8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported): December 4, 2013

ARRIS Group, Inc.

(Exact name of registrant as specified in its charter)

Delaware	000-31254	46-1965727
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)
3871 Lakefield Drive, Suwanee, Georgia		30024
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: 678-473-2000

Not Applicable

Former name or former address, if changed since last report

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 7.01 Regulation FD Disclosure

ARRIS Group, Inc. will be presenting at the ARRIS Investor Day 2013 on December 4, 2013. A copy of the presentation slides is furnished with this Current Report as Exhibit 99.1.

Item 9.01 Financial Statements and Exhibits

99.1 Slides to be used in presentation at the ARRIS Investor Day 2013

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

ARRIS Group, Inc.
By:	/s/ David B Potts
	David B Potts Executive Vice President and CFO

Date: December 4, 2013

EX-99.1

ARRIS INVESTOR

DAY 2013

DECEMBER 4, 2013

Exhibit 99.1

VIDEO

WELCOME

BOB

PUCCINI

ARRIS INVESTOR CONFERENCE

SAFE HARBOR

Statements in this presentation or made in this meeting, including those related to the outlook for the remainder of 2013

and beyond, the integration of Motorola Home, expected revenues and net income, gross margins, operating expenses,

research and development expenses, cash flows, income taxes, acceptance of certain ARRIS products, our strategy

and

objectives,

the

general

market

outlook,

and

industry

trends,

are

forward-looking

statements.

These

statements

involve

risks

and

uncertainties

that

may

cause

actual

results

to

differ

materially

from

those

set

forth

in

these

statements.

Among other things, projected results are based on preliminary estimates, assumptions and projections that

management believes to be reasonable at this time, but are beyond management’s control; ARRIS is dependent upon

customer

decisions

to

purchase

the

Company’s

products

-

these

decisions

can

be

deferred

and

customers

also

may

select competitor products; and the market in which ARRIS operates is volatile and actions taken and contemplated

may not achieve the desired impact. Other factors that could cause results to differ from current expectations include:

the

uncertain

current

economic

climate

and

financial

markets,

and

their

impact

on

our

customers’

plans

and

access

to

capital; ARRIS’

ability to successfully integrate Motorola Home’s opportunities, technology, personnel, and operations;

the impact of rapidly changing technologies; the impact of competition on product development and pricing; rights to

intellectual property and the current trend toward increasing patent litigation; the adoption of industry standards;

possible acquisitions and dispositions; and consolidations within the telecommunications industry of both the customer

and supplier base. These factors are not intended to be an all-encompassing list of risks and uncertainties that may

affect

the

Company’s

business.

Additional

information

regarding

these

and

other

factors

can

be

found

in

ARRIS’

reports

filed with the SEC, including its Form 10-Q for the quarter ended September 30, 2013. In providing forward-looking

statements, the Company expressly disclaims any obligation to update publicly or otherwise these statements, whether

as a result of new information, future events or otherwise, except as required by law.

4

DECEMBER 4, 2013

ARRIS INVESTOR CONFERENCE

WHO YOU WILL HEAR FROM

TODAY

5

BOB Stanzione

Chairman and CEO

LARRY Robinson

Customer Premises

Equipment

BRUCE McClelland

Network & Cloud

RON Coppock

Sales and

Marketing

LARRY Margolis

HR and Legal

DAVID Potts

Finance and IT

JIM Brennan

Supply Chain

DECEMBER 4, 2013

Diverse, experienced management team

-

Bob S –

25 years with Bell Labs and Lucent, 18 years with ARRIS (founding CEO) and predecessor company ANTEC

-

Dave Potts –

20+ years with Nortel, 18 years with ARRIS (founding CTO)

-

Larry Margolis –

20+ years with ANTEC, ~12 years with ARRIS

-

John Burke –

20+ years with GI and Motorola Home

-

Larry Robinson–

many years with GI and Motorola Home

-

Bruce McClelland -

~12 years with Nortel, ~16 years with ARRIS

-

Rob McLaughlin–

20+ years with GI and Motorola Home

-

Ron Coppock -

~15 years experience with ANTEC and predecessor companies, ~12 years with ARRIS

-

Jim Brennan many years with GI and Motorola Home

Robust professional experience in both telco and cable technologies and business.

ARRIS INVESTOR CONFERENCE

2013 INVESTOR DAY AGENDA

6

8:00 –

8:30

COFFEE, CONTINENTAL BREAKFAST

8:30 –

8:35

Welcome

BOB

Puccini

8:35 –

9:00

ARRIS Vision, Strategy, Direction Forward

BOB

Stanzione

9:00 –

9:40

CPE Business Update

LARRY

Robinson

9:40 –

9:55

BREAK

9:55 –

10:10

Demonstrations

JONATHAN

Ruff

10:10 –

10:50

Network & Cloud Business Update

BRUCE

McClelland

10:50 –

11:20

Financial Update

DAVID

Potts

11:20 –

11:50

Executive Leadership Panel Q&A session

ARRIS

Leadership

Bob Stanzione, Dave Potts, Larry Robinson, Bruce

McClelland, Ron Coppock, Jim Brennan, Larry Margolis

11:50 –

12:00

Wrap up

BOB

Stanzione

DECEMBER 4, 2013

CEO

BOB

STANZIONE

ARRIS INVESTOR CONFERENCE

ARRIS COMPANY OVERVIEW

NASDAQ: ARRS

8

Global Leader in Video Delivery

and Broadband Technology

DECEMBER 4, 2013

25+

$1.1B

2,176 Patents Approved or

Pending

Q3 2013 revenue $1.068 billion

Channel presence in over

85 countries

Direct presence in over 25

countries

HQ Suwanee, GA, Public

1993, ~6,500 employees

85+

2,176

o

Acquisition creates a global leader

in

video delivery and broadband technology

o

The new ARRIS has the scale and expertise to transform the industry

o

We have unique insight into the needs of service/content providers on a global scale

And how they must evolve their networks as they continue to evolve their businesses to deliver the smart,

simple connected home

ARRIS INVESTOR CONFERENCE

ARRIS PRODUCT PORTFOLIO

Set-Top

Box

Gateway

Cable

Modem

E-MTA Voice /

Data Modem

CMTS Edge

Router

Universal

Edge QAM

Flagship Product Lines

Cable Operator Headend Equipment

that communicates with cable modems

to control flow of data; allocates shared

bandwidth and prioritizes and routes

traffic

Combines the functionality of CMTS and

Edge QAM to enable voice, video and

data in a converged IP network

Cable Operator Headend Equipment

that packages video for delivery over the

HFC network to the settop box. Can also

be used for packaging of data packets

sent from the CMTS to the home

A device located at the

subscriber's home and

connects to the Cable

network to receive and

transmit digital information

between subscriber-owned

computers and the CMTS

over the HFC network,

providing Internet

connectivity

A cable modem which also

provides telephone service

from the cable operator

throughout the home

A device installed at the

subscriber's television set

and connects to the

Service Provider network

to decode digital video

signals and render them

as video on the television

set

A device which connects

to the Service Provider

network and provides

voice, data, and video

services throughout the

subscriber's home

CCAP

9

DECEMBER 4, 2013

As many of you know, we have one of the largest product lines in

the industry, providing equipment and services spanning network

to home.

We believe this approach makes us a stronger supplier to our customers, and provides important insight into the interworking of the

technology, leading to superior products.

