10-Q/A

QuickLinks -- Click here to rapidly navigate through this document

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q/A
(Amendment No. 1)

(Mark One)

/x/	QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended April 30, 2000
OR
/ /	TRANSACTION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from N/A to N/A

Commission file number 0-1424

ADC Telecommunications, Inc.
(Exact name of registrant as specified in its charter)

Minnesota
(State or other jurisdiction of
incorporation or organization) 41-0743912
(I.R.S. Employer
Identification No.)

12501 Whitewater Drive, Minnetonka, MN 55343
(Address of principal executive offices) (Zip code)

(952) 938-8080
(Registrant's telephone number, including area code)

N/A
(Former name, former address and former fiscal year, if changed since last report)

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 for 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   X    NO     

APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.

Common stock, $.20 par value: 321,289,306 of June 6, 2000

EXPLANATORY NOTE

    ADC's previously filed Form 10-Q report dated June 13, 2000 for the fiscal quarter ended April 30, 2000 is hereby amended and restated in its entirety. The amendment and restatement is necessary to reflect the accounting treatment required by Emerging Issued Task Force Issue No. 91-5 ("EITF 91-5") with respect to an investment in stock of a privately held company held as an available-for-sale security exchanged for stock of another company in an acquisition transaction.

    This amendment and restatement reflects the modification in accounting treatment for a transaction related to the Company's investment in Siara Systems, Inc. ("Siara Systems"). ADC acquired a 7.3% interest in Siara Systems during 1999 for approximately $3 million and, in subsequent periods, continued to carry this investment at its original cost. On March 8, 2000, Redback Networks, Inc. ("Redback") acquired Siara Systems in an exchange of Redback shares for all the outstanding shares of Siara Systems (the "Siara Systems Transaction"). The Siara Systems Transaction resulted in ADC exchanging its shares of Siara Systems for shares of Redback. Upon the closing of the Siara Systems Transaction, ADC recorded the shares of Redback at the current market value of the Redback shares. The Redback shares ADC received in the Siara Systems Transaction had a market value of $726 million. Consistent with its treatment of other unrealized gains and losses in its investment portfolio, ADC recorded the $722.6 million increase in its investment portfolio as an unrealized gain. Such gains are excluded from earnings, but increase other comprehensive income (a component of shareowners' investment). However, in accordance with EITF 91-5, "Nonmonetary Exchange of Cost Method Investments," the increase in value caused by the Siara Systems Transaction should have been recorded as a component of earnings in the period in which the Siara Systems Transaction occurred. Therefore, ADC is filing this amendment and restatement to reflect the $722.6 million gain from the Siara Systems Transaction as other income for the period ended April 30, 2000.

    This amendment and restatement does not affect previously reported operating income, assets, liabilities, shareowners' investment or cash flow. Net income for the quarter and six months ended April 30, 2000 increased by $455.2 million to $548.9 million and $605.2 million, respectively. Diluted earnings per share increased $1.41 to $1.70 for the quarter and increased $1.43 to $1.90 for the six months ended April 30, 2000.

PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS

ADC TELECOMMUNICATIONS, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS—UNAUDITED

(In thousands)

			April 30, 2000		October 31, 1999
ASSETS
CURRENT ASSETS:
	Cash and cash equivalents		$	233,016	$	143,523
	Available for sale securities			549,267		150,493
	Accounts receivable			530,149		436,751
	Inventories			315,459		243,882
	Prepaid income taxes and other assets			62,052		54,789
		Total current assets		1,689,943		1,029,438
PROPERTY AND EQUIPMENT, net				384,133		312,066
OTHER ASSETS, principally goodwill				351,595		331,025
			$	2,425,671	$	1,672,529
LIABILITIES AND SHAREOWNERS' INVESTMENT
CURRENT LIABILITIES:
	Accounts payable		$	139,158	$	119,212
	Accrued liabilities			265,152		216,671
	Accrued income taxes			219,395		41,919
	Notes payable and current maturities of long-term debt			9,817		35,152
		Total current liabilities		633,522		412,954
LONG-TERM DEBT, less current maturities				21,554		11,024
		Total liabilities		655,076		423,978
SHAREOWNERS' INVESTMENT (306,685 and 300,346 shares outstanding, respectively)				1,770,595		1,248,551
			$	2,425,671	$	1,672,529

See accompanying notes to consolidated financial statements.

2

ADC TELECOMMUNICATIONS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME—UNAUDITED

(In thousands, except earnings per share)

			Three Months Ended April 30,						Six Months Ended April 30,
			2000			1999			2000			1999
NET SALES			$	709,158		$	456,591		$	1,253,792		$	860,885
COST OF PRODUCT SOLD				356,655			240,466			639,712			452,776
GROSS PROFIT				352,503			216,125			614,080			408,109
EXPENSES:
	Research and development			66,597			47,350			124,547			93,094
	Selling and administration			138,389			94,442			252,354			178,669
	Goodwill amortization			6,137			5,470			11,704			10,567
	Non-recurring charges			—			—			—			60,327
		Total expenses		211,123			147,262			388,605			342,657
OPERATING INCOME				141,380			68,863			225,475			65,452
OTHER INCOME (EXPENSE), NET:
	Interest			2,532			671			4,727			1,041
	Gain on conversion of Siara Systems investment			722,550			—			722,550			—
	Other			(2,001	)		(1,000	)		(2,945	)		(2,208	)
INCOME BEFORE INCOME TAXES				864,461			68,534			949,807			64,285
PROVISION FOR INCOME TAXES				315,593			23,244			344,611			28,677
NET INCOME			$	548,868		$	45,290		$	605,196		$	35,608
AVERAGE COMMON SHARES OUTSTANDING (BASIC)				305,366			298,290			303,761			270,380
EARNINGS PER SHARE (BASIC)			$	1.80		$	0.15		$	1.99		$	0.13
AVERAGE COMMON SHARES OUTSTANDING (DILUTED)				321,934			306,698			318,876			276,746
EARNINGS PER SHARE (DILUTED)			$	1.70		$	0.15		$	1.90		$	0.13

See accompanying notes to consolidated financial statements.

3

ADC TELECOMMUNICATIONS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS—UNAUDITED

(In thousands)

					Six Months Ended April 30,
					2000			1999
OPERATING ACTIVITIES:
	Net income				$	605,196		$	35,608
	Adjustments to reconcile net income to net cash from operating activities—
		Non-recurring charges				—			60,327
		Depreciation and amortization				53,357			45,622
		Gain on conversion of Siara Systems investment				(722,550	)		—
		Other				2,712			3,670
		Changes in assets and liabilities
			Accounts receivable			(96,818	)		68,557
			Inventories			(68,340	)		(18,365	)
			Prepaid income taxes and other assets			(8,331	)		(19,086	)
			Accounts payable			17,030			7,091
			Accrued liabilities			344,680			8,288
				Total cash from operating activities		126,936			191,712
INVESTMENT ACTIVITIES:
	Acquisitions					(45,671	)		(192,422	)
	Property and equipment additions, net					(111,532	)		(49,185	)
	Marketable securities and short-term investments					39,342			6,207
	Long-term investments					1,664			(13,099	)
				Total cash used for investment activities		(116,197	)		(248,499	)
FINANCING ACTIVITIES:
	Decrease in debt					(22,798	)		(129,188	)
	Common stock issued					103,404			30,661
				Total cash from/(used for) financing activities		80,606			(98,527	)
EFFECT OF EXCHANGE RATE CHANGES ON CASH						(1,852	)		(1,190	)
INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS						89,493			(156,504	)
CASH AND CASH EQUIVALENTS, beginning of period						143,523			328,032
CASH AND CASH EQUIVALENTS, end of period					$	233,016		$	171,528

See accompanying notes to consolidated financial statements.

