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    2014 ANNUAL REPORT


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    RECONCILIATION OF GAAP MEASURES TO NON-GAAP ADJUSTED MEASURES (Unaudited--in millions, except per share amounts) YEAR ENDED DECEMBER 31 2012 2013 2014 RECONCILIATION OF ADJUSTED OPERATING INCOME Operating income, as reported $ 238.2 $ 329.7 $ 577.4 Adjustments: Amortization of purchased intangible assets 175.7 174.9 178.3 Restructuring costs, net 23.0 22.1 19.3 Equity-based compensation 7.5 16.1 21.1 Asset impairments 40.9 45.5 12.1 Purchase accounting adjustments (1) - 2.5 (11.9) Transaction costs(2) 6.3 27.2 12.1 Adjustment of prior year warranty matter 8.9 2.1 - Gain on sale of subsidiary (1.5) - - Prior year customs matter 2.0 - - Total adjustments to operating income 262.8 290.4 231.0 Non-GAAP adjusted operating income $ 501.1 $ 620.1 $ 808.4 RECONCILIATION OF ADJUSTED NET INCOME Income before income taxes, as reported $ 37.3 $ 76.2 $ 317.1 Income tax expense, as reported (31.9) (56.8) (80.3) Net income, as reported $ 5.4 $ 19.4 $ 236.8 Adjustments: Total pretax adjustments to operating income 262.8 290.4 231.0 Pretax amortization of deferred financing costs & OID(3) 17.1 26.6 32.4 Pretax loss on debt transactions - 34.4 93.9 Pretax gains on sale of equity investment - - (12.3) Tax effects of adjustments and other tax items(4) (99.9) (108.7) (155.1) Non-GAAP adjusted net income $ 185.3 $ 262.1 $ 426.7 Diluted EPS, as reported $ 0.03 $ 0.12 $ 1.24 Non-GAAP adjusted diluted EPS $ 1.19 $ 1.60 $ 2.23 RECONCILIATION OF ADJUSTED FREE CASH FLOW Cash flow generated by operating activities, as reported $ 286.1 $ 237.7 $ 289.4 Less: Additions to property, plant and equipment (28.0) (36.8) (36.9) Adjustments: Debt redemption premium - 33.0 93.9 Fee paid to terminate management agreement - 20.2 - Non-GAAP adjusted free cash flow $ 258.1 $ 254.1 $ 346.4 (1) Reflects non-cash charges resulting from purchase accounting adjustments, CommScope management believes that presenting operating income, net income, including adjustments to the estimated fair value of contingent consideration diluted EPS and cash flow information excluding the special items noted above pro- payable. vides meaningful information to investors in understanding operating results and may (2) Reflects transaction costs related to potential and consummated acquisitions as enhance investors’ ability to analyze financial and business trends, when considered well as secondary stock offerings. Also includes the Carlyle management fee and together with the GAAP financial measures. In addition, CommScope management the management agreement termination fee. believes that these non-GAAP financial measures allow investors to compare period to (3) Included in interest expense. period more easily by excluding items that could have a disproportionately negative or (4) The tax rates applied to adjustments reflect the tax expense or benefit based positive impact on results in any particular period. on the tax jurisdiction of the entity generating the adjustment. There are certain adjustments for which we expect little or no tax benefit. Note: Components may not sum to total due to rounding.


