Slide 1: Second Quarter 2016 Results
Armstrong, Philip; Edwards, Eddie; Olson, Mark Eddie Edwards President and Second Quarter 2016 Results Chief Executive Officer July 28, 2016 Mark Olson Executive Vice President and Chief Financial Officer 1
Slide 2: Safe Harbor
Safe Harbor Caution Regarding Forward Looking Statements During this presentation or any other oral or written statements made by us or on our behalf may include forward-looking statements which reflect our current views with respect to future events and financial performance. These forward-looking
Slide 3: Agenda
Agenda • Second quarter 2016 results • Segment review • Cash flow, liquidity and capital structure • BNS acquisition synergy update • Third quarter and calendar year 2016 outlook 3
Slide 4: Q2 2016 Results
Q2 2016 Results Revenue Operating Income(1) Diluted Earnings Per Share(1) (in millions) (in millions) $1,307 $291 $1,144 $0.74 $211 $867 $176 $0.49 $0.48 Adjusted Adjusted $184 GAAP GAAP $0.06 $0.32 $109 $0.24 $91 Q2 2015 Q1 2016 Q2 2016 Q2 2015 Q1 2016 Q2 2016 Q2 2015 Q1 2016 Q2 2016 Sales & Orders
Slide 5: CommScope Connectivity Solutions (CCS)
CommScope Connectivity Solutions (CCS) Fiber Residential/MDU to the Home Revenue (in millions) Outside $778 Plant $687 $352 Backhaul CATV Central Headend Office Q2 2015 Q1 2016 Q2 2016 Intelligent Building Operating Income(1) (in millions) $169 $135 Data Center Adjusted $72 $93 GAAP $39 $50 Addition
Slide 6: CommScope Mobility Solutions (CMS)
CommScope Mobility Solutions (CMS) Outdoor Additional Offerings Cell Site Cabling & connectivity Revenue Metro cells Filters & combiners Microwave (in millions) Services Backhaul $515 $529 Small $457 Cell Cloud RAN Nodes Integrated Cabinets Q2 2015 Q1 2016 Q2 2016 Operating Income(1) (in millions) $
Slide 7: Cash Flow and Liquidity
Cash Flow and Liquidity Cash Flow Highlights LTM LTM (in millions) Q2 2015 Q2 2016 Q2 2015 Q2 2016 Cash flow from operations $ 72 $ 151 $ 412 $ 497 Capital expenditures, net of capital expenditures related to BNS integration(1) (9) (16) (37) (57) Cash paid for transaction & integration costs 12 15 1
Slide 8: Capital Structure
Capital Structure Capital Summary & Net Leverage Ratio Major Debt Maturities as of June 30, 2016(2) (dollars in millions) 6/30/2016 (in millions) 5.00% and 5.50% Notes $ 1,300.0 PIK Notes 236.6 Announced Term Loans 1,502.5 $237 million 6.00% Notes 1,500.0 PIK Notes Secured Notes 500.0 Redemption Les
Slide 9: BNS Acquisition Synergy Update
BNS Acquisition Synergy Update Accelerated and raised synergy targets Original: Q1 2016 Update: Current Update: Estimated Synergies Estimated Synergies Estimated Synergies ≥ $150 million ≥ $175 million ≥ $200 million (in millions) (in millions) (in millions) (in millions) ≥ $200 ≥ $175 ≥ $170 ≥ $145
Slide 10: Outlook
Outlook(1) • Sales of $1.26 billion - $1.31 billion • Operating income of $166 million - $183 million Q3 2016 • Adjusted operating income of $265 million - $285 million • Earnings per diluted share of $0.37 - $0.39, based on 196 million weighted average Guidance diluted shares • Adjusted earnings pe
Slide 11: Appendix: Non-GAAP Financial Measures