Video Processing

•

Significant ongoing investment in VOD, AI, and Transcoding

•

Most significant activity and opportunity is around 3-screen support and evolution to CDN network architectures

•

Introduced a new backoffice last year called CMM that was targeted directly at this growing opportunity –

CDN support today

•

Core VOD not growing very rapidly but it a critical asset/control point

•

Several new products focused on MPEG4 transcoding for multi-screen support –

higher growth rate and low share today

Assurance

•

Opex reduction and improved customer satisfaction is high priority for all operators

•

Growing interest in our Assurance products

•

Only real competition is the customer themselves

•

Pursuing several new business models such as cloud hosted service, network mgmt outsourcing, and even cost-sharing collaboration

Wireless

•

Recently announced a new partnership with a company call Ruckus

Wireless

•

Fabulous product line directly focused on WiFi hotspots; compliment existing wired service offering and provider cellular offload

•

Growing focus within the cable operators; significant growth potential

Access and Transport

•

growth in narrowcast bandwidth will drive continued investment in the HFC infrastructure –

node splits or DWDM expansion

•

has been muted due to economy and reduced home construction –

have seen this turn around and start to grow again

•

Investing in PON and deep fiber solutions –

commercial today but eventually residential as well

Pro Services

•

Very pleased in the growth of our Pro Services business

•

Much more than just rack/stack of our own equipment

•

Network design and planning, Cell tower backhaul turnkey project mgmt/execution

•

40% of revenue from outside cable

ARRIS INVESTOR CONFERENCE

GLOBAL CUSTOMER BASE

10

DECEMBER 4, 2013

ARRIS INVESTOR CONFERENCE

WHAT YOU WILL HEAR TODAY

ARRIS continues to execute well

on our company strategy

ARRIS is ideally positioned in the most exciting

and fast growing segments of our industry

•

Multi-screen Video

•

CPE refresh cycle

•

CCAP and DOCSIS 3.1 network upgrades

•

IP Convergence

Our updated long-term strategy

Believe our December 2012 post-integration target “run rate”

model is achievable

11

DECEMBER 4, 2013

ARRIS INVESTOR CONFERENCE

ARRIS CORPORATE STRATEGY

INVESTOR CONFERENCE AUGUST 2012

Maintain a strong capital structure, mindful of our 2013 debt

maturity, share repurchase

opportunities and other capital

needs including M&A.

Grow our current businesses into a more complete portfolio

including

a

strong

video

product

suite.

Continue

to

invest

in

the evolution toward enabling true network convergence onto

an all IP platform.

Continue to expand our product/service portfolio through

internal developments, acquisitions and partnerships.

Expand our international

business and begin to consider

opportunities in markets other than cable.

Continue to invest in and evolve the ARRIS talent pool to

implement the above…

DECEMBER 4, 2013

12

ARRIS INVESTOR CONFERENCE

KEY ACCOMPLISHMENTS IN 2013

Home acquisition

•

Customer diversification

•

Product diversification

•

Scale

Sound capital structure to support new ARRIS

Integration ahead of schedule

New product launches

•

E6000

•

XG1

•

Various other CPE devices

Strengthening of talent pool, particularly through the

acquisition

DECEMBER 4, 2013

13

ARRIS INVESTOR CONFERENCE

ARRIS REVENUE HISTORY

$M

14

Mot Home

portfolio

2013

excludes

Home

Business

Revenue

from

January

1

–

April

16,

2013

Circuit Switched

Cable Telephony

(Cornerstone)

Cable IP Telephony Build Out

DOCSIS 3.0 CMTS

and CPE Cycle

CCAP, Advanced

Gateways, etc.

DECEMBER 4, 2013

ARRIS INVESTOR CONFERENCE

15

ARRIS R&D INVESTMENTS

2013

excludes

Home

Business

Spending

from

January

1

–

April

16,

2013

DECEMBER 4, 2013

ARRIS INVESTOR CONFERENCE

ARRIS EVOLVING GROWTH STORY

16

STRONG TRACK RECORD OF PURPOSEFUL, SUCCESSFUL CORPORATE DEVELOPMENT

Circuit Switch Cable

Telephony

Voice over IP

DOCSIS CMTS and

CPE Cycle

CCAP and Adv.

Gateways

Forging New

Boundaries

INTERNATIONAL

CLOUD

WIRELESS

APPLICATIONS

ENTERPRISE

RETAIL

Early organic

growth

evolving

from Circuit switch

to IP Telephony

Selected

technology

acquisitions to

address adjacent

markets

Transformative

acquisition to drive

diversification, scale,

market reach, and

development

capabilities

Positioned to

accelerate

growth with

new market

opportunities

DECEMBER 4, 2013

ARRIS INVESTOR CONFERENCE

ARRIS SHARE PRICE GROWTH

17

DECEMBER 4, 2013

EXCELLENT SHAREHOLDER RETURNS

Through November 29, 2013

ARRIS INVESTOR CONFERENCE

POSITIVE CUSTOMER

RESPONSE

N.A. CABLE

“ARRIS commitment to integrating hardware and software

solutions in support of our RDK initiative has been

instrumental in expanding the Comcast X1 experience.”

N.A. TELCO

“With SecureMedia, we can continue to expand our delivery

of premium on demand content to multiple screens, safely

and securely.”

N.A. CABLE

"DreamGallery will allow us to deliver the experience where

customers can enjoy their content whenever and wherever

they want.”

EMEA

CONTENT

AGGREGATOR

“SecureMedia gives us the protection and assurance to

provide a variety of premium video to our customers.”

GLOBAL

PROGRAMMER

"We've worked with ARRIS for years and knew they were

ideal to help us.”

EMEA CABLE

“By consolidating the video and data service over

APEX3000, we've been able to merge traffic in an agile and

flexible way -

increasing network capacity for future growth.”

N.A. CABLE

"ARRIS E6000 CER enables us to deliver popular services.”

18

DECEMBER 4, 2013

ARRIS INVESTOR CONFERENCE

MULTI-SCREEN VIDEO IS

CHANGING CONSUMPTION

HABITS…FAST

DECEMBER 4, 2013

19

•

Total TV Time (N.A.):

•

2010 –

3.9 hours daily

•

2013 –

4.2 hours daily

•

Connected video devices (N.A):

•

2012 –

277.2 M

•

2017 –

537.7 M

Source: eMarketer, MRG, CTAM

AND WATCHING VIDEO IN

MORE WAYS THAN EVER

SP = traditional video Service Provider

CONSUMERS ARE WATCHING

MORE VIDEO THAN EVER

ON MORE DEVICES THAN

EVER

52%

17%

4%

6%

21%

% Average Time Spent Watching

Video in the Home (N.A)

TV/HDTV

SP DVR

SP VOD

SP TV to Other Devices

Over-the -Top Streaming

ARRIS INVESTOR CONFERENCE

CONSUMER BEHAVIOR DRIVING

TRANSITION TO ALL IP

NETWORKS

MIGRATION WILL REQUIRE $ BILLIONS OF

INVESTMENT

20

DECEMBER 4, 2013

DEPLOY TV

EVERYWHERE

IMPROVE SERVICE

VELOCITY, 

INNOVATION

OPERATIONAL

EXCELLENCE

SERVICE PROVIDER

IMPERATIVES

IP

SERVICE

DELIVERY

MULTI-SCREEN,

TV-EVERYWHERE

BANDWIDTH

DEMAND

GROWTH

ENHANCED

QUALITY OF

EXPERIENCE

SCALABLE,

OPEN CLOUD

ADVANCED

HOME

NETWORKING

IMPROVED

MONETIZATION

OTT VIDEO

INTEGRATION

ARRIS INVESTOR CONFERENCE

ARRIS GROWTH STRATEGIES

DECEMBER 4, 2013

21

Deliver next-generation broadband and video solutions

that enable service providers to offer content anytime,

anywhere solutions

Be the leading supplier of in-home solutions enabling rich

media experiences and IP services

Expand and grow the ARRIS service delivery business by

enabling the evolution to next generation networks and

time to market advantage for operators

CUSTOMER PREMISE EQUIPMENT

NETWORK and CLOUD

GLOBAL SERVICES

ARRIS INVESTOR CONFERENCE

KEY FOCUS AREAS FOR 2014

22

DECEMBER 4, 2013

DELIVER ON GROWTH AND EXPANSION ….