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    A STRONG A Transformative Acquisition for CommScope 2014 In January 2015, CommScope agreed to acquire the Telecom, Enterprise and Wireless businesses of TE Connectivity, a world leader in fiber optic connectivity for wireline and wireless networks, in The combined company’s pro 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. CommScope® helps companies an all-cash transaction valued at $3 The transaction is expected to around the world design, build and billion. CommScope expects that the be in excess of 20% accretive to manage their wired and wireless transaction will enable it to enhance CommScope’s adjusted earnings per growth by entering adjacent markets, share by the end of the first full year networks. Vital networks around the while broadening its position after closing and on a pro forma world run on CommScope solutions. as a leading communications basis, excluding purchase accounting infrastructure provider to wireless charges, transition costs and other operators, business enterprises, special items. Closing is expected by governments and cable television/ the end of 2015. WIRELESS residential broadband operators. #1 in merchant radio frequency network connectivity solutions and small cell DAS “This is an important and transformative acquisition for CommScope, bringing solutions for carriers, OEMs and enterprises together complementary geographic and customer coverage, products and technologies for the benefit of our stockholders, customers and employees. It creates enhanced scale with $2.47B REVENUE a combined, diversified portfolio that we believe is well-positioned to take advantage of opportunities in the marketplace.We look forward to welcoming the TE Connectivity $600M ADJ. OPERATING INCOME 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 ENTERPRISE expeditiously as possible.” #1 in enterprise connectivity solutions for Eddie Edwards data centers and commercial buildings President and Chief Executive Officer $850M REVENUE $167M ADJ. OPERATING INCOME PLANNED ACQUISITION–PRODUCT SALES DIVERSIFICATION1 Broadband Connectivity: 13% Broadband Connectivity: 28% BROADBAND Enterprise: 22% CommScope today2 Enterprise: 26% CommScope Pro Forma2 #1 in cables for hybrid fiber coaxial (HFC) Wireless: 65% Wireless: 46% networks for broadband service providers $511M REVENUE 1 Actual segment reporting will be determined following the completion of the acquisition. 2 Based on LTM September 30, 2014 revenue. $41M ADJ. OPERATING INCOME Please see CommScope’s website for additional information related to the planned acquisition, including a reconciliation of GAAP to adjusted measures. Note: Sales exclude inter-segment eliminations. 1


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    Eddie Edwards, president and chief executive officer To Our Shareholders As a consumer or business person, how often do you think In this hyper-connected, data-intensive era, about network infrastructure? Whether you appreciate it or not, the average person has become dependent on networking for basic your network provides a critical link to the communications such as talking and messaging and for lifestyle world. It has become a fundamental resource, tasks such as banking, entertainment, shopping, education and more. one that at times is underappreciated and These ubiquitous networks are the virtually invisible foundation even unnoticed by the millions of people who for modern life. We largely don’t see them or think about their presence. But they are everywhere—radio frequency signals in the depend on networks for everyday life. air around us, wherever we go, and cabling or connectivity within walls or floors 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 influence 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 confident in saying “Your Network Runs on CommScope™.” You will find CommScope solutions in many of the world’s most prominent networks, including the largest cellular networks, most advanced data centers, tallest skyscrapers and biggest office campuses, largest cable TV systems, biggest stadiums, busiest airports and longest tunnels. 2


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    Our role as one of the world’s leading and most trusted To a person, we at CommScope are proud of the infrastructure providers isn’t only about high-profile projects. infrastructure we make and provide—an array of award- CommScope is part of thousands and thousands of networks winning, innovative offerings that become part of an of all types and sizes around the world. Name a country…. overall network. But it doesn’t begin or end there. We we’re likely in it. Name an operator….we’ve likely helped are even prouder of our ability to help customers solve them. Name a FORTUNE 500 company….our solutions are their networking challenges before a physical piece of likely there. Our long-standing expertise and experience in infrastructure is even deployed. We live for the discussions, helping customers solve networking challenges innovatively analysis, designing, data-sharing, brainstorming, means that your favorite TV shows, texts, tweets, videos, research, advising, testing, recommending, late-night phone calls, emails, financial transactions, downloads, posts, videoconferences, early morning meetings and everything business orders and videoconferences very likely travel over a else that goes into fully understanding the business problems CommScope-supported network. our customers face, and providing communications options As bandwidth requirements continue to grow, we expect to solve them. It’s our goal to be a trusted advisor to our to be part of many more networks, new and existing. customers—a vital part of their team in helping solve their The growth in data usage from consumers, businesses, business and networking issues. governments and others is creating capacity constraints that Networks need to be robust, efficient, simplified, future- operators struggle continually to keep pace with. That is the proof, and constantly evolving to address the needs of our sweet spot in which CommScope exists. That is our charter— customers and theirs. We specialize in doing that through helping customers by providing essential infrastructure our three operating segments: Wireless, Enterprise and solutions that enable communications through a constant Broadband. We believe that we are strongly positioned with focus on integrity, innovation and agility. significant leadership positions in connectivity and essential infrastructure solutions for each of these three segments. Well-Positioned to Meet Growing Bandwidth Demand Through our Andrew brand, our wireless products, solutions and services are tailored to increase network There are four major drivers of communication traffic— speed, flexibility and reliability. We are the leading wireless mobility, social media, cloud computing and Big Data. All infrastructure provider to the most advanced LTE networks, require next generation infrastructure to support their building upon more than 75 years of involvement in every exponential growth. How great is the hunger for bandwidth? evolution of wireless communication. In data centers and Consider these industry projections: buildings, our solutions help customers manage energy, space, productivity, availability and capacity with greater • Mobile data traffic will grow at an annual rate of 61% through 2018, while social media traffic will rise more efficiency. With a long history of innovation that started than 20% per year in that time. with Bell Labs, our industry-leading SYSTIMAX connectivity solutions set the standard and drive the evolution of data • Cloud data center traffic is expected to grow 600% in networks for our customers and partners. Our broadband the next two years. solutions help customers increase bandwidth, maximize • About 70% of consumer Internet traffic will be video existing capacity, improve network performance, enable by 2017. simple technology migration and deploy more revenue- generating services. For over 40 years, the CommScope brand At CommScope, we spend most of our time helping has represented a long tradition of reliable solutions, service operators around the world keep pace with that growth and and support for broadband networks. their own customers’ demands for more data, better services, higher quality and faster networks. It’s a never-ending quest, An Outstanding Year of Performance yet one for which we feel we’re ideally suited. As usage increases, there will be greater demand and competition By almost any financial measure, 2014 was an outstanding for the strong, underlying physical infrastructure that year. Sales rose 10% year-over-year to $3.8 billion, with CommScope can provide. That motivates us and keeps us growth in all of our served markets and particular strength innovating. in Wireless. 3


