Courseware Exhibits for Vodafone AirTouch's Bid for Mannesmann Case No.

N1-201-096 April 18, 2001 (Revised July 17, 2001)

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Exhibit 3. Wireless Players in the UK Market, September 1999 Vodafone Cellnet Market Share based on number of subscribers 35% 1999E UK Revenues (billion ) 3 1999E EBITDA Margin 34.0% 1999E EBIT Margin -EV/EBITDAa 30 b European Average EV/EBITDA 21.9 European Median EV/EBITDA 21
a

30.40% 2.4 12.8% 2.7% 23

Source: Morgan Stanley Dean Witter December 13,1999, ABN-AMRO, case writers estimates. EV was the enterprise value i.e., market value of equity and debt. The EV/EBITDA multiples for Orange and One2One use the acquired price to estimate the enterprise value. EV/EBITDA multiples for Vodafone and Cellnet were based on analyst estimates of b The European average includes valuations of fixed line operators, which were lower than wireless operators.

Exhibit 4. Summary of Vodafone AirTouch Holdings Around the World, September 1999 Company No. of Countries No, of Controlled Companies Europe 14 United States 1 Asia 6 Africa and Middle East 3

7 0 2 1

Source: WestLB Penmure, Dresdner Kleinwort Benson Research, Goldman Sachs, case writers estimates.

Exhibit 5. Selected Items from Consolidated Financial Statements for Vodafone AirTouch ( million) 6 months ending Year Ended 31 March September 1999a 1999 Turnover (Revenues) 4,208 3,360 253b Total Group Operating Profit 962.6 Net Profits (loss) (455) 636.7 Total Fixed Assetsc 48,483 2,852.10 Total Current Assets 2,247 791.5 Liabilities due within one year 7,700 1,529.90 Liabilities due after one year 2,036 1,189.40 Capital and Reservesd 40,994 924.3 Source: Vodafone AirTouch prospectus. Financial statements are in accordance with UK GAAP. a Pro forma profit and loss under the assumption that Vodafone AirTouch merger took place on April 1, 1999. b Total operating profit before goodwill was 1.4 billion. Amortization of goodwill was 1.2 billion. c The goodwill arising from the merger of Vodafone with AirTouch was estimated to be 40.9 billion. d Total equity shareholders funds increased on account of the issue of new share capital of 39 billion in relation to Vodafones merger with AirTouch.

Orange 18% 1.4 18.0% 8.0% 77.5

One2One 16.60% 1.14 14.0% 5.0% 57

or Orange and One2One d Cellnet were based on analyst estimates of enterprise value. ess operators.

Enterprise Subscribers 43,158 25,000 12,110 2,686

Controlled Subscribers 12,694 1,593 244

AirTouch ( million) ear Ended 31 March 1998 2,470.80 686.4 418.8 1,911.50 590.8 1,426.40 696.4 379.5 place on April 1, 1999. 1997 1,749 538.9 363.8 1,926.60 495.2 1,013.20 580 828.6

40.9 billion. al of 39 billion in relation to Vodafones

Exhibit 6. Mannesmann and Its Businesses Country Stake Products Sales 1998 (em) 2,547 1,989 2,132 3,338 2,150 2,338 939 188 156

Engineering Rexroth Germany 100 Motion Control Equipment Dematic Germany 100 Cranes & Handling Equipment Demag KraussMalfee Germany 100 Plastic Machinery and Compressors Automotive VDO Germany 100 Engineering Auto Manufacturers Sachs Germany 100 Powertrain & Chasis Tubes Germany 100 Seamless Welded Steel Tubes Wireline Telecommunications Arcor Germany 70.1 Infostrada Italy 100 Cegetel France 15 tele-ring Austria 53.8 Wireless Telecommunications Mobilfunk (D2) Germany 65.2 Omnitel Italy 55.2 SFR France 12 Orangea UK 100 Source: Mannesmann. a Consolidated results for Orange PLC, acquired by Mannesmann in October, 1999. Exhibit 7. Selected Items from Consolidated Financial Statements for Mannesmann ( e Year Ended December 31, 1998 1997 1996 Total Sales 19,065 19,989 18,115 EBITDA 3,125 2,204 1,992 EBIT 1,469 894 954 Net Profit (loss) 239 189 584 Intangible assets 2,816 Tangible assets 4,902 Trade creditors 1,452 Amounts owned to credit institutions 1,803 Other Liabilitiesa 7,734 Shareholders Equity 6,360 2,003 4,689 1,696 1,361 7,514 4,498 997 3,809 1,428 617 6,314 3,942

3,731 2,332 2,658 1,731

Source: Vodafone AirTouch prospectus, Mannesmann Company Reports, ABN-AMRO November 8, 1999. Prepared in accordance with German GAAP. a Includes provisions for pension liabilities and other liabilities.

