CommScope Company Annual Report 2014

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FY2014 Annual Report · CommScope Company

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2014 ANNUAL REPORT

1100 CommScope Place, SE • Hickory, NC 28602 • phone: +1 828.324.2200 • www.commscope.com

All trademarks identiﬁ ed by ® or ™ are registered trademarks or trademarks, respectively, of CommScope, Inc.

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RECONCILIATION OF GAAP MEASURES TO NON-GAAP ADJUSTED MEASURES
(Unaudited--in millions, except per share amounts)

BOARD OF DIRECTORS

LEADERSHIP TEAM

INVESTOR INFORMATION

RECONCILIATION OF ADJUSTED OPERATING INCOME

Operating income, as reported
Adjustments:

Amortization of purchased intangible assets
Restructuring costs, net
Equity-based compensation
Asset impairments
Purchase accounting adjustments (1)
Transaction costs(2)
Adjustment of prior year warranty matter
Gain on sale of subsidiary
Prior year customs matter
Total adjustments to operating income

Non-GAAP adjusted operating income

RECONCILIATION OF ADJUSTED NET INCOME
Income before income taxes, as reported
Income tax expense, as reported
Net income, as reported
Adjustments:

Total pretax adjustments to operating income
Pretax amortization of deferred ﬁ nancing costs & OID(3)
Pretax loss on debt transactions
Pretax gains on sale of equity investment
Tax effects of adjustments and other tax items(4)

Non-GAAP adjusted net income
Diluted EPS, as reported
Non-GAAP adjusted diluted EPS

RECONCILIATION OF ADJUSTED FREE CASH FLOW

Cash ﬂ ow generated by operating activities, as reported
Less: Additions to property, plant and equipment
Adjustments:

Debt redemption premium
Fee paid to terminate management agreement

Non-GAAP adjusted free cash ﬂ ow

YEAR ENDED DECEMBER 31

2012

2013

2014

$ 238.2

$ 329.7

$ 577.4

175.7
23.0
7.5
40.9
-
6.3
8.9
(1.5)
2.0
262.8
$ 501.1

37.3
(31.9)
5.4

262.8
17.1
-
-
(99.9)
$ 185.3
0.03
$
1.19
$

174.9
22.1
16.1
45.5
2.5
27.2
2.1
-
-
290.4
$ 620.1

$ 76.2
(56.8)
$ 19.4

290.4
26.6
34.4
-
(108.7)
$ 262.1
$ 0.12
$ 1.60

178.3
19.3
21.1
12.1
(11.9)
12.1
-
-
-
231.0
$ 808.4

$ 317.1
(80.3)
$ 236.8

231.0
32.4
93.9
(12.3)
(155.1)
$ 426.7
1.24
$
2.23
$

$ 286.1
(28.0)

$ 237.7
(36.8)

$ 289.4
(36.9)

-
-
$ 258.1

33.0
20.2
$ 254.1

93.9
-
$ 346.4

(1) Reﬂ ects non-cash charges resulting from purchase accounting adjustments,

including adjustments to the estimated fair value of contingent consideration
payable.

(2) Reﬂ ects transaction costs related to potential and consummated acquisitions as

well as secondary stock offerings. Also includes the Carlyle management fee and
the management agreement termination fee.

(3) Included in interest expense.
(4) The tax rates applied to adjustments reﬂ ect the tax expense or beneﬁ t based

on the tax jurisdiction of the entity generating the adjustment. There are certain
adjustments for which we expect little or no tax beneﬁ t.

Note: Components may not sum to total due to rounding.

CommScope management believes that presenting operating income, net income,
diluted EPS and cash ﬂ ow information excluding the special items noted above pro-
vides meaningful information to investors in understanding operating results and may
enhance investors’ ability to analyze ﬁ nancial and business trends, when considered
together with the GAAP ﬁ nancial measures. In addition, CommScope management
believes that these non-GAAP ﬁ nancial measures allow investors to compare period to
period more easily by excluding items that could have a disproportionately negative or
positive impact on results in any particular period.

Annual Meeting

Friday, May 1, 2015, 1:30 p.m. ET

JPMorgan Chase & Co. Conference Centers

270 Park Avenue, Floor 2

New York, NY 10017

Corporate Headquarters

CommScope Holding Company, Inc.

1100 CommScope Place, SE

Hickory, NC 28602

www.commscope.com

+1 828.324.2200

800.982.1708 (U.S. only)

Transfer Agent and Registrar

American Stock Transfer & Trust Company, LLC.

Shareholder Services Department

6201 15th Avenue

Brooklyn, NY 11219

info@amstock.com

+1 718.921.8124

800.937.5449 (U.S. Only)

www.amstock.com

Investor Relations

+1 828.323.4848

investor.relations@commscope.com

Common Stock

CommScope’s common stock began trading

on NASDAQ under the symbol “COMM”

on October 25, 2013.

COMM

L I S T E D

2014 Common Stock Price Ranges

High

Low

First Quarter .................... $25.89

$16.86

Second Quarter ............... $27.96

$22.66

Third Quarter ................... $26.89

$21.79

Fourth Quarter ................. $24.43

$19.68

Frank M. Drendel

Chairman*

CommScope

Marvin (Eddie) S. Edwards, Jr.

President and Chief Executive Ofﬁ cer

CommScope

Austin A. Adams

Audit Committee Member

Independent Director

Former EVP & CIO of JPMorgan Chase

Marco De Benedetti

Managing Director

Co-Head Europe Buyout

The Carlyle Group

Peter J. Clare

Managing Director

Co-Head US Buyout

The Carlyle Group

Campbell (Cam) R. Dyer

Compensation & Nominating Committee Member

Managing Director

Technology Buyout Group

The Carlyle Group

Stephen (Steve) C. Gray

President and Chief Executive Ofﬁ cer

Syniverse Corporation

L. William (Bill) Krause

Compensation & Nominating Committee Member

Senior Advisor

The Carlyle Group

Retired Chairman & CEO of 3Com Corporation

President of LWK Ventures

Thomas J. Manning

Audit Committee Member

Independent Director

Lecturer in Law at The University of Chicago Law School

Claudius (Bud) E. Watts IV

Compensation & Nominating Committee Chair

Managing Director

The Carlyle Group

Timothy T. Yates

Audit Committee Chair

Independent Director

*Non-Executive Chairman

CEO and President Monster Worldwide, Inc.

Marvin (Eddie) S. Edwards, Jr.

President and Chief Executive Ofﬁ cer

Mark A. Olson

Executive Vice President and

Chief Financial Ofﬁ cer

Randall W. Crenshaw

Executive Vice President and

Chief Operating Ofﬁ cer

Frank (Burk) B. Wyatt, II

Senior Vice President,

General Counsel and Secretary

Philip M. Armstrong, Jr.

Senior Vice President

Corporate Finance

Michael A. Cross

Senior Vice President and

Chief Information Ofﬁ cer

Robert W. Granow

Senior Vice President,

Corporate Controller and

Principal Accounting Ofﬁ cer

Daniel J. Hartnett

Senior Vice President

Tax

Peter U. Karlsson

Senior Vice President

Global Sales

Fiona E. Nolan

Senior Vice President

Marketing

Christopher A. Story

Senior Vice President

Global Operations

Robert C. Suffern

Senior Vice President and

Chief Technology Ofﬁ cer

Wendy H. Taylor

Vice President

Corporate Compliance

Joanne Townsend

Senior Vice President

Human Resources

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A STRONG
2014

CommScope® helps companies
around the world design, build and
manage their wired and wireless
networks. Vital networks around the
world run on CommScope solutions.

WIRELESS

#1 in merchant radio frequency network
connectivity solutions and small cell DAS
solutions for carriers, OEMs and enterprises

$2.47B REVENUE
$600M ADJ. OPERATING INCOME

ENTERPRISE

#1 in enterprise connectivity solutions for
data centers and commercial buildings

$850M REVENUE
$167M ADJ. OPERATING INCOME

BROADBAND

#1 in cables for hybrid ﬁ ber coaxial (HFC)
networks for broadband service providers

$511M REVENUE
$41M ADJ. OPERATING INCOME

Note: Sales exclude inter-segment eliminations.

A Transformative Acquisition for CommScope

In January 2015, CommScope

The combined company’s pro

agreed to acquire the Telecom,
Enterprise and Wireless businesses
of TE Connectivity, a world leader
in ﬁ ber optic connectivity for
wireline and wireless networks, in
an all-cash transaction valued at $3
billion. CommScope expects that the
transaction will enable it to enhance
growth by entering adjacent markets,
while broadening its position
as a leading communications
infrastructure provider to wireless
operators, business enterprises,
governments and cable television/
residential broadband operators.

forma results for the 12 months
ended September 30, 2014 would
have been approximately $5.8
billion in net sales and $1.2 billion
in pro forma adjusted EBITDA.
The transaction is expected to
be in excess of 20% accretive to
CommScope’s adjusted earnings per
share by the end of the ﬁ rst full year
after closing and on a pro forma
basis, excluding purchase accounting
charges, transition costs and other
special items. Closing is expected by
the end of 2015.

“This is an important and transformative acquisition for CommScope, bringing
together complementary geographic and customer coverage, products and technologies for
the beneﬁ t of our stockholders, customers and employees. It creates enhanced scale with
a combined, diversiﬁ ed portfolio that we believe is well-positioned to take advantage of
opportunities in the marketplace. We look forward to welcoming the TE Connectivity
businesses to CommScope, which will bring top talent, strong customer relationships in
growing markets, and a robust pipeline of innovations. CommScope has a strong track
record of disciplined strategic acquisitions and successful integrations, and we look forward
to working with the TE Connectivity team to bring these assets together as cohesively and
expeditiously as possible.”

Eddie Edwards
President and Chief Executive Offi cer

PLANNED ACQUISITION–PRODUCT SALES DIVERSIFICATION1

Broadband Connectivity: 13%

Broadband Connectivity: 28%

CommScope
today2

Enterprise: 22%

Wireless: 65%

CommScope
Pro Forma2

Enterprise: 26%

Wireless: 46%

Actual segment reporting will be determined following the completion of the acquisition.

1
2 Based on LTM September 30, 2014 revenue.

Please see CommScope’s website for additional information related to the planned acquisition,
including a reconciliation of GAAP to adjusted measures.

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To Our Shareholders

In this hyper-connected, data-intensive era,
your network provides a critical link to the
world. It has become a fundamental resource,
one that at times is underappreciated and
even unnoticed by the millions of people who
depend on networks for everyday life.

Eddie Edwards, president and chief executive ofﬁ cer

As a consumer or business person, how often do you think
about network infrastructure? Whether you appreciate it or not,
the average person has become dependent on networking for basic
communications such as talking and messaging and for lifestyle
tasks such as banking, entertainment, shopping, education and
more.
These ubiquitous networks are the virtually invisible foundation
for modern life. We largely don’t see them or think about their
presence. But they are everywhere—radio frequency signals in the
air around us, wherever we go, and cabling or connectivity within
walls or ﬂ oors of buildings and under streets, sidewalks and yards
in our communities.

Our Critical Role in Global Networks

One more thing that you likely don’t think about or know—
CommScope has played a role in the majority of those networks.
With our roots in cable television combined with the historic
legacies of Andrew, SYSTIMAX, Argus and others, CommScope’s
inﬂ uence and reach into wireless, cable TV, telecommunications,
broadband, business enterprise and government networks is
extensive and pervasive worldwide. Alongside our customers and
partners, for decades we have helped design and implement the
communications infrastructure that helps the world function.
That is why we are proud and conﬁ dent in saying “Your
Network Runs on CommScope™.” You will ﬁ nd CommScope
solutions in many of the world’s most prominent networks,
including the largest cellular networks, most advanced data centers,
tallest skyscrapers and biggest offi ce campuses, largest cable TV
systems, biggest stadiums, busiest airports and longest tunnels.

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Our role as one of the world’s leading and most trusted
infrastructure providers isn’t only about high-proﬁ le projects.
CommScope is part of thousands and thousands of networks
of all types and sizes around the world. Name a country….
we’re likely in it. Name an operator….we’ve likely helped
them. Name a FORTUNE 500 company….our solutions are
likely there. Our long-standing expertise and experience in
helping customers solve networking challenges innovatively
means that your favorite TV shows, texts, tweets, videos,
phone calls, emails, ﬁ nancial transactions, downloads, posts,
business orders and videoconferences very likely travel over a
CommScope-supported network.
As bandwidth requirements continue to grow, we expect
to be part of many more networks, new and existing.
The growth in data usage from consumers, businesses,
governments and others is creating capacity constraints that
operators struggle continually to keep pace with. That is the
sweet spot in which CommScope exists. That is our charter—
helping customers by providing essential infrastructure
solutions that enable communications through a constant
focus on integrity, innovation and agility.

Well-Positioned to Meet Growing Bandwidth Demand

There are four major drivers of communication traffi c—
mobility, social media, cloud computing and Big Data. All
require next generation infrastructure to support their
exponential growth. How great is the hunger for bandwidth?
Consider these industry projections:

• Mobile data traffi c will grow at an annual rate of 61%

through 2018, while social media traffi c will rise more
than 20% per year in that time.

• Cloud data center traffi c is expected to grow 600% in

the next two years.

• About 70% of consumer Internet traffi c will be video

by 2017.

At CommScope, we spend most of our time helping
operators around the world keep pace with that growth and
their own customers’ demands for more data, better services,
higher quality and faster networks. It’s a never-ending quest,
yet one for which we feel we’re ideally suited. As usage
increases, there will be greater demand and competition
for the strong, underlying physical infrastructure that
CommScope can provide. That motivates us and keeps us
innovating.

To a person, we at CommScope are proud of the
infrastructure we make and provide—an array of award-
winning, innovative off erings that become part of an
overall network. But it doesn’t begin or end there. We
are even prouder of our ability to help customers solve
their networking challenges before a physical piece of
infrastructure is even deployed. We live for the discussions,
analysis, designing, data-sharing, brainstorming,
research, advising, testing, recommending, late-night
videoconferences, early morning meetings and everything
else that goes into fully understanding the business problems
our customers face, and providing communications options
to solve them. It’s our goal to be a trusted advisor to our
customers—a vital part of their team in helping solve their
business and networking issues.
Networks need to be robust, effi cient, simpliﬁ ed, future-
proof, and constantly evolving to address the needs of our
customers and theirs. We specialize in doing that through
our three operating segments: Wireless, Enterprise and
Broadband. We believe that we are strongly positioned with
signiﬁ cant leadership positions in connectivity and essential
infrastructure solutions for each of these three segments.
Through our Andrew brand, our wireless products,
solutions and services are tailored to increase network
speed, ﬂ exibility and reliability. We are the leading wireless
infrastructure provider to the most advanced LTE networks,
building upon more than 75 years of involvement in every
evolution of wireless communication. In data centers and
buildings, our solutions help customers manage energy,
space, productivity, availability and capacity with greater
effi ciency. With a long history of innovation that started
with Bell Labs, our industry-leading SYSTIMAX connectivity
solutions set the standard and drive the evolution of data
networks for our customers and partners. Our broadband
solutions help customers increase bandwidth, maximize
existing capacity, improve network performance, enable
simple technology migration and deploy more revenue-
generating services. For over 40 years, the CommScope brand
has represented a long tradition of reliable solutions, service
and support for broadband networks.

An Outstanding Year of Performance

By almost any ﬁ nancial measure, 2014 was an outstanding
year. Sales rose 10% year-over-year to $3.8 billion, with
growth in all of our served markets and particular strength
in Wireless.

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Our Wireless segment grew nearly 14% and beneﬁ ted
from the evolution globally of networks from 2G/3G systems
supporting basic data and voice to fourth generation LTE
technology being deployed for greater coverage, capacity and
effi ciency. North American sales were robust, while our mid-
year acquisition of Alifabs™, a leading designer and supplier
of metro layer concealment solutions in the UK, helped our
year-over-year results. Our ability to respond to customer
global demand and deliver cutting-edge wireless solutions
helped drive another year of strong operating margin
expansion.
Our Enterprise segment grew 3% from the prior year
as the global economy continues to recover and as large
business enterprises continue to invest in data centers and
intelligent buildings. We are also proud of delivering higher
operating margins while investing in new solutions for data
centers and intelligent buildings.
Our Broadband segment also recovered, growing 5%
year-over-year as North American cable operators push ﬁ ber
deeper into the network and invest to improve the quality
of their video and broadband off erings. After a tough year
in 2013, we are particularly pleased to report a signiﬁ cant
improvement in Broadband proﬁ tability, which more than
doubled year over year. We intend to continue positioning
Broadband for long-term success as we look closely at the
portfolio in the coming year.
Gross proﬁ t margins hit 36% due to higher sales
volumes, favorable customer shifts toward more advanced
solutions, and a relentless focus on cost management. This
record operating performance propelled adjusted operating
earnings, which exclude special items, to $2.23 per diluted
share, up 39% from 2013. We also are proud to deliver
record adjusted free cash ﬂ ow of $346 million, which
excludes the redemption premium associated with the
reﬁ nancing of higher-cost debt. This reﬁ nancing helped save
nearly $23 million of interest expense annually.

I am proud of the global CommScope team’s performance

in a continued environment of modest growth, uneven
customer spending and industry consolidation. I believe
we have strengthened CommScope’s overall position in the
market by focusing on our strengths—passionate support
for customers, industry-leading technologies and ongoing
innovation, geographic and product diversity, operational
excellence in our global manufacturing and distribution
network, and continued cost management. These attributes
have served us well over many years and variable economic
cycles, and 2014 was no diff erent.

Continual Eff orts to Improve Performance

Long-time CommScope followers are familiar with the
company’s devotion to operational excellence and cost
management. I believe we exempliﬁ ed that long-standing
culture through a wave of continual improvement programs
that began in 2014 and have been embraced by our
employees worldwide.
For example, our “Safety Starts With Me!” program targets
reductions in the rates of major injuries and days away
from work—keeping employees safer and healthier, while
contributing to a culture of high productivity and workplace
effi ciency.
Our “Quality Matters” initiative
is helping instill a culture in which
employees instinctively and passionately
take greater responsibility for the work
they do individually and as teams, while reducing or
eliminating any potential pain points that may negatively
aff ect our customers’ experience with us.

Similarly, we expanded our focus on lean manufacturing

to reduce the amount of building space, people, materials
and time required to make and deliver our products, and
doing so with less cost and fewer defects.
Our most signiﬁ cant and strategic eff ort also promises
to provide a long-lasting and meaningful impact on

customers. “Simply CommScope,” as
the name implies, is marshalling the
eff orts of every single organization and
employee to remove complexity from

the company. This will impact the way we do business, the
processes we follow, the systems we use, and how we interact
within CommScope—and ultimately with our customers
and suppliers. The goal is straightforward—to make doing
business with CommScope as easy and fast as possible.
Customers demand that we off er consistency across the
organization, and make it easy for them to engage with us
at every point in the company, in every part of the world.
After years of organic growth and multiple acquisitions, we
see tremendous opportunity to streamline our systems and
processes for the beneﬁ t of everyone inside and outside of
CommScope.

In good times or bad, we never intend to sit still. We
passionately and diligently strive for better performance and
constant improvement in all areas of our business. It is what
our customers expect from a market leader like CommScope,
and it serves our shareholders well, too.

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adaptable to compete in this changing landscape. We also will
face pressure in the integration and transition of the Telcom,
Enterprise and Wireless businesses from TE Connectivity.
My conﬁ dence in the CommScope team—about 13,000
strong—has never been higher. Driven by our three core
values—integrity, innovation and agility—this talented,
diverse global team has worked tirelessly to build upon our
strengths and create an even stronger company.
We have more work to do. However, I believe CommScope
is uniquely positioned to help our customers meet the
world’s growing demand for network bandwidth, and to
do so with greater effi ciency, performance and technology
innovation. That has been our hallmark and is why we are
part of so many of the world’s networks. We have earned that
position and intend to grow it.

So go ahead and make that call, send that transaction,
enjoy that video, and transfer that ﬁ le with the conﬁ dence
that CommScope is there, making communications happen
behind the scenes. The world’s vital networks run on
CommScope solutions.

I look forward to continuing our journey together.

Thank you for your support of CommScope.

Eddie Edwards
President and Chief Executive Offi cer

Accelerating Growth and Global Expansion Through
Acquisition

In 2014, we acquired two of
the businesses of United Kingdom-
based Alifabs Group to expand metro
cell and cell services, and provide additional support for
European wireless operators as LTE network deployments
accelerate. We believe Alifabs’ capabilities of designing
and manufacturing enclosures, monopoles, towers and
streetworks can be expanded from the UK into Europe at a
time of strong growth in LTE network deployments there,
with the need to build networks with greater capacity in
urban areas and other population centers.

In January 2015, we announced the proposed acquisition

of TE Connectivity’s Telecom, Enterprise and Wireless
businesses to accelerate CommScope’s strategy to increase
proﬁ table growth. With this transaction, which we expect
to close by the end of 2015, we will enter into attractive
adjacent markets and broaden our position as a leading
communications infrastructure provider. This is an important
and transformative acquisition for CommScope with
many clear strategic and ﬁ nancial beneﬁ ts for all of our
stakeholders. It creates enhanced scale with a combined,
diversiﬁ ed portfolio that we believe is well-positioned to
take advantage of customer opportunities. We look forward
to achieving a successful transition and welcoming the TE
Connectivity businesses.
Our presence in all parts of the world also is a
CommScope advantage. Whether our customers serve just
one nation or market, or they are multi-national or global,
we have in-region account managers, technical specialists,
manufacturing plants, distribution centers, engineers,
business partners, customer care professionals and other
valuable resources to serve them.
With a look back, it is easy to get energized by our
future prospects. While we intend to build upon our great
success in 2014, we recognize that customer spending does
not always grow in a straight line. We expect some North
American wireless customers to temporarily slow spending
after an aggressive pace of investment in 2014. We will also
be navigating headwinds in foreign currency markets and
uneven recovery in global economies, which will likely put
pressure on our 2015 results. We serve a dynamic industry
that continues to evolve through mergers and acquisitions,
new competitors and regulatory change. We will need to be

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AT A GLANCE

WIRELESS $2.47B

DESCRIPTION

Through its Andrew Solutions portfolio, CommScope is a global leader in providing infrastructure for the most advanced wire-
less networks. The Andrew Solutions portfolio includes the integral building blocks for cellular base station sites, in-building
and distributed antenna wireless systems, and wireless network backhaul planning and optimization products and services.

CUSTOMERS

• Wireless network operators
• Original equipment manufacturers

• Network backhaul operators
• US government agencies

BUSINESS
APPLICATIONS

In-building wireless coverage and capacity

Infrastructure solutions for:
• Cellular networks
•
• Metro cells
• Network backhaul
• Specialized coverage and capacity for large-scale events and venues

REPRESENTATIVE
PRODUCTS/SOLUTIONS

• Outdoor sites

- Base station antenna systems
- Interconnectivity (ﬁ ber, hybrid ﬁ ber/power and coaxial
feeder cabling; connectors and assemblies)
- RF conditioning (ampliﬁ ers, ﬁ lters, diplexers, combiners)
- Installation systems (mounts and monopoles)
- Metro cell concealment solutions
- Design and installation services

- Pre-assembled and tested tower top systems
- Microwave antenna systems
- Network optimization and testing

• Indoor coverage and capacity
- Distributed antenna systems
- Uniﬁ ed wireless infrastructure
- Repeaters, boosters and radiating cabling
• Spectrum management consulting and services

SIGNIFICANT BRANDS

• Andrew®
• HELIAX®
• Argus®

• Sentinel®
ION®
•
• ValuLine®

INDUSTRY DRIVERS

• Growth in wireless data consumption
• Smartphone and tablet adoption
• Video and photo downloads and sharing
• Global deployment of 4G LTE networks

• Mobility and wireless requirements in enterprise buildings

and large public venues

• Network coverage needs in tunnels, railways and other

hard-to-reach locations

2014 HIGHLIGHTS

• Introduced ION-E™, a uniﬁ ed wireless infrastructure platform designed around IT-based structured cabling

architecture friendly to wireless operators and business enterprises

• Acquired two of the businesses of UK-based Alifabs Group to expand metro cell and cell services
• Expanded In-Building Wireless Partner program and named ﬁ rst companies to achieve new level of

In-Building Wireless Premier Partner

• Honored with seven different vendor awards from customers and partners
• Announced SiteRise™ Standard Interface, which simpliﬁ es the interface between a base station antenna and

virtually any remote radio unit technology

• Introduced new small antenna technology to help operators address cell densiﬁ cation requirements
• Unveiled Andrew Passive Devices line for in-building applications, the newest addition to CommScope’s

PIM-avoidance portfolio

Note: Sales exclude inter-segment eliminations.

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ENTERPRISE $850M

BROADBAND $511M

A global leader in infrastructure solutions that enable businesses and governments
to better manage energy, space, productivity, availability and capacity with greater
efﬁ ciency in their data centers and buildings.

A global leader in optical and radio frequency (RF) infrastructure solutions to support
the delivery of advanced broadband services—such as HDTV, high-speed internet,
and video on demand—to residential and commercial customers.

• Majority of FORTUNE 100
• Global companies
•

Large multi-nationals

• Small- to mid-sized businesses
• Governments
• Data center owners and operators

Infrastructure solutions for:
• Data centers
• Buildings and campus environments
•
• Business or educational campus environments

Indoor wireless

• Data center infrastructure management (DCIM)
• Purpose-built data center solutions
• Structured cabling
• Pre-terminated ﬁ ber and copper cabling
•
•

Intelligent infrastructure management hardware and software
Intelligent lighting and sensor network

• Multiple system operators
• Broadband service providers
• Telecommunications companies

Infrastructure solutions supporting:
• Fiber-to-the-premise networks
• Hybrid ﬁ ber coax networks
• Network evolution

• Coaxial and ﬁ ber optic cable
• Conduit and cable-in-conduit
• Residential connectivity (ampliﬁ ers, splitters, drop cable, interconnects)
• Access transport solutions (xPON and Edge QAM)

• SYSTIMAX®
• Uniprise®
iTRACS®
•

• Redwood®
imVision®
•
• Data Center On Demand™

• CommScope®
• BOS®
• GroundSmart®
LxS® Edge QAM
•

• Big Data
• Security
• Need for greater monitoring

and management

• BYOD and mobility
• Cloud computing
• Internet of Things
• Energy efﬁ ciency

• First technology partner supporting the refurbishing of the famed Daytona

International Speedway

• Added ﬁ ber manufacturing capabilities to plants in Europe and Asia
• Telecom operator Ooredoo implements CommScope’s Redwood, imVision and
SYSTIMAX solutions to support fully integrated, intelligent IT and facilities
infrastructure at Qatar data center

• Introduced Data Center on Demand solution as ﬂ exible purpose-built, carrier-class

alternative to traditional brick-and-mortar data centers

• Initiated ﬁ rst phase of ongoing integration of iTRACS DCIM solution with imVision

infrastructure management to better manage connectivity in data centers

• More devices accessing gaming and video
content from over-the-top video providers
• Competition between traditional cable/

telecom companies and new entrants to the
service provider business

• Mobility
• Need to stream multiple video
formats to support various
network end devices

• Increased sales of trunk and distribution coaxial cable, ﬁ ber cable, cable-in-conduit
solution, and our new E2O® family of composite construction solutions due to
investment in infrastructure upgrades by several major MSOs.

• Leading MSO network expansion creates growth in our RF solutions portfolio used

for subscriber connection

• Growth in BOS product line sales from increased deployment of FTTH infrastructure
• Demonstrated market leadership by qualifying and deploying a 10G EPON solution

capable of supporting a synchronous 10G service capability.
• Successful cost management programs helped increase proﬁ tability

IR-108854-EN Singles.indd 7

2/27/15 10:38 AM

Insights on Networking Trends from
Our Business Segment Leaders

Despite sharing a common purpose of
transporting information between two or more
points, each of the world’s countless networks
are unique. Whether in size, customers served,
architecture, quality, applications supported and
many more, the needs of a network vary and
must be optimized.

The world’s cellular, residential broadband,
telecommunications and large business
enterprise networks are among the largest and
most signiﬁ cant in the world and share at least
two fundamental challenges. First, nearly all
networks have diffi culties providing the capacity
when and where it is required in a bandwidth-
driven, always-connected society. Second, the
rapid pace of technological change puts constant
pressure on network operators to evolve their
networks in a cost-eff ective, seamless manner.

CommScope has enjoyed a long-standing role
in providing critical infrastructure to many of
the world’s vital and widely-used networks. We
have developed deep, meaningful relationships
with our customers and partners to help address
the need for increased bandwidth and eff ective
technology evolution. We are proud to serve
as a trusted advisor in addressing the critical
network infrastructure issues and opportunities
that our customers face.

In the following pages, the leaders of
CommScope’s three business segments provide
their insights into some of the trends and issues
they expect will impact network operators.

WIRELESS

Morgan Kurk, senior vice president

WILL LTE REMAIN A KEY FOCUS FOR WIRELESS OPERATORS THIS YEAR?
On average, a new mobile generation has been
introduced every decade since the introduction of AMPS
(the ﬁ rst 1G system) in 1983. 4G, standardized as LTE, was
introduced about ﬁ ve years ago, and will reach a general
acceptance milestone in 2015. That’s the point in the
technology evolution when LTE handsets and networks
have become stable, generally available, and cost-eff ective.
Although not all wireless operators in the world have
implemented LTE, most have plans in place or are under
construction. With or without LTE, every operator is under
increasing pressure to provide more capacity, coverage and
quality, without increasing the prices charged to customers.
So I believe the key to success in 2015 is effi ciency.

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2/27/15 10:38 AM

HOW DO OPERATORS ACHIEVE THIS EFFICIENCY?

HOW ARE OPERATORS DEALING WITH THIS?

One increasingly popular method to add capacity is the

creation of a metro layer. These are new, smaller cell sites
that are lower to the ground than traditional tower-based or
roof-based systems and placed in outdoor areas with a high
concentration of potential users, such as streets and public
squares in urban areas. These metro cells are placed to add
capacity to the overall system, not to provide initial coverage.
Metro cells can be placed discretely on or inside existing street
poles and furniture to help address deployment challenges,
which include new site acquisition, signal backhaul to the core
network and commercial power.

A second method is focusing on indoor areas, where

approximately 80 percent of all cellular traffi c occurs.
Providing dedicated indoor systems puts a massive amount
of capacity and coverage very close to users. While indoor
distributed antenna systems (DAS) have been around for
years, new DAS technology is enabling a faster uptake in
systems within buildings by automating much of what was
done by skilled technicians in the past, conserving energy and
cost through new interfaces, and enabling maintenance and
operations by a much broader group of people through new
methodologies. In addition, next generation indoor solutions,
such as CommScope’s ION-E, feature new architectures and
effi ciencies to help address needs in the approximately 80
percent of commercial buildings that today are not served by a
dedicated cellular system.

HOW DOES NETWORK MODERNIZATION SUPPORT THIS?

LTE is the latest evolution of commercial cellular systems

and boasts the greatest spectral effi ciency yet. Effi ciency
improvements, however, are not limited to spectrum—they
apply to the ecosystem as a whole. To serve customers with
more data for the same price, each and every portion of the
infrastructure will be evaluated, negotiated, calculated and
optimized—from the core network to the remote towers
at the end of the radio access network (RAN), from power
consumption to the amount of space used at a cell site and
the time it takes to acquire a site. When operators modernize
their networks, they look to do so across all aspects of the
ecosystem.

There are multiple considerations. I expect operators
will continue to modernize their networks by upgrading
and replacing their legacy 2G and 3G systems and adding
4G. This improves the effi ciency of the radio access network
(for example, size, function and energy consumption)
and the core network architecture (backhaul, switches,
applications). As data requirements continue to increase,
the operators will further increase network effi ciency and
capacity through cell splitting, the creation of a metro layer,
and increased deployment of the indoor coverage layer. And
with limited spectrum, operators will continue to maximize
capacity through increased spectral reuse on top of improved
modulation formats such as LTE.

OBTAINING ADDITIONAL RADIO SPECTRUM HAS BEEN AN INDUSTRY FOCUS.
ARE THERE ALTERNATIVES TO THIS?

Spectrum is a ﬁ nite resource, much like beach front
property. Effi cient usage of this limited resource is key to a
long-term, successful network. Capacity of a cellular network
comes from three principle areas: additional spectrum, more
effi cient air interface technologies and increased spectral reuse.
Spectral reuse has and will continue to be the primary method
to increase a network’s capacity. This occurs through either
splitting sectors at a cell site or adding more cell sites. A sector
split has long been considered the most cost-eff ective way
to add capacity. Initial cellular systems were all omni-sector
(picture a large circle, with a cell site in the middle), but
when capacity was needed, many were split into three-sector
sites, like a pie being cut into three pieces. Sites that require
additional capacity in 3G and 4G networks now are being split
into six sectors. High density, special purpose solutions can
include antennas that have up to 27 beams, or sectors, at a
single site. Eventually so-called active antennas will continue
this trend and further divide a cell into a sector per person.

CAPACITY SEEMS TO HAVE BECOME A MORE PRESSING ISSUE TO OPERATORS
THAN COVERAGE. WHY IS THAT?

This is a question of timing. When a new generation of
wireless is introduced, the ﬁ rst focus is coverage through the
so-called macro networks that provide large umbrellas of radio
signals that today essentially reach into most of the world’s
populated areas. That is followed by a capacity phase. Network
usage has moved quickly from being voice-centric to data-
centric, and consumers can’t get enough of it. This has strained
wireless networks tremendously—the race to add bandwidth
seemingly never ends. With the proliferation of data-intensive
devices such as smartphones and tablets, offl oading traffi c
from the macro networks is increasingly important.

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2/27/15 10:38 AM

WILL CLOUD-BASED ARCHITECTURES BECOME PART OF THIS MODERNIZATION?
In the pursuit of effi ciency, there are near- and far-term
dimensions. One of the biggest long term beneﬁ ts may come
from Cloud RAN or Network Functions Virtualization (NFV),
as it is also known. Cloud RAN is an architecture that starts
with applications and data being hosted in data centers on
traditional, standard IT equipment. Some of this architecture
may be in mega data centers and some may be located closer
to the user for latency reasons.

Effi ciency comes from the utilization of off -the-shelf,
standardized hardware and the virtualization of software.
Depending on how far virtualization is pushed into the
network, some if not all of the call processing can be moved
away from today’s special purpose-made hardware. This
change in equipment as it gets further in the RAN out toward
the tower, subsuming the current eNode-B, will drive fewer
products at the bottom of the tower and more integration
at the top of the tower, thus creating gains in space and
power effi ciency.

WILL THIS ADD MORE COMPLEXITY TO WIRELESS NETWORKS?
Well, complexity always will be part of this industry,
considering the vastness of technology, processes, standards
and markets we serve! However, as architectures have
changed and evolved through various technology generations,
they have consistently been simpliﬁ ed, believe it or not.
And this simpliﬁ cation helps create network quality. The
same simpliﬁ cation theme that has been applied to the
core network is being applied to the RAN portion. From
use of multi-band, multi-technology antennas and remote
radio units to innovations in connectivity, the RAN is being
improved and optimized for capacity. Simplifying the RAN
extends to improving deployment, where innovations in
equipment have led to easier and higher quality installations
that in turn lead to increases in capacity. Where there is
quality, there is capacity.

ENTERPRISE

Kevin St. Cyr, senior vice president

WHAT IS THE INTERNET OF THINGS AND HOW WILL NETWORKS SUPPORT IT?
Many view the Internet of Things (IoT) as better data in
real time, and a lot more of it. The reason is simple—there
are far more “things” than there are people, and the potential
of interconnections that previously were stand alone and off
line is compelling.

IoT is a term that represents the rapid expansion

of connectivity to the internet beyond people to enable
communication among physical objects. These physical
objects—for example, a machine, an animal, a tool, a
medical device and a vehicle—will be uniquely identiﬁ ed via
its own IP address, vastly expanding the communications and
analytics possible over the internet. While still in its relative
infancy, the IoT is rapidly developing, which of course will
require the world’s network infrastructure providers and
operators to play a critical role in creating the bandwidth,
security and reliability necessary to facilitate this growth.

IR-108854-EN Singles.indd 10

2/27/15 10:38 AM

with intelligent lighting solutions, collects data that help
facilities managers make better decisions on space utilization
and energy usage, as well as provide a security feature through
motion and thermal tracking.

STRUCTURED CABLING IS A KEY COMPONENT OF THE DATA CENTER AND
INTELLIGENT BUILDING APPROACHES YOU HAVE DISCUSSED. WHAT ARE THE
NEWEST DEVELOPMENTS IN CABLING TECHNOLOGY?

Fiber is gaining more wide-spread adoption as bandwidth
needs grow, while copper remains popular and viable in many
applications as it remains cost-eff ective and performs reliably.
In copper-based cabling, Category 6A is hitting its stride
and making its way out of the data center and into general
building use. This is driven—surprise—primarily by greater
bandwidth needs and the desire to create a degree of future
prooﬁ ng as demands for network-based building applications
increase. For example, wireless coverage is considered by
many the next utility within the building, and Category 6A
can provide the infrastructure for next generation WiFi access
points as well as the next generation of in-building cellular
wireless systems.

Industry discussions around a standard for Category 8

cabling to accommodate 40G networks continue. In 2015, I
think manufacturers will put Category 8 into pre-production
or provide limited availability in anticipation of the standard,
which might be completed in 2015 or early 2016. Pre-
standardization can be referred to as a manufacturing phase
that provides limited availability of a product to allow for
customer trials and sampling—this phase will probably be the
ﬁ rst sighting of Category 8 in the market.
Meanwhile, ﬁ ber has overtaken copper to become the
medium of choice to interconnect all data center devices.
The move toward OM4 has accelerated, with it being used in
40G and 100G data center networks around the world. That is
driving users and manufacturers toward higher grade cabling.
Work by industry standards groups on the next generation of
high-grade multimode optical ﬁ ber is continuing.

SPEAKING OF GROWTH AND BANDWIDTH, IoT AND CLOUD-BASED SERVICES AND
APPLICATIONS ARE DRIVING GREATER CAPACITY REQUIREMENTS IN DATA CENTERS.
HOW ARE DATA CENTER MANAGERS DEALING WITH THIS?

At a basic level, signiﬁ cant growth in the internet and
the vast amount of data processed over networks requires a
tremendous increase in computing power to process and store
all that digital information. That means more data centers and
all the computing and networking infrastructure that goes
with them. Handling this growth means adding more data
centers or getting more out of what you already operate. I
believe that two relatively new approaches will begin to take
hold in the near future.
Modular data centers are now in the mix as a viable
solution for increasing data center capacity. These are ﬂ exible,
highly effi cient, purpose-built alternatives to traditional
brick and mortar data centers that off er a pay-as-you-grow
approach to data center expansion. They can be built indoors
or outdoors exactly to the customer’s speciﬁ cations and needs,
and in only a few weeks. In a rapidly evolving market, this
speed and customization is vital.

It is also critical to look at existing assets. Attaining
higher performance from existing infrastructure can create
more capacity and effi ciency. Data center infrastructure
management (DCIM) solutions can be a huge help. Customers
are beginning to see the tremendous value DCIM can deliver
in terms of monitoring power usage; asset placement, refresh,
and replacement; physical layer connectivity, server utilization
and much more to ensure their data centers are performing
to their capabilities. Harnessing the power of intelligence and
predictive analysis through DCIM can be critical in helping
operators have deeper insight into how their assets are being
used, how much capacity is available for growth and how their
systems are interconnected.

FOR YEARS, PEOPLE HAVE TALKED ABOUT WAYS TO MAKE ENTERPRISE
BUILDINGS, INCLUDING DATA CENTERS, MORE INTELLIGENT. WHAT IS
AHEAD IN THAT AREA?

In the past, building intelligence talk centered around
getting disparate systems—such as lighting, security, HVAC
and more—to interact wherever possible, and to enable them
to be centrally controlled and monitored. That discussion has
evolved to include using real estate more productively and
cost-effi ciently. Real estate is a business’ second greatest cost
after people, yet most companies don’t have a handle on how
their building space is utilized. Sensor networks are beginning
to change that. A sensor-based network, like the kind used

IR-108854-EN Singles.indd 11

2/27/15 10:38 AM

BROADBAND

Ric Johnsen, senior vice president

WHAT IS DRIVING CONSOLIDATION IN THE CABLE TV INDUSTRY?

Industry mergers and acquisitions have been a hot topic
in the cable TV and telecommunications industries for many
years, and what we’re seeing now is just a continuation of this
trend. It’s driven in large part by intense competition between
traditional cable and telco operators as to which operators
will serve millions of households and businesses the blended
off erings of voice, internet and video. Just as importantly,
content has become king, so by becoming bigger, companies
feel they have more assets and content of their own to off er
to their customers, and thus move beyond just providing the
transport of third-party content. This has required multiple
system operators (MSOs) and traditional telcos to quickly
evolve their networks technologically and architecturally
to add signiﬁ cantly more bandwidth to serve data-hungry
subscribers, and add unprecedented enhancements and
effi ciencies to their infrastructures.

HOW IS CONSUMER BEHAVIOR CREATING CHANGES IN NETWORK
REQUIREMENTS?