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    Our Wireless segment grew nearly 14% and benefited Continual Efforts to Improve Performance from the evolution globally of networks from 2G/3G systems supporting basic data and voice to fourth generation LTE Long-time CommScope followers are familiar with the technology being deployed for greater coverage, capacity and company’s devotion to operational excellence and cost efficiency. North American sales were robust, while our mid- management. I believe we exemplified that long-standing year acquisition of Alifabs™, a leading designer and supplier culture through a wave of continual improvement programs of metro layer concealment solutions in the UK, helped our that began in 2014 and have been embraced by our year-over-year results. Our ability to respond to customer employees worldwide. global demand and deliver cutting-edge wireless solutions For example, our “Safety Starts With Me!” program targets helped drive another year of strong operating margin reductions in the rates of major injuries and days away expansion. from work—keeping employees safer and healthier, while Our Enterprise segment grew 3% from the prior year contributing to a culture of high productivity and workplace as the global economy continues to recover and as large efficiency. business enterprises continue to invest in data centers and Our “Quality Matters” initiative intelligent buildings. We are also proud of delivering higher is helping instill a culture in which operating margins while investing in new solutions for data employees instinctively and passionately centers and intelligent buildings. take greater responsibility for the work Our Broadband segment also recovered, growing 5% they do individually and as teams, while reducing or year-over-year as North American cable operators push fiber eliminating any potential pain points that may negatively deeper into the network and invest to improve the quality affect our customers’ experience with us. of their video and broadband offerings. After a tough year Similarly, we expanded our focus on lean manufacturing in 2013, we are particularly pleased to report a significant to reduce the amount of building space, people, materials improvement in Broadband profitability, which more than and time required to make and deliver our products, and doubled year over year. We intend to continue positioning doing so with less cost and fewer defects. Broadband for long-term success as we look closely at the Our most significant and strategic effort also promises portfolio in the coming year. to provide a long-lasting and meaningful impact on Gross profit margins hit 36% due to higher sales customers. “Simply CommScope,” as volumes, favorable customer shifts toward more advanced the name implies, is marshalling the solutions, and a relentless focus on cost management. This efforts of every single organization and record operating performance propelled adjusted operating employee to remove complexity from earnings, which exclude special items, to $2.23 per diluted the company. This will impact the way we do business, the share, up 39% from 2013. We also are proud to deliver processes we follow, the systems we use, and how we interact record adjusted free cash flow of $346 million, which within CommScope—and ultimately with our customers excludes the redemption premium associated with the and suppliers. The goal is straightforward—to make doing refinancing of higher-cost debt. This refinancing helped save business with CommScope as easy and fast as possible. nearly $23 million of interest expense annually. Customers demand that we offer consistency across the I am proud of the global CommScope team’s performance organization, and make it easy for them to engage with us in a continued environment of modest growth, uneven at every point in the company, in every part of the world. customer spending and industry consolidation. I believe After years of organic growth and multiple acquisitions, we we have strengthened CommScope’s overall position in the see tremendous opportunity to streamline our systems and market by focusing on our strengths—passionate support processes for the benefit of everyone inside and outside of for customers, industry-leading technologies and ongoing CommScope. innovation, geographic and product diversity, operational In good times or bad, we never intend to sit still. We excellence in our global manufacturing and distribution passionately and diligently strive for better performance and network, and continued cost management. These attributes constant improvement in all areas of our business. It is what have served us well over many years and variable economic our customers expect from a market leader like CommScope, cycles, and 2014 was no different. and it serves our shareholders well, too. 4


