MITEL NETWORKS CORPORATION 2012 2012 ANNUAL REPORT MITEL NETWORKS CORPORATION | ANNUAL REPORT ABOUT MITEL Mitel Networks (Nasdaq:MITL) is a global provider of business communications solutions and services, consisting of unified communications and collaboration software applications, IP telephony platforms, mobility applications and managed and network services. Mitel enables businesses of all sizes to move beyond basic fixed telephony tools toward integrated multimedia collaboration solutions, accessible from anywhere, helping to improve performance, gain competitive advantage, and reduce costs. Mitel’s global headquarters are in Ottawa, Canada, US headquarters are in Chandler, Arizona and EMEA headquarters are in Caldicot, UK, with offices, partners, and resellers worldwide. For more information visit: http://www.mitel.com. GLOBAL HEADQUARTERS U.S. EMEA CALA ASIA PACIFIC Tel: +1(613) 592-2122 Tel: +1(480) 961-9000 Tel: +44(0)1291-430000 Tel: +1(613) 592-2122 Tel: +61(0) 2 9023 9500 Fax: +1(613) 592-4784 Fax: +1(480) 961-1370 Fax: +44(0)1291-430400 Fax: +1(613) 592-7825 Fax: +61(0) 2 9023 9501 FOR MORE INFORMATION ON OUR WORLDWIDE OFFICE LOCATIONS, VISIT OUR WEBSITE AT MITEL.COM/OFFICES mitel.com THIS DOCUMENT IS PROVIDED TO YOU FOR INFORMATIONAL PURPOSES ONLY. The information furnished in this document, believed by Mitel to be accurate as of the date of its publication, is subject to change without notice. Mitel assumes no responsibility for any errors or omissions in this document and shall have no obligation to you as a result of having made this document available to you or based upon the information it contains. M MITEL (design) is a registered trademark of Mitel Networks Corporation. All other products and services are the registered trademarks of their respective holders. © Copyright 2012, Mitel Networks Corporation. All Rights Reserved. GD 1565_10353 MITEL NETWORKS | FINANCIAL AND OPERATING HIGHLIGHTS REVENUE ADJUSTED EBITDA1 DIRECTORS MARKET INFORMATION ($ in millions and gross margin – in %) ($ in millions) DR. TERENCE H. MATTHEWS STOCK SYMBOL: MITL Chairman of the Board Nasdaq Global Market Chairman of Wesley Clover FY10 FY11 FY12 INVESTOR RELATIONS FY10 FY11 FY12 RICHARD D. MCBEE ANNUAL REVENUES $599 $589 $612 1 President and Chief Executive Officer, Mitel THE BLUESHIRT GROUP ANNUAL GROSS MARGIN 51.8% 52.2% 53.8% Adjusted EBITDA $90 $76 $88 Cynthia Hiponia PETER D. CHARBONNEAU TEL: 1-613-592-2122 [email protected] $612 $90 Lead Director $599 $88 General Partner, Skypoint Capital $589 ANNUAL SHAREHOLDERS MEETING $76 BENJAMIN H. BALL The Annual Meeting of Shareholders Director will be held on July 26, 2012 at 2:30 p.m. EST at: Partner, Francisco Partners Management, LLC Brookstreet Hotel 525 Legget Drive, JEAN-PAUL G. COSSART Ottawa, Ontario 51.8% 52.2% 53.8% Director Associate Director, Infoteria of France MITEL EXECUTIVE MANAGEMENT ANDREW J. KOWAL RICHARD D. MCBEE Director President and Chief Executive Officer Partner, Francisco Partners Management, LLC STEVEN E. SPOONER JOHN P. MCHUGH Chief Financial Officer FY10 FY11 FY12 FY10 FY11 FY12 Director Chief Marketing Officer, Brocade Communications GRAHAM BEVINGTON 1 Executive Vice President Sales, Service and Marketing, International Adjusted EBITDA is not a measure calculated in accordance with U.S. GAAP. For a description of Adjusted EBITDA, its use and limitations, HENRY L. PERRET and a reconciliation of Adjusted EBITDA to net income, please see Item 6 of this Annual Report. Director PHILIP B. KEENAN President and Chief Executive Officer, Executive Vice President Sales, Service and Marketing, North America The Capital Area Food Bank of Texas CONSOLIDATED STATEMENTS OF OPERATIONS DATA – IN MILLIONS (except for per share amount) RONALD G. WELLARD DONALD W. SMITH Executive Vice President and General Manager, Retired Executive Mitel Communications Solutions FISCAL YEARS ENDED APRIL 30 2010 2011 2012 NORMAN STOUT JON D. BRINTON Revenue $599 $589 $612 Director General Manager, Mitel NetSolutions® Partner, True North Venture Partners, L.P. Gross Margin 311 307 329 Chairman of EF Johnson Technologies, Inc. RYAN M. DONOVAN General Manager, Mitel Datanet / CommSource Operating Income 50 17 29 INDEPENDENT AUDITORS STEPHEN BEAMISH Net Income 37 88 50 DELOITTE & TOUCHE LLP Vice President Corporate Marketing and Business Development Ottawa, Ontario Adjusted EBITDA 90 76 88 DAVID LOESER Executice Vice President, Human Resources Net Income (loss) Per Share – Diluted ($7.30) $1.57 $0.89 TRANSFER AGENT COMPUTERSHARE SHAREOWNER SERVICES, LLC GWILYM R. FUNNELL New York, New York Vice President, Asia Pacific Region TEL: 1-866-298-4980 CONSOLIDATED BALANCE SHEET AND CASH FLOW DATA – IN MILLIONS Toronto, Ontario TEL: 1-800-564-6253 FISCAL YEARS ENDED