Eddie Edwards Fourth Quarter 2016 Results President and Chief Executive Officer February 23, 2017 Mark Olson Executive Vice President and Chief Financial Officer 1
Safe Harbor Caution Regarding Forward Looking Statements During this presentation or any other oral or written statements made by us or on our behalf may include forward-looking statements which reflect our current views with respect to future events and financial performance. These forward- looking statements are generally identified by their use of such terms and phrases as “intend,” “goal,” “estimate,” “expect,” “project,” “projections,” “plans,” “anticipate,” “should,” “could,” “designed to,” “foreseeable future,” “believe,” “think,” “scheduled,” “outlook,” “target,” “guidance” and similar expression s although not all forward-looking statements contain such terms. This list of indicative terms and phrases is not intended to be all-inclusive. These statements are subject to various risks and uncertainties, many of which are outside our control, including, without limitation, our ability to integrate the BNS business on a timely and cost-effective manner; our reliance on TE Connectivity for transition services for the BNS business; our ability to realize expected growth opportunities a nd cost savings from the BNS business; our dependence on customers’ capital spending on data and communication systems; concentration of sales among a limited number of customers and channel partners; changes in technology; industry competition and the ability to retain customers through product innovation, introduction and marketing; risks associated with our sales through channel partners; product quality or performance issues and associated warranty claims; our ability to maintain effective information management systems and to successfully implement major systems initiatives; cyber-security incidents, including data security breaches or computer viruses; the risk our global manufacturing operations suffer production or shipping delays causing difficulty in meeting customer demands; the risk that internal production capacity and that of contract manufacturers may be insufficient to meet customer demand or quality standards for our products; changes in cost and availability of key raw materials, components and commodities and the potential effect on customer pricing; risks associated with our dependence on a limited number of key suppliers; changes in the laws and policies of the U.S. affecting trade; the risk that contract manufacturers we rely on encounter production, quality, financial or other difficulties; our ability to fully realize anticipated benefits from prior or future acquisitions or equity investments; potential difficulties in realigning global manufacturing capacity and capabilities among our global manufacturing facilities, including delays or challenges related to removing, transporting or reinstalling equipment, that may affect our ability to meet customer demands for products; possible future restructuring actions; substantial indebtedness and maintaining compliance with debt covenants; our ability to incur additional indebtedness; our exposure to interest rate risk to the extent of our variable rate debt; our ability to generate cash to service our indebtedness; possible future impairment charges for fixed or intangible assets, including goodwill; income tax rate variability and ability to recover amounts recorded as value-added tax receivables; our ability to attract and retain qualified key employees; labor unrest; obligations under our defined benefit employee benefit plans may require plan contributions in excess of current estimates; significant international operations expose us to economic, political and other risks, including the impact of variability in foreign exchange rates; our ability to comply with governmental anti-corruption laws and regulations and export and import controls worldwide; our ability to compete in international markets due to export and import controls to which we may be subject; cost of protecting or defending intellectual property; costs and challenges of compliance with domestic and foreign environmental laws; and other factors beyond our control. These and other factors are discussed in greater detail in our 2016 Annual Report on Form 10-K.Although the information contained in this presentation represents our best judgment as of the date of this presentation based on information currently available and reasonable assumptions, we can give