4

ADC TELECOMMUNICATIONS, INC. AND SUBSIDIARIES

SUPPLEMENTAL FINANCIAL INFORMATION—UNAUDITED

(In thousands, except earnings per share)

			2nd Quarter 2000			1st Quarter 2000			4th Quarter 1999			3rd Quarter 1999
NET SALES			$	709,158		$	544,634		$	582,465		$	483,597
COST OF PRODUCT SOLD				356,655			283,057			302,964			254,243
GROSS PROFIT				352,503			261,577			279,501			229,354
EXPENSES:
	Research and development			66,597			57,950			54,075			45,703
	Selling and administration			138,389			113,965			112,296			99,229
	Goodwill amortization			6,137			5,567			6,141			5,541
	Non-recurring charges			—			—			30,400			58,250
		Total expenses		211,123			177,482			202,912			208,723
OPERATING INCOME				141,380			84,095			76,589			20,631
OTHER INCOME (EXPENSE), NET:
	Interest			2,532			2,195			2,079			1,656
	Gain on conversion of Siara Systems investment			722,550			—			—			—
	Other			(2,001	)		(944	)		(3,311	)		(1,546	)
INCOME BEFORE INCOME TAXES				864,461			85,346			75,357			20,741
PROVISION FOR INCOME TAXES				315,593			29,018			34,214			9,857
NET INCOME			$	548,868		$	56,328		$	41,143		$	10,884
AVERAGE COMMON SHARES OUTSTANDING (BASIC)				305,366			302,120			300,966			299,316
EARNINGS PER SHARE (BASIC)			$	1.80		$	0.19		$	0.14		$	0.04
AVERAGE COMMON SHARES OUTSTANDING (DILUTED)				321,934			314,518			307,412			307,588
EARNINGS PER SHARE (DILUTED)			$	1.70		$	0.18		$	0.13		$	0.04

See accompanying notes to consolidated financial statements.

5

ADC TELECOMMUNICATIONS, INC. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—UNAUDITED

Note 1 Basis of Presentation:

    All historical financial information has been restated to reflect the acquisition of Saville Systems PLC ("Saville") which was completed in the fourth quarter of fiscal year 1999 and accounted for as a pooling of interests.

    Earnings per share amounts, stock options and shares outstanding have been restated to reflect the ADC Telecommunications, Inc.'s ("ADC") 2-for-1 stock split effected in the form of a common stock dividend distributed on February 15, 2000.

    The interim information furnished in this report is unaudited but reflects all adjustments which are necessary, in the opinion of management, for a fair statement of the results for the interim periods. The operating results for the quarter ended April 30, 2000 are not necessarily indicative of the operating results to be expected for the full fiscal year. These statements should be read in conjunction with ADC's most recent Annual Report on Form 10-K.

Note 2 Inventories:

    Inventories include material, labor and overhead and are stated at the lower of first-in, first-out cost or market. Inventories consisted of (in thousands):

	April 30, 2000		October 31, 1999
Purchased materials and manufactured products	$	292,572	$	217,021
Work-in-process		22,887		26,861
	$	315,459	$	243,882

Note 3 Acquisitions:

    On February 23, 2000, ADC and PairGain Technologies, Inc. ("PairGain") announced the signing of a definitive agreement providing for a merger (the "Merger") in which PairGain will become a wholly owned subsidiary of ADC. PairGain is a leader in the design, manufacture, marketing and sale of digital subscriber line (DSL) networking systems. Through the Merger, which is structured as a tax-free reorganization for U.S. federal income tax purposes, ADC will issue 0.43 of a share of its common stock for each share of common stock of PairGain. The Merger is intended to be accounted for as a pooling of interests, and is subject to certain conditions, including PairGain stockholder approval.

    In connection with and as a condition of the Merger, PairGain also has granted ADC an option to purchase up to 19.9% of PairGain's common stock exercisable in certain circumstances, including certain events causing termination of the agreement providing for the Merger. Additionally, ADC entered into voting agreements with various individuals, each solely in his capacity as a stockholder of PairGain, who have agreed to vote all shares of PairGain common stock owned or controlled by them in favor of the Merger.

    On May 16, 2000, ADC acquired all of the outstanding equity interests of IBSEN Micro Structures A/S, based in Copenhagen, Denmark. IBSEN is a photonics company focused on development and production of high-performance optical components and tools. The acquisition, a cash transaction, is valued at approximately $80 million and will be accounted for using the purchase method.

6

    On May 17, 2000, ADC acquired all of the outstanding equity interests in Altitun AB, based in Kista, Sweden. Altitun is a leading developer and supplier of active optical components for next-generation optical networks. In the transaction, which is structured as a taxable transaction for U.S. federal income tax purposes, ADC issued approximately 13,801,000 shares of its common stock to Altitun's shareholders. ADC also converted all outstanding Altitun stock options into options to acquire approximately 1,413,000 shares of ADC common stock. Based on ADC's closing price per share of $62.3125 on the closing date, the acquisition is valued at approximately $948 million. The transaction is to be accounted for as a pooling of interests.

    On June 9, 2000 ADC announced that it has entered into a definitive agreement to acquire all the outstanding equity interests of Centigram Communications Corporation, based in San Jose, California. Centigram is a leading provider of unified communications, Internet-enabled call management and wireless access protocol (WAP)-based messaging solutions for communications service providers. The acquisition will be completed as a cash purchase for a fixed price of approximately $200 million and will be accounted for using the purchase method. The acquisition is subject to certain conditions including the approval of Centigram's stockholders, receipt of required regulatory approvals and other customary conditions.

Note 4 Comprehensive Income:

    The following table presents the calculation of comprehensive income as required by SFAS No. 130. Comprehensive income has no impact on ADC's net income, balance sheet, or shareowners' equity. The components of comprehensive income are as follows (in thousands):

	Three Months Ended April 30,						Six Months Ended April 30,
	2000			1999			2000			1999
Net income	$	548,868		$	45,290		$	605,196		$	35,608
Changes in cumulative translation adjustments		(5,781	)		(1,432	)		(6,602	)		134
Changes in market value of derivative financial instruments classified as cash flow hedges		532			—			532			—
Unrealized loss from securities classified as available for sale, net of taxes		(230,171	)		—			(184,325	)		—
Comprehensive income	$	313,448		$	43,858		$	414,801		$	35,742

7

    ADC owns a minority interest in the following publicly held companies. These investments are stated at market value with the valuation adjustments classified in shareowners' investment. As of April 30, 2000, the market value of these investments was as follows (in thousands):

Redback Networks, Inc.		$	352,584
Efficient Networks, Inc.			118,613
Vyyo, Inc. (formerly Phasecom, Inc.)			58,136
interWAVE Communications International Ltd.			4,793
	Total	$	534,126

    In addition, ADC owns a minority interest in ONI Systems Corp. ONI completed an initial public offering on June 1, 2000. As of June 5, 2000, ADC's investment in ONI had a market value of approximately $282 million.

    On March 8, 2000, Redback Networks, Inc. ("Redback") announced the completion of its stock-for-stock acquisition of Siara Systems, Inc. ("Siara Systems"). ADC held a 7.3% ownership interest in Siara Systems at the time of the acquisition. In accordance with Emerging Issues Task Force Issue No. 91-5, "Nonmonetary Exchange of Cost-Method Investments", the former investment in Siara Systems stock was converted to an investment in Redback stock and recorded at fair value at the date of acquisition. The difference between the cost basis of the Siara stock investment and the fair value of the Redback stock investment was recorded as a gain of $722.6 million in the statement of income for the second quarter of fiscal year 2000.

Note 5 Earnings Per Share:

    Basic earnings per common share was calculated by dividing net income by the weighted average number of common shares outstanding during the period. Diluted earnings per share was calculated by dividing net income by the sum of the weighted average number of common shares outstanding plus all additional common shares that would have been outstanding if potentially dilutive common shares had been issued. The following table reconciles the number of shares utilized in the earnings per share calculations for the periods ended April 30, 2000 and 1999 (in thousands, except earnings per share).