APRIL 30 2010 2011 2012 Cash $77 $74 $79 Total Assets 641 672 687 Total Debt, including capital leases 350 323 312 Cash Flow From Operating Activities $34 $33 $35 MITEL NETWORKS CORPORATION 2012 ANNUAL REPORT DEAR SHAREHOLDER, Fiscal Year 2012 was both a productive and dynamic year for Mitel. Driven by execution of a new business strategy introduced at the start of the year, we simultaneously improved operating results while implementing significant structural changes. With disciplined financial focus, we delivered on our commitment for revenue growth, margin improvement, and increased profitability, and met or beat expectations from analysts in all four quarters. Through consistent performance, we have begun to reestablish credibility in the public markets. At the start of the year we made several strategic organizational changes, most notably a significant overhaul of our go-to-market model in the United States, our largest market, with a sweeping shift to deliver Mitel products and solutions indirectly through channel partners. With this shift now complete, the business RICHARD MCBEE (LEFT) rationale to maintain a direct value added distribution unit and value added reseller business has diminished, President and Chief Executive Officer and we have announced our intent to sell our DataNet business unit. TERENCE H. MATTHEWS (RIGHT) Early in June 2012, we announced our intention to expand trading to include both the NASDAQ and Toronto Chairman of the Board Stock Exchange (TSX) platforms. This dual listing will allow us to expand our shareholder base and provide access to the technical investor community in Canada. In FY2012, the Mitel research and development engine continued to deliver industry leading and innovative solutions. Key developments included a comprehensive refresh of our core platforms including the Mitel 5000 and Mitel Communications Director, and ongoing industry leading development of Mitel Virtual Solutions. We also entered the cloud services market with Mitel AnyWare, enabling businesses to leverage the benefits of virtualized cloud-based services without the need for capital investments. Complementary to our internal R&D efforts, our diverse ecosystem of best of breed technology partners continues to provide us with a distinct competitive differentiation and expanded market reach. Through our unique collaboration with industry leader VMware, we continue to outpace the field in the development of virtualized communications solutions to address increasing demand for cost efficient software based tools. Our technology eco-system also includes Mitel Affiliates, a stable of smaller technology companies that develop unique and highly innovative solutions complementary to the core products, and the Mitel Solutions Alliance, a developer partner program that extends the value of Mitel communications platforms by enabling third-party application integrations. These strong and diversified partnerships broaden our portfolio and enable us to better support customers. Although uncertainty in the macroeconomic environment remains, the transition from digital to IP communications, whether on premise or cloud-based, is well underway and expected to continue, creating a solid foundation for Mitel growth. This market shift is being accelerated by the mass consumption of tablets, smart phones and other devices that are changing the nature of workplace communication and collaboration, and creating numerous opportunities to provide new business applications. With tight strategic focus in these areas, and continued disciplined execution, Mitel is well positioned to lead through this transformation. In closing, we are confident that Mitel has the right strategy, the right structure and right people. We would like to thank our shareholders, partners and customers for their continued support and loyalty. We owe our deepest thanks to our employees for their ingenuity, hard work and dedication. They continually design, deliver and support some of the world’s most innovative products, giving us a critical competitive and market advantage. Together, the Mitel team is committed to driving shareholder value by delivering another year of improved sales and operating results. 2012 ANNUAL REPORT MITEL NETWORKS | VISION, MISSION, AND VALUES OUR VISION TO BE THE PREMIER BUSINESS COMMUNICATIONS AND COLLABORATION COMPANY IN OUR INDUSTRY. OUR MISSION TO DELIVER SOLUTIONS THAT ENABLE OUR CUSTOMERS TO COMMUNICATE AND COLLABORATE, AND TO CONDUCT BUSINESS ANYWHERE, OVER ANY MEDIUM, WITH THE DEVICE OF THEIR CHOICE. OUR VALUES CUSTOMERS PARTNERS SHAREHOLDERS PEOPLE INNOVATION INTEGRITY ACCOUNTABILITY UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-K È ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES