EX-99.1 2 c53452exv99w1.htm EX-99.1 exv99w1
Exhibit 99.1
ADC TELECOMMUNICATIONS, INC. AND SUBSIDIARIES
CONSOLIDATED NON-GAAP INCOME AND EPS CALCULATION — UNAUDITED
(In millions except per share amounts)
                         
    Three Months Ended
    December 26,   March 27,   June 26,
    2008   2009   2009
GAAP Income (Loss) from Continuing Operations
   $ (48.4 )   $ (442.1 )   $ 13.0  
Diluted GAAP Income (Loss) from Continuing Operations per Share
   $ (0.46 )   $ (4.58 )   $ 0.13  
 
                        
Non-GAAP adjustments:
                        
Auction Rate Securities Adjustments (4)
     26.4       14.2       0.7  
Amortization of Purchased Intangibles (2)
     8.4       6.9       5.8  
Restructuring Charges (2)
     8.5       3.8       4.2  
Other Impairment Charges (2)
     4.1       0.5       (0.1 )
E-Band Impairment (4)
     —       3.0       —  
Goodwill impairment (3)
     —       361.9       0.4  
Intangibles impairment (2)
     —       47.3       —  
Outdoor Wireless Inventory Charge (1)
     10.8       —       —  
LGC Purchase Accounting Adjustment (1)
     —       —       —  
Tax Valuation Allowance (5)
     —       —       —  
ACX Inventory Charge (1)
     3.2       —       —  
FX Adjustment (4)
     —       —       —  
ADC Foundation Grant (2)
     —       —       —  
Gain on Sale of BigBand (4)
     —       —       —  
One-time opex adjustments (2)
     —       —       (3.2 )
     
Total Adjustments
   $ 61.4     $ 437.6     $ 7.8  
     
Non-GAAP Income (Loss) from Continuing Operations
   $ 13.0     $ (4.5 )   $ 20.8  
Diluted non-GAAP Income (Loss) from Continuing Operations per Share
   $ 0.12     $ (0.05 )   $ 0.21  
 
Reconciliation of the numerators and denominators of non-GAAP diluted income (loss) per share from continuing operations:
                        
Interest addback
   $ —     $ —     $ —  
Diluted shares outstanding — adjusted
     105.9       96.6       97.4  
                                         
    Three Months Ended    
    December 28,   March 28,   June 27,   September 26,    
    2007   2008   2008   2008   FY08
GAAP Income (Loss) from Continuing Operations
   $ (35.3 )   $ (5.6 )   $ 6.8     $ (7.9 )   $ (42.0 )
Diluted GAAP Income (Loss) from Continuing Operations per Share
   $ (0.30 )   $ (0.05 )   $ 0.06     $ (0.07 )   $ (0.36 )
 
                                        
Non-GAAP adjustments:
                                        
Auction Rate Securities Adjustments (4)
     49.9       29.7       18.0       6.0       103.6  
Amortization of Purchased Intangibles (2)
     6.0       10.0       9.0       8.5       33.5  
Restructuring Charges (2)
     —       1.9       0.4       0.2       2.5  
Other Impairment Charges (2)
     0.7       —       —       —       0.7  
E-Band Impairment (4)
     —       —       —       —       —  
Goodwill impairment (3)
     —       —       —       —       —  
Intangibles impairment (2)
     —       —       —       —       —  
Outdoor Wireless Inventory Charge (1)
     —       —       —       —       —  
LGC Purchase Accounting Adjustment (1)
     —       —       3.5       —       3.5  
Tax Valuation Allowance (5)
     —       —       —       3.4       3.4  
ACX Inventory Charge (1)
     —       —       —       —       —  
FX Adjustment (4)
     —       —       —       1.7       1.7  
ADC Foundation Grant (2)
     10.0       —       —       —       10.0  
Gain on Sale of BigBand (4)
     —       —       —       —       —  
     
Total Adjustments
   $ 66.6     $ 41.6     $ 30.9     $ 19.8     $ 158.9  
     
Non-GAAP Income (Loss) from Continuing Operations
   $ 31.3     $ 36.0     $ 37.7     $ 11.9     $ 116.9  
Diluted non-GAAP Income (Loss) from Continuing Operations per Share
   $ 0.26     $ 0.30     $ 0.31     $ 0.10     $ 0.99  
 
                                        
Reconciliation of the numerators and denominators of non-GAAP diluted income (loss) per share from continuing operations:
                                        
Interest addback
   $ 0.1     $ 7.8     $ 7.5     $ —     $ —  
Diluted shares outstanding — adjusted
     118.5       148.4       147.6       117.9       118.2  
                                         
    Three Months Ended    
    December 29,   March 30,   June 29,   September 28,    
    2006   2007   2007   2007   FY07
GAAP Income (Loss) from Continuing Operations
   $ (9.3 )   $ 80.8     $ 39.6     $ 28.6     $ 139.7  
Diluted GAAP Income (Loss) from Continuing Operations per Share
   $ (0.08 )   $ 0.64     $ 0.33     $ 0.24     $ 1.16  
 