Change has been coming for years, but has accelerated

rapidly recently by the untethering of people from their
telephones and televisions. We have quickly become a mobile
society—people want to talk, watch and share information
of their choice, when they choose and where they choose.
We no longer are tethered to the television in our home for
video programming or the landline in our home or offi ce
for voice calls and messaging. The popularity of over-the-top
video services such as Hulu, Netﬂ ix and YouTube, along with
the prevalence of video content being accessed over wireless
devices, is indicative of this transformation and ongoing surge
in data demand. While operators have options on their ability
to expand downstream bandwidth, the upstream bandwidth
is constrained by current technologies and will challenge the
MSOs and conventional broadband operators.

HOW ARE MSOS DEALING WITH THIS?

The primary focus is on evolving their networks from
traditional hybrid ﬁ ber coaxial platforms that have served
them well for many years to converged optical platforms that
can deliver Ethernet/internet protocol-based services to the
user. While hybrid ﬁ ber coaxial networks are cost eff ective
and will be viable for years, operators are installing ﬁ ber
deeper into their networks—ultimately all the way to each
individual home and business. Operators have begun this
push and are investing in the infrastructure needed to do it.
As it comes with great expense and complexity, this network
transformation to all-ﬁ ber will not happen quickly. These ﬁ ber
projects will be seen initially in multi-dwelling units and new
“greenﬁ eld” expansions.

HOW ELSE CAN OPERATORS ADDRESS CAPACITY NEEDS?

Operators are improving network capacity by creating
smaller service group sizes through node splitting—eff ectively
reducing the amount of subscribers that share a portion of the
network—in order to reduce congestion during peak demand
periods. Also, attention is being paid to the infrastructure
supporting greater bandwidth on the upstream (from
subscriber back to the network) as subscribers in many cases
are sending as much content as they download. Additionally,
operators will explore the transition to the next generation of
DOCSIS high bandwidth data transport technology—DOCSIS
3.1—as an avenue to expand capacity. The ability to change
the mid-split frequency between upstream and downstream
transport will enable additional upstream capacity to address
the current bottleneck in the network, and DOCSIS 3.1’s
ability to support OFDM modulation techniques will generate
more effi cient use of the available spectrum.

IR-108854-EN Singles.indd 12

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Form10-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K

(Mark One)
È ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2014

‘ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the transition period from

Commission file number: 001-36146

CommScope Holding Company, Inc.

(Exact name of registrant as specified in its charter)

Delaware
(State or other jurisdiction of
incorporation or organization)

1100 CommScope Place, SE
Hickory, North Carolina
(Address of principal executive offices)

27-4332098
(I.R.S. Employer
Identification No.)

28602
(Zip Code)

(828) 324-2200
(Telephone number)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Name of each exchange on which registered

Common Stock, par value $.01 per share

Nasdaq

Securities registered pursuant to Section 12(g) of the Act: NONE

Indicate by check mark whether the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes È No ‘
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ‘ No È

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 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 È No ‘

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive
Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12
months (or for such shorter period that the registrant was required to submit and post such files). Yes È No ‘

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained
herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by
reference in Part III of this Form 10-K or any amendment to this Form 10-K. È

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting
company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the
Exchange Act. (Check one):
Large accelerated filer È
Non-accelerated filer ‘ (Do not check if a smaller reporting company)
Indicate by check mark whether the registrant is a shell company (as defined in Exchange Act Rule 12b-2). Yes ‘ No È

Accelerated filer
Smaller reporting company ‘

‘

The aggregate market value of the shares of Common Stock held by non-affiliates of the registrant was approximately $1,922 million as of
June 30, 2014 (based on the $23.13 closing price on the Nasdaq on that date). For purposes of this computation, shares held by affiliates
and by directors and officers of the registrant have been excluded.

As of February 9, 2015 there were 188,193,838 shares of the registrant’s Common Stock outstanding.

Documents Incorporated by Reference

Portions of the Registrant’s Proxy Statement for the 2015 Annual Meeting of Stockholders are incorporated by reference in Part III hereof.

[THIS PAGE INTENTIONALLY LEFT BLANK]

TABLE OF CONTENTS

Part I

Item 1.
Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 1A. Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 1B. Unresolved Staff Comments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 2.
Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 3.
Item 4. Mine Safety Disclosures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Part II

Item 5. Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer

Purchases of Equity Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Selected Financial Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Item 6.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of

Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 7A. Quantitative and Qualitative Disclosures About Market Risk . . . . . . . . . . . . . . . . . . . . . . . .
Financial Statements and Supplementary Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 8.
Changes in and Disagreements with Accountants on Accounting and Financial
Item 9.

Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 9A. Controls and Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 9B. Other Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Part III

Item 10. Directors, Executive Officers and Corporate Governance . . . . . . . . . . . . . . . . . . . . . . . . . . .
Executive Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 11.
Security Ownership of Certain Beneficial Owners and Management and Related
Item 12.

Stockholder Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 13. Certain Relationships and Related Transactions, and Director Independence . . . . . . . . . . .
Principal Accountant Fees and Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 14.

Page

1
19
41
41
42
42

42
44

45
71
73

122
122
123

124
124

124
124
124

Part IV

Item 15.

Exhibits and Financial Statement Schedule . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

125
126

(i)

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PART I

Unless the context otherwise requires, references to “CommScope Holding Company, Inc.,” “CommScope,”
“we,” “us,” or “our” are to CommScope Holding Company, Inc. and its direct and indirect subsidiaries on a
consolidated basis.

This Annual Report on Form 10-K includes forward-looking statements that are identified by the use of certain
terms and phrases including but not limited to “intend,” “goal,” “estimate,” “expect,” “project,” “projections,”
“plans,” “anticipate,” “should,” “could,” “designed to,” “foreseeable future,” “believe,” “confident,” “think,”
“scheduled,” “outlook,” “guidance” and similar expressions. This list of indicative terms and phrases is not
intended to be all-inclusive. Readers are cautioned not to place undue reliance on these forward-looking
statements, which speak only as of the date the statement was made. Item 1A, “Risk Factors”, of this Annual
Report on Form 10-K sets forth more detailed information about the factors that may cause our actual results to
differ, perhaps materially, from the views stated in such forward-looking statements. We are not undertaking any
duty or obligation to update any forward-looking statements to reflect developments or information obtained
after the date of this Annual Report on Form 10-K, except to the extent required by law.

ITEM 1. BUSINESS

Company Overview

We are a leading global provider of connectivity and essential infrastructure solutions for wireless, business
enterprise and residential broadband networks. We help companies around the world design, build and manage
their wired and wireless networks by providing critical radio frequency (RF) solutions, intelligent connectivity
and cabling platforms, data center and intelligent building infrastructure and broadband access solutions.
Demand for our offerings is driven by the rapid growth of data traffic and need for bandwidth from the continued
adoption of smartphones, tablets, machine-to-machine communication and the proliferation of data centers, Big
Data, cloud-based services and streaming media content. Our solutions are built upon innovative RF technology,
service capabilities, technological expertise and intellectual property, including approximately 2,700 patents and
patent applications worldwide. We have a team of approximately 13,000 people to serve our customers in over
100 countries through a network of more than 20 world-class manufacturing and distribution facilities
strategically located around the globe. Our customers include substantially all of the leading global wireless
operators as well as thousands of enterprise customers, including many Fortune 500 enterprises, and leading
multi-system operators (MSOs). We have long-standing, direct relationships with our customers and serve them
through a sales force consisting of more than 600 employees and a global network of channel partners. Our
offerings for wired and wireless networks enable delivery of high-bandwidth data, video and voice applications.
To drive incremental revenue and profit, wireless operators and enterprises around the world are utilizing our
solutions to increase bandwidth; manage existing capacity; improve network performance and availability;
increase energy efficiency; and simplify technology migration.

CommScope Holding Company, Inc. was incorporated in Delaware on October 22, 2010.

In January 2011, funds affiliated with The Carlyle Group (Carlyle) completed the acquisition of CommScope,
Inc., our predecessor. Under the terms of the acquisition, CommScope, Inc. became a wholly-owned subsidiary
of CommScope Holding Company, Inc. As of December 31, 2014, Carlyle owned approximately 54% of our
outstanding common stock.

For the year ended December 31, 2014, our revenues were $3.83 billion and our net income was $236.8 million.
For further discussion of our current and prior year financial results, see Part II, Item 7, “Management’s
Discussion and Analysis of Financial Condition and Results of Operations” and the Consolidated Financial
Statements included in Part II, Item 8 of this Annual Report on Form 10-K.

The table below summarizes our offerings, global leadership positions and 2014 revenue:

Solutions

Cell-site
Solutions

Intelligent Enterprise
Infrastructure Solutions

Data Center
Solutions

In-building
Cellular Solutions

Broadband
Solutions

Small Cell Distributed
Antenna Systems
Solutions

Antennas
(base stations &
microwave)

Distributed Antenna
Systems/In-building
Cellular

Connectors

Data Center
Infrastructure
Management

Advanced LED
Systems Management

Amplifiers

Cables
(hybrid, coaxial, optical,
twisted pair)

Network Design
Services

Data Center
on Demand

Filters

Wireless

Enterprise

Broadband

#1
in merchant RF wireless
network connectivity
solutions and small cell
DAS solutions

#1
in enterprise connectivity
solutions for data centers
and commercial buildings

#1
in cables for HFC networks

$2,470

$851

$511

Key products
and services

Operating
segments

Global market
leadership
position

2014
Revenue (in
millions)(1)

(1) Excludes inter-segment eliminations.

Industry Background

We participate in the large and growing global market for connectivity and essential communications
infrastructure. This market is being driven by the growth in bandwidth demand associated with the continued
adoption of smartphones, tablets, machine-to-machine communication and the proliferation of data centers, Big
Data, cloud-based services and streaming media content. Wireless operators are deploying 4G networks and
next-generation network solutions to monetize the dramatic growth in bandwidth demand. As users consume
more data on smartphones, tablets and computers, enterprises are faced with a growing need for higher
bandwidth networks, in-building cellular coverage and more robust, efficient and intelligent data centers. MSOs
are investing in their networks to deliver a competitive triple-play of services (voice, video and high-speed data)
and to maintain service quality.

Carrier Investments in 4G Wireless Infrastructure

4G was developed to handle wireless data more efficiently and allows for faster, more reliable and more secure
mobile service than 2G and 3G networks. The faster data rate and lower latency capabilities of 4G LTE networks
enable a rich mobile computing experience for users. LTE networks are more efficient and cost effective for
wireless operators, in part, because LTE networks improve spectral efficiency, allowing for greater throughput of
data in a fixed amount of spectrum.

Wireless operators have been deploying LTE globally and are making the necessary wireless infrastructure
investments to accommodate the growing demand for next-generation mobile communication services. LTE
investment is expected to be deployed in several phases globally and the deployment is expected to last for

several years. North American wireless operators have made a large LTE investment in building their initial LTE
coverage. As a result of significant LTE investments, merger and acquisition (M&A) activity and the significant
costs associated with spectrum auctions, we expect investments by North American wireless operators to slow in
2015 as compared to 2014. Many wireless operators in Europe, Asia and Latin America are expected to continue
or increase their LTE investment cycle.

As wireless operators deploy LTE, they must manage an increasingly complex, increasingly RF sensitive
network. As a result, we believe wireless operator 4G coverage and capacity investments will drive demand for
our comprehensive offerings.

Small Cell Distributed Antenna Systems Enhance and Expand Wireless Coverage and Capacity

The traditional macro cell network requires mobile users to connect directly to macro cell base stations. Macro
cells are primarily designed to provide coverage over wide areas and typically transmit powerful signals;
however, they have high site acquisition costs and operating expenses. Additionally, they are not optimal for
dense urban areas where physical structures often create coverage gaps and capacity is frequently constrained.
Adding new macro cells or increasing the number of sectors on existing sites has been the traditional way to
increase mobile capacity and will continue to be an important portion of the network. As capacity needs grow
geometrically, however, new solutions are required for more densely populated areas. What is emerging as a very
important portion of the network is a metro cell and an indoor network layer. Metro cells are smaller cell sites,
located closer to the ground than a traditional macro cell site. They are located on street furniture such as existing
street poles in urban areas. Finally there are small cell DAS solutions that address the capacity and speed
requirements from an indoor perspective. These systems not only provide coverage and capacity to the indoor
environment, but also, by reducing the load from the macro and metro layers, improve the network as a whole.

Wireless operators view in-building coverage as a critical component of their network deployment strategies.
Key challenges for wireless operators in providing in-building cellular coverage are signal loss while penetrating
building structures and interference created by mobile devices while connected to macro cell sites from inside a
building. In-building DAS solutions bring the antenna significantly closer to the user, which results in better
coverage and reduced interference. Additionally, in-building DAS provides field-proven, seamless signal
handover for a user between indoor and outdoor zones that can support multi-operator, multi-frequency and
multi-protocol (2G, 3G, 4G) applications, making it the most effective small cell solution. The benefits of small
cell technologies have become increasingly important with the trend towards BYOD (bring your own device) in
the enterprise market.

Small cell DAS solutions also address outdoor capacity issues in urban areas. This urban network capacity issue
can be solved by deploying small cell DAS solutions to create small coverage areas that enable re-use of
spectrum. Re-use of spectrum allows wireless operators to optimize capacity of existing licensed spectrum by
significantly increasing repeated usage of the same frequencies within a defined coverage area.

Growth in Data Center Spending

Organizations are increasingly utilizing data centers to provide products and services to individuals and
businesses. Data center investment is driven by the increase in demand for computing power and improved
network performance, which is greatest for large enterprise data centers and cloud service providers. We expect
there to be growing demand for scalable, flexible data center solutions.

An increase in average data center size and the number of assets in a data center significantly raises the total cost
of ownership and the complexity of managing data center infrastructure. Data center operators strive to manage
their resources efficiently and to reduce energy consumption by monitoring all elements within the data center.
Data center infrastructure management (DCIM) software helps operators improve operational efficiency,
maximize capability and reduce costs by providing clear insight into cooling capacity, power usage, utilization,
applications and overall performance.

Transition to Intelligent Buildings

Business enterprises are managing the proliferation of wireless devices, the impact of cloud computing and
emergence of wireless and wired business applications. This increasing complexity creates the need for
infrastructure to support growing bandwidth requirements, in-building cellular coverage and capacity and
software that monitors the physical layer. These enterprises are also investing in common communications and
building automation systems to enhance energy efficiency, improve productivity and increase comfort. These
intelligent building infrastructure solutions often include integrated network software, small cell DAS and
advanced light-emitting diode (LED) lighting controls and sensor networks.

Strategy

In January 2015, we announced that we agreed to acquire TE Connectivity’s Telecom, Enterprise and Wireless
business in an all-cash transaction valued at approximately $3.0 billion. This business provides fiber optic
connectivity for wireline and wireless networks and generated annual revenues of approximately $1.9 billion in
its fiscal year ended September 26, 2014. The transaction is expected to accelerate our strategy to drive profitable
growth by entering into attractive adjacent markets and to broaden our position as a leading communications
infrastructure provider. In addition, we will have greater geographic and business diversity following the
completion of the transaction. We believe the combination of this businesses with ours places us at the core of
key secular growth trends in the markets we serve. It is our strategy to capitalize on these opportunities and to:

Continue Product Innovation

We plan to build on our legacy of innovation and on our worldwide portfolio of patents and patent applications
by continuing to invest in research and development. Technology innovation such as our base station antenna
technology, small cell DAS and intelligent enterprise infrastructure solutions build upon our leadership position
by providing new, high-performance communications infrastructure solutions for our customers.

Enhance Sales Growth

We expect to capitalize on our scale, market position and broad offerings to generate growth opportunities by:

•

Offering existing products and solutions into new geographies. For example, we have recently strengthened
sales channels in India and China, thereby positioning us favorably for Enterprise growth in these markets.

Cross-selling our offerings into new markets. We intend to build upon our RF technology expertise with
small cell DAS solutions to develop in-building cellular solutions for enterprises, and we will continue to
look for complementary opportunities to cross-sell our offerings.

Continuing to drive solutions offerings. We intend to focus on selling solution offerings to our customers
consistent with their evolving needs and enhancing our position as a strategic partner to our customers.

• Making strategic acquisitions. We have a disciplined approach to evaluating and executing complementary

and strategic acquisitions.

Continue to Enhance Operational Efficiency and Cash Flow Generation

We continuously pursue opportunities to optimize our resources and reduce manufacturing costs by executing
strategic initiatives aimed at improving our operating performance and lowering our cost structure. We believe
that we have a strong track record of improving operational efficiency and successfully executing on formalized
annual profit improvement plans, cost-savings initiatives and modest working capital improvements to drive
future profitability and cash flows. We intend to utilize the cash that we generate to invest in our business, make
strategic acquisitions and reduce our indebtedness.

Operating Segments

We serve our customers through three operating segments: Wireless, Enterprise and Broadband. Through our
Andrew brand, we are the global leader in providing merchant RF wireless network connectivity solutions and
small cell DAS solutions. Through our SYSTIMAX and Uniprise brands, we are the global leader in enterprise
connectivity solutions, delivering a complete end-to-end physical layer solution, including connectivity and
cables, enclosures, data center and network intelligence software, in-building wireless, advanced LED lighting
systems management and network design services for enterprise applications and data centers. We are also a
premier manufacturer of coaxial and fiber optic cable for residential broadband networks globally.

Net revenues are distributed among the three segments as follows:

Wireless
Enterprise
Broadband

Total

Wireless

Year Ended December 31,

2014

2013

2012

64.5% 62.5% 57.7%
23.7
22.2
13.8
13.3

25.5
16.8

100.0% 100.0% 100.0%

We are the global leader in providing merchant RF wireless network connectivity solutions and small cell DAS
solutions to enable carriers’ 2G, 3G and 4G networks. Our solutions, marketed primarily under the Andrew
brand, enable wireless operators to deploy both macro cell sites and small cell DAS solutions to meet coverage
and capacity requirements. We focus on all aspects of the Radio Access Network (RAN) from the macro and
metro layers, to the indoor segment.

Our macro cell site solutions can be found at wireless tower sites and on rooftops and include base station
antennas, microwave antennas, hybrid fiber-feeder and power cables, coaxial cables, connectors, amplifiers,
filters and backup power solutions. Our metro cell solutions can be found outdoors on street poles and on other
urban structures and include RF delivery, equipment housing and concealment. These fully integrated outdoor
systems consist of specialized antennas, filters/combiners, backhaul solutions, intra-system cabling and power
distribution, all minimized to fit an urban environment. Our small cell DAS solutions are primarily comprised of
distributed antenna systems that allow wireless operators to increase spectral efficiency and thereby extend and
enhance cellular coverage and capacity in challenging network conditions such as commercial buildings, urban
areas, stadiums and transportation systems.

Our macro cell site, metro cell site and small cell DAS solutions establish us as a global leader in RF
infrastructure solutions for wireless operators and original equipment manufacturers (OEMs). We provide a one-
stop source for managing the technology lifecycle of a wireless network, including complete physical layer
infrastructure solutions for 2G, 3G and 4G. Our comprehensive solutions include products for every major
wireless protocol and allow wireless operators to operate across multiple frequency bands, reduce cost, achieve
faster data rates and accelerate migration to the latest wireless technologies. Our wireless solutions are built using
a modular approach, which has allowed us to leverage our core technology across generations of networks and
mitigate technology risk. We provide a complete portfolio of RF infrastructure, and we are recognized for our
leading technologies, comprehensive product portfolio and global scale.

To expand our Wireless segment offerings, we acquired two businesses of United Kingdom-based Alifabs Group
(Alifabs) during 2014. Alifabs designs and supplies metro cell enclosures, monopoles, smaller streetworks towers
and tower solutions for the United Kingdom telecommunications, utility and energy markets. We plan to
leverage our sales and distribution networks to expand the services and solutions offering for Alifabs’ products
across Europe.

Enterprise

We are the global leader in enterprise connectivity solutions for data centers and commercial buildings,
comprised of voice, video, data and converged solutions that support mission-critical, high-bandwidth
applications, including storage area networks, streaming media, data backhaul, cloud applications and grid
computing. These comprehensive solutions, sold primarily under the SYSTIMAX and Uniprise brands, include
optical fiber and twisted pair structured cable solutions, intelligent infrastructure software, network rack and
cabinet enclosures, modular data centers, intelligent building sensors, advanced LED lighting control systems
and network design services.

Our Enterprise connectivity solutions deliver data speeds up to 100 gigabits per second (Gbps). We integrate our
structured cabling, connectors, in-building cellular solutions and network intelligence capabilities to create
physical layer solutions that enable voice, video and data communication and building automation. We use
proprietary modeling and simulation techniques to optimize networks to provide performance that exceeds
established standards. Our network design services and global network of partners offer customers custom,
turnkey network solutions that are tailored to each customer’s unique requirements.

We complemented our leading physical layer offerings through business acquisitions during 2013. The addition
of iTRACS Corporation (iTRACS), a leading provider of DCIM software, with unique network intelligence
capabilities complements our data center offerings. We also acquired Redwood Systems, Inc. (Redwood), a
provider of advanced LED lighting control and high-density sensor solutions, which complements our in-
building cellular and intelligent building solutions.

We maintain a leading global market position in enterprise connectivity and network intelligence for data center
and commercial buildings due to our differentiated technology, long-standing relationships with customers and
channel partners, strong brand recognition, premium product features and the performance and reliability of our
solutions. We also believe our global Enterprise sales channel and industry-leading small cell DAS solutions
uniquely position us to address the wireless operator and business owner’s desire for ubiquitous in-building
cellular coverage.

Broadband

We are a global leader in providing cable and communications products that support the multichannel video,
voice and high-speed data services provided by MSOs. We believe we are the leading global manufacturer of
coaxial cable for hybrid fiber-coaxial (HFC) networks and a leading supplier of fiber optic cable for North
American MSOs.

The Broadband segment is our most mature business, and we expect demand for Broadband products to continue
to be influenced by the ongoing maintenance requirements of cable networks, competition between cable
providers and wireless operators and the challenged residential construction market activity in North America.
We are focused on improving the profitability and efficiency of this segment through improving utilization of our
factories, rationalizing our product portfolio and other cost reduction initiatives.

Products

Solutions Offering

Description

Cell site solutions

Metro cell concealment solutions

Small cell DAS solutions

Our cell site solutions can be found at wireless tower sites and on
rooftops and include base station antennas, microwave antennas, hybrid
fiber-feeder and power cables, coaxial cables, connectors, power
amplifiers, filters and backup power solutions.

Our metro cell solutions include RF delivery, equipment housing and
concealment. The fully integrated outdoor systems include specialized
antennas, filters/combiners, intra-system cabling and power distribution
in a minimalistic, concealment form factor. These solutions facilitate site
acquisition and improve RF network performance in the metro area
while minimizing interference with the macro layer. Furthermore they
expedite construction and enable faster zoning approvals.

Our small cell DAS solutions are primarily comprised of distributed
antenna systems that allow wireless operators to increase spectral
efficiency, thereby extending and enhancing cellular coverage and
capacity in challenging network conditions such as urban areas,
commercial buildings, stadiums and transportation systems.

Intelligent enterprise infrastructure solutions

Data Center solutions

Broadband MSO solutions

Our Enterprise solutions, sold primarily under the SYSTIMAX and
Uniprise brands, include optical fiber and twisted pair structured cable
solutions, intelligent infrastructure software, network rack and cabinet
enclosures, intelligent building sensors, advanced LED lighting control
systems and network design services.

We have complemented our leading physical layer solution offerings
with the introduction of modular data centers (Data Center on Demand)
and the addition of iTRACS, a leading provider of DCIM software,
which provides unique network intelligence capabilities.

We provide a broad portfolio of cable solutions including fiber-to-the-
home equipment and headend solutions for MSOs.

Manufacturing and Distribution

We develop, design, fabricate, manufacture and assemble many of our products and solutions in-house at our
facilities located around the world. We have strategically located our manufacturing and distribution facilities to
provide superior service levels to customers. We have utilized lower cost geographies for high labor content
products while investing in largely automated plants in higher cost regions close to customers. Currently, more
than half of our manufacturing employees are located in lower-cost geographies such as China, the Czech
Republic, India and Mexico. We continually evaluate and adjust operations to improve service, lower cost and
improve the return on our capital investments. In addition, we utilize contract manufacturers for many of our
product groups, including certain cabinets, power amplifiers and filter products. We believe that we have enough
production capacity in place today to support current business levels and expected growth with modest capital
investments.

Research and Development

Research and development is important to preserve our position as a market leader and to provide the most
technologically advanced solutions in the marketplace. We have invested more than $120 million in research and
development in each of the last three years. Our major research and development activities relate to ensuring our
wireless products can meet our customers’ changing needs and to developing new enterprise structured-cabling
solutions as well as improved functionality and more cost-effective designs for cables and apparatus. Many of
our professionals maintain a presence in standards-setting organizations which helps ensure that our products can
be formulated to achieve broad market acceptance.

Customers

Our customers include substantially all of the leading global wireless operators as well as thousands of enterprise
customers, including many Fortune 500 enterprises, and leading cable television providers or MSOs, which we
serve both directly and indirectly. Major customers and distributors include companies such as Anixter
International Inc., AT&T Inc., Verizon Communications Inc., Comcast Corporation, T-Mobile US, Inc., Graybar
Electric Company Inc., Ericsson Inc., Alcatel-Lucent SA, Ooredoo and Huawei Technologies Co., Ltd. We
support our global sales organization with regional service centers in locations around the world.

Products from our Wireless segment are primarily sold directly to wireless operators, to OEMs that sell
equipment to wireless operators or to other service providers that deploy elements of wireless networks at the
direction of wireless operators. Our customer service and engineering groups maintain close working
relationships with these customers due to the significant amount of design and customization associated with
some of these products. Direct sales to our top three Wireless segment customers represented 19% of our
consolidated net sales for the year ended December 31, 2014 and 18% of our consolidated net sales for the year
ended December 31, 2013. Sales to our top three OEM customers represented 8% and 9% of our consolidated net
sales for the years ended December 31, 2014 and 2013, respectively. No direct Wireless segment customer
accounted for 10% or more of our consolidated net sales for the years ended December 31, 2014 or 2013.

The Enterprise segment has a dedicated sales team that generates customer demand for our solutions, which are
sold to thousands of end customers primarily through independent distributors, system integrators and value-
added resellers. Direct and indirect sales of Enterprise products to our top three Enterprise segment customers, all
of whom are distributors, represented 15% of our consolidated net sales for the year ended December 31, 2014
and 16% of our consolidated net sales for the year ended December 31, 2013. Net sales to our largest distributor,
Anixter International Inc. and its affiliates (Anixter), accounted for 11% and 12% of our consolidated net sales
for the years ended December 31, 2014 and December 31, 2013, respectively.

Broadband segment products are primarily sold directly to cable television system operators. Although we sell to
a wide variety of customers dispersed across many different geographic areas, sales to our three largest domestic
broadband customers represented 6% of our consolidated net sales for the year ended December 31, 2014 and 5%
of our consolidated net sales for the year ended December 31, 2013.

We generally have no minimum purchase commitments with any of our distributors, system integrators, value-
added resellers, wireless operators or OEM customers, and our contracts with these parties do not prohibit them
from purchasing or offering products or services that compete with ours. While we maintain long-term
relationships with these parties and have not historically lost key customers, we have experienced variability in
the level of purchases by our key customers, and any significant reduction in sales to these customers, including
as a result of the inability or unwillingness of these customers to continue purchasing our products, or their
failure to properly manage their business with respect to the purchase of and payment for our products, could
materially and adversely affect our business, results of operations, financial condition and cash flows. See Part I,
Item 1A, “Risk Factors”.

We employ a global manufacturing and distribution strategy to control production costs and improve service to
customers. We support our international sales efforts with sales representatives based in Europe, Latin America,
Asia and other regions throughout the world. Our net sales from international operations were $1.7 billion for the
year ended December 31, 2014 and $1.6 billion for each of the years ended December 31, 2013 and 2012.

Patents and Trademarks

We pursue an active policy of seeking intellectual property protection, namely patents and registered trademarks,
for new products and designs. On a worldwide basis, we held approximately 2,700 patents and patent
applications and over 1,300 registered trademarks and trademark applications as of December 31, 2014. We
consider our patents and trademarks to be valuable assets, and while no single patent is material to our operations
as a whole, we believe the CommScope, Andrew, Uniprise and SYSTIMAX trade names and related trademarks
are critical assets to our business. We intend to rely on our intellectual property rights, including our proprietary
knowledge, trade secrets and continuing technological innovation, to develop and maintain our competitive
position. We will continue to protect certain key intellectual property rights.

Backlog and Seasonality

At December 31, 2014 and December 31, 2013, we had an order backlog of $479 million and $592 million,
respectively. Orders typically fluctuate from quarter to quarter based on customer demand and general business
conditions. Our backlog includes only orders that are believed to be firm. In some cases, unfilled orders may be
canceled prior to shipment of goods, but cancellations historically have not been material. However, our current
order backlog may not be indicative of future demand.

Due to the variability of shipments under large contracts, customers’ seasonal installation considerations and
variations in product mix and in profitability of individual orders, we can experience significant quarterly
fluctuations in sales and operating income. Our operating performance is typically weaker during the first and
fourth quarters and stronger during the second and third quarters. These variations are expected to continue in the
future. Consequently, it may be more meaningful to focus on annual rather than interim results.

Competition

The market for our products is highly competitive and subject to rapid technological change. We encounter
significant domestic and international competition across all segments of our business. Our competitors include
large, diversified companies – some of whom have substantially more assets and greater financial resources than
we do – as well as small to medium-sized companies. We also face competition from less diversified companies
that have concentrated their efforts in one or more areas of the markets we serve. Our competitors include
Amphenol Corporation, Belden Inc., Berk-Tek (a company of Nexans S.A.), Comba Telecom Systems Holding
Ltd., Corning Incorporated, Emerson Electric Co., Ericsson Inc., Huawei Technologies Co., Ltd., JMA Wireless,
KATHREIN-Werke KG, Nokia, Panduit Corp., RFS (a division of Alcatel-Lucent SA), SOLiD Technologies,
SpiderCloud Wireless, Inc. and TE Connectivity Ltd. We compete primarily on the basis of delivery solutions,
product specifications, quality, price, customer service and delivery time. We believe that we differentiate

ourselves in many of our markets based on our market leadership, global sales channels, manufacturing,
intellectual property, strong reputation with our customer base, the scope of our product offering, the quality and
performance of our solutions and our service and technical support.

Competitive Strengths

We believe the following competitive strengths have been instrumental to our success and position us well for
future growth and strong financial performance.

Global Market Leadership Position

We are a global leader in connectivity and essential infrastructure solutions for communications networks, and
we believe we hold leading market positions across our segments.

Since our founding in 1976, CommScope has been a leading brand in connectivity solutions for communications
networks. In the wireless industry, Andrew is one of the world’s most recognized brands and a global leader in
RF solutions for wireless networks. In the enterprise market, SYSTIMAX and Uniprise are recognized as global
market leaders in enterprise connectivity solutions for business enterprise and data center applications.

Global Scale and Manufacturing Footprint

Our global manufacturing footprint and 600-person sales force give us significant scale within our addressable
markets. We believe our scale and stability make us an attractive strategic partner to our large global customers,
and we have been repeatedly recognized by several of our key customers for these attributes. In addition, our
ability to leverage our core competencies across our business coupled with our successful track record of
operational efficiencies has allowed us to improve our margins and cash flows while continuing to invest in R&D
and acquisitions targeting new products and new markets.

Our manufacturing and distribution facilities are strategically located to optimize service levels and product
delivery times. We also utilize lower-cost geographies for high labor content products and largely automated
plants in higher-cost regions. Currently, more than half of our manufacturing employees are located in lower-cost
geographies such as China, the Czech Republic, India and Mexico. Our dynamic manufacturing and distribution
organization allows us to:

•

flex our capacity to meet market demand and expand our market position;

provide high customer service levels due to proximity to the customer; and

effectively integrate acquisitions and capitalize on related synergies.

Differentiated Solutions Supported by Ongoing Innovation and Significant Proprietary IP

Our integrated solutions for wireless, enterprise and broadband networks are differentiated in the marketplace
and are a significant global competitive advantage. We have invested more than $120 million in research and
development in each of the last three years. We have also added IP and innovation through acquisitions, such as
Argus Technologies (Argus), which enhanced our next-generation base station antenna technology, iTRACS,
Redwood and Alifabs. Our ongoing innovation, supported by proprietary IP and technology know-how, has
allowed us to sustain this competitive advantage.

•

Integrated solutions. Our wireless network offerings include complete connectivity solutions
supporting 2G, 3G and 4G wireless technologies for both macro cell sites and small cell DAS. We are
able to provide a complete portfolio of integrated RF solutions from the output of the base station (or
baseband processor) at the bottom of the tower to the antenna at the top of the tower. In the enterprise
market, we deliver a comprehensive solution including connectivity and cables, enclosures, network

intelligence software, advanced LED lighting systems and network design services. Our ability to
provide integrated connectivity solutions for wireless, enterprise and broadband networks makes us a
value-added solutions provider to our customers and gives us a significant competitive advantage.

•

Strong design capabilities and technology know-how. We have a long tradition of developing highly
engineered connectivity solutions, demonstrating superior performance across various generations of
networks. Our ongoing focus on engineering innovation has enabled us to create high quality products
that are reliable, have a desirable form factor and enable our customers to optimize the performance,
flexibility, installation time, energy consumption and space requirements of their network deployments.

Significant proprietary IP. Our proven record of innovation and decades of experience creating market-
leading technology products are evidenced by our approximately 2,700 patents and patent applications,
as well as our over 1,300 registered trademarks and trademark applications, worldwide. Our significant
proprietary IP, when combined with our deep engineering expertise, allows us to create industry
defining solutions for customers around the world.

Established Sales Channels and Customer Relationships

We serve customers in over 100 countries and have become a trusted advisor to many of them through our
industry expertise, quality, technology and long-term relationships. These factors enable us to provide mission-
critical connectivity solutions that our customers need to build high-performing communication networks.

Our customers include substantially all of the leading global wireless operators as well as thousands of enterprise
customers, including many Fortune 500 enterprises, and leading cable television providers or MSOs. We are a
key merchant supplier within the wireless infrastructure market and enjoy established sales channels across all
geographies and technologies. Our long-standing relationships with wireless operators enable us to work closely
with them in providing highly customized solutions that are aligned with their technology roadmaps. We have a
global Enterprise segment sales force with sales representatives based in North America, Europe, Latin America,
Asia and other regions, and an extensive global network of channel partners including independent distributors,
system integrators and value-added resellers. Our Enterprise segment sales force has direct relationships with our
Enterprise customers and generates demand for our products, with sales fulfilled primarily through channel
partners. Our direct sales force and channel partner relationships give us extensive reach and distribution
capabilities to customers globally. Our Broadband segment products are primarily sold directly to MSOs with
whom we have long-standing relationships.

Proven Management Team with Record of Operational Excellence and Successful M&A Integration

We have a strong track record of organically growing market share, establishing leadership positions in new
markets, managing cash flows, delivering profitable growth across multiple economic cycles and integrating
large and small acquisitions. Our senior management team has an average of more than 20 years of experience in
connectivity solutions for the communications infrastructure industry.

We have a history of strong operating cash flow and have generated approximately $1.2 billion in aggregate in
operating cash flow over the last five fiscal years. Our strong cash flow profile has allowed us to continue to
invest in innovative research and development, pursue strategic acquisitions, repay debt and return cash to
stockholders prior to our initial public offering in 2013 (the IPO). We continuously pursue opportunities to
optimize our resources and reduce manufacturing costs by executing strategic initiatives aimed at improving our
operating performance and lowering our cost structure.

Throughout our history, we have successfully complemented our strong organic growth with strategic
acquisitions. Our management team has effectively integrated large acquisitions, such as Andrew in 2007 and
Avaya Connectivity Solutions in 2004, as well as executed tuck-in acquisitions, such as Argus, iTRACS,
Redwood and Alifabs, to help expand our market opportunities and continue to solve our customers’ business
challenges in multiple growth areas. We have also made strategic minority investments in order to gain access to
key technologies or capabilities.

Raw Materials

Our products are manufactured or assembled from both standard components and parts that are unique to our
specifications. Our internal manufacturing operations are largely process oriented and we use significant
quantities of various raw materials, including copper, aluminum, steel, brass, plastics and other polymers,
fluoropolymers, bimetals and optical fiber, among others. We use significant volumes of copper, aluminum, steel
and polymers in the manufacture of coaxial and twisted pair cables and antennas. Other parts are produced using
processes such as stamping, machining, molding and pressing from metals or plastics. Portions of the
requirements for these materials are purchased under supply arrangements where some portion of the unit pricing
may be indexed to commodity market prices for these metals. We may, from time to time, enter into forward
purchase commitments for a specific commodity to mitigate our exposure to price changes for a portion of our
anticipated purchases. Certain of the raw materials utilized in our products may only be available from a limited
number of suppliers. We may, therefore, encounter availability issues and/or significant price increases.

Our profitability may be materially affected by changes in the market price of our raw materials, most of which
are linked to the commodity markets. Prices for copper, aluminum, fluoropolymers and certain other polymers
derived from oil and natural gas have fluctuated substantially during the past several years. As a result, we have
adjusted our prices for certain Wireless, Enterprise and Broadband segment products and may have to adjust
prices again in the future. Delays in implementing price increases, failure to achieve market acceptance of price
increases or price reductions in response to a rapid decline in raw material costs could have a material adverse
impact on the results of our operations.

In addition, some of our products are assembled from specialized components and subassemblies manufactured
by suppliers. We are dependent upon sole suppliers for certain key components for some of our products. If these
sources were not able to provide these components in sufficient quantity and quality on a timely and cost
efficient basis, it could materially impact our results of operations until another qualified supplier is found. We
believe that our supply contracts and our supplier contingency plans mitigate some of this risk.

Environment

We are subject to various federal, state, local and foreign environmental laws and regulations governing, among
other things, discharges to air and water, management of regulated materials, the handling and disposal of solid
and hazardous waste, the content of our products, and the investigation and remediation of contaminated sites.
Because of the nature of our business, we have incurred, and will continue to incur, costs relating to compliance
with or liability under these environmental laws and regulations. We believe we are in material compliance with
applicable environmental requirements, including the Restriction of the Use of Certain Hazardous Substances in
Electrical and Electronic Equipment (RoHS) and the Waste Electrical and Electronic Equipment Directive
(WEEE) directives. Compliance with current laws and regulations has not had and is not expected to have a
material adverse effect on our financial condition. However, new laws and regulations (including efforts to
regulate the types of substances allowable in certain of our products, or greenhouse gas (GHG) emissions),
stricter enforcement of existing laws and regulations, the discovery of previously unknown contamination or the
imposition of new remediation or discharge requirements could require us to incur costs or become the basis for
new or increased liabilities that could have a material adverse effect on our business.

Pursuant to the U.S. Comprehensive Environmental Response Compensation and Liability Act of 1980 and
similar state statutes, current or former owners or operators of a contaminated property, as well as companies that
generated, disposed of, or arranged for the disposal of hazardous substances at a contaminated property, are
subject to strict, and under certain circumstances joint and several liability (that could result in an entity paying
more than its fair share), for the costs of investigation and remediation of the contaminated property. Certain of
our owned facilities are the subject of ongoing investigation and/or remediation of contamination in the soil and/
or groundwater and from time to time allegations are made that we arranged for the disposal of hazardous
substances at sites that later require investigation and remediation. We are being indemnified by prior owners and
operators of certain of these facilities from costs relating to most of these investigations or remediation activities.

Based on currently available information and, in certain matters, the availability of indemnification, we do not
believe the costs associated with these contaminated sites will have a material adverse effect on our financial
condition or results of operations. However, there can be no assurance that we will not ultimately be liable for
some or all of such costs. Moreover, our present and former facilities have or had been in operation for many
years and, over such time, operations at these facilities have used substances or generated and disposed of wastes
that are or may be considered hazardous. In addition, we have disposed of waste products either directly or
through third parties at numerous disposal sites and we may be held responsible for clean-up costs at these sites.
Therefore, it is possible that environmental liabilities may arise in the future that we cannot now predict.

Employees

As of December 31, 2014, we had a team of approximately 13,000 people to serve our customers worldwide. The
majority of our employees are located outside of the United States. As a matter of policy, we seek to maintain
good relations with our employees at all locations. We are not subject to any collective bargaining agreements in
the United States. Substantially all of our international employees are members of unions or subject to workers’
councils or similar statutory arrangements. From a companywide perspective, we believe that our relations with
our employees and unions are satisfactory. Historically, periods of labor unrest or work stoppage have not had a
material impact on our operations or results.

Available Information

Our web site (www.commscope.com) contains frequently updated information about us and our operations. Our
filings with the Securities and Exchange Commission (SEC) on Form 10-K, Form 10-Q, Form 8-K and Proxy
Statements and all amendments to those reports can be viewed and downloaded free of charge as soon as
reasonably practicable after the reports and amendments are electronically filed with or furnished to the SEC by
accessing www.commscope.com and clicking on Investors and then clicking on SEC Filings.

SEC Certifications

The certifications by the Chief Executive Officer and Chief Financial Officer of the Company, required under
Section 302 of the Sarbanes-Oxley Act of 2002 (the Sarbanes-Oxley Act), have been filed as exhibits to this
Annual Report on Form 10-K.

Executive Officers and Directors of the Registrant

The following table provides information regarding our executive officers and Board of Directors:

Name

Age

Position

Marvin (Eddie) S. Edwards, Jr.
Mark A. Olson
Frank M. Drendel
Randall W. Crenshaw
Frank (Burk) B. Wyatt, II
Peter U. Karlsson
Robert W. Granow

Philip M. Armstrong, Jr.
Joanne L. Townsend
Claudius (Bud) E. Watts IV
Campbell (Cam) R. Dyer
Austin A. Adams
Marco De Benedetti
Peter J. Clare
Stephen (Steve) C. Gray
L. William (Bill) Krause
Timothy T. Yates
Thomas J. Manning

Marvin (Eddie) S. Edwards, Jr.

66
President, Chief Executive Officer and Director
56 Executive Vice President and Chief Financial Officer
70 Director and Chairman of the Board
57 Executive Vice President and Chief Operating Officer
Senior Vice President, General Counsel and Secretary
52
Senior Vice President, Global Sales
51
Senior Vice President, Corporate Controller and Principal
57
Accounting Officer
Senior Vice President, Corporate Finance
Senior Vice President, Human Resources

53
61
53 Director
41 Director
71 Director
52 Director
49 Director
56 Director
72 Director
67 Director
59 Director

Mr. Edwards became our President and Chief Executive Officer and a member of our Board of Directors
following the Acquisition of CommScope, Inc. by Carlyle in January 2011 (the Carlyle acquisition). From
January 1, 2010 to the Carlyle acquisition, Mr. Edwards was our President and Chief Operating Officer. Prior to
that, Mr. Edwards served as our Executive Vice President of Business Development and General Manager,
Wireless Network Solutions since the closing of the Andrew acquisition in 2007. Prior to the Andrew acquisition,
he served as our Executive Vice President of Business Development and the Chairman of the Board of Directors
of our wholly-owned subsidiary, Connectivity Solutions Manufacturing LLC, since April 2005. Mr. Edwards
also served as President and Chief Executive Officer of OFS Fitel, LLC and OFS BrightWave, LLC, a joint
venture between our Company and The Furukawa Electric Co. Mr. Edwards has also served in various capacities
with Alcatel, including President of Alcatel North America Cable Systems and President of Radio Frequency
Systems. The Board of Directors has concluded that Mr. Edwards should serve as a director because he brings
extensive experience regarding the management of public and private companies and the financial services
industry, as well as an understanding of the telecommunications industry.

Mark A. Olson

Mr. Olson became our Executive Vice President and Chief Financial Officer on February 1, 2012. From
November 2009 to January 2012, Mr. Olson served as our Senior Vice President and Corporate Controller.
Mr. Olson served as Vice President and Controller for Andrew LLC since the closing of the Andrew acquisition.
Prior to that acquisition, he was Vice President, Corporate Controller and Chief Accounting Officer of Andrew.
Mr. Olson joined Andrew in 1993 as Group Controller, was named Corporate Controller in 1998, Vice President
and Corporate Controller in 2000 and Chief Accounting Officer in 2003. Prior to joining Andrew, he was
employed by Nortel and Johnson & Johnson.

Frank M. Drendel

Mr. Drendel has been our Chairman of the Board since the Carlyle acquisition. He served as our Chairman of the
Board and Chief Executive Officer from July 28, 1997 (when we were spun-off (the Spin-Off) from General

Instrument Corporation and became an independent company) until the Carlyle acquisition. Effective with the
Carlyle acquisition, Mr. Drendel stepped down as Chief Executive Officer but remained the Chairman of the
Board. Mr. Drendel served as a director of GI Delaware, a subsidiary of General Instrument Corporation, and its
predecessors from 1987 to 1992 and was a director of General Instrument Corporation from 1992 until the Spin-
Off and NextLevel Systems, Inc. (which was renamed General Instrument Corporation) from the Spin-Off until
January 5, 2000. Mr. Drendel served as President and Chairman of CommScope, Inc. of North Carolina
(CommScope NC), our wholly owned subsidiary, from 1986 to 1997, and served as Chief Executive Officer of
CommScope NC from 1976 until 2011.

Mr. Drendel is a director of the National Cable & Telecommunications Association, the principal trade
association of the cable industry in the United States, and was inducted into the Cable Television Hall of Fame in
2002. Mr. Drendel joined the board of directors of Tyco International, Ltd. on September 14, 2012 and served as
a director of Sprint Nextel Corporation from August 2005 to May 2008 and as a director of Nextel
Communications, Inc. from August 1997 to August 2005. The Board of Directors has concluded that
Mr. Drendel should serve as a director because he brings extensive experience regarding the management of
public and private companies and the financial services industry, as well as an understanding of the
telecommunications industry.

Randall W. Crenshaw

Mr. Crenshaw became our Executive Vice President and Chief Operating Officer following the consummation of
the Carlyle acquisition. From January 1, 2010 to the Carlyle acquisition, Mr. Crenshaw was our Executive Vice
President and Chief Supply Officer. Prior to this role, Mr. Crenshaw was Executive Vice President and General
Manager, Enterprise since February 2004. From 2000 to 2004, he served as Executive Vice President,
Procurement, and General Manager, Network Products Group of our Company. Prior to that time, he held
various other positions with our Company since 1985.

Frank (Burk) B. Wyatt, II

Mr. Wyatt has been Senior Vice President, General Counsel and Secretary of CommScope since 2000. Prior to
joining our company as General Counsel and Secretary in 1996, Mr. Wyatt was an attorney in private practice
with Bell, Seltzer, Park & Gibson, P.A. (now Alston & Bird LLP). Mr. Wyatt is also our Chief Ethics and
Compliance Officer.

Peter U. Karlsson

Mr. Karlsson has been our Senior Vice President, Global Sales since July 2011. Mr. Karlsson previously served
as Senior Vice President, Enterprise Sales since our acquisition of Avaya’s Connectivity Solutions division in
2004. From 2002 to that acquisition, he was Global Vice President, Sales for Avaya’s SYSTIMAX division.
Mr. Karlsson joined AT&T in 1989 holding several management positions in the Nordic and Sub-Sahara Africa
regions, was named General Manager of Lucent Technologies Global Commercial Markets Southwest Territory
in 1997 and Managing Director, Caribbean and Latin America for Lucent Global Business Partners Group in
1999 before transitioning to Vice President, Distribution for Avaya’s Connectivity Solutions division.

Robert W. Granow

Mr. Granow became our Vice President, Corporate Controller and Principal Accounting Officer on February 1,
2012 and was promoted to Senior Vice President in December 2013. Mr. Granow joined CommScope in 2004
and has held various positions within the Corporate Controller organization. Prior to joining our Company, he
was employed by LifeSpan Incorporated, Aetna, Inc. and Arthur Andersen & Co.

Philip M. Armstrong, Jr.

Mr. Armstrong has been our Senior Vice President, Corporate Finance since November 2009. Mr. Armstrong
previously served as Vice President, Investor Relations and Corporate Communications since 2000. Prior to
joining CommScope in 1997, he held various Treasury and Finance positions at Carolina Power and Light Co.
(formerly Progress Energy).

Joanne L. Townsend

Ms. Townsend became our Senior Vice President, Human Resources, in November 2012. Prior to joining
CommScope, she was the Chief Human Resource Officer at Zebra Technologies Corporation from 2008 to
November 2012. Additionally, Ms. Townsend worked for CommScope from 2007 to 2008 as a vice president of
HR, supporting the Wireless segment.

Ms. Townsend has more than 30 years of experience in human resources (HR), including a long-term career with
Motorola where she spent time in the Asia Pacific region as an expatriate in Hong Kong and had global
responsibility for sales and marketing organizations; functional experience in employee relations, compensation
and staffing; and experience in strategic HR support for a variety of business functions.

Claudius (Bud) E. Watts IV

Mr. Watts became a member of our Board of Directors following the Carlyle acquisition and serves as the Chair
of our Compensation and Nominating Committees. He currently serves as a Managing Director of The Carlyle
Group. Prior to joining Carlyle in 2000, Mr. Watts was a Managing Director in the M&A group of First Union
Securities, Inc. He joined First Union Securities when First Union acquired Bowles Hollowell Conner & Co.,
where Mr. Watts was a principal. He also serves on the board of directors of Freescale Semiconductor and
Carolina Financial Corporation and has previously served on the boards of directors of numerous other Carlyle
portfolio companies over the past 14 years, including SS&C Technologies, Inc. The Board of Directors has
concluded that Mr. Watts should serve as a director because he brings extensive experience regarding the
management of public and private companies and the financial services industry.

Campbell (Cam) R. Dyer

Mr. Dyer became a member of our Board of Directors following the Carlyle acquisition and serves on our
Compensation Committee. He currently serves as a Managing Director in the Technology Buyout Group of The
Carlyle Group, which he joined in 2002. Prior to joining Carlyle, Mr. Dyer was an associate with the private
equity firm William Blair Capital Partners, a consultant with Bain & Company and an investment banking
analyst in the M&A Group of Bowles, Hollowell, Conner & Co. He also serves on the board of directors of
Dealogic. The Board of Directors has concluded that Mr. Dyer should serve as a director because he brings
extensive experience regarding the management of public and private companies and the financial services
industry.

Austin A. Adams

Mr. Adams became a member of our Board of Directors in January 2014 and serves on our Audit Committee. He
served as Executive Vice President and Corporate Chief Information Officer of JPMorgan Chase from July 2004
(upon the merger of JPMorgan Chase and Bank One Corporation) until his retirement in October 2006. Prior to
the merger, Mr. Adams served as Executive Vice President and Chief Information Officer of Bank One from
2001 to 2004. Prior to joining Bank One, he was Chief Information Officer at First Union Corporation (now
Wells Fargo & Co.) from 1985 to 2001. Mr. Adams is also a director of the following public companies: The
Dun & Bradstreet Corporation, Spectra Energy, Inc. and First Niagara Financial Group, Inc. The Board has
concluded that Mr. Adams should serve as a director because he brings significant experience in information
technology, has significant public company directorship and committee experience and has significant core
business skills, including technology and strategic planning.

Marco De Benedetti

Mr. De Benedetti became a member of our Board of Directors following the Carlyle acquisition. He joined
Carlyle in 2005 and is currently a Managing Director and Co-head of Carlyle’s European Buyout Group,
particularly focusing on the telecommunications and branded consumer goods sectors. Prior to joining Carlyle,
Mr. De Benedetti was the Chief Executive Officer of Telecom Italia from July 2005 to October 2005. Mr. De
Benedetti was the Chief Executive Officer of Telecom Italia Mobile from 1999 until its merger with Telecom
Italia in June 2005. Mr. De Benedetti currently also serves on the boards of directors of NBTY Inc., Moncler
SpA, Twin-Set Simona Barbieri SpA, Marelli Motori SpA, CIR SpA and Cofide SpA. He served on the boards of
directors of Numericable Group SA and Zodiac Marine & Pool during 2013 and Parmalat S.p.A. between 2005
and 2011. The Board of Directors has concluded that Mr. De Benedetti should serve as a director because he has
significant directorship experience and has significant core business skills, including financial and strategic
planning.

Peter J. Clare

Mr. Clare became a member of our Board of Directors following the Carlyle acquisition. Mr. Clare currently
serves as a Managing Director of The Carlyle Group as well as Co-head of U.S. Buyout Group. Prior to joining
Carlyle in 1992, Mr. Clare was with First City Capital Corporation, a private equity firm that invested in
leveraged buyouts, public equities, distressed bonds and restructuring. Prior to joining First City Capital, he was
with the Merchant Banking Group and Prudential-Bache. Mr. Clare currently serves on the boards of directors of
Booz Allen Hamilton Holding Corporation, Sequa Corporation, Pharmaceutical Product Group and Signode
Industrial. He served on the board of directors of Wesco Aircraft Holdings, Inc. between 2006 and 2012 and
ARINC Inc. between 2007 and 2013. The Board of Directors has concluded that Mr. Clare should serve as a
director because he brings significant experience in finance, financial reporting, compliance and controls and
global businesses, has public company directorship and committee experience and has significant core business
skills, including financial and strategic planning.

Stephen (Steve) C . Gray

Mr. Gray became a member of our Board of Directors following the Carlyle acquisition. He currently serves as a
Senior Advisor to The Carlyle Group a position he has held since 2008. Mr. Gray is the Founder and Chairman
of Gray Venture Partners, LLC a private investment company and previously served as President of
McLeodUSA Incorporated from 1992 to 2004. Prior to joining McLeodUSA, he served from 1990 to 1992 as
Vice President of Business Services at MCI Inc. and before that, from 1988 to 1990, he served as Senior Vice
President of National Accounts and Carrier Services for TelecomUSA. From 1986 to 1988, Mr. Gray held a
variety of sales management positions with WilTel Network Services and the Clayton W. Williams Companies,
including ClayDesta Communications Inc. Mr. Gray serves as the Chairman of ImOn Communications, LLC,
SecurityCoverage, Inc., Involta, LLC and HH Ventures, LLC and he also serves on the board of directors for
Syniverse Holdings, Inc. and served on the board of directors for Insight Communications, Inc. from December
2005 until February 2012. In addition, he assumed the role of Interim President and CEO of Syniverse Holdings,
Inc. in August 2014. The Board of Directors has concluded that Mr. Gray should serve as a director because he
has significant core business skills, including financial and strategic planning, and has extensive experience as a
director.

L. William (Bill) Krause

Mr. Krause became a member of our Board of Directors following the Carlyle acquisition and serves as a
member of our Compensation and Nominating Committees. Mr. Krause has been President of LWK Ventures, a
private advisory and investment firm, since 1991. He also currently serves as a Senior Advisor to The Carlyle
Group. In addition, Mr. Krause served as President and Chief Executive Officer of 3Com Corporation, a global
data networking company, from 1981 to 1990, and as its Chairman from 1987 to 1993 when he retired.
Mr. Krause currently serves on the boards of directors of the following public companies: Brocade

Communications Systems, Inc., a networking systems supplier and Coherent, Inc., a leading supplier of
Photonic-based systems. Mr. Krause previously served as a director for the following public companies: Core-
Mark Holding Company, Inc., Packateer, Inc., Sybase, Inc. and Trizetto Group, Inc. The Board of Directors has
determined that Mr. Krause should serve as a director because of his years of executive leadership and
management experience in the high technology industry and his service on the boards of other public companies
and committees thereof.

Timothy T. Yates

Mr. Yates became a member of our Board of Directors following the IPO and serves as the Chairman of our
Audit Committee. In November 2014, Mr. Yates was appointed to the role of CEO of Monster Worldwide, Inc.
He also serves as a director of Monster Worldwide, Inc., a publicly traded company. He served as Monster
Worldwide’s Executive Vice President from June 2007 until June 2013 and Chief Financial Officer from June
2007 until January 2011. Prior to that, Mr. Yates served as Senior Vice President, Chief Financial Officer and a
director of Symbol Technologies, Inc. from February 2006 to June 2007. From January 2007 to June 2007, he
was responsible for the integration of Symbol into Motorola, Inc.’s Enterprise Mobility business. From August
2005 to February 2006, Mr. Yates served as an independent consultant to Symbol. Prior to this, from October
2002 to November 2005, Mr. Yates served as a partner and Chief Financial Officer of Saguenay Capital, a
boutique investment firm. Prior to that, he served as a founding partner of Cove Harbor Partners, a private
investment and consulting firm, which he helped establish in 1996. From 1971 through 1995, Mr. Yates held a
number of senior leadership roles at Bankers Trust New York Corporation, including serving as Chief Financial
and Administrative Officer from 1990 through 1995. The Board of Directors has concluded that Mr. Yates
should serve as a director because he has significant core business skills, including financial and strategic
planning, and he has significant management experience and financial expertise.

Thomas J. Manning

Mr. Manning became a member of our Board in September 2014 and serves on our Audit Committee. He has
been a Lecturer in Law at The University of Chicago Law School, teaching courses on corporate governance,
private equity and U.S.-China relations, since July 2012. Mr. Manning is also a Senior Advisor to The Demand
Institute, a joint venture of The Conference Board and The Nielsen Company, and an Affiliated Partner of
Waterstone Management Group. Previously, he served as the Chief Executive Officer of Cerberus Asia
Operations & Advisory Limited, a subsidiary of Cerberus Capital Management, a global private equity firm,
from April 2010 to June 2012, Chief Executive Officer of Indachin Limited from October 2005 to March 2009,
Chairman of China Board of Directors Limited from August 2005 to April 2010, and a senior partner with
Bain & Company and a member of Bain’s China board and head of Bain’s information technology strategy
practice in the Silicon Valley and Asia from August 2003 to January 2005. Prior to that, Mr. Manning served as
Global Managing Director of the Strategy & Technology Business of Capgemini, Chief Executive Officer of
Capgemini Asia Pacific, and Chief Executive Officer of Ernst & Young Consulting Asia Pacific, where he led
the development of consulting and IT service and outsourcing businesses across Asia from June 1996 to January
2003. Early in his career, Mr. Manning was with McKinsey & Company, Buddy Systems, Inc. and CSC Index.
Mr. Manning is also a director of the following public companies: The Dun & Bradstreet Corporation and Clear
Media Limited. He previously served as a director of iSoftStone Holdings Limited, Gome Electrical Appliances
Company, AsiaInfo-Linkage, Inc. and Bank of Communications. The Board has concluded that Mr. Manning
should serve as a director because he brings significant expertise in technology and business operations and
innovation on a global scale, has significant public company directorship and committee experience and has
significant core business skills, including strategic planning, regulatory matters, partnerships and alliances and
general corporate governance.

ITEM 1A. RISK FACTORS

The following is a cautionary discussion of risks, uncertainties and assumptions that we believe are significant to
our business. In addition to the factors discussed elsewhere in this Annual Report on Form 10-K, the following
are some of the important factors that, individually or in the aggregate, we believe could make our results differ
materially from those described in any forward-looking statements. It is impossible to predict or identify all such
factors and, as a result, you should not consider the following factors to be a complete discussion of risks,
uncertainties and assumptions.

Risks Related to Our Business

Our business is dependent on capital spending on data and communication networks by customers or end
users of our products and reductions in such capital spending adversely affect our business.

Our performance is dependent on customers’ or end users’ capital spending for constructing, rebuilding,
maintaining or upgrading data and communication networks, which can be volatile or hard to forecast. Capital
spending in the communications industry is cyclical and can be curtailed or deferred on short notice. A variety of
factors affect the amount of capital spending, and, therefore, our sales and profits, including:

•

competing technologies;

general economic conditions;

timing and adoption of global rollout of new technologies, including 4G/LTE;

customer specific financial or stock market conditions;

availability and cost of capital;

governmental regulation;

demands for network services;

competitive pressures, including pricing pressures;

acceptance of new services offered by our customers;

impact of industry consolidation; and

real or perceived trends or uncertainties in these factors.

Several of our customers or end users of our products have accumulated significant levels of debt. These high
debt levels, coupled with uncertainty in the capital markets, may impact their access to capital in the future. Even
if the financial health of our customers or end users of our products remains intact, these customers or end users
of our products may not purchase new equipment at levels we have seen in the past or expect in the future. If our
product portfolio and product development plans do not position us well to capture an increased portion of the
capital spending of customers or end users of our products in the markets on which we focus, our revenue may
decline.

As a result of these issues, we may not be able to maintain or increase our revenue in the future, and our business,
financial condition, results of operations and cash flows could be materially and adversely affected.

A substantial portion of our business is derived from a limited number of key customers or distributors.

We derived 22% of our 2014 consolidated net sales from our top three direct customers or distributors. Our
largest distributor, Anixter, accounted for 11% of our 2014 consolidated net sales. The concentration of our net
sales among these and other key customers or distributors subjects us to a variety of risks that could have a
material adverse impact on our net sales and profitability, including, without limitation:

•

lower sales resulting from the loss of one or more of our key customers or distributors;

•

renegotiations of agreements with key customers or distributors resulting in materially less favorable
terms;

financial difficulties experienced by one or more of our key customers, distributors or our distributors’
end customers, resulting in reduced purchases of our products and/or uncollectible accounts receivable
balances;

reductions in inventory levels held by distributors and OEMs which may be unrelated to purchasing
trends by the ultimate customer;

consolidations in the wireless or cable television industries resulting in delays in purchasing decisions
or reduced purchases by the merged businesses;

new or proposed laws or regulations affecting the telecommunications, wireless or cable television
industries resulting in reduced capital spending;

increases in the cost of borrowing or capital and/or reductions in the amount of debt or equity capital
available to the telecommunications, wireless or cable television industries resulting in reduced capital
spending; and

changes in the technology deployed by customers resulting in lower sales of our products.

Additionally, the risks above are further increased as a result of our indirect sales to end users of our products,
including those who may also be direct customers. In addition, we generally have no minimum purchase
commitments from any of our distributors, system integrators, value-added resellers, OEMs, or other customers,
and our contracts with these parties do not prohibit them from purchasing or offering products or services that
compete with ours. Although we maintain long-term relationships with these parties and have not historically lost
key customers, we have experienced variability in the level of purchases by our key customers and end users of
our products, and any significant reduction in sales to these customers and end users of our products, including as
a result of their inability or unwillingness to continue purchasing our products, or their failure to properly manage
their businesses with respect to the purchase of and payment for our products, could materially and adversely
affect our business, results of operations, financial condition and cash flows.

Our future success depends on our ability to anticipate and to adapt to technological changes and develop,
implement and market product innovations.

Many of our markets are characterized by advances in information processing and communications capabilities
that require increased transmission speeds and greater bandwidth. These advances require ongoing improvements
in the capabilities of our products.

However, we may not be successful in our ongoing improvement efforts if, among other things, our products:

•

are not cost effective;

are not brought to market in a timely manner;

are not in accordance with evolving industry standards;

fail to achieve market acceptance or meet customer requirements; or

are ahead of the needs of their markets.

There are various competitive wireless technologies that could be a potential substitute for some of the
communications products we sell. Fiber optic technology presents a potential substitute for some of the
broadband communications cable products we sell. A significant decrease in the cost of deploying fiber optic
systems could make these systems superior on a price/performance basis to copper or aluminum systems and
have a material adverse effect on our business.

In order to successfully develop and market certain of our planned products, we may be required to enter into
technology development or licensing agreements with third parties. We cannot provide assurances that we will be
able to timely enter into any necessary technology development or licensing agreements on reasonable terms, or
at all.

The failure to successfully introduce new or enhanced products on a timely and cost-competitive basis or the
inability to continue to market existing products on a cost-competitive basis could have a material adverse effect
on our results of operations and financial condition. In addition, sales of new products may replace sales of some
of our existing products, mitigating the benefits of new product introductions and possibly resulting in excess
levels of inventory.

Our revenues are dependent on the commercial deployment of technologies based on time division multiple
access, or “TDMA”, code division multiple access, or “CDMA,” and orthogonal frequency-division multiple
access, or “OFDMA,” among others, and upgrades of 2G, 3G and 4G wireless communications equipment,
products and services based on these technologies.

We develop, patent and commercialize technology and products based on TDMA, CDMA and OFDMA, among
others. Our revenues are dependent upon the commercial deployment of these technologies and products and
upgrades of 2G, 3G and 4G wireless communications equipment, products and services based on these
technologies. For example, several wireless providers in the United States have announced plans to shut down
legacy TDMA and CDMA networks. While we believe the deployment and adoption of LTE technology will
help reduce the effect of this industry trend, our business may be harmed, and our investments in these
technologies may not provide us an adequate return if:

• LTE, an OFDMA-based wireless standard, is not widely deployed or commercial deployment is

delayed;

• wireless operators delay moving 2G customers to 3G and 4G devices;

• wireless operators delay 3G and/or 4G deployments, expansions or upgrades;

•

government regulators delay the reallocation of spectrum to allow wireless operators to upgrade to 3G
and 4G, which will restrict the expansion of 3G and 4G wireless connectivity, primarily outside of
major population areas;

• wireless operators are unable to drive improvements in 3G and 4G network performance and/or

capacity;

• wireless operators and other industries using these technologies deploy other technologies; or

• wireless operators choose to spend their capital on their core network or limit their expenditures on

radio access network (RAN).

Our business is dependent on our ability to increase our share of components sold and to continue to drive the
adoption of our products and services into 3G and 4G wireless networks. We are also dependent on the success
of our customers, licensees and TDMA-, CDMA- and OFDMA-based wireless operators and other industries
using our technologies, as well as the timing of their deployment of new services. They may incur lower gross
margins on products or services based on these technologies than on products using alternative technologies as a
result of greater competition or other factors. If commercial deployment of these technologies, upgrade of 2G
subscribers to 3G devices and upgrades to 3G or 4G wireless communications equipment, products and services
based on these technologies do not continue or are delayed, our revenues could be negatively impacted, and our
business could suffer.

We may not fully realize anticipated benefits from past or future acquisitions or equity investments.

We anticipate that a portion of any future growth of our business might be accomplished by acquiring existing
businesses, products or technologies. The success of any acquisition will depend upon, among other things, our
ability to integrate acquired personnel, operations, products and technologies into our organization effectively, to
retain and motivate key personnel of acquired businesses and to retain their customers. In addition, we might not
be able to identify suitable acquisition opportunities or obtain any necessary financing on acceptable terms. We
might also spend time and money investigating and negotiating with potential acquisition or investment targets,
but not complete the transaction.

Although we expect to realize strategic, operational and financial benefits as a result of our past or future
acquisitions and equity investments, we cannot predict whether and to what extent such benefits will be achieved.
There are significant challenges to integrating an acquired operation into our business, including, but not limited
to:

•

successfully managing the operations, manufacturing facilities and technology;

integrating the sales organizations and maintaining and increasing the customer base;

retaining key employees, suppliers and distributors;

integrating management information, inventory, accounting and research and development activities;
and

addressing operating losses related to individual facilities or product lines.

Any future acquisition could involve other risks, including the assumption of additional liabilities and expenses,
issuances of debt, transaction costs and diversion of management’s attention from other business concerns, and
such acquisition may be dilutive to our financial results. See “Risk Factors – Risks Related to the Acquisition”.

We face competitive pressures with respect to all of our major products.

In each of our major product groups, we compete with a substantial number of foreign and domestic companies,
some of which have greater resources (financial or otherwise) or lower operating costs than we have.
Competitors’ actions, such as price reductions or introduction of new innovative products, and the use of
exclusively price driven Internet auctions by customers may have a material adverse impact on our net sales and
profitability. In addition, the rapid technological changes occurring in the communications industry could lead to
the entry of new competitors. We cannot assure you that we will continue to compete successfully with our
existing competitors or with new competitors.

Many of our competitors are substantially larger than we are, and have greater financial, technical, marketing and
other resources than we have. Many of these large enterprises are in a better position to withstand any significant
reduction in capital spending by customers in our markets. They often have broader product lines and market
focus, and may not be as susceptible to downturns in a single market. These competitors may also be able to
bundle their products together to meet the needs of a particular customer, and may be capable of delivering more
complete solutions than we are able to provide. To the extent large enterprises that currently do not compete
directly with us choose to enter our markets by acquisition or otherwise, competition would likely intensify.

Further, some of our competitors that have greater financial resources have offered, and in the future may offer,
their products at lower prices than we offer for our competing products or on more attractive financing or
payment terms, which has in the past caused, and may in the future cause, us to lose sales opportunities and the
resulting revenue or to reduce our prices in response to that competition. Reductions in prices for any of our
products could have a material adverse effect on our revenue and operating margins. In addition, many of our
competitors have been in operation longer than we have and, therefore, have more long-standing and established
relationships with domestic and foreign customers, making it difficult for us to sell to those customers.

If any of our competitors’ products or technologies were to become the industry standard, our business would be
seriously harmed. If our competitors are successful in bringing their products to market earlier than we can, or if
their products are more technologically capable than ours, our revenue could be materially and adversely
affected. In addition, certain companies that have not had a large presence in the broadband communications
equipment market have begun to expand their presence in this market through mergers and acquisitions. The
continued consolidation of our competitors could have a significant negative impact on our business. Further, our
competitors may bundle their products or incorporate functionality into existing products in a manner that
discourages users from purchasing our products or which may require us to lower our selling prices, resulting in
lower revenue and decreased gross margins.

If we are unable to compete at the same level as we have in the past, in any of our markets, or are forced to
reduce the prices of our products in order to continue to be competitive, our operating results, financial condition
and cash flows would be materially and adversely affected.

We depend on channel partners to sell our products in certain markets and regions and are subject to risks
associated with these arrangements.

We utilize distributors, system integrators and value-added resellers (collectively, channel partners) to sell our
products to certain end customers and in certain geographic regions to improve our access to these customers and
regions and to lower our overall cost of post-sales support. For the year ended December 31, 2014, sales to our
four largest channel partners represented 19% of our net sales. Our sales through channel partners are subject to a
number of risks, including:

•

the ability of our selected channel partners to effectively sell our products to end customers;

our ability to continue channel partner arrangements into the future because most are for a limited term
and subject to mutual agreement to extend;

a reduction in gross margins realized on sale of our products; and

a diminution of contact with end customers which, over time, could adversely impact our ability to
develop new products that meet customers’ evolving requirements.

In the past, we have seen some channel partners acquired and consolidated. If there were further consolidation of
our channel partners, this could affect our relationships with these channel partners. It could also result in
consolidation of channel partner inventory, which could temporarily depress our revenue. In addition, changes in
the inventory levels of our products held by our channel partners can result in significant variability in our
revenues. The financial failure of a channel partner could result in our inability to collect accounts receivable in
full. A global economic downturn could cause financial difficulties (including bankruptcy) for our channel
partners and customers, which would adversely affect our results of operations.

We generally have no minimum purchase commitments from any of our channel partners or OEM customers,
and our contracts with these parties do not prohibit them from purchasing or offering products or services that
compete with ours. Our competitors may provide incentives to any of our channel partners or OEM customers to
favor their products or, in effect, to prevent or reduce sales of our products. Any of our channel partners or OEM
customers may independently choose not to purchase or offer our products. Many of our channel partners are
small and may have relatively unsophisticated processes and limited financial resources to conduct their
business. Any significant disruption of our sales to these customers, including as a result of the inability or
unwillingness of these customers to continue purchasing our products, or their failure to properly manage their
businesses with respect to the purchase of and payment for our products, could materially and adversely affect
our business, results of operations, financial condition and cash flows. In addition, our failure to continue to
establish or maintain successful relationships with channel partners or OEM customers could likewise materially
and adversely affect our business, results of operations and financial condition.

If contract manufacturers that we rely on encounter production, quality, financial or other difficulties, we
may experience difficulty in meeting customer demands.

We rely on unaffiliated contract manufacturers, both domestically and internationally, to produce certain
products or key components of products. If we are unable to arrange for sufficient production capacity among our
contract manufacturers or if our contract manufacturers encounter production, quality, financial or other
difficulties, including labor disturbances or geopolitical risks, and if alternative suppliers cannot be identified, we
may encounter difficulty in meeting customer demands. Any such difficulties could have an adverse effect on our
business, financial results and results of operations, which could be material.

If our integrated global manufacturing operations suffer production or shipping delays, we may experience
difficulty in meeting customer demands.

We internally produce, both domestically and internationally, a portion of certain components used in our
finished products. Disruption of our ability to produce at or distribute from these facilities due to failure of our
manufacturing infrastructure, information technology outage, fire, electrical outage, natural disaster, acts of
terrorism, shipping interruptions or some other catastrophic event could have a material adverse effect on our
ability to manufacture products at our other manufacturing facilities in a cost-effective and timely manner, which
could have a material adverse effect on our business, financial condition and results of operations.

If we encounter capacity constraints with respect to our internal facilities and/or existing or new contract
manufacturers, it could have an adverse impact on our business.

If we do not have sufficient production capacity, either through our internal facilities and/or through independent
contract manufacturers, to meet customer demand for our products, we may experience lost sales opportunities
and customer relations problems, which could have a material adverse effect on our business, financial condition
and results of operations.

Our business depends on effective information management systems.

We rely on our enterprise resource planning systems to support such critical business operations as processing
sales orders and invoicing; manufacturing; shipping; inventory control; purchasing and supply chain
management; human resources; and financial reporting. If we are unable to successfully implement major
systems initiatives and maintain critical information systems, we could encounter difficulties that could have a
material adverse impact on our business, internal controls over financial reporting, or our ability to timely and
accurately report our financial results.

Cyber-security incidents, including data security breaches or computer viruses, could harm our business by
exposing us to various liabilities, disrupting our delivery of products and services and damaging our
reputation.

We rely extensively on information technology systems to operate our business. We receive, process, store and
transmit, often electronically, the confidential data of the Company and our customers, vendors, employees and
others. Despite implemented security measures, our facilities, systems and procedures, and those of our third-
party service providers, may be vulnerable to security breaches, acts of vandalism, software viruses, misplaced or
lost data, programming and/or human errors or other similar events. In particular, unauthorized access to our
computer systems or stored data could result in the theft or improper disclosure of confidential or sensitive
information, the deletion or modification of records or interruptions in our operations. Any such events, including
those involving the misappropriation, loss or other unauthorized disclosure or use of confidential or sensitive
information of the Company or our customers, vendors, employees or others, whether by us or a third party,
could (i) subject us to civil and criminal penalties, (ii) expose us to liabilities to our customers, employees,
vendors, third parties or governmental authorities, (iii) disrupt our delivery of products and services, or (iv) have
a negative impact on our reputation. Any of these events could have a material adverse effect on our business,
financial condition and results of operations.

If our products, including material purchased from our suppliers, experience quality or performance issues,
our business may suffer.

Our business depends on delivering products of consistently high quality. To this end, our products are tested for
quality both by us and our customers. Nevertheless, many of our products are highly complex and testing
procedures used by us and our customers are limited to evaluating our products under likely and foreseeable
failure scenarios. For various reasons (including, among others, the occurrence of performance problems
unforeseeable in testing), our products (including components and raw materials purchased from our suppliers
and completed goods purchased for resale) may fail to perform as expected. Performance issues could result from
faulty design or problems in manufacturing. We have experienced such performance issues in the past and
remain exposed to such performance issues. In some cases, recall of some or all affected products, product
redesigns or additional capital expenditures may be required to correct a defect. In addition, we generally offer
warranties on most products, the terms and conditions of which depend upon the product subject to the warranty.
In some cases, we indemnify our customers against damages or losses that might arise from certain claims
relating to our products. Future claims may have a material adverse effect on our business, financial condition
and results of operations. Any significant or systemic product failure could also result in lost future sales of the
affected product and other products, as well as reputational damage.

Our significant international operations expose us to economic, political and other risks.

We have significant international sales, manufacturing and distribution operations. We have major international
manufacturing and/or distribution facilities in, among others, Australia, China, the Czech Republic, Germany,
India, Ireland, Mexico, Singapore and the United Kingdom. For the years ended December 31, 2014, 2013 and
2012, international sales represented approximately 45%, 45% and 47%, respectively, of our consolidated net
sales. In general, our international sales have lower margins than our domestic sales. To the extent international
sales represent a greater percentage of our revenue, our overall margin may decline.

Our international sales, manufacturing and distribution operations are subject to the risks inherent in operating
abroad, including, but not limited to, risks with respect to currency exchange rates; economic and political
destabilization; restrictive actions by foreign governments; wage inflation; nationalizations; the laws and policies
of the United States affecting trade, exports, imports, anti-bribery, foreign investment and loans; foreign tax laws,
including the ability to recover amounts paid as value-added taxes; potential restrictions on the repatriation of
cash; reduced protection of intellectual property; longer customer payment cycles; compliance with local laws
and regulations; armed conflict; terrorism; shipping interruptions; and major health concerns (such as infectious
diseases).

Risks related to foreign currency rates can impact our results of operations, cash flows and financial position. We
manage these risks through regular operating and financing activities and periodically use derivative financial
instruments such as foreign exchange forward and option contracts. There can be no assurance that our risk
management strategies will be effective or that the counterparties to our derivative contracts will be able to
perform. In addition, foreign currency rates in many of the countries in which we operate have at times been
extremely volatile and unpredictable. We may choose not to hedge or determine that we are unable to effectively
hedge the risks associated with this volatility. In such cases, we may experience declines in revenue and adverse
impacts on earnings and such changes could be material.

Our international operations require us to comply with anti-corruption laws and regulations of the U.S.
government and various international jurisdictions.

Doing business on a worldwide basis requires us to comply with the laws and regulations of the U.S. government
and various international jurisdictions, and our failure to comply with these rules and regulations may expose us
to liabilities. These laws and regulations may apply to companies, individual directors, officers, employees and
agents, and may restrict our operations, trade practices, investment decisions and partnering activities. In

particular, our international operations are subject to U.S. and foreign anti-corruption laws and regulations, such
as the U.S. Foreign Corrupt Practices Act (FCPA). The FCPA prohibits U.S. companies and their officers,
directors, employees and agents acting on their behalf from improperly offering, promising, authorizing or
providing anything of value to foreign officials for the purposes of influencing official decisions or obtaining or
retaining business or otherwise obtaining favorable treatment. The FCPA also requires companies to keep books,
records and accounts that accurately and fairly reflect transactions and dispositions of assets and to maintain a
system of adequate internal accounting controls. As part of our business, we deal with state-owned business
enterprises, the employees and representatives of which may be considered foreign officials for purposes of the
FCPA. We are also subject to the U.K. Anti-Bribery Act, which prohibits both domestic and international
bribery, as well as bribery across both public and private sectors. In addition, some of the international locations
in which we operate lack a developed legal system and have elevated levels of corruption. As a result of the
above activities, we are exposed to the risk of violating anti-corruption laws. Violations of these legal
requirements are punishable by criminal fines and imprisonment, civil penalties, disgorgement of profits,
injunctions, debarment from government contracts as well as other remedial measures. We have established
policies and procedures designed to assist us and our personnel in complying with applicable U.S. and
international laws and regulations. However, our employees, subcontractors and agents could take actions that
violate these requirements, which could adversely affect our reputation, business, financial condition and results
of operations and such effects could be material.

We are subject to governmental export and import controls that could subject us to liability or impair our
ability to compete in international markets.

Certain of our products are subject to export controls and may be exported only with the required export license
or through an export license exception. If we were to fail to comply with export licensing, customs regulations,
economic sanctions and other laws, we could be subject to substantial civil and criminal penalties, including fines
for us and incarceration for responsible employees and managers, and the possible loss of export or import
privileges. In addition, if our distributors fail to obtain appropriate import, export or re-export licenses or permits,
we may also be adversely affected through reputational harm and penalties. Obtaining the necessary export
license for a particular sale may be time-consuming and may result in the delay or loss of sales opportunities.
Furthermore, export control laws and economic sanctions prohibit the shipment of certain products to embargoed
or sanctioned countries, governments and persons. While we train our employees to comply with these
regulations, we cannot assure that a violation will not occur, whether knowingly or inadvertently. Any such
shipment could have negative consequences including government investigations, penalties, fines, civil and
criminal sanctions, and reputational harm. Any change in export or import regulations, economic sanctions or
related legislation, shift in the enforcement or scope of existing regulations, or change in the countries,
governments, persons or technologies targeted by such regulations, could result in our decreased ability to export
or sell our products to existing or potential customers with international operations. Any decreased use of our
products or limitation on our ability to export or sell our products could adversely affect our business, financial
condition and results of operations and such effects could be material.

We may sell one or more of our product lines, as a result of our evaluation of our products and markets, and
any such divestiture could adversely affect our expenses, revenues, results of operation, cash flows and
financial position.

We periodically evaluate our various product lines and may, as a result, consider the divestiture of one or more of
those product lines. Any such divestiture could adversely affect our expenses, revenues, results of operations,
cash flows and financial position.

Divestitures of product lines have inherent risks, including the expense of selling the product line, the possibility
that any anticipated sale will not occur, possible delays in closing any sale, the risk of lower-than-expected
proceeds from the sale of the divested business, unexpected costs associated with the separation of the business
to be sold from our information technology and other operating systems, and potential post-closing claims for
indemnification. Expected cost savings, which are offset by revenue losses from divested businesses, may also be

difficult to achieve or maximize due to a fixed cost structure, and we may experience varying success in reducing
fixed costs or transferring liabilities previously associated with the divested business.

Difficulties may be encountered in the realignment of manufacturing capacity and capabilities among our
global manufacturing facilities that could adversely affect our ability to meet customer demands for our
products.

We periodically realign manufacturing capacity among our global facilities in order to reduce costs by improving
manufacturing efficiency and to strengthen our long-term competitive position. The implementation of these
initiatives may include significant shifts of production capacity among facilities.

There are significant risks inherent in the implementation of these initiatives, including, but not limited to, failing
to ensure that: there is adequate inventory on hand or production capacity to meet customer demand while
capacity is being shifted among facilities; there is no decrease in product quality as a result of shifting capacity;
adequate raw material and other service providers are available to meet the needs at the new production
locations; equipment can be successfully removed, transported and re-installed; and adequate supervisory,
production and support personnel are available to accommodate the shifted production.

In the event that manufacturing realignment initiatives are not successfully implemented, we could experience
lost future sales and increased operating costs as well as customer relations problems, which could have a
material adverse effect on our business, financial condition and results of operations.

We may need to undertake additional restructuring actions in the future.

We have previously recognized restructuring charges in response to slowdowns in demand for our products and
in conjunction with implementation of initiatives to reduce costs and improve efficiency of our operations.
Recent actions have included the sale of certain assets of our BiMetals® business and the closure of
manufacturing facilities in Statesville, North Carolina; Joliet, Illinois; and Guangzhou, China. Much of the
production capacity from these facilities was shifted to other existing facilities or contract manufacturers.
Additional restructuring actions were initiated to realign and lower our cost structure primarily through
workforce reductions at various U.S. and international facilities. As a result of changes in business conditions
and other developments, we may need to initiate additional restructuring actions that could result in workforce
reductions and restructuring charges, which could be material.

We may need to recognize additional impairment charges related to goodwill, identified intangible assets and
fixed assets.

We have substantial balances of goodwill and identified intangible assets. We are required to test goodwill for
possible impairment on the same date each year and on an interim basis if there are indicators of a possible
impairment. We are also required to evaluate amortizable intangible assets and fixed assets for impairment if
there are indicators of a possible impairment.

There is significant judgment required in the analysis of a potential impairment of goodwill, identified intangible
assets and fixed assets. If, as a result of a general economic slowdown, deterioration in one or more of the
markets in which we operate or in our financial performance and/or future outlook, the estimated fair value of
our long-lived assets decreases, we may determine that one or more of our long-lived assets is impaired. An
impairment charge would be determined based on the estimated fair value of the assets and any such impairment
charge could have a material adverse effect on our business, financial condition and results of operations.

We have obligations under our defined benefit employee benefit plans and may be required to make plan
contributions in excess of current estimates.

At December 31, 2014, the net liability for pension and other postretirement benefits was $29.8 million (benefit
obligation of $339.0 million and plan assets of $309.2 million). See Note 10 to Consolidated Financial

Statements included elsewhere in this Annual Report on Form 10-K. Significant declines in the assets and/or
increases in the liabilities related to these obligations as a result of changes in actuarial estimates, asset
performance, interest rates or benefit changes, among others, could have a material adverse impact on our
financial position and/or results of operations.

We continue to fund a material portion of our underfunded pension obligations in the U.S. under the terms of an
agreement with the Pension Benefit Guaranty Corporation (PBGC), that we entered into in connection with the
2011 closure of our Omaha production facility. The terms of the agreement with the PBGC require funding
through 2015. We have similar exposures with respect to certain pension plans outside the U.S. Foreign plans
represented 46% and 48% of our pension benefit obligation and pension plans’ assets, respectively, as of
December 31, 2014. The amounts and timing of the remaining contributions we expect to make to our defined
benefit plans reflect a number of actuarial and other estimates and assumptions with respect to our expected plan
funding obligations. The actual amounts and timing of these contributions will depend upon a number of factors
and the actual amounts and timing of our future plan funding contributions may differ materially from those
presented in this Annual Report on Form 10-K. If we elect to terminate one or more of these plans and settle the
obligation through the purchase of one or more annuities, we could incur a charge and/or make additional
contributions and such amounts could be material.

Our financial condition may be adversely affected to the extent that we are required to make contributions to any
of our defined benefit plans in excess of the amounts assumed in our current projections.

We may incur costs and may not be successful in protecting our intellectual property and in defending claims
that we are infringing the intellectual property of others.

We may encounter difficulties and significant costs in protecting our intellectual property rights or obtaining
rights to additional intellectual property to permit us to continue or expand our business. Other companies,
including some of our largest competitors, hold intellectual property rights in our industry and the intellectual
property rights of others could inhibit our ability to introduce new products unless we secure necessary licenses
on commercially reasonable terms.

In addition, we have been required and may be required in the future to initiate litigation in order to enforce
patents issued or licensed to us or to determine the scope and/or validity of a third party’s patent or other
proprietary rights. We also have been and may in the future be subject to lawsuits by third parties seeking to
enforce their own intellectual property rights, including against certain of the intellectual property that we have
acquired through our strategic acquisitions. Any such litigation, regardless of outcome, could subject us to
significant liabilities or require us to cease using proprietary third party technology and, consequently, could
have a material adverse effect on our results of operations and financial condition.

In certain markets, we may be required to address counterfeit versions of our products. We may incur significant
costs in pursuing the originators of such counterfeit products and, if we are unsuccessful in eliminating them
from the market, we may experience a reduction in the value of our products and/or a reduction in our net sales.

Changes to the regulatory environment in which we or our customers operate may negatively impact our
business.

The telecommunications and cable television industries are subject to significant and changing federal and state
regulation, both in the U.S. and other countries, including regulations regarding the “Open Internet” or “net
neutrality”. Changes to the way in which internet service providers are regulated could adversely impact our
customers’ decisions regarding capital spending, which could decrease demand for our products. Manufacturers
of telecommunications equipment are subject to various environmental regulations relating to electrical
equipment generally, including, without limitation, The Restriction of Hazardous Substances Directive
2002/95/EC (RoHS), in the European Union regarding the use of certain hazardous materials used in the

manufacturing of various types of electronic and electrical equipment, regulations under the Waste Electrical and
Electronic Equipment Directive 2002/96/EC (WEEE), regarding the collection, recycling and recovery for
electrical goods and regulations under the European Community Regulation EC 1907/2006 regulating chemicals
and their safe use. Compliance with these environmental regulations could increase the cost of manufacturing our
products. If we were unable to comply with these regulations we may not be able to sell noncompliant products
in certain markets.

Regulatory changes of more general applicability could also have a material adverse effect on our business. For
example, changes to the U.S. corporate tax system have been proposed that would lead to the taxation of foreign
earnings at the time they are earned rather than when they are repatriated to the U.S. Implementation of such
changes would have an adverse effect on our net income and would require us to make earlier cash tax payments
which would have a negative effect on our cash flows.

Compliance with current and future environmental laws, potential environmental liabilities and the impact of
climate change may have a material adverse impact on our business, financial condition and results of
operations.

We are subject to various federal, state, local and foreign environmental laws and regulations governing, among
other things, discharges to air and water, management of regulated materials, handling and disposal of solid and
hazardous waste, and investigation and remediation of contaminated sites. Because of the nature of our business,
we have incurred and will continue to incur costs relating to compliance with or liability under these
environmental laws and regulations. In addition, new laws and regulations, including those regulating the types
of substances allowable in certain of our products, new or different interpretations of existing laws and
regulations, the discovery of previously unknown contamination or the imposition of new remediation or
discharge requirements, could require us to incur costs or become the basis for new or increased liabilities that
could have a material adverse effect on our financial condition and results of operations. For example, the
European Union has issued RoHS and WEEE regulating the manufacture, use and disposal of electrical goods. If
we are unable to comply with these and similar laws in other jurisdictions, or to sufficiently increase prices or
otherwise reduce costs to offset the increased cost of compliance, it could have a material adverse effect on our
business, financial condition and results of operations.

The physical effect of future climate change (such as increases in severe weather) may have an impact on our
suppliers, customers, employees and facilities which we are unable to quantify, but which may be material.

Efforts to regulate emissions of GHGs, such as carbon dioxide are underway in the U.S. and other countries
which could increase the cost of raw materials, production processes and transportation of our products. If we are
unable to comply with such regulations, sufficiently increase prices or otherwise reduce costs to offset the
increased costs of compliance, GHG regulation could have a material adverse effect on our results of operations.

Certain environmental laws impose strict and in some circumstances joint and several liability (that could result
in an entity paying more than its fair share) on current or former owners or operators of a contaminated property,
as well as companies that generated, disposed of or arranged for the disposal of hazardous substances at a
contaminated property, for the costs of investigation and remediation of the contaminated property. Our present
and past facilities have been in operation for many years and over that time, in the course of those operations,
hazardous substances and wastes have been used, generated and disposed of at such facilities and investigation
and remediation projects are underway at a few of these sites. There can be no assurance that the contractual
indemnifications we have received from prior owners and operators of certain of these facilities will continue to
be honored. In addition, we have disposed of waste products either directly or through third parties at numerous
disposal sites, and from time to time we have been and may be held responsible for investigation and clean-up
costs at these sites where those owners and operators have been unable to remain in business. Also, there can be
no guarantee that new environmental requirements or changes in their enforcement or the discovery of previously
unknown conditions will not cause us to incur additional costs for environmental matters which could be
material.

Our dependence on commodities subjects us to cost volatility and potential availability constraints which could
have a material adverse effect on our profitability.

Our profitability may be materially affected by changes in the market price and availability of certain raw
materials, most of which are linked to the commodity markets. The principal raw materials we purchase are rods,
tapes, sheets, wires, tubes and hardware made of copper, steel, aluminum or brass; plastics and other polymers;
and optical fiber. Fabricated copper, steel and aluminum are used in the production of coaxial and twisted pair
cables and polymers are used to insulate and protect cables. Prices for copper, steel, aluminum, fluoropolymers
and certain other polymers, derived from oil and natural gas, have experienced significant volatility as a result of
changes in the levels of global demand, supply disruptions and other factors. As a result, we have adjusted our
prices for certain products and may have to adjust prices again in the future. Delays in implementing price
increases or a failure to achieve market acceptance of price increases has in the past and could in the future have
a material adverse impact on our results of operations. In an environment of falling commodities prices, we may
be unable to sell higher-cost inventory before implementing price decreases, which could have a material adverse
impact on our business, financial condition and results of operations.

We are dependent on a limited number of key suppliers for certain raw materials and components.

For certain of our raw material and component purchases, including certain polymers, copper rod, copper and
aluminum tapes, fine aluminum wire, steel wire, optical fiber, circuit boards and other electronic components, we
are dependent on a limited number of key suppliers.

Our key suppliers have in the past and could in the future experience production, operational or financial
difficulties, or there may be global shortages of the raw materials or components we use, and our inability to find
sources of supply on reasonable terms could have a material adverse effect on our ability to manufacture
products in a cost-effective way which could have a material adverse effect on our gross margin and results of
operations.

We may not be able to attract and retain key employees, including our sales force.

Our business depends upon our continued ability to hire and retain key employees, including our sales force, at
our operations around the world. Competition for skilled personnel and highly qualified managers in the
telecommunications industry is intense. Difficulties in obtaining or retaining employees with the necessary
management, technical and financial skills needed to achieve our business objectives may have a material
adverse effect on our business, financial condition and results of operations.

Allegations of health risks from wireless equipment may negatively affect our results of operations.

Allegations of health risks from the electromagnetic fields generated by base stations and mobile handsets, and
potential lawsuits or negative publicity relating to them, regardless of merit, could have a material adverse effect
on our operations by leading consumers to reduce their use of mobile phones, reducing demand for certain of our
products, or by causing us to allocate resources to address these issues.

A significant uninsured loss or a loss in excess of our insurance coverage could have a material adverse effect
on our results of operations and financial condition.

We maintain insurance covering our normal business operations, including property and casualty protection that
we believe is adequate. We do not generally carry insurance covering wars, acts of terrorism, earthquakes or
other similar catastrophic events. We may not be able to obtain adequate insurance coverage on financially
reasonable terms in the future. A significant uninsured loss or a loss in excess of our insurance coverage could
have a material adverse effect on our results of operations and financial condition.

In addition, the financial health of our insurers may deteriorate and our insurers may not be able to respond if we
should have claims reaching their policies.

Natural or man-made disasters or other disruptions could unfavorably affect our operations and financial
performance.

Natural or man-made disasters could result in physical damage to one or more of our properties, the temporary
lack of an adequate work force, temporary or long-term disruption in the supply of products from suppliers and
delays in the delivery of products to our customers. Damage to our properties, the lack of an adequate workforce,
disruption in the supply of products from suppliers, and delays in the delivery of our products to our customers
could have a material adverse effect on our business, financial condition and results of operations.

We may experience significant variability in our quarterly or annual effective income tax rate.

We have a large and complex international tax profile and a significant level of net operating loss and other
carryforwards in various jurisdictions. Variability in the mix and profitability of domestic and international
activities, repatriation of earnings from foreign affiliates, changes in tax laws, identification and resolution of
various tax uncertainties and the inability to realize net operating loss and other carryforwards included in
deferred tax assets, among other matters, may significantly impact our effective income tax rate in the future. A
significant increase in our quarterly or annual effective income tax rate could have a material adverse impact on
our results of operations.

Labor unrest could have a material adverse effect on our business, results of operations and financial
condition.

While none of our U.S. employees are represented by unions, substantially all of our international employees are
members of unions or subject to workers’ councils or similar statutory arrangements. In addition, many of our
direct and indirect customers and vendors have unionized work forces. Strikes, work stoppages or slowdowns
experienced by these customers or vendors, contract manufacturers or their other suppliers could result in
slowdowns. Organizations responsible for shipping our products may also be impacted by strikes. Any
interruption in the delivery of our products could harm our reputation or reduce demand for our products and
could have a material adverse effect on us.

In general, we consider our labor relations with all of our employees to be good. However, in the future we may
be subject to labor unrest with respect to our employees or those of our vendors or customers. Occurrences of
strikes, work stoppages or lock-outs at our facilities or at the facilities of our vendors or customers, could have a
material adverse effect on our business, financial condition and results of operations.

Our future research and development projects may not be successful.

The successful development of telecommunications products can be affected by many factors. Products that
appear to be promising at their early phases of research and development may fail to be commercialized for
various reasons, including the failure to obtain the necessary regulatory approvals. There is no assurance that any
of our future research and development projects will be successful or completed within the anticipated time
frame or budget or that we will receive the necessary approvals from relevant authorities for the production of
these newly developed products, or that these newly developed products will achieve commercial success. Even
if such products can be successfully commercialized, they may not achieve the level of market acceptance that
we expect.

Regulations related to conflict minerals could adversely impact our business.

The Dodd-Frank Act contains provisions to improve transparency and accountability concerning the supply of
certain minerals, known as conflict minerals, originating from the Democratic Republic of Congo (the DRC), and
adjoining countries. As a result, in August 2012 the SEC adopted annual disclosure and reporting requirements
for those companies who use conflict minerals mined from the DRC and adjoining countries in their products.
These new requirements will require continued due diligence efforts in fiscal 2015, with our initial disclosure

requirements beginning in May 2016. The implementation of these rules could adversely affect the sourcing,
supply and pricing of materials used in our products. As there may be only a limited number of suppliers offering
“conflict free” conflict minerals, we cannot be sure that we will be able to obtain necessary materials produced
from conflict free minerals from such suppliers in sufficient quantities or at competitive prices. We will likely be
asked to make similar certifications as to the “conflict free” status of the minerals we use to our customers. If we
are unable or fail to make the requisite certifications, our customers may terminate their relationship with us.
Also, we may face adverse effects to our reputation if we determine that certain of our products contain minerals
not determined to be conflict free or if we are unable to sufficiently verify the origins for all conflict minerals
used in our products through the procedures we may implement.

Seasonality may cause fluctuations in our revenue and operating results.

Historically, our operations have been seasonal, with a greater portion of total net revenue and operating income
occurring in the second and third fiscal quarters. As a result of this seasonality, any factors negatively affecting
us during the second and third fiscal quarters of any year, including the variability of shipments under large
contracts, customers’ seasonal installation considerations and variations in product mix and in profitability of
individual orders, could have a material adverse effect on our financial condition and results of operations for the
entire year. See “Backlog and Seasonality” included in Part I, Item 1 of this Annual Report on Form 10-K. Our
quarterly results of operations also may fluctuate based upon other factors, including general economic
conditions.

Our substantial indebtedness could adversely affect our ability to raise additional capital to fund our
operations, limit our ability to react to changes in the economy or our industry, expose us to interest rate risk
to the extent of our variable rate debt and prevent us from meeting our obligations with respect to our
indebtedness.

As of December 31, 2014, we had approximately $2.7 billion of indebtedness on a consolidated basis, including
$650.0 million of 5.0% Senior Notes due 2021 (the 2021 Notes) and $650.0 million of 5.5% Senior Notes due
2024 (the 2024 Notes), $550.0 million of 6.625%/7.375% Senior PIK Toggle Notes due 2020 (senior PIK toggle
notes) and $864.1 million of senior secured term loans. We had no outstanding borrowings under our revolving
credit facility and approximately $321.7 million in borrowing capacity available under our revolving credit
facility, reflecting a borrowing base of $345.3 million and $23.6 million of outstanding letters of credit. Our
ability to borrow under our revolving credit facility depends, in part, on inventory, accounts receivable and other
assets that fluctuate from time to time and may further depend on lenders’ discretionary ability to impose
reserves and availability blocks and to recharacterize assets that might otherwise incrementally decrease
borrowing availability.

Our substantial indebtedness could have important consequences. For example, it could:

•

limit our ability to obtain additional financing for working capital, capital expenditures, acquisitions,
general corporate purposes or other purposes;

require us to dedicate a substantial portion of our annual cash flow for the next several years to the
payment of interest on our indebtedness;

expose us to the risk of increased interest rates as, over the term of our debt, the interest cost on a
significant portion of our indebtedness is subject to changes in interest rates;

place us at a competitive disadvantage compared to certain of our competitors who have less debt;

hinder our ability to adjust rapidly to changing market conditions;

limit our ability to secure adequate bank financing in the future with reasonable terms and conditions;
and

increase our vulnerability to and limit our flexibility in planning for, or reacting to, a potential
downturn in general economic conditions or in one or more of our businesses.

In addition, the indentures governing the senior PIK toggle notes, the 2021 Notes and the 2024 Notes (together,
the Notes Indentures) and the agreements governing our senior secured credit facilities contain affirmative and
negative covenants that limit our ability to engage in activities that may be in our long-term best interests. Our
failure to comply with those covenants could result in an event of default which, if not cured or waived, could
result in the acceleration of all of our debts. See “Risk Factors – Risks Related to the Acquisition”.

Despite current indebtedness levels and restrictive covenants, we and our subsidiaries may incur additional
indebtedness or we may pay dividends in the future. This could further exacerbate the risks associated with
our substantial financial leverage.

We and our subsidiaries may incur significant additional indebtedness in the future under the agreements
governing our indebtedness. Although the Notes Indentures and the credit agreements governing our senior
secured credit facilities contain restrictions on the incurrence of additional indebtedness, these restrictions are
subject to a number of thresholds, qualifications and exceptions, and the additional indebtedness incurred in
compliance with these restrictions could be substantial. Additionally, these restrictions permit us to incur
obligations that, although preferential to our common stock in terms of payment, do not constitute indebtedness.
As of December 31, 2014, we had approximately $321.7 million of additional borrowing capacity under our
revolving credit facility.

In addition, if new debt is added to our and/or our subsidiaries’ debt levels, the related risks that we now face as a
result of our leverage would intensify.

To service our indebtedness, we will require a significant amount of cash and our ability to generate cash
depends on many factors beyond our control.

Our operations are conducted through our subsidiaries and our ability to make cash payments on our
indebtedness and to fund planned capital expenditures will depend on the earnings and the distribution of funds
from our subsidiaries. However, none of our subsidiaries is obligated to make funds available to us for payment
on our indebtedness. Further, the terms of the instruments governing our indebtedness significantly restrict
certain of our subsidiaries from paying dividends and otherwise transferring assets to us. Our ability to make cash
payments on and to refinance our indebtedness, to fund planned capital expenditures and to meet other cash
requirements will depend on our financial condition and operating performance, which are subject to prevailing
economic and competitive conditions and to financial, business, legislative, regulatory and other factors beyond
our control. We might not be able to maintain a level of cash flows from operating activities sufficient to permit
us to pay the principal, premium, if any, and interest on our indebtedness.

Our business may not generate sufficient cash flow from operations and future borrowings may not be available
under our senior secured credit facilities in an amount sufficient to enable us to pay our indebtedness, or to fund
our other liquidity needs. In such circumstances, we may need to refinance all or a portion of our indebtedness,
including the senior PIK toggle notes, the 2021 Notes and the 2024 Notes, on or before maturity. We may not be
able to refinance any of our indebtedness on commercially reasonable terms or at all. If we cannot service our
indebtedness, we may have to take actions such as selling assets, seeking additional equity or reducing or
delaying capital expenditures, strategic acquisitions, investments and alliances. Such actions, if necessary, may
not be effected on commercially reasonable terms or at all. Our indebtedness may restrict our ability to sell assets
and limit the use of the proceeds from such sales.

If we are unable to generate sufficient cash flow or are otherwise unable to obtain funds necessary to meet
required payments of principal, premium, if any, and interest on our indebtedness, or if we otherwise fail to
comply with the various covenants in the instruments governing our indebtedness, we could be in default under
the terms of the agreements governing such indebtedness. In the event of such default, the holders of such
indebtedness could elect to declare all the funds borrowed thereunder to be due and payable, together with
accrued and unpaid interest, the lenders under our revolving credit facility could elect to terminate their

commitments thereunder, cease making further loans and institute foreclosure proceedings against our assets, and
we could be forced into bankruptcy or liquidation. If our operating performance declines, we may in the future
need to obtain waivers from the required lenders under our senior secured credit facilities to avoid being in
default. If we breach our covenants under our senior secured credit facilities and seek a waiver, we may not be
able to obtain a waiver from the required lenders. If this occurs, we would be in default under our senior secured
credit facilities, the lenders could exercise their rights, as described above, and we could be forced into
bankruptcy or liquidation.

CommScope Holding Company, Inc. is a holding company with no operations of its own, and it depends on its
subsidiaries for cash to fund all of its operations and expenses, including to make future dividend payments, if
any.

Our operations are conducted almost entirely through our subsidiaries and our ability to generate cash to meet
our debt service obligations or to make future dividend payments, if any, is highly dependent on the earnings and
the receipt of funds from our subsidiaries via dividends or intercompany loans. We do not currently expect to
declare or pay dividends on our common stock for the foreseeable future; however, to the extent that we
determine in the future to pay dividends on our common stock, the Notes Indentures and the credit agreements
governing our senior secured credit facilities, significantly restrict the ability of our subsidiaries to pay dividends
or otherwise transfer assets to us. In addition, Delaware law may impose requirements that may restrict our
ability to pay dividends to holders of our common stock.

We are controlled by Carlyle, whose interests in our business may be different than yours.

As of December 31, 2014, Carlyle owned approximately 54% of our common stock and is able to control our
affairs in all cases. Pursuant to an amended and restated stockholders agreement, Carlyle has the right to
designate up to nine of our eleven directors and a majority of the Board of Directors has been designated by
Carlyle and is affiliated with Carlyle. As a result, Carlyle or its nominees to the Board of Directors have the
ability to control the appointment of our management, the entering into of mergers, sales of substantially all of
our assets and other extraordinary transactions and influence amendments to our certificate of incorporation. So
long as Carlyle continues to own a majority of our common stock, they will have the ability to control the vote in
any election of directors and will have the ability to prevent any transaction that requires stockholder approval
regardless of whether others believe the transaction is in our best interests. In any of these matters, the interests
of Carlyle may differ from or conflict with the interests of our other stockholders. Moreover, this concentration
of stock ownership may also adversely affect the trading price for our common stock to the extent investors
perceive disadvantages in owning stock of a company with a controlling stockholder or anticipate further sales of
shares by Carlyle.

In addition, Carlyle is in the business of making investments in companies and may, from time to time, acquire
interests in businesses that directly or indirectly compete with our business, as well as businesses that are
significant existing or potential customers.

Future sales of our common stock in the public market could lower our share price, and any additional capital
raised by us through the sale of equity or convertible debt securities may be dilutive and may adversely affect
us or the market price of our common stock.

We or Carlyle, may sell additional shares of common stock. We may also issue additional shares of common
stock or convertible debt securities to finance future acquisitions, including the TE Acquisition. We cannot
predict the size of future issuances of our common stock or the effect, if any, that future issuances and sales of
our common stock will have on the market price of our common stock. Sales of substantial amounts of our
common stock (including sales that may occur pursuant to Carlyle’s registration rights and shares that may be
issued in connection with an acquisition), or the perception that such sales could occur, may adversely affect the
market prices for our common stock. Future changes in the level of Carlyle ownership could, depending on the
timing of such changes, have an adverse effect on our ability to utilize various tax attributes.

We do not intend to pay dividends on our common stock and, consequently, the ability of investors to achieve a
return on their investment will depend on appreciation in the price of our common stock.

We do not intend to declare and pay dividends on our common stock for the foreseeable future. We currently
intend to invest our future earnings, if any, to reduce indebtedness and fund our growth. Therefore, common
stock investors are not likely to receive any dividends for the foreseeable future and the success of an investment
in shares of our common stock will depend upon any future appreciation in their value. There is no guarantee that
shares of our common stock will appreciate in value. However, the payment of future dividends will be at the
discretion of our Board of Directors and will depend on, among other things, our earnings, financial condition,
capital requirements, level of indebtedness, statutory and contractual restrictions applying to the payment of
dividends and other considerations that our Board of Directors deems relevant. The Notes Indentures and the
credit agreements governing our senior secured credit facilities also effectively limit our ability to pay dividends.
As a consequence of these limitations and restrictions, we may not be able to make, or may have to reduce or
eliminate, the payment of dividends on our common stock.

Provisions of our amended and restated certificate of incorporation and amended and restated bylaws and
Delaware law might discourage, delay or prevent a change of control of our company or changes in our
management and, as a result, depress the trading price of our common stock.

Our amended and restated certificate of incorporation and amended and restated bylaws contain provisions that
could discourage, delay or prevent a change in control of our company or changes in our management that the
stockholders of our company may deem advantageous. These provisions:

•

authorize 1,300,000,000 shares of common stock, which, to the extent unissued, could be issued
without stockholder approval by the Board of Directors to increase the number of outstanding shares
and to discourage a takeover attempt;

authorize the issuance, without stockholder approval, of blank check preferred stock that our Board of
Directors could issue to increase the number of outstanding shares and to discourage a takeover
attempt;

grant to the Board of Directors the sole power to set the number of directors and to fill any vacancy on
the Board of Directors;

limit the ability of stockholders to remove directors only “for cause” if Carlyle and its affiliates
collectively cease to own more than 50% of our common stock and require any such removal to be
approved by holders of at least three-quarters of the outstanding shares of common stock;

prohibit our stockholders from calling a special meeting of stockholders if Carlyle and its affiliates
collectively cease to own more than 50% of our common stock;

prohibit stockholder action by written consent, which requires all stockholder actions to be taken at a
meeting of our stockholders, if Carlyle and its affiliates collectively cease to own more than 50% of our
common stock;

provide that the Board of Directors is expressly authorized to adopt, or to alter or repeal our bylaws;
establish advance notice and certain information requirements for nominations for election to our
Board of Directors or for proposing matters that can be acted upon by stockholders at stockholder
meetings;

establish a classified Board of Directors, with three staggered terms; and

require the approval of holders of at least three-quarters of the outstanding shares of common stock to
amend the bylaws and certain provisions of the certificate of incorporation if Carlyle and its affiliates
collectively cease to own more than 50% of our common stock.

In addition, we opted out of Section 203 of the General Corporation Law of the State of Delaware (the DGCL),
which, subject to some exceptions, prohibits business combinations between a Delaware corporation and an

interested stockholder, which is generally defined as a stockholder who becomes a beneficial owner of 15% or
more of a Delaware corporation’s voting stock for a three-year period following the date that the stockholder
became an interested stockholder.

These anti-takeover defenses could discourage, delay or prevent a transaction involving a change in control of
our company and may prevent our stockholders from receiving the benefit from any premium to the market price
of our common stock offered by a bidder in a takeover context. Even in the absence of a takeover attempt, the
existence of these provisions may adversely affect the prevailing market price of our common stock if the
provisions are viewed as discouraging takeover attempts in the future. These provisions could also discourage
proxy contests and make it more difficult for you and other stockholders to elect directors of your choosing and
cause us to take corporate actions other than those you desire.

We are a “controlled company” within the meaning of the rules of Nasdaq and, as a result, qualify for, and
intend to continue to rely on, exemptions from certain corporate governance requirements. Our stockholders
do not have the same protections afforded to stockholders of companies that are subject to such requirements.

Carlyle continues to control a majority of the voting power of our outstanding common stock. As a result, we are
a “controlled company” within the meaning of the corporate governance standards of Nasdaq. Under these rules,
a company of which more than 50% of the voting power is held by an individual, group or another company is a
“controlled company” and may elect not to comply with certain corporate governance requirements, including:

•

the requirement that a majority of the Board of Directors consist of independent directors;

the requirement that we have a compensation committee that is composed entirely of independent
directors with a written charter addressing the committee’s purpose and responsibilities; and

the requirements that director nominees are selected, or recommended for selection by the Board of
Directors, either by (1) independent directors constituting a majority of the Board’s independent
directors in a vote in which only independent directors participate or (2) a nominations committee
comprised solely of independent directors, and that a formal written charter or board resolution, as
applicable, addressing the nominations process is adopted.

We intend to continue to utilize these exemptions for as long as we continue to qualify as a “controlled
company.” While exempt, we will not have a majority of independent directors and our nominating and
compensation committees will not consist entirely of independent directors and such committees will not be
subject to annual performance evaluations. Accordingly, our stockholders do not have the same protections
afforded to stockholders of companies that are subject to all of the corporate governance requirements of Nasdaq.

Risks Related to the Acquisition

The proposed acquisition of the Acquired Business may not be completed on a timely basis, on anticipated
terms, or at all, and there are uncertainties and risks to consummating the Acquisition.

As previously described, on January 27, 2015, we entered into a definitive agreement (the “Acquisition
Agreement”) with TE Connectivity Ltd. (“TE”), to purchase its Telecom, Enterprise and Wireless businesses,
including its managed connectivity business (the “Acquired Business”), for $3.0 billion in cash (such acquisition,
the “Acquisition”). The obligation of each party to consummate the Acquisition is subject to the satisfaction or
waiver, to the extent permitted under applicable law, of a number of conditions, many of which are not within
our control. These conditions include expiration or termination of the waiting period (and any extensions thereof)
applicable under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (the “HSR Act”), the receipt of all
required clearances, approvals or authorizations required by certain other specified foreign governmental
authorities under applicable antitrust laws and the absence of any order, judgment, injunction, law or other legal
restraint prohibiting the consummation of the Acquisition. Our obligation to consummate the Acquisition is also
subject the absence of a material adverse effect on the business, operations or condition of the Acquired

Business, and each party’s obligation to consummate the Acquisition is subject to certain additional closing
conditions, including (i) the accuracy of the other party’s representations and warranties contained in Acquisition
Agreement (subject to certain materiality qualifiers) and (ii) the other party’s compliance in all material respects
with its covenants and agreements contained in the Acquisition Agreement.

The failure to satisfy all of the required conditions could delay the completion of the Acquisition for a significant
period of time or prevent it from occurring. Any delay in completing the Acquisition could cause us not to realize
some or all of the benefits that we expect to achieve if the Acquisition is successfully completed within its
expected timeframe. Additionally, it is not certain that the conditions set forth in the Acquisition Agreement will
be met or waived, that the necessary approvals will be obtained, or that we will be able to successfully
consummate the Acquisition as provided for under the Acquisition Agreement, or at all.

We face risks and uncertainties due both to the pending Acquisition as well as the potential failure to
consummate the Acquisition, including:

•

if the Acquisition is not consummated, we will not realize any of the expected benefits of the
Acquisition;

failure to consummate the Acquisition could result in negative reactions from the financial markets or
in the investment community, including negative impacts on our stock price;

• we will remain liable for significant transaction costs, including legal, financial advisory, accounting

and other costs relating to the Acquisition even if it is not consummated;

•

if the Acquisition Agreement is terminated before we complete the Acquisition, under some
circumstances, including in the event we fail to obtain the required antitrust approvals or we are unable
to secure the financing necessary to consummate the Acquisition, we may have to pay a termination fee
to TE of $210 million in cash;

the pending Acquisition could have an adverse impact on our relationships with employees, customers
and suppliers, and prospective customers or other third parties may delay or decline entering into
agreements with us as a result of the announcement of the Acquisition; and

the attention of our management and employees may be diverted from day-to-day operations.

The occurrence of any of these events individually or in combination could have a material adverse effect on our
share price, business, cash flows, results of operations and financial position.

In order to complete the Acquisition, we must make certain governmental filings and obtain certain
governmental authorizations under applicable antitrust laws, and if such filings and authorizations are not
made or granted or are granted with conditions, or if governmental authorities otherwise seek to impose
conditions or to challenge the Acquisition, completion of the Acquisition may be jeopardized or the anticipated
benefits of the Acquisition could be reduced.

Although we and TE have agreed in the Acquisition Agreement to use our reasonable best efforts, subject to
certain limitations, to make certain governmental filings and obtain the required expiration or termination of the
waiting period or approvals under the HSR Act and multiple foreign antitrust laws, there can be no assurance that
the termination of the waiting period or receipt of approvals under the HSR Act and applicable foreign antitrust
laws will occur. There can also be no assurance that governmental authorities will not seek to challenge the
Acquisition or impose conditions, terms, obligations or restrictions and that such conditions, terms, obligations or
restrictions will not have the effect of delaying completion of the Acquisition or imposing additional material
costs on or materially limiting the revenues of our business and the Acquired Business following the Acquisition,
or otherwise adversely affecting our business and the Acquired Business after completion of the Acquisition;
provided, that, under the terms of the Acquisition Agreement, we are not required to take any action that would,
or would reasonably be expected to, impose (i) any material limitation on our ability effectively to acquire the

full rights of ownership of the assets of the Acquired Business, (ii) a material reduction in the reasonably
anticipated benefits (financial or otherwise) of the Acquisition or (iii) an impact that is materially adverse to the
assets, business, results of operation or condition (financial or otherwise) of our business or the Acquired
Business. In addition, in the event we fail to obtain the required antitrust approvals and the Acquisition
Agreement is terminated as a result thereof, we will be required to pay a termination fee to TE of $210 million in
cash. The occurrence of any of these events individually or in combination could have a material adverse effect
on our share price, business, cash flows, results of operations and financial position.

Integration of the Acquired Business into our business will be difficult, costly and time consuming and the
anticipated benefits and cost savings of the Acquisition may not be realized.

Even if the Acquisition is completed, our ability to realize the anticipated benefits of the Acquisition will depend,
to a large extent, on our ability to integrate the two businesses. The combination of two independent businesses is
a complex, costly and time-consuming process and there can be no assurance that we will be able to successfully
integrate the Acquired Business into our business, or if such integration is successfully accomplished, that such
integration will not be more costly or take longer than presently contemplated. If we cannot successfully
integrate and manage the Acquired Business within a reasonable time following the Acquisition, we may not be
able to realize the potential and anticipated benefits of the Acquisition, which could have a material adverse
effect on our share price, business, cash flows, results of operations and financial position.

Our ability to realize the expected synergies and benefits of the Acquisition is subject to a number of risks and
uncertainties, many of which are outside of our control. These risks and uncertainties could adversely impact our
business, results of operation and financial condition and include, among other things:

•

our ability to complete the timely integration of operations and systems, organizations, standards,
controls, procedures, policies and technologies, as well as the harmonization of differences in the
business cultures of our company and the Acquired Business;

our ability to minimize the diversion of management attention from ongoing business concerns of both
our business and the Acquired Business during the process of integrating our company and the
Acquired Business;

our ability to retain the service of senior management and other key personnel of both our business and
the Acquired Business;

our ability to preserve customer, supplier and other important relationships of our company and the
Acquired Business and resolve potential conflicts that may arise;

the risk that certain customers and suppliers of the Acquired Business will opt to discontinue business
with the Acquired Business or exercise their right to terminate their agreements as a result of the
Acquisition pursuant to change of control provisions in their agreements;

the risk that the Acquired Business may have liabilities that we failed to or were unable to discover in
the course of performing due diligence;

the risk that integrating the Acquired Business into our business may be more difficult, costly or time
consuming than anticipated;

difficulties in achieving anticipated cost savings, synergies, business opportunities and growth
prospects from the combination;

difficulties in managing the expanded operations of a significantly larger and more complex combined
business; and

the risk that regulatory agencies will require that we dispose of material aspects of our business or the
Acquired Business as a condition to the consummation of the Acquisition.

We may encounter additional integration-related costs, may fail to realize all of the benefits anticipated in the
acquisition or be subject to other factors that adversely affect preliminary estimates. In addition, even if the

operations of the Acquired Business are integrated successfully, the full benefits of the Acquisition may not be
realized, including the synergies, cost savings or sales or growth opportunities that are expected. The occurrence
of any of these events individually or in combination could have a material adverse effect on our share price,
business and cash flows, results of operations and financial position. The Acquisition may not be accretive to
earnings or other key financial metrics, which may also negatively affect the price of our common stock
following consummation of the Acquisition.

Following the closing of the Acquisition, we expect that we will be relying on TE to provide a wide range of
services required to operate the Acquired Business under Transition Services Agreements (TSAs) for an
extended period.

Due to the high level of integration of the Acquired Business with the remainder of TE’s business, it will be
highly complex and time consuming to separate the Acquired Business in order to effectively begin to integrate
them with our business. As a result, we will be dependent on TE to continue to perform elements of such critical
functions as information technology, human resources, finance, logistics and operations for parts or all of the
Acquired Business under TSAs. It may be up to several years before we are able to assume all of these functions
and discontinue the TSAs.

While operating under these TSAs, we are exposed to various risks, including the following:

•

costs of operating the Acquired Business may be greater than we anticipated;

• we may need to operate under the TSAs for longer than expected;

• we may not get information necessary to realize the anticipated synergies while we are operating under

the TSAs; and

• we may not be able to maintain an effective system of internal controls over financial reporting while

operating under the TSAs.

We may be unable to realize the expected growth opportunities and cost savings from the Acquisition.

We currently expect to realize annual cost savings of approximately $150 million to be fully achieved within
three years of the closing of the Acquisition. The anticipated cost savings are based upon assumptions about our
ability to implement integration measures in a timely fashion and within certain cost parameters. Our ability to
achieve the planned cost synergies is dependent upon a significant number of factors, many of which are beyond
our control. For example, we may be unable to eliminate duplicative costs in a timely fashion or at all. Our
inability to realize anticipated cost savings and revenue enhancements from the Acquisition could have a material
adverse effect on our share price, business, cash flows, results of operations and financial position.

We currently expect to incur significant additional indebtedness to finance the Acquisition, and such
increased debt levels could adversely affect our business, cash flow and results of operations.

We expect to incur up to $3.0 billion of indebtedness in connection with the Acquisition. As a result of this
indebtedness, our interest payment obligations will increase substantially. The degree to which we are leveraged
could have adverse effects on our business, including the following:

• making it difficult for us to satisfy our obligations under our credit facility and contractual and

commercial commitments;

•

requiring us to dedicate a substantial portion of our cash flow from operations to payments on our
indebtedness, thereby reducing the availability of our cash flow to fund working capital, capital
expenditures and other general corporate purposes;

limiting our flexibility in planning for, or reacting to, changes in our business and the industries in
which we operate;

•

limiting our ability to make additional strategic acquisitions or exploit business opportunities;

placing us at a competitive disadvantage compared to our competitors that have less debt;

limiting our ability to refinance indebtedness, or increasing the associated costs;

• making us more vulnerable to economic downturns and adverse developments in the business;

•

limiting our ability to borrow additional funds; and

decreasing our ability to compete effectively or operate successfully under adverse economic and
industry conditions.

If we incur additional debt in the future, these risks will intensify. Our ability to meet our debt service obligations
will depend upon our future performance, which will be subject to the financial, business and other factors
affecting our operations, many of which are beyond our control.

In addition, the agreements that will govern the indebtedness to be incurred or assumed in connection with our
acquisition of the Acquired Business are expected to contain various affirmative and negative covenants that
may, subject to certain exceptions, restrict our ability to, among other things, engage in certain business
transactions or incur additional indebtedness.

Additionally, pursuant to the terms of the financing commitment, if the Acquisition is not consummated within
six months of the date of the Acquisition Agreement we will begin to incur significant additional expenses either
in the form of ticking fees or in interest (if we are required to incur the indebtedness contemplated by the
financing commitment prior to the consummation of the Acquisition) that in each case will accrue until the
Acquisition is successfully consummated or the Acquisition Agreement is terminated.

Although we have a financing commitment from lenders for this indebtedness, the commitment is subject to
certain conditions, and we cannot assure that those conditions will be satisfied. If we fail to secure the financing
necessary to consummate the Acquisition and the Acquisition Agreement is terminated as a result thereof, we
will be required to pay a termination fee to TE of $210 million in cash.

ITEM 1B. UNRESOLVED STAFF COMMENTS

None.

ITEM 2.

PROPERTIES

Our facilities are used primarily for manufacturing, distribution and administration. Facilities primarily used for
manufacturing may also be used for distribution, engineering, research and development, storage, administration,
sales and customer service. Facilities primarily used for administration may also be used for research and
development, sales and customer service. As of December 31, 2014, our principal facilities, grouped according to
the facility’s primary use, were as follows:

Location

Administrative facilities:
Hickory, NC (1)
Joliet, IL (2)
Richardson, TX (1)
Richardson, TX

Manufacturing and distribution facilities:

Catawba, NC (1)
Claremont, NC (1)
Suzhou, China (3)
Suzhou, China (3)
Statesville, NC (1)(4)
Reynosa, Mexico
Goa, India (3)
Brno, Czech Republic
Campbellfield, Australia
Lochgelly, United Kingdom
Bray, Ireland
Mission, TX
McCarran, NV
Buchdorf, Germany
Vacant facilities and properties:
Orland Park, IL (1)(5)
Newton, NC (1)(6)
Sorocaba, Brazil (1)(7)

Approximate
square feet

Principal segments

Owned or leased

Corporate headquarters
84,000
690,000
Corporate
100,000 Wireless
75,000

Enterprise

Broadband
Enterprise

Broadband
Broadband

1,000,000
583,000
414,000 Wireless
363,000
310,000
279,000 Wireless
236,000 Wireless
150,000 Wireless
133,000 Wireless
132,000 Wireless and Broadband
Enterprise
130,000
121,000 Wireless
120,000
109,000 Wireless

Broadband

—

Wireless
455,000 Wireless
152,000 Wireless

Owned
Leased
Owned
Leased

Owned
Owned
Owned
Owned
Owned
Owned
Owned
Leased
Leased
Owned
Owned
Leased
Leased
Owned

Owned
Owned
Owned

(1) Our interest in each of these properties is encumbered by a mortgage or deed of trust lien securing our
senior secured credit facilities (see Note 6 in the Notes to Consolidated Financial Statements included
elsewhere in this Annual Report on Form 10-K).

(2) The former manufacturing portion of the Joliet facility is vacant and is currently being marketed for

sublease.

(3) The buildings in these facilities are owned while the land is held under long-term lease agreements.
(4) The Statesville facility is expected to be vacated during 2015 and is currently being marketed for sale.
(5) The building at the Orland Park facility has been demolished and cleared and the 73 acre parcel is vacant.
(6) The Newton facility is currently being marketed for sale.
(7) The Sorocaba, Brazil facility is currently being marketed for sale.

We believe that our facilities and equipment generally are well maintained, in good condition and suitable for our
purposes and adequate for our present operations. While we currently have excess manufacturing capacity in
certain of our facilities, utilization is subject to change based on customer demand. We can give no assurances
that we will not have excess manufacturing capacity or encounter capacity constraints over the long term.

ITEM 3.

LEGAL PROCEEDINGS

We are either a plaintiff or a defendant in certain pending legal matters in the normal course of business.
Management believes none of these legal matters will have a material adverse effect on our business or financial
condition upon their final disposition.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. MARKET FOR THE REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER

MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Stock Price and Dividends

Our common stock is traded on the Nasdaq Global Select Market under the symbol COMM. The following table
sets forth the high and low sale prices as reported by Nasdaq for the periods indicated:

2013
First Quarter
Second Quarter
Third Quarter
Fourth Quarter (beginning October 25, 2013)
2014
First Quarter
Second Quarter
Third Quarter
Fourth Quarter

Common Stock
Price Range

High

Low

N/A
N/A
N/A
$19.02

$25.89
$27.96
$26.89
$24.43

N/A
N/A
N/A
$14.72

$16.86
$22.66
$21.79
$19.68

As of February 9, 2015, the approximate number of registered stockholders of record of our common stock was
25.

Although we have paid cash dividends from time to time in the past while we were a privately-held company, we
do not currently intend to pay dividends in the foreseeable future, but intend to reinvest earnings in our business.
The declaration and payment of any dividends in the future will be determined by our Board of Directors, in its
discretion, and will depend on a number of factors, including our earnings, capital requirements, overall financial
condition and contractual restrictions, including covenants under our senior notes and senior secured credit
facilities, which may limit our ability to pay dividends.

Stock Performance Graph

The following graph compares cumulative total return on $100 invested on October 25, 2013 in each of
CommScope’s Common Stock, the Standard & Poor’s 500 Stock Index (S&P 500 Index) and the Standard &
Poor’s 1500 Communications Equipment Index (S&P 1500 Communications Equipment). The return of the
Standard & Poor’s indices is calculated assuming reinvestment of dividends.

Comparison of Cumulative Total Return

$170

$160

$150

$140

$130

$120

$110

$100

$90

10/25/13

12/31/13

3/31/14

6/30/14

9/30/14

12/31/14

CommScope Holding Company, Inc.

S&P 500 Index

S&P 1500 Communications Equipment Index

Company / Index

CommScope Holding Company, Inc.
S&P 500 Index
S&P 1500 Communications Equipment

Base
Period
10/25/13
100
100
100

INDEXED RETURNS Period Ending

12/31/13

3/31/14

6/30/14

9/30/14

12/31/14

126.28
105.49
105.56

164.64
107.39
109.85

154.30
113.01
115.22

159.51
114.29
112.51

152.30
119.93
119.17

PART II

ITEM 6. SELECTED FINANCIAL DATA

The following table presents our historical selected financial data as of the dates and for the periods indicated.
The data for each of the years presented are derived from our audited consolidated financial statements. The
information set forth below should be read in conjunction with our audited consolidated financial statements and
notes thereto and Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of
Operations” of this Annual Report.

Five-Year Summary of Selected Financial Data
(In thousands, except per share amounts)

Year Ended December 31,

2014

2013

2012

2011 (1)

2010

Results of Operations:
Net sales
Gross profit
Restructuring costs, net
Impairments of long-lived assets
Operating income (loss)
Net interest expense
Net income (loss)
Earnings Per Share Information:
Weighted average number of shares

outstanding:
Basic
Diluted
Earnings per share:

Basic
Diluted

Other Information:
Net cash provided by operating activities
Depreciation and amortization
Additions to property, plant and equipment
Cash dividends per share

$3,829,614 $3,480,117 $3,321,885 $3,275,462
830,352
1,397,269
18,724
19,267
126,057
12,096
(188,432)
577,449
(259,998)
(173,981)
(392,362)
236,772

1,200,940
22,104
45,529
329,714
(205,492)
19,396

1,060,681
22,993
40,907
238,238
(185,557)
5,353

$3,188,916
937,209
59,647
—

224,933
(97,904)
44,099

186,905
191,450

160,641
164,013

154,708
155,517

$
$

1.27 $
1.24 $

0.12 $
0.12 $

0.03
0.03

(3)
(3)

$ 289,418 $ 237,701 $ 286,135 $ 130,995
297,005
39,533
—

259,504
36,935

256,616
36,780

262,279
27,957

3.47 $

1.29 $

— $

$ 226,287
187,207
35,399
—

2014

2013

2012

2011

2010

As of December 31,

Balance Sheet Data (2):
Cash, cash equivalents and short-term

investments

Goodwill and intangible assets
Property, plant and equipment, net
Total assets
Working capital
Long-term debt, including current maturities
Stockholders’ equity

$ 729,321
2,712,814
289,371
4,955,885
1,351,805
2,707,725
1,307,619

$ 346,320
2,872,698
310,143
4,734,055
860,042
2,514,552
1,088,016

$ 264,375
3,052,615
355,212
4,793,264
737,638
2,470,770
1,182,282

$ 317,102
3,267,497
407,557
5,153,189
853,625
2,563,004
1,365,089

$ 706,066
1,617,878
343,318
3,875,452
1,256,616
1,346,598
1,669,930

(1) The period of January 1 – January 14, 2011(prior to the acquisition of CommScope, Inc. by Carlyle) and the

period of January 15 – December 31, 2011 (subsequent to the acquisition of CommScope, Inc. by Carlyle)
have been combined for presentation of 2011 results and the combined 2011 amounts are unaudited.
(2) Balance Sheet Data as of December 31, 2010 does not reflect the application of acquisition accounting and

new debt incurred as a result of the acquisition of CommScope, Inc. by Carlyle in 2011.

(3) Excluded from presentation due to lack of comparability of shares outstanding.

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS

The following discussion and analysis of our financial condition and results of operations should be read in
conjunction with our consolidated financial statements and related notes appearing elsewhere in this Annual
Report on Form 10-K. This discussion contains forward-looking statements based upon current expectations that
involve risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-
looking statements as a result of various factors, including those set forth under “Risk Factors” included in
Part I, Item 1A or in other parts of this Annual Report on Form 10-K.

OVERVIEW

We are a leading global provider of connectivity and essential infrastructure solutions for wireless, business
enterprise and residential broadband networks. We help our customers solve communications challenges by
providing critical radio frequency (RF) solutions, intelligent connectivity and cabling platforms, data center and
intelligent building infrastructure and broadband access solutions.

We serve our customers through three operating segments: Wireless, Enterprise and Broadband. We believe that
we are the only company in the world with a significant leadership position in connectivity and essential
infrastructure solutions for the wireless, enterprise and residential broadband networks. Through our Andrew
brand, we are the global leader in providing merchant RF wireless network connectivity solutions and small cell
distributed antenna systems (DAS) solutions. Through our SYSTIMAX and Uniprise brands, we are the global
leader in enterprise connectivity solutions, delivering a complete end-to-end physical layer solution, including
connectivity and cables, enclosures, data center and network intelligence software, in-building wireless,
advanced LED lighting systems management and network design services for enterprise applications and data
centers. We are also a premier manufacturer of coaxial and fiber optic cable for residential broadband networks
globally.

During the periods presented below, the primary sources of revenue for our Wireless segment were (i) product
sales of primarily passive transmission devices for the wireless infrastructure market including base station and
microwave antennas, hybrid fiber-feeder and power cables, coaxial cable connectors and equipment primarily
used by wireless operators, (ii) product sales of active electronic devices and services including power amplifiers,
filters and tower-mounted amplifiers and (iii) engineering and consulting services and products like small cell
DAS that are used to extend and enhance the coverage of wireless networks in areas where signals are difficult to
send or receive such as commercial buildings, urban areas, stadiums and transportation systems. Demand for
Wireless segment products depends primarily on capital spending by wireless operators to expand their
distribution networks or to increase the capacity of their networks.

To expand our Wireless segment offerings, we acquired two businesses of United Kingdom-based Alifabs Group
(Alifabs) during 2014 for $48.8 million ($46.7 million, net of cash acquired). Alifabs designs and supplies metro
cell enclosures, monopoles, smaller streetworks towers and tower solutions for the United Kingdom
telecommunications, utility and energy markets.

The primary source of revenue for our Enterprise segment was sales of optical fiber and twisted pair structured
cabling solutions and intelligent infrastructure products and software to large, multinational companies, primarily
through a global network of distributors, system integrators and value-added resellers. Demand for Enterprise
segment products depends primarily on information technology spending by enterprises, such as communications
projects in new data centers, buildings or campuses, building expansions or upgrades of network systems within
buildings, campuses or data centers.

During 2013, we acquired two businesses within our Enterprise segment: iTRACS Corporation (iTRACS), a
provider of enterprise-class data center infrastructure management (DCIM) solutions, for $29.3 million, and
Redwood Systems, Inc. (Redwood), a provider of advanced LED lighting control and high-density sensor

solutions for data centers and buildings, for $22.2 million. The purchase price for Redwood consisted of an initial
payment of $9.8 million and contingent consideration with an estimated fair value of $12.4 million as of the
acquisition date. The contingent consideration is payable in 2015 and could range from zero to $37.25 million.
The amount to be paid for contingent consideration will be based on achievement of sales targets for Redwood
products with the maximum level of payout reached with $55.0 million of sales by July 31, 2015. During 2014,
the estimated fair value of the liability for contingent consideration was reduced to zero.

The primary source of revenue for our Broadband segment was product sales to cable television system
operators, including cable and communications products that support the multichannel video, voice and high-
speed data services of multi-system operators (MSOs) and coaxial and fiber optic cable for residential broadband
networks. Demand for our Broadband segment products depends primarily on capital spending by cable
television system operators for maintaining, constructing and rebuilding or upgrading their systems.

Our future financial condition and performance will be largely dependent upon: global spending by wireless
operators; global spending by business enterprises on information technology; investment by cable operators and
communications companies in the video and communications infrastructure; overall global business conditions;
and our ability to manage costs successfully among our global operations. We have experienced significant
increases and greater volatility in raw material prices during the past several years as a result of increased global
demand, supply disruptions and other factors. We attempt to mitigate the risk of increases in raw material price
volatility through effective requirements planning, working closely with key suppliers to obtain the best possible
pricing and delivery terms and implementing price increases. Delays in implementing price increases, failure to
achieve market acceptance of price increases, or price reductions in response to a rapid decline in raw material
costs could have a material adverse impact on the results of our operations. Our profitability is also affected by
the mix and volume of sales among our various product groups and between domestic and international
customers and competitive pricing pressures.

In January 2015, we announced that we agreed to acquire TE Connectivity’s Telecom, Enterprise and Wireless
business in an all-cash transaction valued at approximately $3.0 billion. This business provides fiber optic
connectivity for wireline and wireless networks and generated annual revenues of approximately $1.9 billion in
its fiscal year ended September 26, 2014. The transaction is expected to accelerate our strategy to drive profitable
growth by entering into attractive adjacent markets and to broaden our position as a leading communications
infrastructure provider. In addition, we will have greater geographic and business diversity following the
completion of the transaction. The acquisition is expected to be financed using a combination of cash on hand
and up to $3.0 billion of additional debt. The transaction is expected to close by the end of 2015, subject to
consummation of contemplated financing, regulatory approvals and other customary closing conditions.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

Our consolidated financial statements have been prepared in conformity with U.S. GAAP. The preparation of
these financial statements requires management to make estimates and assumptions that affect the amounts
reported in the financial statements and accompanying notes. These estimates and their underlying assumptions
form the basis for making judgments about the carrying values of assets and liabilities that are not readily
apparent from other objective sources. Management bases its estimates on historical experience and on
assumptions that are believed to be reasonable under the circumstances and revises its estimates, as appropriate,
when changes in events or circumstances indicate that revisions may be necessary.

The following critical accounting policies and estimates reflected in our financial statements are based on
management’s knowledge of and experience with past and current events and on management’s assumptions
about future events. While we have generally not experienced significant deviations from our critical estimates in
the past, it is reasonably possible that these estimates may ultimately differ materially from actual results. See
Note 2 in the Notes to the Consolidated Financial Statements included elsewhere in this Annual Report on Form
10-K for a description of all of our significant accounting policies.

Revenue Recognition

We recognize revenue when persuasive evidence of an arrangement exists, delivery has occurred or service has
been rendered, the selling price is fixed or determinable and collectability is reasonably assured. The majority of
our revenue comes from product sales. Revenue from product sales is recognized when the risks and rewards of
ownership have passed to the customer and revenue is measurable. Revenue is not recognized related to products
sold to contract manufacturers that the Company anticipates repurchasing in order to complete the sale to the
ultimate customer.

Revenue for certain of the Company’s products is derived from multiple-element contracts. The value of the
revenue elements within these contracts is allocated based on the relative selling price of each element. The
relative selling price is determined using vendor-specific objective evidence of selling price or other third party
evidence of selling price, if available. If these forms of evidence are unavailable, revenue is allocated among
elements based on management’s best estimate of the stand-alone selling price of each element.

Certain revenue arrangements are for the sale of software and services. Revenue for software products is
recognized based on the timing of customer acceptance of the specific revenue elements. The fair value of each
revenue element is determined based on vendor-specific objective evidence of fair value determined by the
stand-alone pricing of each element. These contracts typically contain post-contract support (PCS) services
which are sold both as part of a bundled product offering and as a separate contract. Revenue for PCS services is
recognized ratably over the term of the PCS contract. Other service revenue is typically recognized once the
service is performed or over the period of time covered by the arrangement.

We record reductions to revenue for anticipated sales returns as well as customer programs and incentive
offerings, such as discounts, allowances, rebates and distributor price protection programs. These estimates are
based on contract terms, historical experience, inventory levels in the distributor channel and other factors.

Management generally believes it has sufficient historical experience to allow for reasonable and reliable
estimation of these reductions to revenue. However, deteriorating market conditions could result in increased
sales returns and allowances and potential distributor price protection incentives, resulting in future reductions to
revenue. If management does not have sufficient historical experience to make a reasonable estimation of these
reductions to revenue, recognition of the revenue is deferred until management believes there is a sufficient basis
to recognize such revenue.

Inventory Reserves

We maintain reserves to reduce the value of inventory based on the lower of cost or market principle, including
allowances for excess and obsolete inventory. These reserves are based on management’s assumptions about and
analysis of relevant factors including current levels of orders and backlog, forecasted demand, market conditions
and new products or innovations that diminish the value of existing inventories. If actual market conditions
deteriorate from those anticipated by management, additional allowances for excess and obsolete inventory could
be required.

Product Warranty Reserves

We recognize a liability for the estimated claims that may be paid under our customer warranty agreements to
remedy potential deficiencies of quality or performance of our products. The product warranties extend over
periods ranging from one to twenty-five years from the date of sale, depending upon the product subject to the
warranty. We record a provision for estimated future warranty claims based upon the historical relationship of
warranty claims to sales and specifically identified warranty issues. We base our estimates on historical
experience and on assumptions that are believed to be reasonable under the circumstances and revise our
estimates, as appropriate, when events or changes in circumstances indicate that revisions may be necessary.

Although these estimates are based on management’s knowledge of and experience with past and current events
and on management’s assumptions about future events, it is reasonably possible that they may ultimately differ
materially from actual results, including in the case of a significant product failure.

Tax Valuation Allowances, Liabilities for Unrecognized Tax Benefits and Other Tax Reserves

We establish an income tax valuation allowance when available evidence indicates that it is more likely than not
that all or a portion of a deferred tax asset will not be realized. In assessing the need for a valuation allowance,
we consider the amounts, character, source and timing of expected future deductions or carryforwards as well as
sources of taxable income and tax planning strategies that may enable utilization. We maintain an existing
valuation allowance until sufficient positive evidence exists to support its reversal. Changes in the amount or
timing of expected future deductions or taxable income may have a material impact on the level of income tax
valuation allowances. If we determine that we will not be able to realize all or part of a deferred tax asset in the
future, an increase to an income tax valuation allowance would be charged to earnings in the period such
determination was made.

We recognize income tax benefits related to particular tax positions only when it is considered more likely than
not that the tax position will be sustained if examined on its technical merits by tax authorities. The amount of
benefit recognized is the largest amount of tax benefit that is evaluated to be greater than 50% likely to be
realized. Considerable judgment is required to evaluate the technical merits of various positions and to evaluate
the likely amount of benefit to be realized. Lapses in statutes of limitations, developments in tax laws, regulations
and interpretations, and changes in assessments of the likely outcome of uncertain tax positions could have a
material impact on the overall tax provision.

We establish deferred tax liabilities for the estimated tax cost associated with foreign earnings that we do not
consider permanently reinvested. These liabilities are subject to adjustment if we determine that foreign earnings
previously considered to be permanently reinvested should no longer be so considered.

We also establish allowances related to value added and similar tax recoverables when it is considered probable
that those assets are not recoverable. Changes in the probability of recovery or in the estimates of the amount
recoverable are recognized in the period such determination is made and may be material to earnings.

Asset Impairment Reviews

Impairment Reviews of Goodwill

We test goodwill for impairment annually as of October 1 and on an interim basis when events occur or
circumstances indicate the carrying value may no longer be recoverable. Goodwill is evaluated at the reporting
unit level, which may be the same as a reportable segment or a level below a reportable segment. Step one of the
goodwill impairment test is a comparison of the carrying value of a reporting unit to its estimated fair value. We
estimate the fair value of a reporting unit through the use of a discounted cash flow (DCF) valuation model. The
significant assumptions in the DCF model are the annual revenue growth rate, the annual operating income
margin and the discount rate used to determine the present value of the cash flow projections. Among other
inputs, the annual revenue growth rate and operating income margin are determined by management using
historical performance trends, industry data, insight derived from customers, relevant changes in the reporting
unit’s underlying business and other market trends that may affect the reporting unit. The discount rate is based
on the estimated weighted average cost of capital as of the test date of market participants in the industry in
which the reporting unit operates. The assumptions used in the DCF model are subject to significant judgment
and uncertainty. Changes in projected revenue growth rates, projected operating income margins or estimated
discount rates due to uncertain market conditions, loss of one or more key customers, changes in technology, or
other factors, could result in one or more of our reporting units with a significant amount of goodwill failing step
one of the goodwill impairment test in the future. It is possible that future impairment reviews may indicate
additional impairments of goodwill, which could be material to our results of operations and financial position.
Our historical or projected revenues or cash flows may not be indicative of actual future results.

2014 Interim Goodwill Analysis

During 2014, the Microwave Antenna Group (Microwave) reporting unit in the Wireless segment experienced
lower than expected levels of sales and operating income. Management considered these results and the longer
term effect of market conditions on the continued operations of the business and determined that an indicator of
possible impairment existed. A step one goodwill impairment test was performed using a DCF valuation model.
Based on the estimated fair values generated by the DCF model, the Microwave reporting unit did not pass step
one of the goodwill impairment test. A step two analysis was completed and a $4.9 million impairment charge
was recorded. The goodwill impairment charge resulted primarily from lower projected operating results than
those assumed during the 2013 annual impairment test. The weighted average discount rate used in the interim
impairment test for the Microwave reporting unit was 11.0% compared to 11.5% that was used in the 2013
annual goodwill impairment test.

2014 Annual Goodwill Analysis

The annual test of goodwill was performed for each of the reporting units with goodwill balances as of
October 1, 2014. The test was performed using a DCF valuation model. The weighted average discount rates
used in the 2014 annual test were 11.4% for the Wireless reporting units and 10.5% for both the Enterprise and
Broadband reporting units. These discount rates were slightly lower than those used in the 2013 annual goodwill
impairment test. Based on the estimated fair values generated by our DCF models, no reporting units failed step
one of the annual goodwill impairment test.

The goodwill balance by reporting unit as of December 31, 2014 and a summary of the excess of estimated fair
value over the carrying value of the reporting unit as a percent of the carrying value as of the annual impairment
test date is as follows:

Reportable
Segment

Wireless
Wireless
Wireless
Wireless
Enterprise
Broadband

Total

Reporting Unit

Cable Products
Base Station Antennas
Microwave Antenna Group
Distributed Coverage and Capacity Solutions
Enterprise
Broadband

Goodwill
(in millions)

Estimated Fair Value
in Excess of Carrying
Value

$ 294.0
166.4
126.2
161.4
653.8
50.1

$1,451.9

16%
203
3
205
73
16

Definite-Lived Intangible Assets and Other Long-Lived Assets

Management reviews definite-lived intangible assets, investments and other long-lived assets for impairment
when events or changes in circumstances indicate that their carrying values may not be fully recoverable. This
analysis differs from our goodwill impairment analysis in that an intangible or other long-lived asset impairment
is only deemed to have occurred if the sum of the forecasted undiscounted future net cash flows related to the
assets being evaluated is less than the carrying value of the assets. If the forecasted net cash flows are less than
the carrying value, then the asset is written down to its estimated fair value. Changes in the estimates of
forecasted net cash flows may cause additional asset impairments, which could result in charges that are material
to our results of operations. The net carrying value of our definite-lived intangible assets was $1.3 billion as of
December 31, 2014.

During 2014, as a result of revisions to the business plan for a particular product line, we determined that certain
intangible assets in the Broadband segment were no longer recoverable and a $7.2 million impairment charge
was recorded.

RESULTS OF OPERATIONS

Comparison of results of operations for the year ended December 31, 2014 with the year ended December 31,
2013

Year Ended December 31,

2014

2013

Amount

% of Net
Sales

Amount

% of Net
Sales

Dollar
Change

%
Change

Net sales
Gross profit
Operating income
Non-GAAP adjusted operating income (1)
Net income
Diluted earnings per share

$3,829.6
1,397.3
577.4
808.4
236.8
1.24

(1) See “Reconciliation of Non-GAAP Measures”.

Net sales

(dollars in millions, except per share amounts)
100.0% $349.5
196.4
34.5
247.7
9.5
188.3
17.8
217.4
0.6

100.0% $3,480.1
1,200.9
36.5
329.7
15.1
620.1
21.1
19.4
6.2
0.12

10.0%
16.4
75.1
30.4
1,120.6

Net sales

Domestic net sales
International net sales

Year Ended
December 31,

Change

2014

2013

$3,829.6
2,107.6
1,722.0

(dollars in millions)
$3,480.1
1,903.0
1,577.1

$349.5
204.6
144.9

10.0%
10.8
9.2

Net sales. All of our segments reported higher net sales for 2014 compared to 2013. The increase was primarily
attributable to higher sales to domestic wireless operators in the Wireless segment as they continued to expand
4G coverage and capacity. In addition to the growth in the U.S., net sales were higher in the Asia Pacific (APAC)
region and Europe, Middle East and Africa (EMEA) regions partially offset by lower sales in the Central and
Latin America (CALA) for 2014 compared with 2013. Net sales to customers located outside of the U.S.
comprised 45% of total net sales for both 2014 and 2013. Foreign exchange rates negatively affected net sales by
less than 1% for 2014 as compared to 2013. For further details by segment, see the section titled “Segment
Results” below.

Gross profit, SG&A expense and R&D expense

Gross profit

Gross margin percent

SG&A expense

As a percent of sales

R&D expense

As a percent of sales

Year ended December 31,

Change

2014

2013

(dollars in millions)

$1,397.3

$1,200.9

$196.4

16.4%

36.5%
484.9
12.7%
125.3

3.3%

34.5%
502.3
14.4%
126.4

3.6%

(17.4)

(3.5)

(1.1)

(0.9)

Gross profit (net sales less cost of sales). Gross profit and gross profit margin increased for 2014 compared to
2013 primarily due to higher sales volumes, a favorable change in the mix of products sold and benefits from
cost savings initiatives. While all of our segments recorded higher gross margins in 2014 as compared to 2013,
the majority of the increase was attributable to the Wireless segment.

Selling, general and administrative expense. Selling, general and administrative (SG&A) expense for 2014
included a reduction in expense of $13.1 million resulting from an adjustment to the estimated fair value of
contingent consideration payable related to the Redwood acquisition. SG&A expense for 2014 and 2013 included
transaction costs of $12.1 million and $27.2 million, respectively. The 2013 transaction costs included a $20.2
million fee to terminate the Carlyle management agreement. Excluding these adjustments, SG&A expense
increased by $10.8 million for 2014 compared to 2013 primarily as a result of additional sales expense in certain
target markets, increases in equity-based compensation and higher cash incentive expense. These increased costs
were partially offset by benefits from cost reduction initiatives. Although bad debt expense increased in 2014 as
compared to 2013, the $4.4 million write-off of an uncollectible account during 2014 did not affect bad debt
expense for 2014 as the account was fully reserved at the time of the write-off. The reduction in SG&A expense
as a percentage of net sales for 2014 was primarily the result of higher net sales.

Research and development. Research and development (R&D) expense decreased for 2014 compared to 2013.
Cost savings initiatives in the Broadband segment resulted in lower R&D expense during 2014. These decreases
were largely offset by increased investments in R&D in our Enterprise segment. The reduction in R&D expense
as a percentage of net sales for 2014 was primarily the result of higher net sales. R&D activities generally relate
to ensuring that our products are capable of meeting the developing technological needs of our customers,
bringing new products to market and modifying existing products to better serve our customers.

Amortization of purchased intangible assets, Restructuring costs and Asset impairments

Amortization of purchased intangible assets
Restructuring costs, net
Asset impairments

Year Ended December 31,

Change

2014

2013

(dollars in millions)

$178.3
19.3
12.1

$174.9
22.1
45.5

$ 3.4
(2.8)
(33.4)

1.9%

(12.7)
(73.4)

Amortization of purchased intangible assets. The amortization of purchased intangible assets was higher in 2014
compared to 2013 primarily due to the additional amortization resulting from the July 2014 acquisition of
Alifabs, the July 2013 acquisition of Redwood and the March 2013 acquisition of iTRACS.

Restructuring costs, net. The restructuring costs recognized in 2014 were primarily related to the consolidation
of operations following the closings of manufacturing operations at two locations in the U.S. and one location in
China and continued efforts to realign and lower our cost structure. The 2013 restructuring costs were partially
offset by a gain of $18.7 million related to the sale of a business within the Broadband segment. Excluding this
gain, $40.8 million of restructuring costs were incurred in 2013 primarily related to workforce reductions and
other cost reduction initiatives at certain domestic and international facilities.

We expect to incur additional pretax costs of $1 million to $2 million related to completing actions announced to
date. Additional restructuring actions may be identified and resulting charges and cash requirements could be
material.

Asset impairments. We recognized impairment charges of $12.1 million in 2014 consisting of a $4.9 million
impairment of goodwill in the Wireless segment and a $7.2 million impairment of intangible assets in the
Broadband segment. We recognized impairment charges of $45.5 million in 2013 consisting of a $36.2 million
impairment of goodwill in the Broadband segment and a $9.3 million impairment of long-lived assets in the
Wireless segment. It is possible that we may incur additional asset impairment charges in future periods.

Net interest expense, Other expense, net and Income taxes

Net interest expense
Other expense, net
Income tax expense

Year Ended December 31,

Change

2014

2013

(dollars in millions)

$174.0
86.4
80.3

$205.5
48.0
56.8

$(31.5)
38.4
23.5

(15.3)%
80.0
41.4

Net interest expense. In May 2014, we issued $1.3 billion of new senior notes, $650.0 million of 5.00% Senior
Notes due June 15, 2021 (the 2021 Notes) and $650.0 million of 5.50% Senior Notes due June 15, 2024 (the
2024 Notes) and used substantially all of the net proceeds to redeem the entire outstanding amount of the 8.25%
senior notes that were due in 2019 (the 2019 Notes). In connection with the redemption of the 2019 notes in June
2014, we wrote off $19.1 million of deferred financing costs to interest expense. In May 2013, we issued $550.0
million of senior PIK toggle notes due June 1, 2020 (the senior PIK toggle notes), which resulted in $38.0 million
of interest expense during 2014 as compared to $22.5 million in 2013.

Interest expense for 2013 included a write-off of deferred financing costs of $7.9 million related to the
redemption of $400.0 million of the 2019 Notes with the net proceeds of the Company’s initial public offering.
As a result of amending our senior secured term loans and making a voluntary term loan repayment of $100.0
million during 2013, interest expense included a write-off of deferred financing costs and original issue discount
of $3.4 million. Despite the higher write-offs of debt-related costs, net interest expense decreased in 2014
compared to 2013 primarily due to a lowering of the interest rate on our outstanding borrowings.

Our weighted average effective interest rate on outstanding borrowings, including the amortization of deferred
financing costs and original issue discount and assuming the cash interest rate on the senior PIK toggle notes,
was 5.38% as of December 31, 2014 and 6.89% as of December 31, 2013.

Other expense, net. In connection with redeeming the 2019 Notes in June 2014 and December 2013, we paid a
premiums of $93.9 million and $33.0 million, respectively, which were included in other expense, net. We also
incurred costs of $3.3 million during 2013, which were included in other expense, net, related to amending our
senior secured term loan facility.

Foreign exchange losses of $2.7 million were included in other expense, net for 2014 compared to $9.8 million
for 2013.

During 2014, we recorded pretax gains on the sale of investments of $12.3 million, which were recorded in other
expense, net. Other expense, net for 2014 also included our share of losses in our equity investments of $1.5
million compared to losses of $1.4 million for 2013. Also, included in other expense, net, for 2013 was the write-
off of one such equity investment of $0.8 million.

Income taxes. Our effective income tax rate of 25.3% for 2014 included reductions in tax expense related to
reductions in reserves for uncertain tax positions as a result of the lapse of statutes of limitations on certain
matters. The benefits to the income tax rate were partially offset by the impact of losses in certain jurisdictions
where we did not recognize tax benefits due to the likelihood of them not being realizable and the provision for
state income taxes. Earnings in foreign jurisdictions, which are generally taxed at rates lower than the U.S.
statutory rate, reduce our effective tax rate. This reduction is largely offset by providing for the cost of
repatriating the majority of these earnings.

For 2013, our effective income tax rate of 74.5% included the impact of a $36.2 million goodwill impairment
charge that is not deductible for income tax purposes. In addition to the impairment charge, the effective tax rate
for 2013 reflected increases in valuation allowances and losses in certain foreign jurisdictions where we did not
recognize tax benefits due to the likelihood of them not being realizable.

We generally expect that our effective income tax rate will continue to reflect a minimal benefit from lower tax
rates on operations outside the U.S. due to our expectation that a significant portion of earnings from such
operations will be repatriated to the U.S.

Segment Results

Our three reportable segments, which align with the manner in which the business is managed, are Wireless,
Enterprise and Broadband.

Year Ended December 31,

2014

2013

Amount % of Net Sales Amount % of Net Sales Dollar Change

%
Change

(dollars in millions)

Net sales by segment:

Wireless
Enterprise
Broadband
Inter-segment eliminations

$2,469.8
850.5
511.1
(1.8)

64.5% $2,174.2
827.9
22.2
484.6
13.3
(6.6)
(0.0)

62.5%
23.8
13.9
(0.2)

Consolidated net sales

$3,829.6

100.0% $3,480.1

100.0%

Operating income (loss) by segment:

Wireless
Enterprise
Broadband

Consolidated operating income

Non-GAAP adjusted operating income

by segment (1):
Wireless
Enterprise
Broadband

Non-GAAP consolidated adjusted

operating income

$ 468.1
99.8
9.5

$ 577.4

19.0% $ 303.4
66.7
11.7
(40.4)
1.9

15.1% $ 329.7

14.0%
8.1
(8.3)

9.5%

$ 600.3
166.6
41.5

24.3% $ 449.4
155.3
19.6
15.4
8.1

20.7%
18.8
3.2

$150.9
11.3
26.1

33.6%
7.3
169.5

$ 808.3

21.1% $ 620.1

17.8%

$188.3

30.4%

$295.6
22.6
26.5
4.8

$349.5

$164.7
33.1
49.9

$247.7

13.6%
2.7
5.5

10.0%

54.3%
49.6
NM

75.1%

NM – Not meaningful
(1) See “Reconciliation of Non-GAAP Measures”.

Wireless Segment

We provide merchant RF wireless network connectivity solutions and small cell DAS solutions. Our solutions,
marketed primarily under the Andrew brand, enable wireless operators to deploy both cell sites and small cell
DAS solutions to meet 2G, 3G and 4G cellular coverage and capacity requirements. Our macro cell site solutions
can be found at wireless tower sites, rooftops, and include base station antennas, microwave antennas, hybrid
fiber-feeder cables, coaxial cables, connectors, amplifiers, filters and backup power solutions . Our metro cell
solutions can be found outdoors on street poles and on other urban structures and include RF delivery, equipment
housing and concealment. These fully integrated outdoor systems consist of specialized antennas, filters/
combiners, backhaul solutions, intra-system cabling and power distribution, all minimized to fit an urban
environment. Our small cell DAS solutions are composed of distributed antenna systems that allow wireless
operators to increase spectral efficiency and thereby extend and enhance cellular coverage and capacity in
challenging network conditions such as commercial buildings, urban areas, stadiums and transportation systems.

The Wireless segment net sales significantly increased in the U.S., the APAC region and Europe for 2014
compared to 2013 primarily as a result of 4G/LTE rollouts in developed markets and 3G coverage buildouts in

emerging markets. These improvements in Wireless segment net sales were partially offset by lower sales in the
Middle East and the CALA region. The acquisition of Alifabs provided incremental net sales of $25.2 million to
the Wireless segment in 2014. Foreign exchange rate changes had a negative impact of less than 1% on Wireless
segment net sales for 2014 compared to 2013.

Wireless segment operating income and non-GAAP adjusted operating income increased substantially for 2014
as compared to 2013 primarily due to the higher level of net sales, with additional benefit from a favorable mix
of products sold and the benefit of cost reduction initiatives. During 2014, we recorded a goodwill impairment
charge in the Wireless segment primarily as a result of lower projected future operating results for the
Microwave reporting unit than those used in the 2013 annual impairment test.

Our sales to wireless operators can be volatile. Although we expect lower sales for our Wireless segment in 2015,
we expect longer term demand for Wireless products to be positively affected by wireless coverage and capacity
expansion in emerging markets and growth for mobile data services (including 4G deployments) in developed
markets. Uncertainty in the global economy or a particular region or consolidation among wireless operators may
slow the growth or cause a decline in capital spending by wireless operators and negatively impact our net sales.

Enterprise Segment

We provide enterprise connectivity solutions for data centers and commercial buildings. We provide voice,
video, data and converged solutions that support mission-critical, high-bandwidth applications including storage
area networks, streaming media, data backhaul, cloud applications and grid computing. These comprehensive
solutions, sold primarily under the SYSTIMAX and Uniprise brands, include optical fiber and twisted pair
structured cable solutions, intelligent infrastructure software, network rack and cabinet enclosures, intelligent
building sensors, advanced LED lighting control systems and network design services.

Enterprise segment net sales were higher in 2014 compared to 2013 primarily due to higher net sales in the
APAC and U.S. regions that were partially offset by a decrease in sales in the EMEA region. Foreign exchange
rate changes had a negative impact of less than 1% on Enterprise segment net sales for 2014 as compared to
2013.

Enterprise segment operating income and non-GAAP adjusted operating income increased for 2014 as compared
to 2013. Operating income for 2014 reflected a $13.1 million benefit related to the adjustment of the estimated
fair value of contingent consideration payable from the Redwood acquisition. The positive impact of this
adjustment to contingent consideration payable was excluded from the calculation of non-GAAP adjusted
operating income. Higher net sales and the benefit of cost reduction initiatives had positive impacts on operating
income and non-GAAP adjusted operating income that were partially offset by increased costs related to
developing and marketing new solutions.

We expect the modest sales growth in our Enterprise segment in 2015 as well as long-term demand for Enterprise
products to be driven by global information technology and data center spending as the ongoing need for
bandwidth and intelligence in the network continues to create demand for high-performance structured
connectivity solutions in the enterprise market. Uncertain global economic conditions, variability in the levels of
commercial construction activity, uncertain levels of information technology spending and reductions in the
levels of distributor inventories may negatively affect demand for our products.

Broadband Segment

We provide cable and communications products that support the multi-channel video, voice and high-speed data
services provided by MSOs. We believe we are the leading global manufacturer of coaxial cable for hybrid fiber
coaxial networks globally and a leading supplier of fiber optic cable for North American MSOs.

Broadband segment net sales increased in 2014 as compared to 2013 as a result of higher spending by MSOs in
the U.S. The higher domestic net sales were partially offset by lower net sales in most other major geographic
regions. Foreign exchange rate changes had a negative impact of less than 1% on Broadband segment net sales
for 2014 as compared to 2013.

Broadband segment operating income and non-GAAP adjusted operating income increased in 2014 as compared
to 2013. During 2014, we recorded an impairment charge in the Broadband segment related to certain intangible
assets that we have determined are no longer recoverable. Broadband segment non-GAAP adjusted operating
income for 2014 improved primarily as a result of higher net sales and the benefit of cost reduction initiatives.
The Broadband segment recorded operating losses in 2013 primarily as a result of goodwill impairment charges.

We expect demand for Broadband products to continue to be influenced by ongoing maintenance requirements of
cable networks, cable providers’ competition with telecommunication service providers, consolidation in the
broadband service provider market and activity in the residential construction market. Spending by our
Broadband customers on maintaining and upgrading networks is expected to continue to be influenced by
uncertain regional and global economic conditions. We expect a decline in our Broadband segment net sales for
2015 as compared to 2014 as a result of product rationalization.

Comparison of results of operations for the year ended December 31, 2013 with the year ended December 31,
2012

Year ended December 31,

2013

2012

Amount

% of Net
Sales

Amount

% of Net
Sales

Dollar
Change

%
Change

(dollars in millions, except per share amounts)

Net sales
Gross profit
Operating income
Non-GAAP adjusted operating income (1)
Net income
Diluted earnings per share

(1) See “Reconciliation of Non-GAAP Measures”

Net sales

Domestic net sales
International net sales

$3,480.1 100.0%$3,321.9 100.0%$158.2
13.2
140.2
1,200.9
38.4
91.5
329.7
119.0
620.1
23.7
19.4
14.0 259.3
0.12

1,060.7
238.2
501.1
5.4
0.03

31.9
7.2
15.1
0.2

34.5
9.5
17.8
0.6

4.8%

Year Ended December 31,

Change

2013

2012

(dollars in millions)

$3,480.1
1,903.0
1,577.1

$3,321.9
1,754.3
1,567.6

$158.2
148.7
9.5

4.8%
8.5
0.6

Net sales. The increase in net sales for 2013 compared to 2012 was primarily attributable to higher sales to
domestic wireless operators in the Wireless segment as they continued to expand 4G coverage and capacity. This
increase was partially offset by lower net sales in the Broadband and Enterprise segments. In addition to the
growth in the U.S., net sales were higher in the CALA and EMEA regions partially offset by lower sales in the
APAC region for 2013 compared with 2012. Foreign exchange rates negatively affected net sales by less than 1%
for 2013 as compared to 2012. Acquisitions had an immaterial favorable effect on 2013 net sales. For further
details by segment, see the section titled “Segment Results” below.

Gross profit, SG&A expense and R&D expense

Gross profit

Gross margin percent

SG&A expense

As a percent of sales

R&D expense

As a percent of sales

Year Ended
December 31,

Change

2013

2012

$1,200.9

(dollars in millions)
$1,060.7

$140.2

13.2%

34.5%
502.3
14.4%
126.4

3.6%

31.9%
461.1
13.9%
121.7

3.7%

41.2

4.7

8.9

3.9

Gross profit (net sales less cost of sales). Gross profit and gross profit margin increased for 2013 primarily due
to higher sales volumes, a favorable change in the mix of products sold and benefits from cost savings initiatives.
Cost of sales for 2013 and 2012 included charges of $2.1 million and $8.9 million, respectively, related to a
warranty matter within the Broadband segment for products sold in 2006 and 2007.

