
Converged Services – SMS-IP • SMS is traditionally offered to wireless users • Syniverse has expanded the SMS footprint to Wireline users in the IP community – VoIP soft phone SMS messaging – IM Client SMS messaging – Hybrid devices with support for multiple technologies (ex. iPhone – cellular and WiFi capabilities) • Advantage to the IP provider – Increase overall subscriber-to-subscriber message traffic – Generate more revenue per subscriber • Signed SMS-IP contract with one of the world’s largest web-based application companies
8 2008 Initiatives - North America
Subscriber Bandwidth Management • North American operators suffering from “abuse” of their high speed data network (bandwidth “hogs”) • Looking for solution for bandwidth management through real-time, in-line monitoring and control of subscriber’s IP data access • Syniverse enhanced the ITHL Solution to fit the operators needs • Signed a trial agreement (Bell Mobility) Nov. 2007
9 Syniverse Analyst Day
February 21, 2008 Key Products For 2008
Bud Basu Vice President Global Product Management Agenda
Key Products for 2008:
•DataNet
• GSM Visibility
• Financial Clearing House
2 DataNet NRTRDE
• International Revenue Share Fraud (IRSF) – Long duration outgoing international calls to premium number ranges with high termination costs – Fraudsters also own the premium number ranges – Biggest source of roaming fraud losses
• Other common techniques – SIM cloning – Stolen SIM – Technical fraud – Internal fraud (e.g., test SIM abuse)
3 DataNet NRTRDE
• Roaming fraud incidents highly organized
• Not limited to one geographic location
• Industry losses attributed to IRSF over past 24 months are significant
• Worldwide losses since 2005 are tens of millions of dollars
4 DataNet NRTRDE
• Syniverse’s anti-fraud roaming solution in support of GSMA NRTRDE initiative
• GSMA implementation guideline October 2008
Addressable Market: $18-20M
Potential Customers: GSM operators
Launched: June 2007
Customers: 60+ Contracts (9 Implemented) 25 in negotiation
5 DataNet NRTRDE
• Enables the operator to discover fraud in 4hrs or less • Provide better customer QoE through early fraud Value detection Proposition • Potential to pay for itself with prevention of only one significant fraud case
• Reduces roaming risk exposure from 36 hours to 4 hours or less Customer Benefits • Opens gateway agreements with other vendors • Reduce fraud by 90%
6 DataNet NRTRDE
• Experience & Expertise Key Differentiators • Cutting Edge Platform and Service • Value Added Services
Named best roaming product by GSMA at Mobile World Congress 2008
7 GSM Visibility
• Enables real-time resolution of roaming issues
Addressable Market: $50-75M
Potential Customers: All GSM operators
Launched: 3Q2007
Customers: 12 Contracts (8 Implemented) 15 in negotiation
8 GSM Visibility
• Quality of Service tool enables operators to: Value – Provide superior subscriber service Proposition – Identify roaming partner issues
• Ability to troubleshoot roaming issues 24 x 7 Customer • Resolve problems at lower tiers of customer service Benefits – Faster resolution for the customer –Lower cost model – Increased roaming revenue
• Try before you buy Key • Immediate installation Differentiators • Near real-time tool with 7 days of data history • Network agnostic
9 Financial Clearing House (FCH)
• Transaction processing solutions
• Authorize, collect and settle between mobile operators
Addressable Market: $50M