	Three Months Ended April 30,				Six Months Ended April 30,
	2000		1999		2000		1999
Net income	$	548,868	$	45,290	$	605,196	$	35,608
Earnings per common share (basic)	$	1.80	$	0.15	$	1.99	$	0.13
Earnings per common share (diluted)	$	1.70	$	0.15	$	1.90	$	0.13
Weighted average common shares outstanding (basic)		305,366		298,290		303,761		270,380
Effect of dilutive securities—stock options		16,568		8,408		15,115		6,366
Weighted average common shares outstanding (diluted)		321,934		306,698		318,876		276,746

8

Note 6 Segment Reporting:

    Beginning with fiscal 1999, ADC adopted SFAS No. 131, "Disclosures About Segments of an Enterprise and Related Information." This standard requires ADC to disclose selected financial data by operating segment, defined as a component with business activity resulting in revenue and expense that has separate financial information evaluated regularly by ADC's chief operating decision maker in determining resource allocation and assessing performance. ADC has identified three reportable segments based on its internal organization structure, management of operations and performance evaluation. These segments are Broadband Connectivity, Broadband Access and Transport, and Integrated Solutions. Segment detail is summarized as follows:

	Segment Information (In thousands)
	Broadband Connectivity		Broadband Access and Transport			Integrated Solutions			Unallocated Items			Consolidated
Three months ended April 30, 2000:
External Sales	$	417,005	$	179,224		$	112,170		$	759		$	709,158
Operating Income (Loss)		188,965		(30,309	)		(1,988	)		(15,288	)		141,380
Three months ended April 30, 1999:
External Sales	$	216,113	$	153,499		$	86,977		$	2		$	456,591
Operating Income (Loss)		79,001		(5,733	)		2,228			(6,633	)		68,863
Six months ended April 30, 2000:
External Sales	$	684,034	$	348,719		$	219,969		$	1,070		$	1,253,792
Operating Income (Loss)		290,503		(46,938	)		6,499			(24,589	)		225,475
Six months ended April 30, 1999:
External Sales	$	391,309	$	293,149		$	176,424		$	3		$	860,885
Operating Income (Loss)		136,857		(9,938	)		10,631			(72,098	)		65,452

9

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

OVERVIEW

    ADC Telecommunications, Inc. ("ADC") offers a broad range of network equipment, software and integration services for broadband, multiservice networks that deliver Internet/data, video and voice communications over telephone, cable television, Internet, broadcast, wireless and enterprise networks. ADC's broadband, multiservice network solutions enable local access, high-speed transmission and software management of communications services from service providers to consumers and businesses over fiber-optic, copper, coaxial and wireless media.

    Telephone companies, cable television operators, Internet/data service providers, wireless service providers and other communications service providers are building the broadband infrastructure required to offer high-speed Internet access and data, video, telephony and other interactive multimedia services to residential and business customers. Broader network bandwidths are continually required for these services, and ADC's product offerings and development efforts are focused on increasing the speed and efficiency of communications networks from the service providers' offices through the network equipment that connects to end users' residences and businesses.

    ADC offers network equipment, software and integration services within the following three product groups: Broadband Connectivity, Broadband Access and Transport, and Integrated Solutions.

    BROADBAND CONNECTIVITY products include broadband connection and access devices for copper, coaxial, fiber-optic, wireless and broadcast communications networks. The group also supplies fiber-optic and wireless components. These products are used globally in telephone, cable television, Internet, wireless, enterprise and broadcast communications networks. Broadband Connectivity products provide the physical contact points for connecting different communications system components and gaining access to communications system circuits for the purpose of installing, testing, monitoring, accessing, managing, reconfiguring, splitting and multiplexing such circuits within the central office and the "last mile/kilometer" portion of communications networks. Fiber-optic components include phase masks, tunable lasers, pump lasers, connectors, isolators, circulators, collimators, couplers, splitters, and dense wavelength division multiplexing (DWDM) devices. Wireless components include coverage enhancement products, tower top amplifiers and RF filters. Broadband Connectivity products are sold to local and long-distance telephone companies, cable television operators, wireless service providers, new competitive service providers, broadcasters, enterprises, governments, system integrators and communications equipment manufacturers and distributors.

    BROADBAND ACCESS AND TRANSPORT products include access and transport systems that deliver broadband, multiservice communications to residences and businesses over copper, coaxial, fiber-optic and wireless networks. These products are used globally to deliver Internet/data, video and voice services to residential and business customers. Generally, these products are aimed at upgrading service providers' networks to broadband capabilities, while also introducing new service delivery functionality and cost effectiveness into the networks. Broadband Access and Transport products are sold to local and long-distance telephone companies, cable television operators, wireless service providers, new competitive service providers, broadcasters, enterprises, governments and communications equipment distributors.

    The group's transport systems operate between central offices and in the "last mile/kilometer" portion of communications networks and include Soneplex®, Cellworx®, Axity™, Homeworx™, Optiworx™, DV6000™ and BroadAccess™ systems. The Soneplex system delivers T1-based services over copper or fiber facilities. As the industry's first global ATM Virtual Path transport element, the Cellworx system offers bandwidth-efficient, multiservice delivery of Internet/data, video and voice services, allocates only the bandwidth needed per service type and extends communications services over fiber-optic and copper (using xDSL technologies) facilities to businesses and residences. The Axity broadband wireless system

10

delivers high-speed Internet/data, video and voice services. The Homeworx system enables cable television operators to transport high-speed digital signals for two-way Internet/data, video and voice services. ADC also provides the Optiworx family of fiber-optic transmitter and node products, along with coaxial amplifiers that cable television operators use to upgrade their networks to broader bandwidths for digital Internet/data, video, and voice services. The DV6000 system transmits a variety of signal types using a high-speed, uncompressed digital format over fiber facilities, and is used in the long haul portions of cable television, broadcast and interactive video networks, including distance learning, government and campus networks. The BroadAccess digital loop carrier system is used to deliver Internet/ data and voice services.

    The group's access systems include both customer located devices (which are part of the service provider's network) and customer premise devices (which are owned by the service provider's business customer) that can work alone or in conjunction with one of ADC's transport systems or with other vendors' transport systems. These devices include data service units (DSUs), channel service units (CSUs), T1/E1 multiplexers, T3/E3 multiplexers, integrated access devices (offering a wide variety of Internet/data, video and voice interfaces), MPEG video products and ATM access concentrators.

    INTEGRATED SOLUTIONS products and services consist of systems integration services, operations support systems (OSS) software and enhanced services/intelligent network software that positions service providers to deliver broadband, multiservice communications over wireline and wireless networks. Systems integration is used to design, equip and build communications networks and OSS applications that deliver Internet/data, video and voice services to residences and businesses. OSS software includes the Saville Systems® line of communications billing and customer care software and the Metrica® line of network performance and service level assurance software. Enhanced services/intelligent network software includes the NewNet® line of Signaling System 7 (SS7), intelligent network, wireless messaging and provisioning, Communications Assistance to Law Enforcement Act (CALEA) and Internet applications software. Integrated Solutions products and services are sold to local and long-distance telephone companies, cable television operators, wireless service providers, new competitive service providers and communications equipment manufacturers. During the most recent quarter, ADC rolled out its Singularit.e™ suite of software products and services that allows integrated communications providers (ICPs) to build open OSSs to compete more effectively in the broadband era. Singularit.e automates key OSS processes by combining convergent billing and integrated customer management from Saville Systems®, along with service assurance technology from Metrica®.

    Historically, ADC's principal product offerings generally consisted of copper-based and fiber-optic-based products designed to address the needs of its customers for transmission and connectivity on traditional communications networks. With the growth of multimedia applications and the related development of enhanced Internet/data, video and voice services, ADC's more recent product offerings and research and development efforts have increasingly focused on emerging technologies and network equipment, software and integration service offerings for broadband communications applications. The market for broadband communications network equipment, software and integration services is evolving and rapidly changing. ADC's growth is dependent in part on its ability to successfully develop and commercially introduce new products in each of its product groups and is also dependent on the growth of the market. The growth in the market for such broadband communications products and services is dependent on a number of factors, including the amount of capital expenditures by communications service providers, regulatory and legal developments, changes to capital expenditure rates by communications service providers (which could result from the ongoing consolidation of customers in the market as well as the addition of new customer entrants to the market) and end-user demands for integrated Internet/data, video, voice and other communications services. There can be no assurance that ADC's new or enhanced products and services will meet with market acceptance or be profitable.