Our gross profit margin for 2013 was 34.5% compared to 31.9% for the prior year. The higher gross profit
margin for 2013 is primarily due to higher net sales, favorable changes in the mix of products sold, the benefit of
cost savings initiatives and the impact of a favorable commodities environment.

Selling, general and administrative expense. SG&A expense increased for 2013 compared to 2012 primarily as
a result of the $20.2 million fee paid to terminate the Carlyle management agreement, incremental SG&A costs
from the iTRACS and Redwood acquisitions, additional sales expense in certain target markets and increases in
incentive compensation costs. These costs were partially offset by benefits from cost reduction initiatives and a
decrease in bad debt expense.

Research and development. R&D expense was higher for 2013 compared to 2012 primarily due to R&D
spending added by the iTRACS and Redwood acquisitions that was partially offset by the benefit of cost savings
initiatives, which included the closure in 2012 of a facility in New Jersey. R&D expense as a percentage of net
sales for 2013 was essentially unchanged compared to 2012. R&D activities generally relate to ensuring that our
products are capable of meeting the developing technological needs of our customers, bringing new products to
market and modifying existing products to better serve our customers.

Amortization of purchased intangible assets, Restructuring costs and Asset impairments

Amortization of purchased intangible assets
Restructuring costs, net
Asset impairments

Year Ended
December 31,

Change

2013

2012

(dollars in millions)

$174.9
22.1
45.5

$175.7
23.0
40.9

$(0.8)
(0.9)
4.6

(0.5)%
(3.9)
11.2

Amortization of purchased intangible assets. The amortization of purchased intangible assets was $0.8 million
lower in 2013 than 2012 due to the impairment that was recognized on certain intangible assets in 2012, partially
offset by the additional amortization resulting from the acquisitions of iTRACS and Redwood. The amortization
is primarily related to intangible assets established as a result of applying acquisition accounting following the
2011 Carlyle acquisition of CommScope, Inc.

Restructuring costs, net. We recognized net restructuring costs of $22.1 million during 2013 compared with
$23.0 million during 2012. Restructuring costs of $40.8 million in 2013 were partially offset by a gain of $18.7
million on the sale of certain assets of our BiMetals business in the Broadband segment. The costs incurred in
2013 were primarily from the announced closing of two manufacturing operations in the U.S. and costs incurred

to consolidate a portion of those operations into our existing facilities, as well as workforce reductions in a
continued effort to realign and lower our cost structure. The restructuring costs recognized in 2012 were
primarily related to announced workforce reductions at certain domestic and international facilities.

Asset impairments. We recognized impairment charges of $45.5 million in 2013 consisting of a $36.2 million
impairment of goodwill in the Broadband segment and a $9.3 million impairment of long-lived assets in the
Wireless segment. We recognized impairment charges of $40.9 million in 2012 related to long-lived assets in the
Wireless segment.

Net interest expense, Other expense, net and Income taxes

Net interest expense
Other (income) expense, net
Income tax expense

NM – Not meaningful

Year Ended
December 31,

Change

2013

2012

$205.5
48.0
56.8

(dollars in millions)
$19.9
$185.6
32.6
15.4
24.9
31.9

10.7%
NM
78.1

Net interest expense. We incurred net interest expense of $205.5 million for 2013 compared to $185.6 million
for 2012. Interest expense on the senior PIK toggle notes issued in May 2013 was $22.5 million during 2013. In
addition, interest expense for 2013 included a write-off of deferred financing costs of $7.9 million related to the
redemption of $400.0 million of the 2019 Notes with the net proceeds of the Company’s initial public offering.
As a result of amending our senior secured term loans and making a voluntary term loan repayment of $100.0
million during 2013, interest expense included a write-off of deferred financing costs and original issue discount
of $3.4 million. Partially offsetting these increases were interest savings from rate reductions that resulted from
the term loan amendments. Interest expense for 2012 included a $3.1 million write-off of deferred financing costs
and original issue discount related to amendments to the senior secured term loan and asset-based revolving
credit facility completed during 2012.

Our weighted average effective interest rate on outstanding borrowings, including the amortization of deferred
financing costs and original issue discount and assuming the cash interest rate on the senior PIK toggle notes,
was 6.89% as of December 31, 2013 and 7.33% as of December 31, 2012.

Other expense, net. In connection with the redemption of $400.0 million of the 2019 Notes in 2013, we paid a
premium of $33.0 million that was recorded in other expense, net. Foreign exchange losses of $9.8 million were
included in other expense, net for 2013 compared to $7.0 million for 2012. We incurred costs of $3.3 million
during 2013 related to amending our senior secured term loans compared to costs of $1.7 million during 2012
related to the amendments of our senior secured term loan and revolving credit facility. Also included in other
expense, net for 2013 was the Company’s share of losses in our equity investments of $1.4 million as compared
to $3.4 million in 2012. Additionally, other expense, net included the impairment of one such investment of $0.8
million and $2.6 million for 2013 and 2012, respectively.

Income taxes. For 2013, the effective income tax rate included the impact of a $36.2 million goodwill
impairment charge that is not deductible for income tax purposes. In addition to the impairment charge, the
effective tax rate for 2013 reflected increases in valuation allowances and losses in certain foreign jurisdictions
where we did not recognize tax benefits due to the likelihood of them not being realizable.

The effective income tax rate for 2012 was affected by various true-up items related to prior year tax returns,
changes in valuation allowances and additional tax expense related to income tax uncertainties. In addition to
these items, the effective income tax rate for the prior year was also impacted by losses in certain foreign
jurisdictions where we did not recognize tax benefits due to the likelihood of them not being realizable.

Excluding the items listed above, the effective income tax rate for 2013 and 2012 was higher than the statutory
rate of 35% primarily due to the provision for state income taxes and certain tax costs associated with repatriation
of foreign earnings. We generally expect that our effective income tax rate will continue to reflect a minimal
benefit from lower tax rates on operations outside the U.S. due to our expectation that a significant portion of
earnings from such operations will be repatriated to the U.S.

Segment Results

Net sales by segment:

Wireless
Enterprise
Broadband
Inter-segment eliminations

Consolidated net sales

Operating income (loss) by segment:

Wireless
Enterprise
Broadband

Consolidated operating income

Non-GAAP adjusted operating income (loss)

by segment (1):
Wireless
Enterprise
Broadband

Year Ended December 31,

2013

2012

Amount % of net sales Amount % of net sales Dollar change

(dollars in millions)

$2,174.2
827.9
484.6
(6.6)

62.5% $1,917.1
846.5
23.8
564.0
13.9
(5.7)
(0.2)

57.7%
25.5
17.0
(0.2)

$3,480.1

100.0% $3,321.9

100.0%

$ 303.4
66.7
(40.4)

$ 329.7

14.0% $ 106.7
119.6
11.9

8.1
(8.3)

9.5% $ 238.2

5.6%
14.1
2.1

7.2%

$257.1
(18.6)
(79.4)
(0.9)

$158.2

$196.7
(52.9)
(52.3)

$ 91.5

%
change

13.4%
(2.2)
(14.1)

4.8%

184.3%
(44.2)
(439.5)

38.4%

$ 449.4
155.3
15.4

20.7% $ 269.1
189.7
18.8
42.2
3.2

14.0%
22.4
7.5

$180.3
(34.4)
(26.8)

67.0%
(18.1)
(63.5)

Non-GAAP consolidated adjusted operating

income

$ 620.1

17.8% $ 501.1

15.1%

$119.1

23.8%

(1) See “Reconciliation of Non-GAAP Measures”

Wireless Segment

The Wireless segment net sales increased in all major geographic regions for 2013 compared to 2012. Net sales
growth was particularly strong in the U.S. as a result of higher investment in 4G/LTE solutions by U.S. wireless
operators. Sales to a major Middle Eastern wireless operator also benefited Wireless segment net sales in 2013.
Foreign exchange rate changes had a negligible negative impact on Wireless segment net sales for 2013
compared to 2012.

Wireless segment operating income and non-GAAP adjusted operating income increased in 2013 as compared to
2012 primarily due to the higher level of net sales, a favorable mix of products sold and the benefit of cost
reduction initiatives. In addition to these improvements, the Wireless segment also experienced a $31.6 million
reduction in asset impairment charges. These increases to operating income were partially offset by the portion of
the Carlyle management agreement termination fee that was allocated to the Wireless segment ($11.6 million)
and $2.4 million of higher restructuring charges.

Enterprise Segment

The Enterprise segment experienced a decrease in net sales for 2013 compared to 2012 primarily due to lower net
sales in the APAC and EMEA regions that were partially offset by an increase in sales in the CALA region.

Enterprise segment net sales in North America were essentially unchanged in 2013 as compared to 2012. Net
sales for 2013 that resulted from the 2013 acquisitions of iTRACS and Redwood were not significant to the
Enterprise segment. Foreign exchange rate changes had a negligible negative impact on Enterprise segment net
sales for 2013 as compared to 2012.

The decrease in Enterprise segment operating income and non-GAAP adjusted operating income for 2013 as
compared to 2012 was primarily attributable to lower sales (mainly resulting from an increase in discounting for
certain projects) and the impact of iTRACS and Redwood, as investments are made to develop product offerings
and integrate the acquired businesses. Enterprise segment operating income also decreased as a result of $4.8
million of higher restructuring costs, the allocation of $5.4 million of the Carlyle management agreement
termination fee.

Broadband Segment

Broadband segment net sales decreased for 2013 as compared to 2012 in all major geographic regions primarily
as a result of the completion of large international projects and the impact of decreased U.S. federal stimulus
spending. Foreign exchange rate changes had a negligible negative impact on Broadband segment net sales for
2013 as compared to 2012.

Broadband segment operating income and non-GAAP adjusted operating income for 2013 as compared to 2012
were both negatively affected by lower sales volumes, less favorable pricing and mix of products sold. In
addition, Broadband segment operating income decreased in 2013 compared to 2012 as a result of goodwill
impairment charges of $36.2 million in 2013 and the allocation of $3.2 million of the Carlyle management
agreement termination fee. These decreases in operating income were partially offset by an $8.1 million
reduction in net restructuring costs, which included an $18.7 million gain on the sale of certain assets of the
BiMetals business. Broadband segment operating income (loss) for 2013 and 2012 included charges of $2.1
million and $8.9 million, respectively, related to a warranty matter for products sold in 2006 and 2007. These
charges are excluded from the calculation of non-GAAP adjusted operating income.

Liquidity and Capital Resources

The following table summarizes certain key measures of our liquidity and capital resources:

Cash and cash equivalents
Working capital (1), excluding cash and cash equivalents

and current portion of long-term debt
Availability under revolving credit facility
Long-term debt, including current portion
Total capitalization (2)
Long-term debt, including current portion, as a

percentage of total capitalization

For the Year Ended
December 31,

2014

2013

Dollar
Change

%
Change

$ 729.3

(dollars in millions)
$ 346.3

$383.0

110.6%

631.5
321.7
2,707.7
4,015.3

523.2
308.7
2,514.6
3,602.6

108.3
13.0
193.1
412.7

20.7
4.2
7.7
11.5

67.4%

69.8%

(1) Working capital consists of current assets of $1,827.6 million less current liabilities of $475.8 million as of
December 31, 2014. Working capital consists of current assets of $1,453.4 million less current liabilities of
$593.4 million as of December 31, 2013.

(2) Total capitalization includes long-term debt, including the current portion, and stockholders’ equity.

Our principal sources of liquidity on a short-term basis are cash and cash equivalents, cash flows provided by
operations and availability under credit facilities. On a long-term basis, our potential sources of liquidity also

include raising capital through the issuance of debt and/or equity. The primary uses of liquidity include funding
working capital requirements (primarily inventory and accounts receivable, net of accounts payable and other
accrued liabilities), debt service requirements (including voluntary debt payments), capital expenditures,
acquisitions, payment of certain restructuring costs, and pension and other postretirement obligations.

The increase in cash and cash equivalents during 2014 was primarily driven by strong operating performance and
the issuance of $1.3 billion of new senior notes that was substantially offset by the redemption of the $1.1 billion
outstanding amount of the 8.25% senior notes and the payment of a redemption premium of $93.9 million. The
increase in working capital, excluding cash and cash equivalents and current portion of long-term debt, is due to
the decrease in the level of accounts payable and other accrued liabilities. The increase in long-term debt was
primarily the result of issuance of the new senior notes, net of the redemption of the 8.25% senior notes. The
increase in total capitalization primarily reflects the increase in long-term debt and current year earnings.

Cash Flow Overview

Net cash generated by operating activities
Net cash used in investing activities
Net cash generated by (used in) financing activities

Operating Activities

For the Year Ended
December 31,

2014

$289.4
(76.0)
190.8

2013

Dollar
Change
(dollars in millions)
$ 51.7
$237.7
(12.6)
(63.4)
280.5
(89.7)

%
Change

21.8%
19.9
(312.7)

Cash flow from operations during 2014 increased from 2013 primarily due to increased operating income,
partially offset by increased working capital balances. In addition to the increase in working capital, cash flow
from operations for 2014 also reflected the payment of a $93.9 million premium related to redeeming the 8.25%
senior notes. Cash flow from operations for 2013 included the payment of a premium of $33.0 million related to
the redemption of $400.0 million of the 8.25% senior notes and $20.2 million paid to terminate our management
agreement with Carlyle.

Uses of cash during 2014 included $184.9 million paid for interest, $98.6 million paid for taxes, $24.4 million
paid for restructuring, $23.4 million paid to fund pension and postretirement benefit obligations and a combined
increase in inventories and accounts receivable of $23.1 million. These uses of cash were offset by positive
operating results.

Excluding any impact from the anticipated acquisition of TE Connectivity’s Telecom, Enterprise and Wireless
business, we currently do not expect a significant change in working capital requirements in 2015 and we expect
lower cash interest as a result of the benefit from lower interest rates for the entire year. Cash paid for taxes is
dependent upon the geographic mix of earnings and the cost of repatriation, both of which can vary from year to
year.

Investing Activities

During 2014, we paid $46.7 million, net of cash acquired, in connection with the Alifabs acquisition and received
$4.7 million related to the final determination of the iTRACS purchase price. Also during 2014, we paid $15.0
million for the purchase of a non-controlling interest in a company developing high-speed transceivers and
photonic integrated circuit products. In addition, we received proceeds of $12.8 million related to the sale of
long-term investments, primarily the sale of a portion of our investment in Hydrogenics Corporation.

Investment in property, plant and equipment during 2014 was $36.9 million and primarily related to supporting
improvements to manufacturing operations as well as investments in information technology (including software
developed for internal use). Excluding any impact from the anticipated acquisition of TE Connectivity’s
Telecom, Enterprise and Wireless business, we currently expect total capital expenditures of $35 million to $40
million in 2015.

During 2013, we paid $43.8 million related to our acquisitions of iTRACS and Redwood. We also paid $12.0
million during 2013 in connection with the 2011 acquisition of Argus Technologies. We received proceeds of
$26.5 million during 2013 from the sale of businesses. This related to the sale of our BiMetals business in 2013
and additional proceeds received from the 2012 sale of our filter manufacturing subsidiary in Shenzhen, China.

Financing Activities

During 2014, we issued $1.3 billion of new senior notes at a weighted average interest rate of 5.25%. Proceeds
from the new senior notes were used to redeem the entire $1.1 billion of outstanding 8.25% senior notes. In
connection with issuing the new senior notes, we paid financing costs of $23.3 million 2014.

Also during 2014, we borrowed and repaid $15.0 million under our revolving credit facility and repaid $8.8
million of our senior secured term loans. As of December 31, 2014, we had no outstanding borrowings under our
$400.0 million revolving credit facility and the remaining availability was approximately $321.7 million,
reflecting a borrowing base of $345.3 million reduced by $23.6 million of letters of credit issued under the
revolving credit facility.

We recorded proceeds from stock option exercises and the related excess tax benefits of $23.5 million and $1.4
million in 2014 and 2013, respectively.

In May 2013, we issued $550.0 million in principal amount of the senior PIK toggle notes for net proceeds of
$538.8 million. The net proceeds from the note issuance were combined with existing liquidity to pay
distributions of $550.0 million to our stockholders and option holders. Although we have paid cash dividends
from time to time in the past while we were a privately-held company, we do not currently intend to pay cash
dividends in the foreseeable future. The declaration and payment of any dividends in the future may be limited
by contractual restrictions, including covenants under the indentures governing our senior notes and senior
secured credit facilities.

In October 2013, we received net proceeds of $434.0 million from the issuance of common stock in connection
with our initial public offering. The net proceeds from the IPO were used to redeem $400.0 million of the 8.25%
senior notes.

In March and December 2013, we amended our senior secured term loan facility, which resulted in the
repayment of $172.3 million to certain lenders who exited our term loan syndicate and the receipt of $172.3
million in proceeds from new lenders and existing lenders who increased their positions. In connection with the
December amendment, we made a voluntary repayment of $100.0 million. Also during 2013, we made scheduled
repayments of $9.7 million under our senior secured term loans and borrowed and repaid $225.0 million under
our senior secured revolving credit facility.

Future Cash Needs

We expect that our primary future cash needs will be debt service, funding working capital requirements
(including operating leases), capital expenditures, funding acquisitions, paying certain restructuring costs, tax
payments (including the cost of repatriation), and funding pension and other postretirement benefit obligations.
We paid $24.4 million of restructuring costs during 2014 and expect to pay an additional $5 million to $6 million
in 2015 and an additional $7 million to $9 million by 2022 related to restructuring actions that have been
initiated. Any future restructuring actions would likely require additional cash expenditures and such
requirements may be material. As of December 31, 2014, we have an unfunded obligation related to pension and
other postretirement benefits of $29.8 million. We made contributions of $23.4 million to our pension and other
postretirement benefit plans during 2014. Contributions made during 2014 include those required to comply with
an agreement with the Pension Benefit Guaranty Corporation. We expect that our noncurrent employee benefit
liabilities will be funded from existing cash balances and cash flow from future operations.

We may voluntarily repay existing debt or repurchase our new senior notes (2021 Notes and 2024 Notes) or our
senior PIK toggle notes, if market conditions are favorable and the applicable indenture and the senior secured
credit facilities permit such repayment or repurchase.

Although there are no financial maintenance covenants under the terms of our new senior notes or senior PIK
toggle notes, there is a limitation, among other limitations, on certain future borrowings based on an adjusted
leverage ratio or a fixed charge coverage ratio. These ratios are based on financial measures similar to Adjusted
EBITDA as presented in this Annual Report on Form 10-K (see Reconciliation of Non-GAAP Measures) and
also give pro forma effect to certain events, including acquisitions, synergies and cost savings initiatives. For the
year ended December 31, 2014, our pro forma adjusted EBITDA, as measured pursuant to indentures governing
our notes, was $877.8 million, which included the impact of cost reduction initiatives and acquisitions ($20.6
million) so that the impact of the initiatives and acquisitions are fully reflected in the twelve-month period used
in the calculation of the ratios. In addition to limitations under these indentures, our senior secured credit
facilities contain customary negative covenants. We believe we are in compliance with the covenants under our
indentures and senior secured credit facilities at December 31, 2014.

As of December 31, 2014, approximately 29% of our cash and cash equivalents was held outside the United
States. Income taxes have been provided on foreign earnings such that there would be no significant tax cost to
repatriate substantially all of this cash. The cash tax requirements to repatriate existing funds may vary from year
to year.

We believe that our existing cash, cash equivalents and cash flows from operations, combined with availability
under our revolving credit facility, will be sufficient to meet our presently anticipated future cash needs. We may,
from time to time, increase borrowings under our revolving credit facility or issue securities, if market conditions
are favorable, to meet our future cash needs or to reduce our borrowing costs.

The proposed acquisition of TE Connectivity’s Telecom, Enterprise and Wireless business for approximately
$3.0 billion is expected to close by the end of 2015 and be funded using a combination of cash on hand and up to
$3.0 billion of additional debt. In addition to the purchase price, we expect to incur financing costs and other
transaction-related costs that will require the use of cash on hand or borrowing under our revolving credit facility.
If the acquisition is terminated prior to completion, we may be required to pay TE Connectivity a termination fee
of $210.0 million.

Reconciliation of Non-GAAP Measures

We believe that presenting certain non-GAAP financial measures enhances an investor’s understanding of our
financial performance. We further believe that these financial measures are useful financial metrics to assess our
operating performance from period to period by excluding certain items that we believe are not representative of
our core business. We also use certain of these financial measures for business planning purposes and in
measuring our performance relative to that of our competitors. We believe these financial measures are
commonly used by investors to evaluate our performance and that of our competitors. However, our use of the
terms Adjusted Operating Income and Adjusted EBITDA may vary from that of others in our industry. These
financial measures should not be considered as alternatives to operating income (loss), net income (loss) or any
other performance measures derived in accordance with U.S. GAAP as measures of operating performance or
operating cash flows or as measures of liquidity.

Consolidated

Year Ended December 31,

2014

2013

2012

Operating income
Adjustments:

Amortization of purchased intangible assets
Restructuring costs, net
Equity-based compensation
Asset impairments
Transaction costs (a)
Purchase accounting adjustments (b)
Other

Non-GAAP adjusted operating income

Depreciation

Non-GAAP adjusted EBITDA

(dollars in millions)
$329.7

$238.2

$577.4

178.3
19.3
21.1
12.1
12.1
(11.9)
—

174.9
22.1
16.1
45.5
27.2
2.5
2.1

175.7
23.0
7.5
40.9
6.3
—
9.4

$808.4
48.8

$620.1
55.2

$501.1
69.5

$857.2

$675.3

$570.6

(a) Reflects transaction costs related to potential and consummated acquisitions as well as transaction costs

related to secondary stock offerings. The 2013 adjustment includes the $3.0 million annual management fee
paid to Carlyle and the $20.2 million fee paid to terminate the management agreement with Carlyle. The
2012 adjustment includes the $3.0 million management fee paid to Carlyle.

(b) Reflects non-cash charges resulting from purchase accounting adjustments. The 2014 adjustment also
includes $13.1 million for the reduction in the estimated fair value of contingent consideration payable
related to the Redwood acquisition.

Wireless Segment

Year Ended December 31,

2014

2013

2012

Operating income
Adjustments:

Amortization of purchased intangible assets
Restructuring costs, net
Equity-based compensation
Asset impairments
Transaction costs
Purchase accounting adjustments
Other

(dollars in millions)
$303.4

$106.7

$468.1

91.3
16.2
11.7
4.9
7.6
0.6
—

88.1
24.3
8.7
9.4
15.5
—
—

90.7
21.9
4.7
40.9
3.7
—
0.5

Non-GAAP adjusted operating income

$600.3

$449.4

$269.1

Enterprise Segment

Year Ended December 31,

2014

2013

2012

Operating income
Adjustments:

Amortization of purchased intangible assets
Restructuring costs, net
Equity-based compensation
Transaction costs
Purchase accounting adjustments

(dollars in millions)
$ 66.7

$119.6

$ 99.8

69.4
0.1
6.7
3.0
(12.5)

68.4
5.1
5.2
7.4
2.5

66.6
0.3
1.6
1.6
—

Non-GAAP adjusted operating income

$166.6

$155.3

$189.7

Broadband Segment

Year Ended December 31,

2014

2013

2012

Operating income (loss)
Adjustments:

Amortization of purchased intangible assets
Restructuring costs, net
Equity-based compensation
Asset impairments
Transaction costs
Other

(dollars in millions)
$(40.4)

$11.9

$ 9.5

17.6
2.9
2.7
7.2
1.5
—

18.4
(7.3)
2.3
36.2
4.3
2.1

18.4
0.8
1.3
—
1.0
8.9

Non-GAAP adjusted operating income

$41.5

$ 15.4

$42.2

Note: Components may not sum to total due to rounding

Description of the Senior Secured Credit Facilities

Revolving credit facilities

Our senior secured asset-based revolving credit facilities consist of a tranche A revolving credit facility available
to our U.S. subsidiaries designated as co-borrowers (the U.S. Borrowers) and a tranche B revolving credit facility
available to the U.S. Borrowers and to certain of our non-U.S. subsidiaries (the European Co-Borrowers). Our
revolving credit facilities provide for revolving loans and letters of credit in an aggregate amount of up to $250
million for the tranche A revolving credit facility and up to $150 million for the tranche B revolving credit
facility, in each case, subject to borrowing base capacity. Letters of credit are limited to $130 million for tranche
A and tranche B in the aggregate. Subject to certain conditions, the revolving credit facilities may be expanded
by up to $150 million in the aggregate in additional commitments. Loans under the tranche A revolving credit
facility are denominated in U.S. dollars and loans under the tranche B revolving credit facility may be
denominated, at our option, in either U.S. dollars, euros, pounds sterling or Swiss francs. JPMorgan Chase Bank,
N.A. acts as administrative agent for the tranche A revolving credit facility and collateral agent for the revolving
credit facilities, and J.P. Morgan Europe Limited acts as administrative agent for the tranche B revolving credit
facility. Each revolving credit facility matures in January 2017. We use borrowings under our revolving credit
facilities to fund working capital and for other general corporate purposes, including permitted acquisitions and
other investments. We amended and restated our revolving credit facility in March 2012 to, among other things,
reduce pricing and certain fees. As of December 31, 2014, we had no outstanding borrowing under our revolving
credit facilities and $23.6 million of outstanding letters of credit.

Borrowings under our revolving credit facilities are limited by several jurisdictionally-specific borrowing base
calculations based on the sum of specified percentages of eligible accounts receivable and, in certain instances,
eligible inventory minus the amount of any applicable reserves. Borrowings bear interest at a floating rate, which
(i) in the case of tranche A loans can be either adjusted Eurodollar rate plus an applicable margin or, at our
option, a base rate plus an applicable margin, and (ii) in the case of tranche B loans shall be adjusted Eurodollar
rate plus an applicable margin. We may borrow only up to the lesser of the level of our then-current respective
borrowing bases and our committed maximum borrowing capacity of $400 million in the aggregate. Our ability
to draw under our revolving credit facilities or issue letters of credit thereunder is conditioned upon, among other
things, our delivery of prior written notice of a borrowing or issuance, as applicable, our ability to reaffirm the
representations and warranties contained in our credit agreements and the absence of any default or event of
default under our revolving credit facilities.

Our obligations under the revolving credit facilities are guaranteed by us and all of our direct and indirect wholly
owned U.S. subsidiaries (subject to certain permitted exceptions based on immateriality thresholds of aggregate
assets and revenues of excluded U.S. subsidiaries), and the obligations of the European Co-Borrowers under the
tranche B revolving credit facility are guaranteed by certain of our indirect non-U.S. subsidiaries. The revolving
credit facilities are secured by a lien on substantially all of our assets, and each of our direct and indirect wholly
owned U.S. subsidiaries’ current and fixed assets (subject to certain exceptions), and the tranche B revolving
credit facility is also secured by certain of the current assets of the non-U.S. borrowers and guarantors. The
revolving credit facilities have a first priority lien on the above-referenced current assets, and a second priority
lien on all other assets (second in priority to the liens securing the term loan facility referred to below), in each
case, subject to other permitted liens.

The following fees are applicable under each revolving credit facility: (i) an unused line fee of either 0.375% or
0.25% per annum (depending on usage of the revolving credit facilities), of the unused portion of the respective
revolving credit facility; (ii) a letter of credit participation fee on the aggregate stated amount of each letter of
credit equal to the applicable margin for Eurodollar rate loans, as applicable; and (iii) certain other customary
fees and expenses of the lenders and agents. We are required to make prepayments under our revolving credit
facilities at any time when, and to the extent that, the aggregate amount of the outstanding loans and letters of
credit under such revolving credit facility exceed the lesser of the aggregate amount of commitments in respect
of such revolving credit facility and the applicable borrowing base.

Our revolving credit facilities contain customary covenants, including, but not limited to, restrictions on our
ability and that of our subsidiaries to merge and consolidate with other companies, incur indebtedness, grant liens
or security interests on assets subject to their security interest, make acquisitions, loans, advances or investments,
pay dividends, sell or otherwise transfer assets, optionally prepay or modify terms of any junior indebtedness,
enter into transactions with affiliates or change our line of business. Our revolving credit facilities require the
maintenance of a fixed charge coverage ratio of 1.0 to 1.0 at the end of each fiscal quarter when excess
availability for both tranche A and tranche B in total is less than the greater of $32.5 million and 10% of the
aggregate borrowing base of both tranche A and tranche B in total.

Our revolving credit facilities provide that, upon the occurrence of certain events of default, our obligations
thereunder may be accelerated and the lending commitments terminated. Such events of default include payment
defaults to the lenders, material inaccuracies of representations and warranties, covenant defaults, cross-defaults
to other material indebtedness, voluntary and involuntary bankruptcy proceedings, material money judgments,
material pension-plan events, certain change of control events and other customary events of default.

Term loan facility

Our senior secured term loan facility consists of two tranches, one of which is due January 2017 (the 2017 term
loan) and the other is due January 2018 (the 2018 term loan). As of December 31, 2014, we had $345.6 million
outstanding under the 2017 term loan and $518.4 million outstanding under the 2018 term loan. JPMorgan Chase
Bank, N.A. acts as the administrative agent for our term loan facility.

Borrowings under our term loan facility amortize in equal quarterly installments in an amount equal to 1.00% per
annum of the principal amount at the time of an amendment to the term loan facility in December 2013 ($350.0
million for the 2017 term loan and $525.0 million for the 2018 term loan), with the remaining balance due at
final maturity. The interest rate margin applicable to the term loans is, at the Company’s option, either (1) the
base rate (which is the highest of the then current Federal Funds rate plus 0.5%, the prime rate most recently
announced by JPMorgan Chase Bank, N.A., and the one-month Eurodollar rate (taking into account the
Eurodollar rate floor, if any, plus 1.0%)) plus a margin of 1.50% or (2) one-, two-, three- or six-month LIBOR or,
if available from all lenders, twelve-month LIBOR (selected at the Company’s option) plus a margin of 2.50%.
The 2018 term loan also includes a 0.75% LIBOR floor.

Subject to certain conditions, our term loan facility, without the consent of the then existing lenders (but subject
to the receipt of commitments), may be expanded (or a new term loan facility added) by up to the greater of $200
million in the aggregate or such amount as will not cause the net senior secured debt ratio to exceed 2.75 to 1.00.
If the effective interest rate on an expanded or new term loan is more than 0.5% higher than the existing term
loans, the rate on the existing term loans will be increased to reflect the new rate minus 0.5%.

We may voluntarily prepay loans or reduce commitments under our term loan facility, in whole or in part, subject
to minimum amounts, with prior notice but without premium or penalty.

We must prepay our term loan facility with the net cash proceeds of certain asset sales, the incurrence or issuance
of specified refinancing indebtedness and 50% of excess cash flow (such percentage subject to reduction based
on the achievement of specified senior secured leverage ratios), in each case, subject to certain reinvestment
rights and other exceptions.

Our obligations under the term loan facility are guaranteed by us and all of our direct and indirect wholly owned
U.S. subsidiaries (subject to certain permitted exceptions based on immateriality thresholds of aggregate assets
and revenues of excluded U.S. subsidiaries). The term loan facility is secured by a lien on substantially all of our
assets and each of our direct and indirect U.S. subsidiaries’ current and fixed assets (subject to certain
exceptions), and the term loan facility has a first priority lien on the above-referenced fixed assets, and a second
priority lien on all current assets (second in priority to the liens securing the revolving credit facilities referred to
above), in each case, subject to other permitted liens.

Our term loan facility contains customary negative covenants consistent with those applicable to the 2021 Notes
and 2024 Notes (see below), including, but not limited to, restrictions on our ability and that of our restricted
subsidiaries to merge and consolidate with other companies, incur indebtedness, grant liens or security interests
on assets, pay dividends or make other restricted payments, sell or otherwise transfer assets, or enter into
transactions with affiliates. We are currently in compliance with the covenants under our term loan facility.

Our term loan facility provides that, upon the occurrence of certain events of default, our obligations thereunder
may be accelerated. Such events of default are consistent with those described above for the revolving credit
facilities.

Description of the 2021 Notes and 2024 Notes

In May 2014, CommScope, Inc. issued $650.0 million principal amount of senior notes due June 2021 and
$650.0 million principal amount of senior notes due June 2024. The 2021 Notes bear interest at a rate of 5.00%.
The 2024 Notes bear interest at a rate of 5.50%. The interest on the 2021 Notes and the 2024 Notes is payable
semi-annually in arrears on June 15 and December 15.

All of CommScope, Inc.’s existing and future direct and indirect domestic subsidiaries that guarantee the senior
secured credit facilities jointly, severally and unconditionally guarantee the 2021 Notes and the 2024 Notes on a
senior unsecured basis. The 2021 Notes and the 2024 Notes may be redeemed at the option of the holders at
101% of their face amount, plus accrued and unpaid interest, upon certain change of control events. Prior to

June 15, 2017 in the case of the 2021 Notes and June 15, 2019 in the case of the 2024 Notes, the 2021 Notes and
2024 Notes will be redeemable at a redemption price equal to 100% of their principal amount, plus a make-whole
premium (as defined in the respective indentures), plus accrued and unpaid interest to the redemption date. On or
prior to June 15, 2017, under certain circumstances, we may also redeem up to 40% of the aggregate principal
amount of the 2021 Notes and the 2024 Notes at a redemption price of 105.0% in the case of the 2021 Notes or
105.5% in the case of the 2024 Notes, plus accrued and unpaid interest to the redemption date using the proceeds
of certain equity offerings.

Beginning on June 15, 2017, the 2021 Notes may be redeemed at the redemption prices listed below, plus
accrued interest to the date of redemption.

Redemption in twelve-month period beginning June 15,

2017
2018
2019 and thereafter

Percentage

102.500%
101.250%
100.000%

Beginning on June 15, 2019, the 2024 Notes may be redeemed at the redemption prices listed below, plus
accrued interest to the date of redemption.

Redemption in twelve-month period beginning June 15,

2019
2020
2021
2022 and thereafter

Percentage

102.750%
101.833%
101.917%
100.000%

The indentures governing the 2021 Notes and the 2024 Notes limit the ability of CommScope, Inc. and most of
its subsidiaries to:

•

incur additional debt or issue certain capital stock unless a fixed charge coverage ratio is satisfied or
certain other exceptions apply;

pay dividends on, repurchase or make distributions in respect of our capital stock or repurchase or
retire subordinated indebtedness;

• make certain investments;

•

sell assets;

create liens;

consolidate, merge, sell or otherwise dispose of all or substantially all of our assets;

enter into certain transactions with our affiliates; and

permit restrictions on the ability of our subsidiaries to make distributions.

There are no financial maintenance covenants in the indentures governing the 2021 Notes and the 2024 Notes.
Events of default under the 2021 Notes and 2024 Notes include, among others, nonpayment of principal or
interest when due, covenant defaults, bankruptcy and insolvency events and cross defaults.

Description of the senior PIK toggle notes

In May 2013, CommScope Holdings issued $550.0 million of senior PIK toggle notes that mature on June 1,
2020 (the senior PIK toggle notes). Interest on the senior PIK toggle notes is payable semi-annually in arrears on
June 1 and December 1. We are required to pay interest on the senior PIK toggle notes entirely in cash, unless the
“Applicable Amount,” as defined in the senior PIK toggle notes Indenture, is less than the applicable semi-annual

requisite cash interest payment amount, in which case, we may elect to pay a portion of the interest due on the
senior PIK toggle notes for such interest period by increasing the principal amount of the senior PIK toggle notes
or by issuing new notes for up to the entire amount of the interest payment, in each case, “PIK Interest,” to the
extent described in the senior PIK toggle notes Indenture. For the purposes of the senior PIK toggle notes
Indenture, “Applicable Amount” generally refers to CommScope, Inc.’s then current restricted payment capacity
under the instruments governing its indebtedness less $20 million plus CommScope Holdings’ cash and cash
equivalents less $10 million. Cash interest on the senior PIK toggle notes accrues at the rate of 6.625% per
annum. PIK Interest on the senior PIK toggle notes accrues at the rate of 7.375% per annum until the next
payment of cash interest.

The senior PIK toggle notes may be redeemed at the option of the holders at 101% of their face amount, plus
accrued and unpaid interest, upon certain change of control events. Prior to June 1, 2016, the senior PIK toggle
notes will be redeemable at a redemption price equal to 100% of their principal amount, plus a make-whole
premium (as defined in the senior PIK toggle notes Indenture), plus accrued and unpaid interest to the
redemption date. On or prior to June 1, 2016, under certain circumstances, we may also redeem up to 40% of the
aggregate principal amount of the senior PIK toggle notes at a redemption price of 106.625% plus accrued and
unpaid interest to the redemption date using the proceeds of certain equity offerings.

Beginning on June 1, 2016, the senior PIK toggle notes may be redeemed at the redemption prices listed below,
plus accrued interest to the date of redemption.

Redemption in twelve-month period beginning June 1,

2016
2017
2018 and thereafter

Percentage

103.313%
101.656%
100.000%

The senior PIK toggle notes Indenture limits the ability of us and most of our subsidiaries to:

•

incur additional debt or issue certain capital stock unless a fixed charge coverage ratio is satisfied or
certain other exceptions apply;

pay dividends on, repurchase or make distributions in respect of our capital stock or repurchase or
retire subordinated indebtedness;

• make certain investments;

•

sell assets;

create liens;

consolidate, merge, sell or otherwise dispose of all or substantially all of our assets;

enter into certain transactions with our affiliates; and

permit restrictions on the ability of our subsidiaries to make distributions.

There are no financial maintenance covenants in the senior PIK toggle notes Indenture. Events of default under
the senior PIK toggle notes Indenture include, among others, nonpayment of principal or interest when due,
covenant defaults, bankruptcy and insolvency events and cross defaults.

Description of Certain Other Indebtedness

Certain of our subsidiaries are parties to capital leases, other loans, lines of credit and letter of credit facilities. As
of December 31, 2014, $0.4 million of capital leases and other loans were outstanding. As of December 31, 2014,
there were no borrowings and approximately $11.3 million of borrowing capacity under these lines of credit. We
had approximately $3.1 million in letters of credit outstanding and approximately $2.2 million of remaining
capacity under these letters of credit facilities.

Contractual Obligations, Contingent Liabilities and Commitments

The following table summarizes our contractual obligations as of December 31, 2014:

Contractual Obligations

Amount of Payments Due per Period

Total
Payments Due

2015

2016-2017

2018-2019 Thereafter

Long-term debt, including current maturities (a)
Interest on long-term debt (a)(b)
Operating leases
Purchase obligations (c)
Pension and other postretirement benefit liabilities (d)
Restructuring costs, net (e)
Redwood acquisition payments (f)
Unrecognized tax benefits (g)

$2,714.5
818.4
86.5
14.1
34.4
3.8
—
—

(dollars in millions)
$352.8
$
9.0
252.5
131.2
31.2
23.4
—
14.1
5.2
17.4
0.1
3.7
—
—
—
—

$502.7
210.0
17.9
—
4.5
—
—
—

$1,850.0
224.7
14.0
—
7.3
—
—
—

Total contractual obligations

$3,671.7

$198.8

$641.8

$735.1

$2,096.0

(a) No prepayment or redemption of any of our long-term debt balances has been assumed. Refer to Note 6 in

the Notes to Consolidated Financial Statements included elsewhere in this Annual Report on Form 10-K for
information regarding the terms of our long-term debt agreements.
Interest on long-term debt excludes the amortization of deferred financing fees and original issue discount.
Interest on variable rate debt is estimated based upon rates in effect as of December 31, 2014.
(c) Purchase obligations include minimum amounts owed under take-or-pay or requirements contracts.

(b)

Amounts covered by open purchase orders are excluded as there is no contractual obligation until goods or
services are received.

(d) Amounts reflect expected contributions related to payments under the postretirement benefit plans through

2024 and expected pension contributions of $14.4 million in 2015 (see Note 10 in the Notes to Consolidated
Financial Statements included elsewhere in this Annual Report on Form 10-K).

(e) Future restructuring payments exclude payments due under lease arrangements which are included in

operating leases above.

(f) Additional payments of up to $49.0 million related to the acquisition of Redwood Systems, Inc. could be
due in 2015 if net sales of Redwood products reach various levels of up to $55.0 million over various
periods through July 31, 2015. We believe the likelihood is remote that the sales targets will be met or any
payments will be required.

(g) Due to the uncertainty in predicting the timing of tax payments related to our unrecognized tax benefits,

$57.5 million has been excluded from the presentation. We anticipate a reduction of up to $5.0 million of
unrecognized tax benefits during the next twelve months (see Note 11 in the Notes to Consolidated
Financial Statements included elsewhere in this Annual Report on Form 10-K).

Recently Issued Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update 2014-09,
Revenue from Contracts with Customers, which establishes a single comprehensive model for revenue
recognition. Under the new guidance, revenue will be recognized when control over goods or services has been
transferred to a customer. When multiple goods or services are sold under a single arrangement, revenue will be
allocated based on the relative standalone selling prices of the various elements. We will be required to adopt the
standard as of January 1, 2017 and early adoption is not permitted. Transition alternatives include full
retrospective adoption or a modified retrospective adoption. We have not determined the transition approach that
will be utilized or estimated the impact of adopting the new accounting standard.

Off-Balance Sheet Arrangements

We are not a party to any significant off-balance sheet arrangements, except for operating leases.

