Slide 1: Fourth Quarter 2015 Results
Armstrong, Philip; Edwards, Eddie; Olson, Mark Eddie Edwards President and Fourth Quarter 2015 Results Chief Executive Officer February 19, 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 • Financial overview • Fourth quarter 2015 results • Segment review • Cash flow and liquidity • First quarter and calendar year 2016 outlook • BNS integration progress 3
Slide 4: Financial Overview
Financial Overview (All values in $m) Revenue Adjusted Operating Income(2) $4,975 $975 $808 $730 $3,830 $3,808 $620 $3,480 $3,275 $3,322 $501 $381 (1) 2011 2012 2013 2014 2015 2016E(1) 2011 2012 2013 2014 2015 2016E (1) Midpoint of 2016 outlook. Includes impact of BNS acquisition. Excludes amortizat
Slide 5: A More Diversified CommScope
A More Diversified CommScope Segment Diversification Geographic Diversification Q4 2015 Revenue Q4 2015 Revenue Other BNS Americas 34% 9% Wireless 39% US 48% APAC 21% EMEA Broadband 22% 9% Enterprise 18% 5
Slide 6: Q4 2015 Results
Q4 2015 Results Sales & Orders: Consolidated Sales • Sales of $1.14B, consistent with guidance (in millions) • Excluding BNS and FX, down 6% YOY $1,143 • Orders of $1.15B $973 $828 • Book-to-bill ratio of 1.01 • First time wireless ≥ 1.0x since Q1 2014 Q4 2014 Q3 2015 Q4 2015 Operating Results: • GA
Slide 7: Wireless Segment
Wireless Segment Services Global Leader in Wireless RF Base Station Antennas Infrastructure Solutions Wireless Sales(1) Integrated Solutions Metro Cells (in millions) and Products Offering $485 $475 $452 Small Cell DAS Cables and Q4 2014 Q3 2015 Q4 2015 Connectivity Adjusted Operating Income(2) Base
Slide 8: Enterprise Segment
Enterprise Segment Data Center Solutions Structured Cabling Connectivity Solutions (including iTRACS) Enterprise Sales(1) (in millions) $213 $228 $203 Q4 2014 Q3 2015 Q4 2015 Adjusted Operating Income(2) (in millions) $58 Data Center $43 $43 on Demand Q4 2014 Q3 2015 Q4 2015 Intelligent & Commercial
Slide 9: Broadband Segment
Broadband Segment Coaxial and Fiber Optic Solutions for Cable Television Operators Broadband Sales(1) Coaxial (in millions) FTTX Cable Solutions $131 $128 $99 Q4 2014 Q3 2015 Q4 2015 Adjusted Operating Income(2) (in millions) $18 Cable in Conduit $13 $11 Fiber Cable Q4 2014 Q3 2015 Q4 2015 (1) Sales
Slide 10: BNS Segment
BNS Segment (Acquisition closed August 28, 2015) Broadband Leader in Fiber Optic Connectivity Telecom Cloud BNS Sales(1)(2) (in millions) RF CONNECTIVITY ADC COAXIAL FIBER-TO- CATV Krone $417 $416 $389 AND THE-X (FTTX) HEADEND FIBER ARCHITECTURES AMP NetConnect OPTIC Raychem CABLING PF Q4 2014 PF Q3
Slide 11: Cash Flow and Liquidity
Cash Flow and Liquidity Cash Flow Highlights Full Year Full Year (in millions) Q4 2014 Q4 2015 2014 2015 Cash flow from operations $ 128 $ 116 $ 289 $ 302 Capital expenditures, net of capital expenditures related to BNS integration (12) (15) (37) (44) Cash paid for transaction & integration costs *
Slide 12: Cash Flow and Capital Structure
Cash Flow and Capital Structure Adjusted Free Cash Flow(1) ≥ $500 ≥ $425 $346 $354 $258 $254 $236 2011 2012 2013 2014 2015 2016E(2) 2017E(2) $1,500 Major Debt $1,247 $1,037 Maturities $650 $650 As of $262 (3) $0 $0 $0 $0 $0 December 2015 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 (1) See
Slide 13: Outlook
Outlook(1) • Sales of $1.075 billion - $1.150 billion Q1 2016 • Adjusted operating income of $165 million - $195 million • Adjusted earnings per diluted share of $0.32 - $0.37, based on 196 million Guidance weighted average diluted shares • Adjusted effective tax rate of 34% - 35% • Sales of $4.90 b
Slide 14: BNS Integration Progress
BNS Integration Progress • Organizational Structure • Additional details at May Analyst Day • Synergy Activity 14
Slide 15: BNS Acquisition Synergy Update
BNS Acquisition Synergy Update Plan: Updated: Estimated Run Rate Synergies Estimated Run Rate Synergies ≥ $150 million ≥ $175 million ($m) ($m) ≥ $175 ≥ $150 ≥ $145 ≥ $120 ≥ $75 ≥ $50 2016 2017 2018 2016 2017 2018 Highlights • Sales force reorganization • Announced two facility closures (San Jose, C
Slide 16: 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 17: Full Year 2015 Results