Potential Customers: All CDMA and GSM operators
Launch: GSM – 2001 (BSG) CDMA – 2008
Customers: 91 Implemented
10 Financial Clearing House (FCH)
• Less expensive to outsource Value • Scalability for future growth and flexibility of Proposition customer reporting • Integrated FCH/DCH
• Lower risks for operators Customer • Ability to clear with any global operator Benefits • Debt control and operational risk reduction
• Industry leader in debt control Key • SAS70 Type II certification on the entire financial Differentiators clearing and settlement process • Superior quality and feature set
11 Syniverse Analyst Day
February 21, 2008 Financial Overview
David Hitchcock Chief Financial Officer February 21, 2008 Agenda – Financial Overview
• Business Model and Trends
• BSG Synergies: Impact and Timing
• Uses of Free Cash Flow
• 2008 Guidance
• Appendix A: Non-GAAP Reconciliations and Credit Statistics
2 Strong Operating Model
Scalable HighHigh VisibilityVisibility Scalable EconomicsEconomics ~90%~90% RecurringRecurring RevenueRevenue ~~ 70%70% TransactionTransaction BasedBased RevenueRevenue
LowLow SalesSales && LowLow CapitalCapital MarketingMarketing IntensityIntensity 24%24% SG&ASG&A // 7%7% CapexCapex // 11 22 RevenueRevenue Scalability and Leverage: RevenueRevenue Distinct Investment Value
HighHigh MarginsMargins SignificantSignificant FreeFree 1 65%65% GrossGross MarginMargin1 CashCash FlowFlow 42% Adjusted 1 42% Adjusted $97.3M$97.3M1 EBITDAEBITDA MarginMargin11
1 Figures based on financials for the year ended 12/31/2007, EBITDA adjusted for IOS Transition, facilities move expense and 123R expenses and non-operating gains. Revenue excludes off-network database query fees. 2 Based on revenue (excluding off-network database query fees) and capital expenditures for year ended 12/31/2007. 3 Net Revenue Growing with Technology Interoperability
($ in millions)
$372 $331 $329 $309
$242 34%
38% 40% 42% 50% 46% 42% 33% 26% 28%
2003 2004 2005 2006 2007
Technology Interoperability Network Services Number Portability Call Processing Enterprise Solutions
4 Growing Outside of North America
($ in millions)
$80.7
$61.0
$33.8 $25.0 $18.6
2003 2004 2005 2006* 2007
CALA Asia Pacific EMEA
*Includes $17M from ITHL acquisition
5 Improved Revenue Diversity
2003 2007 2007PF
VZW VZW VZW
Others Others Others 2 - 10 2 - 10 2 - 10
Net Revenue $241.9M Net Revenue $371.9M Net Revenue $420.5M 92% North America 78% North America 69% North America 20% Verizon 14% Verizon 12% Verizon
Note: 2007PF includes Syniverse 2007 and BSG LTM 9/30/07
6 Operating Leverage
Continued declines throughout 2007 Pricing Bundled pricing strategy
Favorable industry dynamics Volumes Growth outpaces pricing declines Growth outpaces pricing declines
Net Revenues +13.1% YOY Costs COGS (excluding pass-thru) & SG&A +4.3% YOY Offshoring program, BSG synergies, Six Sigma…
7 Strong Profitability
($ in millions) Adjusted EBITDA1 Cash Net Income1
R 0.5% CAG AGR 1 $155.9 8% C $146.4 29. $75.3 $133.8 $127.7 $65.2 $104.5 $57.3 $46.9
$26.5
2003 2004 2005 2006 2007 2003 2004 2005 2006 2007
% Margin 43.2% 43.4% 44.2% 38.8% 41.9% Cash EPS 39¢ 69¢ 96¢ 85¢ $1.11
• 22.1% Adjusted EBITDA growth in 2007 • 31.4% Cash Net Income growth in 2007 • Data growth and operating leverage have driven margin expansion • Margins strong and durable • Strong EPS growth driven by solid performance and deleveraging
Note: 2006 results include loss of Sprint center contract. 1 For a reconciliation, see Appendix A.