no assurance that the expectations will be attained or that any deviation will not be material. Given these uncertainties, we caution you not to place undue reliance on these forward-looking statements, which speak only as of the date made. We are not undertaking any duty or obligation to update this information to reflect developments or information obtained after the date of this presentation, except as otherwise may be required by law. Non-GAAP Financial Measures CommScope management believes that presenting certain non-GAAP financial measures provides meaningful information to investors in understanding operating results and may enhance investors' ability to analyze financial and business trends. Non-GAAP measures are not a substitute for GAAP measures and should be considered together with the GAAP financial measures. As calculated, our non-GAAP measures may not be comparable to other similarly titled measures of other companies. In addition, CommScope management believes that these non-GAAP financial measures allow investors to compare period to period more easily by excluding items that could have a disproportionately negative or positive impact on results in any particular period. GAAP to non-GAAP reconciliations are included in this presentation. 2
Agenda • Fourth quarter and full year 2016 highlights • Fourth quarter 2016 results • Segment review • Cash flow, liquidity and capital structure • First quarter and full year 2017 outlook 3 3
Q4 2016 Highlights FY 2016 Highlights • • Revenue rose 3% YOY driven by NAR Revenue rose 29% YOY to $4.92 billion due strength (Mobility & FTTX) to the BNS acquisition • • Gross Margin of 42% Gross Margin of 41% Adjusted Operating Margin (1) of 21%, up ~420 Adjusted Operating Margin (1) of 21%, up ~220 • • bps YOY bps YOY • • GAAP EPS of $0.28, up from ($0.39) YOY Delivered >$100 million of BNS synergies Adjusted EPS (1) of $0.61, up 45% YOY • • GAAP EPS of $1.13, up from ($0.37) YOY Adjusted EPS (1) of $2.64, up 42% YOY • • Cash Flow from Operations of $81 million • Cash Flow from Operations more than • Significant IT system conversion doubled to $606 million • Net Leverage Ratio of ~3.7x; Repaid ~$700 million in debt (1) See appendix for reconciliation of Non-GAAP measures. 4 4
Q4 2016 Results Diluted Revenue Operating Income Earnings Per Share (in millions) (in millions) $297 $1,294 $0.81 $1,179 $1,143 $252 $0.61 $196 $181 Adjusted (1) Adjusted (1) $0.42 $119 $0.48 $22 $0.28 $(0.39) GAAP GAAP Q4 2015 Q3 2016 Q4 2016 Q4 2015 Q3 2016 Q4 2016 Q4 2015 Q3 2016 Q4 2016 Operating Results: Net Income & EPS: Sales & Orders: • • • GAAP Net Income of $54 million, or Sales of $1.18 billion, up 3% YOY and Gross Margin of 42% consistent with guidance $0.28 per diluted share • GAAP Operating Income of $119 • Adjusted Net Income (1) of $121 million, • million Orders of $1.07 billion or $0.61 per diluted share, up 45% • • Book-to-bill ratio of 0.91 ~$25 million incremental BNS YOY • Strong double-digit NAR growth driven synergies by Mobility and FTTX • Adjusted Operating Income (1) increased 28% YOY to $252 million, or 21% of sales (1) See appendix for reconciliation of non-GAAP adjusted measures. 5 NAR revenue growth, cost reduction initiatives and favorable mix drove strength 5
CommScope Connectivity Solutions (CCS) Fiber to Residential/ Revenue the Home Outside MDU Plant (in millions) $819 $681 $672 Actual Up 1% YOY CATV Fiber Headend Backhaul Q4 2015 Q3 2016 Q4 2016 Intelligent Building Operating Income (in millions) $189 Data Center $140 Q4 2016 Adjusted $117 Operating Margin (1) Adjusted (1) $105 Central of 21%, up ~300 Office $(18) $43 bps YOY GAAP Additional Offerings Intelligence Q4 2015 Q3 2016 Q4 2016 Cabling & Connectivity (1) See appendix for reconciliation of non-GAAP adjusted measures. Strong, double-digit NAR FTTX growth offset by other regions 6 6
CommScope Mobility Solutions (CMS) Revenue Outdoor Additional Offerings Cell Site Cabling & connectivity (in millions) Filters & combiners Services $498 $471 $475 Microwave Actual Backhaul Metro & Small Up 6% YOY Cloud Cell RAN Nodes Integrated Cabinet Q4 2015 Q3 2016 Q4 2016 Operating Income Cloud RAN Node (in millions) Indoor Wireless $113 Q4 2016 Adjusted $107 Coverage Operating Margin (1) $79 Adjusted (1) of 23%, up ~590 $76 bps YOY $76 GAAP $40 Q4 2015 Q3 2016 Q4 2016 (1) See appendix for reconciliation of non-GAAP adjusted measures. Strong double-digit NAR growth offset by other regions 7 7
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