MOVE BEYOND INTEGRATION AND FOCUS ON GROWTH

And most importantly invest in and evolve our best-in-industry talent

pool

Maintain a strong capital structure, mindful of our debt & liquidity

Expand our international business including exploring adjacent

market opportunities

Invest

aggressively

to

refresh

and

expand

our

product/service

portfolios through organic development and partnership/acquisition

Capitalize on the evolution toward network convergence and

all IP platforms

to

drive

business

growth

Leverage ARRIS scale

to drive profitable worldwide growth

ARRIS INVESTOR CONFERENCE

EXECUTE ON OUR STRONG FOUNDATION…

THANK YOU

QUESTIONS?

CUSTOMER

PREMISE

EQUIPMENT

BUSINESS

UPDATE

LARRY

ROBINSON

ARRIS INVESTOR CONFERENCE

ARRIS CUSTOMER PREMISES

EQUIPMENT

25

Global Customer Relationships

End-to-End Network Expertise

Extensive R&D Capabilities

Robust Product Portfolio

Operational Excellence

BROADBAND

ACCESS

IP

VIDEO

DIGITAL

VIDEO

DECEMBER 4, 2013

WELL-POSITIONED TO DELIVER THE FUTURE OF HOME ENTERTAINMENT

ARRIS INVESTOR CONFERENCE

MARKET TRENDS

IMPACTING THE HOME

26

26

26

Access

Network

Cloud Solutions

Home Network

Traffic

DECEMBER 4, 2013

CREATING A “CHALLENGED”

CONSUMER EXPERIENCE

ENTERTAINMENT

REDEFINED

GROWING POPULATION

OF DEVICES WITHIN

THE HOME

INCREASED HOME

NETWORK DEMANDS

ARRIS INVESTOR CONFERENCE

DECEMBER 4, 2013

27

39% considering switching TV providers within 6 mos

16% have added/increased services in past 6 mos

14% have dropped/decreased services in past 6 mos

Less than 1% fully “cut the cord”

Source: CTAM, Digitalsmiths, Investor’s Business Daily, websites

CONSUMER BEHAVIOR DRIVING

COMPETITION & SERVICE INNOVATION

CONSUMERS DEMANDING MORE SERVICES

ARRIS INVESTOR CONFERENCE

CPE TECHNOLOGIES

SHAPE THE HOME

Software

Broadband

Video

Processors

Wireless

Networks

Wired

Networks

Storage

Security

28

DECEMBER 4, 2013

ARRIS CONTINUES TO INVEST IN KEY CPE TECHNOLOGIES

ARRIS INVESTOR CONFERENCE

DEPLOY TV

EVERYWHERE

IMPROVE

SERVICE

VELOCITY, 

INNOVATION

OPERATIONAL

EXCELLENCE

INDUSTRY PRIORITIES

DRIVING CPE INVESTMENTS

29

SERVICE

PROVIDER

PROGRAMS

&

INVESTMENTS

SERVICE PROVIDER

IMPERATIVES

ARRIS CAPABILITIES

DECEMBER 4, 2013

•

Enable cloud-based access to content

•

Connecting all IP devices in the home with Cloud and

Gateway

•

Evolve in-home architecture increasing service

delivery flexibility

•

Convergence

for

the

home

–

beyond

3-play

•

Increased consumer engagement with enhanced

interactivity and applications

•

Next Gen compression and screen resolution

•

Enhance initial Wi-Fi install and maintenance

•

Deploy next-gen video gateways

•

Implement cloud and remote based user interface

•

Multiservice IP Gateways

and STB

•

Advanced 802.11ac

•

In-Home Transcoding

•

High MIPS CPU

•

Thin Client Evolution

•

HEVC/4K STB

•

Wi-Fi Assure

•

Hybrid and all-IP

Gateways

•

HTML5

ARRIS INVESTOR CONFERENCE

SIMPLIFY THE CONNECTED

EXPERIENCE

30

Game

Consoles

Traditional TV

/ HDTV’s

Broadband

Access

SMART TV’s /

OTT Boxes

Multi-screen

(Tablets)

Connecting devices in the

home, enabling content

sharing, unifying &

enhancing the consumer

experience

DECEMBER 4, 2013

ARRIS INVESTOR CONFERENCE

ARRIS INVESTOR CONFERENCE

THE

GATEWAY—

MULTI-PURPOSE

PLATFORM

31

DRIVING A CPE REPLACEMENT CYCLE

Industry

Verticals

Audio Entertainment

Services

Apps Platform

Next

Generation TV

Experiences

Gigabit Broadband Access

ARRIS Gateway Portfolio –

Leading The Industry Transition

DECEMBER 4, 2013

THE

GATEWAY—

ENABLING

NEW

EXPERIENCES

32

Video Gateways

Multimedia

Gateways

Advanced WiFi

Gateways

Data Gateways

Voice

Gateways

Multi-Service

IP Gateways

Platforms That Power

the Future of Home

Entertainment

DECEMBER 4, 2013

ARRIS INVESTOR CONFERENCE

PLATFORM

FUNCTIONS

IP Service Translation for In-Home

Device Distribution

Service Provider & Subscriber

Network Demarcation

Managed Device –

Provision

Services, Monitor & Maintain

Quality of Service

In-Home CPE Resource

Aggregation

ARRIS INVESTOR CONFERENCE

FUTURE HOME GATEWAY

ARCHITECTURE

33

Current NA Video CPE / HH

Screens

Set-Tops

3+ TV’s / 7 IP-devices      ~1.8

Refresh Rate

8-11 years

CY'12

CY'17

CAGR

WW Video

Subs

730.2M

921.5M

4.8%

WW

Broadband

Subs

525.6M

635.8M

3.9%

WW DOCSIS

3.0 Subs

13.6M

57.5M

33.4%

DECEMBER 4, 2013

= Trending Up

= Trending Down

Key Trends & New Architecture Demands Creating Robust Market

Source: ARRIS estimates, 2013 Infonetics Research, Inc. (WW Broadband Subs

include DOCSIS & DSL estimates)

Key Trends

ARRIS INVESTOR CONFERENCE

GROWTH DRIVEN BY

MULTIMEDIA & ADVANCED

BROADBAND DEVICES

DECEMBER 4, 2013

Multimedia Home Gateways

Broadband Devices

NEW SERVICES ENABLED BY TECHNOLOGY –

MAINTAINS STRONG BUSINESS MOMENTUM

CAGR

8.4%

CAGR

26.7%

34

SERVICE PROVIDERS –

DRIVING CPE INVESTMENT CYCLES

DECEMBER 4, 2013

35

NEW SERVICES DEMANDING NEW PLATFORMS

ARRIS INVESTOR CONFERENCE

GATEWAY SOLUTIONS –

ALIGNED

WITH INDUSTRY TRENDS

DECEMBER 4, 2013

36

Data /

Voice

Gateway

D3.0 Data/Voice

802.11ac

D3.1 Data/Voice

802.11ac/ad/HEW

Headless 3-play GW

MOXI WHS Platform

Next-Gen

Gateway

Headed Video GW

Flexible Front End

CA / DRM Support

Xcode Support

8x4 D3.0

ARRIS Gateway

Portfolio

Next-Gen

Gateway

Headless 3-play GW

16x4+ D3.0

Video Gateways

Multi-Service Gateways

Data Gateways

Time

ARRIS INVESTOR CONFERENCE

GigE

CPE

SOLUTIONS

–

LEVERAGING

THE LATEST TECHNOLOGY

DECEMBER 4, 2013

37

DOCSIS

Performance

Home LAN

100Mbps

1Gbps

5 Gbps

APU

Security

GigE

G.hn

G.hn

Shift-to-IP Catalyst

D3.0/D3.1 Service Delivery

Wi-Fi performance /

management ultimate

differentiator

VDSL

50Mbps

Bonded Pair

Vectoring

100Mbps

200Mbps

3K DMIPS

10K DMIPS

40K DMIPS

Time

ARRIS INVESTOR CONFERENCE

ARRIS

CPE

–

DRIVING

PLATFORM

DIFFERENTIATION

38

•

Cloud to Home Connectivity

•

Network Interoperability

•

Increased Access Speeds

•

Network Unification

•

Gbps Home LANs

•

Best in Class Wired & Wireless

Network Performance

•

Converged Services

•

Advanced Gateway Platforms

•

Client Devices

•

Flexible Application Ecosystem

•

X-functions

DECEMBER 4, 2013

CONSUMER TRENDS

•

Any Content, Anywhere,

Any Time

•

Personalized Experience

•

Customer-owned Devices

•

Quality of Experience

Access

Network

Connectivity

Home

Network

Performance

Home

Devices

ARRIS INVESTOR CONFERENCE

Look at

our

Focus

Areas

–

centered

around

the

consumer

experience

(that

our

customers

are

delivering)