Full Year 2015 Results(1) Sales & Orders: Consolidated Sales • Sales of $3.81B (in millions) • Enterprise growth offset by lower Wireless and Broadband sales $3,830 $3,808 • Foreign exchange rates negatively impacted sales by 3% • Orders of $3.72B • Book-to-bill ratio of 0.98 FY 2014 FY 2015 Operati
Slide 18: Income Statements
Income Statements Thre e Months Ende d Ye ar Ende d (Unaudited -- In thousands) De ce mbe r 31, De ce mbe r 31, 2015 2014 2015 2014 Net sales $ 1,142,541 $ 827,895 $ 3,807,828 $ 3,829,614 Operating costs and expenses: Cost of sales 743,511 542,475 2,462,008 2,432,345 Selling, general and administrat
Slide 19: Balance Sheets
Balance Sheets December 31, 2015 2014 (Unaudited -- In thousands) Assets Cash and cash equivalents $ 562,884 $ 729,321 Accounts receivable, less allowance for doubtful accounts of $19,392 and $8,797, respectively 833,041 612,007 Inventories, net 441,815 367,185 Prepaid expenses and other current ass
Slide 20: Statements of Cash Flows
Statements of Cash Flows Three Months Ended Year Ended December 31, December 31, (Unaudited -- In thousands) 2015 2014 2015 2014 Operating Activities: Net income (loss) $ (75,147) $ 47,811 $ (70,875) $ 236,772 Adjustments to reconcile net income (loss) to net cash generated by operating activities:
Slide 21: Quarter Segment Information
Quarter Segment Information (Unaudited -- In millions) Sales by Segment % Change Q4 2015 Q3 2015 Q4 2014 Sequential YOY Wireless $ 451.7 $ 475.3 $ 484.8 (5.0) % (6.8) % Enterprise 203.4 227.8 212.5 (10.7) % (4.3) % Broadband 99.0 128.5 130.6 (23.0) % (24.2) % BNS 388.5 141.1 - 175.3 % NM Inter-segme
Slide 22: Full Year Segment Information
Full Year Segment Information (Unaudited -- In millions) Sales by Segment % Change 2015 2014 YOY Wireless $ 1,938.5 $ 2,469.8 (21.5) % Enterprise 864.4 850.5 1.6 % Broadband 476.1 511.1 (6.8) % BNS 529.6 - NM Inter-segment eliminations (0.8) (1.8) NM Total Net Sales $ 3,807.8 $ 3,829.6 (0.6) % Non-G
Slide 23: Adjusted Net Income Reconciliation
Adjusted Net Income Reconciliation Three Months Ended Year Ended December 31, December 31, (Unaudited -- In thousands) 2015 2014 2015 2014 Operating income, as reported $ 21.6 $ 76.2 $ 181.6 $ 577.4 Adjustments: Amortization of purchased intangible assets 76.9 44.8 220.6 178.3 Restructuring costs, n
Slide 24: Adjusted Operating Income Reconciliation by Quarter
Adjusted Operating Income Reconciliation by Quarter (Unaudited -- In millions) Q4 2015 Q3 2015 Q2 2015 Q1 2015 Q4 2014 Operating income (loss), as reported $ 21.6 $ (42.5) $ 109.4 $ 93.1 $ 76.2 Amortization of purchased intangible assets 76.9 54.3 44.6 44.8 44.8 Restructuring costs, net 18.9 6.9 1.9
Slide 25: Adjusted Operating Income Reconciliation by Year
Adjusted Operating Income Reconciliation by Year (Unaudited -- In millions) 2015 2014 2013 2012 2011 Operating income (loss), as reported $ 181.6 $ 577.4 $ 329.7 $ 238.2 $ (188.4) Amortization of purchased intangible assets 220.6 178.3 174.9 175.7 174.9 Restructuring costs, net 29.5 19.3 22.1 23.0 1
Slide 26: Quarterly Adjusted Operating Income Reconciliation by Segment
Quarterly Adjusted Operating Income Reconciliation by Segment Fourth Quarter 2015 Non-GAAP Adjusted Operating Income Reconciliation by Segment (Unaudited -- In millions) Wireless Enterprise Broadband BNS Total Operating income (loss), as reported $ 50.4 $ 16.0 $ 5.8 $ (50.6) $ 21.6 Amortization of p
Slide 27: Adjusted Free Cash Flow Reconciliation
Adjusted Free Cash Flow Reconciliation (Unaudited -- In millions) Adjusted Free Cash Flow Q4 2015 Q4 2014 Full Year 2015 Full Year 2014 Full Year 2013 Full Year 2012 Full Year 2011 Cash flow from operations $ 116.3 $ 127.8 $ 302.1 $ 289.4 $ 237.7 $ 286.1 $ 131.0 Capital expenditures (17.1) (12.1) (5
Slide 28: BNS Revenue by Quarter
BNS Revenue by Quarter (Unaudited -- In millions) BNS Revenue by Quarter 2015 PF Q1(1) $ 424.9 PF Q2(1) 471.0 PF Q3(1) 415.8 Q4 388.5 Total $ 1,700.2 PF 2014 (1) PF Q1 $ 467.6 PF Q2 504.0 PF Q3 503.2 PF Q4 417.1 $ 1,891.8 (1) See Description of Pro Forma Results Components may not sum to total due t