                                        
Non-GAAP adjustments:
                                        
Auction Rate Securities Adjustments (4)
     —       —       —       —       —  
Amortization of Purchased Intangibles (2)
     6.0       6.1       6.0       6.0       24.1  
Restructuring Charges (2)
     13.6       —       (0.2 )     5.4       18.8  
Other Impairment Charges (2)
     0.6       0.1       0.1       1.5       2.3  
E-Band Impairment (4)
     —       —       —       —       —  
Goodwill impairment (3)
     —       —       —       —       —  
Intangibles impairment (2)
     —       —       —       —       —  
Outdoor Wireless Inventory Charge (1)
     —       —       —       —       —  
LGC Purchase Accounting Adjustment (1)
     —       —       —       —       —  
Tax Valuation Allowance (5)
     —       —       —       (6.0 )     (6.0 )
ACX Inventory Charge (1)
     —       —       —       8.9       8.9  
FX Adjustment (4)
     —       —       —       —       —  
ADC Foundation Grant (2)
     —       —       —               —  
Gain on Sale of BigBand (4)
     —       (57.1 )     —       —       (57.1 )
     
Total Adjustments
   $ 20.2     $ (50.9 )   $ 5.9     $ 15.8     $ (9.0 )
     
Non-GAAP Income (Loss) from Continuing Operations
   $ 10.9     $ 29.9     $ 45.5     $ 44.4     $ 130.7  
Diluted non-GAAP Income (Loss) from Continuing Operations per Share
   $ 0.09     $ 0.25     $ 0.37     $ 0.37     $ 1.11  
 
                                        
Reconciliation of the numerators and denominators of non-GAAP diluted income (loss) per share from continuing operations:
                                        
Interest addback
   $ —     $ —     $ 3.8     $ 3.8     $ 15.2  
Diluted shares outstanding — adjusted
     117.3       117.4       131.9       132.0       131.8  
 
(1)   Included in Cost of Goods Sold
 
(2)   Included in Operating Expenses
 
(3)   Included in Operating Expenses (Q1 FY09 $366.2 offset by ($4.3) million in Provision (Benefit) for Income Taxes)
 
(4)   Included in Other Income (Expense)
 
(5)   Included in Provision (Benefit) for Income Taxes

 

 

Reasons for Presenting Non-GAAP Measures. The consolidated non-GAAP net income and non-GAAP EPS calculations above contain non-GAAP financial measures. ADC utilizes a number of different financial measures, both GAAP and non-GAAP, in analyzing and assessing our overall business performance, for making operating decisions and for forecasting and planning future periods. The non-GAAP financial measures ADC uses include non-GAAP net income from continuing operations and diluted non-GAAP net income from continuing operations per share. Non-GAAP net income from continuing operations is defined as net income from continuing operations excluding the items identified in the above table and the tax effect of these non-GAAP adjustments. These measures are used by some investors when assessing the performance of ADC. ADC income from continuing operations per share. Non-GAAP net income from continuing operations is defined as net income from continuing operations excluding the items identified in the above table and the tax effect of these non-GAAP adjustments. These measures are used by some investors when assessing the performance of ADC. ADC believes the assessment of its operations excluding these items is relevant to the assessment of internal operations and comparisons to industry performance.
ADC believes these non-GAAP measures help illustrate ADC’s baseline performance before gains, losses or certain charges that are considered by ADC management to be outside of on-going operating results. Accordingly, ADC uses these non-GAAP measures to gain a better understanding of ADC’s comparative operating performance from period-to-period and as a basis for planning and forecasting future periods. ADC believes these non-GAAP measures, when read in conjunction with ADC’s GAAP financial statements and notes to the financial statements, provide valuable information to investors.
Items Excluded From Non-GAAP Measures. As described above, the calculation of non-GAAP net income from continuing operations excludes items in the following categories:
Amortization of Purchased Intangibles. ADC excludes amortization of intangible assets resulting from acquisitions to allow more accurate comparisons of its financial results to its historical operations, forward-looking guidance and the financial results of peer companies. ADC believes that providing a non-GAAP financial measure that excludes the amortization of acquisition-related intangible assets provides those reviewing ADC’s financial statements an enhanced understanding of historic and potential future financial results and also facilitates comparisons to the results of peer companies. Additionally, with respect to the amortization of acquisition-related intangible assets, if ADC had developed these intangible assets internally, the amortization of such intangible assets would have been expensed historically. ADC believes the assessment of its operations excluding these costs is relevant to the assessment of internal operations and comparisons to industry performance. Amortization of acquisition-related intangibles will recur in future periods.
Restructuring and Related Impairment of Long-Lived Assets. ADC excludes these items because it believes that they are not related directly to the underlying performance of ADC’s core business operations. These items are expected to recur in future periods.
Other Non-GAAP Adjustments. ADC excludes these items because it believes that they are not related directly to the underlying performance of ADC’s core business operations. These items generally are not expected to recur in future periods.
Reconciliation of the numerators and denominators non-GAAP diluted income (loss) per share from continuing operations. On both a GAAP and Non-GAAP basis, we are required to use the “if-converted” method for computing diluted earnings per share with respect to the shares reserved for issuance upon conversion of our convertible notes. Under this method, we first calculate diluted earnings per share on both a GAAP and Non-GAAP basis by dividing net income by our total diluted outstanding shares, excluding shares reserved for issuance upon conversion of our outstanding notes. We then calculate diluted earnings per share on both a GAAP and Non-GAAP basis by adding back the interest expense and the amortization of financing expenses on the convertible notes to net income and then dividing this amount by our total diluted outstanding shares, including those shares reserved for issuance upon conversion of the notes. We then select the lower of the two earnings per share calculations on both a GAAP and Non-GAAP basis to represent our GAAP and Non-GAAP diluted earnings per share.
Limitations. Each of the non-GAAP financial measures described above, and used in this consolidated non-GAAP EPS calculation and the related conference call, should not be considered in isolation from, or as a substitute for, a measure of financial performance prepared in accordance with GAAP. Further, investors are cautioned that there are inherent limitations associated with the use of each of these non-GAAP financial measures as an analytical tool. In particular, these non-GAAP financial measures are not based on a comprehensive set of accounting rules or principles and many of the adjustments to the GAAP financial measures reflect the exclusion of items that are recurring and will be reflected in ADC’s financial results for the foreseeable future. In addition, other companies, including other companies in ADC’s industry, may calculate non-GAAP financial measures differently than ADC does, limiting their usefulness as a comparative tool. ADC attempts to compensate for these limitations by providing specific information in the reconciliation included in this consolidated non-GAAP EPS calculation regarding the GAAP amounts excluded from the non-GAAP financial measures. In addition, as noted above and as required by law, ADC evaluates the non-GAAP financial measures together with the most directly comparable GAAP financial information.