WAN2LAN –

Leveraging capabilities within Bruce’s team

Home network becomes increasing important (discovery, seamless integration, performance)

Devices…X-funtions

ARRIS INVESTOR CONFERENCE

ARRIS

CPE

–

LEVERAGING

MARKET

TRENDS TO DRIVE GROWTH

39

•

Grow / secure new wins in

DVB (Int’l markets)

•

Expand DSL pursuits

•

Leverage scale; Drive

supply chain efficiencies

•

Exploit design expertise

•

Ensure disciplined mgmt approach

•

Capitalize on diversified portfolio

•

Deliver on product pipeline

•

Cont’d R&D investment

•

Execute in core markets

•

Build upon key customer

engagements

DECEMBER 4, 2013

Regain

Market

Share

Deliver

New

Products

Focus

on

Execution

Expand

Market

Presence

•

Grow / secure new wins in

DVB (Int’l markets)

•

Expand DSL pursuits

•

Leverage scale; Drive

supply chain efficiencies

•

Exploit design expertise

•

Ensure disciplined mgmt approach

•

Capitalize on diversified portfolio

•

Deliver on product pipeline

•

Cont’d R&D investment

•

Execute in core markets

•

Build upon key customer

engagements

THANK YOU

QUESTIONS?

BREAK

DEMONSTRATIONS

JONATHAN

RUFF

•

Gbps High Speed data

•

Voice, Video and Data

with one connector

•

Self Healing non-stop

performance

E6000

•

Video Access Point

•

Whole Home Coverage

•

Multiple simultaneous

HD streams

•

Advanced Quality of

Service Functionality

•

Easy Install Solution

VAP 2500

•

Voice, Video and Data

•

Home Networking & WiFi

•

6 Channel Transcoder

•

DECT Telephony

•

Home Automation-Zigbee

MG2402

DEPLOY TV

EVERYWHERE

IMPROVE SERVICE

VELOCITY,

INNOVATION

OPERATIONAL

EXCELLENCE

SERVICE PROVIDER

IMPERATIVES

•

Wi-Fi Video Access Points

•

Wi-Fi Set Tops

ARRIS CAPABILITIES

•

Self Healing E6000 and CCAP

•

Gbps High Speed Data

•

Applications on Set-top

•

OTT Video Services Support

•

Gateway with Home Automation Connectivity

THANK YOU

NETWORK

&

CLOUD

BUSINESS

UPDATE

BRUCE

MCCLELLAND

EVOLVING CONSUMER DEMANDS

DRIVING NETWORK INVESTMENT

Source: Cisco VNI

Source: ARRIS estimates, eMarketer

The

American

Media

Diet:

2010

vs.

2013

CONSUMER DEMAND FOR TV EVERYWHERE

IS MAJOR CATALYST FOR NETWORK INVESMENT

Global

Consumer

Internet

Traffic

2012

-

2017

DEMAND FOR BANDWIDTH WILL

CONTINUE TO INCREASE

TV

VIEWING

REMAINS

STRONG

EVEN

AS

NEW

DEVICES

EMERGE

DECEMBER 4, 2013

49

ARRIS INVESTOR CONFERENCE

File

Sharing

Web,

email,

and

data

Internet

Video

Daily Consumption  in Hours

DEPLOY TV

EVERYWHERE

IMPROVE SERVICE

VELOCITY,

INNOVATION

OPERATIONAL

EXCELLENCE

•

Improve delivery and support model using

sophisticated tools and analytics

•

Reduce service outage impacts and improve

subscriber experience

•

Expand network capacity with platforms that

provide for future growth and capability

•

Evolve network architecture to provide network-

based capabilities such as remote User

Interfaces and TV On Demand

•

Enhanced recommendations and contextual

advertising

SERVICE PROVIDER PROGRAMS &

INVESTMENTS

SERVICE PROVIDER

IMPERATIVES

•

IP Convergence

•

Assurance

•

Services

•

SaaS

•

CCAP

•

HEVC

•

Network DVR

•

Advanced Advertising

•

Offer Management

ARRIS CAPABILITIES

•

Multi-screen

•

Content Mgmt

•

Video Transcoding

•

HTML5/DRM

STRONG ALIGNMENT WITH

SERVICE PROVIDER MAJOR PRIORITIES

50

DECEMBER 4, 2013

•

Enable multi-screen video distribution

•

Re-fresh main-screen user experience

•

Provide cloud-based access to content with

enhanced interactivity and applications

ARRIS INVESTOR CONFERENCE

NETWORK INFRASTRUCTURE AND

CLOUD SOLUTIONS

51

CLOUD

SOLUTIONS

ACCESS AND

TRANSPORT

CMTS/CCAP

VIDEO

INFRASTRUCTURE

GLOBAL

SERVICES

SERVING THE CABLE, TELCO, AND PROGRAMMER SEGMENTS

DECEMBER 4, 2013

1

2

3

4

5

Multi-Screen

Video

HFC

Advanced

Advertising

QoE

Assurance

PON

ARRIS INVESTOR CONFERENCE

Organized in four Product Lines: Cloud Solutions, Video Infrastructure, CMTS/CCAP, and Access and

Transport.

Global Services spanning all  ARRIS Products.

ARRIS Cloud Solutions

ARRIS CLOUD STRATEGY

SOLVING THE TV EVERYWHERE ‘PINCH POINT’

52

Traditional

Media

New

Aggregators

User

Content

The Subscriber Experience

•

Integrated open-standards

solutions for cloud-based

delivery enabling content

anytime and anywhere

•

Systems integration and end-

to-end solutions expertise

DECEMBER 4, 2013

Cloud

1

•

New media monetization

solutions

•

New customer engagement

models

ARRIS INVESTOR CONFERENCE

Talk to Pain Points

-

Bandwidth

-

Ingest/format

-

Security

-

Multi-screen UE

-

Content search, navigation, transaction

-

QOE, ease of use, etc.