Employees 1998 20,927 12,907 11,265 23,036 19,860 13,084 6,554

6,711

6,144

ber 8, 1999. Prepared in

Exhibit 8. European and US Mobile Transactions in 1999

Equity POPSa Stake Equity Date Name Acquired (%) (m) Subscribers (m) European Mobile Transactions (Acquirer-Target) Jun Bouygues - Bouyges Tel 20 11.6 1.9 Jul BT-BT Cellnet 40 4.6 2.08 Aug Deutsche Telekom One2One 100 58.1 2.98 Oct France Tel E Plus 17.3 14.1 0.51 Oct France Tel E Plus 60.1 49.3 1.77 Oct Tele Danmark Netcom 19.6 0.8 0.15 Oct Mannesmann Orange 100 58.1 3.5 Jan Oliman-BAM 10.3 13.5 0.67 Mar Mannesmann Omnitel 23.5 13.5 1.6 Mean Mean for controlling dealsb US Mobile Transactions (Acquirer-Target) Jun Vodafone AirTouch 100 211.8 14.2 Mar AT&T Vanguard 100 9.7 0.7 Mar SBC Comcast 100 8.6 0.75 Apr GTE Ameritech 100 11 1.7 Jun Hutchison Voicestream 30 17.6 0.55 Jun Voicestream Omnipoint 100 26.4 0.59 Jul Vodafone Comnet 100 7.6 0.34 Sep Voicestream Aerial 100 25.4 0.35 Oct Worldcom Sprint 100 220 4.0 Mean Mean for controlling dealsb Source: WestLB Penmure, case writers estimates. a Equity POPS is a pro-rata value, which reflects the firms share of the population served by the target firm, based on the equity b Controlling deals were deals in which a majority stake was acquired. c EV/Subscriber multiple was obtained by dividing enterprise value by the equity subscribers while EV/POP multiple was the ente divided by equity POPS of the firm.

EV/Subc(e) 932 2,813 4,745 5,157 5,989 2,800 8,857 3,134 3,538 4,218 6,530 5,620 2,629 2,413 2,018 2,236 2,085 4,206 5,480 12,100 4,310 4,569

EV/POPc (e) 153 1,272 243 187 215 525 533 156 419 411 330 377 190 210 312 70 47 188 76 220 188 203

ed by the target firm, based on the equity stake acquired.

bers while EV/POP multiple was the enterprise value

Exhibit 10. Estimation of Synergies from Vodafone AirTouch's Acquisitions of Mannesmann ( m) Year End March 2000E Revenue Synergy Cost Associated with Revenue Synergy Cost Synergy Total Operating Profit Impact Savings in Capital Expenditures 0 0 0 0 0 2001E 50 (40) 80 90 60 2002E 153 (107) 200 246 147 2003E 469 (281) 500 688 360 2004E 656 (328) 656 984 420 2005E 977 (488) 732 1,221 469

Assumptions WACCa 7.60% b Perpetuity Growth 4% Tax Rate 35% Source: Goldman Sachs Research. a The WACC assumed a Nominal Sterling () risk free rate of 5.5%, a market risk premium of 2%, cost of debt of 7%, gearing ( of debt to total market value of the firm) at 5%,and corresponding equity beta of Vodafone of 1.1. b The estimated inflation in the UK was 2.5%. c The expected synergies in 2004 as a percentage of the respective categories i.e., revenues, operating profits and capital expe for the combined firm in 2004.

2006E 1,221 (610) 879 1,489 506

Synergy as % of combined firm in 2004c 1.70%

5.70% 7.80%

2%, cost of debt of 7%, gearing ( the ratio

perating profits and capital expenditures

Exhibit 11a. Value of Vodafone AirTouch and Mannesmann ( m) Year ending March 2000E 2001E Vodafone AirTouch Proportionate EBITDAa Taxes Paid
b c

2002E 5,191 1188 3945 58 6,747 1594 4169 984

2003E 8,497 2042 4265 2189

3,925 861 3505 (441) 116,361

Capital Expenditure Free Cash Flows Terminal Value Enterprise Value

Mannesmanns Telecommunications Business (not including Orange) Proportionate Telecommunications EBITDAa Taxes Paidb Capital Expenditures Free Cash Flows Terminal Value Value of Telecommunications Business 71,387
c

1565 343 1125 96

2101 481 1145 474

2923 690 1192 1041

3908 939 1324 1645

Assumptions 1. WACC = 7.6% 2. Terminal Value Growth Rate = 4% Source: Goldman Sachs Research and case writers estimates. a Proportionate EBITDA is a pro-rata consolidation which reflects the firms share of EBITDA in both its consolidated and unconsolidated entities. Proportionate EBTIDA is not a recognized presentation under either UK or German GAAP. The EBITDA for Mannesmanns telecommunications business does not include Orange PLC. b The taxes paid were estimated after deducting depreciation but before any interest payments c The estimated depreciation was assumed to be approximately equal to capital expenditure in 2005.