 

 

ADC TELECOMMUNICATIONS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS — UNAUDITED
(In Millions, Except Per Share Amounts)
                         
    Three Months Ended
    December 26,   March 27,   June 26,
    2008   2009   2009
NET SALES
   $ 303.7     $ 258.1     $ 292.3  
COST OF SALES
     227.0       175.0       189.4  
     
GROSS PROFIT
     76.7       83.1       102.9  
     
GROSS MARGIN
     25.3 %     32.2 %     35.2 %
OPERATING EXPENSES:
                        
Research and development
     18.5       19.0       17.3  
Selling and administration
     62.4       62.1       55.6  
Amortization of purchased intangibles
     8.4       6.9       5.8  
Impairment charges
     4.1       414.0       0.3  
Restructuring charges
     8.5       3.8       4.2  
     
Total Operating Expenses
     101.9       505.8       83.2  
     
OPERATING INCOME
     (25.2 )     (422.7 )     19.7  
OTHER INCOME (EXPENSE), NET:
                        
Interest
     (1.6 )     (5.6 )     (4.9 )
Other
     (25.6 )     (16.8 )     (0.9 )
     
INCOME (LOSS) BEFORE INCOME TAXES
     (52.4 )     (445.1 )     13.9  
(BENEFIT) PROVISION FOR INCOME TAXES
     (4.0 )     (3.0 )     0.9  
     
INCOME (LOSS) FROM CONTINUING OPERATIONS
     (48.4 )     (442.1 )     13.0  
Total Discontinued Operations
     (1.3 )     (0.9 )     (6.2 )
     
NET INCOME (LOSS)
   $ (49.7 )   $ (443.0 )   $ 6.8  
     
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING — BASIC
     105.5       96.6       96.6  
     
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING — DILUTED
     105.5       96.6       97.4  
     
EARNINGS (LOSS) PER SHARE FROM CONTINUING OPERATIONS — BASIC
   $ (0.46 )   $ (4.58 )   $ 0.13  
     
EARNINGS (LOSS) PER SHARE FROM CONTINUING OPERATIONS — DILUTED
   $ (0.46 )   $ (4.58 )   $ 0.13  
     
EARNINGS (LOSS) PER SHARE FROM DISCONTINUING OPERATIONS — BASIC
   $ (0.01 )   $ (0.01 )   $ (0.06 )
     
EARNINGS (LOSS) PER SHARE FROM DISCONTINUING OPERATIONS — DILUTED
   $ (0.01 )   $ (0.01 )   $ (0.06 )
     
NET EARNINGS (LOSS) PER SHARE — BASIC
   $ (0.47 )   $ (4.59 )   $ 0.07  
     
NET EARNINGS (LOSS) PER SHARE — DILUTED
   $ (0.47 )   $ (4.59 )   $ 0.07  
     
                                         
    Three Months Ended    
    December 28,   March 28,   June 27,   September 26,    
    2007   2008   2008   2008   FY08
NET SALES
   $ 331.7     $ 355.3     $ 392.4     $ 355.9     $ 1,435.3  
COST OF SALES
     214.6       222.3       257.5       238.4       932.8  
     