ARRIS INVESTOR CONFERENCE

SERVICE PROVIDERS ARE ADOPTING

CLOUD-BASED ARCHITECTURES

53

TRADITIONAL NETWORKS

CLOUD NETWORKS

DVR

User Interface

HW Security

Storage

Control

Maintenance

Routing

Platform-as-a-Service

TV Everywhere

Service Cloud

Tightly

Integrated

–

Monolithic

–

Proprietary

–

Platform

Dependent

Loosely

Coupled

–

Multi-Vendor

–

Open

–

Platform

Independent

DECEMBER 4, 2013

SERVICE VELOCITY, SCALABILITY, RELIABILITY

Cloud

1

In The Home

On The Go

ARRIS INVESTOR CONFERENCE

MULTI-SCREEN

INFRASTRUCTURE

ASSURANCE

SOLUTIONS

MULTI-SCREEN

CONSUMER

SOLUTIONS

CLOUD SOLUTIONS

•

WorkAssure™

•

ServAssure™

•

DreamGallery™

UI Framework

•

MOXI®

Whole Home Solutions

•

SecureMedia®

DRM

•

MobileTV

•

Multi-screen Video Back Office

•

Recommendation and Offer Management

•

Advertising

54

DECEMBER 4, 2013

Cloud

1

ARRIS INVESTOR CONFERENCE

KEY INITIATIVES

CLOUD SOLUTIONS

MARKET OPPORTUNITY

55

’13E / ’17E CAGR: 13%

GLOBAL REVENUE OPPORTUNITY

Multi-screen

Consumer

Solutions

Multi-screen

Video

Infrastructure

Assurance

•

Competitive forces spurring investment in re-fresh of

User Experience

•

Connected Device Digital Rights Management

•

Advanced Video Gateways and Settop Box Software

•

Actionable Intelligence and Proactive Service Mgmt

•

Improved Quality of Experience

•

Field Service Management

•

Multi-screen and connected device video services

•

Expanded cloud-centric applications, e.g. Network DVR

•

Advanced Offer Management and Recommendation

•

Advanced Advertising

•

Cloud-centric applications

SIGNIFICANT GROWTH OPPORTUNITY TO ENABLE

CONTENT ANYTIME, ANYWHERE SOLUTIONS

Sources: ARRIS Views based on Infonetics 1Q13, IHS 2Q13, ABI 2012, F&S 2013, ARC 2013, IDC Research, MRG 2013, TBR 2013 and ARRIS Internal Estimates

DECEMBER 4, 2013

Cloud

1

$ 0.0 

$ 1.0 

$ 2.0 

$ 3.0 

$ 4.0 

2013

2017

$1.7B 

$2.9B 

BEST-IN-CLASS MULTI-SCREEN

CONSUMER SOLUTIONS

56

Whole Home

Solution with MOXI

®

DreamGallery

Multi-Screen Software

MOXI

®

Reference UI

DreamGallery

Framework/ 

Portal

SecureMedia®

DRM

DECEMBER 4, 2013

Cloud

Hide the

complexity

Customer retention

Grow ARPU

ARRIS INVESTOR CONFERENCE

1

TM

TM

ARRIS INVESTOR CONFERENCE

SECUREMEDIA

®

DIGITAL RIGHTS MANAGEMENT

•

Award-winning advanced security and DRM solution to protect

delivery of VOD and linear content to virtually all devices

•

Approved by all major film studios and broadcast networks

•

Available today on market-leading platforms

•

And deployed by Multi-Screen Video Providers worldwide

57

DECEMBER 4, 2013

Cloud

1

Award-winning advanced security and DRM solution to protect delivery of VOD and linear content to virtually

all devices.

Approved by all major film studios and broadcast networks

MULTI-SCREEN VIDEO

INFRASTRUCTURE SOLUTIONS

58

Platform-As-A-Service

•

Enable seamless management and

delivery of content end-to-end across

multiple networks

•

Provide elegant migration from current

broadcast paradigm to full IP distribution

•

Create new revenue stream with robust

advertising solution

Simple solutions and services

Scale with out customers

Grow new markets

DECEMBER 4, 2013

Cloud

1

ARRIS INVESTOR CONFERENCE

ARRIS INVESTOR CONFERENCE

ARRIS END-TO-END

MULTI-SCREEN SOLUTIONS

59

•

ConnectSR

(Billing interface)

•

CMM –

EAM

(Entitlements and

Account Management)

•

Merchandizer

•

DreamGallery

•

DreamGallery  Virtual

•

Moxi

•

Moxi Mobile Client

•

Portal

CONTENT MGMT

CONTENT

PROTECTION

OFFER MGMT

USER EXPERIENCE

•

Secure Media

•

Integration with other

3    Party Systems

SESSION MGMT

•

PlayList Manager and

Packager

•

QAM & IP Session

Management

•

Fulfillment Manager

•

ConvergeMedia Manager

•

AdManager -

SpotAgent

•

VideoFlow

•

Capture Manager (Cloud,

Start-Over for Capture)

•

Policy Manager

ADVERTISING

•

AdManager (PO System,

Router, Enterprise)

•

SkyVision

•

SkyVision ADS

•

AdEdge (IVE)

SERVICES

Multi-screen Integration

and Deployment

Broadband Network

Transformation

Headend Progression

IPTV Evolution

Custom Development

DECEMBER 4, 2013

Cloud

1

rd

ARRIS INVESTOR CONFERENCE

CLOUD SOLUTIONS—

A COMPELLING BUSINESS MODEL

Tightly integrated with Service Provider core business

•

Long term sticky engagement

Recurring revenue stream

•

Both hosted and enterprise operating models

•

Application revenue share opportunities

•

Multi-year agreements with minimum purchase commitments

High Gross Margin software business

•

Per device, per household, per transaction

•

Scales as the business grows

•

Low cost of sales

Significant Professional Service and System Integration components

60

DECEMBER 4, 2013

Cloud

1

ARRIS INVESTOR CONFERENCE

CMTS/CCAP—

A GROWING MARKET

61

•

$1B+ market with 10%+ CAGR over next 3 years

•

Exponential growth in bandwidth demand primarily driven

by IP Video

•

CCAP platforms rapidly consuming CMTS market

–

Need for more bandwidth putting pressure on space, power,

capital

–

Video and Data convergence will grow in importance

•

Important inflection point to gain share and establish base

for future revenue

•

‘Classic’

CMTS platforms will continue to operate for years

and support additional advanced features

•

CCAP platform provides operators a

path to Video and Data convergence

•

Initial priority focused on addressing

Data growth

•

Additional headend simplification will be

achieved as legacy Video traffic is

added to the CCAP platform over time

DECEMBER 4, 2013

CCAP

2

Source: Infonetics Q213

Phase 1: Dense CMTS and IP Video    

Phase 2: Legacy Narrowcast Video (VoD & SDV)     

Phase 3: Legacy Broadcast Video   

Phase 4: EPON/GPON      

•

Converged capabilities of CCAP Platform will be enabled over time as operators simplify headend infrastructure

–

Initial priority focused on meeting HSD exponential growth needs

CCAP ANATOMY

62

•

Continued shift in pricing model towards capacity-

based licenses

•

Currently deploying chassis with less than 25% of

capacity

‘activated’

–

will

result

in

future

stream

of

high

margin revenue

•

Majority of deployments are replacing current “Classic”

CMTS

chassis

–

opportunity

to

gain

share

•

Lower Price/Mbps achieved thru technology advances

Economics of CCAP

Continual Re-fresh Cycle will

drive future upgrades

•

DOCSIS3.1

•

Analog and Digital Optical Interfaces

•

Remote CCAP & C-DOCSIS

•

Remote Phy

•

Software Defined Networking

•

PON

Density Advantages

E6000 -

Platform for the Future

DECEMBER 4, 2013

CCAP

ARRIS INVESTOR CONFERENCE

Initial Chassis Deployment

Card Fill

Capacity License Upgrades

Gen2 Line Card Upgrades

Network-side Interface Upgrades

2

5,000

4,000

3,000

2,000

1,000

0

2009

2011

2013

25

20

15

10

5

0

DS Channels/Chassis

Power/DS Channel (W)

Source: ARRIS estimates

ARRIS INVESTOR CONFERENCE

E6000 CONVERGED EDGE ROUTER

DEPLOYMENT STATUS

63

•

Highly successful market introduction and

product ramp

•

Supporting >1 Million subscribers

•

Replacing

‘classic’

CMTS

platforms

from

all

vendors

•

Platform expected to provide 10+ year life

cycle

•

Both software and hardware upgrades planned to

expand capacity and add new services

•

Technology and Quality leadership

•

Near term roadmap prioritized to gain share

•

Advanced Routing Features

•

Increased density and scalability (less space, lower

power, lower cost)