8 Significant Cash Flows and Deleveraging
($ in millions) Free Cash Flow1 Total Leverage2
$97.3 4.3x
$76.6 $74.1 3.4x 3.3x $63.5 2.7x 2.5x 2.4x
$30.1
% 2003 2004 2005 2006 2007 2003 2004 2005 2006 2007 PF 2007 Margin 12.4% 20.6% 23.1% 22.5% 26.1%
• Operating leverage and minimal capital requirements drive free cash flow • Long history of consistent debt paydown • Pro Forma leverage ratio of 2.7x – Leverage ratio for 2007 excludes BSG EBITDA and Synergies
Note: 2006 results include loss of Sprint center contract. 1 Defined as cash from operations less capex, cash related to legal settlements, and changes in working capital. For a reconciliation, see Appendix A. 2 Defined as total debt divided by Adjusted EBITDA. 3 Includes $12 million of annual run-rate synergies associated with the BSG Wireless acquisition and annualized Adjusted EBITDA for the 9 months ended 9/30/07 for BSG Wireless. 9 Debt Structure
($ in millions) ($ in millions)
12/31/2006 12/31/2007 Term Note B $ 135.2 $ 347.9 7 ¾% Senior Subordinated Notes 175.0 175.0 Total Debt $ 310.2 $ 522.9
SVR Adjusted EBITDA $ 127.7 $ 155.9
Total Debt/Adjusted EBITDA 2.4x 3.4x
BSG Adjusted EBITDA Annualized 9 months 2007 27.6 Expected Run-Rate BSG Synergies1 12.0 Synergy Adjusted EBITDA $ 195.5
Total debtDebt / Synergy Adjusted EBITDA 2.7x
1 Reflects annual run-rate synergies expected to be realized within 2 years.
10 $12 Million Synergies Realized in 3 Equal Steps
1. Duplicative SG&A Headcount – Timeline: 1Q08 – 3Q08 – Not dependent on customer migrations
2. Consolidated Platform Labor Savings – Timeline: 3Q08 – YE09 – Headcount reduced as customers migrate
3. Consolidated Platform Processing Savings – Timeline: 3Q08 – YE09 – Processing savings realized as customers migrate to more efficient BSG platform
Expected Year End Run Rate Savings: 2009: $12 Million Approx. one third by YE2008
11 Synergies and Benefits of BSG Platform
Syniverse BSG Mainframe based Server based Variable cost Fixed cost Less efficient More efficient Legacy system
• Two-thirds of synergies realized as Syniverse GSM customers migrate to BSG platform consolidation – Reduced data processing costs – Reduced headcount needed to operate the processing platform
12 BSG Synergy Timeline
12/31/076/30/08 12/31/086/30/09 12/31/09
Planning Reduce platform labor Development SG&A reductions Development Testing Work with initial customers Testing Migrating customers Integrate combined teams Migrating customers
$12
$8
$4
$0 Dec-07 Jun-08 Dec-08 Jun-09 Dec-09
Note: Graph for illustrative purposes only 13 Transition Expenses Included as Non-GAAP Adjustments
Syniverse Holdings Inc. • Integration-specific expenses Reconciliation of Non GAAP Measure Estimates to GAAP (unaudited) – $4 - $5 million in 2008 2008E 2008E – Recognized as expensed (in millions) Low High – Ex: temporary headcount, travel for Reconciliation to adjusted EBITDA Net income $ 47.5 $ 54.0 integration team Interest expense, net 36.5 36.5 Provision for income taxes 29.5 33.0 Depreciation and amortization(1) 59.0 59.0 • Duplicative Costs SFAS 123R non-cash compensation 4.0 4.0 – $9 - $10 million in 2008 BSGW transition expenses(2) 13.5 13.5 Adjusted EBITDA $ 190.0 $ 200.0 • $2 - $3 million expected to be eliminated in 2008 – Excess Headcount Reconciliation to adjusted net income and cash net income Net income $ 47.5 $ 54.0 • Duplicative SG&A Add provision for income taxes 29.5 33.0 • Consolidated Platform labor Income before provision for income taxes 77.0 