GROSS PROFIT
     117.1       133.0       134.9       117.5       502.5  
     
GROSS MARGIN
     35.3 %     37.4 %     34.4 %     33.0 %     35.0 %
 
                                        
OPERATING EXPENSES:
                                        
Research and development
     19.2       21.4       21.4       21.7       83.7  
Selling and administration
     79.0       77.1       78.2       75.8       310.1  
Amortization of purchased intangibles
     6.0       10.0       9.0       8.5       33.5  
Impairment charges
     0.7       —       —       —       0.7  
Restructuring charges
     —       1.9       0.4       0.2       2.5  
     
Total Operating Expenses
     104.9       110.4       109.0       106.2       430.5  
     
 
                                        
OPERATING INCOME
     12.2       22.6       25.9       11.3       72.0  
OTHER INCOME (EXPENSE), NET:
                                        
Interest
     4.8       1.7       (0.6 )     (1.4 )     4.5  
Other
     (48.9 )     (27.9 )     (16.2 )     (11.6 )     (104.6 )
     
 
                                        
INCOME (LOSS) BEFORE INCOME TAXES
     (31.9 )     (3.6 )     9.1       (1.7 )     (28.1 )
(BENEFIT) PROVISION FOR INCOME TAXES
     3.4       2.0       2.3       6.2       13.9  
     
INCOME (LOSS) FROM CONTINUING OPERATIONS
     (35.3 )     (5.6 )     6.8       (7.9 )     (42.0 )
 
                                        
Total Discontinued Operations
     1.9       1.5       0.5       2.3       6.2  
     
 
                                        
NET INCOME (LOSS)
   $ (33.4 )   $ (4.1 )   $ 7.3     $ (5.6 )   $ (35.8 )
     
 
                                        
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING — BASIC
     117.6       117.7       117.7       117.4       117.6  
     
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING — DILUTED
     117.6       117.7       118.1       117.4       117.6  
     
EARNINGS (LOSS) PER SHARE FROM CONTINUING OPERATIONS — BASIC
   $ (0.30 )   $ (0.05 )   $ 0.06     $ (0.07 )   $ (0.36 )
     
EARNINGS (LOSS) PER SHARE FROM CONTINUING OPERATIONS — DILUTED
   $ (0.30 )   $ (0.05 )   $ 0.06     $ (0.07 )   $ (0.36 )
     
EARNINGS (LOSS) PER SHARE FROM DISCONTINUING OPERATIONS — BASIC
   $ 0.02     $ 0.02     $ —     $ 0.02     $ 0.06  
     
EARNINGS (LOSS) PER SHARE FROM DISCONTINUING OPERATIONS — DILUTED
   $ 0.02     $ 0.02     $ —     $ 0.02     $ 0.06  
     
NET EARNINGS (LOSS) PER SHARE — BASIC
   $ (0.28 )   $ (0.03 )   $ 0.06     $ (0.05 )   $ (0.30 )
     
NET EARNINGS (LOSS) PER SHARE — DILUTED
   $ (0.28 )   $ (0.03 )   $ 0.06     $ (0.05 )   $ (0.30 )
     

 

 

                                         
    Three Months Ended    
    December 29,   March 30,   June 29,   September 28,    
    2006   2007   2007   2007   FY07
NET SALES
   $ 291.1     $ 316.6     $ 342.3     $ 322.0     $ 1,272.0  
COST OF SALES
     197.6       206.2       219.8       212.9       836.5  
     
GROSS PROFIT
     93.5       110.4       122.5       109.1       435.5  
     
GROSS MARGIN
     32.1 %     34.9 %     35.8 %     33.9 %     34.2 %
 
                                        
OPERATING EXPENSES:
                                        
Research and development
     16.6       17.6       16.9       17.9       69.0  
Selling and administration
     61.4       65.0       62.1       62.1       250.6  
Amortization of purchased intangibles
     6.0       6.1       6.0       6.0       24.1  
Impairment charges
     0.6       0.1       0.1       1.5       2.3  
Restructuring charges
     13.6       —       (0.2 )     5.4       18.8  
     
Total Operating Expenses
     98.2       88.8       84.9       92.9       364.8  
     
 
                                        
OPERATING INCOME
     (4.7 )     21.6       37.6       16.2       70.7  
OTHER INCOME (EXPENSE), NET:
                                        
Interest
     4.6       3.1       4.7       5.3       17.7  
Other
     (5.5 )     57.4       0.3       2.3       54.5  
     
 
                                        
INCOME (LOSS) BEFORE INCOME TAXES
     (5.6 )     82.1       42.6       23.8       142.9  
(BENEFIT) PROVISION FOR INCOME TAXES
     3.7       1.3       3.0       (4.8 )     3.2  
     
INCOME (LOSS) FROM CONTINUING OPERATIONS
     (9.3 )     80.8       39.6       28.6       139.7  
Total Discontinued Operations
     (2.7 )     (11.3 )     (4.3 )     (5.9 )     (24.2 )
     
 
                                        
NET INCOME (LOSS)
   $ (12.0 )   $ 69.5     $ 35.3     $ 22.7     $ 115.5  
     
 
                                        
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING — BASIC
     117.2       117.3       117.4       117.5       117.4  
     
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING — DILUTED
     117.2       131.6       131.9       117.8       131.8  
     
EARNINGS (LOSS) PER SHARE FROM CONTINUING OPERATIONS — BASIC
   $ (0.08 )   $ 0.69     $ 0.34     $ 0.24     $ 1.19  
     
EARNINGS (LOSS) PER SHARE FROM CONTINUING OPERATIONS — DILUTED
   $ (0.08 )   $ 0.64     $ 0.33     $ 0.24     $ 1.16  
     
EARNINGS (LOSS) PER SHARE FROM DISCONTINUING OPERATIONS — BASIC
   $ (0.02 )   $ (0.10 )   $ (0.04 )   $ (0.05 )   $ (0.21 )
     
EARNINGS (LOSS) PER SHARE FROM DISCONTINUING OPERATIONS — DILUTED
   $ (0.02 )   $ (0.09 )   $ (0.04 )   $ (0.05 )   $ (0.18 )
     
NET EARNINGS (LOSS) PER SHARE — BASIC
   $ (0.10 )   $ 0.59     $ 0.30     $ 0.19     $ 0.98  
     
NET EARNINGS (LOSS) PER SHARE — DILUTED
   $ (0.10 )   $ 0.55     $ 0.29     $ 0.19     $ 0.98  
     
                                 
    Two Months Ended   Three Months Ended
    Sept 2008   Sept 2007   Oct 2008   Oct 2007
NET SALES
     201.4       190.5       352.3       320.3  
COST OF SALES
     139.0       124.8       255.5       206.9  
         
GROSS PROFIT
     62.4       65.7       96.8       113.4  
         
GROSS MARGIN
     31.0 %     34.5 %     27.5 %     35.4 %
 
                                
OPERATING EXPENSES:
                                
Research and development
     13.9       10.7       20.5       17.5  
Selling and administration
     49.4       39.4       70.8       76.4  
Amortization of purchased intangibles
     5.7       4.0       8.5       5.9  
Impairment charges
     —       —       4.1       0.7  
Restructuring charges
     0.4       1.6       8.8       1.4  
         
Total Operating Expenses
     69.4       55.7       112.7       101.9  
         
 
                                
OPERATING INCOME
     (7.0 )     10.0       (15.9 )     11.5  
OTHER INCOME (EXPENSE), NET:
                                
Interest
     (1.3 )     3.2       (1.1 )     5.2  
Other
     (2.2 )     1.8       (28.5 )     (26.8 )
         
 
                                
INCOME (LOSS) BEFORE INCOME TAXES
     (10.5 )     15.0       (45.5 )     (10.1 )
(BENEFIT) PROVISION FOR INCOME TAXES
     4.3       (5.6 )     (0.1 )     (2.5 )
         
INCOME (LOSS) FROM CONTINUING OPERATIONS
     (14.8 )     20.6       (45.4 )     (7.6 )
 
                                
Total Discontinued Operations
     0.7       (0.8 )     (0.6 )     1.6  
         
 
                                
NET INCOME (LOSS)
     (14.1 )     19.8       (46.0 )     (6.0 )
         

 

ADC TELECOMMUNICATIONS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS — UNAUDITED
(In millions)
                         
    December 26,   March 27,   June 26,
    2008   2009   2009
ASSETS
                        
 
CURRENT ASSETS:
                        
Cash and cash equivalents
   $ 520.9     $ 444.5     $ 488.3  
Accounts receivable, net
     183.6       171.7       183.8  
Unbilled revenues
     14.2       19.1       21.9  
Inventories, net
     171.8       158.5       145.2  
Assets of discontinued operations
     11.1       10.3       7.2  
Prepaid and other current assets
     35.0       35.5       32.3  
     
Total current assets
     936.6       839.6       878.7  
 
                        
PROPERTY AND EQUIPMENT, net
     174.9       167.9       168.3  
ASSETS HELD FOR SALE
     —       —       —  
RESTRICTED CASH
     15.3       28.3       21.5  
GOODWILL
     359.3       —       —  
INTANGIBLES, net
     155.6       101.8       96.7  
AVAILABLE-FOR-SALE SECURITIES
     40.4       77.8       77.9  
LONG-TERM ASSETS OF DISCONTINUED OPERATIONS
     1.3       1.1       1.1  
OTHER ASSETS
     86.2       81.2       82.8  
     
Total assets
   $ 1,769.6     $ 1,297.7     $ 1,327.0  
     
 
                        
LIABILITIES & SHAREOWNERS’ INVESTMENT
                        
 
                        
CURRENT LIABILITIES:
                        
Current portion of long-term notes payable
   $ 1.8     $ 1.0     $ 1.0  
Accounts payable
     82.0       74.4       76.4  
Accrued compensation and benefits
     55.3       49.2       53.2  
Other accrued liabilities
     83.2       72.9       78.1  
Income taxes payable
     2.3       2.1       0.8  
Liabilities of discontinued operations
     7.5       6.4       6.9  
     
Total current liabilities
     232.1       206.0       216.4  
 
                        
PENSION OBLIGATIONS & OTHER LT OBLIGATIONS
     91.6       87.5       83.8  
LONG-TERM NOTES PAYABLE
     650.6       650.5       650.4  
     
Total liabilities
     974.3       944.0       950.6  
 
                        
SHAREOWNERS’ INVESTMENT
     795.3       353.7       376.4  
     
Total liabilities and shareowners’ investment
   $ 1,769.6     $ 1,297.7     $ 1,327.0  
     
                                 
    December 28,   March 28,   June 27,   September 26,
    2007   2008   2008   2008
ASSETS
                                
 
                                
CURRENT ASSETS:
                                
Cash and cash equivalents
   $ 804.5     $ 781.0     $ 627.0     $ 601.9  
Accounts receivable, net
     198.1       230.2       231.0       210.8  
Unbilled revenues
     23.4       28.8       28.5       28.4  
Inventories, net
     190.4       200.0       196.1       190.2  
Assets of discontinued operations
     20.4       18.4       19.1       19.4  
Prepaid and other current assets
     76.5       37.3       32.3       48.2  
     
Total current assets
     1,313.3       1,295.7       1,134.0       1,098.9  
 
                                
PROPERTY AND EQUIPMENT, net
     197.2       202.4       200.6       192.6  
ASSETS HELD FOR SALE
     0.1       0.1       0.1       —  
RESTRICTED CASH
     12.5       13.1       14.4       13.9  
GOODWILL
     372.4       353.8       354.8       353.9  
INTANGIBLES, net
     137.7       192.2       173.9       166.3  
AVAILABLE-FOR-SALE SECURITIES
     91.3       90.3       72.2       66.6  
LONG-TERM ASSETS OF DISCONTINUED OPERATIONS
     1.0       1.1       1.1       1.1  
OTHER ASSETS
     70.3       75.5       91.7       87.2  
     
Total assets
   $ 2,195.8     $ 2,224.2     $ 2,042.8     $ 1,980.5  
     

 

 

                                 
    December 28,   March 28,   June 27,   September 26,
    2007   2008   2008   2008
LIABILITIES & SHAREOWNERS’ INVESTMENT
                                
 
                                
CURRENT LIABILITIES:
                                
Current portion of long-term notes payable
   $ 217.2     $ 205.2     $ 3.8     $ 2.6  
Accounts payable
     87.5       105.7       97.2       90.2  
Accrued compensation and benefits
     53.0       59.0       76.4       82.4  
Other accrued liabilities
     69.2       69.9       74.6       78.3  
Income taxes payable
     15.2       4.4       3.8       6.5  
Liabilities of discontinued operations
     16.5       14.5       12.1       10.7  
     
Total current liabilities
     458.6       458.7       267.9       270.7  
 
                                
PENSION OBLIGATIONS & OTHER LT OBLIGATIONS
     86.8       105.6       100.8       95.7  
LONG-TERM NOTES PAYABLE
     651.3       651.1       650.9       650.7  
     
Total liabilities
     1,196.7       1,215.4       1,019.6       1,017.1  
 
                                
SHAREOWNERS’ INVESTMENT
     999.1       1,008.8       1,023.2       963.4  
     
Total liabilities and shareowners’ investment
   $ 2,195.8     $ 2,224.2     $ 2,042.8     $ 1,980.5  
     
                                 
    December 29,   March 30,   June 29,   September 28,
    2006   2007   2007   2007
ASSETS
                                
 
                                
CURRENT ASSETS:
                                
Cash and cash equivalents
   $ 119.6     $ 120.0     $ 108.8     $ 497.0  
Accounts receivable, net
     151.3       150.6       177.9       157.7  
Unbilled revenues
     14.8       23.2       21.7       31.6  
Inventories, net
     169.2       172.4       178.4       177.6  
Assets of discontinued operations
     33.8       15.7       18.1       19.2  
Prepaid and other current assets
     445.4       546.8       573.9       237.2  
     
Total current assets
     934.1       1,028.7       1,078.8       1,120.3  
 
                                
PROPERTY AND EQUIPMENT, net
     203.4       200.8       197.7       198.3  
ASSETS HELD FOR SALE
     1.0       1.0       1.0       1.0  
RESTRICTED CASH
     11.5       12.8       12.8       12.2  
GOODWILL
     238.5       238.5       239.0       239.1  
INTANGIBLES, net
     141.2       135.8       129.9       125.0  
AVAILABLE-FOR-SALE SECURITIES
     9.7       8.2       5.0       3.0  
LONG-TERM ASSETS OF DISCONTINUED OPERATIONS
     2.0       2.9       2.3       1.3  
OTHER ASSETS
     52.5       54.2       51.2       64.9  
     
Total Assets
   $ 1,593.9     $ 1,682.9     $ 1,717.7     $ 1,765.1  
     
 
                                
LIABILITIES & SHAREOWNERS’ INVESTMENT
                                
 
                                
CURRENT LIABILITIES:
                                
Current portion of long-term notes payable
   $ 1.6     $ 1.5     $ 201.5     $ 200.7  
Accounts payable
     65.0       90.1       91.9       80.0  
Accrued compensation and benefits
     44.8       49.6       56.1       65.2  
Other accrued liabilities
     71.6       68.3       61.0       70.4  
Income taxes payable
     17.5       17.7       13.2       15.2  
Liabilities of discontinued operations
     32.8       18.6       15.3       17.8  
     
Total current liabilities
     233.3       245.8       439.0       449.3  
 
                                
PENSION OBLIGATIONS & OTHER LT OBLIGATIONS
     79.8       82.0       82.4       89.4  
LONG-TERM NOTES PAYABLE
     400.3       400.4       200.5       201.2  
     
Total liabilities
     713.4       728.2       721.9       739.9  
 
                                
SHAREOWNERS’ INVESTMENT
     880.5       954.7       995.8       1,025.2  
     
Total liabilities and shareowners’ investment
   $ 1,593.9     $ 1,682.9     $ 1,717.7     $ 1,765.1  
     

 

 

ADC TELECOMMUNICATIONS, INC. AND SUBSIDIARIES
STATEMENT OF CASH FLOWS — UNAUDITED
(In millions)
                 
    Twelve Months Ended
    September 26,   September 28,
    2008   2007
Operating Activities:
                
Income (loss) from continuing operations
   $ (42.0 )   $ 139.7  
Adjustments to reconcile income (loss) from continuing operations to net cash provided by operating activities from continuing operations:
                
Inventory write-offs
     11.6       21.8  
Write-down of cost method investments
     0.0       3.9  
Write-down of available-for-sale investments
     103.6       0.0  
Impairment
     0.7       2.3  
Depreciation and amortization
     80.6       68.9  
Non-cash stock compensation
     16.7       9.0  
Change in deferred income taxes
     1.6       (5.1 )
Loss on sale of property and equipment
     0.4       0.4  
Gain on sale of investments
     0.0       (57.5 )
Other, net
     0.8       (11.5 )
Changes in operating assets and liabilities, net of acquisitions and divestitures:
                
Accounts receivable and unbilled revenues decrease
     2.3       0.2  
Inventories increase
     (5.4 )     (20.4 )
Prepaid and other assets (increase)/decrease
     (4.1 )     5.9  
Accounts payable decrease
     (17.5 )     (4.2 )
Accrued liabilities decrease
     (1.1 )     (1.8 )
Pension liabilities
     5.1       3.3  
     
Total cash provided by operating activities from continuing operations
     153.3       154.9  
Total cash used for operating activities from discontinued operations
     (0.6 )     (12.3 )
     
Total cash provided by operating activities
     152.7       142.6  
     
Investing Activities:
                
Acquisitions, net of cash acquired
     (199.4 )     (1.6 )
Purchase of interest in affiliates
     (5.2 )     (8.1 )
Divestitures
     0.1       0.5  
Property, equipment and patent additions
     (40.6 )     (32.7 )
Proceeds from disposal of property and equipment
     0.5       1.4  
Proceeds from sale of investments
     0.0       59.8  
Warrant exercise
     0.0       (1.8 )
(Increase)/decrease in restricted cash
     (1.3 )     2.9  
Purchase of available-for-sale securities
     (129.3 )     (1,000.8 )
Sale of available-for-sale securities
     157.2       1,196.6  
Other
     0.1       0.4  
     
Total cash provided by (used for) investing activities from continuing operations
     (217.9 )     216.6  
Total cash provided by investing activities from discontinued operations
     (0.5 )     1.2  
     
Total cash provided by (used for) investing activities
     (218.4 )     217.8  
     
Financing Activities:
                
Debt issued
     450.0       0.0  
Payments of financing costs
     (10.7 )     0.0  
Debt payments
     (218.9 )     0.0  
Treasury stock purchase
     (49.5 )     0.0  
Common stock issued
     0.7       4.6  
     
Total cash provided by financing activities
     171.6       4.6  
     
Effect of Exchange Rate Changes on Cash
     (1.0 )     9.9  
     
Increase in Cash and Cash Equivalents
     104.9       374.9  
Cash and Cash Equivalents, beginning of period
     497.0       122.1  
     
Cash and Cash Equivalents, end of period
   $ 601.9     $ 497.0  
     

 

 