•

Video Convergence

DECEMBER 4, 2013

TARGETING INCREASED MARKET SHARE AND SALES GROWTH

CCAP

2

VIDEO INFRASTRUCTURE

A SOLID PROFITABLE BUSINESS

DECEMBER 4, 2013

64

Video

3

ANALOG

DIGITAL

HD / DVR

BROADBAND &

MULTI-SCREEN

Encoders /

Transcoders

Rate Shaping

Multiplexing

Switched

Digital Video

Encryption /

Authentication

Integrated Receiver

/ Decoder

Encoder

Uplink

Digital Accessable

Controller

EdgeQAM

VOD Storage/

Streaming

Network

DVR

•

Broad portfolio of products that are at the foundation of providing high quality Pay TV

Services

•

Large $1.5B+ Addressable Market

•

Key opportunities include HD/Ultra-HD, Network DVR, HEVC compression

Source: ARRIS estimates, Frost &Sullivan, ABI and Infonetics

ARRIS INVESTOR CONFERENCE

ARRIS INVESTOR CONFERENCE

VIDEO INFRASTRUCTURE

NEW GROWTH OPPORTUNITIES

65

Video Processing

•

–

Encoding, Transcoding, Encryption,

Packaging

•

•

–

MPEG2/MPEG4 video compression

efficiency improvements

–

Adaptive Bitrate IP video streaming

–

HEVC and UltraHD/4K

Programmer Infrastructure

•

•

–

Increased HD content; keen interest

in UltraHD –

4K/8K

–

IP Distribution and Multi-screen

services

Programmer

Uplink

Service Provider

Satellite Receivers

Satellite

DECEMBER 4, 2013

Video

3

Source: Frost &Sullivan

Strategic product segment

Sizable market ~ $800M

Primary growth drivers

Leading provider of compression

and encryption technology to the

leading Programmers

Programmers continue to invest in

upgrades to their distribution

network

ARRIS INVESTOR CONFERENCE

ACCESS AND TRANSPORT

POISED FOR GROWTH

DECEMBER 4, 2013

66

•

Cable MSO’s investing $1B+ annually in HFC

equipment

•

Significant installed base of aging

equipment to be replaced

•

Technology upgrade cycle required to

address increased bandwidth needs

•

Evolving network architectures focused on

driving fiber deeper

•

Metro WiFi deployments expanding worldwide

•

Multiple new products in the pipeline:

•

All-digital optics

•

Expanded frequency range support

•

Deep Fiber, PON, RFoG, FTTH

•

Advanced WiFi performance

Source: ARRIS estimates

Headend Optics

Fiber Nodes

RF Amps and

Passives

4

Access

ARRIS INVESTOR CONFERENCE

GLOBAL SERVICES—

A SIGNIFICANT GROWTH OPPORTUNITY

67

MULTI-SCREEN

INTEGRATION &

DEPLOYMENT

ENABLING THE EVOLUTION TO NEXT GENERATION NETWORKS

AND TIME TO MARKET ADVANTAGE FOR OPERATORS

BROADBAND

NETWORK

TRANSFORMATION

HEADEND

PROGRESSION

IPTV EVOLUTION

CUSTOM

DEVELOPMENT

Personalized,

multi-device,

promotion / ad

enabled

Value added

applications for

widely deployed

IPTV environments

Secure flawless

video delivery

Cable plant

evolution, Metro

WiFi, Metro

Ethernet

Customer-driven

uniquely product

and service

development

DECEMBER 4, 2013

Services

5

ARRIS NETWORK AND CLOUD

ENTERING PROFITABLE GROWTH CYCLE

68

DECEMBER 4, 2013

•

Broadband

•

IP Video

•

Multi-screen

•

Professional Services

•

Technology Leadership

•

Software-as-a-Service

•

Technical Services

•

E6000 Converged Edge Router

•

MPEG4/HEVC Compression

•

Programmer Distribution

•

Multi-screen

•

HFC and PON

•

Next Gen Platforms

•

Multi-screen

•

Customer Relationship

=  Early Access

Deliver

New

Products

Increase

Market

Share

Growing

Markets

Focus on

Execution

ARRIS INVESTOR CONFERENCE

THANK YOU

QUESTIONS?

FINANCIAL

UPDATE

DAVE

POTTS

ARRIS INVESTOR CONFERENCE

FIRST SIX MONTHS –

POST ACQUISITION

DECEMBER 4, 2013

71

Q3 2013

Actual

Q4 2013

Guidance

December 2012 Post-

Integration Target

Annual “Run Rate”

Model

Revenues

$1,068M

$1,150M -

$1,180M

$4,800M -

$5,100M

-

New Products Providing Growth

-

Customer Diversification

-

International Expansion

Gross margin

29.7%

29% -

30%

-

In line with Target Model

Operating Expense

$228M

$930M -

$980M

-

At or Below Target Model

EPS

GAAP EPS

$0.13

$0.00 -

$0.04

$0.48 -

$0.63

Non-GAAP EPS

(1)

$0.39

$0.42 -

$0.46

$2.00 -

$2.15

-

Good Progress

Strong Cash Generation -

$380M from operating activities through Q3 2013

-

Excludes Home Business Cash from January 1 –

April 16, 2013

(1)

See GAAP to Non-GAAP EPS Reconciliation

EXCELLENT PROGRESS

POST ACQUISITION

SYNERGY UPDATE

72

EXCELLENT PROGRESS, AHEAD OF SCHEDULE

DECEMBER 4, 2013

ARRIS INVESTOR CONFERENCE

COST SYNERGIES

R&D Restructuring & Alignment

G&A Restructuring & Alignment

S&M Restructuring & Alignment

CoGS Synergies

INTEGRATION ACTIONS

Simplification/Optimization

Google/Motorola Separation

“Back Offfice”

Systems

Complete –

ahead of schedule

STATUS

COMMENTS

Underway –

targeted Q3, 2014

Complete –

ahead of schedule

On track, initial savings in Q4, 2013

Manufacturing & Real Estate on track

On track to complete majority by YE

Underway –

targeted Q3 2014

ARRIS INVESTOR CONFERENCE

TARGET ANNUAL “RUN RATE”

MODEL UPDATE

DECEMBER 4, 2013

73

Revenue

$4.8 B -

$5.1B

GAAP EPS

(1)

$0.72 -

$0.87

Non-GAAP EPS

(2)

$2.00 -

$2.15

(1)

Reflects updated estimates for amortization of intangibles and equity compensation expense

(2)

See GAAP to Non-GAAP EPS Reconciliation

Believe target model is achievable

ARRIS INVESTOR CONFERENCE

74

CAPITAL ALLOCATION PRIORITIES

•

Ensure liquidity

-

Target ~$300M of cash buffer

-

Have $250M Revolver in reserve, undrawn

•

De-lever

-

$232M Convertible Note will be paid off in December 2013

-

A key priority is to reduce debt

-

Our target model should yield robust EBITDA to do so

•

Acquisition

-

Continue to evaluate alternatives

•

Share Repurchases

-

Lower priority given leverage

DECEMBER 4, 2013

ARRIS INVESTOR CONFERENCE

CASH + DEBT POST CONVERTIBLE

NOTE REDEMPTION

DECEMBER 4, 2013

75

9/30/2013

9/30/2013

Adjusted for

Note

Redemption

Cash

and

Cash

Equivalents

(1)

$695 M

$463 M

Debt

Convertible Notes

$232 M

$0M

Term Loan A/B

$1,893 M

(2)

$1,893 M

(2)

$2,125 M

$1,893 M

(1)

Includes cash and cash equivalents, marketable securities, and long term investments

(2)

Net of $32M mandatory pre-payments

($ in millions)

•

Convertibles will be redeemed in December 2013

•

Significant liquidity post-redemption

THANK YOU

QUESTIONS?