87.0 – Consolidated Platform Data Adjustments to income before provision for income taxes Processing Purchase accounting amortizations 27.5 27.5 • Fixed versus variable processing costs SFAS 123R non-cash compensation 4.0 4.0 BSGW transition expenses(2) 13.5 13.5 Adjusted income before provision for income taxes 122.0 132.0 • Quarterly disclosure Less assumed provision for income taxes (46.2) (51.2) – Duplicative costs trend lower as Adjusted net income 75.8 80.8 synergies are achieved Add cash savings of tax deductible goodwill(3) 9.2 9.2 Cash net income $ 85.0 $ 90.0
14 Integration History
Acquisition Date Size Scale/Product Geography Brience 2003 Small Product North America Softwright 2003 Small Scale EMEA IOS North America 2004 Medium Scale North America ITHL 2006 Medium Product Asia Pacific BSG Wireless 2007 Large Scale EMEA
• Successfully integrated 4 previous acquisitions since 2003
• BSG Wireless integration similar to IOS North America – Migrations completed on schedule – Significant synergies realized
15 Uses of Free Cash Flow
2004(1) 2005 2006 2007(2)(3) TOTAL Free Cash Flow $ 63.5 $ 76.6 $ 74.1 $ 97.3 $ 311.5
Purchase of Business (12.0) (37.7) (6.9) (56.6) Principal Payments on senior credit facility (40.7) (61.7) (41.8) (81.6) (225.7) Additions (reductions) to Cash (1.2) 16.5 (17.2) (6.4) (8.4) TOTAL CASH FLOW $ 9.6 $ 31.4 $ (22.6) $ 2.4 $ 20.8
M&A De-lever
New Products or Scale Long Term Target 2.0x History of Successful Acquisitions Comfort Zone up to 4.5x
Flexibility Supported By Strong Cash Flow
Notes: 1) Purchase of business includes cash from balance sheet used to finance the IOS NA acquisition 2) Includes contingent payments accrued in 2006 but paid in 2007 for ITHL 3) Excludes purchase of BSGW
16 2008 Guidance
Low High
Net Revenues $425M $440M
Net Income $47.5M $54M
Adjusted EBITDA $190M $200M
Cash Net Income $85M $90M
Operating Free Cash Flow $100 Million
17 Syniverse Analyst Day
February 21, 2008 Appendix A
Non-GAAP Reconciliations and Credit Statistics Reconciliation to Free Cash Flow
Cash Generation (In Millions) Reconciliation to Free Cash Flow 2003 2004 2005 2006 2007 Cash From Operations$ 48.4 $ 85.7 $ 110.6 $ 97.8 $ 121.3
Add cash paid (received) in legal settlement - - - 2.4 (2.5) Less capital expenditures (18.3) (22.2) (34.0) (19.9) (27.7) Less accrued but not yet paid acquisition earn out - - - (6.2) 6.2 Free Cash Flow$ 30.1 $ 63.5 $ 76.6 $ 74.1 $ 97.3
Supplemental Information Cash Interest$ 46.2 $ 44.3 $ 40.7 $ 26.5 $ 24.5 Cash Taxes$ - $ 0.1 $ 0.1 $ 0.8 $ 6.0
20 Reconciliation to Adjusted EBITDA
2003 2004 200520062007 Reconciliation to adjusted EBITDA Net income (loss) $ (57.9) $ 15.1 $ 9.8 $ 89.7 $ 52.4 Interest expense, net 57.4 51.8 32.7 25.5 23.6 Loss on extinguishment of debt - - 42.8 0.9 - Add provision (benefit) for income taxes 10.1 8.7 9.0 (39.6) 31.3 Depreciation and amortization 37.3 42.0 46.8 41.2 42.9 Restructuring 2.2 0.3 0.1 1.0 2.2 Impairment losses on intangible assets 53.7 14.1 - - - Loss from disposal of assets - - 0.6 - - SFAS 123R non-cash compensation - - - 1.8 3.6 IOS North America transition expenses - 1.9 3.8 0.8 - Facilities move expense - - 2.2 5.3 - Data processing contract termination fee - - - 1.0 - Li t igat i on se tt l ement - - - 0.4 - Pre Acquisition Brience EBITDA Loss 1.8 - - - - Non operating (gains) - - (1.4) (0.3) - Adjusted EBITDA $ 104.5 $ 133.8 $ 146.4 $ 127.7 $ 155.9
21 Reconciliation to Cash Net Income