Appendix Non-GAAP Financial Measures CommScope management believes that presenting certain non-GAAP financial measures provides meaningful information to investors in understanding operating results and may enhance investors' ability to analyze financial and business trends. Non-GAAP measures are no
Slide 12: Income Statements
Income Statements Thre e Months Ende d Six Months Ende d June 30, June 30, (Unaudited -- In thousands, except per share amounts) 2016 2015 2016 2015 Net sales $ 1,306,788 $ 867,290 $ 2,450,767 $ 1,692,690 Operating costs and expenses: Cost of sales 753,029 552,595 1,449,917 1,084,791 Selling, genera
Slide 13: Balance Sheets
Balance Sheets June 30, 2016 December 31, 2015 Assets (Unaudited -- In thousands, Cash and cash equivalents $ 516,043 $ 562,884 except share amounts) Accounts receivable, less allowance for doubtful accounts of $16,365 and $19,392, respectively 993,013 833,041 Inventories, net 465,685 441,815 Prepai
Slide 14: Statements of Cash Flows
Statements of Cash Flows Three Months Ended Six Months Ended (Unaudited -- In thousands) June 30, June 30, 2016 2015 2016 2015 Operating Activities: Net income $ 61,961 $ 45,592 $ 74,541 $ 85,068 Adjustments to reconcile net income to net cash generated by operating activities: Depreciation and amor
Slide 15: Quarter Segment Information
Quarter Segment Information (Unaudited -- In millions) Sales by Segment (1) % Change Q2 2016 Q1 2016 Q2 2015 Sequential YOY Connectivity Solutions 778.0 687.0 352.1 13.2 % 121.0 % Mobility Solutions 528.8 457.0 515.2 15.7 % 2.6 % Total Net Sales $ 1,306.8 $ 1,144.0 $ 867.3 14.2 % 50.7 % Non-GAAP Adj
Slide 16: Pro Forma Sales
Pro Forma Sales (Unaudited -- In millions) Pro Forma Sales (1) Q1 2015 Q2 2015 Q3 2015 Q4 2015 (2) Full Year 2015 Legacy CommScope $ 825.4 $ 867.3 $ 831.5 $ 754.0 $ 3,278.2 Legacy BNS 424.9 471.0 415.8 388.5 1,700.2 Total Pro Forma Net Sales $ 1,250.3 $ 1,338.3 $ 1,247.3 $ 1,142.5 $ 4,978.4 Pro Form
Slide 17: Adjusted Operating Income Reconciliation by Quarter
Adjusted Operating Income Reconciliation by Quarter (Unaudited -- In millions) Q2 2016 Q1 2016 Q4 2015 Q3 2015 Q2 2015 Operating income (loss), as reported $ 183.9 $ 90.7 $ 21.6 $ (42.5) $ 109.4 Amortization of purchased intangible assets 76.0 73.6 76.9 54.3 44.6 Restructuring costs, net 7.6 6.1 18.
Slide 18: Quarterly Adjusted Operating Income Reconciliation by Segment
Quarterly Adjusted Operating Income Reconciliation by Segment Second Quarter 2016 Non-GAAP Adjusted Operating Income Reconciliation by Segment (1) (Unaudited -- In millions) Connectivity Mobility Solutions Solutions Total Operating income, as reported $ 92.9 $ 91.0 $ 183.9 Amortization of purchased
Slide 19: Adjusted Net Income Reconciliation
Adjusted Net Income Reconciliation Three Months Ended S ix Months Ended June 30, June 30, (Unaudited – In millions) 2016 2015 2016 2015 Operating income, as reported $ 183.9 $ 109.4 $ 274.6 $ 202.5 Adjustments: Amortization of purchased intangible assets 76.0 44.6 149.6 89.4 Restructuring costs, net
Slide 20: Outlook GAAP to Non-GAAP Reconciliation
Outlook GAAP to Non-GAAP Reconciliation Outlook (Unaudited -- In millions) Three Months Ended S eptember 30, Full Year 2016 2016 Operating income $166 - $183 $562 - $597 Adjustments: Amortization of purchased intangible assets $74 $297 Equity-based compensation $9 $36 Restructuring costs, integratio