Effects of Inflation and Changing Prices

We continually attempt to minimize the effect of inflation on earnings by controlling our operating costs and
adjusting our selling prices. The principal raw materials purchased by us (copper, aluminum, steel, plastics and
other polymers, bimetals and optical fiber) are subject to changes in market price as they are influenced by
commodity markets and other factors. Prices for copper, fluoropolymers and certain other polymers derived from
oil and natural gas have, at times, been volatile. As a result, we have increased our prices for certain products and
may have to increase prices again in the future. To the extent that we are unable to pass on cost increases to
customers without a significant decrease in sales volume or must implement price reductions in response to a
rapid decline in raw material costs, these cost changes could have a material adverse impact on the results of our
operations.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are exposed to market risks related to changes in interest rates, foreign currency exchange rates and
commodity prices. We may utilize derivative financial instruments, among other methods, to hedge some of
these exposures. We do not use derivative financial instruments for speculative or trading purposes.

Interest Rate Risk

The table below summarizes the expected interest and principal payments associated with our variable rate debt
outstanding as of December 31, 2014 (mainly the variable rate term loans). The principal payments presented
below are based on scheduled maturities and assume no borrowings under the revolving credit facility. The
interest payments presented below assume the interest rate in effect as of December 31, 2014 (see Note 6 in the
Notes to Consolidated Financial Statements included elsewhere in this Annual Report on Form 10-K). The
impact of a 1% increase in the interest rate index (taking into account the impact of the LIBOR floor on the 2018
term loan) on projected future interest payments on the variable rate debt is also included in the table below.

For the year ended December 31,

2015

2016

2017

2018

2019

There-
after

Principal and interest payments on variable rate debt
Average cash interest rate
Impact of 1% increase in interest rate index

(dollars in millions)
$503.3

$35.1 $360.8

$35.5
3.08% 3.08% 3.23% 3.25% —
$ 6.0

$— $—
—
$— $—

$ 5.9

2.7

0.1

We also have $1.85 billion aggregate principal amount of fixed rate senior notes and senior PIK toggle notes.
The table below summarizes our expected interest and principal payments related to our fixed rate debt at
December 31, 2014 (assuming we make all of our interest payments on the senior PIK toggle notes at the 6.625%
cash-pay interest rate).

Principal and interest payments on fixed rate debt
Average cash interest rate

Foreign Currency Risk

For the year ended December 31,

2015

2016

2017

2018

2019

There-
after

$104.7

(dollars in millions)
$104.7
$104.7

$104.7

$2,074.7

5.66% 5.66% 5.66% 5.66% 5.66%

5.51%

Approximately 45% of our 2014 and 2013 net sales were to customers located outside the U.S. Significant
changes in foreign currency exchange rates could adversely affect our international sales levels and the related
collection of amounts due. In addition, a significant decline in the value of currencies used in certain regions of
the world as compared to the U.S. dollar could adversely affect product sales in those regions because our
products may become more expensive for those customers to pay for in their local currency. Conversely,
significant increases in the value of foreign currencies as compared to the U.S. dollar could adversely affect
profitability as certain product costs increase relative to a U.S. dollar-denominated sales price. The foreign
currencies to which we have the greatest exposure include the Chinese yuan, euro, Brazilian real, Indian rupee
and Australian dollar. Local manufacturing provides a natural hedge and we continue to evaluate additional
alternatives to help us reasonably manage the market risk related to foreign currency exposures.

We use derivative instruments such as forward exchange contracts to manage the risk of fluctuations in the value
of certain foreign currencies. At December 31, 2014, we had foreign exchange contracts with a negative net fair
value of ($2.4) million, with maturities ranging from one to nine months with an aggregate notional value of
$363 million (based on exchange rates as of December 31, 2014). These instruments are not leveraged and are

not held for trading or speculation. These contracts are not designated as hedges for accounting purposes and are
marked to market each period through earnings and, as such, there were no unrecognized gains or losses as of
December 31, 2014 or 2013. See Note 7 in the Notes to Consolidated Financial Statements included elsewhere in
this Annual Report on Form 10-K for further discussion of these contracts. We may increase our use of derivative
instruments to manage our economic exposure to foreign currency risk.

Commodity Price Risk

Materials, in their finished form, account for a large portion of our cost of sales. These materials, such as copper,
aluminum, steel, plastics and other polymers, bimetals and optical fiber, are subject to changes in market price as
they are influenced by commodity markets and supply and demand levels, among other factors. Management
attempts to mitigate these risks through effective requirements planning and by working closely with key
suppliers to obtain the best possible pricing and delivery terms. As of December 31, 2014, we had forward
purchase commitments outstanding under take-or-pay contracts for certain metals of approximately $14.1 million
that we expect to consume in the normal course of operations through the second quarter of 2015. We may begin
to use derivative financial instruments to manage our economic exposure to commodity price risk.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Index to Financial Statements

Reports of Independent Registered Public Accounting Firm

Consolidated Statements of Operations and Comprehensive Income

Consolidated Balance Sheets

Consolidated Statements of Cash Flows

Consolidated Statements of Stockholders’ Equity

Notes to Consolidated Financial Statements

Schedule I - Condensed Financial Information - Parent Company Information

Page

117

Report of Independent Registered Public Accounting Firm

The Board of Directors and Stockholders of CommScope Holding Company, Inc.

We have audited the accompanying consolidated balance sheets of CommScope Holding Company, Inc. as of
December 31, 2014 and 2013, and the related consolidated statements of operations and comprehensive income,
stockholders’ equity, and cash flows for each of the three years in the period ended December 31, 2014. Our
audits also included the financial statement schedule listed in the Index at Item 15(a). These financial statements
and schedule are the responsibility of the Company’s management. Our responsibility is to express an opinion on
these financial statements and schedule based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board
(United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated
financial position of CommScope Holding Company, Inc. at December 31, 2014 and 2013, and the consolidated
results of its operations and its cash flows for each of the three years in the period ended December 31, 2014, in
conformity with U.S. generally accepted accounting principles. Also, in our opinion, the related financial
statement schedule, when considered in relation to the basic financial statements taken as a whole, presents fairly
in all material respects the information set forth therein.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board
(United States), CommScope Holding Company, Inc.’s internal control over financial reporting as of
December 31, 2014, based on criteria established in Internal Control – Integrated Framework issued by the
Committee of Sponsoring Organizations of the Treadway Commission (2013 Framework) and our report dated
February 19, 2015 expressed an unqualified opinion thereon.

Charlotte, North Carolina
February 19, 2015

Report of Independent Registered Public Accounting Firm

The Board of Directors and Stockholders of CommScope Holding Company, Inc.

We have audited CommScope Holding Company, Inc.’s internal control over financial reporting as of
December 31, 2014, based on criteria established in Internal Control – Integrated Framework issued by the
Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria).
CommScope Holding Company, Inc.’s management is responsible for maintaining effective internal control over
financial reporting, and for its assessment of the effectiveness of internal control over financial reporting included in
the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to
express an opinion on the company’s internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board
(United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about
whether effective internal control over financial reporting was maintained in all material respects. Our audit
included obtaining an understanding of internal control over financial reporting, assessing the risk that a material
weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the
assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe
that our audit provides a reasonable basis for our opinion.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for external purposes in
accordance with generally accepted accounting principles. A company’s internal control over financial reporting
includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail,
accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable
assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance
with generally accepted accounting principles, and that receipts and expenditures of the company are being made
only in accordance with authorizations of management and directors of the company; and (3) provide reasonable
assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the
company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect
misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that
controls may become inadequate because of changes in conditions, or that the degree of compliance with the
policies or procedures may deteriorate.

As indicated in the accompanying Management’s Report on Internal Control over Financial Reporting,
management’s assessment of and conclusion on the effectiveness of internal control over financial reporting did not
include the internal controls of Alifabs, which is included in the 2014 consolidated financial statements of
CommScope Holding Company, Inc. and constituted approximately 1% of total assets as of December 31, 2014 and
1% of net sales for the year then ended. Our audit of internal control over financial reporting of CommScope
Holding Company, Inc. also did not include an evaluation of the internal control over financial reporting of Alifabs.

In our opinion, CommScope Holding Company, Inc. maintained, in all material respects, effective internal
control over financial reporting as of December 31, 2014, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board
(United States), the 2014 consolidated financial statements of CommScope Holding Company, Inc. and our
report dated February 19, 2015 expressed an unqualified opinion thereon.

Charlotte, North Carolina
February 19, 2015

CommScope Holding Company, Inc.
Consolidated Statements of Operations
and Comprehensive Income
(In thousands, except per share amounts)

Net sales
Operating costs and expenses:

Cost of sales
Selling, general and administrative
Research and development
Amortization of purchased intangible assets
Restructuring costs, net
Asset impairments

Total operating costs and expenses

Operating income
Other expense, net
Interest expense
Interest income

Income before income taxes
Income tax expense

Net income

Earnings per share:

Basic
Diluted

Weighted average shares outstanding:

Basic
Diluted

Comprehensive income:

Net income
Other comprehensive income (loss), net of tax:

Foreign currency loss
Defined benefit plans:

Change in unrecognized actuarial gain (loss)
Change in unrecognized net prior service credit

Gain on available-for-sale securities

Total other comprehensive income (loss), net of tax

Total comprehensive income

Year Ended December 31,

2014

2013

2012

$3,829,614

$3,480,117

$3,321,885

2,432,345
484,891
125,301
178,265
19,267
12,096

2,279,177
502,275
126,431
174,887
22,104
45,529

2,261,204
461,149
121,718
175,676
22,993
40,907

3,252,165

3,150,403

3,083,647

577,449
(86,405)
(178,935)
4,954

317,063
(80,291)

329,714
(48,037)
(208,599)
3,107

76,185
(56,789)

238,238
(15,379)
(188,974)
3,417

37,302
(31,949)

$ 236,772

19,396

5,353

$
$

1.27
1.24

$
$

0.12
0.12

$
$

0.03
0.03

186,905
191,450

160,641
164,013

154,708
155,517

$ 236,772

19,396

5,353

(51,411)

(4,848)

(4,379)

(11,584)
(6,169)
11,892

(57,272)

(1,469)
(3,313)
—

(9,630)

1,813
12,284
—

9,718

$ 179,500

9,766

15,071

See notes to consolidated financial statements.

CommScope Holding Company, Inc.
Consolidated Balance Sheets
(In thousands, except share amounts)

Cash and cash equivalents
Accounts receivable, less allowance for doubtful accounts of $8,797 and $12,617,

Assets

respectively
Inventories, net
Prepaid expenses and other current assets
Deferred income taxes

Total current assets

Property, plant and equipment, net of accumulated depreciation of $207,342 and

$183,965 respectively

Goodwill
Other intangible assets, net
Other noncurrent assets

Total assets

Liabilities and Stockholders’ Equity

Accounts payable
Other accrued liabilities
Current portion of long-term debt

Total current liabilities

Long-term debt
Deferred income taxes
Pension and other postretirement benefit liabilities
Other noncurrent liabilities

Total liabilities

Commitments and contingencies
Stockholders’ equity:
Preferred stock, $.01 par value: Authorized shares: 200,000,000; Issued and

outstanding shares: None at December 31, 2014 and 2013

Common stock, $.01 par value: Authorized shares: 1,300,000,000; Issued and

outstanding shares: 187,831,389 and 185,861,777 at December 31, 2014 and 2013,
respectively

Additional paid-in capital
Retained earnings (accumulated deficit)
Accumulated other comprehensive loss
Treasury stock, at cost: 961,566 shares at December 31, 2014 and 2013

Total stockholders’ equity

Total liabilities and stockholders’ equity

See notes to consolidated financial statements.

December 31,

2014

2013

$ 729,321

$ 346,320

612,007
367,185
67,875
51,230

607,489
372,187
71,818
55,609

1,827,618

1,453,423

289,371
1,451,887
1,260,927
126,082

310,143
1,450,506
1,422,192
97,791

$4,955,885

$4,734,055

$ 177,806
289,006
9,001

$ 251,639
332,280
9,462

475,813
2,698,724
339,945
29,478
104,306

593,381
2,505,090
386,527
40,349
120,692

3,648,266

3,646,039

—

1,888
2,141,433
(741,519)
(83,548)
(10,635)

1,868
2,101,350
(978,291)
(26,276)
(10,635)

1,307,619

1,088,016

$4,955,885

$4,734,055

CommScope Holding Company, Inc.
Consolidated Statements of Cash Flows
(In thousands)

Operating Activities:
Net income
Adjustments to reconcile net income to net cash generated by

operating activities:

Depreciation and amortization
Equity-based compensation
Deferred income taxes
Asset impairments
Non-cash restructuring charges
Excess tax benefits from equity-based compensation
Changes in assets and liabilities:
Accounts receivable
Inventories
Prepaid expenses and other current assets
Accounts payable and other accrued liabilities
Other noncurrent liabilities
Other noncurrent assets

Other

Year Ended December 31,

2014

2013

2012

236,772

$ 19,396

5,353

259,504
21,092
(33,278)
12,096
1,237
(11,411)

(18,824)
(4,324)
1,502
(109,922)
(49,265)
715
(16,476)

256,616
16,108
(40,722)
45,529
11,179
(229)

(11,895)
(62,141)
(27,257)
57,575
(21,944)
(3,060)
(1,454)

262,279
7,525
(48,713)
40,907
963
(748)

(15,889)
18,186
(490)
45,763
(35,285)
4,344
1,940

Net cash generated by operating activities

289,418

237,701

286,135

Investing Activities:

Additions to property, plant and equipment
Proceeds from sale of property, plant and equipment
Cash paid for acquisitions
Proceeds from sale of businesses and long-term investments
Cash paid for long-term investments
Other

Net cash used in investing activities

Financing Activities:

Long-term debt repaid
Long-term debt proceeds
Net proceeds from the issuance of common stock
Long-term debt financing costs
Dividends paid
Cash paid to stock option holders
Proceeds from the issuance of common shares under equity-based

compensation plans

Excess tax benefits from equity-based compensation
Other

Net cash generated by (used in) financing activities
Effect of exchange rate changes on cash and cash equivalents

Change in cash and cash equivalents
Cash and cash equivalents, beginning of period

Cash and cash equivalents, end of period

(36,935)
4,575
(41,794)
12,761
(15,000)
441

(36,780)
3,237
(55,770)
26,502
(750)
150

(27,957)
2,345
(12,214)
4,022
(3,250)
1,529

(75,952)

(63,411)

(35,525)

(1,124,392)
1,315,026

—
(23,257)
—
—

12,052
11,411
—

190,840
(21,305)

383,001
346,320

(907,817)
947,379
433,958
(14,560)
(538,705)
(11,295)

(394,356)
299,150

—
(2,701)
(200,000)
(732)

1,174
229
(32)

—
748
(1,631)

(89,669)
(2,676)

(299,522)
(3,815)

81,945
264,375

(52,727)
317,102

729,321

$ 346,320

$ 264,375

See notes to consolidated financial statements.

CommScope Holding Company, Inc.
Consolidated Statements of Stockholders’ Equity
(In thousands, except share amounts)

Number of common shares outstanding:
Balance at beginning of period
Issuance of shares under equity-based compensation plans
Shares repurchased under equity-based compensation plans
Issuance of shares

Balance at end of period

Common stock:

Balance at beginning of period
Issuance of shares under equity-based compensation plans
Issuance of shares

Balance at end of period

Additional paid-in capital:

Balance at beginning of period
Issuance of shares under equity-based compensation plans
Equity-based compensation
Tax benefit from shares issued under equity-based

compensation plans

Issuance of shares

Balance at end of period

Retained earnings (accumulated deficit):
Balance at beginning of period
Net income
Dividends paid
Cash payment to stock option holders

Balance at end of period

Accumulated other comprehensive loss:
Balance at beginning of period
Other comprehensive income (loss), net of tax

Balance at end of period

Treasury stock, at cost:

Balance at beginning of period
Net shares repurchased under equity-based compensation

plans

Balance at end of period

Total stockholders’ equity

Year Ended December 31,

2014

2013

2012

185,861,777
1,969,612
—
—

154,879,299
238,514
(25,266)
30,769,230

154,688,355
559,914
(368,970)

—

187,831,389

185,861,777

154,879,299

1,868
20

—

1,888

1,558
2
308

1,868

2,101,350
12,052
16,620

$ 1,655,379
1,453
10,639

1,553
5

—

1,558

1,648,165
2,727
4,003

11,411
—

229
433,650

484
—

2,141,433

$ 2,101,350

1,655,379

(978,291) $
236,772
—
—

(447,687) $
19,396
(538,705)
(11,295)

(252,308)
5,353
(200,000)
(732)

(741,519) $

(978,291) $

(447,687)

(26,276) $
(57,272)

(16,646) $
(9,630)

(26,364)
9,718

(83,548) $

(26,276) $

(16,646)

(10,635) $

(10,322) $

(5,957)

—

(313)

(4,365)

(10,635) $

(10,322)

1,307,619

1,088,016

1,182,282

See notes to consolidated financial statements.

CommScope Holding Company, Inc.
Notes to Consolidated Financial Statements
(In thousands, unless otherwise noted)

1. BACKGROUND AND DESCRIPTION OF THE BUSINESS

CommScope Holding Company, Inc., along with its direct and indirect subsidiaries, is a leading global provider
of essential infrastructure solutions for wireless, business enterprise and residential broadband networks. The
Company’s solutions and services for wired and wireless networks enable high-bandwidth data, video and voice
applications. CommScope’s global leadership position is built upon innovative technology, broad solution
offerings, high-quality and cost-effective customer solutions and global manufacturing and distribution scale.

As of December 31, 2014 and 2013, funds affiliated with The Carlyle Group (Carlyle) owned 53.9% and 76.1%,
respectively, of the outstanding shares of CommScope.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Consolidation

The accompanying consolidated financial statements include CommScope Holding Company, Inc., along with its
direct and indirect subsidiaries (CommScope or the Company). All intercompany accounts and transactions are
eliminated in consolidation.

Certain prior year amounts have been reclassified to conform to the current year presentation.

Cash and Cash Equivalents

Cash and cash equivalents represent deposits in banks and cash invested temporarily in various instruments with
a maturity of three months or less at the time of purchase.

Allowance for Doubtful Accounts

The Company maintains allowances for doubtful accounts for estimated losses expected to result from the
inability of its customers to make required payments. These estimates are based on management’s evaluation of
the ability of customers to make payments, focusing on historical experience, known customer financial
difficulties and age of receivable balances.

Inventories

Inventories are stated at the lower of cost or market. Inventory cost is determined on a first-in, first-out (FIFO)
basis. Costs such as idle facility expense, excessive scrap and rehandling costs are recognized as expenses as
incurred. The Company maintains reserves to reduce the value of inventory to the lower of cost or market,
including reserves for excess and obsolete inventory.

Long-Lived Assets

Property, Plant and Equipment

Property, plant and equipment are stated at cost, including interest costs associated with qualifying capital
additions. Upon application of acquisition accounting, property, plant and equipment were measured at estimated
fair value as of the acquisition date to establish a new historical cost basis. Provisions for depreciation are based
on estimated useful lives of the assets using the straight-line method. Useful lives generally range from 10 to
35 years for buildings and improvements and 3 to 10 years for machinery and equipment. Expenditures for
repairs and maintenance are charged to expense as incurred. Assets that management intends to dispose of and
that meet held for sale criteria are carried at the lower of the carrying value or fair value less costs to sell.

CommScope Holding Company, Inc.
Notes to Consolidated Financial Statements – (Continued)
(In thousands, unless otherwise noted)

Goodwill and Other Intangible Assets

Goodwill is assigned to reporting units, which are operating segments or one level below the operating segment
level, based on the difference between the purchase price as allocated to the reporting units and the estimated fair
value of the identified net assets acquired as allocated to the reporting units. Purchased intangible assets with
finite lives are carried at their estimated fair values at the time of acquisition less accumulated amortization and
any impairment charges. Amortization is recognized on a straight-line basis over the estimated useful lives of the
respective assets (see Note 4).

Asset Impairments

Goodwill is tested for impairment annually or at other times if events have occurred or circumstances exist that
indicate the carrying value of the reporting unit may exceed its fair value. Goodwill impairment charges of $4.9
million and $36.2 million were recorded during the years ended December 31, 2014 and 2013, respectively. See
Notes 4 and 8 for further discussion of these impairment charges.

Property, plant and equipment and intangible assets with finite lives are reviewed for impairment whenever
events or changes in circumstances indicate that the carrying value of the assets may not be recoverable, based on
the undiscounted cash flows expected to be derived from the use and ultimate disposition of the assets. Assets
identified as impaired are carried at estimated fair value. During the years ended December 31, 2014, 2013 and
2012, the Company recognized pretax impairment charges, other than goodwill impairments, of $7.2 million,
$9.3 million and $40.9 million, respectively. See Notes 4 and 8 for further discussion of these impairment
charges.

Due to uncertain market conditions, it is possible that future impairment reviews may indicate additional
impairments of goodwill and/or other intangible assets, which could result in charges that are material to the
Company’s results of operations.

Income Taxes

Deferred income taxes reflect the future tax consequences of differences between the financial reporting and tax
basis of assets and liabilities. The Company records a valuation allowance, when appropriate, to reduce deferred
tax assets to an amount that is more likely than not to be realized.

Tax benefits that result from uncertain tax positions may be recognized only if they are considered more likely
than not to be sustainable, based on their technical merits. The amount of benefit to be recognized is the largest
amount of tax benefit that is at least 50% likely to be realized.

The cumulative amount of undistributed earnings from foreign subsidiaries for which no U.S. taxes have been
provided was $441 million as of December 31, 2014. In addition, the Company does not provide for U.S. taxes
related to the foreign currency remeasurement gains and losses on its long-term intercompany loans with foreign
subsidiaries. These loans are not expected to be repaid in the foreseeable future, and the foreign currency gains
and losses are therefore recorded to accumulated other comprehensive income (loss).

Revenue Recognition

Revenue is recognized when persuasive evidence of an arrangement exists, delivery has occurred or service has
been rendered, the selling price is fixed or determinable and collectability is reasonably assured. The majority of
the Company’s revenue comes from product sales. Revenue from product sales is recognized when the risks and

CommScope Holding Company, Inc.
Notes to Consolidated Financial Statements – (Continued)
(In thousands, unless otherwise noted)

rewards of ownership have passed to the customer and revenue is measurable. Revenue is not recognized related
to product sold to contract manufacturers that the Company anticipates repurchasing in order to complete the sale
to the ultimate customer.

Certain revenue arrangements are for the sale of software and services. Revenue for software products is
recognized based on the timing of customer acceptance of the specific revenue elements. The fair value of each
revenue element is determined based on vendor-specific objective evidence of fair value determined by stand-
alone pricing of each element. These contracts typically contain post-contract support (PCS) services which are
sold both as part of a bundled product offering and as a separate contract. Revenue for PCS services is
recognized ratably over the term of the PCS contract. Other service revenue is typically recognized once the
service is performed or over the period of time covered by the arrangement.

For sales to distributors, system integrators and value-added resellers (primarily for the Enterprise segment),
revenue is recorded at the net amount to be received after deductions for estimated discounts, allowances, returns
and rebates. These estimates are determined based upon historical experience, contract terms, inventory levels in
the distributor channel and other related factors. Adjustments are recorded when circumstances indicate revisions
may be necessary. If management does not have sufficient historical experience to make a reasonable estimation
of these reductions to revenue, recognition of the revenue is deferred until management believes there is a
sufficient basis to recognize such revenue.

Product Warranties

The Company recognizes a liability for the estimated claims that may be paid under its customer warranty
agreements to remedy potential deficiencies of quality or performance of the Company’s products. These product
warranties extend over periods ranging from one to twenty-five years from the date of sale, depending upon the
product subject to the warranty. The Company records a provision for estimated future warranty claims as cost of
sales based upon the historical relationship of warranty claims to sales and specifically identified warranty issues.
The Company bases its estimates on assumptions that are believed to be reasonable under the circumstances and
revises its estimates, as appropriate, when events or changes in circumstances indicate that revisions may be
necessary. Such revisions may be material.

Shipping and Handling Costs

CommScope includes shipping and handling costs billed to customers in net sales and includes the costs incurred
to transport product to customers as cost of sales. Certain internal handling costs, which relate to activities to
prepare goods for shipment, are recorded in selling, general and administrative expense and were approximately
$27.2 million, $27.3 million and $25.2 million for the years ended December 31, 2014, 2013 and 2012,
respectively.

Advertising Costs

Advertising costs are expensed in the period in which they are incurred. Advertising expense was $10.5 million,
$10.3 million and $7.7 million for the years ended December 31, 2014, 2013 and 2012, respectively.

CommScope Holding Company, Inc.
Notes to Consolidated Financial Statements – (Continued)
(In thousands, unless otherwise noted)

Research and Development

Research and development (R&D) costs are expensed in the period in which they are incurred. R&D costs
include materials and equipment that have no alternative future use, depreciation on equipment and facilities
currently used for R&D purposes, personnel costs, contract services and reasonable allocations of indirect costs,
if clearly related to an R&D activity. Expenditures in the pre-production phase of an R&D project are recorded as
R&D expense. However, costs incurred in the pre-production phase that are associated with output actually used
in production are recorded in cost of sales. A project is considered finished with pre-production efforts when
management determines that it has achieved acceptable levels of scrap and yield, which vary by project.
Expenditures related to ongoing production are recorded in cost of sales.

Derivative Instruments and Hedging Activities

CommScope is exposed to risks resulting from adverse fluctuations in commodity prices, interest rates and
foreign currency exchange rates. CommScope’s risk management strategy includes the use of derivative and non-
derivative financial instruments as hedges of these risks, whenever management determines their use to be
reasonable and practical. This strategy does not permit the use of derivative financial instruments for trading
purposes, nor does it allow for speculation. A hedging instrument may be designated as a net investment hedge to
manage exposure to foreign currency risks related to an investment in a foreign subsidiary; a fair value hedge to
manage exposure to risks related to a foreign-currency-denominated cash or other account or a firm commitment
for the purchase of raw materials or equipment; or a cash flow hedge to manage exposure to risks related to a
forecasted purchase of raw materials, variable interest rate payments or a forecasted foreign-currency-
denominated sale of product. The use of non-derivative financial instruments in hedging activities is limited to
hedging fair value risk related to a foreign-currency-denominated firm commitment or a foreign currency risk
related to a net investment in a foreign subsidiary.

The Company’s risk management strategy permits the reasonable and practical use of derivative hedging
instruments such as forward contracts, options, cross currency swaps, certain interest rate swaps, caps and floors,
and non-derivative hedging instruments such as foreign-currency-denominated loans. The Company recognizes
all derivative financial instruments as assets or liabilities and measures them at fair value. All hedging
instruments are designated and documented as a fair value hedge, a cash flow hedge or a net investment hedge at
inception. The Company did not designate any transactions as hedges in the years ended December 31, 2014,
2013 or 2012.

The Company also uses derivative instruments such as forward exchange contracts to manage the risk of foreign
currency fluctuations. These instruments are not leveraged and are not held for trading or speculation. These
contracts are not designated as hedges for accounting purposes and are marked to market each period through
earnings and, as such, there were no unrecognized gains or losses as of December 31, 2014 or 2013. See Note 7
for further disclosure related to the derivative instruments and hedging activities.

The Company has elected and documented the use of the normal purchases and sales exception for normal
purchase and sales contracts that meet the definition of a derivative financial instrument.

Foreign Currency Translation

For the years ended December 31, 2014, 2013 and 2012, approximately 45%, 45% and 47%, respectively, of the
Company’s net sales were to customers located outside the U.S. A portion of these sales were denominated in
currencies other than the U.S. dollar, particularly sales from the Company’s foreign subsidiaries. The financial
position and results of operations of certain of the Company’s foreign subsidiaries are measured using the local

CommScope Holding Company, Inc.
Notes to Consolidated Financial Statements – (Continued)
(In thousands, unless otherwise noted)

currency as the functional currency. Revenues and expenses of these subsidiaries have been translated into U.S.
dollars at average exchange rates prevailing during the period. Assets and liabilities of these subsidiaries have
been translated at the exchange rates as of the balance sheet date. Translation gains and losses are recorded to
accumulated other comprehensive income (loss).

Aggregate foreign currency transaction gains and losses of the Company and its subsidiaries, such as those
resulting from the settlement of receivables or payables and short-term intercompany advances in a currency
other than the subsidiary’s functional currency, are recorded currently in earnings (included in other expense,
net) and resulted in losses of $2.7 million, $9.8 million and $7.0 million during the years ended December 31,
2014, 2013 and 2012, respectively. Foreign currency remeasurement gains and losses related to long-term
intercompany loans that are not expected to be settled in the foreseeable future are recorded to accumulated other
comprehensive income (loss).

Equity-Based Compensation

The estimated fair value of stock awards that are ultimately expected to vest is recognized as expense over the
requisite service periods. The Company records deferred tax assets related to compensation expense for awards
that are expected to result in future tax deductions for the Company, based on the amount of compensation cost
recognized and the Company’s statutory tax rate in the jurisdiction in which it expects to receive a deduction.
Differences between the deferred tax assets recognized for financial reporting purposes and actual tax deductions
reported on the Company’s income tax return are recorded in additional paid-in capital (if the tax deduction
exceeds the deferred tax asset) or in the Consolidated Statements of Operations and Comprehensive Income as
additional income tax expense (if the deferred tax asset exceeds the tax deduction and no excess additional paid-
in capital exists from previous awards).

Common Stock, Preferred Stock and Stock Split

On October 4, 2013, the Company’s Board of Directors approved a 3-for-1 stock split of the Company’s
outstanding common stock, which was effective as of October 4, 2013. Each share of issued and outstanding
common stock was increased to 3 shares of common stock, the number of shares of common stock into which
each outstanding option to purchase stock is exercisable was proportionally increased on a 3-for-1 basis, and the
exercise price of each outstanding option to purchase common stock was proportionally decreased. All of the
share numbers, share prices, exercise prices and other per share information throughout these financial statements
have been adjusted on a retroactive basis, to reflect this 3-for-1 stock split, including reclassifying an amount
equal to the increase in par value from additional paid-in capital. In conjunction with the Company’s initial
public offering in October 2013, the Company’s Board of Directors authorized 1.3 billion shares of common
stock, par value $0.01 per share and 200 million shares of preferred stock, par value $0.01 per share.

Earnings Per Share

Basic earnings per share is computed by dividing net income by the weighted average number of common shares
outstanding during the period. Diluted earnings per share is based on net income divided by the weighted average
number of common shares outstanding plus the dilutive effect of potential common shares outstanding during the
period using the treasury stock method. Dilutive potential common shares include outstanding equity-based
awards (stock options and restricted stock units). Certain outstanding equity-based awards were not included in
the computation of diluted earnings per share because the effect was either antidilutive or the performance
condition was not met (1.4 million, 2.2 million and 6.9 million shares for the years ended December 31, 2014,
2013 and 2012, respectively).

CommScope Holding Company, Inc.
Notes to Consolidated Financial Statements – (Continued)
(In thousands, unless otherwise noted)

The following table presents the basis for the earnings per share computations:

Year Ended December 31,

2014

2013

2012

Numerator:

Net income for basic and diluted earnings per share

$236,772

$ 19,396

5,353

Denominator:

Weighted average shares outstanding – basic

Dilutive effect of equity-based awards

Weighted average common shares outstanding – diluted

Earnings per share:

Basic
Diluted

186,905
4,545

160,641
3,372

154,708
809

191,450

164,013

155,517

$
$

1.27
1.24

$
$

0.12
0.12

$
$

0.03
0.03

Use of Estimates in the Preparation of the Financial Statements

The preparation of the accompanying consolidated financial statements in conformity with accounting principles
generally accepted in the U.S. requires management to make estimates and assumptions that affect the amounts
reported in the financial statements and accompanying notes. These estimates and their underlying assumptions
form the basis for making judgments about the carrying values of assets and liabilities that are not readily
apparent from other objective sources. The Company bases its estimates on historical experience and on
assumptions that are believed to be reasonable under the circumstances and revises its estimates, as appropriate,
when events or changes in circumstances indicate that revisions may be necessary. Significant accounting
estimates reflected in the Company’s financial statements include the allowance for doubtful accounts; reserves
for sales returns, discounts, allowances, rebates and distributor price protection programs; inventory excess and
obsolescence reserves; product warranty reserves and other contingent liabilities; tax valuation allowances and
liabilities for unrecognized tax benefits; purchase price allocations; impairment reviews for investments, fixed
assets, goodwill and other intangibles; and pension and other postretirement benefit costs and liabilities.
Although these estimates are based on management’s knowledge of and experience with past and current events
and on management’s assumptions about future events, it is at least reasonably possible that they may ultimately
differ materially from actual results.

Concentrations of Risk

Non-derivative financial instruments used by the Company in the normal course of business include letters of
credit and commitments to extend credit, primarily accounts receivable. The Company generally does not require
collateral on its accounts receivable. These financial instruments involve risk, including the credit risk of
nonperformance by the counterparties to those instruments, and the maximum potential loss may exceed the
reserves provided in the Company’s balance sheet. See Note 14 for further discussion of customer-related
concentrations of risk.

The Company manages its exposures to credit risk associated with accounts receivable using such tools as credit
approvals, credit limits and monitoring procedures. CommScope estimates the allowance for doubtful accounts
based on the actual payment history and individual circumstances of significant customers as well as the age of
receivables. In management’s opinion, as of December 31, 2014, the Company did not have significant
unreserved risk of credit loss due to the nonperformance of customers or other counterparties related to amounts
receivable. However, an adverse change in financial condition of a significant customer or group of customers or
in the telecommunications industry could materially affect the Company’s estimates related to doubtful accounts.

CommScope Holding Company, Inc.
Notes to Consolidated Financial Statements – (Continued)
(In thousands, unless otherwise noted)

The principal raw materials purchased by CommScope (copper, aluminum, steel, brass, plastics and other
polymers, bimetals and optical fiber) are subject to changes in market price as these materials are linked to
various commodity markets. The Company attempts to mitigate these risks through effective requirements
planning and by working closely with its key suppliers to obtain the best possible pricing and delivery terms.

Recent Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update 2014-09,
Revenue from Contracts with Customers, which establishes a single comprehensive model for revenue
recognition. Under the new guidance, revenue will be recognized when control over goods or services has been
transferred to a customer. When multiple goods or services are sold under a single arrangement, revenue will be
allocated based on the relative standalone selling prices of the various elements. The Company will be required
to adopt the standard as of January 1, 2017 and early adoption is not permitted. Transition alternatives include
full retrospective adoption or a modified retrospective adoption. The Company has not determined the transition
approach that will be utilized or estimated the impact of adopting the new accounting standard.

3. ACQUISITIONS AND DIVESTITURES

Acquisitions

Alifabs Group

In July 2014, the Company acquired two businesses of United Kingdom-based Alifabs Group (Alifabs) for $48.8
million ($46.7 million, net of cash acquired). Alifabs is a designer and supplier of enclosures, monopoles, smaller
streetworks towers and tower solutions for the United Kingdom telecommunications, utility and energy markets.
Sales of Alifabs products reflected in the Consolidated Statements of Operations and Comprehensive Income
were $25.2 million for the year ended December 31, 2014.

The preliminary allocation of the purchase price, based on estimates of the fair values of assets acquired and
liabilities assumed, is as follows (in millions):

Cash and cash equivalents
Other current assets
Identifiable intangible assets
Goodwill
Other noncurrent assets
Less: Liabilities assumed

Net acquisition cost

Estimated Fair Value

$ 2.1
15.7
26.9
15.3
0.6
(11.8)

$ 48.8

The goodwill arising from the purchase price allocation of the Alifabs acquisition is believed to result from the
company’s reputation in the marketplace and assembled workforce and is not expected to be deductible for
income tax purposes.

As additional information is obtained, adjustments may be made to the preliminary purchase price allocation.
The Company is still finalizing the estimated fair value of certain of the tangible and intangible assets acquired.

Redwood Systems, Inc.

In July 2013, the Company acquired Redwood Systems, Inc. (Redwood), a provider of LED lighting solutions
and integrated sensor networks for data centers and buildings. Redwood was acquired for an initial payment of

CommScope Holding Company, Inc.
Notes to Consolidated Financial Statements – (Continued)
(In thousands, unless otherwise noted)

$9.8 million and contingent consideration with an estimated fair value of $12.4 million as of the acquisition date.
The Company may be required to pay up to an additional $37.25 million of consideration if certain net sales
targets of up to $55.0 million are met over various periods through July 31, 2015. During the year ended
December 31, 2014, the estimated fair value of the liability for contingent consideration was reduced to zero (see
Note 8). In addition, there are potential retention payments for employees of Redwood of up to $11.75 million
based on the same net sales targets as the contingent consideration. The Company believes that the likelihood is
remote that any of the retention payments will be made. Redwood is a component of the Enterprise segment.

The allocation of the purchase price, based on estimates of the fair values of assets acquired and liabilities
assumed, is as follows (in millions):

Current assets
Deferred taxes
Other intangible assets
Goodwill
Other noncurrent assets
Less: Liabilities assumed

Net acquisition cost

Estimated Fair Value

$ 2.6
7.3
9.0
4.2
0.8
(1.7)

$22.2

The goodwill arising from the purchase price allocation of the Redwood acquisition is believed to result from the
company’s reputation in the marketplace and assembled workforce and is not expected to be deductible for
income tax purposes.

iTRACS Corporation

In March 2013, the Company acquired substantially all of the assets and assumed certain liabilities of iTRACS
Corporation (iTRACS) for approximately $34.0 million in cash. In March 2014, the Company reached an
agreement with the former owners of iTRACS to adjust the purchase price by $4.7 million and that amount was
received by the Company in April 2014. iTRACS develops and markets enterprise-class data center infrastructure
management (DCIM) solutions. iTRACS is a component of the Enterprise segment.

The allocation of the purchase price, based on the estimated fair values of assets acquired and liabilities assumed,
is as follows (in millions):

Current assets
Noncurrent assets, excluding intangible assets
Other intangible assets
Goodwill
Less: Liabilities assumed

Net acquisition cost

Estimated Fair Value

$ 1.7
0.7
13.1
15.1
(1.3)

$29.3

The goodwill arising from the purchase price allocation of the iTRACS acquisition is believed to result from
iTRACS’ reputation in the marketplace and assembled workforce and is expected to be deductible for income tax
purposes.

CommScope Holding Company, Inc.
Notes to Consolidated Financial Statements – (Continued)
(In thousands, unless otherwise noted)

Argus Technologies

In 2013, the Company made the final payment of $12.0 million for the 2011 acquisition of Argus Technologies.

Divestitures

BiMetals Sale

In December 2013, the Company sold certain assets of its BiMetals business. The Company received $23.0
million in cash and a note with a face value of $15.0 million and a term of up to 7 years. The estimated fair value
of the note was $9.8 million. A portion of the Company’s identified intangible assets ($2.9 million) and goodwill
($6.5 million) were allocated to the sale transaction. The Company recorded a net gain on the transaction of
$18.7 million that was reported in restructuring costs, net on the Consolidated Statements of Operations and
Comprehensive Income. The gain on sale is reported in the Broadband segment.

Other

During the year ended December 31, 2012, the Company sold its filter manufacturing facility in Shenzhen, China
for $6.9 million, net of cash sold, of which $4.0 million was received in the year ended December 31, 2012 and
$2.9 million in the year ended December 31, 2013. A gain of $1.5 million was recorded in the year ended
December 31, 2012 related to the sale.

4. GOODWILL AND OTHER INTANGIBLE ASSETS

The following table presents details of the Company’s intangible assets other than goodwill as of December 31,
2014 and 2013 (in millions):

2014

2013

Gross Carrying
Amount

Accumulated
Amortization

Net Carrying
Amount

Gross Carrying
Amount

Accumulated
Amortization

Net Carrying
Amount

Customer base
Trade names and trademarks
Patents and technologies
Non-compete agreements

Total intangible assets

$1,167.8
555.5
236.9
0.3

$1,960.5

$450.1
111.6
137.8
0.1

$699.6

$ 717.7
443.9
99.1
0.2

$1,148.1
554.0
241.4
0.3

$1,260.9

$1,943.8

$335.4
83.7
102.4
0.1

$521.6

$ 812.7
470.3
139.0
0.2

$1,422.2

During 2014, as a result of reduced expectations of future cash flows of a product line in the Broadband Segment,
certain intangible assets were determined to be impaired. A pretax charge of $7.2 million was recognized, which
consisted of $2.6 million of customer base, $0.2 million of trade names and trademarks, and $4.4 million of
patents and technologies intangible assets (recorded in other expense, net, on the Consolidated Statements of
Operations and Comprehensive Income).

CommScope Holding Company, Inc.
Notes to Consolidated Financial Statements – (Continued)
(In thousands, unless otherwise noted)

The Company’s finite-lived intangible assets are being amortized on a straight-line basis over the weighted-
average amortization periods in the following table. The aggregate weighted-average amortization period is
12.6 years.