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    Accelerating Growth and Global Expansion Through adaptable to compete in this changing landscape. We also will Acquisition face pressure in the integration and transition of the Telcom, Enterprise and Wireless businesses from TE Connectivity. In 2014, we acquired two of My confidence in the CommScope team—about 13,000 the businesses of United Kingdom- strong—has never been higher. Driven by our three core based Alifabs Group to expand metro values—integrity, innovation and agility—this talented, cell and cell services, and provide additional support for diverse global team has worked tirelessly to build upon our European wireless operators as LTE network deployments strengths and create an even stronger company. accelerate. We believe Alifabs’ capabilities of designing We have more work to do. However, I believe CommScope and manufacturing enclosures, monopoles, towers and is uniquely positioned to help our customers meet the streetworks can be expanded from the UK into Europe at a world’s growing demand for network bandwidth, and to time of strong growth in LTE network deployments there, do so with greater efficiency, performance and technology with the need to build networks with greater capacity in innovation. That has been our hallmark and is why we are urban areas and other population centers. part of so many of the world’s networks. We have earned that In January 2015, we announced the proposed acquisition position and intend to grow it. of TE Connectivity’s Telecom, Enterprise and Wireless So go ahead and make that call, send that transaction, businesses to accelerate CommScope’s strategy to increase enjoy that video, and transfer that file with the confidence profitable growth. With this transaction, which we expect that CommScope is there, making communications happen to close by the end of 2015, we will enter into attractive behind the scenes. The world’s vital networks run on adjacent markets and broaden our position as a leading CommScope solutions. communications infrastructure provider. This is an important I look forward to continuing our journey together. and transformative acquisition for CommScope with Thank you for your support of CommScope. many clear strategic and financial benefits for all of our stakeholders. It creates enhanced scale with a combined, diversified 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. Eddie Edwards Our presence in all parts of the world also is a President and Chief Executive Officer 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 5


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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 • Network backhaul operators • Original equipment manufacturers • US government agencies BUSINESS Infrastructure solutions for: • Cellular networks APPLICATIONS • In-building wireless coverage and capacity • Metro cells • Network backhaul • Specialized coverage and capacity for large-scale events and venues REPRESENTATIVE • Outdoor sites - Pre-assembled and tested tower top systems - Base station antenna systems - Microwave antenna systems PRODUCTS/SOLUTIONS - Interconnectivity (fiber, hybrid fiber/power and coaxial - Network optimization and testing feeder cabling; connectors and assemblies) • Indoor coverage and capacity - RF conditioning (amplifiers, filters, diplexers, combiners) - Distributed antenna systems - Installation systems (mounts and monopoles) - Unified wireless infrastructure - Metro cell concealment solutions - Repeaters, boosters and radiating cabling - Design and installation services • Spectrum management consulting and services SIGNIFICANT BRANDS • Andrew® • Sentinel® • HELIAX® • ION® • Argus® • ValuLine® INDUSTRY DRIVERS • Growth in wireless data consumption • Mobility and wireless requirements in enterprise buildings • Smartphone and tablet adoption and large public venues • Video and photo downloads and sharing • Network coverage needs in tunnels, railways and other • Global deployment of 4G LTE networks hard-to-reach locations 2014 HIGHLIGHTS • Introduced ION-E™, a unified 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 first 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 simplifies the interface between a base station antenna and virtually any remote radio unit technology • Introduced new small antenna technology to help operators address cell densification 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. 6


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    ENTERPRISE $850M BROADBAND $511M A global leader in infrastructure solutions that enable businesses and governments A global leader in optical and radio frequency (RF) infrastructure solutions to support to better manage energy, space, productivity, availability and capacity with greater the delivery of advanced broadband services—such as HDTV, high-speed internet, efficiency in their data centers and buildings. and video on demand—to residential and commercial customers. • Majority of FORTUNE 100 • Small- to mid-sized businesses • Multiple system operators • Global companies • Governments • Broadband service providers • Large multi-nationals • Data center owners and operators • Telecommunications companies Infrastructure solutions for: Infrastructure solutions supporting: • Data centers • Fiber-to-the-premise networks • Buildings and campus environments • Hybrid fiber coax networks • Indoor wireless • Network evolution • Business or educational campus environments • Data center infrastructure management (DCIM) • Coaxial and fiber optic cable • Purpose-built data center solutions • Conduit and cable-in-conduit • Structured cabling • Residential connectivity (amplifiers, splitters, drop cable, interconnects) • Pre-terminated fiber and copper cabling • Access transport solutions (xPON and Edge QAM) • Intelligent infrastructure management hardware and software • Intelligent lighting and sensor network • SYSTIMAX® • Redwood® • CommScope® • Uniprise® • imVision® • BOS® • iTRACS® • Data Center On Demand™ • GroundSmart® • LxS® Edge QAM • Big Data • BYOD and mobility • More devices accessing gaming and video • Mobility • Security • Cloud computing content from over-the-top video providers • Need to stream multiple video • Need for greater monitoring • Internet of Things • Competition between traditional cable/ formats to support various and management • Energy efficiency telecom companies and new entrants to the network end devices service provider business • First technology partner supporting the refurbishing of the famed Daytona • Increased sales of trunk and distribution coaxial cable, fiber cable, cable-in-conduit International Speedway solution, and our new E2O® family of composite construction solutions due to • Added fiber manufacturing capabilities to plants in Europe and Asia investment in infrastructure upgrades by several major MSOs. • Telecom operator Ooredoo implements CommScope’s Redwood, imVision and • Leading MSO network expansion creates growth in our RF solutions portfolio used SYSTIMAX solutions to support fully integrated, intelligent IT and facilities for subscriber connection infrastructure at Qatar data center • Growth in BOS product line sales from increased deployment of FTTH infrastructure • Introduced Data Center on Demand solution as flexible purpose-built, carrier-class • Demonstrated market leadership by qualifying and deploying a 10G EPON solution alternative to traditional brick-and-mortar data centers capable of supporting a synchronous 10G service capability. • Initiated first phase of ongoing integration of iTRACS DCIM solution with imVision • Successful cost management programs helped increase profitability infrastructure management to better manage connectivity in data centers 7


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    WIRELESS 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 significant in the world and share at least two fundamental challenges. First, nearly all networks have difficulties 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-effective, 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 Morgan Kurk, senior vice president the need for increased bandwidth and effective technology evolution. We are proud to serve as a trusted advisor in addressing the critical WILL LTE REMAIN A KEY FOCUS FOR WIRELESS OPERATORS THIS YEAR? network infrastructure issues and opportunities On average, a new mobile generation has been that our customers face. introduced every decade since the introduction of AMPS (the first 1G system) in 1983. 4G, standardized as LTE, was In the following pages, the leaders of introduced about five years ago, and will reach a general CommScope’s three business segments provide acceptance milestone in 2015. That’s the point in the their insights into some of the trends and issues technology evolution when LTE handsets and networks they expect will impact network operators. have become stable, generally available, and cost-effective. 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 efficiency. 8


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    HOW DO OPERATORS ACHIEVE THIS EFFICIENCY? HOW ARE OPERATORS DEALING WITH THIS? There are multiple considerations. I expect operators One increasingly popular method to add capacity is the will continue to modernize their networks by upgrading creation of a metro layer. These are new, smaller cell sites and replacing their legacy 2G and 3G systems and adding that are lower to the ground than traditional tower-based or 4G. This improves the efficiency of the radio access network roof-based systems and placed in outdoor areas with a high (for example, size, function and energy consumption) concentration of potential users, such as streets and public and the core network architecture (backhaul, switches, squares in urban areas. These metro cells are placed to add applications). As data requirements continue to increase, capacity to the overall system, not to provide initial coverage. the operators will further increase network efficiency and Metro cells can be placed discretely on or inside existing street capacity through cell splitting, the creation of a metro layer, poles and furniture to help address deployment challenges, and increased deployment of the indoor coverage layer. And which include new site acquisition, signal backhaul to the core with limited spectrum, operators will continue to maximize network and commercial power. capacity through increased spectral reuse on top of improved A second method is focusing on indoor areas, where modulation formats such as LTE. approximately 80 percent of all cellular traffic occurs. Providing dedicated indoor systems puts a massive amount OBTAINING ADDITIONAL RADIO SPECTRUM HAS BEEN AN INDUSTRY FOCUS. of capacity and coverage very close to users. While indoor ARE THERE ALTERNATIVES TO THIS? distributed antenna systems (DAS) have been around for Spectrum is a finite resource, much like beach front years, new DAS technology is enabling a faster uptake in property. Efficient usage of this limited resource is key to a systems within buildings by automating much of what was long-term, successful network. Capacity of a cellular network done by skilled technicians in the past, conserving energy and comes from three principle areas: additional spectrum, more cost through new interfaces, and enabling maintenance and efficient air interface technologies and increased spectral reuse. operations by a much broader group of people through new Spectral reuse has and will continue to be the primary method methodologies. In addition, next generation indoor solutions, to increase a network’s capacity. This occurs through either such as CommScope’s ION-E, feature new architectures and splitting sectors at a cell site or adding more cell sites. A sector efficiencies to help address needs in the approximately 80 split has long been considered the most cost-effective way percent of commercial buildings that today are not served by a to add capacity. Initial cellular systems were all omni-sector dedicated cellular system. (picture a large circle, with a cell site in the middle), but when capacity was needed, many were split into three-sector HOW DOES NETWORK MODERNIZATION SUPPORT THIS? sites, like a pie being cut into three pieces. Sites that require LTE is the latest evolution of commercial cellular systems additional capacity in 3G and 4G networks now are being split and boasts the greatest spectral efficiency yet. Efficiency into six sectors. High density, special purpose solutions can improvements, however, are not limited to spectrum—they include antennas that have up to 27 beams, or sectors, at a apply to the ecosystem as a whole. To serve customers with single site. Eventually so-called active antennas will continue more data for the same price, each and every portion of the this trend and further divide a cell into a sector per person. infrastructure will be evaluated, negotiated, calculated and optimized—from the core network to the remote towers CAPACITY SEEMS TO HAVE BECOME A MORE PRESSING ISSUE TO OPERATORS at the end of the radio access network (RAN), from power THAN COVERAGE. WHY IS THAT? consumption to the amount of space used at a cell site and This is a question of timing. When a new generation of the time it takes to acquire a site. When operators modernize wireless is introduced, the first focus is coverage through the their networks, they look to do so across all aspects of the so-called macro networks that provide large umbrellas of radio ecosystem. 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, offloading traffic from the macro networks is increasingly important. 9


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    ENTERPRISE WILL CLOUD-BASED ARCHITECTURES BECOME PART OF THIS MODERNIZATION? In the pursuit of efficiency, there are near- and far-term dimensions. One of the biggest long term benefits 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. Efficiency 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 efficiency. 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 simplified, believe it or not. And this simplification helps create network quality. The Kevin St. Cyr, senior vice president same simplification 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 WHAT IS THE INTERNET OF THINGS AND HOW WILL NETWORKS SUPPORT IT? radio units to innovations in connectivity, the RAN is being Many view the Internet of Things (IoT) as better data in improved and optimized for capacity. Simplifying the RAN real time, and a lot more of it. The reason is simple—there extends to improving deployment, where innovations in are far more “things” than there are people, and the potential equipment have led to easier and higher quality installations of interconnections that previously were stand alone and off that in turn lead to increases in capacity. Where there is line is compelling. quality, there is capacity. 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 identified 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. 10