ADC TELECOMMUNICATIONS, INC. AND SUBSIDIARIES
SEGMENT INFORMATION and STATISTICS — UNAUDITED
(In millions)
                         
    Three Months Ended
    December 26,   March 27,   June 26,
    2008   2009   2009
Net Sales by Segment
                        
Global Connectivity Solutions
   $ 234.7     $ 206.6     $ 232.7  
Network Solutions
     27.0       16.9       22.4  
Professional Services
     42.0       34.6       37.2  
     
Total Net Sales by Segment
   $ 303.7     $ 258.1     $ 292.3  
     
 
                        
Product Sales by Segment
                        
Global Connectivity Solutions:
                        
Global Copper Connectivity
     32 %     31 %     29 %
Global Fiber Connectivity
     27 %     32 %     33 %
Global Enterprise Connectivity
     15 %     13 %     14 %
Wireline
     3 %     4 %     3 %
     
Total Global Connectivity Solutions
     77 %     80 %     79 %
Network Solutions
     9 %     7 %     8 %
Professional Services
     14 %     13 %     13 %
     
Total Product Sales by Segment
     100 %     100 %     100 %
     
 
                        
Operating Income (Loss) by Segment
                        
Global Connectivity Solutions
   $ 0.4     $ 5.5     $ 28.0  
Network Solutions
     (15.4 )     (10.9 )     (6.6 )
Professional Services
     2.4       0.5       2.8  
Restructuring, Impairment and Other
     (12.6 )     (417.8 )     (4.5 )
     
Total Operating Income (Loss) by Segment
   $ (25.2 )   $ (422.7 )   $ 19.7  
     
                                 
    Three Months Ended
    December 28,   March 28,   June 27,   September 26,
    2007   2008   2008   2008
Net Sales by Segment
                                
Global Connectivity Solutions
   $ 261.6     $ 288.3     $ 311.9     $ 280.7  
Network Solutions
     24.0       22.4       34       30.4  
Professional Services
     46.1       44.6       46.5       44.8  
     
Total Net Sales by Segment
   $ 331.7     $ 355.3     $ 392.4     $ 355.9  
     
 
                                
Product Sales by Segment
                                
Global Connectivity Solutions:
                                
Global Copper Connectivity
     31 %     30 %     32 %     30 %
Global Fiber Connectivity
     28 %     33 %     31 %     29 %
Global Enterprise Connectivity
     16 %     15 %     14 %     17 %
Wireline
     3 %     4 %     3 %     3 %
     
Total Global Connectivity Solutions
     79 %     81 %     79 %     79 %
Network Solutions
     7 %     6 %     9 %     9 %
Professional Services
     14 %     13 %     12 %     13 %
     
Total Product Sales by Segment
     100 %     100 %     100 %     100 %
     
 
                                
Operating Income (Loss) by Segment
                                
Global Connectivity Solutions
   $ 19.3     $ 38.2     $ 35.7     $ 21.6  
Network Solutions
     (3.7 )     (12.8 )     (10.5 )     (9.5 )
Professional Services
     (2.7 )     (1.0 )     1.2       (0.6 )
Restructuring, Impairment and Other
     (0.7 )     (1.8 )     (0.5 )     (0.2 )
     
Total Operating Income (Loss) by Segment
   $ 12.2     $ 22.6     $ 25.9     $ 11.3  
     
                                 
    Three Months Ended
    December 29,   March 30,   June 29,   September 28,
    2006   2007   2007   2007
Net Sales by Segment
                                
Global Connectivity Solutions
   $ 248.7     $ 270.8     $ 285.2     $ 266.8  
Network Solutions
     7.5       5.2       15.8       11.6  
Professional Services
     34.9       40.6       41.3       43.6  
     
Total Net Sales by Segment
   $ 291.1     $ 316.6     $ 342.3     $ 322.0  
     
 
                                
Product Sales by Segment
                                
Global Connectivity Solutions:
                                
Global Copper Connectivity
     37 %     33 %     34 %     33 %
Global Fiber Connectivity
     24 %     33 %     30 %     28 %
Global Enterprise Connectivity
     18 %     16 %     16 %     17 %
Wireline
     6 %     5 %     4 %     4 %
     
Total Global Connectivity Solutions
     85 %     86 %     83 %     83 %
Network Solutions
     3 %     2 %     5 %     4 %
Professional Services
     12 %     12 %     12 %     14 %
     
Total Product Sales by Segment
     100 %     100 %     100 %     100 %
     
 
                                
Operating Income (Loss) by Segment
                                
Global Connectivity Solutions
   $ 15.0     $ 26.6     $ 36.2     $ 24.3  
Network Solutions
     (4.4 )     (6.1 )     (0.8 )     (4.0 )
Professional Services
     (1.1 )     1.1       2.2       2.7  
Restructuring, Impairment and Other
     (14.2 )     0.0       0.0       (6.8 )
     
Total Operating Income (Loss) by Segment
   $ (4.7 )   $ 21.6     $ 37.6     $ 16.2