Reconciliation to cash net income 2003 2004 2005 2006 2007 Net income (loss) $ (57.9) $ 15.1 $ 9.8 $ 89.7 $ 52.4 Add provision (benefit) for income taxes 10.1 8.7 9.0 (39.6) 31.3 Income before provision for income taxes (47.9) 23.8 18.8 50.2 83.7
Restructuring 2.2 0.3 0.1 1.0 2.2 Purchase accounting amortization 21.8 22.7 24.4 17.8 18.8 SFAS 123R non-cash compensation - - - 1.8 3.6 Impairment losses on intangible assets 53.7 14.1 - - - Loss from disposal of assets - - 0.6 - - IOS North America transition expenses - 1.9 3.8 0.8 - Facilities move expense - - 2.7 5.3 - Loss on extinguishment of debt - - 42.8 0.9 - Data processing contract termination fee - - - 1.0 - Litigation settlement - - - 0.4 - Non operating (gains) - - (1.4) (0.3) - Adjusted income before provision for income taxes 29.8 62.8 91.8 78.9 108.3 Less assumed provision for income taxes at 39% (11.6) (24.5) (35.8) (30.8) (42.2) Adjusted Net Income 18.2 38.3 56.0 48.1 66.1 Add cash savings of tax deductible goodwill(1) 8.4 8.6 9.2 9.2 9.2 Cash net income $ 26.5 $ 46.9 $ 65.2 $ 57.3 $ 75.3
22 Credit Statistics
2003 2004 2005 2006 2007 Cash$ 8.3 $ 17.9 $ 49.3 $ 26.7 $ 49.1 Net PPE 101.2 90.4 96.1 94.7 106.5
Subordinated Debt 241.0 241.8 189.5 175.0 175.0 Credit Facility 208.3 215.6 178.3 136.6 347.9 Total Debt 449.4 457.4 367.8 311.6 522.9
Stockholder's equity 213.7 228.8 322.6 414.8 470.7 2.1x 2.0x 1.1x 0.8x 1.1x
Total Leverage Ratio 4.3x 3.4x 2.5x 2.4x 3.4x Senior Leverage Ratio 2.0x 1.6x 1.2x 1.1x 2.2x
Net of Cas h Total Leverage Ratio 4.2x 3.3x 2.2x 2.2x 3.0x Senior Leverage Ratio 1.9x 1.5x 0.9x 0.9x 1.9x
Free Cash flow 30.1 63.5 76.6 74.1 97.3 Cumulative Free Cash Flow 30.1 93.7 170.2 244.4 341.6
23 BSG Wireless Adjusted EBITDA
Reconciliation to adjusted EBITDA 1Q07 2Q07 3Q07 9 Months 07 Net income $ (0.0) $ 1.0 $ 3.0 $ 4.0 Interest expense, net 1.3 1.4 1.7 4.4 Provision for income taxes 0.2 (0.8) 0.8 0.2 Depreciation and amortization 4.0 3.9 4.2 12.2 Adjusted EBITDA$ 5.4 $ 5.6 $ 9.7 $ 20.7
Annualized adjusted EBITDA$ 27.6
24 Syniverse 2008 Focus
Tony Holcombe President & CEO February 21, 2008 Syniverse 2008 Focus
• BSG integration
• Customer satisfaction
• Successfully renew Verizon contract
• Meet financial targets
2 Syniverse 2008 Focus
• Employee satisfaction
• Regional management approach
• Strategic growth regions – Brazil, China, India
• New products and services – DataNet, FCH, GSM Visibility, Mobile Broadband Solution
3 Syniverse Analyst Day
February 21, 2008 Analysts Briefing
February 21, 2008 Financial Clearing Pre-Meeting Primer
Aaron Frank Director, Financial Clearing February 21, 2008 Role of the Data and Financial Clearing House
• Roaming subscriber makes a Holiday Cellular Subscribers call Holiday • Visited and home networks use Cellular a data clearing house (DCH) to
Exchange of validate and exchange call data Billing Data • The DCH acts as a single point Exchange of of contact between the client Billing Data Sun Data Clearing and its roaming partners Wireless House • The financial clearing house (FCH) receives and verifies the Provision of billing data processed by the Billing Data DCH
Financial • The FCH provides all invoicing Clearing House and settlement services between the client and its roaming partners
3 Financial Clearing House Services
Financial Clearing House
1) Invoicing & 2) Netting 3) Settlement 4) Reporting Adjustments
A Financial Clearing House (FCH) allows a wireless operator to fully outsource the payables and receivables function with its roaming partners.