PANEL

ARRIS LEADERSHIP

ARRIS INVESTOR CONFERENCE

ARRIS SENIOR LEADERSHIP

TEAM

78

BOB Stanzione

Chairman and CEO

LARRY Robinson

Customer Premises

Equipment

BRUCE McClelland

Network & Cloud

RON Coppock

Sales and

Marketing

LARRY Margolis

HR and Legal

DAVID Potts

Finance and IT

JIM Brennan

Supply Chain

DECEMBER 4, 2013

Diverse, experienced management team

-

-

-

-

-

-

-

-

-

Robust professional experience in both telco and cable technologies and business.

Bob S –

25 years with Bell Labs and Lucent, 18 years with ARRIS (founding CEO) and predecessor company ANTEC

Dave Potts –

20+ years with Nortel, 18 years with ARRIS (founding CTO)

Larry Margolis –

20+ years with ANTEC, ~12 years with ARRIS

John Burke –

20+ years with GI and Motorola Home

Larry Robinson–

many years with GI and Motorola Home

Bruce McClelland -

~12 years with Nortel, ~16 years with ARRIS

Rob McLaughlin–

20+ years with GI and Motorola Home

Ron Coppock -

~15 years experience with ANTEC and predecessor companies, ~12 years with ARRIS

Jim Brennan many years with GI and Motorola Home

CEO

BOB

STANZIONE

ARRIS INVESTOR CONFERENCE

THINGS TO REMEMBER FROM

TODAY

ARRIS continues to execute well

on our company strategy

ARRIS is ideally positioned in the most exciting

and fast growing segments of our industry

•

Multi-screen Video

•

CPE refresh cycle

•

CCAP and DOCSIS 3.1 network upgrades

•

IP Convergence

Our updated long-term strategy

Continue to believe our December, 2012 post-integration target

“run rate”

model is achievable

81

DECEMBER 4, 2013

CLOSE

BACKUP

ARRIS INVESTOR CONFERENCE

DECEMBER 2012 TARGET ANNUAL

MODEL POST-INTEGRATION

GAAP TO NON-GAAP EPS RECONCILIATION

84

(1)

Purchase accounting impacts reflect current estimates. Amortization and other items may change

(2)

Assumes no share repurchases and normal course equity grants

(3)

Non-GAAP EPS excludes stock based compensation, amortization of acquired intangibles

DECEMBER 4, 2013

84

ARRIS INVESTOR CONFERENCE

UPDATED TARGET ANNUAL “RUN

RATE”

MODEL

GAAP TO NON-GAAP EPS RECONCILIATION

DECEMBER 4, 2013

85

GAAP to Non-GAAP EPS

Reconciliation

GAAP Net Income

$106

<->

$128

Amortization

(1)

$240

$240

Stock Based Compensation

$50

$50

Tax Effect on Above Items

($102)

($102)

Estimated Non-GAAP Net Income

$294

<->

$316

Shares Outstanding

(2)

147

147

GAAP EPS

$0.72

<->

$0.87

Non-GAAP EPS

(3)

$2.00

<->

$2.15

(1)

Purchase accounting impacts reflect current estimates. Amortization and other items may change

(2)

Assumes no share repurchases and normal course equity grants

(3)

Non-GAAP EPS excludes stock based compensation, and amortization of acquired intangibles

($ in millions)

ARRIS INVESTOR CONFERENCE

Q4 2013 GUIDANCE

GAAP TO ADJUSTED NON-GAAP EPS GUIDANCE

RECONCILIATION

DECEMBER 4, 2013

86

Q4 2013

Guidance

Estimated GAAP EPS

$ 0.00 -$ 0.04

Reconciling Items (after tax):

Amortization of Intangibles

0.34

Acquisition

accounting

impacts

related

to

Motorola

Home

deferred

revenue

0.01

Stock Compensation Expense

0.05

Acquisition Costs

0.02

Subtotal

0.42

Estimated Adjusted (Non-GAAP) EPS

$ 0.42 -$ 0.46

GAAP EPS

(1)

/ADJUSTED EPS

RECONCILIATION Q3 2013

(PRELIMINARY & UNAUDITED)

DECEMBER 4, 2013

87

See the Notes to GAAP / Adjusted Non-GAAP Financial Measures slide

(in thousands, except per share data)

Amount

Amount

Amount

Amount

Sales

357,432

$  

1,067,823

$  

1,009,660

$  

2,421,835

$ 

Highlighted items:

Acquisition accounting impacts related to Motorola Home and BigBand deferred revenue

546

1,556

2,467

3,973

Reduction in revenue related to Comcast investment in ARRIS

-

-

-

13,182

Sales excluding highlighted items

357,978

$  

1,069,379

$  

1,012,127

$  

2,438,990

$ 

Per Diluted

Per Diluted

Per Diluted

Per Diluted

Amount

Share

Amount

Share

Amount

Share

Amount

Share

Net income (loss)

17,864

$    

0.15

$           

17,959

$       

0.13

$           

38,664

$       

0.33

$           

(44,380)

$     

(0.34)

$          

(2)

Highlighted items:

Impacting gross margin:

Acquistion accounting impacts related to Motorola Home fair value of inventory

-

-

-

-

-

-

57,600

0.44

Product rationalization

-

-

-

-

-

-

13,582

0.10

Acquisition accounting impacts related to Motorola Home and BigBand deferred revenue

546

0.00

1,006

0.01

2,467

0.02

2,478

0.02

Fair value impacts related to Comcast investment in ARRIS

-

-

-

-

-

-

13,182

0.10

Stock compensation expense

808

0.01

1,248

0.01

2,367

0.02

2,945

0.02

Impacting operating expenses:

Acquisition costs and other

30

0.00

6,221

0.04

739

0.01

32,804

0.25

Restructuring

213

0.00

6,057

0.04

6,455

0.06

38,323

0.29

Amortization of intangible assets

7,742

0.07

64,606

0.46

22,565

0.19

127,751

0.97

Loss off sale of product line

-

-

-

-

337

0.00

-

-

Stock compensation expense

5,870

0.05

9,481

0.07

18,827

0.16

21,708

0.16

-

Impacting other (income) / expense:

-

-

Non-cash interest expense

3,120

0.03

3,374

0.02

9,177

0.08

9,926

0.08

Impairment of investment

-

-

-

-

466

0.00

-

-

Credit facility - ticking Fees

-

-

-

-

-

-

865

0.01

Mark-to-market FV adjustment related to Comcast investment in ARRIS

-

-

-

-

-

-

13,189

0.10

Net Tax Items

(10,545)

(0.09)

(54,998)

(0.39)

(25,415)

(0.22)

(143,034)

(1.08)

Total highlighted items

7,784

0.07

36,995

0.26

37,985

0.33

191,319

1.45

Net income excluding highlighted items

25,648

$    

0.22

$           

54,954

$       

0.39

$           

76,649

$       

0.66

$           

146,939

$    

1.11

$           

Weighted average common shares - Basic

113,709

138,478

114,206

129,502

Weighted average common shares - diluted

116,346

140,605

116,348

132,169

(1) Excludes Motorola Home results prior to April 17, 2013

(2) Basic shares used for YTD 2013 as a loss was reported for that periods and the inclusion of dilutive shares would be anti-dilutive

Q3 2012

Q3 2013

YTD 2012

YTD 2013

Q3 2012

Q3 2013

YTD 2012

YTD 2013

(1)

ARRIS INVESTOR CONFERENCE

ARRIS INVESTOR CONFERENCE

DECEMBER 4, 2013

88

NOTES TO GAAP/ADJUSTED NON-GAAP

FINANCIAL MEASURES

(PRELIMINARY & UNAUDITED)

Acquisition Accounting Impacts Related to Deferred Revenue:

Product

Rationalization:

Reduction

in

Revenue

Related

to

Comcast

Investment

in

ARRIS:

Stock-Based

Compensation

Expense:

Restructuring,

Acquisition

and

Integration

Costs:

Loss

on

Sale

of

Product

Line:

Amortization

of

Intangible

Assets:

Non-Cash

Interest

on

Convertible

Debt:

Impairment

of

Investment:

Inventory Valuation:

In connection with our acquisition of Motorola Home, business combinations rules require the inventory be recorded at fair value on the opening balance sheet.  This is different 

from historical cost.  Essentially we were required to write the inventory up to end customer price less a reasonable margin as a distributor.  This resulted in an increase in the value of inventory and 

will result in higher cost of goods sold as it is sold.  