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    SPEAKING OF GROWTH AND BANDWIDTH, IoT AND CLOUD-BASED SERVICES AND with intelligent lighting solutions, collects data that help APPLICATIONS ARE DRIVING GREATER CAPACITY REQUIREMENTS IN DATA CENTERS. facilities managers make better decisions on space utilization HOW ARE DATA CENTER MANAGERS DEALING WITH THIS? and energy usage, as well as provide a security feature through At a basic level, significant growth in the internet and motion and thermal tracking. the vast amount of data processed over networks requires a tremendous increase in computing power to process and store STRUCTURED CABLING IS A KEY COMPONENT OF THE DATA CENTER AND all that digital information. That means more data centers and INTELLIGENT BUILDING APPROACHES YOU HAVE DISCUSSED. WHAT ARE THE all the computing and networking infrastructure that goes NEWEST DEVELOPMENTS IN CABLING TECHNOLOGY? with them. Handling this growth means adding more data Fiber is gaining more wide-spread adoption as bandwidth centers or getting more out of what you already operate. I needs grow, while copper remains popular and viable in many believe that two relatively new approaches will begin to take applications as it remains cost-effective and performs reliably. hold in the near future. In copper-based cabling, Category 6A is hitting its stride Modular data centers are now in the mix as a viable and making its way out of the data center and into general solution for increasing data center capacity. These are flexible, building use. This is driven—surprise—primarily by greater highly efficient, purpose-built alternatives to traditional bandwidth needs and the desire to create a degree of future brick and mortar data centers that offer a pay-as-you-grow proofing as demands for network-based building applications approach to data center expansion. They can be built indoors increase. For example, wireless coverage is considered by or outdoors exactly to the customer’s specifications and needs, many the next utility within the building, and Category 6A and in only a few weeks. In a rapidly evolving market, this can provide the infrastructure for next generation WiFi access speed and customization is vital. points as well as the next generation of in-building cellular It is also critical to look at existing assets. Attaining wireless systems. higher performance from existing infrastructure can create Industry discussions around a standard for Category 8 more capacity and efficiency. Data center infrastructure cabling to accommodate 40G networks continue. In 2015, I management (DCIM) solutions can be a huge help. Customers think manufacturers will put Category 8 into pre-production are beginning to see the tremendous value DCIM can deliver or provide limited availability in anticipation of the standard, in terms of monitoring power usage; asset placement, refresh, which might be completed in 2015 or early 2016. Pre- and replacement; physical layer connectivity, server utilization standardization can be referred to as a manufacturing phase and much more to ensure their data centers are performing that provides limited availability of a product to allow for to their capabilities. Harnessing the power of intelligence and customer trials and sampling—this phase will probably be the predictive analysis through DCIM can be critical in helping first sighting of Category 8 in the market. operators have deeper insight into how their assets are being Meanwhile, fiber has overtaken copper to become the used, how much capacity is available for growth and how their medium of choice to interconnect all data center devices. systems are interconnected. The move toward OM4 has accelerated, with it being used in 40G and 100G data center networks around the world. That is FOR YEARS, PEOPLE HAVE TALKED ABOUT WAYS TO MAKE ENTERPRISE driving users and manufacturers toward higher grade cabling. BUILDINGS, INCLUDING DATA CENTERS, MORE INTELLIGENT. WHAT IS Work by industry standards groups on the next generation of AHEAD IN THAT AREA? high-grade multimode optical fiber is continuing. 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-efficiently. 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 11


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    BROADBAND 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 office for voice calls and messaging. The popularity of over-the-top video services such as Hulu, Netflix 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 fiber 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 fiber coaxial networks are cost effective and will be viable for years, operators are installing fiber 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. Ric Johnsen, senior vice president As it comes with great expense and complexity, this network transformation to all-fiber will not happen quickly. These fiber projects will be seen initially in multi-dwelling units and new WHAT IS DRIVING CONSOLIDATION IN THE CABLE TV INDUSTRY? “greenfield” expansions. Industry mergers and acquisitions have been a hot topic in the cable TV and telecommunications industries for many HOW ELSE CAN OPERATORS ADDRESS CAPACITY NEEDS? years, and what we’re seeing now is just a continuation of this Operators are improving network capacity by creating trend. It’s driven in large part by intense competition between smaller service group sizes through node splitting—effectively traditional cable and telco operators as to which operators reducing the amount of subscribers that share a portion of the will serve millions of households and businesses the blended network—in order to reduce congestion during peak demand offerings of voice, internet and video. Just as importantly, periods. Also, attention is being paid to the infrastructure content has become king, so by becoming bigger, companies supporting greater bandwidth on the upstream (from feel they have more assets and content of their own to offer subscriber back to the network) as subscribers in many cases to their customers, and thus move beyond just providing the are sending as much content as they download. Additionally, transport of third-party content. This has required multiple operators will explore the transition to the next generation of system operators (MSOs) and traditional telcos to quickly DOCSIS high bandwidth data transport technology—DOCSIS evolve their networks technologically and architecturally 3.1—as an avenue to expand capacity. The ability to change to add significantly more bandwidth to serve data-hungry the mid-split frequency between upstream and downstream subscribers, and add unprecedented enhancements and transport will enable additional upstream capacity to address efficiencies to their infrastructures. the current bottleneck in the network, and DOCSIS 3.1’s ability to support OFDM modulation techniques will generate more efficient use of the available spectrum. 12


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    Form10-K


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    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 OR ‘ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number: 001-36146 CommScope Holding Company, Inc. (Exact name of registrant as specified in its charter) Delaware 27-4332098 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 1100 CommScope Place, SE Hickory, North Carolina 28602 (828) 324-2200 (Address of principal executive offices) (Zip Code) (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 Accelerated filer ‘ Non-accelerated filer ‘ (Do not check if a smaller reporting company) 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 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.