4 Financial Clearing House Services
1) Invoicing & • Billing data verification and error-checking Adjustments • Creation of client’s receivable invoices Data Verification • Reconciliation of client’s payable invoices Receivable Invoices Payable Invoices • Handling of credit and debit notes Credit / Debit Notes
2) Netting • Determination of client’s receivable and payable positions • In accordance with roaming agreements and other Direct Bilateral contractual arrangements Multilateral
5 Financial Clearing House Services
3) Settlement • Execution of outgoing payments on behalf of the client to its partners Outgoing Payments Incoming Payments • Receipt of incoming payments from the client’s partners Foreign Exchange Debt Recovery • Foreign exchange and banking • Comprehensive debt recovery
4) Reporting • Standard (pre-defined) and customized reporting • Reports for loading by ERP systems Pre-Defined Customized • Online, dynamic reporting with scheduling and ERP Feeds Online Reporting customization functions
6 GSM Financial Clearing Market
• GSM Financial Clearing market is estimated at $40-45M annually on a global basis
• Over two-thirds of GSM Operators outsource financial clearing – Outsourcing is seen as cost-effective (in terms of personnel, systems, bank charges, forex handling, and printing & mailing costs)
• We expect the GSM Financial Clearing market to continue to grow: 1) Implementation of new GSM networks worldwide 2) Expanded roaming coverage • The average GSM operator has 250 partners • This is a small portion of the 700+ GSM networks worldwide 3) Growth in non-voice services • Operators increasingly want their FCH to manage their SMS/MMS Interworking and Wireless LAN settlements
7 Syniverse FCH History
• Service launched as United Clearing – August 2001 • United Clearing listed on London Stock Exchange (AIM market) – July 2004 • Acquired by BSG (Billing Systems Group) – March 2006 • BSG Wireless acquired by Syniverse – December 2007 • Headquartered in the UK • Regional support staff in Hong Kong and the U.S • Total of 45 employees fully dedicated to Financial Clearing • Fully SAS 70 Type II Compliant
8 Syniverse FCH Customer Base
• Over 90 customers in Africa, Europe, Americas and Asia – New Operators – Transferred from another FCH – First time to outsource FCH
• Significant wins including O2 UK, Orange UK, O2 Germany, T-Mobile Austria, Hong Kong CSL, and Cable & Wireless
• Experienced with group agreements – Cable & Wireless – France Telecom Group for all its FT and Orange properties – Hutchison 3 Group
–O2 Group Deal
9 Syniverse FCH Differentiators
• Automation of the majority of tasks vastly reduces human error
• Comprehensive reporting, including exception reports and ERP feeds
• Full auditing of the financial clearing process
• SAS70 Type II controls across the entire process
• Supports clients with all Data Clearing Houses
• Scalable technology to support new services
10 Syniverse FCH Strategic Importance
• Operators increasingly require that their Data Clearing and Financial Clearing services be provided by the same vendor
• For the Operator, key advantages of a bundled DCH / FCH service are: – End-to-end commitment to the customer – Improved revenue assurance – More efficient response times – One account manager – One contract – Wider scope for new or enhanced services
11 Syniverse FCH Opportunities
• Leverage Syniverse’s customer relationships and sales staff:
• Lead the GSM Financial Clearing market for value-added services: – Financial clearing for SMS and MMS interworking – Financial clearing for Wireless LAN traffic – IOT discount calculation and management – Historical debt collection – Pro-active debt collection – VAT reclaim
• Utilize Syniverse’s CDMA expertise to launch CDMA Financial Clearing: – Develop an improved Financial Net Settlement Program – Provide One-Stop-Shop solution for CDMA Data & Financial Clearing
12