In conjunction with the integration of Motorola Home, we have identified certain product lines which overlap.  In the second quarter of 2013, we made the decision to eliminate 

certain products.  As a result, we recorded expenses related to the elimination of inventory and certain vendor liabilities.  We believe it is useful to understand the effects of this item on our total cost 

of goods sold.      

In connection with our acquisition of Motorola Home, Comcast purchased shares of ARRIS common stock to fund a portion of the 

acquisition price.  The accounting guidance requires that we record the implied fair value of benefit received by Comcast as a reduction in revenue. Until the closing of the deal, changes in the value 

of the investment were marked to market and flowed through other expense (income).  We have excluded the effect of the implied fair value in calculating our non-GAAP financial measures. We 

believe it is useful to understand the effects of these items on our total revenues and other expense (income). 

We have excluded the effect of stock-based compensation expenses in calculating our non-GAAP operating expenses and net income measures. Although 

stock-based compensation is a key incentive offered to our employees, we continue to evaluate our business performance excluding stock-based compensation expenses. We record non-cash 

compensation expense related to grants of options and restricted stock. Depending upon the size, timing and the terms of the grants, the non-cash compensation expense may vary significantly 

but will recur in future periods. 

We have excluded the effect of acquisition related and other expenses and the effect of restructuring expenses in calculating our non-GAAP 

operating expenses and net income measures. We will incur significant expenses in connection with our recent acquisition of Motorola Home, which we generally would not otherwise incur in the

periods presented as part of our continuing operations. Acquisition related expenses consist of transaction costs, costs for transitional employees, other acquired employee related costs, and 

integration related outside services. Restructuring expenses consist of employee severance, abandoned facilities, and other exit costs. We believe it is useful to understand the effects of these items 

on our total operating expenses.  

We have excluded the effect of a loss on the sale of a product line in calculating our non-GAAP operating expenses and net income measures.  We believe it is 

useful to understand the effects of these items on our total operating expenses.  

We have excluded the effect of amortization of intangible assets in calculating our non-GAAP operating expenses and net income measures. Amortization of 

intangible assets is non-cash, and is inconsistent in amount and frequency and is significantly affected by the timing and size of our acquisitions. Investors should note that the use of intangible 

assets contributed to our revenues earned during the periods presented and will contribute to our future period revenues as well. Amortization of intangible assets will recur in future periods. 

We have excluded the effect of non-cash interest in calculating our non-GAAP operating expenses and net income measures. We record the accretion 

of the debt discount related to the equity component non-cash interest expense. We believe it is useful to understand the component of interest expense that will not be paid out in cash. 

We have excluded the effect of an other-than-temporary impairment of a cost method investment in calculating our non-GAAP financial measures. We believe it is useful 

to understand the effect of this non-cash item in our other expense (income).   

In connection with our acquisitions of Motorola Home and BigBand, business combination rules require us to account for the fair 

values of arrangements for which acceptance has not been obtained, and post contract support in our purchase accounting.  The non-GAAP adjustment to our sales and cost of sales is intended to 

include the full amounts of such revenues.  We believe the adjustment to these revenues is useful as a measure of the ongoing performance of our business.  We have historically experienced high 

renewal rates related to our support agreements and our objective is to increase the renewal rates on acquired post contract support agreements; however, we cannot be certain that our customers 

will renew our contracts. 

The Company reports its financial results in accordance with accounting principles generally accepted in the United States (“GAAP” or referred to herein as “reported”). However, management believes that

certain non-GAAP financial measures provide management and other users with additional meaningful financial information that should be considered when assessing our ongoing performance. Our

management regularly uses our supplemental non-GAAP financial measures internally to understand, manage and evaluate our business and make operating decisions. These non-GAAP measures are among

the factors management uses in planning for and forecasting future periods.  Non-GAAP financial measures should be viewed in addition to, and not as an alternative to, the Company’s reported results

prepared in accordance with GAAP.  Our non-GAAP financial measures reflect adjustments based on the following items, as well as the related income tax effects:

NOTES TO GAAP/ADJUSTED NON-GAAP

FINANCIAL MEASURES (CON’T)

(PRELIMINARY & UNAUDITED)

DECEMBER 4, 2013

89

ARRIS INVESTOR CONFERENCE

We have excluded the tax effect of the non-GAAP items mentioned above.  Additionally, we have excluded the effects of certain tax adjustments related to state

valuation allowances, research and development tax credits and provision to return differences. 

Income

Tax

Expense

(Benefit):

In connection with our acquisition of Motorola Home, the cash portion of the consideration was funded primarily through debt financing commitments. A ticking fee is a

fee paid to our banks to compensate for the time lag between the commitment allocation on a loan and the actual funding. We have excluded the effect of the ticking fee in calculating our 

non-GAAP financial measures. We believe it is useful to understand the effect of this non-cash item in our other expense (income).  

Credit

Facility

-

Ticking

Fees:

Mark

To

Market

Fair

Value

Adjustment

Related To

Comcast

Investment in

ARRIS:

:

In connection with our acquisition of Motorola Home, Comcast  purchased shares of ARRIS common stock. 

The accounting guidance requires we mark to market the changes in the value of the investment and flow through other expense (income).  We have excluded the effect of the implied fair value in

calculating our non-GAAP financial measures. We believe it is useful to understand the effects of these items on our total other expense (income).

ARRIS INVESTOR CONFERENCE

BSR –

Broadband Services Router

CCAP –

Converged Cable Access Platform

CE –

Converged Experiences Business Unit /

Consumer Electronics

CMS –

Content Management System

CMTS –

Cable Modem Termination System

CPE –

Customer Premises Equipment

DCT –

Digital Consumer Terminal

DOCSIS –

Data Over Cable Service Interface

Specification  (Version 3.0 is the latest

specification)

DRM –

Digital Rights Management

DSL –

Digital Subscriber Line

DTA –

Digital Television Adapter

DVB –

Digital Video Broadcasting

DVR –

Digital Video Recorder

E-MTA –

Embedded Multimedia Terminal

Adapter

EPON –

Ethernet over Passive Optical Network

FTTH –

Fiber to the Home

HD –

High Definition

HD-DVR –

High Definition Digital Video Recorder

HDTV –

High Definition Television

HEVC –

High Efficiency Video Coding / H.265 /

MPEG-H Part 2

HFC –

Hybrid Fiber Coaxial

HSD –

High-Speed Data

IP –

Internet Protocol

IPR –

Intellectual Property Rights

IPTV –

Internet Protocol Television

IRD –

Integrated Receiver/Decoder

LAN –

Local Area Network

MPEG –

Motion Picture Experts Group

MSO –

Multisystem Operator

MSP –

Media Services Platform

nDVR –

Network Digital Video Recorder

OEM –

Original Equipment Manufacturer

OSS –

Operations Support System

OTT –

Over-the-Top

QAM –

Quadrature Amplitude Modulation

RFOG –

Radio Frequency over Glass

SD –

Standard Definition

SDV –

Switched Digital Video

STB –

Set-Top Box

Triple Play –

Bundled Offering of Internet (data),

Telephone and TV

VOD –

Video on Demand

VolP –

Voice over Internet Protocol

VSP –

Video Services Platform / Video Service

Provider

Glossary of Terms

90

DECEMBER 4, 2013