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    TABLE OF CONTENTS Page Part I Item 1. Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 Item 1A. Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 Item 1B. Unresolved Staff Comments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41 Item 2. Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41 Item 3. Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42 Item 4. Mine Safety Disclosures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42 Part II Item 5. Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42 Item 6. Selected Financial Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45 Item 7A. Quantitative and Qualitative Disclosures About Market Risk . . . . . . . . . . . . . . . . . . . . . . . . 71 Item 8. Financial Statements and Supplementary Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 122 Item 9A. Controls and Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 122 Item 9B. Other Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 123 Part III Item 10. Directors, Executive Officers and Corporate Governance . . . . . . . . . . . . . . . . . . . . . . . . . . . 124 Item 11. Executive Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 124 Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 124 Item 13. Certain Relationships and Related Transactions, and Director Independence . . . . . . . . . . . 124 Item 14. Principal Accountant Fees and Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 124 Part IV Item 15. Exhibits and Financial Statement Schedule . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 125 Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 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. 1


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    The table below summarizes our offerings, global leadership positions and 2014 revenue: Cell-site Intelligent Enterprise Small Cell Distributed Solutions Infrastructure Solutions Antenna Systems Solutions Solutions Data Center In-building Broadband Solutions Cellular Solutions Solutions Antennas Distributed Antenna Connectors Data Center (base stations & Systems/In-building Infrastructure microwave) Cellular Management Key products Cables Advanced LED Data Center and services Systems Management (hybrid, coaxial, optical, on Demand twisted pair) Network Design Amplifiers Services Filters Operating Wireless Enterprise Broadband segments #1 #1 #1 Global market in merchant RF wireless in enterprise connectivity in cables for HFC networks leadership network connectivity solutions for data centers position solutions and small cell and commercial buildings DAS solutions 2014 Revenue (in $2,470 $851 $511 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 2


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    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. 3


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    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. 4


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    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: Year Ended December 31, 2014 2013 2012 Wireless 64.5% 62.5% 57.7% Enterprise 22.2 23.7 25.5 Broadband 13.3 13.8 16.8 Total 100.0% 100.0% 100.0% Wireless 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. 5


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    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. 6


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    Products Solutions Offering Description Cell site 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. Metro cell concealment 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. Small cell DAS solutions 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 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. Data Center solutions 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. Broadband MSO solutions We provide a broad portfolio of cable solutions including fiber-to-the- home equipment and headend solutions for MSOs. 7


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    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. 8


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    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 9


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    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 10


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    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. 11


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    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. 12


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    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. 13


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    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. 66 President, Chief Executive Officer and Director Mark A. Olson 56 Executive Vice President and Chief Financial Officer Frank M. Drendel 70 Director and Chairman of the Board Randall W. Crenshaw 57 Executive Vice President and Chief Operating Officer Frank (Burk) B. Wyatt, II 52 Senior Vice President, General Counsel and Secretary Peter U. Karlsson 51 Senior Vice President, Global Sales Robert W. Granow 57 Senior Vice President, Corporate Controller and Principal Accounting Officer Philip M. Armstrong, Jr. 53 Senior Vice President, Corporate Finance Joanne L. Townsend 61 Senior Vice President, Human Resources Claudius (Bud) E. Watts IV 53 Director Campbell (Cam) R. Dyer 41 Director Austin A. Adams 71 Director Marco De Benedetti 52 Director Peter J. Clare 49 Director Stephen (Steve) C. Gray 56 Director L. William (Bill) Krause 72 Director Timothy T. Yates 67 Director Thomas J. Manning 59 Director Marvin (Eddie) S. Edwards, Jr. 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 14


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    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. 15


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    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. 16


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    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 17


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    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. 18


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    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; 19


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    • 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. 20


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    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. 21


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    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. 22


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    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. 23


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    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. 24


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    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 25


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    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 26


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    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 27


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    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 28


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    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. 29


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    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. 30

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