Customer base
Trade names and trademarks
Patents and technologies
Non-compete agreements

Weighted-
Average
Amortization
Period

(in years)
10.1
19.8
6.7
4.0

Amortization expense for intangible assets was $178.3 million, $174.9 million and $175.7 million for the years
ended December 31, 2014, 2013 and 2012, respectively. Estimated amortization expense for the next five years is
as follows (in millions):

2015
2016
2017
2018
2019

Estimated
Amortization
Expense

$178.1
177.2
152.2
143.9
116.4

The following table presents the allocation of goodwill by reportable segment (in millions):

Goodwill, gross as of December 31, 2011
Adjustments to purchase price allocations
Foreign exchange

Goodwill, gross, as of December 31, 2012
Preliminary purchase price allocations
Goodwill allocated to BiMetals sale
Foreign exchange

Goodwill, gross, as of December 31, 2013
Acquisitions and adjustments to purchase price allocations
Foreign exchange

Wireless Enterprise Broadband

Total

$828.8
(4.5)
0.5

$638.9
(2.4)
—

$ 96.4
(3.6)
—

$1,564.1
(10.5)
0.5

824.8
—
—
(3.7)

821.1
15.3
(3.3)

636.5
23.0
—
—

659.5
(5.7)
—

92.8
—
(6.5)
—

86.3
—
—

1,554.1
23.0
(6.5)
(3.7)

1,566.9
9.6
(3.3)

Goodwill, gross, as of December 31, 2014

$833.1

$653.8

$ 86.3

$1,573.2

Accumulated impairment charges as of December 31, 2011 and

2012

Impairment charges for year ended December 31, 2013

Accumulated impairment charges as of December 31, 2013
Impairment charges for year ended December 31, 2014

$ (80.2)
—

$ —
—

(80.2)
(4.9)

—
—

$ —

(36.2)

(36.2)
—

$ (80.2)
(36.2)

(116.4)
(4.9)

Accumulated impairment charges as of December 31, 2014

$ (85.1)

$ —

$(36.2)

$ (121.3)

Goodwill, net, as of December 31, 2014

$748.0

$653.8

$ 50.1

$1,451.9

CommScope Holding Company, Inc.
Notes to Consolidated Financial Statements – (Continued)
(In thousands, unless otherwise noted)

During 2014, management determined that an indicator of possible impairment existed for the Microwave
Antenna Group (Microwave) reporting unit in the Wireless segment, as a result of lower than expected levels of
sales and operating income during 2014 and the effect of market conditions on the projected future operations of
the business. A step one goodwill impairment test was performed using a discounted cash flow (DCF) valuation
model. The significant assumptions in the DCF model are the annual revenue growth rate, the annual operating
income margin and the discount rate used to determine the present value of the cash flow projections. The
discount rate used for the Microwave reporting unit valuation was 11.0% compared to 11.5% in the 2013 annual
test and was based on the estimated weighted average cost of capital as of the test date for market participants in
the industry in which the Microwave reporting unit operates. Based on the estimated fair values generated by the
DCF model, the Microwave reporting unit did not pass step one of the goodwill impairment test. A step two
analysis was performed and a goodwill impairment charge of $4.9 million was recorded. The goodwill
impairment charge resulted primarily from lower projected operating results than those used in the 2013 annual
impairment test.

During 2013, a goodwill impairment charge of $36.2 million was recorded in the Broadband reporting unit using
a DCF model. The discount rate used was 11.0% compared to 11.5% used in the 2012 annual test. The goodwill
impairment charge resulted primarily from lower projected operating results than those used in the 2012 annual
test.

SUPPLEMENTAL FINANCIAL STATEMENT INFORMATION

Allowance for Doubtful Accounts

Period

Year Ended December 31, 2012
Year Ended December 31, 2013
Year Ended December 31, 2014

Balance at
Beginning of
Period

Charged to
Costs and
Expenses

Deductions (1)

Balance at End
of Period

$12,315
14,555
12,617

$2,978
(757)
772

$ 738
1,181
4,592

$14,555
12,617
8,797

(1) Uncollectible customer accounts written off, net of recoveries of previously written off customer accounts.

Includes the write-off of one fully reserved uncollectible account of $4,399 for the year ended December 31,
2014.

Inventories

Raw materials
Work in process
Finished goods

December 31,

2014

2013

$ 90,486
105,739
170,960

$ 72,170
124,049
175,968

$367,185

$372,187

CommScope Holding Company, Inc.
Notes to Consolidated Financial Statements – (Continued)
(In thousands, unless otherwise noted)

Property, Plant and Equipment

Land and land improvements
Buildings and improvements
Machinery and equipment
Construction in progress

Accumulated depreciation

December 31,

2014

2013

$ 33,711
149,596
306,454
6,952

$ 34,723
152,281
300,810
6,294

496,713
(207,342)

494,108
(183,965)

$ 289,371

$ 310,143

Depreciation expense was $48.8 million, $55.2 million and $69.5 million during the years ended December 31,
2014, 2013 and 2012, respectively. No interest was capitalized during 2014, 2013 or 2012.

Investments

The Company utilizes the equity method of accounting for investments in entities where it does not have control
but has the ability to exercise significant influence over the investee’s operating and financial policies. The
Company considers investments in publicly traded securities for which it does not have significant influence as
available-for-sale. Available-for-sale securities are carried at fair value with changes in fair value recorded, net of
tax, in other comprehensive income (loss). As of December 31, 2014, the Company owned 1.5 million shares of
Hydrogenics Corporation (Hydrogenics), a publicly traded company that supplies hydrogen generators and
hydrogen-based power modules and fuel cells for various uses. During the year ended December 31, 2014, the
Company reduced its ownership in Hydrogenics and no longer has significant influence over the investee’s
operating and financial policies. As a result, the Company changed its method of accounting from the equity
method to classifying the investment as available-for-sale. The Company’s share of losses in investments
accounted for as equity method investments were $1.5 million, $1.4 million and $3.4 million for the years ended
December 31, 2014, 2013 and 2012, respectively.

As of December 31, 2014, the cost basis of the investment in Hydrogenics was $1.2 million, the fair value was
$20.4 million and the unrealized pretax gain recorded in accumulated other comprehensive income (loss) was
$19.2 million ($11.9 million, net of tax). The Company did not hold any investments that were classified as
available-for-sale as of December 31, 2013. As of December 31, 2013 the carrying value of the Hydrogenics
investment, accounted for under the equity method, was $3.1 million. Investments are recorded in other
noncurrent assets on the Consolidated Balance Sheets.

During the year ended December 31, 2014, the Company sold 0.7 million shares of Hydrogenics common stock,
and received proceeds of $10.3 million. Using the average cost method to value the shares sold, the Company
recorded pretax realized gains of $9.8 million for the year ended December 31, 2014 (recorded in other expense,
net on the Consolidated Statements of Operations and Comprehensive Income). No available-for-sale securities
were sold during the years ended December 31, 2013 or 2012.

CommScope Holding Company, Inc.
Notes to Consolidated Financial Statements – (Continued)
(In thousands, unless otherwise noted)

Other Accrued Liabilities

Compensation and employee benefit liabilities
Deferred revenue
Product warranty accrual
Accrued interest
Restructuring reserve
Income taxes payable
Other

December 31,

2014

2013

$122,291
25,888
17,054
8,952
5,657
35,302
73,862

$124,893
21,498
24,838
47,366
18,572
24,074
71,039

$289,006

$332,280

Accumulated Other Comprehensive Loss

The following table presents changes in accumulated other comprehensive income (AOCI), net of tax, and
accumulated other comprehensive loss (AOCL), net of tax:

Foreign currency translation loss

AOCL balance, beginning of period
Other comprehensive loss
Amounts reclassified from AOCL

AOCL balance, end of period

Pension and other postretirement benefit activity

AOCI balance, beginning of period
Other comprehensive income (loss)
Amounts reclassified from AOCI

AOCI (AOCL) balance, end of period

Gain on available-for-sale securities

AOCI balance, beginning of period
Other comprehensive income
Amounts reclassified from AOCI

AOCI balance, end of period

Net AOCL, end of period

Year Ended December 31,

2014

2013

$(29,072)
(51,311)
(100)

$(24,224)
(5,825)
977

$(80,483)

$(29,072)

$ 2,796
(11,562)
(6,191)

$ 7,578
722
(5,504)

$(14,957)

$ 2,796

$ —
13,771
(1,879)

$ 11,892

$ —
—
—

$ —

$(83,548)

$(26,276)

Amounts reclassified from net AOCL related to foreign currency translation gains and losses and available-for-
sale gains are recorded in other expense, net in the Consolidated Statement of Operations and Comprehensive
Income. Defined benefit plan amounts reclassified from net AOCL are included in the computation of net
periodic benefit income and are primarily recorded in cost of sales and selling, general and administrative
expenses in the Consolidated Statements of Operations and Comprehensive Income.

CommScope Holding Company, Inc.
Notes to Consolidated Financial Statements – (Continued)
(In thousands, unless otherwise noted)

Cash Flow Information

Cash paid during the period for:

Income taxes, net of refunds
Interest

Noncash investing and financing activities:
Noncash acquisition consideration
Noncash consideration received for sale of assets
Acquisition of treasury stock resulting from

stock option exercises

Year Ended December 31,

2014

2013

2012

$ 98,636
184,925

$ 80,888
199,339

$ 81,138
172,109

—
—

—

12,400
11,398

—
—

279

2,734

FINANCING

5.00% senior notes due June 2021
5.50% senior notes due June 2024
8.25% senior notes due January 2019
Senior secured term loan due January 2017
Senior secured term loan due January 2018
Senior PIK toggle notes due June 2020
Senior secured revolving credit facility expires January 2017
Other

Less: Original issue discount, net of amortization
Less: Current portion

December 31,

2014

2013

$ 650,000
650,000
—

345,625
518,438
550,000
—
408

—
—
1,100,000
349,125
523,688
550,000
—
1,079

$2,714,471
(6,746)
(9,001)

$2,523,892
(9,340)
(9,462)

$2,698,724

$2,505,090

5.00% Senior Notes Due 2021 and 5.50% Senior Notes Due 2024

In May 2014, CommScope, Inc., a direct wholly owned subsidiary of the Company, issued $650.0 million of
5.00% Senior Notes due June 15, 2021 (the 2021 Notes) and $650.0 million of 5.50% Senior Notes due June 15,
2024 (the 2024 Notes), collectively referred to as the New Notes. Interest is payable on the New Notes semi-
annually in arrears on June 15 and December 15 of each year.

Proceeds from the New Notes were used to redeem the entire outstanding amount of the 8.25% senior notes due
January 2019 (the 2019 Notes) plus pay a redemption premium of $93.9 million, which was included in other
expense, net for the year ended December 31, 2014. The remainder of the net proceeds was available for general
corporate purposes. In connection with the redemption of the 2019 Notes, the Company wrote off $19.1 million
of deferred financing costs to interest expense during the year ended December 31, 2014.

Each of the Company’s existing and future direct and indirect domestic subsidiaries that guarantees the senior
secured credit facilities guarantees the New Notes on a senior unsecured basis. The New Notes and the
guarantees are unsecured senior obligations ranking equal in right of payment to all of the Company’s and the
guarantors’ existing and future senior indebtedness, including its senior secured credit facilities. However, the

CommScope Holding Company, Inc.
Notes to Consolidated Financial Statements – (Continued)
(In thousands, unless otherwise noted)

New Notes and guarantees are effectively junior to all of the Company’s and the guarantors’ existing and future
secured debt, including its senior secured credit facilities, to the extent of the value of the assets securing such
secured debt. In addition, the New Notes are structurally subordinated to all existing and future liabilities
(including trade payables) of the Company’s subsidiaries that do not guarantee the New Notes, including
indebtedness incurred by certain of the Company’s non-U.S. subsidiaries under the revolving credit facility.

The New Notes may be redeemed prior to maturity under certain circumstances. Upon certain change of control
events, the New Notes may be redeemed at the option of the holders at 101% of their face amount, plus accrued
and unpaid interest to the date of purchase. Prior to June 15, 2017 in the case of the 2021 Notes and June 15,
2019 in the case of the 2024 Notes, the New Notes may be redeemed at a redemption price equal to 100% of their
principal amount, plus a make-whole premium (as defined in the indentures governing the New Notes), plus
accrued and unpaid interest to the redemption date. On or prior to June 15, 2017, under certain circumstances, we
may also redeem up to 40% of the aggregate principal amount of each series of the New Notes at a redemption
price of 105.0% in the case of the 2021 Notes or 105.5% in the case of the 2024 Notes, plus accrued and unpaid
interest to the redemption date using the proceeds of certain equity offerings.

In connection with issuing the New Notes, the Company incurred costs of approximately $23.3 million during
the year ended December 31, 2014, which were capitalized as other noncurrent assets and are being amortized
over the terms of the notes.

Senior Secured Credit Facilities

The Company’s senior secured credit facilities consist of an $875 million term loan facility and a $400 million
asset-based revolving credit facility, of which $864.1 million was outstanding under the term loan facility and no
borrowings were outstanding under the asset-based revolving credit facility as of December 31, 2014. The senior
secured credit facilities are secured by substantially all of the Company’s assets and are guaranteed by
substantially all of the Company’s active domestic subsidiaries.

The senior secured term loan consists of two tranches, one of which is due January 2017 (the 2017 term loan) and
the other is due January 2018 (the 2018 term loan). The interest rate margin applicable to the 2017 and 2018 term
loans is, at the Company’s option, either (1) the base rate (which is the highest of the then current Federal Funds
rate plus 0.5%, the prime rate most recently announced by JPMorgan Chase Bank, N.A., the administrative agent
under the Credit Agreement, and the one-month Eurodollar rate (taking into account the Eurodollar rate floor, if
any) plus 1.0%) plus a margin of 1.50% or (2) one-, two-, three- or six-month LIBOR or, if available from all
lenders, twelve-month LIBOR (selected at the Company’s option) plus a margin of 2.50%. There is a LIBOR
floor of 0.75% with respect to the 2018 term loan.

Outstanding principal under the revolving credit facility bears interest at a rate equal to, at the Company’s option,
either (1) the base rate (as defined above) plus a margin that ranges from 0.50% to 1.00% or (2) one-, two-, three-
or six-month LIBOR (or any other LIBOR period agreed to by the revolving lenders) plus a margin that ranges
from 1.50% to 2.00%. The range of margins applied to base rate and LIBOR-based loans is subject to a pricing
grid that is dependent on an excess availability calculation. As of December 31, 2014, the applicable margin was
0.50% for base rate loans and 1.50% for LIBOR loans. The unused line fee calculated on the undrawn portion of
the revolving credit facility ranges from an annual rate of 0.250% to 0.375% based on usage of the facility. As of
December 31, 2014, the rate was 0.375%.

During 2014, the Company borrowed and repaid $15.0 million under the revolving credit facility and made
scheduled repayments of $8.8 million of its senior secured term loans. As of December 31, 2014, the Company

CommScope Holding Company, Inc.
Notes to Consolidated Financial Statements – (Continued)
(In thousands, unless otherwise noted)

had remaining availability of approximately $321.7 million under the asset-based revolving credit facility,
reflecting a borrowing base of $345.3 million reduced by $23.6 million of letters of credit issued under the
revolving credit facility.

During 2013 and 2012, the Company amended its senior secured credit facilities. In connection with the 2013
amendments and a voluntary $100.0 million term loan payment made during 2013, $1.4 million of original issue
discount and $2.0 million of deferred financing costs were written off and included in interest expense for 2013.
As a result of the 2012 amendments, $0.5 million of original issue discount and $2.6 million of deferred
financing fees were written off and included in interest expense for 2012. The amendments in 2013 and 2012
resulted in the repayment of $172.3 million and $104.6 million, respectively, to certain lenders under the senior
secured credit facilities and the receipt of $172.3 million and $104.6 million, respectively, in proceeds from new
lenders and existing lenders who increased their positions.

The Company also incurred pretax costs of $3.3 million and $1.7 million during 2013 and 2012, respectively,
which were included in other expense, net on the Consolidated Statements of Operations and Comprehensive
Income (Loss) and in long-term debt financing costs on the Consolidated Statements of Cash Flows. In addition,
upfront fees of $10.4 million paid to lenders and other financing costs of $1.0 million that were incurred in
connection with the 2012 amendments were recorded as original issue discount during 2012 and are being
amortized over the terms of the facilities.

Senior PIK Toggle Notes

In May 2013, CommScope Holding Company, Inc. (the Parent Company) issued $550.0 million of 6.625%/
7.375% Senior Payment-in-Kind Toggle Notes due 2020 (the senior PIK toggle notes) in a private offering, for
proceeds of $538.8 million, net of debt issuance costs. The net proceeds from the issuance of the senior PIK
toggle notes and available cash were used to fund $550.0 million of special cash dividends and distributions to
the Parent Company’s equity holders. The senior PIK toggle notes are senior unsecured obligations that are not
guaranteed by any of the Parent Company’s subsidiaries.

The Parent Company may redeem the notes in whole or part during periods after June 1, 2016 at redemption
prices (expressed as a percentage of the principal amount), plus accrued and unpaid interest to the redemption
date, as follows: (i) June 1, 2016 through May 31, 2017 at 103.313%; (ii) June 1, 2017 through May 31, 2018 at
101.656%; and (iii) June 1, 2018 to maturity at 100.000%.

Interest is due on the senior PIK toggle notes semi-annually in arrears on each June 1 and December 1. For each
interest period, the Parent Company is required to pay interest on the senior PIK toggle notes entirely in cash,
unless the Applicable Amount, as defined in the indenture governing the senior PIK toggle notes (the PIK Notes
Indenture), is less than the applicable semi-annual requisite interest payment amount, in which case, the Parent
Company may elect to pay a portion of the interest due on the senior PIK toggle notes for such interest period by
increasing the principal amount of the senior PIK toggle notes or by issuing new notes for up to the entire amount
of the interest payment (in each case, PIK interest) to the extent described in the PIK Notes Indenture. Cash
interest on the senior PIK toggle notes will accrue at the rate of 6.625% per annum. PIK interest on the senior
PIK toggle notes will accrue at the rate of 7.375% per annum until the next payment of cash interest. The interest
payments on the senior PIK toggle notes during the years ended December 31, 2014 and 2013 were paid in cash.

For the purposes of the PIK Notes Indenture, “Applicable Amount” generally refers to the Company’s then
current restricted payment capacity under the instruments governing the Company’s other indebtedness, less

CommScope Holding Company, Inc.
Notes to Consolidated Financial Statements – (Continued)
(In thousands, unless otherwise noted)

$20 million, and plus the Parent Company’s cash and cash equivalents less $10 million. Based on the Applicable
Amount as of December 31, 2014, the Parent Company would be required to make its next interest payment on
the senior PIK toggle notes entirely in cash.

The senior PIK toggle notes are structurally subordinated to indebtedness and other liabilities of the Parent
Company’s subsidiaries. Claims of creditors of such subsidiaries, including trade creditors, will have priority
with respect to the assets and earnings of such subsidiaries over the holders of the senior PIK toggle notes. The
Parent Company is a holding company with no material operations of its own and is, therefore, dependent upon
the revenues and cash flows of its subsidiaries to service its debt obligations.

Other Matters

The following table summarizes scheduled maturities of long-term debt as of December 31, 2014 (in millions):

Scheduled maturities of long-term debt

$9.0

$8.9

$343.9

$502.7

$— $1,850.0

2015

2016

2017

2018

2019

Thereafter

The Company’s non-guarantor subsidiaries held approximately $1,089 million, or 22%, of total assets and
approximately $282 million, or 8%, of total liabilities as of December 31, 2014 and accounted for approximately
$1,519 million, or 40%, of net sales for the year ended December 31, 2014. The Company’s non-guarantor
subsidiaries held approximately $1,077 million, or 23%, of total assets and approximately $315 million, or 9%,
of total liabilities as of December 31, 2013 and accounted for approximately $1,358 million, or 39%, of net sales
for the year ended December 31, 2013. All amounts presented exclude intercompany balances.

The weighted average effective interest rate on outstanding borrowings, including the amortization of deferred
financing costs and original issue discount, was 5.38% and 6.89% as of December 31, 2014 and 2013,
respectively.

7. DERIVATIVES AND HEDGING ACTIVITIES

The Company uses forward contracts to hedge a portion of its exposure to balances denominated in currencies
other than the functional currency of various subsidiaries and to manage exposure to certain planned foreign
currency expenditures in order to mitigate the impact of changes in exchange rates. At December 31, 2014, the
Company had foreign exchange contracts with maturities ranging from one to nine months with an aggregate
notional value of $363 million (based on exchange rates as of December 31, 2014). Unrealized gains and losses
resulting from these contracts are recognized in other expense, net and partially offset corresponding foreign
exchange gains and losses on these balances. These instruments are not held for speculative or trading purposes.
These contracts are not designated as hedges for hedge accounting and are marked to market each period through
earnings.

The following table presents the balance sheet location and fair value of the Company’s derivatives:

Balance Sheet Location

December 31, 2014

December 31, 2013

Fair Value of Asset (Liability)

Foreign currency contracts

Prepaid expenses and other

Foreign currency contracts

Other accrued liabilities

current assets

Total derivatives not designated

as hedging instruments

$ 1,165
(3,584)

$2,738
(662)

$(2,419)

$2,076

CommScope Holding Company, Inc.
Notes to Consolidated Financial Statements – (Continued)
(In thousands, unless otherwise noted)

The pretax impact of the foreign currency forward contracts not designated as hedging instruments on the
Consolidated Statements of Operations and Comprehensive Income is as follows:

Foreign Currency Forward Contracts

Location of Gain (Loss)

Gain (Loss) Recognized

Year ended December 31, 2014
Year ended December 31, 2013
Year ended December 31, 2012

Other expense, net
Other expense, net
Other expense, net

$(10,273)
9,010
529

FAIR VALUE MEASUREMENTS

Fair value measurements using quoted prices in active markets for identical assets and liabilities fall within Level
1 of the fair value hierarchy, measurements using significant other observable inputs fall within Level 2, and
measurements using significant unobservable inputs fall within Level 3.

The Company’s financial instruments consist primarily of cash and cash equivalents, trade receivables, trade
payables, investment in equity securities, debt instruments, foreign currency contracts and contingent
consideration payable. For cash and cash equivalents, trade receivables and trade payables, the carrying amounts
of these financial instruments as of December 31, 2014 and December 31, 2013 were considered representative
of their fair values due to their short terms to maturity. The fair value of the Company’s investment in equity
securities is based on quoted market prices. The fair values of the Company’s debt instruments and foreign
currency contracts were based on indicative quotes. The fair value of the contingent consideration payable was
based on a probability weighted discounted cash flow analysis.

The carrying amounts, estimated fair values and valuation input levels of the Company’s investment in equity
securities, foreign currency contracts, senior notes, senior secured term loans, senior PIK toggle notes and
contingent consideration payable as of December 31, 2014 and December 31, 2013, are as follows:

Assets:

Investment in equity securities
Foreign currency contracts

Liabilities:

December 31, 2014

December 31, 2013

Carrying
Amount

Fair
Value

Carrying
Amount

Fair
Value

Valuation
Inputs

$ 20,392 $ 20,392 $

1,165

3,112 $
2,738

41,879 Level 1
2,738 Level 2

5.00% senior notes due 2021
5.50% senior notes due 2024
8.25% senior notes
Senior secured term loans due 2017, at par
Senior secured term loans due 2018, at par
Senior PIK toggle notes due 2020
Foreign currency contracts
Contingent consideration

650,000
650,000
—
345,625
518,438
550,000
3,584
—

643,500
640,250

—
—
— 1,100,000
349,125
523,688
550,000
662
13,068

342,169
513,254
566,500
3,584
—

— Level 2
— Level 2
1,205,280 Level 2
349,997 Level 2
524,997 Level 2
572,000 Level 2
662 Level 2
13,068 Level 3

Contingent consideration represents the estimated fair value of the expected payment due related to the
acquisition of Redwood. The contingent consideration is payable in 2015 and could range from zero to $37.25
million. The amount to be paid is based on the achievement of sales targets of Redwood products with a
maximum payout reached with $55.0 million of sales by July 31, 2015. The estimated fair value of the contingent
consideration was $12.4 million as of July 3, 2013, the Redwood acquisition date. During the year ended

CommScope Holding Company, Inc.
Notes to Consolidated Financial Statements – (Continued)
(In thousands, unless otherwise noted)

December 31, 2014, the estimated fair value of the contingent consideration was reduced to zero based on
revenue projections for the requisite periods, which resulted in a $13.1 million reduction in selling, general and
administrative expense in the Consolidated Statements of Operations and Comprehensive Income.

Non-Recurring Fair Value Measurements

During the year ended December 31, 2014, the Company recorded impairment charges of $12.2 million. The
valuations supporting the following pretax impairment charges are based on level 3 valuation inputs.

• Goodwill impairment charge of $4.9 million related to the Wireless segment.

•

Impairment charge of $7.2 million to reduce certain intangible assets in the Broadband segment to their
estimated fair value.

In connection with restructuring actions during the year ended December 31, 2014, the Company recorded a
pretax charge of $8.1 million related to the unused portion of its leased facility in Joliet, Illinois, that is currently
available for sublease. This charge was based on level 3 valuation inputs and recorded in restructuring costs, net
on the Consolidated Statements of Operations and Comprehensive Income.

During the year ended December 31, 2013, the Company recorded asset impairment charges of $45.5 million.
The valuations supporting the following pretax impairment charges are based on Level 3 valuation inputs.

• Goodwill impairment charge of $36.2 million related to the Broadband segment.

•

Impairment charge of $3.6 million recognized within the Wireless segment regarding a facility that is
being marketed for sale.

• Other impairment charges of $5.7 million recognized in the Wireless segment for certain production

equipment and intellectual property that will no longer be utilized.

In connection with restructuring actions initiated during the year ended December 31, 2013, the Company
recorded pretax impairment charges of $7.8 million related to the planned cessation of manufacturing at facilities
in Joliet, Illinois and Statesville, North Carolina. These facility and equipment impairment charges, described
below, are based on Level 3 valuation inputs and are reported in restructuring costs, net on the Consolidated
Statements of Operations and Comprehensive Income.

•

Facility impairment charge of $1.2 million based on market data the Company received for a facility
that is being marketed for sale.

• Equipment impairment charges of $6.6 million related to manufacturing equipment that was no longer

being utilized.

Also during the year ended December 31, 2013, the Company sold certain assets of its BiMetals business. As part
of the sale consideration, the Company received a note from the purchaser with a face value of $15.0 million and
a term of up to 7 years. The Company recorded the note in other noncurrent assets on the Consolidated Balance
Sheet at its estimated fair value of $9.8 million. The valuation supporting the estimated fair value of the note
receivable was based on Level 3 valuation inputs.

These fair value estimates are based on pertinent information available to management as of the date made.
Although management is not aware of any factors that would significantly affect these fair value estimates, such
amounts have not been comprehensively revalued for purposes of these financial statements since those dates and
current estimates of fair value may differ significantly from the amounts presented.

CommScope Holding Company, Inc.
Notes to Consolidated Financial Statements – (Continued)
(In thousands, unless otherwise noted)

9. RESTRUCTURING COSTS AND EMPLOYEE TERMINATION BENEFITS

The Company has initiated restructuring actions to realign and lower its cost structure primarily through
workforce reductions and other cost reduction initiatives at various facilities, including the cessation of
manufacturing operations at the Joliet, Illinois; Statesville, North Carolina; and Guangzhou, China facilities.
Much of the production capacity from these facilities is being shifted to other existing facilities or unaffiliated
suppliers. The Company’s net pretax restructuring charges (credits), by segment, were as follows:

Wireless
Enterprise
Broadband

Total

Year Ended December 31,

2014

2013

2012

$16,191
147
2,929

$24,306
5,094
(7,296)

$21,859
311
823

$19,267

$22,104

$22,993

The activity within the liability established for these restructuring actions was as follows:

Employee-
Related Costs

Lease
Termination
Costs

Fixed Asset
Related
Costs

BiMetals
Asset Sale

Total

Balance as of December 31, 2011
Additional charge recorded
Cash paid
Foreign exchange and other non-cash items

Balance as of December 31, 2012
Additional charge (credit) recorded
Cash paid
Consideration received
Foreign exchange and other non-cash items

Balance as of December 31, 2013
Additional charge recorded
Cash paid
Foreign exchange and other non-cash items

$ 18,961
21,469
(21,653)
451

19,228
23,355
(25,292)
—
(118)

17,173
6,625
(19,806)
(170)

$ 2,471
561
(1,839)
60

1,253
1,778
(1,614)
—
(18)

1,399
8,048
(1,205)
1

$ — $ — $ 21,432
22,993
(23,492)
(452)

963
—
(963)

—
—
—

—
15,636
(4,457)
—
(11,179)

—
4,594
(3,357)
(1,237)

—
(18,665)
—
32,783
(14,118)

—
—
—
—

20,481
22,104
(31,363)
32,783
(25,433)

18,572
19,267
(24,368)
(1,406)

Balance as of December 31, 2014

$ 3,822

$ 8,243

$ — $ — $ 12,065

Balance sheet classification as of December 31,

2014

Other accrued liabilities
Other noncurrent liabilities

Total liability

$ 3,822
—

$ 3,822

$ 1,835
6,408

$ — $ — $ 5,657
6,408

—

$ 8,243

$ — $ — $ 12,065

Employee-related costs include the expected severance costs and related benefits as well as one-time severance
benefits that are accrued over the remaining period employees are required to work in order to receive such
benefits.

Lease termination costs relate to the discounted cost of unused leased facilities, net of anticipated sub-rental
income.

CommScope Holding Company, Inc.
Notes to Consolidated Financial Statements – (Continued)
(In thousands, unless otherwise noted)

Fixed asset related costs include non-cash impairments or disposals of fixed assets associated with restructuring
actions in addition to the cash costs to uninstall, pack, ship and reinstall manufacturing equipment and the costs
to prepare the receiving facility to accommodate relocated equipment. These costs are expensed as incurred.
Cash paid is net of proceeds received from the sale of related assets.

BiMetals asset sale activity reflects the 2013 sale of the certain assets of the Company’s BiMetals business. The
Company received $23.0 million in cash and a note with an estimated fair value of $9.8 million as consideration.
In addition to $4.7 million of tangible assets, the transaction also included $2.9 million of identified intangible
assets and $6.5 million of goodwill. Within its Broadband segment, the Company recorded a net gain on the
transaction of $18.7 million that was reported in restructuring costs, net on the Consolidated Statements of
Operations and Comprehensive Income.

As a result of restructuring and consolidation actions, the Company owns unutilized real estate at various
facilities in the U.S. and internationally. The Company is attempting to sell or lease this unutilized space.
Additional impairment charges may be incurred related to these or other excess assets.

The Company has recognized restructuring charges of $83.1 million since January 2011. Additional pretax costs
of approximately $1.0 million to $2.0 million are expected to complete these initiatives. Cash payments of
approximately $5.0 million to $6.0 million are expected to be paid by the end of 2015 with additional payments
of $7.0 million to $9.0 million to be paid between 2016 and 2022. Additional restructuring actions may be taken
and the resulting charges and cash requirements could be material.

10. EMPLOYEE BENEFIT PLANS

Defined Contribution Plans

The Company sponsors defined contribution retirement savings plans (including a 401(k) plan) that allow
employees of certain subsidiaries to contribute a portion of their compensation on a pretax and/or after-tax basis
in accordance with guidelines established by the plans and the Internal Revenue Service or other tax authorities.
The Company matches a percentage of the employee contributions up to certain limits. During the years ended
December 31, 2014, 2013 and 2012, the Company contributed cash of $19.6 million, $20.2 million and
$18.9 million, respectively, to these retirement savings plans.

The Company maintains a noncontributory unfunded defined contribution plan (the Supplemental Executive
Retirement Plan or SERP) for certain active and retired executives. The Company is not required to make any
payments until the participant is eligible to receive retirement benefits. During the years ended December 31,
2014, 2013 and 2012, the Company recognized pretax costs of $2.0 million, $1.8 million, $1.8 million,
respectively, representing additional accrued benefits and interest credited under the SERP. The SERP liability
was approximately $13.0 million and $12.7 million as of December 31, 2014 and 2013, respectively.

The Company also established a contributory deferred compensation plan (DCP) in 2013 that allows certain
executives to defer up to 90% of salary and bonus. Participant accounts are credited or charged amounts
consistent with the investment experience of a notional portfolio (as directed by each executive) based on
available investment alternatives in the Company’s 401(k) plan. Upon termination of employment, an executive
may elect a lump sum payout or annual installments over two to ten years. As of December 31, 2014 and 2013,
the DCP liability was $4.2 million and $1.2 million, respectively.

100

CommScope Holding Company, Inc.
Notes to Consolidated Financial Statements – (Continued)
(In thousands, unless otherwise noted)

Pension and Other Postretirement Benefit Plans

The Company sponsors defined benefit pension plans covering certain domestic former employees and certain
foreign current and former employees. Included in the defined benefit pension plans are both funded and
unfunded plans. The Company also sponsors postretirement health care and life insurance benefit plans that
provide benefits to certain domestic former employees and certain domestic full-time employees who retire from
the Company. The health care plans contain various cost-sharing features such as participant contributions,
deductibles, coinsurance and caps, with Medicare as the primary provider of health care benefits for eligible
retirees. The accounting for the health care plans anticipates future cost-sharing changes that are consistent with
the Company’s expressed intent to maintain a consistent level of cost sharing with retirees.

The following table summarizes information for the defined benefit pension and other postretirement benefit
plans based on a December 31 measurement date:

Change in benefit obligation:

Benefit obligation, beginning of year
Service cost
Interest cost
Plan participants’ contributions
Actuarial loss (gain)
Net curtailment loss (gain)
Settlement (gain) loss
Plan amendments
Benefits paid, including settlements
Foreign exchange and other

Benefit obligation, end of year

Change in plan assets:

Fair value of plan assets, beginning of year
Employer and plan participant contributions
Return on plan assets
Benefits paid, including settlements
Foreign exchange and other

Fair value of plan assets, end of year

Pension Benefits

Other Postretirement Benefits

2014

2013

2014

2013

$290,581
453
13,313
—
37,638
—
—
—
(15,747)
(8,966)

$293,549
453
11,600
—
(4,114)
—
—
—
(13,666)
2,759

$27,242
86
901
1,773
(3,077)
—
—
—
(5,169)
—

$317,272

$290,581

$21,756

$276,913
22,405
33,151
(15,747)
(9,073)

$258,199
22,067
7,570
(13,666)
2,743

$ 3,946
2,766
—
(5,169)
—

$307,649

$276,913

$ 1,543

$36,033
248
912
1,839
(3,674)
970
(21)
(4,242)
(4,823)
—

$27,242

$ 5,210
3,358
201
(4,823)
—

$ 3,946

Funded status (benefit obligation in excess of fair value of

plan assets)

9,623

$ 13,668

$20,213

$23,296

The following table presents the balance sheet location of the Company’s pension and postretirement liabilities
and assets:

Other accrued liabilities
Pension and other postretirement benefit liabilities
Other noncurrent assets

101

December 31,

2014

2013

$ (1,761)
(29,478)
1,403

$ (1,152)
(40,349)
4,537

CommScope Holding Company, Inc.
Notes to Consolidated Financial Statements – (Continued)
(In thousands, unless otherwise noted)

Foreign plans represented 46% and 48% of the pension benefit obligation and pension plan assets, respectively,
as of December 31, 2014 and 45% and 49% of the pension benefit obligation and pension plan assets,
respectively, as of December 31, 2013.

During 2013, the Company amended certain of its other postretirement benefit plans to eliminate eligibility for
certain employees and reduce medical benefits offered under the plans. The impact of the plan amendments is
being recognized over the remaining service life of plan participants in plans with active participants and over the
life expectancy of plan participants in plans with no active participants.

The accumulated benefit obligation for all of the Company’s defined benefit pension plans was $283,053 and
$261,217 as of December 31, 2014 and 2013, respectively.

The following table summarizes information for the Company’s pension plans with an accumulated benefit
obligation in excess of plan assets:

Projected benefit obligation
Accumulated benefit obligation
Fair value of plan assets

December 31,

2014

2013

$171,348
171,348
160,325

$160,063
160,063
141,857

The following table summarizes pretax amounts included in accumulated other comprehensive loss for the years
ended December 31, 2014 and 2013:

Unrecognized net actuarial gain (loss)
Unrecognized prior service credit

Total

Pension Benefits

Other Postretirement Benefits

2014

2013

2014

2013

$(47,301)

$(28,783)

—

$ 1,650
27,816

$(47,301)

$(28,783)

$29,466

$ (1,084)
37,793

$36,709

Pretax amounts for net periodic benefit cost and other amounts included in other comprehensive income (loss)
for the defined benefit pension and other postretirement benefit plans consisted of the following components:

Service cost
Interest cost
Recognized actuarial loss
Settlement loss
Expected return on plan assets

Net periodic benefit cost (income)

Changes in plan assets and benefit obligations included in other comprehensive

income (loss):

Change in unrecognized net actuarial loss (gain)

Total included in other comprehensive income (loss)

Total recognized in net periodic benefit cost and included in other

comprehensive income (loss)

102

Pension Benefits

Year Ended December 31,

2014

2013

2012

453
13,313
309
—
(15,249)

453
11,600
469
—
(14,439)

408
12,732
519
1,535
(12,803)

(1,174)

(1,917)

2,391

18,518

2,686

(6,436)

$ 17,344

769

$ (4,045)

CommScope Holding Company, Inc.
Notes to Consolidated Financial Statements – (Continued)
(In thousands, unless otherwise noted)

Service cost
Interest cost
Recognized actuarial loss (gain)
Amortization of prior service credit
Net settlement/curtailment gain
Expected return on plan assets

Net periodic benefit cost (income)

Changes in plan assets and benefit obligations included in other comprehensive

income (loss):

Change in unrecognized net actuarial loss (gain)
Change in unrecognized prior service credit

Total included in other comprehensive income (loss)

Total recognized in net periodic benefit cost and included in other comprehensive

income (loss)

Other Postretirement Benefits

Year Ended December 31,

2014

2013

2012

86
901
(343)
(9,977)
—
—

248
912
279
(9,618)
(21)
—

301
2,200
—
(6,759)
(971)
(165)

(9,333)

(8,200)

(5,394)

(2,734)
9,977

(2,984)
5,376

4,286
(20,023)

7,243

2,392

(15,737)

$(2,090) $(5,808) $(21,131)

Amortization of amounts included in accumulated other comprehensive loss as of December 31, 2014 is expected
to increase (decrease) net periodic benefit cost during 2015 as follows:

Amortization of net actuarial loss (gain)
Amortization of prior service credit

Total

Assumptions

Pension
Benefits

$683
—

$683

Other Postretirement Benefits

2014

2013

2012

3.15% 3.50% 2.65%

3.50% 2.65% 4.20%
7.25% 7.25% 7.35%
4.75% 4.75% 4.75%
2023

2023

2022

The Company considered the available yields on high-quality fixed-income investments with maturities
corresponding to the Company’s expected benefit obligations to determine the discount rates at each
measurement date.

A one-percentage-point change in assumed health care cost trend rates would have had an immaterial impact on
the total service and interest cost components of net periodic benefit cost and the benefit obligation as of and for
the year ended December 31, 2014.

Plan Assets

In developing the expected rate of return on plan assets, the Company considered the expected long-term rate of
return on individual asset classes. Expected return on plan assets is based on the market value of the assets.
Substantially all of the pension assets are managed by independent investment advisors with an objective of
transitioning to a portfolio of fixed income investments that matches the durations of the obligations as the
funded status of each plan improves.

Mutual funds classified as Level 1 are valued at net asset value, which is based on the fair value of the funds’
underlying securities. Certain mutual funds are classified as Level 2 because a portion of the funds’ underlying
assets are valued using significant other observable inputs. Other assets are primarily composed of fixed income
investments (including insurance products) and are valued based on the investment’s stated rate of return, which
approximates market interest rates.

The estimated fair values and the valuation input levels of the Company’s plan assets as of December 31, 2014
are as follows:

Mutual funds:

U.S. equity
International equity
U.S. debt
International debt

Other

Total

Pension Benefits

Other Postretirement Benefits

Level 1
Fair Value

Level 2
Fair Value

Level 1
Fair Value

Level 2
Fair Value

6,243
3,735
142,820
6,123
1,404

$ —

49,559
—
97,662
103

$160,325

$147,324

$ —
—
1,543
—
—

$1,543

$—
—
—
—
—

$—

104

CommScope Holding Company, Inc.
Notes to Consolidated Financial Statements – (Continued)
(In thousands, unless otherwise noted)

The estimated fair values and the valuation input levels of the Company’s plan assets as of December 31, 2013
are as follows:

Mutual funds:

U.S. equity
International equity
U.S. debt
International debt

Other

Total

Expected Cash Flows

Pension Benefits

Other Postretirement Benefits

Level 1
Fair Value

Level 2
Fair Value

Level 1
Fair Value

Level 2
Fair Value

5,777
6,343
114,586
11,533
3,620

$ —

48,260
—
86,640
154

$141,859

$135,054

$ —
—
3,946
—
—

$3,946

$—
—
—
—
—

$—

The Company expects to contribute $14.2 million to the defined benefit pension plans and $3.0 million to the
other postretirement benefit plans during 2015.

The following table summarizes projected benefit payments from pension and other postretirement benefit plans
through 2024, including benefits attributable to estimated future service (in millions):

2015
2016
2017
2018
2019
2020-2024

11. INCOME TAXES

Pension Benefits