Exhibit 11b. Equity Valuation of Vodafone and Mannesmann ( m) Vodafone AirTouch Mannesmann Value of Telecommunications Business 116,361 71,387 Value of Orange PLCa 17,730 b Value of Industrials 7,405 Total Enterprise Value (EV) 116,361 96,522 Value of Proportionate Net Debt 8,000 16,250 Value of Equity () 108,361 80,272 Value of Equity (e)c 173,377 128,434

Source: Goldman Sachs, Lehman Brothers, Dresdner Kleinwort Benson, case writers estimates. The value of Orange was based on an EBITDA estimate of 598 for 2000 and Vodafones EV/EBITDA multiple of 29.6. b The value of Mannesmanns non-telecommunications industrial assets was based on the EBITDA estimate of 903 for 2000 and a EV/EBIT c The value was converted to e at the spot exchange rate on December 17, 1999 of e1.6 = 1.
a

2004E 10,653 2559 4324 3770

2005E 13,044 3138 4534 5372 155,200

4822 1158 1342 2322

5905 1420 1256 3228 93,261

both its consolidated ither UK or German GAAP.

multiple of 29.6. mate of 903 for 2000 and a EV/EBITDA multiple of 8.2.

Date

Analyst Nov-99 Credit Suisse First Boston Dec-99 Dresdner Kleinwort Benson Dec-99 Exhibit 11 Dec-99 Julius Br Nov-99 Commerzbank 18-Nov Market Prices 17-Dec Market Prices

Vodafone Mannesmann AirTouch 90 131 128 129-181 122 108 121 138 154 143 178 173

Valuation Methodology Sum of Parts, DCF, EV/EBITA Sum of Parts, DCF, EV/EBITDA DCF on Proportionate Cash Flows Sum of Parts, DCF, M&A premium and Conglomerate Discount Sum of Parts, DCF, EV/EBITDA

Source: Equity Analyst Reports dated November 1999 and December 1999. Note: Equity valuations are under the assumption of full acceptance of Mannesmanns offer for Orange. Mannesmann had 517.9 million and Vodafone AirTouch had 31,105 million shares outstanding. Sum of Parts methodology valued each affiliate using DCF or multiples and added proportionate values based on equity stake to obtain the value of the group. DCF on proportionate cash flows first estimated proportionate cash flows of the group (based on equity stakes held in affiliates), which were then discounted.

e Cash Flows

M&A premium

ts methodology n the value of the group. es held in affiliates),

Exhibit 14. Share Prices and Exchange Rates (October-December 1999) Date MannesmannVodafone Value of 1e 10/19/1999 10/20/1999 10/21/1999 10/22/1999 10/25/1999 10/26/1999 10/27/1999 10/28/1999 10/29/1999 11/1/1999 11/2/1999 11/3/1999 11/4/1999 11/5/1999 11/8/1999 11/9/1999 11/10/1999 11/11/1999 11/12/1999 11/15/1999 11/16/1999 11/17/1999 11/18/1999 11/19/1999 11/22/1999 Source: Datastream. 153 158.6 145.35 141.3 143 147.5 145.5 148.5 149.5 146.5 144.75 146 147.9 159.95 165.25 162.6 175.2 178.9 185 201.5 206.2 195.8 208.7 194 186.5 2.74 2.57 2.7 2.69 2.64 2.73 2.72 2.69 2.83 3 2.89 2.95 3.01 3.17 3.18 3.22 3.2 3.17 2.96 2.92 2.71 2.77 2.83 2.75 2.75 0.6467 0.6465 0.645 0.6428 0.6422 0.6402 0.6392 0.6413 0.6406 0.639 0.6372 0.6374 0.6373 0.6412 0.6413 0.6415 0.6419 0.6413 0.6394 0.6362 0.6371 0.6396 0.6381 0.6365 0.6371

(October-December 1999) Date Press reports Mannesmanns interest in Orange PLC Mannesmann makes deal with Orange 11/23/1999 11/24/1999 11/25/1999 11/26/1999 11/29/1999 11/30/1999 12/1/1999 12/2/1999 12/3/1999 12/6/1999 12/7/1999 12/8/1999 12/9/1999 12/10/1999 12/13/1999 12/14/1999 12/15/1999 12/16/1999 12/17/1999 MannesmannVodafone 181.5 187.5 202.8 202 204.95 206.4 215.7 220.6 226 234.5 238.6 231 234.5 229.8 224 229 221 227 234 2.73 2.79 3 2.98 2.95 2.95 3.02 3 3.05 3.18 3.26 3.12 3.14 3.11 3.04 3.08 2.99 3.06 3.11

Vodafones first bid for Mannesmann

Vodafones amended offer for Mannesmann Mannesmanns offer for Orange PLC becomes unconditional

 Value of 1e 0.6329 0.6322 0.6313 0.6301 0.6287 0.6322 0.631 0.6276 0.6253 0.6321 0.6298 0.6303 0.6268 0.6264 0.6231 0.6226 0.6241 0.6313 0.6274