    ADC's operating results may fluctuate significantly from quarter to quarter due to several factors. ADC is growing through acquisition and expansion, and results of operations described in this report may not be indicative of results to be achieved in future periods. ADC's expense levels are based in part on

11

management's expectations of future revenues. Although management has and will continue to take measures to adjust expense levels, if revenue levels in a particular period fluctuate, operating results may be adversely affected. In addition, ADC's results of operations are subject to seasonal factors. ADC historically has experienced a stronger demand for its products in the fourth fiscal quarter, primarily as a result of customer budget cycles and ADC's fiscal year-end incentives, and has experienced a weaker demand for its products in the first fiscal quarter, primarily as a result of the number of holidays in late November, December and early January and a general industry slowdown during that period. There can be no assurance that these historical seasonal trends will continue in the future. A more detailed description of these risk factors as well as other risk factors associated with ADC's business can be found in Exhibit 99-a to ADC's Form 10-K for the fiscal year ended October 31, 1999.

RESULTS OF OPERATIONS

    The percentage relationships to net sales of certain income and expense items for the quarters ended April 30, 2000 and 1999 and the percentage changes in these income and expense items between periods are contained in the following table:

		Percentage of Net Sales								Percentage Increase (Decrease) Between Periods
		Three Months Ended April 30,				Six Months Ended April 30,				Three Months Ended April 30,		Six Months Ended April 30,
		2000		1999		2000		1999
Net Sales		100.0	%	100.0	%	100.0	%	100.0	%	55.3	%	45.6	%
Cost of Product Sold		(50.3	)	(52.7	)	(51.0	)	(52.6	)	48.3		41.3
Gross Profit		49.7		47.3		49.0		47.4		63.1		50.5
Expenses:
	Research and development	(9.4	)	(10.3	)	(10.0	)	(10.8	)	40.6		33.8
	Selling and administration	(19.5	)	(20.7	)	(20.1	)	(20.8	)	46.5		41.2
	Goodwill amortization	(0.9	)	(1.2	)	(0.9	)	(1.2	)	12.2		10.8
	Non-recurring charges	—		—		—		(7.0	)	—		—
Operating Income		19.9		15.1		18.0		7.6		105.3		244.5
Other Income (Expense), Net:
	Interest	0.4		0.1		0.4		0.1		277.3		354.1
	Gain on conversion of Siara Systems investment	101.9		—		57.6		—		—		—
	Other	(0.3	)	(0.2	)	(0.2	)	(0.2	)	100.1		33.4
Income Before Income Taxes		121.9		15.0		75.8		7.5		1,161.4		1,377.5
Provision for Income Taxes		(44.5	)	(5.1	)	(27.5	)	(3.3	)	1,257.7		1,101.7
Net Income		77.4	%	9.9	%	48.3	%	4.2	%	1,111.9	%	1,599.6	%

12

    Net Sales:  The following table sets forth ADC's net sales for the three-month and six-month periods ended April 30, 2000 and 1999 for each of ADC's functional product groups described above:

		Three Months Ended April 30,								Six Months Ended April 30,
		2000				1999				2000				1999
Product Group		Net Sales		%		Net Sales		%		Net Sales		%		Net Sales		%
Broadband Connectivity		$	417.0	58.8	%	$	216.1	47.3	%	$	684.0	54.6	%	$	391.3	45.5	%
Broadband Access and Transport			179.2	25.3			153.5	33.6			348.7	27.8			293.2	34.1
Integrated Solutions			112.2	15.8			87.0	19.1			220.0	17.6			176.4	20.4
Other			0.8	0.1			—	—			1.1	—			—	—
	Total	$	709.2	100.0	%	$	456.6	100.0	%	$	1,253.8	100.0	%	$	860.9	100.0	%

    Net sales for the three-month and six-month periods ended April 30, 2000 were $709.2 million and $1,253.8 million, reflecting 55.3% and 45.6% increases, respectively, over the comparable 1999 time periods. These increases reflected growth in all product groups. Revenue contributions from companies during the first six months of the present fiscal year were $4.7 million and $7.3 million for the three-month and six-month periods ended April 30, 2000, respectively. International revenues comprised approximately 19.3% and 20.0% of ADC's sales for the three-month and six-month periods ended April 30, 2000, respectively.

    During the three and six months ended April 30, 2000, net sales of Broadband Connectivity products rose by 93.0% and 74.8%, respectively. This growth reflects continued strong global demand for ADC's fiber-and copper-connectivity systems and optical components. Sales were made to a broad range of Internet/data, video and voice service providers—incumbents and new entrants—around the globe. Strong worldwide growth in Broadband Connectivity systems continues as a result of growth in Internet/data traffic and digital services, which is creating demand for broader bandwidth connections, and the entrance of new service providers, which is creating demand for connectivity to new and existing communications networks. Broadband Connectivity's sales have grown to represent approximately 58.8% of ADC's net sales. ADC expects that future sales of Broadband Connectivity products will continue to account for a substantial portion of its net sales.

    During the three and six months ended April 30, 2000, net sales of Broadband Access and Transport products rose by 16.8% and 19.0%, respectively. The growth is primarily the result of sales increases in the major product systems-telephone transport and access systems, cable television systems, and broadband wireless systems.

    During the three and six months ended April 30, 2000, Integrated Solutions net sales increased by 29.0% and 24.7%, respectively. Both systems integration services and software systems contributed to sales growth. This growth primarily resulted from a broad range of wireline and wireless service providers that are building or upgrading networks that offer integrated Internet/data, video and voice services.

    Gross Profit:  During the three-month periods ended April 30, 2000 and 1999, gross profit percentages were 49.7% and 47.3%, respectively. During the six-month periods ended April 30, 2000 and 1999, gross profit percentages were 49.0% and 47.4%, respectively. These increases were the result of increased sales volume and changes in product mix primarily within the Broadband Connectivity group. ADC anticipates that its future gross profit percentage will continue to be affected by many factors, including product mix, the timing of new product introductions and manufacturing volume.

    Operating Expenses:  Total operating expenses for the three months ended April 30, 2000 and 1999 were $211.1 million and $147.3 million, respectively, representing 29.8% and 32.3% of net sales, respectively. Total operating expenses for the six months ended April 30, 2000 and 1999 were $388.6 million and

13

$342.7 million, respectively, representing 31.0% and 39.8% of net sales, respectively. Included in the six-month operating expenses in 1999 is a non-recurring charge of $60.3 million. The 1999 non-recurring charge represents the write-off of purchased in-process research and development costs resulting from the acquisitions of Teledata Communications, Hadax Electronics, and Phasor Electronics, along with costs for strategic restructuring of the product line comprising the former Wireless Systems Group. Operating expenses, before non-recurring charges, for the six months ended April 30, 2000 and 1999 were $388.6 million and $282.3 million, representing 31.0% and 32.8% of net sales, respectively. The increase in absolute dollars of operating expenses, before non-recurring charges, was due primarily to costs associated with acquired companies and expanded operations necessary to support higher revenue levels.

    Research and development expenses were $66.6 million for the three months ended April 30, 2000, an increase of 40.6% over $47.4 million for the three months ended April 30, 1999. For the six months ended April 30, 2000, research and development expenses were $124.5 million, representing an increase of 33.8% over $93.1 million for the six months ended April 30, 1999. The increase reflects the activities from companies acquired in the first six months of the present fiscal year substantial product development and introduction efforts in all functional product groups. ADC believes that, given the rapidly changing technology and competitive environment in the communications equipment industry, continued commitment to product development efforts will be required for ADC to remain competitive. Accordingly, ADC intends to continue to allocate substantial resources to product development for each of the product groups. However, ADC recognizes the need to balance the cost of product development with expense control and remains committed to carefully managing the rate of increase of such expenses.

    Selling and administration expenses were $138.4 million for the three months ended April 30, 2000, representing an increase of 46.5% over $94.4 million for the three months ended April 30, 1999. For the six months ended April 30, 2000, selling and administration expenses were $252.4 million, an increase of 41.2% over $178.7 million for the six months ended April 30, 1999. This increase primarily reflects the activities of acquired companies, incentives granted to sales persons associated with selling activities and additional personnel costs related to expanded operations.

    Several of ADC's acquisitions have been accounted for as purchase transactions in which the initial purchase prices exceeded the fair value of the acquired assets. As a result of ADC's acquisition activity, goodwill amortization increased to $6.1 million in the three months ended April 30, 2000, compared to $5.5 million in the three months ended April 30, 1999. Goodwill amortization for the six months ended April 30, 2000 has increased to $11.7 million from $10.6 million for the six months ended April 30, 1999.

    Other Income (Expense), Net:  For the three and six months ended April 30, 2000 and 1999, the net interest income (expense) category represented net interest income on cash and cash equivalents. See "Liquidity and Capital Resources" below for a discussion of cash levels.

    Other expense primarily represents the gain or loss on foreign exchange transactions, the sale of fixed assets and ADC's share of the net operating results of its investments in other companies accounted for on an equity basis.

    On March 8, 2000, Redback completed its stock-for-stock acquisition of Siara Systems. ADC held a 7.3% ownership interest in Siara Systems at the time of the acquisition. The difference between the cost basis of the Siara stock investment and the fair value of the Redback stock investment was recorded as a gain of $722.6 million in the statement of income for the second quarter of fiscal year 2000.

    Income Taxes:  The effective income tax rate for the six months ended April 30, 1999 was affected significantly by non-tax deductible purchased in-process research and development charges. These expenses are associated with the acquisitions made during the period. In addition, a higher marginal rate of 37% was applied to restructuring expenses and the gain on the conversion of ADC's Siara Systems investment. Excluding the impact of purchased in-process research and development and the higher rate used for restructuring charges in 1999 and the gain on the conversion of ADC's Siara Systems investment

14

in 2000, the effective income tax rate was 34% for the three-month and six-month periods ended on each of April 30, 2000 and 1999.

    Net Income:  Net income was $548.9 million (or $1.70 per diluted share) for the three months ended April 30, 2000 over $45.3 million (or $0.15 per diluted share) for the three months ended April 30, 1999. Net income was $605.2 million (or $1.90 per diluted share) for the six months ended April 30, 2000 over $35.6 million (or $0.13 per diluted share) for the six months ended April 30, 1999. Excluding the gain on conversion of ADC's Siara Systems investment, net of tax, net income for the three and six months ended April 30, 2000 was $93.7 million (or $0.29 per diluted share) and $150.0 million (or $0.47 per diluted share), respectively. Excluding the non-recurring charges of $47.3 million, net of tax, net income for the six months ended April 30, 1999 was $82.9 million (or $0.30 per diluted share).

LIQUIDITY AND CAPITAL RESOURCES

    Cash and cash equivalents, primarily short-term investments in commercial paper with maturities of less than 90 days and other short-term investments, increased $89.5 million and decreased $156.5 million during the six months ended April 30, 2000 and 1999, respectively. The major elements of the 2000 change included $126.9 million provided by operations and $103.4 million from issuance of common stock to employees pursuant to ADC's stock option and employee stock purchase plans. These increases were partially offset by $111.5 million in property and equipment additions during the period. The major elements of the 1999 change included $191.7 million provided by operations offset by $192.4 million used for acquisitions plus $129.2 million used to decrease outstanding debt.

    ADC believes that current cash on hand, cash generated from operating activities, and available credit facilities will be adequate to fund its working capital requirements and planned capital expenditures for the duration of the fiscal year. However, ADC may still find it necessary to seek additional sources of financing to support its capital needs, for additional working capital, potential investments or acquisitions or otherwise.

    During the third quarter of fiscal 1999, Efficient Networks, Inc. completed an initial public offering of its common stock, which caused a valuation adjustment in ADC's investment in that company. At April 30, 2000, ADC carried its investment in Efficient Networks at a market value of $118.6 million.

    During the second quarter of fiscal 2000, Redback acquired Siara Systems, in which ADC had an approximate 7.3% ownership interest, in a stock-for-stock transaction. As a result, this investment in Siara Systems shares was converted into shares of Redback, which are recorded on ADC's balance sheet at the market value of the Redback shares received in the transaction. The difference between the cost basis of the Siara Systems investment and the fair value of the Redback investment was recorded as a gain of $722.6 million in the statement of income in the second quarter. At April 30, 2000, ADC carried this investment at a market value of $352.6 million.

    On April 6, 2000, Vyyo, Inc. (formerly Phasecom, Inc.) completed an initial public offering of its common stock which caused a valuation adjustment in ADC's investment in that company. At April 30, 2000 ADC carried its investment at a market value of $58.1 million.

    In addition, on June 1, 2000, ONI Systems Corp. completed an initial public offering of its common stock. As of June 5, 2000, ADC's investment in ONI Systems Corp. had a market value of approximately $282 million.

    During the three months ended April 30, 2000, ADC announced the formation of a $100 million venture capital fund focused on investing in emerging and start-up companies throughout the world which are engaged in developing high-performance broadband communication technologies. As of April 30, 2000, approximately $7.8 million has been invested through this fund.

15

    At April 30, 2000 and October 31, 1999, ADC had approximately $31.4 million and $46.2 million of debt outstanding, respectively, relating primarily to acquired companies. At April 30, 2000, ADC had a $340 million five-year credit facility which is available for general corporate purposes, of which none was outstanding, at an interest rate equal to the commercial paper interest rate plus 25 basis points. In addition, ADC has recently begun to provide financing to certain of its customers to assist in their purchase of products. ADC intends to continue this practice in the future when it believes the business conditions of such a transaction are appropriate. To date, none of the financing transactions has been material.

EURO CONVERSION

    On January 1, 1999, several member countries of the European Union established fixed conversion rates and adopted the Euro as their new common legal currency. Beginning on such date, the Euro began trading on currency exchanges while the legacy currencies remain legal tender in the participating countries for a transition period between January 1, 1999 and January 1, 2002.

    During the transition period, parties may elect to pay for goods and services and transact business using either the Euro or a legacy currency. Between January 1, 2002 and July 1, 2002, the participating countries will introduce Euro hard currency and withdraw all legacy currencies.

    The Euro conversion may affect cross-border competition by creating cross-border price transparency. ADC is assessing its pricing and marketing strategy in order to ensure that ADC remains competitive in a broader European market. ADC is also modifying its information technology systems to permit transactions to take place in both the legacy currencies and the Euro and provide for the eventual elimination of the legacy currencies. In addition, ADC is reviewing whether certain existing contracts will need to be modified. ADC's currency risks and risk management for operations in participating countries may be reduced as the legacy currencies are converted to the Euro. ADC will continue to evaluate issues involving introduction of the Euro. Based on current information and assessments, ADC does not expect that the Euro conversion will have a material adverse effect on its business, results of operations or financial condition.

Cautionary Statement for Purposes of the "Safe Harbor" Provisions of the Private Securities Litigation Reform Act of 1995.

    The foregoing Management's Discussion and Analysis of Financial Condition and Results of Operations contains various "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements represent ADC's expectations or beliefs concerning future events, including the following: any statements regarding future sales, profit percentages and other results of operations, any statements regarding the continuation of historical trends, any statements regarding the sufficiency of ADC's cash balances and cash generated from operating and financing activities for ADC's future liquidity and capital resource needs, any statements regarding the effect of regulatory changes and any statements regarding the future of the communications equipment industry or ADC's business. ADC cautions that any forward-looking statements made by ADC in this Form 10-Q or in other announcements made by ADC are further qualified by important factors that could cause actual results to differ materially from those in the forward-looking statements, including, without limitation, the factors set forth on Exhibit 99-a to ADC's Form 10-K for the fiscal year ended October 31, 1999.

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

    ADC is exposed to market risk from changes in foreign exchange rates. To mitigate the risk from these exposures, ADC has instituted a balance sheet hedging program. The objective of the program is to protect the net monetary assets and liabilities of ADC from fluctuations due to movements in foreign exchange

16

rates. This program operates in markets where hedging costs are beneficial. Exposure to currencies in which hedging instruments are unavailable, or the costs prohibitive, are minimized through managing operating activities and net asset positions. The majority of hedging instruments utilized are forward contracts with maturities of less than one year. Foreign exchange contracts reduce ADC's overall exposure to exchange rate movements, since gains and losses on these contracts offset losses and gains on the underlying exposure. ADC's policy prohibits the use of derivative financial instruments for trading and other speculative purposes.

    As documented in the Liquidity and Capital Resources section as well as Note 4, ADC owns common stock in several publicly held companies. Due to material changes in the fair value of such common stock, ADC has recorded a $203.9 million unrealized loss, $128.5 million net of income tax effects, in shareowners' investment as of April 30, 2000. Assuming an immediate decrease of 20% in the portfolio stock price, the hypothetical reduction in shareowners' investment related to these holdings is estimated to be $67.3 million (net of income tax effects), or 3.8% of total shareowners' investment at April 30, 2000.

ITEM 1.  LEGAL PROCEEDINGS

    None.

ITEM 2.  CHANGES IN SECURITIES

    On May 17, 2000, ADC completed its acquisition of Altitun AB, a Swedish corporation ("Altitun"), pursuant to an Agreement, dated May 5, 2000, between ADC and the equityholders of Altitun (the "Acquisition Agreement"). As provided in the Acquisition Agreement, each share of Altitun outstanding at closing was exchanged for 12.8366 shares of ADC's common stock. ADC issued approximately 13,801,000 shares of common stock in exchange for the outstanding shares of Altitun. ADC also converted all outstanding Altitun stock options into options to acquire approximately 1,413,000 shares of ADC common stock. The closing price of ADC common stock on the Nasdaq Stock Market on May 17, 2000 was $62.3125 per share.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

    None.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

a.

An annual meeting of the shareowners (the "Annual Meeting") was held on February 22, 2000. Proxies for the Annual Meeting were solicited pursuant to Regulation 14 under the Securities and Exchange Act of 1934. There was no solicitation in opposition to the management's nominees for director as listed in the proxy statement, and all such nominees were elected.



b.

At the Annual Meeting, John A. Blanchard III, William J. Cadogan, B. Kristine Johnson and Jean-Pierre Rosso were elected as directors. for terms expiring at the annual meeting of shareowners in 2003. John W. Sidgmore was elected as a director for a term expiring at the annual meeting of shareowners of 2002. John J. Boyle III and Charles D. Yost were elected as directors for terms expiring at the annual meeting of shareowners in 2001. James C. Castle, Ph.D., Alan E. Ross and John D. Wunsch continued as directors after the annual meeting.

17

The following table shows the vote totals with respect to the election of the seven directors.

Name	Votes For	Authority Withheld
John A. Blanchard, III	133,364,469	659,228
John J. Boyle, III	133,355,567	668,130
William J. Cadogan	133,309,835	713,862
B. Kristine Johnson	133,376,502	647,195
Jean-Pierre Rosso	133,358,044	665,653
John W. Sidgmore	133,353,030	670,667
Charles D. Yost	132,649,107	1,374,590

In addition to the election of directors, the shareowners also approved an amendment to ADC's 1991 Stock Incentive Plan to increase the number of shares available for issuance pursuant to awards thereunder.

The following table shows the vote totals with respect to the 1991 Stock Incentive Plan:

Votes For:	87,987,829
Votes Against:	45,471,494
Abstentions:	564,374

    On February 15, 2000, ADC effected a 2-for-1 stock split in the form of a 100% stock dividend. As proxies for the Annual Meeting were mailed before the stock split was effected, all share numbers are reflected above on a pre-split basis.

ITEM 5.  OTHER INFORMATION

Thomas E. Halloran retired as a director of ADC on February 22, 2000.

Alan E. Ross resigned as a director of ADC on March 16, 2000.

On June 9, 2000 ADC announced that it has entered into a definitive agreement to acquire all the outstanding equity interests of Centigram Communications Corporation, based in San Jose, California. Centigram is a leading provider of unified communications, Internet-enabled call management and wireless access protocol (WAP)-based messaging solutions for communications service providers. The acquisition will be completed as a cash purchase for a fixed price of approximately $200 million and will be accounted for using the purchase method. The acquisition is subject to certain conditions including the approval of Centigram's stockholders, receipt of required regulatory approvals and other customary conditions.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

a.

Exhibits

4-a	Form of certificate for shares of Common Stock of ADC Telecommunications, Inc. (Incorporated by reference to Exhibit 4-a to ADC's Form 10-Q for the quarter ended January 31, 1996.)
4-b	Restated Articles of Incorporation of ADC Telecommunications, Inc., as amended prior to January 20, 2000. (Incorporated by reference to Exhibit 4.1 to ADC's Registration Statement on Form S-3 dated April 15, 1997.)

18

4-c	Restated Bylaws of ADC Telecommunications, Inc., as amended. (Incorporated by reference to Exhibit 4.2 to ADC's Registration Statement on Form S-3 dated April 15, 1997.)
4-d	Second Amended and Restated Rights Agreement, amended and restated as of November 28, 1995, between ADC Telecommunications, Inc. and Norwest Bank Minnesota, N.A. (amending and restating the Rights Agreement dated as of September 23, 1986, as amended and restated as of August 16, 1989), which includes as Exhibit A thereto the form of Right Certificate. (Incorporated by reference to Exhibit 4 to ADC's Form 8-K dated December 11, 1995.)
4e	Amendment to Second Amended and Restated Rights Agreement dated as of October 6, 1999. (Incorporated by reference to Exhibit 4-c to ADC's Form 10-K for the fiscal year ended October 31, 1999.)
4-f	Articles of Amendment to Restated Articles of Incorporation of ADC Telecommunications, Inc. dated January 20, 2000. (Incorporated by reference to Exhibit 4.6 to ADC's Registration Statement on Form S-8 dated March 14, 2000.)
10-a	ADC Telecommunications, Inc. 1991 Stock Incentive Plan (as amended and restated through February 22, 2000). (Incorporated by reference to Exhibit 10-a to ADC's Form 10-Q for the fiscal quarter ended January 31, 2000.)
10-b	ADC Telecommunications, Inc. Nonemployee Director Stock Option Plan (as amended and restated through February 22, 2000).
27-a	Financial Data Schedule for the period ended April 30, 2000.
27-b	Financial Data Schedule for the period ended April 30, 1999.

b.

Reports on Form 8-K

Current Report on Form 8-K dated January 13, 2000 filed on January 18, 2000 in connection with ADC's press release dated January 13, 2000 announcing a 2-for-1 stock split in the form of a 100% common stock dividend. The dividend was distributed on February 15, 2000.

Current Report on Form 8-K dated February 22, 2000 filed on February 28, 2000 in connection with the execution of an agreement dated February 22, 2000 among ADC, a wholly owned subsidiary of ADC and PairGain Technologies, Inc. ("PairGain") pursuant to which ADC has agreed, subject to certain conditions, to acquire all of the issued and outstanding capital stock of PairGain.

Current Report on Form 8-K dated May 4, 2000 filed on May 9, 2000 in connection with the execution of an agreement dated May 5, 2000 pursuant to which ADC agreed to acquire all of the issued and outstanding capital stock of Altitun AB.

Current Report on Form 8-K dated May 17, 2000, filed on June 1, 2000 in connection with the closing of the acquisition by ADC of all of the issued and outstanding capital stock of Altitun AB.

19

SIGNATURES

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

Dated: September 13, 2000	ADC TELECOMMUNICATIONS, INC.
	By:	/s/ ROBERT E. SWITZ Robert E. Switz Senior Vice President, Chief Financial Officer

20

ADC TELECOMMUNICATIONS, INC.
EXHIBIT INDEX TO FORM 10-Q
FOR THE QUARTER ENDED APRIL 30, 2000

Exhibit No.	Description
4-a	Form of certificate for shares of Common Stock of ADC Telecommunications, Inc. (Incorporated by reference to Exhibit 4-a to ADC's Form 10-Q for the quarter ended January 31, 1996.)
4-b	Restated Articles of Incorporation of ADC Telecommunications, Inc., as amended prior to January 20, 2000. (Incorporated by reference to Exhibit 4.1 to ADC's Registration Statement on Form S-3 dated April 15, 1997.)
4-c	Restated Bylaws of ADC Telecommunications, Inc., as amended. (Incorporated by reference to Exhibit 4.2 to ADC's Registration Statement on Form S-3 dated April 15, 1997.)
4-d	Second Amended and Restated Rights Agreement, amended and restated as of November 28, 1995, between ADC Telecommunications, Inc. and Norwest Bank Minnesota, N.A. (amending and restating the Rights Agreement dated as of September 23, 1986, as amended and restated as of August 16, 1989), which includes as Exhibit A thereto the form of Right Certificate. (Incorporated by reference to Exhibit 4 to ADC's Form 8-K dated December 11, 1995.)
4e	Amendment to Second Amended and Restated Rights Agreement dated as of October 6, 1999. (Incorporated by reference to Exhibit 4-c to ADC's Form 10-K for the fiscal year ended October 31, 1999.)
4-f	Articles of Amendment to Restated Articles of Incorporation of ADC Telecommunications, Inc. dated January 20, 2000. (Incorporated by reference to Exhibit 4.6 to ADC's Registration Statement on Form S-8 dated March 14, 2000.)
10-a	ADC Telecommunications, Inc. 1991 Stock Incentive Plan (as amended and restated through February 22, 2000). (Incorporated by reference to Exhibit 10-a to ADC's Form 10-Q for the fiscal quarter ended January 31, 2000.)
10-b	ADC Telecommunications, Inc. Nonemployee Director Stock Option Plan (as amended and restated through February 22, 2000).
27-a	Financial Data Schedule for the period ended April 30, 2000.
27-b	Financial Data Schedule for the period ended April 30, 1999.

21

QuickLinks

EXPLANATORY NOTE
PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS
SIGNATURES
ADC TELECOMMUNICATIONS, INC. EXHIBIT INDEX TO FORM 10-Q FOR THE QUARTER ENDED APRIL 30, 2000

EX-10.B

QuickLinks -- Click here to rapidly navigate through this document

ADC TELECOMMUNICATIONS, INC.
NONEMPLOYEE DIRECTOR STOCK OPTION PLAN
(As Amended through February 22, 2000)

Section 1. Purpose.

    This plan shall be known as the "ADC Telecommunications, Inc. Nonemployee Director Stock Option Plan" and is hereinafter referred to as the "Plan." The purpose of the Plan is to promote the interests of ADC Telecommunications, Inc., a Minnesota corporation (the "Company"), by enhancing its ability to attract and retain the services of experienced and knowledgeable outside directors and by providing additional incentive for such directors to increase their interest in the Company's long-term success and progress.

Section 2. Administration.

    The Plan shall be administered by a committee (the "Committee") of three or more persons appointed by the Board of Directors of the Company. Grants of stock options under the Plan and the amount and nature of the awards to be granted shall be automatic as described in Section 6. However, all questions of interpretation of the Plan or of any options issued under it shall be determined by the Committee and such determination shall be final and binding upon all persons having an interest in the Plan.

Section 3. Participation in the Plan.

    Each director of the Company shall be eligible to participate in the Plan unless such director is an employee of the Company or any subsidiary of the Company.

Section 4. Stock Subject to the Plan.

    Subject to the provisions of Section 11 hereof, the stock to be subject to options under the Plan shall be authorized but unissued shares of the Company's common stock, par value $.20 per share (the "Common Stock"). Subject to adjustment as provided in Section 11 hereof, the maximum number of shares with respect to which options may be exercised under this Plan shall be 840,000 shares. If an option under the Plan expires, or for any reason is terminated, any shares that have not been purchased upon exercise of the option prior to the expiration or termination date shall again be available for options thereafter granted during the term of the Plan.

Section 5. Nonqualified Stock Options.

    All options granted under the Plan shall be nonqualified stock options which do not qualify as incentive stock options within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended.

Section 6. Terms and Conditions of Options.

    Each option granted under this Plan shall be evidenced by a written agreement in such form as the Committee shall from time to time approve, which agreements shall comply with and be subject to the following terms and conditions:

    (a) Initial Option Grants. An option to purchase 24,000 shares of Common Stock shall be granted automatically on the first business day immediately following each meeting of the Company's shareholders or Board of Directors during the term of the Plan to each eligible director, if any, who is elected to the Board of Directors for the first time at such meeting.

1

    (b) Annual Option Grants. Subject to Section 6(c) hereof, an option to purchase 12,000 shares of Common Stock shall be granted automatically on the first business day immediately following each annual meeting of the Company's shareholders held during the term of the Plan beginning with the 2000 annual meeting of shareholders (the "Annual Option Grant Date") to each eligible director in office on such Annual Option Grant Date who prior to such Annual Option Grant Date has received an option pursuant to Section 6(a) hereof; provided, however, that, in the event that a director has attended less than 75% of the total meetings of the Board of Directors held in the calendar year immediately preceding such Annual Option Grant Date, such director shall be granted an option to purchase 9,000 shares of Common Stock pursuant to this Section 6(b).

    (c) Return on Equity Requirement. No options shall be granted pursuant to Section 6(b) hereof on any Annual Option Grant Date if the Company's "return on equity" (as hereinafter defined) for the fiscal year ended immediately preceding such Annual Option Grant Date was less than 10%. "Return on equity" shall mean the percentage determined by dividing (i) the net income of the Company for such fiscal year by (ii) the total stockholders' investment in the Company as of the end of the next preceding fiscal year. Net income and total stockholders' investment shall be determined by reference to the Company's audited financial statements. If the Company does not have net income for any fiscal year, the return on equity for such fiscal year shall be deemed to be less than 10%.

    (d) Options Non-Transferable. No option granted under the Plan shall be transferable by the optionee otherwise than by will or by the laws of descent and distribution as provided in Section 6(g) hereof; provided, however, that an optionee may, in the manner established by the Committee, transfer an option to any member of such optionee's immediate family (which, for purposes of this clause (d) shall mean such optionee's children, grandchildren, or current spouse) or to one or more trusts established for the exclusive benefit of one or more such immediate family members or one or more partnerships in which the Participant or such immediate family members are the only partners, and provided further that (1) there is no consideration for such transfer, and (2) the options held by such transferees continue to be subject to the same terms and conditions (including restrictions on subsequent transfers) as were applicable to such options immediately prior to their transfer. During the lifetime of the optionee, the options shall be exercisable only by such optionee. No option or interest therein may be transferred, assigned, pledged or hypothecated by the optionee during such optionee's lifetime, except as set forth at this section (d), whether by operation of law or otherwise, or be made subject to execution, attachment or similar process.

    (e) Period of Options. Options shall terminate upon the expiration of 10 years from the date on which they were granted.

    (f)  Exercise of Options.

    (i)  Options granted under the Plan shall not be exercisable for a period of one year after the date on which they were granted, but thereafter will be exercisable in full at any time or from time to time during the term of the option.

    (ii) The exercise of any option granted hereunder shall only be effective at such time as counsel to the Company shall have determined that the issuance and delivery of Common Stock pursuant to such exercise will not violate any federal or state securities or other laws. An optionee desiring to exercise an option may be required by the Company, as a condition of the effectiveness of any exercise of an option granted hereunder, to agree in writing that all Common Stock to be acquired pursuant to such exercise shall be held for his or her own account without a view to any distribution thereof, that the certificates for such shares shall bear an appropriate legend to that effect and that such shares will not be transferred or disposed of except in compliance with applicable federal and state securities laws.

2

    (iii) An optionee electing to exercise an option shall give written notice to the Company of such election and of the number of shares subject to such exercise. The full purchase price of such shares shall be tendered with such notice of exercise. Payment shall be made to the Company in cash (including check, bank draft or money order).

    (g) Effect of Death. If the optionee shall die prior to the time the option is fully exercised, such option may be exercised at any time within two years after his or her death by the personal representatives or administrators of the optionee or by any person or persons to whom the option is transferred by will or the applicable laws of descent and distribution, to the extent of the full number of shares the optionee was entitled to purchase under the option on the date of death and subject to the condition that no option shall be exercisable after the expiration of the term of the option.

Section 6A. One-Time Grant

    On April 1, 1997, benefits accrued pursuant to the Company's Directors' Supplemental Retirement Plan prior to its termination, shall be converted to options for the purchase of the Company's Common Stock to be issued pursuant to the Plan, in accordance with the following schedule:

Length of Service 12/96	No. of Option Shares
<1 year	900
2 to 3 years	2,750
3 to 4 years	3,650
5 to 6 years	5,450
6 to 7 years	6,350
10 + years	9,100

    Each such option shall have an exercise price equal to the market price of a share of the Common Stock as of the close of trading on April 1, 1997, and each such option shall be exercisable on the earlier of the date on which a participant no longer is a member of the Board of Directors of the Company or 9.5 years from April 1, 1997, and each unexercised option shall expire ten years from April 1, 1997.

Section 7. Option Exercise Price.

    The option exercise price per share for the shares covered by each option shall be equal to the "fair market value" of a share of Common Stock as of the date on which the option is granted, as determined pursuant to Section 9 hereof.

Section 8. Time for Granting Options.

    Unless the Plan shall have been discontinued as provided in Section 13 hereof, the Plan shall terminate upon the expiration of 10 years from the date upon which it takes effect as provided in Section 12 hereof. No option may be granted after such termination, but termination of the Plan shall not, without the consent of the optionee, alter or impair any rights or obligations under any option theretofore granted.

Section 9. Fair Market Value of Common Stock.

    For purposes of the Plan, the fair market value of the Common Stock on a given date shall be (i) the last sale price of the Common Stock as reported on the NASDAQ National Market System on such date, if the Common Stock is then quoted on the NASDAQ National Market System, or (ii) the closing price of the Common Stock on such date on a national securities exchange, if the Common Stock is then being traded on a national securities exchange. If on the date as of which the fair market value is being determined the Common Stock is not publicly traded, the Committee shall make a good faith attempt to

3

determine such fair market value and, in connection therewith, shall take such actions and consider such factors as it deems necessary or advisable.

Section 10. Limitation of Rights.

    (a) No Right to Continue as a Director. Neither the Plan, nor the granting of an option nor any other action taken pursuant to the Plan, shall constitute, or be evidence of, any agreement or understanding, express or implied, that the Company will retain a director for any period of time, or at any particular rate of compensation.

    (b) No Shareholder Rights for Options. An optionee shall have no rights as a shareholder with respect to the shares covered by options until the date of the issuance to such optionee of a stock certificate therefor, and no adjustment will be made for cash dividends or other rights for which the record date is prior to the date such certificate is issued.

Section 11. Adjustments to Common Stock.

    If there shall be any change in the Common Stock through merger, consolidation, reorganization, recapitalization, stock dividend (of whatever amount), stock split or other change in the corporate structure, appropriate adjustments in the Plan and outstanding options shall be made. In the event of any such changes, adjustments shall include, where appropriate, changes in the aggregate number of shares subject to the Plan, the number of shares subject to outstanding options and the option exercise prices thereof in order to prevent dilution or enlargement of option rights.

Section 12. Effective Date of the Plan.

    The Plan shall take effect immediately upon its approval by the affirmative vote of the holders of a majority of the shares present in person or by proxy and voted at a duly held meeting of shareholders of the Company.

Section 13. Amendment of the Plan.

    The Board may suspend or discontinue the Plan or revise or amend it in any respect whatsoever; provided, however, that without approval of the shareholders of the Company no revision or amendment shall be made that (a) absent such shareholder approval, would cause Rule 16b-3, as promulgated by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended, or any successor rule or regulation thereto, to become unavailable with respect to the Plan or (b) requires the approval of the Company's shareholders under any rules or regulations of the National Association of Securities Dealers, Inc. or any securities exchange that are applicable to the Company. The Board shall not alter or impair any option theretofore granted under the Plan without the consent of the holder of the option.

Section 14. Governing Law.

    The Plan and all determinations made and actions taken pursuant hereto shall be governed by the law of the State of Minnesota and construed accordingly.

4

QuickLinks

ADC TELECOMMUNICATIONS, INC. NONEMPLOYEE DIRECTOR STOCK OPTION PLAN (As Amended through February 22, 2000)

EX-27.A

 


<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS FOR ADC TELECOMMUNICATIONS, INC. AND SUBSIDIARIES FOR THE
SIX-MONTH PERIOD ENDED APRIL 30, 2000 AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.


<MULTIPLIER> 1,000

                             
<PERIOD-TYPE>                   6-MOS
<FISCAL-YEAR-END>                          OCT-31-2000
<PERIOD-START>                             NOV-01-1999
<PERIOD-END>                               APR-30-2000
<CASH>                                         233,016
<SECURITIES>                                   549,267
<RECEIVABLES>                                  530,149
<ALLOWANCES>                                     9,677
<INVENTORY>                                    315,459
<CURRENT-ASSETS>                             1,689,943
<PP&E>                                         710,990
<DEPRECIATION>                                 326,857
<TOTAL-ASSETS>                               2,425,671
<CURRENT-LIABILITIES>                          633,522
<BONDS>                                              0
<PREFERRED-MANDATORY>                                0
<PREFERRED>                                          0
<COMMON>                                        61,653
<OTHER-SE>                                   1,708,942
<TOTAL-LIABILITY-AND-EQUITY>                 2,425,671
<SALES>                                      1,253,792
<TOTAL-REVENUES>                             1,253,792
<CGS>                                          639,712
<TOTAL-COSTS>                                  639,712
<OTHER-EXPENSES>                               388,605
<LOSS-PROVISION>                                 2,171
<INTEREST-EXPENSE>                               1,333
<INCOME-PRETAX>                                949,807
<INCOME-TAX>                                   344,611
<INCOME-CONTINUING>                            605,196
<DISCONTINUED>                                       0
<EXTRAORDINARY>                                      0
<CHANGES>                                            0
<NET-INCOME>                                   605,196
<EPS-BASIC>                                       1.99
<EPS-DILUTED>                                     1.90

<F1>AMOUNT IS NET OF ALLOWANCE FOR BAD DEBT AND RETURNS
<F2>AMOUNT IS NET OF OBSOLESCENCE RESERVES



 

EX-27.B

 


<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS FOR ADC TELECOMMUNICATIONS, INC. AND SUBSIDIARIES FOR
THE SIX-MONTH PERIOD ENDED APRIL 30, 1999 AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.


<MULTIPLIER> 1,000

                             
<PERIOD-TYPE>                   6-MOS
<FISCAL-YEAR-END>                          OCT-31-1999
<PERIOD-START>                             NOV-01-1998
<PERIOD-END>                               APR-30-1999
<CASH>                                         171,528
<SECURITIES>                                    41,285
<RECEIVABLES>                                  358,811
<ALLOWANCES>                                     7,942
<INVENTORY>                                    215,759
<CURRENT-ASSETS>                               856,216
<PP&E>                                         559,119
<DEPRECIATION>                                 265,948
<TOTAL-ASSETS>                               1,465,442
<CURRENT-LIABILITIES>                          336,082
<BONDS>                                              0
<PREFERRED-MANDATORY>                                0
<PREFERRED>                                          0
<COMMON>                                        27,216
<OTHER-SE>                                   1,088,352
<TOTAL-LIABILITY-AND-EQUITY>                 1,465,442
<SALES>                                        860,885
<TOTAL-REVENUES>                               860,885
<CGS>                                          452,776
<TOTAL-COSTS>                                  452,776
<OTHER-EXPENSES>                               342,657
<LOSS-PROVISION>                                 2,307
<INTEREST-EXPENSE>                               5,914
<INCOME-PRETAX>                                 64,285
<INCOME-TAX>                                    28,677
<INCOME-CONTINUING>                             35,608
<DISCONTINUED>                                       0
<EXTRAORDINARY>                                      0
<CHANGES>                                            0
<NET-INCOME>                                    35,608
<EPS-BASIC>                                       0.13
<EPS-DILUTED>                                     0.13

<F1>AMOUNT IS NET OF ALLOWANCE FOR BAD DEBT AND RETURNS
<F2>AMOUNT IS NET OF OBSOLESCENCE RESERVES